Full text of Commercial and Financial Chronicle : January 15, 1953, Vol. 177, No. 5186

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U ISf fyrr
dq
OF

■ •

' ' V
GAN

,

ESTABLISHED 1S39

11 f*

LAY.. J

•

Reg. U. 8. Pat. Office

Volume 177

:

Number 5186

New York 7,

N. Y., Thursday, January 15, 1953

Price 40 Cents

-

Copy

a

EDITORIAL

Which Direction the

\

As

We See It

Business Future?

I

The outgoing President has delivered his reg¬
ular annual budget message, which in the circum¬
stances

serves more as a

plan of financial

take office

After listing optimistic elements in outlook,

to

basic

next

well that

of

nature

they

are.

Dr. McNair asserts

an

situation, and it is as
Mr. Dodge, who is about to

intensive

The facts which have led this

gentleman of wide
practical experience to make such a statement
are in
general available to all, but since in times
such as these much of their impact
may be lost
in the emotional state of hope, it may be well to
review them once again. The President's account
of the budget situation on the expenditure side—
the controlling aspect of the matter—is typical of
all those which have come in the past from the
same

to

pen

we

As

'•

■

we

look

at the

"This

as

i

■

£"

'

on

-

-:

27'

an

address

by

McNair at

iL^'iSST' R"*a Dry

REVIEW AND

DEALERS

on page

Annual

37

OUTLOOK ISSUE NEXT WEEK
appear

next week

businesses and

the

and

nation's economy

as

in

Stale and

The

department is

trust

Securities
telephone:

AND

*A

given

paper

of

"Seminar

the

and

Director
Francisco

Mr.

direction

Manager

Stock

Continued

.

Kelly

as

The

1953.
of

Carl

of" the

Finance

MUNICIPAL

Coast

Statistical

14 Wall

Co.

&

Principal Commodity

and Security

THE NATIONAL CITY BANK

San Francisco

Exchanges

Los Angeles

•

•

•

.

-

OF NEW YORK

J

'

-

Honolulu

ESTABLISHED

j

New

York

Stock

Dept. Teletype: NY 1-708

;

Coast
Bond Department

Angeles

Los
*

"

and

THE

1915

NEW YORK CITY

.

M

•

10 other

Denver
Spokane

CHASE

NATIONAL

BANK

Of THE CITY OF NEW

YORK

Western Cities

Placer

CANADIAN

Central Maine

Net

Development
Market*

Power

BONDS & STOCKS

Maintained

Co,

COMMON
Prospectus

Broadway, New York 4, N. Y.

Teletype NY 1-1843

<$>

CANADIAN DEPARTMENT

Goodbody

a

Co.

ESTABLISHED 1891
MEMBERS NEW YORK STOCK EXCH.

'

New York 4

115 BROADWAY

BRIDGEPORT




.

Inc.

Telephone WHitehall 4-6500

American Stock Exchange

Tele. NY 1-733

San

in U. S. Funds

50

Tel. DIgby 4-7800

the

Municipal

<$>

30 Broad St.

of

.

Exchange

Stock Exchange

Commodity Exchange,

Members

seminar

Relations

1832

and Dealers

Members New York Stock Exchange

Department

Principa I Exchanges

Salt Lake City

Bond

.

American

ESTABLISHED

50 BROADWAY •

-

Chicago:"'

T. L. WATSON & CO.

Members

_

Mem bers of All

1

-

Hardy & Co.

the

Public

is

the

San

J. A. H0GLE & CO.

Street, New York, N. Y;

Boston

for Banks, Brokers

in
of

State and
t

jr.*1

Dean Witter

bond department

BROKERAGE SERVICE

lectures

University

Bonds

to

CHICAGO

40 Exchange Place,

New York b, N. Y,

PERTH AMBOY

Teletype NY 1-702-3

WHitehall 4-8161

on

request

ira haupt & co.
Members
and

New

other

111

Boston

York

Stock

Exchange

Principal Exchanges

Broadway, N. Y. 6

WOrth 4-6000

1 NORTH LA SALLE ST.

NEW YORK

Doaihioh Securities
Grporatioh

a

31 s

Direct Private Wires

Members of

STOCK and BOND

who

page

Exchange.

SECURITIES

Chemical

Y.

the

the

teaching staff for

Schick,

OIL & MINING

Direct Private Wires

30 BROAD ST., N.

at

on

the

on

HAnover 2-3700

COMPANY

of

one

Management"

Calif., Jan. 6,

• - Francisco,
under

by

Investment

of

'

«

"Chronicle's" Annual

The

Hawaiian Securities

BANK & TRUST

*

separate department

a

i'

...

WESTERN

STATE

con¬

imagination

former years,

I.',.'

Municipal,

all hide-bound

/

k

Pacific Coast &

con¬

Organization of Trust Department

in

U, S. Government,

their

and
they know very little about com¬
mon stock investments,. I believe you
Paul B. Kelly
will find it both interesting and help¬
ful in your work to know more about what bank trust
departments really do.

will include
outlocdc for their
in general during 1953. f

and,

are

without

:

Convention

—

officers

under

that

*

A's°ci»,i0"- N- York city'

personal views of leaders in Industry, Trade
own

42nd

assets

trust

servatives

short-run

Continued

'

-

Prof.

The

are

huge in amount and are
steadily growing. Being strictly reg¬
ulated by law, they must conform
to: certain standards prescribed for
trustees. They may not speculate or
do a number of things that may be
proper for others. Instead of presum¬
ing, as some people do, that bank

is'

♦From

investment

trol

proposi'
tion but is quite likely to be a per¬
Prof. M. P. McNair
manent part of our economy for a
". * •
'
' :'
long time to come. Nevertheless, the
very unanimity of the
current optimism is sufficient
reason for.being a bit conservative.
;■
:
*
The argument for a recession in the second half of -'
a

activities of

trust

counts.

the

before it

not

in the

departments. These de¬
partments handle many types of ac¬

takes office; but perprincipally it stems from the
growing
realization
that
defense

Review and Outlook Issue will

the

very

bank

haps

mer-

ANNUAL

be

year.

is

>

...

security salesmen, buyers and
much interested in the years to

come

This change in senti¬
in part the business
momentum arising from the vigorous
rebuilding of inventories following
the steel strike, and ari part the
op^
timism generated by the'Republican "
victory and the strong'hand which
the new Administration- is showing

year

page

' analysts,; will

reflects

business

.

:

•

level will remain high through¬

the

ment

the promotion of defense production and

Continued

;future

Today the opin¬

■'

the last three

civil defense, and

as

1953,

in

downturn

a

second half of 1953.
'A,-

out

foreign relations, the development of atomicr
stabilization,

predicted

ness

grams^—military services, international security

energy,

men,

ion is growing that the general busi¬

1954 will be for six major national security pro¬

economic

general business situation in

who

•

r

have been, by the cost of national security. About

and

*

.'You

:
—

„

Take these

73% of all budget expenditures in the fiscal

:

Calls Prudent! Man Rule revolutionary.

it is apparent that a change has taken, place during re¬
cent months.
As late as September, there were many

even

budget is dominated,

1

of their result

in business reversal rather than of their existence..

paragraphs, for instance:
i

are

ical situation. Concludes question is timing

and, for that matter, those which used

originate from his predecessor.

Explaining in detail what bank trust departments really
do and how they conduct their investment operations,
Mr. Kelly discusses trustee investment powers, particu¬
larly those granted by the State of California. Describes
implications of investing under the "Prudent Man Rule,?
and principles that should guide trustees in investments.

con¬

dients of business downturn.

study of this sitUa-'
;tion," has warned the public not to expect;any.
"sixty-day miracles."
;
j . .•
«

increased

as

gradually accumulating ingre¬
Among threatening factors
be includes: rapid growth of private indebtedness, com¬
pletion of plant deficiencies, diminution of housing short¬
age, high tax rates and declining profits, hardening interest rates, and unstable international economic and polit-

this

I Budget, and who has been devoting himself in
recent weeks to

Vice-President, The Anglo California
National Bank, San Francisco, Calif.

income, decreased taxes, and stable price level;

sumer

the arduous tasks of the Director of the

assume

First

government spending, higher capital outlays, large

week, and the Congress which
has already started to work, are well aware of:

the

By PAUL B. KELLY*

Lincoln Filene Professor of Retailing,

Harvard Graduate School of Business Administration

opera¬

tions.. Apparently the authorities scheduled

By MALCOLM P. McNAIR*

-

challenge to the incoming

Administration than any

Management oi Trast
Department Portfolios

~

Teletype NY 1-2708

Telephone:

Enterprise 1820

2

(190)

The Commercial and Financial Chronicle..

WE

POSITION
TRADE

The

and

Copeland Refrigeration

participate and give their

East Tennessee Natural Gas

for favoring

reasons

(The articles 'contained in this forum

Michigan Gas & Electric

they to he regarded,

are

offer

as an

CHARLES

.

Rights

D.

PULIS

at

Schering Corporation
Sinclair Oil*

"Health"

Western Natural Gas

by

of

that

acres

of

Established

at

geles

foods.
the

growth of
so-called

"miracle

Exchange

5

Teletype NY 1 -583

burden

drugs"

to

within
five

last

the

years

tomers.

the

ates

—

ACTH,
n o n

new

Rights X Scrip

is

is

where

ru.u

the

chemicals,

The

key

research—no¬

value

research

of

in

and

the

field

of

"health."

McpONNELL&COMembers

New York Stock Exchange
American Stock Exchange
120

BROADWAY,
Tel.

NEW

REctor

5

Seldom

have

tors

the

into

a

Cobb
are

f

Bassett Furniture Industries

Camp Manufacturing
Commonwealth Natural Gas

such

terms

available

to

Life Insurance Co. of Va.

re¬
the

Lynchburg, Va.
TWX

LY 77

field,

their

of

business

in

maceutical

distributors,

fact

drug

but

CAROLINA

ments

MUNICIPAL BONDS

and

80-odd

Since
was

RICHMOND, VIRGINIA
Bell System Teletype:

RH 83 & 84

Telephone 3-9137

Brands,

the

originally
has

research

to

30

ists, along with
control
Established

and

1856

analytical

York

Stock

Exchange

products.

now

ducted

to

present

these

drugs

new

to

dwell

but

on,

New

Orleans
And

Cotton

other

Exchange

Exchanges

It is
ress

no

secret that

some

has been made in the

these

drugs have

eral

others

the

balance

In

will be

later

for

in

chlorophyll in treating of
JN, Y. Cotton Exchange Bldg.
NEW YORK 4, N. Y.
CHICAGO

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND




ana

ulcers,

as

well

companies for the

synthetic yarns,

plastic industries

as

prog¬

of

cancer

by textile

deodorizing of

The rubber
are

also

and

seriously
hampered by unpleasant odors. If

management,

witness

Cobb

have

1952.

it

several

is

the
2

or

quite

ethical

year

3

and

years.

possible

chlorophyll

year.

-

Strong, Cobb
stock
&

of

The

'

owns

as

Company's

from

basis,

earnings

after

development
as

well

as

on

heavy

and

a

of

the

Kath" Development

Manufacturing Corp., which is

developing
automatic
and

and

manufacturing

production

machines

packaging equipment for the

drug industry. The management is
very

enthusiastic about Kath-De¬

velopment and feels that the profit

Teletype
NY 1-2976

LAMBORN & CO., Inc.
99

WALL

STREET

NEW YORK

5,

N. Y.

SUGAR
Raw

—

Refined

Liquid

—

Exports—Imports—Futures

DIgby 4-2727

ble

nonrecurring

involved with the train¬

1951

results

NATIONAL BANK
oi INDIA. LIMITED
Bankers

pre-tax earnings.
1953
should improve consider¬

to

the

Government

in

Kenya Colony and Uganda
Head

Office:

re¬

merger

26,

Bishopsgate,

London, E. C. 2
Branches

in

India,

Pakistan,

Ceylon,
Burma, Aden, Kenya, Tanganyika,
Uganda, Zanzibar, and Somaliland

Protectorate.

Authorised

Paid-up
Reserve

Capital
Capital

Fund

._£4,562,500
£2,281,250
£3,675,000

The Bank conducts every

description of

ably.
»

banking

The company is in the
top Ex¬
cess
Profits Tax bracket at the
present time, and therefore, ex¬

Trusteeships and Executorships

piration of the E.P.T. law

on

Because

of

the

Cobb

in

cussion
be

the
of

next

cash

and

exchange

business.

also undertaken

June

30, 1953, would be of considerable
importance.

Over-the-Counter

anticipated

growth and expansion of
75%

Telephone
HA 2-3878/9/80

spectacular

and

risen

Pre-tax

expenses,

on

sev¬

Broad Street

Inc.

search,

ap¬

brought

1953, and

in

within

addition,

that

been

50

New York 4, N. Y.

a

approxi¬
mately $1,500,000 in 1942 to over
$8,800,000 in 1951, and are ex¬
pected to approximate $12,500,000

by the Federal Drug Ad¬

the market early in

i

use

for

even

ing of personnel for its new plant
could be about $1,400,000 or dou¬

ministration)

out¬

standing medical schools.

growth

should

sales

be

to

Strong, Cobb
The company has

strong

Strong,

(which

believes

are

growth in Strong, Cobb and Com¬

time,

next

Inc.

Request

on

It is my belief that the next few
years

cus¬

also

Trade

Memo

chinery.

and

Exchange

of

to

this

as
develop products of merit
improve their plants and ma¬

and

products ma^ be added to the line

Exchange,

of

Recapitalization Plan

per

paid

80%

COMPANY

They have been able to show

build~

well

arrange¬

in Cleveland and Lake Worth and

Board

BALTIMORE TRANSIT

growth industry.
The basic phi¬
losophy of the company has been

and original

Exchange

Chicago

be

George Miller, the Presi¬
of the really eminent
dynamic executives in the

conspicuous

Cotton

Commodity

Tel. NY 1-1932

be

$260

say,

amount

will

to

expenses

until

con¬

many

is

is young, aggressive, and exoerienced in all phases of their busi¬

the

Stock

to

New York 7

Tel. DIgby 9-1550

one

re¬

American

grants

us

drug industry. He is the soar]
nlug of a rra^aeement team th^t

Strong,
stages of re¬
development 24 new

like

proved

jointly at their laboratories

under

Security Dealers Assn.

Mr.

ness.

in

New

York

bond

a

lic information should be released

men

chemists

being

Y.

All

fairness to all concerned, no pub¬

development

way,

N.

Broadway

$208."

or

combined

An expanded pro¬

under

in

n^ral-

sources,

their

management

would

development of

gram of research and

is

Members
New

new

if

is outstanding.

outstanding and which the writer

large number of

a

150

un¬

It is my considered opinion that
the management of

It is planned that the first

of

the

chem¬

research

who assist in the

H. Hentz & Co.

two

department

of three

group

a

grown

Mexico

Members

very large.

competitive with the

present

or

drugs.
cur¬

Standard

m

of

oa

drawings by lot of

or

actual

owner

pany,

the

search

1947, when Strong, Cobb
fro

essav

Gersten & Frenkel

J. V. MANGANARO CO.

Cobb has in various

as

over the counter.

purchased

my

Railroad

at, let

-

At

the

of

chlorophyll products

rently being sold

CRAIGIE&CO.

well

as

the

possibilities for this subsidiary

tomers.

Lever

other manufacturers

many

■F. W.

Colgate,

in¬

users,

one

41/2S, 1947, assented

words,

figure,

prod¬

not

are

royalty

outside

of

Chicle,

items

new

or

from

products

large

Film "A"

"Chronicle"

under the "B" plan
paid at the rate of 80% of the

the

type of products,

entirely

are

manufactures chlorophyll which is

American

to

bond, the

chloro¬

F>»"+ov',r

the

"me-too"

be

Bros.,

the

prepared for publication.

redeemed

in scope, covered either by patent

pow¬

Chlorophyll Di¬

various

offices

General Aniline &

Dr.

bonds

other

large ethical drug

search for future sale

not

to

branch

our

Rights

Interna¬

on

"bread

on

plus

own,

that

will

sold

appearance

4\/$s of 1917,

referring

am

are

the ethical
extension of

drug sales

other

application

American

to

Ohio Edison

amount indicated in the article. In

Strong, Cobb. The most
important phase of this type of an
operation for Strong, Cobb is the

of the phar¬

capsules,

wires

last week's issue

advised

redemptions

lels that of

y's

as

the

P3rW

usual

cluding

in

Railroad

was

these

private

NY 1-1557

Orleans, La.- Birmingham, Ala.

follows:

those

vision, located at Fort Worth, Fla.,

NORTH and SOUTH

commentary

dent,

•''iT-mrr

ders, pills, etc.

VIRGINIA-WEST VIRGINIA

his

tional

and

accounts

The

of

phyll, should permit the company
deve7op along lines similar to

basic

such

lies in

their

of

Cleveland, Montreal, and Los An¬
geles consists of the formulation,
manufacture, packaging, and ship¬

Since 1932 Specialists in

page

to

Chlorophyll, Inc. on a
exchange basis, 1% shares
of Strong, Cobb for each share of
the 104,550 American Chlorophyll

products

the

to

this

International

an
earnings
The real future of

and

ethical

ucts

ping for the

iSTRADER, TAYLOR & CO., Inc!

Subsequent
on

from

company

drug

American

p a n

of

the

represents

butter"

the

stock

c o m

does

pany

point of view.

public because of its merger with

The

volume

St., New York 4f N. Y.

Rights

der the so-called "B" Option.

the

Exchange
Exchange

Sinclair Oil

the drug trade as the Ampin—a
syringe needle attached to a glass
ampule by a flexible rubber tube
—the only pre-sterilized, tamperproof
injection syringe on the

that

Stock
Stock

HAnover 2-0700

4'/2s, 1947
(Additional! Information)

I

automatic, dis¬

25 Broad

Railroad

Prior Lien

and

as

over

ar^d its shares only

became

an

York

American

WINKLER

posable syringe needle, known in

sume

This company

privately owned for

market

New

Members

formula business which this corrt="

shares outstanding.

Dan River Mills

International

story

ethical drug field to its own prod¬
ucts.
We believe it is fair to as¬

Strong,

as

attractive

such

years

cently

American Furniture

LD 30

100

MAX

.

the

to

Members

Members, New York Stock Exchange

Winkler

1951, Strong, Cobb introduced

Steiner,Rouse&Co.

Partner, Bernard, Winkler & Co.,
New York City

■as

today. The Ampin is being
used by Strong, Cobb to open the

private inves¬

available.

has been
u

do

company

on

now

cus¬

market

opportunity to buy

2-7815

Trading Interest In

favorite

my

growth stock at this time is Strong,
Cobb
and
Company, Inc. — the
largest and oldest private formula
pharmaceutical company in the
world.

YORK

this

of

Because

plant

Coast

West

gate Chemical Co., Ltd.

evident than in prescription

more

Since 1917

L>.

etc.

in

found

this

to

the Cleveland

The company also oper¬
Canadian subsidiary, 66%

a

In

sedatives,

forming

An¬

owned,
Cnarus

habit-

-

Los

Quoted

Mobile, Ala.

where

large

Bernard,
Co., New York City.

"I
in Montreal, under a
regret extremely that
working agreement with the Win- sentence was left out when

anti-biotics,
cortisone,

Specialists in

suburban

from

their

Max

Partner,

DR.

forward to relocation of
Cleveland plant. They
gone into full produc¬

plant

Dr.

—

Direct

1952, 72
Bedford, Ohio,

they recently
62,000 square feet for a
10-year period, this operation be¬
ing to eliminate the heavy freight

Witness

4»/2s of 1947 (addi¬

Bought—Sold

New

entire

their

Williams

total area
The com¬

a

feet.

at

B.

9

(Page 2)

leased

the

120 Broadway, New York
BArclay 7-5660

tion

in

have

in¬
dustry, except

1920

Stock

will

also

pass every

Associate Member
American

looking
the

dustry

Corporation

Winkler,

in April,

land

scription

plants

R.

—

information)

Winkler &

square

acquired

pre-

tional

making.

262,000

pany

Johnson

Int'l Railroad

chlorophyll

Louisiana Securities

&

Manager
of
Research
Dept.,
Kidder, Peabody & Co., New
City. (Page 42)

added

be

can

company's main

medicine in¬

New York Hanseatic

or

Cleveland, Ohio, have

five

the

years

request

The

It has been estimated

outstanding authority

an

within

Pfd. & Common

on

rapidly becoming
biggest businesses in

the country.

made

are

some

is in the

is

the

of

one

Development

*Prospectus

*

be found to mix chloro¬
with these products when

then another boom in

Strong, Cobb and Company, Inc.

31/4/83 W. I., & Rights

Conv.

to

stage in the processing to
permanently eliminate :the odor,

Members, American Stock Exchange

Cg., Inc.—Charles

1

art^r, Pnlis. L'nwlCo., New
York
City.
(Page 2)

way can

phyll
they

of

Smelters

Pulis

ing

be, nor
sell the securities discussed.)

to

a

Partner, Pulis, Dowling & Co.,
New York City

Puget Sound Power & Light

Conv.

intended

not

are

D.

Alabama &

Selections

Strong, Cobb

particular security.

a

Week's

Participants and

Their

Mead

Ohio Edison*
&

This
Forum

A continuous forum in which, each week, a different
group of experts
in the investment and advisory field from all sections of the
country

Arkansas Missouri Power

Common

Security I Like Best

IN

Thursday, January 15, 1953

.

year,

Strong,

any

dividends

dis¬

would

Quotation Services
for 40 Years

premature, but it is the opinion

of the writer that

commencing in
1953, stock dividends may be ex¬

pected from time to time.
Based
ratio

at

.

on

the

price

Incorporated
Established 1913

earnings

which other pharmaceu-

Continued

National Quotation Bureau
46 Front Street
CHICAGO

on

page

42

New York 4, N. Y.
SAN

FRANCISCO

Volume 177

Number 5186

..

.The Commercial and Financial Chronicle

(191)

The Outlook ioi 1953

INDEX

Professor of Banking, Graduate
and in the

t

liCHTtnsTfin

B. S.

By RAYMOND RODGERS*
School of Business

Articles and News

Administration
•'

School of Commerce, Accounts and
Finance,
New York University

'

Page
'

r

•

*•«..'

v

Management

of

Trust

Department

AND COMPANY

\

Portfolios

—Paul B. Kelly

j

THE

.Cover

^

After

briefly discussing methods of evaluating the future, Dr7
Rodgers surveys current fiscal and business outlook. Foresees

,

Which Direction the Business
'

i

highly improbable any consequential tax reductions since
heavy unspent military appropriations "guarantee that coming

i

In

new

is

.

every

lies

year

the

of

sense

expensive one."

an

^

—Malcolm

P.

Future?

7

.

THE

McNair

ahead.

word,After

20

political Administration in

new

Washington;
"and,

after

al¬

steady
"'boo m,
it is
*g e ne r a 11 y
thought

Federal Fiscal

the risk of

the

.time

ly,
^be

Raymond

Kougus

deal

care

their

on

eco¬

international

political
In the long ago, it

easier.> All the

of everything.

of

man

;

'

.

\

-v-

•7' Nowadays, men in finance must

-personally keep ahead of develops
ments or they will not last
long!
There

three

are

methods

well-recognized
doing this:.

of

One way is to determine a "nor¬
mal" by looking at past perform¬

• *

about

method

ily.

economic

will

and

social

gravitate.

This

weighs the past too heav¬

It

does

not

give
proper
weight to the dynamic nature of
the

as

'*

^

*

•

v

1

,

the

ever

nor,

economy, with its
higher productivity ■- and its
higher standard of living;

does it take into account the

highly abnormal international
litical situation.

1

" "

w

stock
t

—

J.

Reuben

Into

Clark, Jr.

&

warrants

k '

•

r

9

'

Let Us Not Sell Our Children

*?.

spending
largely
Russia.' Using Korea
it seems .certain

on

General

out

of

South

Newport Steel
10

Portsmouth Steel
11

Salvery

Lone Star Steel
13

i

.____

The Unexpended Balances of Appropriations
—Sen. Harry A. Byrd
—i

,Tv

Eisenhower

the

.

discredited

Korea

and

Koreans to

.Truman

abandon

the

Inflation

sive

that

much

a

operation

Korea.

is

And,

more

of

.

..-/Truman's

and

the

even

may

r

fensive.

her

*

*

'

J-"'

*

t

Last

i

m

<

.

„

T

2

Frederick

•\

Big Four—the

"peace"

conference

a

mere

,

15

—

-

\

'

•*

Shull

Our

and

.

Gold

.

Buying

San

22

___

would,
impact
and

Policy

/'

i

4

'••As We See It

of¬

^

" ■ /
Regular Features

27

(Editorial).....-.

"

Francisco

Associated

•'

'

"

,

and

; •

Business

7

would

Man's

Canadian

_i —__1

H

_.

Cinerama, Inc.

22

Bookshelf.'.!

U.

44

a'.,...,

—

24

—

S.

Airlines

'

:

Investment

Recommendations_____r____^

Weyerhauser Timber
•

8

Einzig—The Menace of the Index Number Standard
t,

,f

'

(

■

'

.

f

business" senti¬

20

*

.

•

(.

^

From

1

Singer, Bean
MACKIE, Inc.

t

Washington Ahead of the News—Carlisle Bargeron.—

Indications of Current Business Activity.._L__

16

&

35

—1.

HA 2-0270

Mutual Funds

<

5
-

7 Dealer-Broker
\

r<

.._________Cover

7 Coming Events in Investment Fields—

ease

.v

■

—---

Securities

Development

Research Corp.

Brown Allen Chemical

Bank and Insurance Stocks..--

activity.

30

——.———

the basis of the present

on

.

Angeles

25

______—

■

•

along these
obviously, /have a
on

f

Los

•

' '
■
'
Subject of letter

,

c

W ires

.

.

Philadelphia

Pick

Franz

and
*

Direct

"L

.

.

-•

6

Teletype NY .1-3370

•

"

,

Broadway, New York

BO 9-5133

17

'*

*

"

1

Incorporated
61

.

New York City's Plan to Tax Security Transactions Attacked
7
'
.
'
I
/
• '
'.'r. *.

developments

Even

comes" so

'

r

From J. W. Popkin___'

\

,7

calling

(2) A real truce in Korea.

ment

'

,

.

.

Reilly & Co.

course,you

international tension.

great

J. F,

14

This could take the form

such

lines

,

1

t

v

•

Canada

y

in

(1) An international conference

Any

;

//.

-

.

t'"

..i''

.

of

Seen for Commercial Banks.-.

Budget.____.___,

•

** J

•

7

.

of:

of the

12

_^V__

^Sterling and the Dollar Discussed in letters from

possibility, that Rus¬

resume

Problem_____

Stock Purchases by Life Companies Off in 19521.
'•

*

•

shouldn't

sia

Main

,

expen¬
up

Favorable Outlook

;

Communist

coming

Still

Control

the

strength during the abortive arm¬
istice talks, this, in all
probability,
means

Kaiser Steel
14

.will

nists may do so.- As the Commu¬
nists
have
grown - greatly ; in

po¬

Another way is to project cur-rent trends into the future.
This
method
weighs the present too
It

YORK

4-6551

Jessop Steel

7

_

...

example,

an

abandon

.

-

heavily.

Beef Rollback Orders;

V "
*;•" Banking and the Security Markets—A. Halsey Cook

•

policy of "waiting it out." As it is
inconceivable that we would get

American

ever

or-

Fight Marxism by Giving Employees Stake in Profits!
.'/—Thomas D'Arcy Brophy

forget Indo-China, Ma¬
laya and the many other .trouble
and calculating some kind of
spots which require money," i:
1
Average—usually a "loaded" aver¬
Of course, as against this
gloomy
age—as being the level to which
outlook, there is always the hope,
"the
future

WALL STREET; NEW

Telephone: WHitehall

6

—Sen. Andrew F. Schoeppel_____.i___;

ance

phenomena

'_

Canada in 1952 and After—James Muir

responsibility had to do in those butchers, the only apparent alter¬
Stimes was to consult an astrologer, native; is afull-scale offensive,
a-'..- soothsayer, an oracle or may-? Furthermore, if we don't step up
the war next spring, the Commu¬
jhap, a real prophet, and that took

'

Obsolete Securities Dept.
99

4

You Can't Eat Govt. Controls

time.

our

....

estimates of future

much

was

great

a

ironies of

that

must base

and

Study Money

Hemingway.

7—C. R. Whittlesey

on

they

depends

-

developments.

to

4

Government

'their policies and actions
nomic

talk

ter

.In vestment

personal

Commission

bad.

swap!

'

Problem

A
L.

are

beautiful.

•_•;•

platform!
In • the
ahead, the Republicans

will

a momen¬
tous year.

rmen

Let's

'

Needed:

V'V:

efforts merely another of the bit¬

Certain¬

1953

'

is

Proposed Changes in Bank Reserve Requirements
•

are making in the Fed¬
spending but, unfortunately,
unfolding events may make such

before

*1954.

'

eral

some

'

•

;

—W.

economy

cuts

economic
trend

.4

being considered

fiscal outlook.

months

in

'

'

,

Our cash

3

___

Portable Pipe Lines^-Ira U. Cobleigh

;

;;

Cassandra, I venture the opinion
that too much i£ being expected

an

have

change

'

1953—Raymond Rodgers.

obsoletes

a

will

~a

'

i

■

•

7

Outlook ~

that Roosevelt, too, was elected

that

shall

"r,

••The Republicans have promised
; to cut at least $10 billion out of
7
the budget; but I seem to recall

most

we

At

on

12

of.

"years

<r.

Says business outlook

The

a

"years of New Deal, we are to have
■a

The Outlook for

-

BEAUTIFUL

Cover
Your

encouraging.

more

BAD

AND
;

*as

fiscal crop will be

3

40

Exchange PL, N. Y. 5

Teletype NY 1-1825 A NY

naturally7NSTA Notes
8
however, that we must continual¬ scale of military operations and
ly guard against both its conscious rearmament shedules, total Fed¬
News About Banks and Bankers.!
18
eral
and subconscious effects.'
expenditures of "more than
•
$80 billion should be provided for J. Observations—A* Wilfred May—-—
5
r
The third, and best, way to ap¬
in the 1953-54 budget. Please note'
praise the future is to make a
".Our Reporter's RepDrt-__.__r_l—________—42
that "should be" qualification. * It
careful
analysis
of
the
future
Our Reporter on Governments.
is possible; in fact,
21
probable; that"
forces which may be expected to
neither Truman's 1953-54
budget
Prospective Security Offerings...
operate
in
the
40
economy.
This nor
Eisenhower's amendments to
method gives due weight to the
1
Public Utility Securities.:.-!
it will fully face up to this
43
heavy
past and the present, but concen¬
spending prospect! Comparison of
Railroad Securities
25
trates on weighing future prob¬ this
$80
billion
prospect
with
20
probable expenditures //Security Salesman's Corner
abilities. Let us apply this method Truman's
of $74.5 billion in the current fis¬
i>f looking forward and analyzing
; Securities Now in Registration.
38
cal year shows
that the Repubr

1-1826

—-

_______

?

WO*

—-

%

■

r

—

______

—

.

•S^viRO^

•

______ —

—

basic forces to

butlook

and,

business

the

Federal

after

that,

outlook..

.

fiscal

to

make
duce

A

talk

by Dr. Rodgers at .a Luncheon
of the Bond Club of Chicago,'

meeting
Jan.

7," 1953.

*.

will-have

the plans

•

,

licans

by

nearly

good

their

to

cut

$16

The

billion,

promise

to

to

Security I Like Best-...

The

1953-54

State of Trade and Industry_i.__—

2

"

re¬

spending by $10 -71 Tomorrow's Markets (Walter Whyte Says).—
Does anyone seriously ex7;Washington and You._
\
■"
Continued on page 17 V' 7 /'■i

•

billion!

"/

t

36

Democratic

....

?•

5

l_

*

.

.

.

.

•

44

•

7"

Published

•

a-

For many years we
have
t

<i

PP[[[PP[|) CTflPKC
lI L J
L f II II LII 0 1 U 0 l\0
in

specialized
',

-

r

•

;

•.

*

•

,

J

l\ Drapers* Gardens, London, E. C.,
land, c/o Edwards & Smith.

'

ReS- tJ, S. Patent Office

'Reentered

•

IWILLIAM

7

Spencer Trask & Go.
Members
,

25

BROAD

New

York Stock

Albany

Boston

•

•

Private Wire to
.

•
•

Nashville

1 Chicago
•

,

\

Y.^

"

•

COMPANY^ Publishers
-

REctor 2-9570 to 9575
...

»

D.

SEIBERT, Editor

&

25,

York,

N.

Y,,

«

Publisher

WILLIAM DANA SEIBERT, President

at the post office at New
under the Act^of March 8,

,

.

Thursday, January 15, 1953

state

and

Other

Chicago

ri

v

news.

Offices:

3,

111.

135

re..

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ppssessiens.

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Territories

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year;

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STate

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$48.00

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per

per

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year.

and

Quotation

$20.00 per year.
Not€__on
rate

of

Record

New

York

1

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Cycirs

21,

N.

f,

Monthly,

account

of

the

fluctuations

remittances

for

eign subscriptions and advertisements
be made in New York funds.

in

formust

a

to

sec

what

Send

Money

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(Foreign postage extra.)

exchange,

want

as

future.
C.

* Other Publications
Rank

the

South

Street,

to

Study

+

Subscription Rates

Other Countries,

Every Thursday I general news and advertising issue) and every Monday (compkt? statistical
issue — tnaiket
quotation
records, corporation r.ews, bank clearings,

77th

the

"dividend," a chart of various
stock market cycles, projected to 1990.
This projection, made in 1944, has worke i
amazingly well for eight years. You will
Also,

"

,

E.

for

a year

1879.

Dominion

c

Foundation
9

who contribute

to persons

$10

as'second-class matter Pebru-

1942,

,

--

,

Worcester

CROWELL, WEEDON & CO,

/

HERBERT

•

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•

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DANA

ary

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TELETYPE N. Y. 1-5

LOS ANGELES, CALIFORNIA




t

ST., NEW YORK 4, N.

TELEPHONE HAnover 24300

Manchester, N. H.

Exchange

7

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Prediction)

^ " D'"a

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Cycles—The Science of

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„

(co-author

Eng-

!

reports a year by Edward R. Dev/iy

Sent

FIXANCIAIL C^^RONICLE

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report.

4

The Commercial and Financial Chronicle...

(192)

convertible

Portable Pipe

million

Lines

"Expanding Your Income"

Author of

•

for

tractors

stoves*

19, Suburban has shown a
whacking growth, management
savvy and a lot of sales dynamics.

petroleum in
and trucks, beyond where the

General

mains end.

.gas

Study Money Problem

around

compressed account of delivery of liquid

bottles

Needed: A Commission to

earned

Common

eight months through
September of 1952 and indicates
a
$1.20 dividend basis.
Quoted
for

$1.29

By IRA U. COBLEIGH

A

preferreds, and $16.3
debt.

of

Thursday, January 15, 1953

Gas

By W. L. HEMINGWAY

Chairman, Executive Committee, Mercantile Trust Company,
St. Louis, Mo.

Corp.

A second worthy entry in this
Midwestern bank executive recommends
Congress set up a cur¬
the letters LP on a coupled that with the sale of ap¬ portable gas business is General
rency
commission composed of representatives of various
phonograph record it means "long propriate appliance to inhale the Gas Corporation.
This forward\
groups to determine whether or not we should again use
playing"; but if you see those gas,8 have built up a quite im¬ looking enterprise is the length¬
gold
[
pressive and expanding field of ened shadow of two energetic
same letters on a big metal bottle
to redeem our
currency and, if so, how shall we go about iL
i
enterprise.
So
let's look at a gentlemen, Rawlston D. Phillips
^they'll stand
Would exclude economists from
membership in the commission.
1
for "Liquid couple of companies which, from and Hal S. Phillips, who started
modest
beginnings, have out on a very small scale back
Petroleum," a quite
Money, especially paper money,
There are those who say that
combination moved up to a position of dis¬ in 1937, in Baton Rouge, La. The is little understood
by most peo¬ gold has gone out of style, that a
of butane and cernible importance both as fuel outfit grow steadily,
buying LP ple, and the confusion that exists managed
currency fitted to the
merchants, and
as
corporations gas from leading companies such is compounded by the ill informed
propane gases,
changing needs of modern times
whose securities attract investors. as
p ressureWarren, Gulf, Shell, etc., and and sometimes
best suits the interests of all the
squeezed into
state¬
delivering same by tank trucks selfish
people. This is too silly to deserve
Suburban Propane Corp.
liquid form,
(company now has 200) for the ments that are
an
answer, but I suggest that any¬
About 1927 a progressive and most
but returning,
part, into permanently in¬ made on this
one
holding such views take a trip
c hameleonenergetic gentleman named Mark stalled tanks owned by consumers. complex and
abroad and

If you

see

'

like,
once
sure

to

gas

the pres¬
is
off.

And where do

get

you
U. Cobleigh

Ira

this

1

eum

of

bu¬

etr

p

o

team

and

tane

of crude oil.

the refining

or

gas

From natural

propane?

"

Somewhere
when

along
the
line,
weave
through the

you

various

stages from

leum

gasoline, there are dis¬
as
by-products, a couple

to

gorged
of

— propane
These two elements,

butane.

mixed

suitably
steel

into

petro¬

hydrocarbons

stray

'and

crude

pressurized

and

cylinders

(for shipping

handling convenience) be¬
a
liquid sold as "bottled
gas" in wide stretches of our rural
and

come

and seashore
mains

where

areas

as

have,

no

gas

yet, penetrated.
This bottled gas, being a very hot
and efficient

fuel, has importantly
displaced kerosene, wood, coal, or
all three,
as heating agent for
stoves;, and in Southern climes

heating (houses, that is, not

space

Anton

bottled

got the idea of selling this
gas
in New Jersey.
He
Gas

Suburban

the

formed

Com¬

pany to popularize and distribute
this clean, convenient fuel out in

the

where

sticks

lines

gas

After

non-existent.

were

scattered

over

wide

a

geographic swath in Connecticut,
Massachusetts, Rhode Island, New
York,
New
Jersey,
Delaware,
Maryland,
Pennsylvania,
Ohio,
South

Carolina, Virginia and Ten¬

nessee.

Further, to develop sales of gas,
it

a land
sale of

doing

was

it

so

from the egg

ness

General

Gas

and

owns

Tank

Co.,

op¬

largest

of

manufacturer

S.

busi¬

its

to the chicken,

also

Delta

erates
U.

control

can

Gas

LP

office busi¬

Thus, General Gas sells a man
a
tank, on time if he's doughshy; they sell him a stove, a
refrigerator, an air conditioner,
a

furnace

to

difficult

ject.

sub¬

or

make

Just

water heater.

a

ownership

thermal

baubles

all

of

easier,

these

General

which

provides

cou

ntless

proofs

the

of

rived

sound

alties

And

sighted

the

people have

things oi

are

at

the

other

end

those who want

us

of
to

adopt

tomorrow
the
gold
coin
standard under which we pros¬
pered for half a century. To them

and
W.

efforts

to prosper

then

the scale

pen¬

short¬

useless

where

life.

exacted

from

countries

less and less of the good

a

money

the

and

countries

de¬

from

those

are

pursuing that policy. He *
will see countries
with steadily
increasing regulations requiring a
strong police to enforce them—■

But his¬

tory

benefits

Tanks.

bit of hard

a

plugging the products caught on;
Phillips Petroleum agreed to sell
gas to Suburban in quantity for
resale, and by 1945 New York
Security Underwriters offered the
financing
accommodations
($13
million) for an expanded com¬
pany.
Thus the new corporate
creature, Suburban Propane Gas
Corporation, emerged. In 1946 it
did not quite $6 million in gross;
but by the
end of 1952 it was'
supplying LP Gas to 2-35,000 cus¬
tomers

visit

Just

L.

Hemingway

I

with

would

the

advise

patience.

I

have

greatest

sympathy with the
As far back goal they seek, but I believe that
as recorded history goes, gold has
before
that
step
is
taken
wci
gallon to each delivery.
Every¬
been
the
universally
accepted should know that our government
body's happy, the client discards
money.
In all lands at all times is committed without question to si
the chopping block,. and General
gold has been able to buy goods sound fiscal and financial policy.
gets a customer—has around 80,and
services, and today every¬ We should know that our proposed
000 of 'em right now in Louisana
where
except where it is pro¬ action would not be harmful to
Gas will let the customer pay for
them by adding a few cents a

and

the

sippi.

half

western

of

Missis¬

.

Gas

depends,

more

than Suburban, on house heating,

winter

dip the
seasonal factor,

warm

a

earnings.
however,

can

This
is being rapidly offset
burgeoning * commercial and

by

scribed

law, it is eagerly ac¬ those nations with which we have'
nearer to being military alliances because we cer¬
the standard of value in terms of
tainly do not want to weaken
which all other things are meas¬ them
financially while we are at¬
ured than any other medium of
tempting to strengthen their eco¬
exchange that man has ever de¬ nomic life. There are many
things
vised.
Now with many nations, to consider.
large and small facing bankruptcy,
Urges Currency Commission
gold is more and more earnestly
cepted.

General

so

unsound currency.

an

industrial

by
It

comes

sales.
Truck, tractor
and. farm vehicles are switching sought in order to bolster their
But it seems to me that now witft
heaters,
ranges,
house
to LPG, and that's duck soup for weak and fluctuating paper cur¬
a new and conservative Administra¬
Importance to Industry
heaters, brooders,
dryers
and
General Gas. The Tank company rencies. Businessmen and states¬ tion
coming in we should have a
Further
than
that,
farmers incubators. Of 1952 gross, placed also has some
big artillery shell men in those countries are recom¬ look to see into this subject. I
million, around
have drummed up some vital and at roughly $23
in

ness

interplanetary space).

the

appliances-^'

water

expanding
and

uses

for

volatile fuel.

this

amazing

Tractors

burn¬

ing LPG instead of gasoline, ap¬
to
generate
more
horse¬

pear

carbonize less, and main¬
operating efficiency longer;

power,

tain
and

up

they are less prone to wind
in repair shops for overhaul¬

ing. Ditto for trucks and thresh¬
ing
and
wood-sawing
engines.
Quite recently, too LPG has
been employed for curing
for
weed
burning, hay
and

brooder

tobacco,
drying

heating.

Yes, LPG
has a lot of uses, and is winning
new
friends, even against tra¬
ditional competition of gasoline,
diesel

oil

and

16%

may

vital

and

be derived from these
business-productive ap¬
pliance sales.
While Suburban started out up

North, where home gas sales
mainly for cooking, on Dec.

are

31,

1951 it purchased the Rulane Gas
Company
of
Charlotte,
N.
C.
This
acquisition
added
almost
70,000 customers, provided geo¬
graphic
diversification,
and
brought in quite a bit of spaceheating sales.
Another item, in

the

Rulane

age,

was

Company pack¬
tank
and
cylinder

a

plant.
This
is
supplies the needed

profitable,

electricity. A hot,
clean fuel, competitive on a
price
basis, and one that notably fails
to
foul engines or stoves with

storage

carbon

residues, is

entered the fertilizer business

future.

And the distributors have

a

gas

with

a

Of course, all the big oil com¬
panies produce this fabulous va¬
por.
Some have engaged in the
distribution but many prefer to
,•

sell

it

to

dealers

who

take

away by trucks and sell and
ice

retail

zations

buyers.

that

pendable

have

delivery

Retail

containers

it

serv¬

organi¬

developed

service,

de¬

to

stuff

and

to

in

anhydrous
in

by

ammonia.

bottles

like

nozzled into the
by specially

furrows

gas-jetting

for

a

tractors.

fertility

not

to

It

be

The prospectus of Nov. 19, 1952
Suburban

Propane

with

955,521 shares of common, follow¬

and ing

conceivably

143,000

the

on

jogged

be

basis

of

It's quite
Gas

zation.

and

is

share.

a

well

a

any

asks

bit

a

results.

that General

expanding

When

Louisana
a

obvious

Corporation

tegrated

up

current

Today's quotation $12

one

in¬

organi¬
in rural

shares

of

$50

ESTABLISHED 18941

par

nating.

Total

zoomed from
in

1945

in 1951.

that

to

While

some

fasci¬

sales

have

have thought

of

gas

mains

sections

rural

more

would

give these distributors

a competi¬
rub,
efficient service
and
delivery, plus selling and instal¬
ling the appliances and tanks

tive

tends
all

to

the

hold
new

customers.

Also,
vehicles,

for

uses

drying, painting, and crop treat¬
ment
suggest sustained growth.
Further,
as
urban
population
dreds

additional

send

pressures

STATE AND MUNICIPAL BONDS

S.

U.

is

1,067,979,000 gallons
4,100,000,000 gallons

penetration

into

deal

of

thousands

of

hun¬

people

to

rural

edicts

or

can

force

francs, etc.

Congress ap¬
commission con¬
sisting of men in government whcr
have familiarity with the subject,
point

men

a currency

of

finance

and

others

wha

have had experience in this field.
With all due respect to my many
friends in that profession, I would

suggest that
on

the

are

mission
ories

U.

"What's

LPG

laws

no

But
our

whole

recommend that the

no economists be puts
commission because they
generally committed to soma
them to accept it at any fixed
monetary theory so strongly that*
value.
We have illustrations
of
they would have decided the issua
this all over the world today in before its work was
begun. Their
the fluctuations in the pesos, the best service would seem to me tcx
cruceiros, the sucres, the lires, the be as witnesses to inform the com¬

for

cooking?"
likely answer will be "General

This

1951,

sniffed at.

shows

ent dividend rate of 70 cents could

Gas."

is

in

equipped
makes

delivery

Suburban,

comes

and

ground

-

Suburban,

distributing

LPG,

customer

well.

Finally

The

the evidence to prove it.

and
as

with the government.
mending programs of great aus¬
1951, gross sales of General terity to enable their countries to
increase their stocks of gold
in
were
$8 million, $3.1 million of
this being sales of tanks and ap¬ order to secure sound monetary
pliances, so persuasive to future systems. They know that however
well they may
administer their
gas sales.
paper currencies at home, the test
For 1952 a fair guess of net earn¬
will come when that currency is
ings would be $1.25. nn each of
offered
abroad.
The
foreigners
the 520,000 common shares. Pres¬
will put the true appraisal on it,
For

Gas

manufacturing

others

contracts

S.

we

doesn't

even

fine

the

book

S.

U.

what

know

in

According

Bakewell's

money,

blameless

not

are

to
on

Treasury

our

historic facts and the¬

on

the subject. The commis¬
sion should be instructed—

Blameless

country.

own

Paul

Not

paper

is because the term "lawful
money" has not been defined by
money

on

(1) To determine whether or nof
should again use gold to re¬
deem our currency. If the answer
is yes, as I would expect it to
be,
then;
(a) How shall we go about it.
(b) When shall we do it.
(c) Shall the gold content of
we

If you present a $1Q bill for
redemption, they merely give you
the dollar be increased or de¬
another one, and if a $1 silver cer¬
creased.
tificate is presented for redemp¬
(2) To report its findings and
tion, the holder is given a silver
coin called a dollar and containing recommendations by July 1, 1954,
law.

65

cents worth

of silver.

I

All will

believe

that

in

this

way

a

is il¬ thorough study can be made of
logical and unsound. And yet my our entire monetary system and
heart has beat with pride when I out of it can come a paper cur¬
have seen the alacrity with which rency which will have the confi¬
agree

that such

currency

a

people all over the world have ac¬ dence of all at home and abroad;
cepted our paper money. Why is and I hope that our great trade
this?

The

reason

is

that the for¬

associations will support this sug¬

residence, and new cottages
eigner knows that our government gestion.
on
mountain, woodland
authorizes the redemption of our
seashore, new buyers of LPG

appear

CORPORATE BONDS

and

will be thankful for

LOCAL STOCKS

the

supply

hundreds

with

are

with
WALNUT 0316




ATLANTA

1, GEORGIA

LONG DISTANCE 421

side,

small

of

only

quite

RHODES-HAVERTY BLDG.

paper

tankful.

a

ounce

On

truck

a

there
two

under capitalized.

logical

units

companies

are

distributors
or

to

These

be

like

and

merged

the

ones

we've discussed, or to become the

nucleus

of

a

new

corporation.

money

in

gold

at

of goods available in this country
or

of converting them into gold.

hope I live to

see

and

tion.

proliferate.

W. Sydnor Gilbreath, Jr., Presi¬
dent
of
First
Michigan

same

Detroit

op¬

Fire

&

Marine Insurance

has been announced by
Hubert Lehr, Vice-President and

I Co.,

the day when

the U. S. citizen has the

may

Elected Directors

per

ly government or its central bank,
Corp.,
less a small charge for handling.
Henry U. Harris of Harris, Upham
So the foreigner is in the position
&
Co., and Robert R. McMath,
of having the option of using his
Chairman of Motors Metal Mfg.
dollars to buy from the vast store
Co., have been elected directors of

Portable pipe lines are profitable

they

$35

when presented by a friend¬

it

Secertary.
of

the

The firm is

Great American

insurance companies.

a

member

Group o£
j

Number 5186... The Commercial and Fimncial Chronicle

Volume 177

(193)

6

Pieferrei Stock
The

Steel

:

Production

Electric Output "

Offerings ia 1952

'

Carloadings

-

-

A

State of Trade

Commodity Price Index
Food Price Index
f

and

Industry

Auto Production

^

Business Failures

1949 and 76 issues in

1948, accord¬
ing to the annual compilation of
preferred stock offerings prepared
by Union Securities Corporation,
65 Broadway, New York 6, N. Y.
Convertible preferred stocks en¬
joyed another good year in 1952

J)
production pushed forward last week from the
reduced level of recent weeks as many industries resumed opera¬
tions following the widespread shut-downs occasioned
by the
Christmas and New Year holidays and that of inventory-taking.
While total output managed to hold moderately above the level

with

of the like 1952 period, it was under the near-record level attained
several weeks ago. In the field of employment, claims for unem¬

36 of

the

largest group, numerically,
last year, with 41 utility preferred
stock issues offered of the total
of 77

market

93

merchandise

becomes

very

strong

indeed,"

when

he"

invehtories

$75,500,000,000 at the end of
November, or $730,000,000 higher than a year earlier, the United
States Department of Commerce currently reports. After allow¬
ance for seasonal variations,
the book value of manufacturing,
wholesale and retail inventories

rose

test

for

■

offered in the total of
of

stock issues

This will put the test up to their sales forces. To the degree
that their sales people are successful, they will be in the market:
°~f6r. steel in the second half of the year*
Most observers consider;
it a foregone! conclusion that high production rates and, a tight

was

sold

last

department

yeai>end bid and asked prices. •'
; j

.

market will extend

Fresh

;;
.

*

•

:

y

v*

This is

'

>

Most steel

consumers

seem

to feel

they will fare better in

a

free market than they have under government controls.

tight steel market has been a lifesaver for small and
non-integrated producers.
Post-strike shortages have enabled
them to build healthy order books.
With the exception of some

specialty items their order books

steel supply and demand start

are now

loaded.

When

swinging into balance they will be

In

.

strongly from

"Ward's Automotive Reports," statistical agency, said
turned out last

week, 33%

more

The

Jan. 16, 1953

(Baltiniore, Md.)

a

Baltimore Security Traders As¬

sociation 18th anpual Mid-Winter
Dinner
at
the
Lord
Baltimore
Hotel.
Jan.

General Motors Corp.

divisions scheduled 43,8C5

cars

for the

week, their highest volume since late October, said "Ward's." G.M.

Continued

on

page

36

that

pleased
we

to announce

have retained

EWART R. ANGUS
(304 Bay Street, Toronto)

as our

New York Security Dealers As¬
27th Annual Dinner at

trialists, Charles R. Hook, Board Chairman of
Armco Steel, and Langbourne M. Williams, Jr.,
Freeport Sulphur, President; two of our sounder
government officials, Andrew N. Overby, As¬
sistant Secretary of the Treasury, and appro¬

enough, J. Thomas Schneider, As¬
Secretary of Commerce; and Vice-

Chairman

Hawthorne

the

of

Arey

January 8, 1953.




Wilfred

May

The findings are interesting and important in various direc¬
tions, as in supporting former ECA chief Paul Hoffman's apparent
gradual shift of position to urging discipline on the recipients of
our international largesse; in making available an invaluable guide

Security Administrator-designate Stassen: in indicating
abolish surplus emergency agencies; in depict¬
ing important Point Four results; and, finally, in showing the need
and opportunity for retaining objectivity in governmental inquiries
for Mutual

the opportunity to

into controversial questions.;

The overall theme that the ultimate solution to the

economic

problems of Western Europe lies not in the United States but in
Europe itself, is pervading.
r
/
:
/
v Questions explored include: the effect of United States tarkf
policy, subsidies, and quotas; conversely, the effect of other coun¬
tries' restrictions on imports of U. S. goods, especially, in the
consumer sphere;
means being taken to solve that seemingly
perennial dollar deficit problem; the impact of rearmament on
the domestic economies; impediments to private American invest¬
ment; and, quite novel, the possibilities of improved psychology
in connection with economic relationships. -

\

•

•

■

-

•

-V

-

-

Foreigners'Eyes

■

on

1

,,

,

succinctly urged,

.

White House

.

.

that, like Americans here, all-foreigners
are
intensely interested in our future policies to be instituted
under the new Administration.
They are worried about possible
further aggravation of our tariff attitudes, per the recent "High
Tariff" assurance from Commerce Secretary-designate Sinclair
incurring the expense of promoting enterprises for exporting com¬
modities to the United States.
The transatlantic producer must

arbitrarily reversed if and when he actually succeeds in finding
a receptive market in the United States.

(Detroit, Mich.)

Jan. 22, 1953

Bond Club of Detroit 37th
nual

Dinner

Cadillac.

Bond

Traders Club

of

Chicago

Club.

Twin

(Minneapolis, Minn.)

Security

City

Traders

Winter Dinner.
Jan. 29, 1953

(Kansas City, Mo.)

Security

City

tariff policy affecting him, will not be

some

"public relations" field the mission interestingly reports
of our tariff actions which are apparently unimportant

unknowp to our citizenry, as those affecting dried figs
raisins, have profoundly disturbing effects all over Europe.
or

lation of officers at the Furniture

Jan. 27, 1953

our

Deflation Psychology
In the

that

(Chicago, 111.)

Jan. 26, 1953

that

An¬

Sheraton

the

at

assurance

Also in the realm of the

people's psychological climate, anal¬

the situation here, is new and increasing awareness in Eu¬
ropean government, business, and even labor circles of the need to
deal with inflation, even at the cost of invoking unpopular meas¬
ures.
Our group reports that in Greece, where Marshall Papagos
won an overwhelming victory, one of his
ministers very wisely
commented that the finest product of the victory would be the

opportunity it would give to invoke some measures
popular.
Investment

Traders
The

Guarantees

Frowned

likely course of private capital investment, rendered par¬

(New York City)
Stock

the Uruguayan

Continued

■

American

that are un¬

On

ticularly important by the UN's recent passage of
Feb. 9, 1953

on

page

Exchange an¬

election.

Feb. 11, 1953

(Boston, Mass.)

*

Bo'ston Securities Traders Asso¬
ciation

Winter Dinner

Annual

at

Plaza at 6 p.m.

We

are

Edgewater Beach Hotel.
20, 1953

Investment

to announce

(Philadelphia, Pa.)

and Auguste

'

the election of

Miller H. Pontius

Edward B. Conway

of America winter meeting at the

Feb.

pleased

(Chicago, 111.)

Investment Bankers Association

Richard

'.J

i

as

Senior Vice Presidents.

Traders Association

of Philadelphia annual Mid-Win¬

Benjamin Frank-

liri Hotel.

R EBERSTADT & CO. INC.
NEW YORK 6, N. Y.

39 BROADWAY

Texas
ers

Group Investment Bank¬

Association

of

American

Spring Meeting at the Plaza Hotel

and

ogous to

May 7-8, 1953 (San Antonio, Tex.)

LEHMAN BROTHERS

A.

Export-

Import Bank.

have

ter Dinner at the

Consultant in Canada

as

sociation

Feb. 13-14, 1953
are

project,

this

Weeks, which have already been worrying European businessmen

16, 1953 (New York City)

the Sheraton

We

of

the Biltmore Hotel.

nual

year ago.

outcome

business in other

The inquirers report

Association Winter Dinner.

preceding week and 68% higher than the 62,500 in the like week

happy

on

spelled out in the so-called "Sawyer Report,"
seems importantly due to the makeup of
its
participating personnel. The team was com¬
posed of two of the nation's leading indus¬

j

105,223

than the 79,125 in the

devoted to the effect

And six specific constructive suggestions are

Kansas

the holiday-shortened previous two weeks.

was

business policies
countries.
our

,

Investment Field.

the first to feel it, concludes "The Iron Age."

Automotive production last week bounced back

-

*

Annual winter Dinner and instal¬

The

were

of

an

Many manufacturers apparently are paying little or no atten¬
tion to restrictive government quotas on steel use.
This is evi¬
denced by production targets much higher than can be realized
from scheduled allotments.
This is interpreted to mean that: (1)
They have already discounted steel controls, or (2) they are con¬
fident they.can fulfill material needs even under government re¬
strictions, "states "The Iron Age."

cars

ground inquiry on a visit through 10
European countries from Oct. 31 to Dec. 8 last,

■v.

The big production push of auto and appliance industries is
being reflected in emergency production demands on their sup¬
pliers. Stampers, particularly, report business rivaling their boom
Of 1950.
Many of their orders are short run jobs labeled "emer¬
gency, rush," states this trade authority.

among

EVE N T S

-

~

,

important indication of steel market strength. The
auto industry has long been the backbone of the conversion mar¬
ket, and is the steel industry's biggest customer. Operating under
strict government controls, last year it received over 17% of total
finished steel shipments and in 1950 21.8%.

wire and

the

Particular attention

t

COM I NG

.

up

this week. "The Iron Age" has learned that at least two of the
biggest auto producers have booked conversion steel through the
second quarter.
The third member of the Big Three is expected
to follow suit.

-

W-

through the first half.

evidence of strong steel demand has been turned

Commerce Charles Sawyer's recent review of current European
business and economic problems and progress, gleaned from on-

and the remaining 14 issues

which each offering was made;
dividend rate; issue price, and the

/,

Some Realism About Our Foreign Aid
At long last a Presidential mission has come through with a
realistic and useful result!
We refer to outrgoing Secretary of

sistant
pre¬

1952 offer¬
ings lists the 77 issues alphabet¬
ically and then gives the month in

.!

;

By A. WILFRED MAY

priately

industrial

22

year.
;
The compilation of

Manufacturers who have been clamoring almost with-"
put letup for more steel will likely get a chance to find out how
.

stock

ous

showdown.

.

1951

over

preferred

store, finance,
retail chain and food companies.
Nine preferred stock issues were
placed privately in 1952, against
11 such placements in the previ¬

in

.

rep¬

offered included shares of chem¬

$450,000,000 above the Octo¬

much they can use, this trade paper notes.

total

ical,

consumer durable goods is approaching its
nearly three years, reports "The Iron Age*"
national metalworking weekly.
Lifting of controls and everincreasing steel production are expected to pave the way for a

real

This

preferred offerings.

year,

ber total.

The market

utility

were

ferred

totaled

increase

an

37

issues
A

Business

first

preferred issues.

resented

declared.

„

In

Public utility stocks constituted

goods, Mr. James H. Jewell,

Prior to 1940, Mr. Jewell added, "new households
were formed at an annual rate of about
500,000. That rate will be
doubled this year. If we add to these figures the demand for new
products to replace worn-out and obsolescent household goods, the
this

issues

features.

ahead."

for

total of 77

carrying conversion fea¬
1951, of the 93 preferred
issues offered, 52 had conversion
tures.

Vice-President of Westinghouse Electric Corp., predicted that de¬
mand will hold high for the next 10 years.
He based his forecast
on the "millions of new househdid^ expected to be formed in the
years

the

offered

ployment insurance benefits rose slightly, as was the case in the
prior week, but they were less numerous than the year before.
consumer

total

offered in each > of the years 1951
and 1950, 69 preferred issues in

Total industrial

Discussing the subject of

Observations...

of 77 major issues of
preferred stocks- was offered dur¬
ing 1952, compared wtih 93 issues

Retail Trade

January 15, 1953

.

.

■

'

16

6

(194)

The Commercial and Financial Chronicle

best
change of adoption is for
counting vault cash as. part of
required reserves.
This proposal

Proposed Changes in Bank
Reserve Requirements

the

Douglas Committee

ings

and

Professor of Finance and Economics,

favored

University of Pennsylvania

munity.

by
We

hear

time

Prof.

as

of credit control.

means

sional

hearings

cation of

controls,

bank

current

whole, cannot always be relied

as a

inflation

or

on

'

The old view of bank

is

reserves

they are primarily for li¬
quidity.
This view, on the evi¬
dence

of

the

tion,

is

cooler when

Patman

by

establishing

ments,

apparently by

The

spokes-

for

men

be

all

25

supposed

or

but

the

primary
lies

reserves

of

of bank

Whittlesey

importance

in

their

deposits.
by,

a

This is the view

others,

among

the

serve

System and by many bartkers, especially those in metropoli¬
areas.

another

aspect of

that

deserves

reserves

attention

ceived.

than

That

is

;
*

the control of credit
higher

reserve

has

enforced

by

means

holding

'-by

of

of
is

it is

as

.not

credit

reason

control

favor

by several
why they did

subjecting

bers to the
ments

given

bankers

same

to

these

the

they

authorities

approved

reserve

The

niary

a

in¬

are

exempting

use

say,

non-

the ground that
check on the
raising of
on

requirements.
influence of direct

considerations

all

enthusiasm

types

Federal

for

the

the

on

sulted

in

would

be

of

of

of

the

have

which

re¬

higher interest rates. It
pleasant to believe that

this
particular Accord,
the
re¬
markable accord between
Federal
Reserve
authorities on the one
side and bankers and other
lend¬
ers on the other
side in maintain¬

ing that higher interest rates

desirable,'
tion

of

the

creased

processes.

however,

that

influenced

the

policy

the

ing.

And

that

the

I

by

has

it

the

warn

greatly
to

you

enthusiasm

on

many

paper

the

delivered

by

in¬

Whitt¬
American Fi¬

nance

Society, Chicago, III., Dec. 28,

of

the

part
con¬

Prof.

at

meeting

the

steady and substan¬
in

pioduction

of

a

on
relative supplies and on
psychological attitude of the
buying public.

the

the

policies
made

followed

since

significant

any

There

con-

true

re-*

of

wholesale

prices.

It

market

not

were

member

Similar

is

to

requirements

various

other

sup¬

plementary control

is

devices.

the

criticisms

most

rected

that

the

part

against them
of

none

sufficient

to

them
do

is

the

out, but
predictions
were

The

vance.

is

ever,
ent.

of

It

something
is

devices

in ad¬

how¬
differ¬

at

some

or

itself.

issue,

quite

whether

these

di¬

perfect

job by

relevant

For

to prove

seem

The point can be conceded

borne

positively than the Chairman

more

widespread opposition

least

virtues

possess

which may, under conceivable cir¬

by possible

of the Board of Governors in 1.948.

non-mem-

Likewise the factor of cost to the

cumstances, outweight their dis¬
advantages. And further, whether

Treasury

the

and

hostility to

and

The op-

there

as

that

require--such- alarmist

is,

to additional reserve

sufficient

and




1952.

serves,

by * sheer

inertia

change.'**

from

was,

broad

a

\ nomic standpoint, of minor

'/

eco-*

conse-

general controls

high favor

in such

now

reasonably be

may

ex¬

considerations ,;cany b3" quence.

and

back

of

introduced

banknotes

in

remote

supplementary

were

importance

National

notes

limitations
with the
to

the

did

not

which

become

went

ex¬

along

security

reserves and not
themselves.

reserves

Special security

reserve require¬
essentially, a device
for compelling banks to hold the

ments

are,

securities

which

In the

reserve.

they

ogy,

are

constitute

themselves,

istrative
The

for

Act, it will be recalled, was to in¬
duce banks to acquire and retain
government

support
been

securities.

for

the

Recent

has

requirement

strongest among those who
this provision a means of
the market from the

in

saw

insulating
sale

of

such

security

must

also

standpoint
The
to

secuiities

basic

cash

resent

be

viewed

of

cost

fact is

reserves
a

the

that

in

the

bank.

contrast

complications.

rep¬

asset.

by

The
some

bankers who looked upon
security
reserves as a

cash

partial substitute for
Given

reserves.

there

was

this

preference

a

choice,
for

re¬

in

serves

earning, rather than in
non-earning, form. On the other
hand, they were opposed by other
bankers who looked upon them
additional to the cash

quired.

With

bankers

feared

as

that

the

as

re¬

choice

security

re¬

would compel them to hold

earning
or

this

reserves

assets

otherwise

in

less

less

profitable

desirable

form.

Prospects of Reserve Modifications
An

evaluation

of

the

prospects

of all the modifications of
reserve

requirements

mentioned
in
the
Patman documents is too
lengthy
for inclusion here. The
one sug¬
gestion that seems to have the

h

'

materials'are

Patman

ever,

k

vf

by life

bv

f.

That the first test of any.
is its ability to

control

should

,

many possible
exercising control over
the expansion of bank credit will

be

widely

more

of

cause

these

still

whether

shall

we

direct

more

such

recognized

documents.

tell

can

the volume of

on

Only

obvious
in

defense

these

that

items

est

rates had

been

thing

as

-thetical

,'

bad

a

under

emergency,

of

and

then

judgment and

even

expertness.

ox

banK

centiai

with.
There

defense,

General

policy

prove
not

affective

at

another.

That

at

one

time

and

one

l765

Water

o

Mr.

y e s

was

partment

for

&

Brinkman,
Frederick O.

Cloyet

of

She¬

boygan.

the

Inc.,

and

prior thereto was with Cruttenden
& Co., and Geyer & Co., Inc., in

it

be

may

re-

Francis Abshire V.-P.

case

J. R.

It

rather

than

the

wholesale

of

.

I.

elected

been

the

a

Vice-President

of

firm.

Gheszpeake & Ohio Ry.
Equip, Tr* Cifs. Offered
Salomon

Bros.

&

Hutzler

and

market

associates

general

15)
$7,200,000
Chesapeake
and
Ohio Railway Equipment Trust of
1953
3%
serial equipment trust

credlt, ,e0"tr°!s ®ere
y rE~
sp°nfbl? fOT.tbe downward move™ent

State
Building, announce that
Abshire, manager of
municipal
department,
has

Francis

Conditions

that general

appears

Phil¬

National

Commodity Prices

conditions

Phillips Inv.

HOUSTON, Texas—J. R.
lips Investment Company,

prices

are

offering today (Jan.

certificates, maturing semi-anunuaLy Aug.' 1, 1953 to Feb. 1T 1968,

since

far y ln 19oi' " ,wl" be rteca11^
why it is so essential to main-■ if,a consider a ble drop m both
tain a full complement of Federal.
wlml^al° ^
prices ocReserve instruments of
policy.
cuired in 1948-49 at a time when
the
is

Comy,

Heronymus

•*

kept from ris¬

Market

Affect

is good unless it does work out as
intended. Both ideas must be in¬

terpreted in the light of conditions, for it is quite possible, that
a
particular
instrument
may

n

a

formerly in
charge of the
trading de¬

Presumably -in a degree that couId
Perceived, have not been fultilled.

in¬

no

p

North

.°

utmost

is the further thought that

with the Mar-

shall

would

parked, is necessary in the

instru-

conditions

become

associa ted

C 1

<,

eept

have

Street.

Regulation W where the correment of central bank poliqy that :l9l l0n between changes in. the volworks; there is only bad adminis- u™e
of, consumer credit and
tration of it. While this is a valid
f^frS'.ln+Fmf1
Hegulaprinciple it is necessary to On-:*1011
18 dramatically apparent,
derstand clearly what constitutes
n ;an^ case, it is important to
good and bad administration.
In
recofnfe ^at the positive arguparticular,
good * administration ment fo1 the abandonment ot a
signifies making no use at all "of support, policy, that it would have
the more stringent measures ex- L^e restrictive efiects mentioned,
such

W.

Brown,;Jr.

ing cannot, of course, be empiri-; Chicago.
cally disproved.
No such hypo-

Bank

One is tempted to say that there
no

and

Charles

*

-have been stilly greater if inter¬

country,

Central

-.The

increase

—in

Administration

.

^ * -d
eitect.

slSnltlGant deterrent

credit, deeven

*

~;

Fred O.

—

VCloyes

tb^view /PPear vindicated tha

connection with banknotes—in the
earlier history of this

is

\.

deposits that have shown the mou
Tapld ,change but ln. n° wtay d°s

how

toward

of control

bank

Bad

j

$bange °f policy than before; a,
d'"6!'6"1 tlmfes
has been de
^and.(depofhs' ^ency or time

vices which have received greater *

and

u

or

recognition abroad and

Good

r

*

be-

or

move

means

taxation,

as

V ':r'7

.7.7

£+«»£* was per-

of

ways

,r'\ (Special to The Finance Chronicle) 5

??
a
have con mu
o up o
self-evident.,the Present The expansion ol

be
are

reserve re¬

Gloyes With '

Issues^

Corporate security

•„

Marshall Company

espe£ia"y tor
money- wfe
mu$h heavier following the Ac-

plans for extending such
measure

And that there

to

/. MILWAUKEE, Wis.

,e

.

Sny lto' fore

control

-

sav-

"

control.

T

com-

mutual

and

market
undervalue

open

alternative devices, of

Fred 9.

gov

insurance

ai<,n

and

quirements are by no means the
last or necessarily the best:' \ •'

gd ^9 °y nvthSiJmdre'
J' ,V

how-yf*.
the-

various

rate

which modifications of

be

J*}4

Ld

They have helped,
to focus attention on

strument

they do not

favored

was

banks.

proposal
from

to

non-earning

proposal

by

reserve

in-

par,

would

companies

,

of-.stopped from selling government',
borrowing by corporations would
be checked, and the rise;in circuplating medium would be" brought

some;

visions.

the

reasons

discount

;

.

governments to fall below

calculated to lead to any immediernments
ate modification of reserve
Pro-*--

"locking-in" de¬

One of the main

:

,

mentioned above, aau
especially out of probable admin-,

Patman terminol¬
a

k-

H was maintained that by al- operations
interest rates to rise, i.e.,; some of the

re-..-

were

rapidly

that

reserve

against increases.',
Opposition to these, de-

plans

which

them.

fact

assets -rrlalns"

vices also arises out of features of. surance

the

time

The

against

reserves

quirements

duced the great German inflation
had
security
reserves
behind

serves

degrees

lesey

a

I

is

expect

lenders for general credit
trols will become
A

notes,

when

too

bonds

from the present status of demand

fact

profitability of lend¬

of

'

are

distilla¬

pure

intellectual

suggest,
strongly
that

was

The

Bank

time

a

atti¬

lenders

policies

Reserve

at

The
pecu¬

tude of bankers and others
toward
credit control is manifest
in the
current

and

tribution to the curbing of inflation and more specifically to induring. j< the
current
downward

so-called

reserve

with

against circulat¬

reserves

ing medium.

not

experience

the provision in the National Bank

making greater
instrument. That is to

was

security

had

Because

not subject

are

from

member banks

this

have

vice.

requirements, they said,

Reserve

of this

We

require¬

member banks.

as

hibited

non-mem-

reserve

non-member banks
-

deposits is precisely be¬
cause
such security reserves are
not necessarily limited in amount.
on

Bank

undoubtedly be simplified

the

why security reserves do
provide the traditional sort of

cessive may be attributed to other

it less expensive to
banks controlled. One of the

member

*

on

non-

interesting points in the en¬
tire Patman discussion of
reserves
is

as

rela-

most

*

reserves,

of

making

the

Much of

public

The

problem

could

re¬

requirements

earning assets.

; tions

'

it

so much to the control
the

to

deposits.

physi¬

was

they are deposits, were of this character.
Opposition to The Reichsbank notes which pro¬

non-earning assets.

to

on

onward

that

\

*

reserves

time

reason

not

National

There is still

more

face

-

of

being

representatives of the Federal Re¬

required

it

assets,

the

and

of

banks

which were behind this
conception of bank reserves. The

controlling the volume check

expressed

banks
basis

ber

secu¬

of money

means

I not

cost

aspects of money, has been
colored by the commodity origins

prevailing current view is

the

tan

Bank

Smith's

thinking

our

R.

texts.

that

Accord

for

growth

great variety of goods to exert its

predictions that abanextension of-doning .par support would lead to
requirements to non- -chaos in the government bond

position is influenced

.

other

C.

Dr.

t

r e c e n

be.

to

Adam

signified specie which

of

The

credit

pos-

without have

under present conditions.

traditionally

are

cally limited in amount.

in

few

very

reserves

from

years

ago '

Not

Reserve

trend

Acco'd, with

effect

opposition;; unwarranted from the start—even
to render their adoption
unlikely..though no one -expressed them

proposals,
discussed
at
length in the Patman docu¬

cash

pub¬

lished

;

than

Security

Are

Federal

downward

the

.

in

nearly
texts

more

b-

ex- -

pressed

"Special

re¬

peatedly

While

the

since

been

considerations

same

But it is on the positive pected to require supplementing
dis¬
counted on to prevent the adop- arguments that were advanced for in some not
improbable future.
cussed by indicating
what they tion of less
conventional meas-; allowing
interest rates to rise
My own guess is that we are
are
not.
They are not a limita¬ ures such
as
special security re-ithiat the greatest uncertainty re¬ tending today to overvalue the
tion on deposits in the sense that

11

p r o

ably

r

comes

ments, for requiring special
rity reserves can best be

au¬

thorities.
would

some

state

banking

the

Contrary to what has been

for

com¬

prob¬

first

at

the added fact that there has been

requirements,

uniform

Reserves"

deposits

non-earning

same

member

What

Banks. *

further power to raise

as

that

and

most

to

these policies are directed toward

many

bankers

investiga¬

tial

to

The

prices

time

suggestions; trend

lower, rather
higher, interest rates.

earlier

had

.

serve

time

to

asserted,' it is by.no
balances held with:the means certain that the
Treasury-

restrict

to

such

still

held

.

the

on

shock
in

trol.

would raise other problems which
make its adoption appear out of
the question.
Other

the

that

account

rude

a

thought.

general methods. of Federal Reserve credit con-

of; interest

payment

than

brought

to

time

able

should

we

overconfidence

com-

expect

from

deal

Reserve

adding

economic stability.

preserve

also

policy would make it

a

sible

to prevent

upon

reserve

such

credit

warns

banking

hap-

_

produced by Congres¬
produce immediate modifi¬

provisions, and

reserve

about

the

should

war
with
accompanying
modity shortages was less

merely be repeating the mistakes of the '20s, which

generally

may

good

Federal

Holds data

not calculated to

are

a

pen

proceed-

be

to

seems

If that

emergency.

had the blessing of the Federal
Reserve authorities at the time of

By C. R. WHITTLESEY*

Whittlesey, in pointing out prevailing view of importance
of bank reserves as means of controlling bank deposits, rather
than as a source of liquidity, reviews opinions expressed in the
Patman Congressional hearings regarding efficacy of reserves

difficulties in case they are not
adequate to deal with some future

Thursday, January 15, 1953

...

rea-

inclusive.

son

priced

The

certificates

to

yield 2.20%
according to maturity.

^

'are

to

3.10%,

to

be

•

support policy
was
m
lull
discon-.- sway. Following the first inflacerting uniformity of opinion that tionary rise after the outbreak of

The

.

There

the

general

been

shown

means

be

is

a

at

present

credit
to

be

a

controls
an

have

effective

of

curbing inflation. It will
happy outcome indeed if the

general

controls

prove

equal

to

preserving an acceptable degree
stability in the economy. There

of

is

the

danger,

ceptance

of

however, that

this

comfortable

fighting
stable

in

several

weeks

in

1950,

only

to

with

the

start

was

existence

as-

port

policy.

reactio-n
of

p

an

It

from

road

held

sel
and

period of

autumn

the

of

500

Chinese

was

apparen

pievious

ly

overbuying and a reflectTon of
the growing belief that a general

se¬

70-ton

freight and passenger

switching

locomotives,

hopper

and

cars,

250

hopper cars, esti-"
$9,012,454. Issuance
au¬

thorization by the Interstate Com¬
Commission.

merce
'

a

road

of the certificates is subiect to

sup-

wave

electric

mated to cost

easing of
evented by the
bond

are

standard-gauge rail¬
equipment, including 25 die-

70-ton 'covered

a?ain

This

active

the

a
.

upward

of

war.

not

of

the

leap

phase of the

prices

ac-

sumption may lead us to rely too
fully upon these methods and
thereby involve us in unnecessary

Korea,./ prices

declined for

or

certificates

cured by new

Other

writing

members

of

the

under¬

group are: Drexel & Co.;
Union Securities Corp.; and Stroud
& Co., Inc. 1
/''
•
' -'

Volume 177

Number 5186

The Commercial and Financial
Chronicle

....

(195)

You Can't Eat Government Controls
Or Beef Rollback Orders!
By HON. ANDREW F. SCIIOEPPEL*

government control program

petrated

hoax and

a

One

seventy-seven

to

ago, the respresentatives of
original 13 colonies affixed

years

the

urneme^h°

the

free1

*

Independence.

°r

years

have

we

concepts

the
a

seen

many

the

upon

life—concepts of

colonies, but
laid

Economy"
It

Scho.ppei

high

rights—that
among these

little less "one world-ism."

a

1 ienable

a

n

is

high time that we begin
teaching a little Americanism and

with certain
i

ah

Time to Eliminate the
"Controlled

men

endowed

are

time

taken

to

that

positive

eliminate

It is

Steps

this

be

so-called

life, liberty, and "controlled economy"
system and
pursuit of happiness; and that return
to the
American

the
to

ments

are

these

secure
are

govern-

instituted, which
the

of

asked that

derive

.

.

end

for

We went to

.

terms

not

t0

seem

armchair

to, produce

of

stockmen

leaders'Vhe

top-flight

a

Hme that

}he wav°most oSf

and. bureaucratic

tape. They just can't
ize

that

in the

is the

their

stead

of

servant

master.

Some

when

to real-

seem

of

the

Salle

in

well

remember

"controller"

1951

Mike

ordered

10

a

1 believe the feeling of cattle-

as yet

.

believe

+

it

that

if

the

tab1®-

beef for the

'/»

..

.

trnrip°inaCfee,w
down—live
-

llve

and
a"u

fmJic
finished
ihhmicu

i

«m't be carried

Washington by
agent who
Let

me

a

who

hazards and risks inherent i.i

never

take

the schemes
-

—

slacken off- That feeders with

no

who Sacrifice

me

informed

we

can

be

This is under

circumstances

110

to

buy,

expect

Controls Mean Decline
I11

You
that
f

men

Farm

in

livestock
UVVSWVK

Income

the business
pIOuuc»
products

Pe construed

to

as

an

eradicate
NEW

inc0^p

from

do-gooders

and with the price of livestock

me

with

.

interest

.

Continued,

business

my

on

offering of these securities for sale,

or as

an

a

ISSUE

past

/

.

place

\ \/

/

government

SINCLAIR

people, and

$101,758,900

■

OIL CORPORATION

who believe

our

in the doctrine of free enterprise,

the
establishment of the fundamental

On April 30, 1953, Public Law
429, which provides the authority
for
price controls, expires, un-

law

of

the

principle

land,

has

freedom

the

been

over-riding

to

guarantee

opportunity for the.
individual and to insure that
gov-

ernment remain the
servant,, and
not the master
of, the people. That
was
the
basic foundation
upon

which

our

country

From the very
life
we

national
guarded
that

early

of

1778

the

American

control,

a

Con-

declared

resolution

in

a

that:

-

"It hath been found
by experi¬
that limitations on the

prices

commodities are
effective for the

not

only

purposes

conditions,
the

oppose

evil

consequences

to

of

the

great

detriment of the public
service and grievous oppression of

individuals.

;

.

petrated

the American

on

of

American
•

In

prospered

system

1933,

of

under

free

however,

en¬

be¬

cause of world
conditions and cir¬
cumstances beyond our
control, a

depression,

was

and

it

with

visited
born

was

strange philosophy.
For twenty
watched men

liberately,
norance,

or

whelming
human

'

:

upon
a
-

us.

new,

years

we

best

—

have

The

expire

over-

throughout

at

3:30 P.M.

Eastern

Standard

Time

on

January 26,

1953.

all

Subscription Price 100%

always been miserable
direct

control

pro¬

the

Administration
fraudulent since its

been

has

During and after the subscription period, the several Underwriters
Debentures, all as more fully set forth in the Prospectus.

incep-

tion.

The Administration has
been,
promoting inflation with ' all the
at

resources

its

disposal,

the

myth

while

that

in which the

by controls.

was being curbed
When the President

overrode the

may

offer

Copies of the Prospectus

the

inflation

may be obtained from the undersigned only in those States
undersigned may legally offer these securities in compliance

recommendations of

same

the

Wage

Stabilization

Wage,

Stimulation Board) in the-case of
the: mine
workers, the / smoke
blown

was

of the

gram

away-and

entire

with the securities laws of the
respective States.

Board

(which I choo~e to call the

have

in

that

whole

of

gram

controls

:

Smith, Barney & Co.

Merrill Lynch, Pierce, Fenner & Beane

,

The First Boston

the

Corporation

Union Securities Corporation

pro¬

became clear and

apparent.
high office de¬
Every one, exceot such as have
through sheer igone
crisis after'difficulty
with
thinking,, must

control

upon

foist govthe Amer-

many

f

,

u.n

long

years

we

have

to deride and seek

income,

costly to the
I

address

American

by Sen. Schoeppel
National

before
Cattlemen's As¬

sociation, Kansas City, Kan., Jan. 7, 1953.




.

...

ha*> lowered the

ducers'

men

u

I°od

share

problems
"An

Company is offering these Debentures for subscription to the
Subscription Warrants are being
issued as more fully set
forth in the Prospectus. The Warrants will

Blyth & Co., Inc.

•

Eastman, Dillon & Co.

Glore, Forgan & Co.

Goldman, Sachs & Co.

create

permitted

the

The

holders of its Common Stock, to whom

failures.

screen

♦

public.

For

at

under certain circumstances.

price controls
throttle private enterprise,
destroy
personal
freedom, and at their

deceit

long

excuse to

tean

at
$44 per share on or before January 15, 1958 and
higher prices thereafter, such prices being subject to adjustment

experience

another, in order to /perpetuate .realize that the
price control pro themselves in office and to estabgram has added to the consumers'
lish a basis or
ernment

Convertible into Common Stock

people

rience—and the evidence is

maintaining

and

grew

January 15, 1983

1953)

to

renewal

law concerning
price controls—because I believe
it to be a hoax and a fraud

in¬
pro-

posed, but likewise productive

terprise.

existing

Due

(to bear interest from January 26,

the section of the

our

doctrine

ence

the

Dated January 15, 1953

by Act of Cortintention, in the

have

of

We

my-

per-

beginning of

Congress, recognizing in-

price

very

of

vigorously

was established,

herent dangers found in
formal

light

is

been

as

tinental

It

gress.

zealously for vote-getting purposes. I will
liberty and freedom not be of that number who' reour
heritage.
As main ignorant — in spite of expe-

the

has

3%% Convertible Subordinated Debentures

less it is renewed

of

for my

has

pro¬

the

in

the

industry,

home state of Kansas

properly be called the

Lehman Brothers

Kidder, P^body & Co.

Stone & Webster Securities

Drexel & Co.

interest
cattle

Ripley & Co.

Lazard Freres & Co.

Incorporated

Corporation

White, Weld & Co.

been

processors,

your

of

and

Harriman

can

"livestock

January 12, 1953

kno'^

account

approximately 60% of all farm,

solicitation of an offer to buy, any of such securities.
The offer is made only by means
of the Prospectus.
or as

ta

turmoil

,-

on

as

wjth farm wageSj
taxef;>
rates,'and necessary production items going up in cost-

save

the
and

not

business,

g

from

chances

my

of

on

are

thinf/hllt

government
saw a live cow.

c'inature, but please

weights
wtug

peo¬

ple

that this business of cattle raising

consumer's

■'

cattle-

the

or

a regulation that will hold
the
hanlr
back the frnct nr ctnn Q norther,, 1
the frost, or stop a nnrth<*r

De-

They can't seem to get through
their heads that.when
government
controls are slapped on live cattle

the

dustry, and administered by

"Whenmake DiSalU.can how me
Mr it rain
tell
to

how to

of

in

consumer,

the check.

Agriculture reports then I'll begin to believe in regan increase in the number of cat- ulations. But until he can do these
tie, that of necessity means an in-! things by
regulations, I will know
crease

the

wrote the'following to CongressIf we allow the continuance o£
-an ¥oyd M. Bentsen:
price controls on the cattle fc-

to

These so-called specialists: write
u0i;a„„

to

seem

round

man, and the taxpayer picked up*

who. believe

the

D5cert,

the

Washington

Men

this
tins

worse.

you

return

to

we

in

philosophy that

not the

have been far

red

is pretty well stated by Joe
range-to-Finley jr 0f Encinal. Texas who

t?eef'sets

our

consumer

■

in-

life.

Washington for, the

jn

men

woul J

people

changes

office

oack-

great industry the situation

Jmen

offer

high

oTthe

suDoort

animal,

the

strictions

^h^ixktin^Wf^6

on

™gniL?11

wv,,vvil

hard

20 years—remove them and

footsteps,

.From the very
inception of
straggle for independence, in

in
we

the

am

Washington..

realize that the

weather, it is too much to
plague him with'governmental re¬

"cattle"

in

fnf
fhat* ^b7TheVme~'the "stockman I"/ indftry' and the hejp
r
y, r
stockman 0f us who are concerned with
^
and

synonymous

^a\' we an Know tne

for
established—and I

these

infested

life possible for any
other nation that
might desire to
pattern its course in our

,

weieht*

this strange breed of administrators and coordinators who have

to

of

way

to

was

II is

preserve-the inheritance that had
been passed down to us
by the
founding fathers
and
to
make
that

you

ways

way.

fr0m

de-

war

it

believe
the

might help

safe

high time that

whom

a

ahead

move

government

United

world

through

men

courage, and individual

genuity to

President

body to declare that

mocracy,

labor,

of

addressing the
States,

the

the

Permits

is

4?^? tT3-1* 5XoSi.te^'
that the United States
make

which

are

"rollbackers"

who

only way an a bun- rollback in the
price of beef. The.
dant supply of meat can be asvery next day Mr. Eric Johnston.
well know, there are
sured is to provide conditions that
approved a wage increase of from
to increase our beef
will insure that the business
of nine to 11 cents to the packin:
raoro.. raising cattle will be profitable, house workers. On
this merry-go-

^erms*
As
two

the

the

bar!

are

remember

the efforts of the controllers

beef

.

consent

On
April
2,
1917,
Woodrow Wilson,

to

system

rights,

their powers from
the governed.

Congress

«beef>

partment

truths

—that all

that

Yes, today, restrictions

attempted to put the entirecan't cattle
industry in an economic:
raising of) straitiacket
livestock is a year-round
job, and
But for the alertness of your
about a three-year job if
you want
These

fix-

Af

to develop fine figures
stop beef production."

enough, but I will long

.

grasp

order

and

supply of the country,

# control , of this program in
Washington haven't learned this

way of life.

down

these funda¬
mental

ofweakness^lazbiess

contrary to the Ameriran
contrary to tne American

SOlUieiy

realize

in

or

b/niLtheJ?sf A, abou!
of
the
potential

one-third

cer-

whalp

a

business,'

and the nation

IJt

dPnmidpnrv—n'iilncnnhiAc

solute^y

13

-

difference between the theoret-

and

ant1

the

iV

that ithprp

quit

npffrPciU+ShAfnoWt>jfhit catde th<;

fact that gov-

can not seem to

profit

back to too many grass-fed

goes

i

design-some of these

pure

fact

of

cut their
programs,

seem

to

S3S awhTc'r^achnl

of

x

tailingL?/ They just can side
rfj?e practical t
raising beef.

claimed the

glorifkaUon

simple economic

-

foisted

American way of

not

pro¬

hope

Washington

fellows just

independence

only

tlt

I wish I could
get across to
tain
bureaucrats in

our great-

was

alien

That historic

-

Place Fixing Does Not
Produce
Meat Animals

-or

enterprise

doc- the systeni upon which
built.
ness

r?'

Whether through sheer
ignorance

"

system — the system which our
forefathers fought and died for—

Declaration of

document

destroy

"wheat
"

■

do no* Produce meat
animals,

accuses

hundred

the

as

P*anrdng and Price

fraud, per¬
Sen. Schoep-

on

well

as

a

the people for vote getting
purposes,
1
Truman Administration of
promoting inflation while
contending it was combating it by controls. Says
price control -V
program has added to consumers' food
bill, lowered producers'
income, and has proven costly to processors. Points out
only
way to an abundant meat
supply is to insure profitable cattle
raising. Promises fight to end OPS.

pel

r>

the

U. S. Senator from Kansas

Calling

ftate"

state.'

7

Dean Witter & Co.

page

2§

The Commercial and

8

Financial Chronicle... Thursday, January 15,1953

(196)

Corporation—Special report—Loewi & Co.,
Milwaukee 2, Wis.

Shell mar Producis

225 East Mason Street,

Standard

Dealer-Broker Investment

Power

understood that the firms

is

send interested parties

to

Ventures

Guest

Company—Analysis—W. Keyser Manly,

& Die

30 Broad Street,

It

Mimic. Bond Women

Co., 120 Broadway, New York 5, N. Y.

&

Superior Tool

Recommendations & Literature

Gallagher to Address

Light Corporation—Analysis—Sutro Bros.

&

New York 4, N. Y.

Limited—Analysis—L. S. Jackson. & Company, Lim¬

ited, 132 St. James Street, W., Montreal, Que., Canada.

Bondwomen's

mentioned will he pleased

of

York

on

Beaver

Notes

NSTA

&

body

Security Traders Association of New York (STANY) Bowling
League standing final first half are as follows:

Securities—Booklet of 1952 yearend prices—New York Hanseatic Corporation, 120 Broad¬
way, New York 5, N. Y.
Also available is a tabulation of
preliminary New York Bank Earnings.
,
Insurance Stocks—Table of comparative values—Geyer & Co.
Incorporated, 63 Wall Street, New York 5, N. Y.
Holidays

the

in

Department, 55

Advertising
Y.

Company,

Donadio

Broad

(Capt.), Demaye, Whiting, O'Connor, Rappa, Seijas

Murphy

(Capt.),

—

Krumholz, Rogers, Gold, Young—
Meyer (Capt.), Kaiser, Swenson, Frankel, Wechsler, Barker
Goodman (Capt.), Smith, Valentine, Meyer, Farrell, Brown
Hunter (Capt.), Klein, Weissman, Sullivan, Murphy, Sea-

Street, New

right

•

up-to-date com¬
parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stock*
used in the National Quotation Bureau Averages, both as to
yield and market performance over a 13-year period—
National
Quotation Bureau, Inc., 46 Front Street, New

Corby

Mewing (Capt), Bradley, Weseman, Hunt, Gronick, Huff—

(Capt.), G. Montanye, Voccoli, Siegel, Reid_
(Capt.), Craig, Fredericks, Bies, McGovern,___
Bean (Capt.), Frankel, Strauss, Nieman, Bass, Krassowich
Krisam (Capt.), Ghegan, Jacobs, Gannon, Cohen..:
Burian

Growney

47%
47
43

41
37
37

28%
28
27

5 Point Club

Point Club

200

Stocks for 1953—List of stocks favored

second half will

be

as

interesting

in the coming

BOSTON SECURITIES TRADERS
The Boston Securities Traders

Stanley Heller & Co., 30 Pine Street, New York 5, N. Y.

season.

as

the

It is now hoped the

one

just completed.

&

—

Memorandum

—

Hirsch

&

Co.,

Stone

&

Webster, Timken

C.

Baltimore Transit
50

;

James

Central

of

A.

Allyn & Co. is in charge of

C.

Underwood

Fred

J.

of

York

Broad-

115

City,
of

members

stock

leading

commod¬

and

Railroad

A.

associ¬

come

ated

the

with

Man¬

as

of
the
Municipal
Bond
departager

t.

Mr.

>

Peine

Boenning & Co., is handling out-ofRichard M. Barnes of A. M.

Charles

was

A.

the

of

firm

Tucker, Anthony

Detroit Bond Club
Annual Dinner

Charles

nounces

reservations for Philadelphia;
W.

Haven.

reservations for1 New York, and Leslie B. Swan of
Scranton & Co., reservations for Hartford and New

that

the

Annual

37th

Dinner will he held at the Shera¬

-

ton

&

Cadillac, Jan. 22. t
will be Charles J.
O'Connor, President of Reichhold
Chemical, Inc. Mr. O'Connor is an.
The speaker

'

report —The Glidden Company,

Three Senior Vice-Pres. Elected by

Eberstadi

Eberstadt & Co. Inc., 39
Broadway, New York City, has announced that Edward B. Con¬
way, Miller H. Pontius and Auguste Richard have been elected
Senior Vice-Presidents of the investment banking firm. All have
Ferdinand Eberstadt, President of F.

avid

world traveler and photo¬
grapher, and his hobby is the edu¬
cation of the

in

man

the

American business¬
modes

peoples in the

of

living

corners

His address

of the earth.

"World

Peace Through Knowledge" is an

expression

Company—Analysis—G. A. Saxton &

through

Fred

& Co-' 40 Wal1 Street,

education

and

recogni¬

Schwarzkopf Now

(Special to The Financial Chronicle)

R0^L^ircraot. S?rS°Stion - Analysis — Walston
Goodwin, 35 Wall
Street, New York 5, N. Y.

Edward

9,

way entered
in 1944.

Company, Inc.—Analysis—B.
Company, 44 Wall Street, New York 5, N. Y.

.

.

AMERICAN ENKA
EMHART MANUFACTURING CO.

KERR-McGEE

Troster, Singer & Co.
Members: N.

Y.

Security Dealers Association

Trinity Place, New York 6, N. Y.

Conway

Miller

H.

Pontius

Auguste

Richard

Mr. Con¬

the firm in 193-3, Mr. Pontius in 1938 and Mr. Richard

Mr. Conway heads the hew business department which, apart
from sales functions, handles the underwriting, private placement,
financial consulting and similar activities of the firm.
He was
;

To have and to hold for.
:

B.

been Vice-Presidents and are directors of the company.

Hoffman &

SapetLnir Heating & Lighting
G. Phillips and




belief

With White, Weld Co.

Analysis and review of the Cement

—

^ Lerner & Co., 10 Post Office Square, Boston

74

sincere

tion of our neighbors' desires and

Sulphur—Analysis—Garrett and Company. In¬
corporated, Fidelity Union Life Building, Dallas
1, Tex.
Piasecki Helicopter
Corp.—Memorandum—Smith, Barney &
Co., 14 Wall Street, New York 5, N. Y.

Capital gain

his

problems.

Pan American

Mass

of

that world peace can be achieved

Co., Inc., 70 Pine Street, New York 5, N. Y. Also available
a list of selected
Public Utility Common Stocks, as well
as
monthly tabulation of Public Utility Common Stocks.

is

Riverside Cement Co.

of

far flung

'

PiNew\ork15aiN~Y^nalySiS~StieglitZ

&

Co.

DETROIT, Mich. — Ernest B.
Kelly, Halsey, Stuart & Co., Pres¬
ident, Bond Club of Detroit, an¬

town

Co., 209 South La Salle Street, Chicago 4, 111.
Lehman Corporation—Bulletin on
changes in portfolio—Ira
Haupt & Co., Ill Broadway, New York 6, N. Y.
Pacific Power & Light

Peine

formerly with

Kidder & Co.,

Roller Bearing,

Company—Analysis—Cruitenden

that

reservations.

Company—Analysis—J, V. Manganaro Co.,

Company — Annual
Cleveland 14, Ohio.

Illinois

McCormick

F.

Co., Inc., is in charge of room

25

Broad. Street, New York 4, N. Y.

Glidden

1

Co.,

&

New

way,

reservations, and James E. Moynihan of J. B. Maguire &

ticket

Campbeil-Taggart Associated Bakeries, Inc. — Analysis — San; ders & Newsom, Republic Bank Building, Dallas 1, Tex.
i

President of

Association; Leon E. Day, Jr., Chas. A. Day & Co., Inc.; Alan
Leland, Geyer & Co., Incorporated; Warren A. Lewis, Weeden
Co.; John McCue, May & Gannon, Inc.; J. Russell Potter, Arthur

W. Wood Company.

Transamerica, and Tri-Continental.
:

Co.; William J. Burke, Jr., May & Gannon, Inc.,

the

Street, New York 4, N. Y. Also available are mem¬
on Erie Railroad, Phillips Petroleum, Public Service
Gas,

Oosdbody & Co.
Goodbody

m e n

of F. L. Putnam & Company, Inc., is Chairman
of the committee which includes: Robert R. Blair, Harris, Upham

&

Works

Association will hold their 29th
Hotel on Wednesday,

John J. D'Arcy,

American-Marietta Company—Analysis—Hill Richards & Co.,
621 South Spring Street, Los Angeles 14, Calif. Also avail¬
able is an analysis of Kaiser Steel Corporation.

&

10th

p.m.

Chas, A. Peine With

firm

ASSOCIATION

February 11 at 6 p.m.

Study of Cycles, 9 East 77th Street, New York 21, N. Y. (plus
a
chart of stock market cycles, projected to 1990—ask for
Chart C).

Electric

floor, at 5:30

announce

annual Winter Dinner at the Sheraton Plaza

year—

What's Ahead?—10 reports a year by Edward R. Dewey sent
to those contributing $10 a year to the Foundation for the

oranda

Broad Street office of the Chemi¬

Peine has be¬

This ends the first half of the

Stock Offerings — Compilation of 1952 preferred
offerings giving month each offering was made and
other particulars — Union Securities Corp., 65 Broadway,
New York 6, N. Y.

Broad

be

held at the 30

Charles

Hoy Meyer

W. Krisam ....228 & 222

stock

Water

meet¬

will

ity exchanges,

Preferred

American

ing

cal Bank & Trust Company,

50

New York.

"Highlights No. 21" a discussion of "An All Plastics
World"—'Troster, Singer & Co., 74 Trinity Place, New York
6, N. Y.

,

Gallagher

Werkmeister, Leinhard,

Tisch,

Greenberg,

(Capt.),

Plastics—In

s

Amer¬

The
P.

Frank

43

—

Leone

51

Pollack,

Serlen (Capt.), Gersten,

Over-the-Counter Index—Folder showing an

York 4,

Montanye, O'Mara,

D.

Manson,

Gavin

States, Alaska, Hawaii, Puerto
Islands—Booklet—Manufacturers Trust

ft

Points

Team—

United

York 15, N.

u-

Bonds

ica."

Insurance

Rico and the Virgin

dis-

"M

Built

SECURITY TRADERS ASSOCIATION OF NEW YORK

Co.,

&

nicipal

Stock Review—Bulletin—White
Company, 506 Olive Street, St. Louis 1, Mo.

Pea-

will

c u s s

Foreign External & Internal

1953

of

who

Also available is a list of Common Stocks for in¬
vestment and a bulletin with brief analyses of Alleghany
Corp., Baltimore & Ohio, and Wabash Railroad.
Casualty

P.

Kidder,

5, N. Y.

and

be

Gallagher,

and

Appreciation—List of common stocks primarily for apprecia¬
tion—Eastman, Dillon & Co., 15 Broad Street, New York

Fire

Jan.

will

Francis

Forecast—Brochure—H. Hentz & Co., 60
Street, New York 4, N. Y.

Rf^view

New

Club

the following literature:

15
Annual

third

the

at

speaker

meeting of the Educational Pro¬
gram
of The
Municipal

CHICAGO, 111.-—Fred Schwarz¬
kopf has become associated with
White, Weld & Co., 231 South La
Salle Street. Mr. Schwarzkopf was
formerly a partner of F. S. Moseley & Co., with which he had been
associated for many years.

With Link, Gorman Co*

formerly associated .with the Bostonlaw firm of Ropes, Gray, Best,
Coolidge & Rugg and later was; a -member of the legal staff of the
Securities and.Exchange.Commission. He is a director of Chemical

Fund, Inc., Hastings Manufacturing Company and National Starch
Products, Inc. He resides in Greenwich, Connecticut.'
-, Mr. Pontius has been in general charge of all sales operations
Of the firm for many years. / He was formerly associated with the
National City Bank of New York and the Home Insurance Co.
traveling abroad in their foreign service. He also served for a time
as a Vice-President in charge of sales for G. L. Ohrstrom & Co.
His residence is in Bronxville, New York.
Mr. Richard was Chairman of the Army and Navy Munitions
Board

during World War II. Previously he had been a partner in
the dry goods commission house of Lawrence & Co., Treasurer of
Ipswich Mills, President of The Spool Cotton Company and VicePresident of Pacific Mills. He is a director of Rio Blanco Copper
Company and Treasurer and director of Manhattan Eye, Ear and
Throat Hospital. His home is in Hewlett, New York.
.

(Special to The Financial-Chronicle)

MILWAUKEE, Wis.
S.

—

Norbert

Derridinger has become affili¬

ated with

Co.,

611

Link, Gorman, Peck &
North

Derridinger

was

Broadway.
formerly

Mr.
with

Gillespie & Wouters of Green Bay.

Harley, Haydon Adds
(Special to The Financial Chronicle)

MADISON,
Larson
with

has

Wis. —Maynard C.
become

connected

Harley, Haydon & Co., Inc^

First National Bank

Building.

Volume 177

Number 5186... The Commercial and Financial
Chronicle

(197)
contraction

1951, to resort to easier credit.
perity, if based largely

familiar

pros¬

"shifting sands of consumer credit."
"apparent" dollar shortage, and in considering inter¬

Discusses

be remedied

I

As

begin 1953 we Canadians
should, I think, not only take
stock of our many present prob¬
we

lems, but should consider also the
in which

ways

Providence,
fortune,

good
and

our

own

best efforts

have

bined

com¬

to

save

from many

us

It was the

stronger current of busi-

activity.
controls were

We

this
f

time,
ed

e r r

the

I
to

possible

"third

wave

of

armament spend¬

come upon us as

continued

increase.

to

My

that "by ac¬
design, the full force of
this third inflationary wave cre¬
ated by armament spending might
year ago was

a

or

be deflected

As

unfolded

the

over

year, it became apparent that the
third
wave
might
be
largely
after

The

all.

of

rate

armament

expenditure, which, as
I observed last year, was far be¬
low
the
estimated
rate
during
1951, rose during 1952 but not suf¬
ficiently to give much hope that
the March, 1952, budget estimate
of $2.1 billion would be fulfilled.
This meant a further postpone¬
ment of the peak rate of arma¬
ment

expenditure in our present
defence "build-up," and a conse¬

reduction, below the esti¬
mated rate of expenditure, during
the intervening period, with the
quent

result that inflationary pressure at

given time was correspond¬
ingly reduced.
Actually, the lull after the in¬
ventory inflation of early 1951
became sufficiently oppressive to
business and government to in¬
spire some measures for relief.
any

corrective

Three

available:

tax

reductions,

or

The

effect

1952-53

that

income

budget
a

for

heavier
than

1951-52. Never¬
a lighter burden
resulted

have

tax

July

were

taxation

of

was

would

the

impose

imposed in

than

on

to

burden

theless this

devices

reductions, price
easier credit terms.
of

was

over-all

if

the

rates, made effective
1951, had not been

1,

somewhat modified.

income tax

cuts

The device of

was

used, there¬

fore, only in the
that

the

negative sense
government forbore to

impose even greater burdens.
However, the cut in some excise
lower

prices

certain lines of

possible

consumer

on

durable

goods.
The heavy inventory position of

firms put severe pressure on
existing prices; and in certain
lines this pressure became espe¬
cially effective owing to the aboli¬
tion of resale price maintenance
by an amendment to the Combines
many

Act in late
duced
were

form

to

1951.

;

*An

the

again become

threat to the

the

allow¬

special deals.
p-)rice reductions
Muir

Annual

of

a

Canadian.

every

who

have

rate

that,

econ¬

standard. Under the gold
standard,
stable exchange rates were
pos¬
sible only because
prices and in¬
were flexible.
Today, with

comes

national

the burden of

even

I

than

$5 billion

per

In

year.

the

language of inflation, we have not
merely too much money chasing
too few

goods, but too much sterling and other soft currency chas'
ing too few dollars. This suggests
that

one

prices

delivered

at

of the share¬
Bank of Canada,

Meeting

Royal

.Montreal, Canada, Jan. 8,




1953.

profited from

certainty regarding 1953, will
scarcely be inclined to cast a
critical eye on the apparent means
their
present
happy
state.

to

Nevertheless, I believe it is
tial

that

consider

we

essen¬

very

not

or

our

care¬

as

consumer

whole.

a

nomic and political
the world.

falls

change rate.
want

to

eco¬

is

ment

less

often

immediate and gratifying to busi¬

result in

allow

the

exchange rate to fluc¬

tuate.
The

Articles

of

Agreement

encountered,

matic in

deficit countries

flowed out; at the
was

automatic

same

gold

as

policy

spending

world.
of

as

permanent

a

the

Fund

control

are:

without

the United

exchange
States, who

had it in the first
plaqe; and
Canada, whose government abannever

time there

monetary inflation

in the surplus countries to which
the gold went. The resulting shift

doned this part of the Fund Agreethe

eign policy.

Self-interest and high
moral purpose, then, lead in our

equilibrium.

to find its

to a common goal: the re¬
habilitation of the world economy.

standard,

that

is

is already evident in much
best in our economic for-

case

Ill

Meeting the Dollar Shortage—
(1) Decreasing the Demand
for

nosed

are

than

in

the

international

an

this

process

ment

ab¬

which

still

cured.

September,
dollar

own

1950,
was

Exchange control

be

loss of

dollar

can

reserves

lowed

our

of
to

were

pre-budget

1951.

If

check the

a time,
nothing to combat, in¬
it may intensify, the under¬

but it does
deed

lying

policy have been directed towards

rate

this end with

store balance in the international

most

seven

years

unbalance

dollar

some success, and it

drain.

moves

that

causes

contrast, a free
automatically to re¬

I

am

no

recent

view that free

convert

This

announcement

is neither

an

The

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

to

buy

any

of these shares.

4

New Issue

January 12, 1953.

1,101,451 Shares

General Public Service

reduction

reduction

or

an

important part in

creasing sales
prices at
material prices

and

retail

decline.

1952,

(Par Value $.10 Per Share)

General Public Service

Corporation has mailed to holders of its Common
on
January 9, 1953, transferable
Warrants evidencing rights to subscribe for one share of its Common Stock
for each two shares then held (with privilege of additional
subscription,
subject to allotment) as set forth in the Prospectus. The Warrants expire
at 3:30 P.M., E.S.T., on
January 23, 1953.
Stock of record

instalment credit

consumer

played

were

when

on

Th<# result

could tmly

in¬

maintaining

time

a

a

at

the close of business

raw

steady

a

Subscription Price to Warrant Holders

then,

be

Corporation

Common Stock

a

levelling off in armament expend¬
iture, our present boom might
seem, in retrospect, an unsound
and temporary one.
Indeed, the
economic pattern today bears no
little similarity to that of 1928 and
1929. Then, as in 1952, the expan¬
sion of

as in
concealed

inflation, with its attendant

$3.75 Per Share

dan¬

gers.

I

believe

that

a

sounder

The

undersigned Dealer Managers have entered into an agreement with
Corporation to assist in the dissemination of information with respect to
the subscription offer among representative dealers throughout the country.
During or after the Subscription Offer, Common Stock may be offered by
the Dealer Managers at the prices and pursuant to the terms and condi¬
tions described in the Prospectus.

pros¬

perity in 1952 would have resulted
from greater use of the two

the

other

corrective devices, namely tax and
price reductions.
These interact
with and reinforce one another in

promoting

a healthy expansion; in
words, the expansion they

other

promote will not be based

on

shifting sands of

credit.

There
sounder

is

consumer

hope

now

devices

for

that

the

these

Copies of the Prospectus may be obtained in any State in which the Prospectus may be legally distributed
from such oj the undersigned Dealer Managers or certain other Dealers as are legally
«

authorized

maintaining

to act as

dealers in securities in such State.

prosperity will be used more ex¬
tensively in the future; and it is
this hope that lends the greatest
support
which
seem

to

the

many

Stone & Webster Securities Corporation

high expectations
businessmen
now

to have for 1953.

Smith, Barney & Co.

Tucker, Anthony & Co.

II

Canada's

Stake

in

World

Hayden, Stone & Co.

Hemphill, Noyes & Co.

Lee Higginson Corporation

Economy
We must always remember

in

Canada,

hopes

and

immediate

any

statement

fears

future

that,

of

the

Paine, Webber, Jackson & Curtis

Shields & Company

Spencer Trask & Co.

our

concerning
must

be

set

against the tremendous expansive
powers of this young

and growing

economy.
In such an economy
there are many "built-in
expand¬
ers" that are bound to
make any

the
are

however, whether monetary equilibrium. I have con¬
we
can maintain stable exchange
sistently urged this policy since
In
international
trade, goods rates today merely by simulating January, 1950, when I made
my
must be paid for either in the exthrough monetary policy the autoporter's currency or in funds that matic mechanism of the the gold
Continued on page 24
It is doubtful,

along with other
deflationary factors, such as heavy
a

to

exchange rates

today prerequisite to international

f°r dollars.

occur

inventories and

the

In

accounts.

likely that the resources of

monetary

after the end of the Second World
War.

buying

this

free

for

able goods to a level quite as low
and depressing as that which fol¬

spree

when

set

level in the world

Nevertheless, in Great
Britain, fiscal policy and monetary

eco-

The

persists

in

Canadian

market.

gold

cannot

automatic; and its effectiveness is
greatly reduced by the inflexi¬
bility of modern wage and price

easily diag- seems

more

Today,

structures.

Dollars

Unfortunately, the world's
ills

of

sence

dur¬

on

of

throughout most of the
Today the only members

enforced reduc¬

an

consumer

we

exchange
control
yet keep our internal prices
and incomes
stable, we have to

but repayment of the debt
by the public in the future may

tion in

In other words, if

in price and income levels restored

but it

sales is

on

by

and

ness;
well

sustained

avoid

to attack the dollar

way

During the heyday of the inter¬
importance in national
gold standard, this type
of monetary deflation was au';o-

and to the economy

The effect

income

full-employment policies,
providing flexibility
increasingly upon the ex¬

present

prosperity is soundly based.
So-called
"easy" consumer
credit can be most costly both to
the

and

trol into existence

corresponds to her increased

nomic

Those

to

the International Monetary
Fund,
shortage is by decreasing the de¬ in limiting
exchange rate move¬
second, mand for dollars through a de¬ ments to
1% above or below par,
Canada has a
responsibility for the crease in the supply, of other
virtually legislated exchange con¬
health of the world
economy that currencies.

has

omy.

and there

trade-in

address

84th

the

over-

that inflation

re¬

other

Nevertheless,

holders

were

reductions in the

liberal

and

ances

Prices

extent,

some

concealed
of

that

corrected, and

taxes and the elimination of others

made

evidence

some

fully whether

reduced."

or

events

avoided

is

decline in activity has been

that

importing

are

there

into

chooses

policy will be tapped
pressure' the present boom, and those for spectacular symptom is of course sti11 further to reduce the supply
which might whom confidence has replaced un¬ the so-called
shortage of dollars of sterling and hence the demand

James Muir

cident

credit

on

Canada, on May 20, 1952.
experiencing the buoyant
effects of these decisions. Indeed,

inflationary

hope

abolished

May
6, 1952, and the voluntary restric¬
tions on bank lending were re¬
moved, at the suggestion of the

dangers
dur¬
ing 1952.

ing

Consumer

ness

world

with the multi¬
tude of restrictions imposed
by the

third device, that of
The first of these statements is
terms, which v/as ap¬
parently chosen by business and familiar enough and few are likely
government as the means to re¬ to question it. The second state-

economic

r e

to

easier credit

Bank of

Last year at

a

first, Canada's economic future depends in part on the health
of the world
economy; and

?ia^t„owards the half"way mark
of 1952.

a

The

United States and Canada at such

are:

a relatively small part in
revival of trade that took

store

convertible

buy goods and services from the

are directly related to Canada's economic growth and to her
present position in the world. They

played

the

freely

long-run

which

not

by creating high-sounding international institutions, but rather
by nations eliminating obstacles to investment. Warns against
"overselling Canada" and careless alienation of her resources.

A Review of 1952

these

are

currency.

should like instead to concentrate
on
two matters of economic fact

on

can

to

activity
self-cor¬

countries, dollar pay¬
the story of Canada's economic
ments for imports exceed dollar
growth. That story should now be
earnings from exports by more

decline late in

Questions soundness of

national investment, points out situation

largely

I do not propose to
repeat here

developments in

Canada and ascribes recovery from business

is

It

economic

factors and the problems and
pos¬
sibilities to which they give rise
that I wish to give most attention.

President, Royal Bank of Canada

I
Executive of largest Canadian bank reviews

and

rective.

By JAMES MUIR*

of

short-lived

Canada in 19S2 and Aitei

9

Robert W. Baird & Co.,

Bosworth, Sullivan & Company, Inc.

Fulton, Reid & Co.

Incorporated

Mitchum, Tully & Co.

Shuman, Agnew & Co.

Wagenseller & Durst, Inc.

10

The Commercial and Financial Chronicle

(193)

Fight Maixism by Giving
Employees Stake in Profits!

best

urges

is

done

that

what

has

been

That

start.

a

our

is in great trouble,
faced
by
an
implacable
and
powerful
enemy
whose
propa¬
ganda knows no truth and whose
promises
are
as
impossible
as
still

Jfojges, prominent advertising executive

their

performance.

would

like

to

And

what

tonight

suggest

six

ago

sider ways and

of

bating

a

.tide

com¬

rising

of

law¬

flow;

vantages

demonstrate

ourselves—that
men

is

continue

and
the

to

to

methods

same

to

is

system

Capitalistic;

yet

a

proven

citizen

duties

is

to

way

be

a

to

participate
citizenship?

of

in

employee-ownership has taken
strong
root.
One-fifth
of
all
Sears Roebuck stock is owned
by

the

Employees Fund. This was
brought about by setting aside a

Europe,

a

certain

quite

the

•the

of

way

business

way."

can

How

do

think

you

million share

8V2

had

we

in

owners

licly and privately owned

pub¬

corpo¬

economic system.
That is a rations.
big order. But let us begin -with-

best.

sale

of

clone

Needed

But does this make

is

This

Telegraph

of

to

to

facilitate
individual

is

now

being
Telephone

Company.

There

are
more
than
300
companies
members of the Council of
Profit

Industries,
are

but

innum¬

working to this

end.
A

satisfied?

us

stock

employees.

the American

uy

and

the

stock

employees.

Sharing
Capitalism

of

profit-sharing for

means

of

erable others

More

it.

benefit

the

in

years ago? Probably less than
million; today, there are over

a

portion

company as

Another

stockholders

many

America
50

doing

our

for

of

century

ago, and connotes today in

the

and

participate in the fruits of

free the neeel

of

way

nomic

this word connoted half

media which have been used

us

world—and

the

the

to help more Americans to par¬
ticipate in our political freedoms
be used to help more millions of

among

means

the

different from the current Ameri¬

is

that

many
in personal participation in the af¬
those called fairs of our nation, can we safe¬
to
Washington for a conference guard our freedoms; preserve the
with the Attorney General to con¬ liberties from which all these ad¬
years

were

As Frederick Lewis Allen
points
out in his book, "The
Big Change,"
"we customarily say that our eco¬

I

same

room

tne

as

good

action

just

country

producing property.
About

just

of

forces

recognize

spon¬

epiployee ownership of business and increasing the scope of
profit-sharing. Says we should have more rather than less
capitalism and more extensive private ownership of income

this

Our Marxist friends should
their ,eyes irom the pages of
19th Century ,book and observe

tern.

Advertising and Capitalism as
it
exists
in
the
Now I know that tms
may sound
which have United States, today. Instead of rather
Utopian. But since when
helped bring this about may well being a frozen system operating have
large ideas discouraged
take pride in what has been ac¬ for the profit of a
few, it has al¬ Americans? And let us agree that
complished,
but in a
world ,of ready expanded in our country any amount of
progress along this
rapidly changing values, we can¬ until
it
now
operates
for
the road will be
helpful.
not rest on our pride.
We must profit of millions.
Fortunately, the encouragement

resist Marxism is by encouraging wider

to

way

the

a

The

sorship of the American Heritage Foundation, in .combating
activities of subversive

that

lift

community

JBy THOMAS P'ARCY BROPHY*

under

fact

body's job!

/Ojhairjnan, Kenyon & Eckhardt, Inc.
President, American Heritage Foundation

After revealing work .of the Advertising Council,

fundamental

the

of

maintenance of Freedom is every¬

Thursday, January 15, 1953

...

Case in Point

Fight Must Continue
Far from it. Things are still not
challenge, the
In Scarsdale
.where I live, we
,c y n i c i s m—
We
must
forces
of advertising,
recognize
that
the what we want them to be. Even have E.
mobilized
Robison, Inc., Household
twin
of
totalitarian
spectres through the Advertising Council, fires
revolution in
the
United
States, we are Equipment, Hardware and Auto
following
i n and under the sponsorship of the being kindled by this enemy plagued with work
stoppages and Supplies. In 1951, when the 30th
the
wake
of American
Heritage Foundation, threaten to sweep over our West¬ strikes. There appears to be no Anniversary of the
lessness

and

war.

undertook

At this meet¬

T.

D'Arcy

dermine

a

the

national

rededication to

program

ern

of

civilization.

fact

ideals and in¬

our

is

that

The

frightening

one-fourth

of

the

ing we were stitutions, utilizing all media of world's land area and one-third of
told about the
communication,
education
and the world's population is now un¬
activities Of community action, to emphasize der the domination of a godless
subversive and dramatize the common heri¬ system of government which has
forces in va¬
tage of every American—our way as its fanatical aim the destruc¬

Brophy

our

Accepting

rious

guises, of life based on individual free¬
seeking to un¬ dom and individual responsibility.

democratic structure.

To

point

out

tion of all

Its

prise

that

we

ideals and prac¬
tices of American
democracy was

Socialism. Both

sorely needed.
The

need

awareness

tion

in

of

for
a
greater
keener apprecia¬

was

and

the

a

advantages

have

we

this

country—emphasizing the
relationship of our h a r d-w o n

liberties

to

our

development

the greatest nation of free
in the world's

history.

And

further,

Americans
?An

to

by

not

the several

address

by Mr. Brophy
Advertising
Awards

npionsored

Jan.

by
9,

"Printers

Ink,"

dwell

at

length

on

of the past

programs

six years. The Freedom Train and
its
17
months
tour
of
all
the

States; the campaign to restore the
original patriotic
significane
of
our

nationally observed holidays;

the

commemoration

of

the

175th

as

anniversary of the Signing of the
people Declaration of
Independence; and
the "Register and Vote"
campaigns

persuade

only

shall

all

active

of

1950

and

1952.

at

the

Dinner,

New

York

1953.

All

tributed, I believe, to
preciation of

Annual

City,

that

I

tage and
ance

of

a

our

have

con¬

greater ap¬
American Heri¬

more

a

general

accept¬
responsibilities
of

the

convinced

have

selves

still

that

against

are

Capitalism

other

record

not

The

cure

"We

are

the

ex¬

are

for this may well

Capitalism
be

may

We

groups.

says,

You

cure

less

We

them¬

playing the old,

that

the exploited.
ploiters."

be

conflicts.

setting

groups

have people

worn

company

industrial

Now the

is that Free Enter¬
Capitalism is an evil and

today—just as
We were informed about the ac¬ a hundred
and seventy-five years dying system and must inevitably
tivities of demagogues and bigots
ago—the price of liberty continues be succeeded by an economy in
carrying on their disruptive game to be the eternal vigilance of which the means of production
of setting one group of Americans those
who enjoy it—and that a will be owned in common and op¬
against another. The alarming in¬
working republic requires active erated by the State.
crease
in
juvenile
delinquency participation by its citizens.
This sytem is Marxism. Its ex¬
was
emphasized, and we were told
treme
form
is
Communism.
A
that a comprehensive program of
Accomplishments to Date
milder form is
education in the

to

still

hold dear.

theory
or

end

to

but

more.

nourish

this

dynamic conception until just as
many Americans as possible are
its direct beneficiaries.
Edward

guished

J.

Meeman,

editor

of

'Press-Scimitar,"
recent

article

the

thinks

he

In

so.

critical

was

Capitalism because

distin¬

Memphis

it

did

go

is

obtain

his

education

where

offer to sell

business.

The

employees

Capitalism,

practiced

in

America,

is

a

for¬

pressure.

sys-

to be

solicitation of an offer to buy any of these Shares.
only by the Prospectus.

With this month's bills to its

If

personal

fewer

I

have

heard

the

objection

freedom

Socialists."

.

It

sharpest

class

division

proletarian
property

is

(a

group

in

by

small

make

all

all

a

curve

from

away

modified and mod¬
version of the Free En¬
a

understand
of

this

themselves

the

and

course

their

and

true

di¬

adjust

thinking to

it?"

ideal

Can
has

it be

not

that

Free

satisfied

because it is

a

Enterprise

Could jt

,

MORGJtN^STANIffEY & CO.
DREXEL & CO.




to

*

to

seri¬

a

Could

private

to .bring

make it

working

—

tensive
to

&

CO.

logic

it

to

its

maturity,

work

of

the

further

as it
is capable
smoothly and cer¬

tainly? Could it be that

SMITH, BARNEY & CO.
WOOD, STRUTHERS

out

carry

Capitalism,

growth,

EQUITABLE SECURITIES CORPORATION

WEBSTER SECURITIES CORPORATION

January 15, 1953.

extensive

to
,

GOLDMAN, SACIIS & CO.
STONE &

more

-

ownership
cf
income-producing
property and wider participation
in
the
profits
of
enterprise is
necessary

CO., ISC.

be .that this is
in our system?

defect

i,t be that

of

BLYTH &

Weapon

end

curses

the
our

were

class

age?

there would
there

ex¬

profit-sharing is necessary

advocates
the

more

be

of

conflict

Could .it

be

that

that

more

free

more

responsibility

.enthusiastic
enterprise
if

participants
of

W

.ownership,

we

an

can.

our

or

concept of the Capital¬

Free

Enterprise System—
only in that system.

and

We Jiave

this

come

country in

vidual

our

great

long

a

wray

in

developing indi¬

freedom

responsibility.
a

as

American dream of
politi¬
economic freedom for the
individual
is
inherent
in

in
as

approach such

rapidly

as

property-

property-owners

cal and

wrong or defective

Profit-Sharing

dhe securities la ws of the respective Stades.

in¬

group

"Pride of Ownership"

Americans, not

opment?

Copies of the Prospectus may be obtained from
only such of the under¬
signed as may legally offer these Shares ill
compliance with

ruling

The

istic

theory and system, but because it
is suffering from arrested
devel¬

ous

Or to

American

Share)

qncfG.eerued dividends

all

workers

and

workers!

was

toward

leaders

Share

the

the

.

terprise System. Will the major¬
ity of our business and industrial

4.44% Preferred Stock

—

which

in

held

very

<

history

state,

owners

rection

"

to

profit-sharing that "wages are so'
high now workers are
sharing

Statism, Socialism, Totalitarianism

Company

a

now

profits."

Recently the "Daily News" said deed)
with
propertyless
slaves
editorially: ".
with, the elec¬ chained to a job!
Perhaos the
tion
of
true way to a classless
Dwight D. Eisenhower,
society in
American history rounded a
democratic
tradition
major the
is
to

ernized

Price $102.50

pro¬

the company and share
in the

own

and

per

cus¬

tomers, the company proudly
claims, "Robison's employees

Marxist attempts to abolish the
property system, in an effort to
achieve a classless society, have
is in fact
resulted in the

firmly rooted," Mr. Meeman

curve.

150,000 Shares

(Par Value $100

61?

become

eligible to purchase stock as
they
complete
six
years
of
service.

chooses—or quit it; to move
about;
as ito be free of political and social

dynamic

and

nor a

Ohio Edison

other

will

he

What these critics and theorists
fail to see is that

means
an

the

own

regular

far enough. "What is
wrong with profits—in
One holds to this philos¬ it
fact, they get most of
is that there are too few
capi¬ them."
Perhaps so.
ophy §o fanatically that it uses
Sometimes
talists," said Mr. Meeman, "too
wages are too frigh for the health
lies, murder and torture to achieve few
people own property. What is of a business, it
would be better
its end.
The
other
attempts to needed is to make
the possession il' some
of the return of labor
use persuasion to
bring about the of
private property as universal were in the
form of
new
order.
Both
radical
Com¬ as
fluctuating
possible; to make all men—or profits.
No
matter
munism and the more moderate
how
high
nearly all men — the owners of
wages get, so long as wages are
Socialism hold that Capitalism is
property. Only when an individ¬ the only return of
suffering from old age and decay. ual
labor, there is
has a reserve of private
conflict between owner and work¬
prop¬
Let's take a good look at this
erty, securely held under demo¬ ers
and
our
society does
not
allegation and see if there is any cratic
law, can he be fully free to achieve
substance to it.
unity!

said, "it must be in the soil of the
property system. More Capitalists

The offer is made

of the

dying.

citizenship—a greater recognition ward-moving

This announcement is neither

was

stock

employee

an

corporation. In 1953,13 more
employees will become eligible to
purchase stock, making a
probable
total of 95
employees Who Willi

a

of

not

celebrated,

purchase plan was announced. To¬
day 82 employees own all the stock

and

But it

individual
can

industrial

be
that,
develop¬

ment, where pride of individual
craftsmanship has been lost, we

have

not

substituted

ownership to

Perhaps,'
been
do

pride

the extent

never

before

we

has

of

can."

there

so

great an opportunity to
Now itsis possible to
extend
economic benefits of the
.en¬

so.

the

terprise

system to many people'
by the simple expedient of mak¬
ing it possible for mo*t employees

to

of

share in the profits and
losses
enterprise and in the pleasures

and

It

heartaches
seems

possible

to

of

me

ownership^
that the widest

individual

ownership of
income-producing property would,
ppovide the justice .that furnishes
the

foundation

for

a

Continued

democratic
on

page 43

Volume 177

Number 5186

The Commercial and Financial
Chronicle

...

Day Loans

Banking and the Security Markets
York
,

Mr. Cook explains the
of commercial bank

procedures, mechanics and techniques
lending to security brokers and dealers.

Day Loan is

loan that-is made
unsecured basis to a broker

an

a

out, because of Federal Reserve regulations and
margin
requirements the call loan market has become a ghost. Dis¬
cusses banks'
stock-margin requirements from borrowers and
explains differences between Call Loans, Day
Loans, loans to

•early in the morning, which will
be
repaid before 3 o'clock that

dealers,

up

afternoon.

to brokers,
Syndicate Loans,
determining the interest rales on these different

and Ihe factors

is

or

money

ically

classes of loans.

be

things:

used

for

only

to

pay

for

has

(1)

-

•

The topic assigned to me is,
"Banking and the Securities Mar-

.kets."

On

could
fine

banking alone,
books, so I shall

write

one
con-

my remarks this morning to
banking of the securities in-

the

-for

Contrary to the
old

call

to

that

me

have been around the Street

you

^nd therefore
the

customers

of

difference

.and

between

dealer.

a

broker

a

Perhaps

is

it

an

over-simplification to say that the
banking of the securities industry
divides

itself

micely

very

checking

accounts

Secondly,

ers.

Essentially the difference is

that

broker's loan

a

.

is

loan

a

se-

,

cured

the

broker's

customer

col-

as

customary to pledge large single
of
securities.
Thirdly,
banks

33%

.

require

a margin of about
making of the loan

the

at

although

minimum

quirements
out

at

for

the

room

fore

33%

call

a

margin

about

are

it

25%.

gives

market

for

to

If

we

drop be-

margin

•

gin accounts.
other

dealer

A

dealer

hand,

is

on

to

a

securi

own

Lies.

thing about margin.
clerk, margin
securities in
0

Now

let

Real Call Money
Market
a

lay

me

may n<^ be

There

call

money

is

their

loan

a

may

Fedeial

in

mean

ghost.

a

what

oi

the

of the amount

iei°anw u0^
Mr. Webster

u

some-

To any, loan

the value of

is

excess

what

No Longer

say

it is,

say

Reserve

Banks

regulations,

but

it

will find the term in
your textbooks. In years
past, call
money was used

of

longer

no

market

in

though

real

a

New

York

adjusting bank

Frankly,
exist

think

into the

of

and

a

the market just

need

we

as

commercial

and

anymore,

I

do

to

go deeply
for it other than

reasons

that with

say

medium for

a

reserves

banks.

the

increase

margin

speculator^the 5,volume of
has

stantially.
to

ran

past

20

margin
reduced sub-

l^een

Brokers' loans in

$9

some

billion.

1929

For

the

they have rarely
$1 billion mark.
At
the present time the brokers' loans
years

crossed

in

the

the

Street

tively

total

constitute

small

banks'

and

rela¬

a

percentage
loans

comparatively

tion.

In other

loan

a

of

of

the

provide

small

outlet

the

securities

this loan at
broker

that

pledged

and

have

you

on

the

is

bought

him:

$2,000

to

th'en

agencv

^

pick
get

and

If
it

to

so

check

a

knows

is

what

:to

well

you

T

oan

is

tbat

only 1%
back

1920's

is

was

York

1%

hcallv
a

when

were

sneaking

be

jn

it

rather

than

banks

money

prac_

fee

Daid
used

a

overcertification

an

interest

'*

charge

$125,000

has

because

better. The

or

trouble

no

his

in

initial

doing

require-

well

in

quirements for
Brokers'

the

of

excess

many

loans

been

banks'

re-

years.

*

loans; that is,

a

payment

or a

broker may pay off

the

substantially,

loan

tice

at all.

}ast

15

I

bank

to

dealer loan

that

sure

,

a

made on-collateral

series

the

are

old

no

tory

investment

or

portfolio,

as

know,

or

reputation

we

for

should

dealer

zero
so

excellent

the

on

the

that

substantially^,
securities, to 25% or

general

'run

Lending

of

quality
other se¬

on

particularly

11

gin,

a 50%
mar¬
In other words, you
dealer only 66%

or more.

would

lend

the

of the market value

or of the price
capital representing
the balance of the
purchase.

he

the

paid,

his

.

Lending

Rates
to

as

Securities

on

rates.

Historically,

call

money rates are governed by
the New York money market and
dflv-to-day money nosition of
the New York banks. When banks

the

lend

90

to

money

cerns

the

commercial

money

is

tied

days to 6 months.

hand, brokers' and dealers'
are

demand

loans,

dealmay

be

required

commercial
now,

rate

an mm n cent

the

,

ma-

•

cut J's-n ei lh
•?

-

er an

Th

e

offer-to sell

n.or a.

at

under

any

e

the

on

buy

any

of

a

Brokers'

loans

for

made

are

479,846 Shares

under

wbat is called a Continuing Loan
to the banks
own
customAgreement by which successive1,
Perhaps the most significant
joans may be made, not by signing
indication of the disappearance of
a
note, but by offering an en¬
the call money market in New
velope containing the securities
York City was the discontinuance
listed on the outside, and
signed
of the Call
Money Desk on the
by an authorized person in the
New York Stock
Exchange some
brokerage firm. Under this agree¬
six or seven
loans

ers.

years

Brokers
lation

"T"
of

ernors

are

of

ago.

governed by Regu¬
the

the

Board

by

of

Federal

System, and banks

Gov¬

Reserve

governed

are

similar Regulation "U," restricting their lending in substantially similar respects. However,
if a
broker lodges a statement
a

With

his

bank

that

the

securities

he is putting up as collateral belong not to him but to his customers,

and

further,

that

his

firm

abides by the provisions of
Regu-

lation "T," his bank, generally
speaking, is then exempted from
the provisions of
Regulation "U"
in
lending him.
..

...

The

reason

that

,

a

-

.

,

broker finds

it necessary to borrow
money from
his bank is that he has lent his

customers

ties..

money

He receives

tomers

permission

to

the

ment

buy

from

securi-

broker has

substitute

the right

collateral

freely,

Common Stock
(Par Value. $12 per Share)

to

flights* evidenced by subscription warrants, to subscribe for 479,843
shares have been ismed by the
Company to its common stockholders,
which riff his wilt expire at 3:30 P.M., Eastern Standard
Time, on

sub¬

ject to the bank's approval. These
loan
and
on

agreements

all

are

inclusive,

provide the bank with'

that particular
other loan which the broker

have

may

with

the

bank.

particular loan there

some

other loan agreements where
necessary to cover a

tion, but with
a]so

agreement

mingie

every

his

turn agree with

b

,

.

in

we

.

him that

,

will

we

..

not exert any-cross, lien
of his customers

deficit

co-

securities; with

own

...

The several underwriters
may offer shares of Common Slock at
prices not less than the Subscription Price set forth above
(less, in the
case of sales to
dealers, the concession allowed to dealers) and not
greater than either the last sate or current
offering price on the New
York Stock Exchange, whichever is
greater,.plus an amount equal to
Ihe applicable New York Stock
Exchange commission.

an

not

customers, and

that

mdy

on secun-

to. protect ai

exist in

a

Copies of the Prospectus may be obtained from only such of the undersigned as may legally offer these Shares in compliance with

loan

,

his

cus-

secured

the broker's

by

to

own.

the Securities laws
of

se-

•

ampunt that he has loaned to his
customers.
•
• >■
~

cured

by

listed

securities;

true

brokers' loans against
lecture

by

Mr.

Cook

covering "The Economics of
ties Industry"
sponsored bv
ment

Association

New

York

of

Business

of

New

in

a

the

the

York

University Graduate
Administration.




course,

curities

generally

unlisted

do

not

se¬

*

DREXEl & CO.

arise

V

/

,

Invest¬
the"

School

these days because brokers-in turn
do

not

regular

lend

against them in

course

the

of their business.

Jan nary

MORGAN STANLEY & CO,

EQUITABLE SECURITIES CORPORATION

SMITH, BARNEY & CO.

Securi¬
and

the respective States.

~

,

*A

Share

it is

have

to
will

a

be

special situabroker, banks

required
that he

f w

Subscripiion Price $35V4

For

may

rehypothecate those
securities,: and in due 'CUOTes, ;
course
pledges them to a bank for
It is generally taken for granted
a
loan in
substantially the same that most brokers' loans are se¬

(

fully set forth in llie Prospectus.

pledged
loan, or

against

ties

as more

the collateral posted or

any

are

January 23, 11133,

lien

a

9, 1'JoS,

;

d

a

prime,

page

these Shares.

Prospectus.

chinery for calling a loan still ex¬
ists, but for most banks it is pretty
hard to remember when last they
called a loan.

time;-

years

has ruled. Right

Continued

solicitation of an offer to

only by th

loans

the so-called call money rate

distribution, thoroughly

ope'r is m ade

for

and payment

therefore, in the past 20

dealer's

con¬

up

On the other

W

This

or

well

known may require

•

no-

are

between

sold

on

securities.

the

A house with

of

process

curities that have little market
that
are
not

to'repay in terms
is

of

high-

on

securities

rate*, somewhat

loan

no

margins

paid. The margin varies

therefore

ings and his experience in the
Street, which, for our purposes, is

the

lent

meaning

These

are

to be

soon

know,

business

have

we

price,

short-term

or

the portfolio that he may
be carrying or may be
clearing,
his

do

we

distribution, top credit municipals

bor-

is

sold,

all.

applicable
grade securities in the

or

distributive ability.

•

course

loans,

annual financial statement of a
dealer and frequently we have his
profit and loss figures. We look
at his capital, and in effect think
°f it as the margin on his inven-

of

ventory

margin at

con-

any

formula

securities,'and (2) to

in-

of

are

purchase

Now

belongs to the dealer. 'Its character.
principal purposes are two-fold:"
The capacity
carry an

curities

lending

same

requirements
The

for

buyers,

require too much in the way
margin. We may ask just "5%
margin. When we know the se¬

issue;

pf

sold, and he requires
package them and

not

series of issues, blocks
or blocks of stocks;
it
a

start

we

of

a

be

to

deliver them to the

We generally have at least the

We
dealer

which

broker's loan

a

is

■

make

the

be

one

are

financing

to a dealer.

Loan
to

all be

Actually,

margin
regular

downtown

some

banks have called

just

on

now

loan,.and I want to repeat that

that in the

suppose

years

demand

can

Dealer

turn

us

well

very

may

(d) to finance the distribution of

demand

are

Let

.

The

;

,

the

his loan

New

three C's—capital, character, and
capacity. There are C's that apply

in

0f what

>

-

_

\%

20%,

^

is

heu

caned

to

lending

jess iban

credh

rower.

is

call

It

dealer

a

it

was

went

to

credit

when

may

requirements

Dav

for

it

annum

the

3q>s

for

charge

sometimes

money
and it
jsjgw

per

in

in

the

Credit

25%

on

loans.

the

even

in

nan
a

more

The collateral may be industrial
bonds or debentures, municipals,
utilities or rails; or it may be
stocks,
preferred
or
common.

the

over

Dav

a

may

and

dealer

The interesting thing about
t

it may be
0f bonds

me

for

it

versified
centrated.

you

Ford

the

endorse

he
ne

-

the

up

the

jend

you

drive"

I'll

Cadillac

received

«wm

we'll

where

new

tha6t

Cadillac

your

my guess would

A dealer loan is not a call loan,
because implicit in the making of
such a loan today is seeing the
deal through. The collateral in a
dealer loan instead of being di-

friend

a

Ford
one

have

for

to

the

first

a

the

with 33%, going down to
25%,
which is to be maintained. If
the
securities which the dealer has in

'

_

You can't get your Ford

you

money
say

the

to.

dntil

to

way

which
come

$2

with

required

Street

ers' 1o91ib-

for

Ford for $2,000. You meet

against

ments to his customers have

of

margin requirements and the virtual disappearance of the
accounts

000

sold

iust

Cadillac

,

as

reserve

doesnt

to

al-

you

secondary

pot

City

by stocks and
have

you

yeaJ,s

last

clerk's

working concepwords, if we make
$100,000, the broker
pledges $133,000 in securities and
is required to maintain the value

is

con-

start

that's

volume,

York City by brokers and dealers
on other than Treasury securities,
the ratio is about 40 to 60—about
$400 million in brokers' loans,
perhaps, and $600 million in deal-

for loans

pay

secured

Supposing

your

vou."
you.''

Right here I want to

mar-

loan,

loan

a

the dealer's

on

are

already

to

You

In

be that of the billion dollars
or iess that are borrowed in

two

enough, he will do it. and that

stork
fctock Margin Requirements
Margin Reauirements

to

which

(2)

market.

figured it out, but

bonds.
-

little

a

additional

becomes necessary.

-re-

which

tracted, and

essence

enable the broker to finance

the

require

them.

by stocks and bonds belong-

to

ing

they

with

against these loans a diverlist of securities; it is not

sified

into, start

loans to brokers and loans to deal-

the

theirs and maintain

familiar with blocks

are

of

market, banks
generally require that brokers be

'du Z'u n?tlce by the brochure lateral
which has been
sent

custom

money

to

1

.

loans

the demand for credit of brokers,
1 don't think any of us has ever

securities

he

can

part of the

dealer requirements far outweigh

only by
chattel mortgage on the

have loaned him, and
specif-

you

secondary

secured

securities which the broker
picks
with the proceeds of the

contrasted with loans

as

lien

a

It

greater

experienced, with a good repu¬
brokers and dealers that you see
tation, can do a great deal of busi¬
in the Federal Reserve statements ness on a lesser
amount of capi¬
every Thursday are loans to deal- tal and
obtain readily the financ¬
ers- The reason that I say thfs is
ing to do so.
that dealers are daily clearing
Now, the margins that are re¬
Jarge amounts of securities and
financing distribution of seeuri- quired on dealer loans vary, and
again I'm going to be a loan clerk.
ties either through the original or

was

Day 'Loan.

A
on

Points

The

about to tell you that all
loans to brokers are
secured, but
there is one form of
loan generally used throughout the Street
that isn't.
This is the

By A. HALSEY COOK*

Vice-President, The National City Bank of New

I

...

GOLDMAN, SACHS & CO.

DEAN WITTER & CO.

22

♦

12

The Commercial and Financial Chronicle.... Thursday, January 15, 1953

(200)

On Jan. 5

•

offeied
of

Cable

&

share.

of

stock

common

Wire

underwriting

an

block

a

The

group

100,000 shares

of

at $16

which

a

was

ft

The

Henry C. Alexander, President of J. P. Morgan & Co. Inc.,
no miracles should be expected in
controlling
inflation or avoiding deflation. Says public must understand
futility of ceaseless rounds of price and wage increases.

other

«

ft

Trust

ford-Connecticut

Hart¬

of The

stockholders

additions

tells stockholders

costs.

Ansonia

The

Company

offering,

of natural gas and to finance
conversion

25%.
In both years there were
non-operating credits and charges,
including substantial charges for

Inflation Control Still Main Problem

Connecticut Brevities

sible

permitted
lations.

Company

In his annual letter to stock¬
oversubscribed, raised a total of will vote at the annual meeting
This amount, together on Jan. 22, 1953 on a proposal to holders, issued on Jan. 14, Henry
with a bank loan of $550,000, was offer the present holders rights to C. Alexander, President of J. P.
used in connection with the pur¬
buy one new share at $50 for each Morgan & Co., Incorporated, in
reporting on
chase of the assets and business of eight shares owned.
The present
The Ansonia Electrical
Division 176,000 shares would thereby be
_the operations
HHhB d u r i n g the
and its establishment as an inde¬ increased to 198,000 shares.
past ;year of
ft
ft
ft
; ■
1
pendent operating company under

$1,600,000.

close of the

of

crease

previous year,

$49,082,356,

Throughout

the

year

averaged about 13

in¬

an

about 8%.

or

deposits

% higher than

in

1951, and earning assets also
increased, particularly loans and
holdings of United States Gov¬
ernment

securities.

The

increase

,

the

SP98

The

new name.

company pro¬
In a-letter to stockholders, Emplastic insulated and jack¬ hart Manufacturing Company an¬
and cables, to a large nounced
purchase of Sundsvalls
degree custom designed and cus¬ Machine Company, Sweden.
The

this

built.

tom

Connecticut

Commission
borrow

the

on

in

obtained
bears

are

loan

$1,100,000
The

loan

loan

new

loans

are

1953. Pro¬
being used

the arrival of

with

to defray the

gas

converting the plant and the
tomers'

appliances.
ft

Ambrook

ft

which

name

Pa. —Hulme,
Applegate & Humphrey, Inc. has

ft

was

adopted by

with

formed

been

Union

Trust

offices

Building

to

in

the

act

as

poration at
the

time it

was

voted to

split each share of stock four for
one
through a reduction in the
value from $1

par

share.

In

plants

at

1952

to

25

cents

Ambrook

Jewett

sold

name

Aspinook.
«

.

ft

of

Cheney

Brothers

a

proposed seven-for-one

stock

There
were
44,566
outstanding at the end of

Since

that

time

trust

a

created

by two members of the
Cheney family has donated 10,462

shares to the company and a few
additional shares have been ac¬

G. Hulme

Lawrie

Applegate

underwriters,

participating

dis¬

tributors and dealers in municipal
and general market securities and
mutual

fund

Milton

G.

shares.

Officers

are

Hulme, President; A.
Lowrie Applegate and Arthur F.

Humphrey, Jr., Vice-Presidents;
will be retired and the number Paul A. Day, Secretary and Treas¬
of
shares
outstanding after the urer, and I. C. Wharton, Assistant
split will be 238,728. The Presi¬ Secretary.
quired.

These

reacquired

shares

dent stated that

earnings for 1952

ment, all from the wholly-owned
subsidiary, Pioneer Parachute

Company.
*

«

Mr. Applegate and Mr. Humph¬
rey

previously partners in
Applegate & Co.
Mr.

were

Geo.

G.

Hulme is also President of Glover
& MacGregor, Inc. of which the
firm is

new

sji

national

"Inflationary
been

at

forces

work

economy,

for

that

considerable

national

Nearly

than

more

a

during
1952.
major indices of

economy

all

the

activity

well

as

an

affiliate.

as

of

consumer

thereto, amounted to
$20.72
per
share,

$5,178,788,
for
1952,
compared with $4,128,946, or $16.52
per share, for 1951, an increase of

New York
Harry

Com¬

Connecticut
from

The

to

borrow

Travelers

reimburse

the

nection

with

customers'

incurred

the

for
in

ex¬

&

Christensen,

thereto

to

the

of
use

Federal

deficit

Government

did

The
with

to

$2,500,000 in 1952.

in

-

the

closed

company

combined

share¬

$2,125,000

year

capital,

surplus
and undivided profits of $66,220,322, or $264.88 per share on the
250,000 shares outstanding. This
was

an

increase of $1,978,638 since

the end of the preceding year.

R.

Security Dealers Elect New Officers
Co

Amott, of Amott, Baker &

Inc., was

elected

Other officers elected

Vice-President;

Inc.,

were

Herbert D. Knox of H. D. Knox & Co.

Charles

H.

Dowd

Hodson

of

Co.

&

Inc.,

to

H.

Harry R. Amott

D. Knox

Charles

H.

Dowd

F.

D.

Gearhart, Jr.

some

financing during the

but carried out

year

funding of the
short-term
debt.
The

existing

no

Federal Reserve continued to pur¬
sue the middle-of-the-road
policy

it

adopted

tions

often

early in

Condi¬

market were
short-term interest

tight;

rates

1951.

the money

on

fluctuated

tended

and

up¬

ward.
"The tentative
in

the

gains during 1952

direction

of

of

greater de¬

a

balance in the national
must be preserved and

Miller & Co. in Los

and

Revel

the

Hanns

E. Kuehner

of

creases,

in

Angeles.

futility

Frank

Dunne

Harry MacCallum, Jr.

of

and

wage

expanding yet stable

an

Philip L. Carret

ceaseless
price in¬
and the common interest

rounds

econ¬

For leadership in this, the
country looks hopefully to the new
omy.

With Louis McClure

Administration in Washington.
"As was natural at a time

(Special to The Financial Chronicle)

TAMPA, Fla.—Homer M. Truitt
has

been

added

to

Louis C. McClure &

Madison

the

staff

of

Company, 615

Street.

active

business

at

heavy

demahds

for

made upon

high
credit

were

the banks of the

coun¬

much the
as

interest

&

CO.

of

banks

cases,

CONNECTICUT

The

the

tain

the

same

prevailed at the
year.
In many

Oliver J. Troster

Samuel

Weinberg

Eugene

were

necessary

obliged to ob¬
funds by bor¬

frequently and heavily than

more

Hartford 7-2669

Teletype NH 194

A

condensed

financial

The

end of
of

Co., Inc.

following

for

Dunne 8c

statement
of J,

of

the

P. Mor¬

of Dec. 31, 1952,
with comparative figures for the
gan &

as

1951, shows deposits at the

1952 stood at $671,241,398,
compared with $622,159,042 at the
end

serve

non;

were

elected

to

the

Board

of

Governors to

1953:;

Philip L.

condition

Statter

Treasurer.

before."

Operating Results
REctor 2-9377

G.

Vice-President; Frederick D. Gearhart of Gearhart & Otis, Inc.,
Secretary; and Hanns E. Kuehner of Joyce, Kuehner & Co.,

rowing from the Federal Reserve

Exchange

ever

—

Morris

rates

New Haven

New Vork

David

banks met these demands for the

CHAS.W. SCRANTON
Members Neu> York Stock

of

prices,

try by their clients in 1952.

of




to

from

private debt continued to rise. The

opening

securKes

1951

distributed

rose

'

.

most part at

Primary Markets in

holders

the

stand

Inc.

with

was

con¬

conversion

appliances

prior

Insurance

company

already

penses

Writer

$700,000

Company on a 10-year serial note
with interest at the rate of 3%%.
The proceeds are to be used to

dividends

President of the New York Security Dealers Association for 1953.

Chronicle)
a lake of 1,870 acres
Newton, Brookfield, New MilDENVER, Colo. — Patrick T.
the most that can be hoped is that
ford, Southbury, Bridgewater and Thompson has joined the staff of
the task will henceforth be ap¬
Roxbury. Water from the lake will
Carroll, Kirchner & Jaquith, Inc., proached with greater realism
supply power to a projected 37,250
Patterson Building.
Mr. Thomp¬ -than for many years past.
The
kilowatt generating station.
son
was
previously with Peters, general public must fully under¬
ft
ft
«

Power

the

stability.

capacity continued

But the problems of
controlling inflation, yet avoiding
deflation, are complex. No mir¬
acles should be expected. Perhaps

Carroll, Kirchner

(Special to The Financial

sion to create

Connecticut

in

income

sphere of money and
credit, no striking developments
took
place, although public and

gree

in

has obtained permission from
the Public Utilities Commission of

rate

consolidated.

Joins

from the Federal Power Commis¬

The

dividends of

share during the year, the
as in 1951; but because
of the increased number of shares
per

same

running

were

of greater economic

economy

The Connecticut Light & Power
Company has obtained permission

pany

increase

or

have

decade continued to influence the

,

would exceed the $6 dividend pay¬

The company paid

$10

in

'Tn

Milton

split.

1951.

greater
degree of bal¬

downward.

on

shares

$17.91

or

shortages became less
acute. While consumer prices re¬
mained
fairly constant at high
levels, commodity prices at whole¬
sale
generally
drifted
slowly

•,

common

$4,478,638,

increase and

has

been called for Jan. 23 to vote

to

share, for 1952, compared with
$4,071,652, or $16.29 per share, for
1951, an increase of 10%.

miracles

no

Productive

.A special meeting of the stock¬
holders

direction

3

According to Mr. Alexander:

tion

-

'

amounted
per

spending. There were, how¬
ever, some evidences in the direc¬

its

ft

and

and

cut, and Adams, Massachusetts, to
a new corporation which will use
the

i

ple,

a

Connecti¬

City,

credits

above or close to peak levels for
peacetime. This was true of the
gross national product, for exam¬

meeting Dec. 12,1952.

a

same

the

business

the stockholders of Aspinook Cor¬

At

Of

can be expected
controlling inflation or
avoiding deflation,

PITTSBURGH,

Industries, Inc. is the

in

a

earnings of the company, notwith¬
standing greater
operating ex¬
solidating the penses and much higher taxes.
tentative
Net
operating earnings, after
income
taxes
related
gains made in Federal
the

either

Humphrey Formed

cus¬

to-

ward preserv-

Henry C. Alexander

since

Hulme, Applegate &

better

such

charges, and tax adjustments re¬
lated thereto, net earnings trans¬
ferred
to
undivided
profits

in

urged

^ing and con¬
ance

cost of

somewhat

on

directed

KIM

WmmM

$480,000, is partially payable over
a five-year period.
Sundsvall will
also continue to produce its pres¬
ent
lines,
including
hydraulic
press
pumps
and
custom-built
hydraulic presses.

The

of

due June 30,

connection

natural

new

to

interest rate of 3 V2 % and

an

ceeds of the

in

application

1951.

extended

loans

Utilities

Public
its

$120,000 and to extend the

date

due

of

thereof at

loans, as
Treasury regu¬

under

After

for pos¬

reserve

losses

yields, together with an increase outstanding as a result of the issu¬
in income from the company's va¬ ance of a 25% stock dividend in
rious • banking services, resulted October, 1951, the total amount ol

tion,

will

acquisition

earning assets and the employ¬

ment

the

that efforts be

provide a Eu¬
*
*
*
>
ropean
source
to
manufacture
The Bridgeport Gas Light Com¬
glass "container
machinery
and
pany has received approval from parts.
The purchase cost, about

the

bank-

wires

eted

the

widely

known

duces

in

to

future

Carret, Granbery,

Marache

&

Co.; Frank

David Morris, David Morris & Co.; Eugene G. Statter, Hart,

Rose &

Co.; Oliver J. Troster, Troster, Singer & Co.; and Samuel

/

Weinberg, S. Weinberg & Co.
The
Jan.

Dunne,

Co.; Harry MacCallum, Jr., MacCallum 8c Co., Mt. Ver¬

16,

Association will hold its 27th annual

at the Biltmore Hotel, at 8 p.m.

dinner, (dress informal) is $15.

dinner

onjFriday,

Subscription for the
_

^

^

Volume 177

Number 5186 ...The Commercial
and Financial Chronicle

(201)
Pitt's Estimate

Let Us Not Sell Oar

I

and

pages

seasoned, distinguished

of

men

Quotes Gladstone

po-

litical documents. I
repeat the oft-

quoted opinion of Gladstone that:
'"The

Ameri-

Constitu-

can

tion

is

most

the

wonder-

ful work

ever

struck off at

a

Colonists.

I

Constitun

o

was

framed
the
j.

Reuben

Clark, Jr.

under

inspira¬

tion

of

the

Lord

God

Almighty.
Washington's

V thought
«*irom

seemed not too far
away
For, as the Constitu-

this.

(* tional Convention

was

getting unway, some member suggested
and half measi itres would
be far more
/ der

ithat "palliatives
find

|

favor

with

mi

the

i

.

.

thorough-going" provisions.
Answering this suggestion, Wash¬
of

the

Conven¬

tion, arose and solemnly declared:
"If, to please the people, we offer
.

what

how

we

can

ourselves

disapprove,

afterward defend

we

There

Franklin

our

(Pennsylvania)
and
Hamilton
(New York),
financiers of the

lofty sentiment thereafter

guided the Convention.

in

no

setts),

experienced administraafterwards ten times Gov¬

tor,

an

of

ernor

Massachusetts;

(Massachusetts),

if

j

great

Court

more

of

service

from
were

for

leading

Israel

the

Consti¬

and
pro¬

form of government that

a

would

his

Egypt, than

tution prepared
by training
experience for their work of

viding

"Secure

the

Blessings

of

Liberty to Ourselves and Our Pos¬
terity," as they proclaimed to the
world

in

the

classic

Preamble to

the Constitution.

Jc

great

of

^

the

»

As nearly
39

men

I

as

can

who signed

Constitution

learn, of the
the Constitu¬

tion, 26 had served in the Conti¬
nental

both

Congress,

in

the

13

had

Congress

_

Constitution,"

statesman.

of

served

and

in

the

Revolutionary

There

a

were

others of great
ability and experi¬
who helped to produce this

historic
great

document.

ability
the

Four

men

no

of

in

choice

a

lot

of

men.

Among the great ones were Washington, Franklin, Hamilton, and
Madison. There
that

were

and

of

ability.

there.

ment,

were many others
exceptional training
Jefferson was not

When

he

he

was

read

not

too

been

too

in

*An

address

Farm

to

ac-

by Mr. Clark before the
Federation
Annual
Lake City, Nov. 21, 1952«




us

preference

dri^k

General Congress at

give

of

such

to

declare

and

in vain.;

1

Himself
"Horse and Buggy" Days

1-

_

"suffered

*1

•

_

1»

J_1

to

T

be

travellers of today, v/ho
duce

them

with

empty

now

ecutive power under the Constitu¬

tion, and the present tendency to
enhance it.
Two Legal Systems

As

_J

of

estab¬

—

13

great

are

lost,

we

of

colonies, including
Colonies).

and if

shall

whether

liberties

our

he
never

The
of

regain

Rome

a

am

an

cn

so

early

American"
American.

boast

may

ever

God
ooa

be

grant
gidin

refused

NEW

was

sovereign.
source

as

a

for adoption by

document.

The

first

essay

ap¬

peared in October, 1787; and others
appeared during that winter and
the spring of 1788. These essays
have

3%

ly rivalry for the control of
the

Civil

Law,

its

and

mental concepts being
ment
through which
men

of

genius

and

Continued

ours.

been

greatest

appraised
as
"the
treatise on government

that

ever

has

been

the

order

same

written," and

with

as

work

Constitution

was

not

the

of

cloistered, fanatical the¬
orists, but of sober, seasoned, dis¬
tinguished men of affairs, drawn
fr0m various walks of life.

They

problems of military
necessity and strategy against one
of the most powerful nations of
the world, but also burdened with
vital local problems of

tion

and

between

measure

cooperation
a

of

13

of

oeoem ence

its

different

Aug. 1,1953

2.20%

Aug. 1, 1953

Feb.

1,1954

2.30

Feb.

Aug. 1,1954
Feb.

2.85

2.40

Aug. 1, 1959

Aug. 1,1963

3.025%

1,1964

3.03

2.90

Aug. 1, 1964

3.05
3.05

Feb.

,

2.50

Feb.

2.925

Feb.

2.55

Aug. 1, 1960

2.95

Aug. 1, 1953

3.075

Feb.

2.60

Feb.

1, 1961

2.975

Feb.

3.075

1,1956

1,1960

1, 1965

1, 1966

Aug. 1,1956

2.625

Aug. 1,1961

2.975

Aug. 1,1956

3.075

Feb.

1,1957

2.65

Feb.

3.09

Feb. .1,1967

3.10

Aug. 1,1937

2.70

Aug. 1,1962

3.00

Aug. 1,1967

3.10

Feb.

2.75

Feb.

3.025

Feb.

3.10

1,1958

1, 1962

1, 1963

■

■

These certificates

•.
are

"

'

offered subject to prior sale, when,

1, 1968

"

J

as an

1 if issued and

received by us, subjeet to approval of the Interstate Commerce Commission.

and

Salomon Bros. & Hutzler

political

beyond
political in-

Drexel

Co.

point
unwillingness, to contribute the
necessary funds for the common

Union Securities Corporation
•

'

Stroud & Company
incorporate a

of

defense and for waging their war

<■

-!*t

and sovereignty, none

independence.

2.89%

1,1^59

1,1955

w'th great financial strength, and
all hesitant, at times to the

for

YIELDS

Aug. 1,1953

confed-

jealous
own

A1ND

coordina-

among

loosely -knit

each

Philadelphia Plan with 20% rash equity

MATURITIES

of

Aristotle,

Montesquien, and Locke.
The

Issued under the

January 15, 1953.

'

-

...

the instru¬
ambitious

on

February 1, 1963

to

men,

funda¬

selfishness

Equipment Trust Certificates
August 1, 1953

the

were

During the centuries, these two
systems have had an almost dead¬

To he dated February 1, 1953. To mature $240,000 each
February 1 and August 1
from

was

whole,

Chesapeake and Ohio Railway
Equipment Trust of 1953

Colonies, Hamilton, Madison,
and Jay wrote the "Federalist," a
series of essays
explaining the

ruler;

In the Common

of all law

$7,200,000

the

source

or emperor,

ISSUE

un¬

the

the

as

the personal

prince, king,

they,
the sovereign.

a

this
una

opposite

as

was

people;

citizen

"I

was,

was

Law. the

price of blood,

proudest boast of

ancient

was

of all law

They must not be lost!

---

ones

her

American

poles—in the Civil Law the

them except at the

w,,

the

(the law of

The basic concept of these two

was re¬

Paul, though

all

there were
of law in the

ssytems

human blood,

mockery

.

writing

Constitution,

great systems

and

travelled the intellectual giants of Roman." The
proudest boast; of
Greece and Rome, or byjiocse or
*any patriotic citizen of this free
chariot; Christ on foot or by doncoun£ry o£ Qurs shQuld b£, .,£ am
key: and so Peter and

with

the

lih
1 say to you that the price of libertyJs and always has been, blood,

ira-

possibly by chariot comotimocsometimes;

of

Continental Europe) and the Common
Law (the law of England

^ f.J

7

„—;w..

time

world—the Civil Law

,,,

said, this land

the

two

the

of

deemed by the shedding of blood.

Moses,
the
great
Lawgiver,
seemingly travelled on foot; so
—

,

the Lord

as

a".d scornful insolence.

'

,

rai®ed TUP._ l

who carried under

men

ambiti0us man.who

gome

Accordingly, I
shall
discuss
briefly certain phases of the Ex¬

lished, and should be maintained

.

the

thousand years," but that our

abundantly shown how this tragic
of enslaving freemen might
be brought to us.

for the rights and protection of all
These were the horse and
buggy
days; these were the men who flesh, according to just and holy
travelled in the horse-drawn bug- principles"; established "by the
principles ; esiaunsiiea
uy
uie
gies and rm VirircoHnpir' hut thncp hands of wise men whom the Lord
on horseback; but these
were

a
a

fate

given time by the brain and purpose of man," a document which,
according to my belief, the Lord

continental

take
make

or

Events of the past few years have

for what

you,

force

Ohio

the Blue Ridge in a trial

on

sefves> and> burning and thirsting
distinction, would gratify his
■'•
ambition whether *
by emancipat¬
ing slaves or enslaving freemen.

may be worth, that it is what
Gladstone said it was, the greatest
document "ever struck off at a

11

na^10n must be

to

«by

t'he

Bona_

a

for

it

impose servitude

mighty

a

it,

I

from

with

£or such could

woujd rjse Up from amongst our-

to

But

a

s£dd

handg of

Constitution.

the

Philadelphia.

nothing equal to

us

attempts

far-flung

real danger would come from the

cringe with shame when
they feel the need of naming the

men

to

ke

track

in the
Indeed, their

government.

most

a

circum¬

body of

or

"Federalist"

der consideration

eration

much

Bureau

not

final_ document—Martin

The

entities,

the spur of the moment
they are
Utah

parte at their head

the

but

While the Constitution

favorably

impressed
.with the then recent
Shays rebel¬
lion in
Massachusetts, and that "in

Convention, Salt

armies o£ the world

charter of liberties and free insti¬
tutions. Some among us seem al¬

(Maryland). Mason (Virginia),
Randolph (Virginia), and Gerry

thef* docu-

inclined; he thought the Framers
had

under

difficult

nation

grave

was

patriots

who fabricated the

men

of

participated

Army,
19
had included students of
wide reading
served in the
Army, of whom 17 md
great learning in all matters
were officers, and of
these, four of government. They were
among
served
on
Washington's
staff, those who had
successfully guided
Only two of the signers had not
the
Colonists
through
a
long
served either in the
Army or in
Revolutionary War, beset not only
the Continental
Congress.
with
This

ar*

solidity of
sagacity, and

conclusion

with

ence

its writers have been ranked

The Framers of Our

j:

achievement; Madison
(Virginia), sometimes called the
"Father

prepared by

the bondage of
the framers of

iv/r«

Revolutionary

the

the political emigres amongst

"For

of

then not yet

was

(Massachusetts).

Pharaoh

of

King

humanitarian

a

i-1

and

n

training and experience gained
the

said:

(he

old),

years

country need not fear all the

Constitution, the document which

Con-

first rank; Wilson
(Pennsylvania), their hats, as they rode in the
a
learned and able jurist; Ells-'buggies and on their
horses, a poworth
worth (CnnnpptinitU one of the litical wisdom garnered from
(Connecticut), onp of the
the
ablest lawyers of his
time, and ages. As giants to pygmies are
afterwards Chief Justice of the they when placed
alongside our
United States; Strong (Massachu- political emigres and their
fellow

cept

God."

was

order;
diplo¬

scientist;* *the " two "Idofrises

a

These
were

of the

some

.Ua

_

P™P0^»onate to' ^ ia trans" CirioiTnd prophet,Tecte^d'ttS

The histories of Greece and Rome

Washington,

of high

(Pennsylvania), a
ability, and

repair; the event is in the hand of

Moses

was

military genius

28

long Portation.

transmitted

Constitutional

force

stand

can

upon

deliberations,

the

were men

already;
again, with

\rork? Let us raise a
standard to
which the wise and the
honest can

This

is, the
widely

already distinguished for his fight
likely to against slavery; Johnson
(Conpeople than necticut), an educator of reputa-

any

ington, President

They

that

mat of great tact and

believe

the
t i

of

Pitt

stances,

ment. I have named some
I
will name
them

others.

purpose
man."

The

all

a

and

the

reason,
wisdom

experienced in affairs of govern-

given time by

in

this point that

u;

speaking

field in 1837

been

P^y untaught and untrained

tion.

wrong.

henyard,

nor

s<:
has become so loud* and
Indeed, at that time they had virulent that some among us have
not
yet been seasoned
by the come to feel that we must apolo¬
problems and crises of the Revolu¬ gize for that divinely inspired

political tyros
political kite to keep in

the

the

brain

was

vision,

upon

vention and others of
equal stat-

not

were

a

but

through tradition and the
of history.

combination

But Jefferson

order

depended

ure.

yard in order.'

flying

inspiration,

never

immigrants from despotism and
ignorant of free institutions, hold
uP,to ridicule as the offspring of a
rade> almost semi-barbarous peo-

men

kite to keep the hen-

up a

Framers

ness,

the

T«"

T

Lincoln,

before i the
Young Men,s Lyceum o£ Springhave

gress, which included

abroad, but from "some ambitious man
among ourselves, who,
seeking distinction and power, would enslave free men."
setting

the

but of the First Continental Con-

affairs, drawn from various
as
saying Constitution was

I remind you at

ereat-

might here appropriately
quote what William Pitt
said,, not
of the Constitutional
Convention,

greatest document "ever struck off at a
given time by the brain
and purpose of man." Warns
our greatest
danger is not from

It is always a
great pleasure to
talk about that
greatest of all

been

Lincoln's Prophecy

and

Intellectual

sniritnal

it,

wrought

had

wisdom

of

niv

Duke,

_wisd_om, spiritual great-

of

We

elementary principles of the Constitution, promi¬

walks of life.

which

Iron

others.

vi

only

to them

not the work of

was

not

experience

that

-Napoleon, Peter

the

of

nower
power,

generations that had gone before

Midwestern attorney and industrialist
points out document
cloistered, fanatical theorists, but of sober,

nent

born,
and

aim

also out of the wisdom of the

Ambassador to Mexico

on

was

wisdom
Wiouum

of State and

times-

Great,

scores

generation

Director, Equitable Life Assurance
Society
Director, Western Pacific Railroad
Company

Speaking

the

tion

By J. REUBEN CLARK, Jr.*

Undersecretary

modern

permitted myself these

introductory remarks in order to
suggest to^you that the Constitu¬

Children Into Slavery

Former

have

13

page

28

14

(202)

■HI

••

I HA

H

J

J

I III AY V)P tlfj A (I

l&V

m

The Commercial and Financial Chronicle

of

H *s obvious that this procedure
piling up unprecedented un-

spent

|

fiscal policy.

m

l|j)l#)Hf*PC

Hi
W»

m*UllftiAVVBi
m

m

Jf

-■

-

past

'

Chairman

,

„

Joint

on

Leading Senatorial critic of
i

a"d

of July I, 1953,

as
I

*

estimates

k'lF

ciftn

approximately

$fuu

total

reach

ana

$175

and

taxes, it is

most

judgment,

"the

of

one

Showing general

Federal

7^ac

of
1953.

'

t

.

and

appears

in

Deeded

remaining

old

proach

than

$100

$75

billion

pPnrin

arid

special fund accounts, and the remaining $20 billion in business
enterprise and revolving fund ac-

the

civilian

*___

c"'

f*

,•/.

%

^dn?iaistration~

N

t,

,

,

Unexpended
lated

at

-

,

.

balances

>

the

National Mediation

Board

has

*/r%! .^,n ln..^ls budget
Friday will estimate

on

lures in the fiscal year

the

message
expendi-

beginning

date"totaline

request

$70

new

ap-

,
.

penditure

as

of

of
of

ap-

bal-

have been obligated
by

con-

obligated

has

uniform

no

mean-

mg and many agencies of govern-

report

ligated

the

even

funds

though

to

no

be

ob-

contract

Housing

and

Department

Department

of

appropriations,

will

be

of

the

as

new

greater than

of

the

fiscal
the

Department of Labor
Post Office
Department

be

expected to
quested by the President.

of funds
balances is not

in

m

unexpended

generally reviewed
by Congress, under
ordinary procedures

durmg

consideration

regular appropriation bills.




of

317

with

addi¬

consequent

savings deposits, life in¬
and retirement plans.

•

international

year has

II

51

by

48,203

pronounced from

the

!

Korean

conflicting

'587 919

403

17,104

15 303

3 871 943

are

4.'419'931
44^088

goods.

14 904

sary

through¬

Baltimore

is

member

a

Stock

of

Exchange

the New

other
leading exchanges. I mi addition to
offices

in

New

Baltimore,

and

York

branch

City

and

offices

are

located in

Philadelphia. Pa.; Cum¬
berland, Md.; and Louisville and
Paducah, Ky.
;
In addition to the general brok¬

business

erage

the

firm

has

which

it

handles

active

been

underwriting field

in

identified

with

the

national

many

has

and

the

been

financing

of

concerns.

Morgan Stanley Group
offering of
150,000 shares of

of

ferred
is
an

stock

Ohio

of

new

issue"

4.44%

pre¬

a

Edison

Co.

being made today (Jan. 15) by
investment
banking
group

headed

by Morgan Stanley & Co.

The stock

share

yield

is

plus

priced at $102.50

per

dividends

accrued

to

4.33%.

Proceeds

from

the

sale

of

new

in

preferred

were

so

outbreak

of

offering to common stockholders
of 479,846 shares of common
stock,

to

desirable.

or

faced

with

On

also

and

from

current

a

being underwritten

the

Certainly
scarcity

no

contrary,

we

we

of
an¬

1953
the
be

used

by Mor¬

212

.

large
production
yyill provide a healthy cli¬

"While

the

public

has

'

Billion

seen

istic
:

/

of

capacitv

new

1953

following

and

will

be

270,000 kw the

year.

the

encroachment of

doctrine upon

Kidder, Peabody Adds
(Special to The Financial Chronicle)

gained

from social and economic reforms
over
the past 20 years, we have

8,579,328 18,098,090

will

additional

and

mate for business and banks.

.

$56,900,000,

generating
A total of 212,000 kilo¬

capacity.
watts

at

portion of -which

for

added in

which

7,617

estimated

are

major

a year in which goods of
types will be in plentiful sim¬

markets

social¬

the system

BOSTON,

Mass.—Arnold

H.

Dunne has been added to the staff
of Kidder.

eral

Peabody & Co., 75 Fed¬

Street.

of

free enterprise on which America
was

founded.

63 0

ernment

10 5

own

ness,

been

We have

outgrow

all

seen

other

gov¬

busi¬

competing directly with its
citizens who, in effect, have
forced to underwrite such

competition
100.2

York

ply with increased competition in
distribution, fewer controls, free

3 258

L.

individual

ticipate
all

4 013

26.7

po¬

diminution

the

War

the firm

business originally
in
1853,

a

in

gan Stanley & Co. and associates/
stituted to check these pressures'1 will be used for property addi¬
were found to be no
longer neces¬ tions. Proposed expenditures for

293 941

18 962

a

to

founded

Public

is

early 1951.
1952, various controls in¬

During

837 906

__

brought

Successor

Offers Ohio Ed. Pfd.

economy

inflationary forces which

2,229,565
4 410 000

__

Anniversary

BALTIMORE, Md.—The invest¬

Improving

generally are
improving and affairs within our
own nation
point to sounder mon¬
etary and fiscal policies. The past

II

18

Boyce

un¬

Con¬

years.

many

Agencies, including General and
Special, and
and Revolving Fund Accounts.
Department of Defense,
including General and Special,
and Business
Enterprise and Revolving Fund Accounts
Total, Foreign Aid,
including General and Special, "and
Business Enterprise and
Revolving Fund Accounts
~A
Grand Total,
including General and Special, and Business
Enterprise and Revolving Fund
Accounts.......

business Enterprise
Total

Lost

be¬

been most

countries, but conditions
out the free world

1

104,267
878,956

"
Total Civilian

i »ci

__

180 579

„

Tbe fact remains that this
avail-

ability

A

.

400

12 232

Agencies

re-

propriations

Fxnenditnrp Contio
Expenditure f nntrni

;i.

ap-

'

135,719

State

consumer

stands

unsettled

229 547

IIIIIIIIIIIIIIII

ePartment of .the Treasury

be-

year,

new

Justice

important
distribution of

is

still

1066 734

Agency...
...

most

the

World Conditions

1,732,906

Department of Commerce
Department of Interior

ewnh^Lmestpended "balancesa1n ^Pei;,ar'men'
old
ginning

Agriculture

the

litical forces and trade
restrictions
on
the
part of

_

Administration.

Home Finance

of

to

"The

A.

Reconstruction Finance
Corporation......
Tennessee Valley
Authority."
Federal Security
Agency

bank

high

more

tions

_I

250,687

Export-Import Bank of Washington.
Federal Deposit Insurance Corporation

large

a

for

types of financ¬

__

97

United" s'tatesIIIIIII

the

other

credit

surance

6 083

Board._.I~_

Administration

hn?1 Seneral Services

these

/

107

Control

demand

264"

Art

_

term

n.ent

Veterans

-v,

.

July 1 would

sub^tantial part
bstantial n^t'

ances

The Tax Court of

aPPr°PNations \

A?ew.

ijl

should be authorized
by this Congiess, total funds available for ex-

of

forces, and

242

Commission

Tariff Commission

billion, to $75

*

Gallerv

Subversive Activities

°L ^

bh 1 ion

bullion

a'

National

the

goods

30,172
-

Selective Service System
Small Defense Plants Administration.....
Smithsonian Institution

^75 bDili0n t0 ^80 billion'

fnJfthTt

and that he will

i

Renegotiation Board
Securities and Exchange

manufac¬

inventories.

the armed

on

and

11

108th

bet¬

a

better world."

a

a

today at an
and, at the same
time, individuals are saving more

3.023

____

'

B,Ulon |°tal
been reported that

^

of

and

sumer

97

Railroad Retirement Board

It

demand

predictable in recent

10

;

be at

cause

havior, which has

178

the

ment banking firm of Stein Bros.
"de-„ &
Boyce, 6 South Calvert Street,
high, is
today (Thursday, Jan. 15) ob¬
level.
Requirements of the mili¬
serving
its
100th
anniversary.
tary program will

consumer

'

and

nation

Stein Bros. &

on

"Perhaps

}_

ter

characterized the past,
hopes are realized,

influence

762

believe

banking industry is in a strong
position to participate in such op¬

a

commitments already
made," the bankers observed,

__

Aero-

National Science Foundation..
National Security Training Commission...

S10 5
*

$175 Billion Total

"Based

credit

775

for

as

ing.

3

free

our

dependence

We

government.

the economy will
require the con¬
tinued use of a
large volume of

measure

2,000
10,463

that

in ourselves with less

such

,

158

feel

we

citizens
In look¬

industry step toward the building of

this in turn determines in

3,081

296

National Labor Relations -Board—

a
Unexpended

^SmTte^^t^Hanproxfrnatelv
hillTnn
appioximateiy

ore

'

260

Committee

1953

most important
fecting the whole economy is the

,

32,782

ahead,

encour¬

our

benefits and to restore confidence

York,

probably the
single factor af¬

33,000

1,600

has

If

turers to carry
large
In the final
analysis,

J96 1,855,723.

■

National Capital Housing Authority
/_
National Capital
Planning Commission...

^

TT

$63 billion.

;

3,172

»

to

leaders of American

all-time

„

in

'

__

'

forward

fense-spending will

25

.

It is indeed

enterprise system will have better
opportunities to demonstrate its

bank credit.

__

__

«

)c Commerce Commission

N0110"?1 Advisory

'

392

Office

•

-

2,080

l"?™.,?3!™8 Comm'ssion-.-r

spe-

v

as

new

which

*

'"/

S ??r Aclministrati°n-

■

[l.-

r

307

Chemical
New

limits

such

of these facts.

aware

ing

Helm

planning for a continuation of the
high
rate
of
business
activity
; year.

9,863

to

gone

inefficiency in corporate

promising opportunity for
banking business. portunities. We aim to lend our
year begins, we find.- full support to every constructive

the

the

__

:

the

Co.,

H.

President,

the commercial

-

/

of

Trust

look

year of

As

/JL

has

breed

on

"We

29,939

Agency.._

&

and

-

'213 '

3,147,631

Chairman

respectively-,

•: J;

Harold

stated that:

Accounts

:

prise and revolving fund accounts.
,

accompanied by inflationary
policies and by a tax program

N. Baxter Jackson

volving Fund*

•

of

been

Helm,

2.

manufacturer

communications network.
"The trend toward socialism has

prtoand

78

;

Government Printing Office

cial fund
accounts; and
$18.1 billion in business enterTT

dominant

aging to believe that

^'

of

indi¬

largest
of

synthetic rubber, and, among other
things, the operator of a huge

management.

'

for the President.,..^...-

General Accounting

agencies

this includes:

$8.6 billion in general and

the

Bank

;

f

r

producer

the

underwriter

insurance,
largest dealer in commodities,

the

1, 1953

Accounts
*

Commission

Among

pe-

so.re-

Authoriza-

of July

EejGra! S°w,er Commission
Federal Trade

counts.
i

as

Economic Stabilization Agency
/_
Federal Civil Defense Administration....
deral Communications Commission
Federal Mediation and Conciliation Service,

more

in'general

billion

unefenS

ap-

with

individual
power,

vidual

foreign aid accounts follow:

in Appropriations and

the advantage
During this era,

electric

current

a

has

government has become the largest
individual lender of money, the

which

Generaiand

Civil Aeronautics Board
Civil Service Commission
Defense Materials Procurement

1,1953,

will

on

itself

exemption.

largest

to

Monuments Commission.
Atomic Energy Commission..
__*

hal-

of July

as

appropriations

one-year

Special Fund

independent Offices:

t

n

petition
of tax

reported fay dvfflan agencies and

:

Emergency Fund

-Z
p

commenting on the business
banking outlook in the 128th
Annual
Report to shareholders,
N.. Baxter Jackson and Harold H.

unexpended balances

American Battle

il rl
Lpccinn InJl

a

control

Estimated

Funds Appropriated to the
President:

acldi-

f-

In

and

to

power

special fund accounts and business

Office of Defense' Mobilization

?n1h«°nSriy f

in

beyond

National Security Council.
y"
18
National Security Resources Boards.33"

July f 1,

tion to appro-

ances

contract

Executive Mansion and Grounds___i___i__
145
bureau of the Budget__:_.:.:,u-_-___:_.
155
Council of Economic Advisers.^—: 2

expenditures,

ihP

agencies should have the

Department Or Agency

au-

for

a

banking business.

especially

course

enterprise and revolving fund accounts, (estimated)
~
(in thousands of dollars)
■

ap-

^|l

of

on

for the

opportunity

commercial

Sif{a"X?goXme„t

and

Summary of Unexpended Balances

"thorizatio-ns

Harry F.Byrd

true

tions to Agencies of the Executive
Branch

w

pect of better opportunities for free
enterprise indicates that
present year will be one of
promising

are

bal-

in

■

other

that

is

expenditure

Executive Office of the President:
m/propriations,
The White House Office—

It

it

enacted

H. Helm, President
Co., tell shareholders that pros¬

summarized estimates for military

esti-

pended

should be begun
that in the future ap-

so

Jackson, Chairman, and Harold

of the Chemical Bank & Trust

each

upon

study

a

promptly

u ne x-

ances

and

Then

un-

.

■■■■Ml'
i

N. Baxter

new

form its fiscal procedure to regain

baianc£s

my

Expenditures, I make
mated

incumbent

riod> but Congress should

^hat the fiscal ^tuation

expended

,

to

made

before

made. It should

are

requirements./

reduce

As chairman of the Joint Committee on Reduction of Nonessen-

relative

Government

agency fully to justify any additional appropriations when huge
balances
are
already
available.

a

Congress Obligation

fortunate

Government expenditures by re¬
viewing and adjusting unexpanded balances.

Favorable Outlook Seen for Commercial Banks

At a time when one of the most year basis This could be accomdifficult problems confronting plished without interference with
Congress is to balance the budget national defense

as
j

Dillion,

will

statement

have

a

New

beginning of new fiscal
year. Says it is obligation of new
Congress to regain control over

this

half of

troJ oyer annual expenditures

billion at

tial Federal

about

expenditures

unexpended

balances of Congressional appro-

priations,

years,

result of this procedure,
Congress has virtually lost con-

government

estimates

be

0qr

As

waste-

_

nonessential

Federal

Federal

appropriations

.

of the

tied over in amounts
equal to
ful, year,s expenditure
more

Federal Expenditures

f, i

task of

control-

appropriations; unspent balances propriations can be
jn appropriations have been
carinrrent basis.

...

Committee

several

important obligations of the
Congress is to review the unexpended balances in previous appropriations to each agency of-the
new

more

been
fr0m
previous appropriations, and about half from current

Reduction of Nonessential

spending

and

most

healthy

It makes much

Under the Truman policy

By HON. HARRY F. BYRD

.

a

ling expenditures.

U. S. Senator from Virginia
.

not

effecting economies

the

.

is

difficult the Congressional

Annroiiriafions
»Jr

balances

Thursday, January 15, 1953

...

heavier

through heavier and

taxes.

Government

com¬

With Lyman

Phillips

(Special to The Financial Cirr.oNicLi:)

BOSTON,

Mass.

Stephens^ has joined

—

the

Peter

staff

of

Lyman W. Phillips & Co., 201 De¬
vonshire Street.

Volume 177

Number 5186

The Commercial,and Financial Chronicle

.; .

15

(203)

iwu

Truman's Last Budget

to Congress tfie Federal
Budget for fiscal
ending June 30, 1054, showing estimated expenditures of

1953,
has

$78.6 billion and potential
receipts (under existing tax laws)
of $68.7
billion, thus indicating fiscal year deficit of about
$10 billion.
President
Truman
on
Jan.
9
submitted to Congress his
Federal

Budget for the fiscal year ending
June 30, 1954,
along with his fi¬
nal
Budget
Message
as
President. The

Budget
for

of

$74.6
for

next

with

and

30,

President

Truman

icipated

Government receipts for
cal

periods

; ;

(under

placed

are

doui

ns-

existing

at $08.7

tax

billion.

The text of the general section

of the' President's

Budget Message

follows:

am

year

transmitting,

Government

with

this

for

the

fiscal

enaing June 30, 1954'.

This

Budget

judgment

represents

to

as

such

the

my

amount

of

have

transmitted in pre¬
vious years, on the
policy that the
Government should undertake to
do only what is'essential for
tne

safety and well-being of the Na¬
tion, and that what must be done
cient

be

done

in

the

most

re¬

to

under

programs

the

Security Act and the De¬

In

this
Budget, I am recom¬
mending that the Congress enact
billion

effi¬

manner.

This

Budget has been prepared
under unique circumstances. It is
the first Budget since the

in5 new

authority to
obligations during
year
1954.
Total ex¬

fiscal

for

the expiration of some of the
post-Korean tax increases, are es¬

timated

basis,

at

$68.7 billion.-On

the

deficit

billion.
the

is

The

this

estimated

at

following, table

Budget

totals for the
five fiscal years 1950 through 1954.
These figures show
very clearly
the

fense

mobilization

which

program

embarked

we

on

after

the

will leave office a few
days
after its transmission.
My succes¬
sor will be
inaugurated as Presi¬
dent

the

on

January 20.

His

will

be

Executive

responsibility dur¬
ing the time when this Budget is
being considered by the Congress,
and
for

his will

the

be the responsibility

administration of Federal
for

programs

the

period

of

time

covered by this
Budget.
I have
done all in my power to ease the

problems of transition to the

new

administration, including inform¬
ing the President-elect,'through a
representative
the

his

of

choice,

of

background and considerations

which* have entered into tne prep¬
aration of this Budget.
However,
I

wish to make it clear that nei¬

ther

my successor in office nor any
of his staff has
participated in the

decisions herein represented.

President-elect

bility for the

has

no

The

responsi¬

amounts included

in

this

Budget, and will be entirely
free, of course, to propose changes
in

them.

crease

by

active

our

about

two

military forces

million

period.

These

and

men

of

the

particular

cir¬

cumstances, there is one signifi¬
cant
difference between this
Budget and others I have trans¬
mitted.

Budget

In
previous
years,
the
estimates have included

the cost of
I

legislation which

new

recommended

to

the

Congress.

were

steps

judged necessary not only to carry
out the commitment

in

we

undertook

Korea, but also to increase

defense
of

are

continuing cost of
in addition, they

Under
gram,

our

expected
the

to

fiscal

their
and

reach

and

are

to

Others—such

all

as

our

other

ac¬

programs for

agriculture, housing and

start

commun¬

ity

development, education and
general research, labor, social se¬
curity, welfare, and health—help

If

stabilized at

approved

for

$10.3

Investigation—have a direct bear¬
ing
on
our
national
security.

in

years.

be

or

of the Federal Bureau of

program

are

peak

subsequent

forces

presently
if

their

1954

year

declining in
OUr armed

expenditures

will

13%,

port security program of the Coast
Guard and the internal
security

present defense pro¬

military

remaining

tivities of the Government. Some
of
these
activities—such as the

As
ex¬

goals

to

our

new

assure

at

years

amounts

to

these

replace

rent
ter

necessary
forces and to

equipment with
items

they

as

the

new

resent basic

ment, such

and bet¬

as

making and enforc¬

ing the laws,- collecting taxes, and
maintaining Federal records and

developed,

are

Still others rep¬

us.

functions' of Govern¬

cur¬

it is difficult to forecast with
any
precision the amount by which property.

As the following table indicates,
for major national

total

Federal
expenditures may
expected to
drop
in future
years under these
assumptions, but

expenditures

be*

it

ky-AJlXV>il.

Hi

1,IJT

inate this

Budget, but also account
of

most

the

increase

AlOY.

J

not only dom¬

programs

for

be in the neighborhood of*

may

ylO

security

in

total

ever, a drop of this magnitude1 Budget expenditures since 1950,
Jannot be expected for at leasu the last full fiscal" year before
two

the attack

three years..

or

on

Korea.

Expenditure

Budget' Expenditures
.

In

This

Budget*

now

possibility

much

a

well

larger

along

Our armed

program.

of

the

Policy

preparation

is

three

of

this

1954 will

year

this

of

Increased
cluded
those

in

funds
this

clear

a

and

exists that cannot

deferred

to

outfit

them

has

ordered,1

major

public interest. In the

case

agencies, such

Interstate

Commerce

then,

constant

our

fense

production

and

economic

fort

civil
defense, and
iperchant marine activities. In the

adjust

expenditure

year

1954

these

grams

cost

change Commission, and the Fed¬
eral Communications

earlier

cutbacks

Commission,

were

amount

cal

obligational

been

programs

expenditures in

14%
1954

of
will

be

for

for.

Budget

Budget

to

some of them.
instances, however.,

restore

in these

Even

the'

policies

Funds

been
strici.
provided fdr

have

have

made up

been

later at

expense, or
ment
of
an

in

a

even

an

agency's

out the

Because

of

the

overriding

quirements of the national

ity

programs,

Government

(Fiscal

for

relying,

Years—In

they

at

are

procurement,

wherever

our

Expenditures
Receipts (under existing tax laws)

possible,

on

a

and the public at
been held, in recent
levels below those justi¬
fied by our growing population,
and expanding economy.
Rising
prices have also increased the cost
large

have

years, to

of

Government

and

have reduced

The

Major

national

Veterans'

Billions)

and

15)52

15)53

15)54

Actual

Est.

Substan¬

tial

made

$26.4

$47.2

$53.2

$57.3

5.3

4.9

4.5

4.6

5.8

5.7

5.9

6.5

9.6

.

_

.Total

progress

has been
Federal

7.9

9.0

10.4

-f

.3

—

more

work done at, less cost'.

progress

is reflected

announcement appears

for

rising.

.7

—

44.6

.9

66.1

purposes

of record only.

undersigned, and have not been and

organization
and
not static.
They
must be continually reviewed and
6.4
modernized in order to adapt the
10.3
machinery of Government to its

____

74.6.

tasks.

An examination

Continued

78.6

on

are

These Bonds
not

were

(—)

or

surplus




( +)

page

placed privately through the

being offered to the public.

$148,000,000

The

Reserve

involved

in

tracts

.

•

Mortgage 4Vi% Bonds, Series A

of

time

let.

are

•

First

the

military equip¬
required to de¬
sign, produce, test, and' deliver
such
complex
items
as
p'anes,
tanks, ships, and guns, after con¬
ment—the

Mining Company

I

This is due to the

Due June 1, 1980

Because of this long

lead-time, most items of military
equipment are not usually deliv¬
ered and

completely paid for until

Ei'lions)
15)51

15*53

15)535

Actual

Actual

Est.

Est.

$50.2

$84.1

$92.9

$80.8

$72.9

40.1

44.6

66.1

74.6

78.6

37.0

48.1

62.1

68.7

68.7

—3.1

-f3.5

—4.0

—5.9

-9.9

15154'

a

are

recommended for the fis¬

lead-time

in this

Government

procedures

current

40.1

This

in

manage¬
ment in the last few years so as to

Est.

$17.8

:

15)51
Actual

benefits

Interest

appropria¬

ency

Budget, and will continue to be
factor in future Budgets.

6.6

security

services

recommended

tions anticipate increases in effici¬

This

15)50

Glore, Forgan & Co.
January 12, 1953

Deficit

important

many

services to business¬

policy of strengthening

Actual

Program—

Although new obligational au¬
thority is declining expenditures
still

re¬

secur¬

farmers,

men,

get
<

1954 is $20 'billion less
than the amount enacted for 1952.

long

greater

serious impair¬

ability to
responsibilities as¬
signed to it by law. It would be
shortsighted to do less.
carry

ef¬

pro¬

Budget Expenditures

year

are

severe

of the work to be done.

military

example, reflect

au¬

declining.

Actual

New authority to incur
obligations

so'

that steps have been taken in this.

resulting frorn reorganiza-'
the
minimum 1 level
consistent tions, improved management pro¬
with our national objectives. Pro¬ cedures, and better programming

approximately $57.3 bil¬

additional

to make"^ure

posals

fiscal

An

to-

a peak of $92.9
fiscal year
1952.

new

thority has

a.-i

Com¬

mission, the Federal Trade Com¬
mission, the Securities and Ex¬

Korea and reached
Since

sev¬

regulatory

the

military weapons and equipment,
rose
sharply after the attack on
the

of

eral

authority, pri¬
marily to finance the purchase of

Years—In

■

definite

be for

New obligational

in

my

national

and much of it has been delivered.

billion

for

in

longer
impairing thr?

without

forces have

been

ih-

be

long since reached the level of
3.6 million; the initial
equipment

15)50
:

been

only

where,-

programs

judgment,

have

Budget

Budget Totals
(Fiscal

reserve

stocks.

of .the current outlook for inter¬ When defense spending has de¬
security pro¬ national
developments, in the light clined, we must bring these serv¬
grams—military services, interna¬ of the
heavy tax burden, and in ices to levels consistent with the
tional security and
foreign rela¬ the light of the
long-term needs long-range development of the
tions, the development of atomic of the
Nation. The recommended Nation and its resources.
energy,. .the.
promotion
of
de¬ estimates
reflect

six

scale.

in

accumulation

the

on

inventories

have

last

Adjust, to daily Treasury statement

on

are

than

large

dominated, as
Budget, every Government pro¬ the actual service to the public
been, by the
gram—including
those
directly per dollar spent just lis they have
qost of national .security.,, About
concerned with national security reduced the purchasing power of
73% of all. Budget expenditures
—has been reviewed in the light private
individuals
and
firms.
in the fiscal
the

continuing

We

rather
of

continued social and

our

lies ahead of

maintain

Other

fighting

continuing flow of weapons and
equipment from production lines,

handling increased workloads 6r
aggressions occur,
economic
new
progress
and
to backlogs of unfinished work only
obligational authority and
expenditures may be expected to strengthen the Nation for the long, when failure to do so would result
hard period of world tension that in
level off in future
delays which would have to be
no

preparedness in the light

the

procurement

Because

expenditures

lion.

nite

who

goods will be delivered.

'

will

President

a

will

pected to exceed mew obligational
authority for the first time since
before Korea.

June, 1950. This Program required,
among other things, that we in¬

to

by

orders

result,

Communist aggression in Korea' in

presented

Congress

approxi¬

billion, represent for

*

need

The

1954,
be placed, but

budgetary Impact of the de¬ stabilization,

women, equip those larger forces
with new and improved weapops,
and maintain them for an indefi¬

adop¬

be¬
authority

to

f

previously enacted, are estimated
at $78.6
billion.
Receipts under
present tax laws, which provide

tion of the Twentieth Amendment
to the Constitution to be
the

a

penditures, irom tnese funds and
from
balahces
of
authoriza'tioris

shows

should

which will require
legislative
authority

fense Production Act.

$9.9

It is based, like all

peace.

un¬

the

Mutual

world

I

new

budget

already

as

funds needed to carry forward our
programs
for
the
security and
welfare
of our
people and for

those

to

or

continue into the next fiscal year,

the

Message, the Budget of the United
States

proper

specific

incur financial

of the United

States:
I

way

$72.9

To the Congress
•

der

newed

deficit for the current fiscal
year.

laws)

transmit

ward certain activities

than twice the
t

during the fiscal

However, funds are in¬
cluded in this Budget to carry for¬

slightly less

an

as

for them.

$9.9 billion,

or

to

me

$11

the most part a
World War II;

billion,

certain

but since I will

ever,

office

and

proposals

legislative proposals

1954

of

as

in

included.

1954, I do not think it

year

for

mated deficit
for fiscal

be

are

these

support

legislative

-

strongly
hot

esti¬

an

still

I

other

fiscal

June

ex¬

estimated receipts from

nor

amount

Korea.

more

For

estimated

neither

mately

expenditures,

obligational

These expenditures,

will

fewer

year,

included.

increased postal rates

ending

year

This

mates of the fiscal effects of such
not

through
authority

year

Accordingly, the usual esti¬
are

new

and benefits.

which

part payments for goods
being de¬
livered.
In the fiscal

however, -I am not transmitting
specific proposals for new legisla¬
tion.

cation

billion

the

budgeting.

example,

com¬

pared

Federal

1951

obligational

new

interest and for veterans' services

years

<"

represented for the most part or-" include the costs of services and
ders being
placed, and expendi¬ benefits for the growing number
tures
of
veterans
of
the
represented
for
the
most
fighting in

sound rule for

a

tnree

from

year

exceeded

cause

penditures for aid to medical edu¬

$78.6

billion,

practice is

a

legislation

calls

expendi¬

tures

Such

sometimes

Each

President submits
year

ux

after they are ordered. '

Smith, Barney & Co,

of

34

16

The Commercial and Financial Chronicle..

(204)

Continued

NASD District 8

From

Washington

Ahead

Elects Officers

By CARLISLE BARGERON

C
Millions of words have

written in the past two months

been

what is

likely to engage the attention of the first session of
Eighty-Third Congress. But what is now apparent is that it
is to be engaged, to a very large extent, with Senator McCarthy.
There is seldom a day that he isn't in the
headlines. If it isn't one thing it is another.
on

the

Jt

that

seems

he

is

dominant

even

the

in

D i

of

t

s

ciation

I

ers,

offfice

members

the

on

vestigating committee
the

to

Foreign

as

had

Senator

and

of

would

we

so-called

the campaign was over.
cessful

issue

for

the

hear

less

of

McCarthyism

He

was

an

Democrats

Carlisle

the

baigeroo

once

understandable, though
that

in

campaign. But
would think the whole

unsuc¬

the

now

votes have been counted and you
purpose
of the issue, of the watchword "McCarthyism" would be lost.
There is no doubt in my mind that from his utterances and

actions the Senator hoped this would be

so. He gave every indica¬
down, which rather belied the charges
against him that he had an overweening ambition that didn't
stop short of the Presidency.

tion that he wanted to tone

That he is still to be

issue and

an

center of the stage, ranking

a

with what should be done about Korea, about European
aid, about

taxes, is, I

convinced, through no fault of his. His enemies
to keep the matter alive.
They are not going to
Day in and day out and throughout
the nights, they are to be gunning for him.
They may eventually
crack him, but they are more likely to build him into a more
pow¬
erful man than he ever dared to hope to be.
There is some cunning strategy in this on the
part of his oppo¬
nents.
It is not all based on downright hate. An
important pur¬
am

determined

are

allow him

moment of rest.

a

pose is to discredit in advance the revelations his
investigating
committee is expected to make about the misdeeds of the Demo¬
crats in power over the past 20 years.

Such

investigation

an

and

such

unless the Republicans are content
It is their job to make the

revelations

simply to rest

people

inevitable

are

on

disgusted in

so

their victory.
the next four

with what the Democrats did in their long
reign of power
be no serious thought of returning them to office
again. The Republicans were quite negligent about this in the

years

that

there will

brief

two-year period,

were

in

1946-48, they controlled Congress. They
lazy that they kept many New Deal pinks and,
instances, commies, in key committee jobs. And it is my
they wouldn't accomplish so much in the

so

smug or so

some

guess

this time without

a

like

man

When the New Dealers

by

of setting the stage for

way

to

was

investigating line
McCarthy to do the job.

came

set loose any

number of

in in 1933 the first
thing they did
the revolution that was to come

investigating committees.

Singly
together they painted such a sordid picture of
thievery, thugduggery and wrongdoing, generally, on the part of our
leading
citizens, our captains of industry, that it was several
years before
our
bankers, for example, were able to walk unattended on
the
streets. Certainly there should now
be some New Deal skeletons
paraded to make possible the
counter-revolution, or the return to
and

decency in government.

Undoubtedly this will

against the grain of the hard core of
party. Republicans by the very nature of
things
are not
given 1o screaming and shouting recriminations in
public.
The conservatism which
makes them Republicans runs
through
go

the Republican

their whole outlook
But the

that

a

raw

assume

that the turn¬

continuing state

people showed they were fed
They very definitely showed
tney

and

up

will

over

of affairs*

remain

were fed up
meat must continue to be fed
to them.
They

kept mad at those who betrayed them

that

that way.

man

work

business.

It

takes

a

McCarthy to handle the situation.

a

would

leather-hided fellow

like

W.
Boehmler, Educa¬
Director, Investment Bank¬

ers

Discussed

versity.

on

tional

Association of America.
Harry G. Guthmann, Professor

of

Radio

"Should People Invest in Com¬
mon

topic

Stocks?"
on

versity

the

discussion
Uni¬

11.

Panel

partici¬

Baird, A. G. Becker

Incorporated.




Northwestern

Uni¬

Marshall D. Ketchum, Associate
Professor
of

of

Finance,

University

Chicago.
Dean

School

the

States

is

of

Illinois,

Michigan,

Iowa,

constituted by

H.

McBurney,

Speech,
served

Northwestern
as

program

WGN, Chicago, and

moderator.

originated
was

on

broadcast

over

some

tual

Broadcasting Network.

200 outlets of the

Mu¬

promptly revived and passed. We must modify
subsidy program; and also repeal Section

On

finally,

1953, Arthur S.
Grossman, Straus, Blosser & Mc¬
Dowell, Chicago, 111., Alfred R.
15,

Kramer, Kramer-Gardner Com¬
pany, Burlington, Iowa, John D.
McHugh, James J. McNulty & Co.,
Chicago, 111., and W. Thurman
Riley, Riley & Company, Mil¬
waukee, Wis., will become mem¬
bers of the Committee

succeeding
Bell, Bell & Farrell, Inc., Madison, Wis., Joseph
E.
Dempsey, Dempsey & Com¬
pany,
Reuben
Thorson,
Paine,
Messrs. Vern S.

the

our

agricultural

104

of

the De¬

imports of cheese and

we must

cease

unrealistic

our

practices and policies of peoples of other

countries.
All

of

which

constructive.

Jan.

our

export

proposals

and

Wisconsin.

less but

completing its job the Committee came up with several im¬
portant specific suggestions. The proposed Customs Simplification
Bill, which was passed by the House but not by the Senate, should

Indiana,

Nebraska

in

In

attempts to direct

District No. 8

They

are

seem

part and

unobjectionable

and

uniquely worthwhile government-sponsored mission,
nificant

ment

is

message

sentence:

"It

is

most

entirely

parcel of this thoroughly

importantly

epitomized

imperatively clear that the

most

in

and

whose sig¬
this

single

important ele¬

required for the complete recovery and future prosperity of

Western Europe is its

own

will to survive."

Kidder, Peabody Go. Admits New Partners
Kidder, Peabody & Co., members of the New York Stock
Exchange, announced today that five of their staff members have
become

general partners

New York

in the

firm.

The

new

office, 17 Wall Street, of the firm

are

partners

in

the

Alfred E. Borne-

Webber,\Jackson & Curtis, and
Harry G. Williams, Quail & Co.,
Davenport.

Ohio Edison Common

Sfk, Offer Underwritten
Rights

to purchase an aggre¬
of 479,846 additional shares

gate
of

stock

common

Ohio

Edison

Jan. 8 to

Co.

at

(par

of
on

stockholders for

$25.25

per

one-for-ten basis.

a

$12)

issued

were

common

subscription
on

share

An under¬

writing group headed b,y Morgan
Stanley & Co. will purchase any
shares remaining unsubscribed at
the

termination

of

tion period on Jan.
The

proceeds

additional
sale

of

ferred

150,000
stock

D.

Miltimore

E.

Merrill

Dariing

subscrip¬
23, 1953.
the sale
from

and

shares
Jan.

on

Louis

the

from

common

Alfred E. Borneman

of

13

of
the

pre¬

will

be

Pro¬

posed expenditures for 1953 are
estimated at $65,900,000, the major

portion of which will be for addi¬

generating

capacity.
212,000 kilowatts of

of

capacity
and

will

be

270,000

added

kw.

the

in

A
new

1953

following

year.

The company which is the larg¬
electric utility in Ohio, sup¬

plies electric service in 577
munities

in

the

com¬

state

including
Akron, Lorainy Mansfield, Spring¬
field, Warren and Youngstown,
Ohio, and its subsidiary, Pennsyl¬
Power Co.

service

in

132

supplies electric
communities

in

western

Pennsylvania.
The two
companies have joined with nine
other

utilities

Valley

Electric

supply

the

for

to

form

Corp.

the

which

Ohio

will

Lloyd
man

and

1928

after

Louis

B.

D.

Waring

Richard

Miltimore.

Mr.

graduating from the

Borneman

Harvard

with the Chase National Bank

in their

Department.

Young

joined the firm in

Business

Miltimore became associated with the firm in
was

N.

School.

Mr.

1935, before that he

Investment

Advisory

I

In the Boston

office, 75 Federal Street, E. Merrill Darling and
Lloyd B. Waring, both of whom joined the firm in 1921, will also
become general partners.
Mr. Darling is a former President of
the Harvard Business School Alumni Association and the Financial

Advertisers Association of New England.
Richard N. Young, with the firm since

general

partner

in

the

Philadelphia

1934, will become a
office, 123 South Broad

Atomic

the

sion's

new

power

requirements

Energy Commis¬
gaseous diffusion proj¬

Street.

With Mutual Fund Assoc,
With Lola Turner Co.
Portsmouth, Ohio.
(Special to The Financial Chronicle)
operating revenues of the
(Special to The Financial Chronicle)
company and
its subsidiary for
SAN FRANCISCO, Calif.—MarSAN JOSE, Calif.—Richard A.
the 12 months ended Oct. 31,
1952, jorie M. Brown, Jack H. Call, Mel- Ball, Howard E. Brown, John R.
amounted to $99,942,000 and net vin L.
Jory, Jr., George H. Pitt- Essick, Clarence R. Leininger, and
income
was
$15537,000,
equal man, and Ellsworth A. Rico have Blake M. Taylor have joined the
after preferred dividend require¬
joined
Mutual Fund Associates, staff of Lola Turner & Co., Bank
ments, to $2.86 per common share. 127 Montgomery Street.
of America Building.

ect

James
of

University,
The

were:

Andrew M.
& Co.

the

Reviewing Stand Sunday

morning, Jan.
pants

was

Northwestern

Finance,

that such "a very substantial reduction will result not
in more efficient operation."

cago.

vania

Erwin

Desirability cf
Equity investing

,

Officer of the Association at Chi¬

total

But it can't hap¬

They report that drastic reduction in personnel is
feasible, and

be

est

nobody's

over-all department "whose
only assignment would be to give
away Uncle Sam's money," the group proposes that the economic
aid functions be transferred to the
ample existing permanent
agencies as the State Department or the Department of Defense.

fense Production Act which has cut off
other dairy products. And

tional

1933-52.

What the scoundrels would do to
such a man, even if such
ever
developed the taste or the stomach for such

like

1952,

at the time

the period

church.

be

his second year.

F.

Brady, Secretary since
continues as the Executive

have got to

I certainly wish,
myself, that the man who is to head
up the
Republican investigation would be a
soft-voiced, refined, Harvard
professor type who was also deacon in a
pen

are

is serving

John

an¬

employing a large staff to consider and report on the
problem, and opposing the proposal for the creation of one new

Hill,
Newton P. Frye
Watling, Lerchen
&
Co.,
Detroit, Michigan, and Carl MeGlone, Carl McGlone & Co., Inc.,
Chicago, Illinois.
Messrs. Frye, and McGlone are
serving their third year as mem¬
bers of the Committee, and Mr*
Hill

require

other study

used for property additions.

party would be very foolish to

the

way.

be

life.

which occurred in Novemoer
is

over

but

on

Vice

J.Gordon

they ordinarily would
Appropriations or

Administrator

not

newly

Chairmen

Relations,

hoped

Jan.

elected

Finance Committees.
I

assume

The

McCarthy will head. One of their most im¬
portant jobs as a minority, it seems, will be to
try to keep the Wisconsin Senator in check.
They are giving as much attention to this in¬

policies.

Over-Staffing

we
have too
many people and too many agencies in Western Europe; with con¬
fusion and wasted effort the result. We still
have MSA missions in
some
countries to which we have not been
giving economic aid
for some time.
Stating that the situation does

15, 1953.

investigating committee which

Agencies'

to be made.

inexpedient,

Harold

Mr. Frye

11

committee

are

Hopefully, for the benefit of the new Aid
Stassen, the opinion is brought back that

seph E. Demp¬

They had to go through consider¬
shake-up, in fact, in order
some of
their abler and more alert

put

Our

Jo¬

suvcceed

investments

Investment guarantee proposals are frowned on as
since they encourage rather than
discourage unsound

to

n c.,

committees.
to

ernments of the countries where the

Deal¬

curities

International Fi¬

an

Corporation to supplement the World Bank's investment op¬
erations, is also covered by this group.
They report general
agreement that the real solution to the problem lies with the gov¬

t

Se¬

of

nod to the right of expropriation,

agitation for

nance

National Asso¬

sey.

a

e

seemingly giving the

and also by the recent abortive

the

of

8

thoughts of the Senate Democratic leaders in
their assignment of Democratic
Senators to
able of

i

Resolution

itteo

o m m

No.

r

5

page

Observations...

CHICAGO, 111. — Newton P
Frye, President, Central Republic
Company, Chicago, Illinois, has
been elected to the Chairmanship

of the News

from

.Thursday, January 15, 1953

near

Total

Number 5186... The Commercial and Financial Chronicle

Volume 177

(205)

Continued from page 3

'•

The Money Market Outlook

have
of

pect that they will do that unless specialty shops may be expected
a modus vivendi can be arranged to
grow
in volume, because of
with Russia?
And, who expects price
maintenance
efforts,
city
that?

sales taxes, and "hardening" of the

'

The gloomy

outlook for expenditures makes any consequential
tax reduction highly improbable.
The Republican party has always

S5i0<i+Sr
reduction

Stock Purchases by Life Companies Off in 1952

Turning now to the money mar¬
ket outlook, I am sure that you

The Outlook for 1953

missed

not

the

the

appointment

Institute of Life Insurance reports purchases

significance
of

W.

Ran-

million

c^oMh^Fed^
of the

Treasury

r>prmtv

common

$87,000,000 and industrials
$73,000,000,
with
railroads
amounting to $10,000,000. In the

traffic arteries. So, when you hear Management, with his office in $200,000,000 in
1952, one-third less
complaints about retail business the Federal Reserve Bank build- than the investments of
this type
bein8 ba£, take note of the loca- ing in the Wall street financiai the
year before.
tlon of the complamer!
center!
Aggregate life insurance com¬

aT^
As

shares. Utilities account¬

ed for

porate stocks by the U. S. life
insurance companies were under

£ Change of Debt

below $200

were

one-third below acquisitions in 1951.

or

wording to the Institute of
Insurance, purchases of cor-

t

cDfJjal

f

DOst

17'

first 11 months of 1951, the utility

shares

acquired by the life

com¬

panies had amounted to $86,000,000, industrial shares $160,000,000

Debt management and monetary pany holdings of stocks at the and railroads $10,000,000.
start of 1953 were estimated at
caDuai exnenditures
witn capnai expenditures verv an(* credit management will unvery
utili/pH VPrv hpnviiv
well
over
$2,300,000,000,
about
th^p traditional Dolicies will not bl&b>
Wltb construction expendi- r
D€) utilized very Heavily
tnese traditional policies win not
higher
by the Republicans. Any slacken- $100,000,000 more than was held
be followed in the coming months, lu.^s vw al&u afa going nigner
hiT<rinP<« arfivitt win u at the start of 1952.1 Stocks are
It wms inescaDable tnai tax re- Wltb retail trade trending upward mg.
a Duslaess activity will be
it seems inescapaDie that tax re
carried by the life companies at
record-breaking levels
and met by credit relaxation through
ductions, if any, will not amount ITV™ r:c°ra oreaxing levels, ana
'
rrpilit m9nafrpmP„t
market value in year-end valua¬
to
much.
In fact
government spending Dawi a®Dt a?a credit management
to
miicn.
in
SAN
lacl> it now seems wltb
it
FRANCISCO, Calif.—
n°w. seems
,
what is there to worrv channels.
The Republicans know tions.
likely that instead of being al- dr
'
f.1 L
worry
consequential recession
in
Preferred stocks accounted for Eastland, Douglass & Co., Inc. has
lowed
to lanse
even
the excess about?
excess
Well,
there are
many ?na* a consequential recession in
towed
to lapse
been formed with offices at 100
even
tne
ight b
mentioned
business activity will defeat them more than half of the 1952 acprofits tax will be modified to mings tnai mignt ne mentioned,
election
After their
quisitions of stocks by the life ®us.^. Street, to engage in the semake
it
more
workable
and
to sucb as dangerous wage policies, aJ; ine nex?_ election.
Alter tneir
curities
business.
Officers
are
companies, in contrast to the 1951
remove some of the gross inequi- subsidization of various economic
Earl S. Douglass, Chairman of the
yoUr
bottom
experience, when common shares
ties of the present statute.
Also. §™up_s, and costly foreign aid procan
your
represented well over half of the board; P. T. Kavanaugh and L. H.
Easterling, Vice-Presidents,
and
year's total.
sonal income tax
P. M. Wie, Secretary-Treasurer.
by most nomjc developments that are beThere was also a shift in the
Mr. Easterling and Mr. Wie were
people now appears doubtful
coming more critical every day.
Because of this Republican de- emphasis on
type of security dur¬
Unfortunate as is the outlook These developments are so famil- termination, as well as the basic
ing the past year. In 1951, about formerly with Walston, Hoffman
for expenditures and taxation, it far.
students of business factors of supply and demand, I two-thirds of the stocks bought by & Goodwin. Mr. Douglass has
is
been Chairman of the board of
doubly
unfortunate
that so ^bat' paradoxically, this very fa- am still of the belief that the the life
companies had been in¬
many people are expecting conse- miRarity may
breed contempt, long-term trend of interest rates is dustrial corporation shares, but in Douglass, Van der Naillen & Co.,
Inc.
quential changes.
Their disape
and over-riding, fact down and not up.
1952 public utility shares led the
pointment when great changes fail ?ba* businessmen must face up to
The Stock Market Outlook
list, accounting for a little over
to materialize may well cause a J® tbaJ *be productive capacity of
half of all stock purchases.
Now, just one word about the
pessimistic reaction which could ™ United States has been ex In the first 11 months of 1952,
adversely affect business activity. Panaed so much, it is more than stock market outlook. As you well for which book value
figures are
At the very least, the disappoint- adequate for our astounding and know, although gross profits are
now available, the life companies
ment will cause some of the "rice" unprecedented
high-level "guns at unprecedented levels, profits
Effective Feb. 1 the firm name
there

the public

of

debt.

What Is There to Worry About?

to believe that

reason

no

is

Eastland, Douglass Co.
Opens in San Francisco

-

..,

•

..

.

^uye®/nej£|f

dollS
bott^ doliar

t

expected

remain in Washington,

Firm Name to Be

Walston & Co.!

feel

to

Republicans

they

that

"have been sold down the river!"

and butter" economy.

after corporate taxes

lbe second, and closely related,

adequate.

means

purchases of stocks

by no

are

In fact,

as

amounted

to

$170,000,000, compared with $256,- of Walston, Hoffman & Goodwin,
000,000 in the corresponding pe- members of the New York and

Dr.

So, it is high time for the word
to spread that
in government as
in agriculture',
the crop reaped

basic fact is tbat tbe pent-up and Leo Barnes of the Prentice-Hall
backl°g demands of our economy Economic Service has so trenchat Present price levels have been antly indicated, corporate profits

depends on the seed sown. Twenty

satisfied and business must rely on after taxes in 1952 represent only $89,000,000 was made up of pre*®wer Prices, new products and re- 3 .6% of sales, which is the lowest ferred shares, and $81,000,000 of

sowing and

of Democratic

years

$70 billion of unspent military ap-

Placement demands for sales in figure of

propriaticns, plus about $10 billion of such unspent funds in other

Both private and public debt have

1952

11-month stock

San Francisco

Of the

acquisitions.

Stock

Exchanges,

be^Cl^towllfto^&Co.'
~

Hrm

maTnTa i

n

The

^many^ offices

throughout the country.

since the great

the m«nths ahead.

be

any year

riod of the previous year.

depression of 1932-33. Dividends
The third fact is the great in- have held up only because a
government departments, guaran- crease in debt, which is now be- larger proportion of net earnings
tee that the coming fiscal crop will ginning to weigh on the economy, has been paid out.
expensive one!

an

'

.

„

^

..

increased to the point where their margins

,

The Business Outlook
The
more

business

is

outlook

combined total at the end of 1951
much

Commerce

outlook.

Plant

to both

Commerce

of

partment

expendi-

equipment

and

according

lures,

Mc-Graw-Hill surveys of
ital

spending

of

plans

the De-

and the
the capbusiness,

will decline less than 5% from the
1952

all-time

billion.

record

It should

these

that

high of $27

be remembered

surveys

when business

was

made
very opti-

were

in

a

mistic phase and, thus, will prob-

ably

$519 billion.

It is reassuringly
encouraging than the fiscal pointed out by the Department of

The

the high side.
competition
ahead

prove

keener

on

cutbacks

cause

was

may

businessmen

as

recognize that over-capacity,- not

that

the

ratio

of

debt

to national income was lower at
the end of 1951 than in 1940, but
that reassurance should be taken
cum grano salis, because the national income was greatly swollen
by heavy government expenditures for rearmament and military
housekeeping. It is the increase
of. $25 to $30 billion a year in
private debt which is the most
disquieting. This rate of increase,
which has been under way for six
years, obviously cannot continue
forever! The implications are obvious.

has
once
more
A resultant of the foregoing
something to reckon with, factors, but nonetheless important
On the other hand, the pressure enough
to
be
considered
sepof high wages
will continue to arately, is our heavy inventory
iorce the substitution of capital position.
The huge total of $75
for labor on a large scale. So, the billion can be rationalized by recapital goods industries can un- lating it to the changes in prices
doubtedly look forward to a good and business volume, by relating
year in 1953.
it to our higher standard of living,

This advertisement is neither

The plain fact is that net profit
are

any

of these

NEW ISSUE

January 14, 1953

1953 will

weaknesses,

spotlight these
although profits on
will be nearly up to

600,000 Shares

the whole
the 1952 level.

It follows that in
evaluating the outlook for a particular
industry,
greater
than
usual
consideration
should
be
given profit margins and break-

The Toledo Edison Company
Common Stock

points,

even

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

too thin and break-

points are too high in many
industries. The increased compe-

even

tition of

an

securities. The

Fortunately, the
tration

new

(Par Value $5 Per Share)

Adminis-

understands

something
fbat mosf 0f Harry Truman's boys
either
SQon

knew, or forgot as
they arrived in Washing-

never

as

Price $12.25 per

ton, namely, that profit is the in¬
centive

prise

which

system

makes

share

enter¬

A

work!

our

decent

under-capacity,

respect for profits will be such

become

great change from recent years in

by blaming the delays involved in
and industrial construction, prom- defense production, and so on, but
ises to be higher in 1953 than last the total remains a fact on the
year. There will be no hindrances, books and the physical goods are
as
building materials will be in on the warehouse shelves.
The
jgood supply, construction controls growing seriousness of the invenwill be removed early in the year, t°ry problem can be seen by a
and ample financing will be avlail- quick look at just two basic facConstruction, other than housing

able.

Commercial construction, in

particular, should surge ahead
much

as

15

to

20%.

This

is

as
an

tors.

Washington,
have
effect

on

it

writers

dealers in securities and in which such

equities,

conclusions

are

„
verv

wf start thrnew yerr
political

new

Copies of the Prospectus may be obtained from any of the several under¬
only in states in which such underwriters are qualified to act as
Prospectus may legally be distributed.

is bound to
psychological

Conclusions
mv

brief

with

administration

activity at a very
bigh ieVel. There is a danger that
people will expect too much of the
"new broom" in Washington and
that
their
disappointment
will
cause

a

reaction

sometime

after

in which there is still a sub-

Btantial

.tLni

schools

keener

economic

factors

comnetition

and

indicate

be

expected

1952

highways,
to

go

also

ahead

of

may

the but demand is

figures.

Retaii trade, despite all the complaints, reached an all-time high
of $164 billion in 1952, and should
po even slightly higher in 1953.
The shift from downtown depart-

ment stores to suburban stores and




greater than
up

a

year ago,

only about half.

If the great 800,000 barrel per day

In the money market, the longer
outlook is for lower interest rates,
,

th

.

k market

whiIe

earn_

ln me stock market' wftlle earn"
inSs after taxes wil1 be inade-

production of the Abadan refinery quate, dividends will be satisfacin Iran should, by some miracle, tory
The confidence factor as
be brought back on the market, pyn'pq_pH jn the times earning
the present demand and supply exPresse<* in t e times earnings
relationship would shift even furr ra^° W1^ be
xey
stock
ther toward

excess

supply.

n

•

A. C.

Smith, Barney & Co.

Merrill Lynch, Pierce, Fenner & Beane

Blyth & Co., Inc.

Central Republic

A. G. Becker & Co.

Allyn and Company

Hemphill, Noyes & Co.
McDonald & Company

Hornblower & Weeks

Company

(Incorporated)

Incorporated

Incorporated

W. C. Langley & Co.

W. E. Hutton & Co.

Wm. C. Roney & Co.

Paine, Webber, Jackson & Curtis

Ball, Burge & Kraus

Harris, Hall & Company

market behavior in 1953.

Merrill, Turben & Co.

The Ohio Company

(Incorporated)

Bosworth, Sullivan & Company, Inc.

Fordon, Aldinger & Co.

Fahey, Clark & Co.

Hayden, Miller & Co.

Greene & Ladd

McDonald-Moore & Co.

Seasongood & Mayer
Field, Richards & Co.
McJunkin, Patton & Co.

Smith, Hague & Co.

Manley, Bennett & Co.

Prescott, Shepard & Co., Inc.

Westheimer and Company

T. H. Jones & Company

J. C. Bradford & Co.

The First Cleveland Corporation

Lester, Ryons & Co.

Charles A. Parcells & Co.

Stix & Co.

First of Michigan Corporation

The Illinois Company

Farwell, Chapman & Co.

Curtiss, House & Co.

Watling, Lerchen & Co.

Stern Brothers & Co.

Nauman, McFawn & Co.

Goodbody & Co.

Laurence M. Marks & Co.

S. R. Livingstone, Crouse & Co.

Fulton, Reid & Co.

per year

duct|°n jl running ahead of demand-„Jrhe s.upplZ of crude is
some 7%

Collin, Norton & Co.

Corporation

'

slifhtlv

backlog of pent-up deUtilities construction, also,

and

*

the first few months,

i0Wer prices
Although the total
has overcome the effects national production will probably
of the 54-day strike last summer be greater than it was last
year,
mand.
and built up consumers' inven- whereas
1952
opened
low
and
will be at a high level, as only tories to the point where producdosed high, the prospect is that
one-half of the electric light and tion may actually have to be cut 1953
which is opening at a very
power facilities authorized under back after this quarter!
bieh' level will close at a lower
accelerated
depreciation
certif(2) Gasoline and fuel oil pro- level
'
area

The First Boston

a

and

business

with

Basic

(1) Steel production running at
the rate of 115 million ingot tons

that

tremendous

a

a

Baker, Simonds & Co.
H. L. Emerson & Co.
Incorporated

Sweney, Cartwright & Co.
*

13

The Commercial and Financial Chronicle...

(206)

Bank

National

First

NEW

announced

BRANCHES

OFFICERS,

First National

REVISED

is reported

ington,

CAPITALIZATIONS

j

the

Merchandising Corpo-

Associated

been appointed
a
member of the Advisory Commit¬
tee of The Chase National Bank's

.

Secretary Treasurer of Allied Stores Corpo¬
C.

Arthur

Hallan,

has

ration,

s

«

Five

elected

have

to

Advisory

been

in

nounced

New

was

an¬

by N. Baxter

Jan. 9,

on

it

York,

Chairman. Philip L.
Xiecker, President, American
Chicle Co.; Roy W.
Moore, Jr.,
Vice-President,
Canada Dry
Ginger Ale, Inc., and Donald G.
Power, President, General Tele¬
Jackson,

phone Corp., have been elected to
the bank's 100 Park Avene Office.
Clinton S.
of

Lutkins, senior partner
Pressprich & Co., has

W.

R.

elected

been

the

to

of

board

Chemical's 30 Broad Street Office,
Thomas

find

E,

Lovejoy,'

Jr.,

President; Treasurer and director
has

Chemical's

of

board

elected

been

Office at

Center

'

•

•

#

the

to

Rockefeller

West 51st St.

11
sjs

■

Abraham

of

United

of

&

the

to

Straus,

States

of

New

York,

on

Jan.

12,

has

of

Board

Trust

it

been'

Trustees

Company

Rothschild'is

Mr.

Chairman of the Executive Com¬
mittee

of

Stores,

Federated

Inc.,

Department

director of Wm.
Co., and of Douglas

Prince-

of

Gibbons & Co., and a director and
former Chairman of the Board pf
■

t

REPORT

OF

CONDITION

OF

Oh

Jr.,-

Jan.

Brady,

Gage

Wm.

8,

the guest of honor at a
at the Union
Club, New

was

dinner

City, given for him by the

York

members of the Board of Trustees
of the East River Savings Bank cf

Mr.

York.

New

been

of

member

a

has

who

Brady,

bank's

the

since 1936, has

Board of Trustees

V-1- V

120

Broadway,

Jfcw.

the

the

Y.,

at

1952,

provisions

State

of

retirement

In

Virginia.
East

The

River

of

New York, announced

the

len,

Jan.

on

appointment of^ Robert E.

Mullen

of

Bank

Savings

8,

a

the

Mills

E.

Charles

and

as

Comptrollers. Mr. Mul-

and

of

cash

items

in

collection

0nited

i

States

$1,297,008.01

Government

obligations,

direct

stocks

Furniture

and

60,000.00

fixtures——

assets

_

387,137.73

449,422.04

—

TOTAL ASSETS

$2,672,764.48

JDemand

uals,

partnerships,

staff

Savings Bank

Sep-

m

tember, 1941. Since 1949 he has
Supervisor of the Examin-

been
ing

Division.

Mr.

$140,500.77

Both
on

he and Mr.

Maior General

T el'ind

Commander1

Denutv

Armv and
mander

Combat

of

active

S

nf

Hnhhc

the

Flr^t

Division

World

War

Com-

TT

to

service

a

Tan

on

retirement

General

position

institution's
with

slock

$2,672,764.48

capital

consists

of

value

.par

of

as

a

MEMORANDA

pledged

or

in

other purposes
Becurities
as
shown

after

serves

duty

the

on

Mexican

preceding World War I.

underwriters

trust

deduction

and due

I,

31,'52

banks

/

12,706,479

12,616,568

1953' the Federal Reserve Bank of
Boston bas announced. The Federal Advisory Council meets with
Jhe Federal Reserve Board at
and

to

spect

best

of

statement

knowledge

my

3,340.81

is

and

true

to

of
the

belief.

'

.

\

GEORGE

to confer

year

conditions

matters

money

bhode

of

Island

and

England, having served

as

second

until

1922

in

various

in

1942

he

1941

regiments.

served

He

was

F.". LePAGE
WATSON




*

the

the

of

command

2nd

He

1947.

secretary

to

returned

serve

as

Staff,

General

the

of

New

]
^Directors

j

*

<

Reserve

System

an-

Jan. 2, the following
appointments of Federal Reserve
Bank

on

Branch

directors:

Henry

ley, whose term expired.
Phil H. Lowery of Loco, Okla.,
was appointed a director of the

17,447,272
1,087,889

1,030,595

,

,

corporation

triust

company,

National

Jersey

the

Bank

of

J
bv the
j., Dy me First
*irsi

National Bank & Trust Company

?11'

f

^ ,^ssepS an

bill ties

place

...

purchase of

PomDton Lakes N
rompion i^dkes,

16,973,998

profits.-

the

the

of

during

tormer

deP°sR lla"
bank

took

the-week-end

of

Jan. 3, officers of the two instituHons
made
known
The
North

resources

Deposits
Cash

$2,672,764

140,501

—

and

t

nr\<*

June3°.52
$2,520,082
169,754

.

due from

banks

1,297,608

.

.

53

:

478,597
158,361

237,900

be

Pompton

t

+u

B

fS 9
Da"k
&
and

t->:

a.

at

a.*

i

f
Flr.st^atlonal
"9riist 9°-.°i Paterson,

m

opaied

tor

business

Jan.

on

under its new

472,181

profits—

,^a*lonal Bank will henceknown as the

forth

name. The same
continue to serve

Cameron

has

elected

Assistant

Frank

P.

elected

Assistant
National

lyn,

N.

Y.,

Vice-President

Plunkett

fayette

been

has> been

Cashier
Bank

according

of

to

of

La-

will

in this Pompton Lakes

Office. At
N.

personnel

a

on

Dec.

11,

shareholders

Bank-

to

Brook-

institution. At the

an

appointed

an-

of

death of C. C. Reed..
.

,

David

purchase

same

W.

"^Pro^d re^1^7iea F
^staff members^The Bankthe
of
Virginia was
approved
by
r

,

hank'<?
banks

at the
at thp

ctnekhnlderq
stocknoideis

the annual meeting
ers

Mr.

all

directors

Carlin

said.

of sharehold-

on

Jan.

9,

annual
an
uai

Richmond,

in

»,

Feisonnel for^^the bank,

j

Already approved by the bank's
directors, the amended plan is

-subject to approval by the Treasury Department and Salary and

were

re-elected,
.

of- Nov. 27,
ers

page

issue

2038, sharehold-

of the Pompton Lakes institu-

*

-

.

National

...

Bank

w0UId

take

gram

from

effect

Baldiwn

Mr

said

supplements

the

Jan.

new

QRaries a.

Vlz;

F

w

Gibson, President

Mani1f9M„r5«f S '
Com-

Pno

M

mQri

f

o

'

r

,

tirement plan for the bank's staff
innnrhpd

muncnea

1941

in

in

iy-41,

and

increases

ana

increases

Mr.

Baldwin said the new
benefits at retirement age
those

participating.

pro-

for

,

t

v.

w

W'

^

Gordon

McLabe,

Y™;?™%evt™
'' TrYpbav,^

t

T°

Qr,j

S

Exchange and member. New
rnttnn

Orleans

w

Mr-Farharn
h

ic

inr

+'

TWota

esident of the

k

On Jan. 1, the

bank had 74 officers and 520 staff
membfers. Of this total number 183
were

^ '.f1■

<.r.

Tnairanco'f^^p *'
nee c0., Pr^si^ Insurance
r~ r?Si?en+u ^
r!/ mS"

Libertv T ifp
d

/

w.

1.

re-

Mills,

and Director, Ely & Walker- Her-

nro-

present

a

Of

threed

\yage Stabilization authorities. It

the age of 35 or older.

H. D. Ivey, President of
Citizens
National Trust & Savings Bank of
Los

Angeles,

celebrated

his

50th

anniversary with the
continental
bank

and

of

illinois
trust

chicago,
TW
-11
Dec. 31,

Total

national

company

banks-

52

559,158.953
-

Tirno-m

'SO

June_ o, 5_

M3WW'5n
663,290,899

Jan.

Jan.

2,

1903

he.

It

was

24,073', 147

^

3

joined

Citizens

BOHl

meSSeng^.

father's ranch,

Texas,

on

he

National
On

hlS

near

San

Antonio,

to

Los

Anffpl-^s

went

while still in his 'teens. Moving
u

up
.

°n me rajli5^ m the bank, in
1911 he was elected to the position
-\

*

T1fi48
undiv'ed profits

on

1953.

that

resources 2.800500,848 2,555.397,000

u" s. Govt, se-

bank

2,

ill.
'cO

time they

our

the

of

John^R^Baldwin Di^ F' W' Foe Manufacturing
rector^of Personnel'fnr^tl^ hank pany; Presldent. Calhoun

from

of the purchase, noted in

Branch

Greenville, S. C., announced on
Jan g: the electi^n of
777^777 77
,new
^o^bers to its Board of Directors,

according to

the

Hopper and

City

*
First

The

,

,

,

the

Jersey National Bank voted
accept the proposal of First

National

Monroe,

special meeting held

North

to

Ft.

Forces,

ganization in 1950, following the pired.

meeting

Following
North

Field

Curiin6 Pr^-Hbyf ^HerhJelfreAt ing agents. According to the terms SSlt/r7ue
At ?alph Cflef t0 ®fP€.as"3"idat.

*

The Board of Governors of the

'

Mechanized
Cavalry Regiment. Banks of Clarkedale, Ark., was apFollowing the German surrender, pointed a director of the Memphis
he remained in the European Branch of the Federal Reserve
Theater as regimental commander Bank of St. Louis for the threeof the 2nd Constabulary Regi- year term beginning Jan. 1. Mr.
ment, Armored, until August. Banks succeeds Hugh M. Brink-

Presi-

Carlm, President of the'bank.

NORMAN J. MacGAFFIN
R.

a

diEx-

CHARLES J. SKINNER

Correct—Attest:

WM'.

a

advise the Board

to

17,823 809

discounts

&

Undivided

James

SKINNER, Treasurer

J.

above

1918

a<.

a

and

He entered West Point
graduating in June, 1922,
Lieutenant, Cavalry.

position
in

the

assumed

as

a member of the Federal Advisory Council to serve for the year

June 30/52

10,086,923

re¬

$he above-named institution, hereby certify
the

0f

Atlantic Rural

Institute

Poiytechnic
rector

member of

a

Industrial Trust Company of Prov-

customers

-—

CHARLES

of

an-

Visitors of Virginia

of

Vice-President

Bank in August, 1941, and

Federal

Association, Director of the New
England Council, etc.

company,

$105,346.70

of

was

of the bank's stock9 Col Reed is a

of Richmond-

Board

the

pirst

new

nounced

dent of the Rhode Island Bankers

from

holdings

"

,

above
of

Va.,

director of Larus & Brother ComDanv

of Dec. 31.

as

serve

Jan

on

Attebery, who retired from the

hank

grade of Lieutenant-Colonel. In January, 1943, he

Clayton, President of the

york
Dec.

and

the

assuming

holders

of

'oiin

has served successively as Assistant Manager and Manager of the
Research Department, 'Assistant
Vice-President and Vice-President. Mr. Attebery began' his
banking career in 1904 with the
American Exchange Bank in St.
Louis. He had been with the Federa! Reserve Bank of St. Louis
since 1914, joining the bank's
staff before the institution was officially open for business. He had
been First Vice-President since
January, 1951.

at Richmond, at the

Virginia

Leeds

Reed,

director of The Bank

a

nnt

i

hank

Reed,

&

Williams

Richmond,

0f

Inc

elected

St

the

joined the staff of the Federal Re-

Hancock

Charles

nual meeting

Officer,

York

for

and

*

*

of

Dtfeetors oi

Tbe

*

of

D^ectors

the

bv

transferred to the Armored Force

fcirs

and

assigned to

liabilities

of thp

vania Railroad.

v/ith

business

G.

K.

*

Federal Reserve Bank of Kansas
City for the two-year term beginning Jan. 1.
He succeeds Mr.
Rufus J. Green, whose term ex-

Undivided

are

011

of the company.

general

Auditor.

^ P^idlnf
™te£ Y1^~ankIf

and Mr' CarpUS Vice-President in M.

Treasurer, succeeding
David Dunbar who resigned after
63 year's service, to take effect

on

Louis Mur¬
Cashier, and

Oklahoma

is

U. S. Govt, security

$500,000.00.

secure

annual

new charge 0f traffic for the Pennsyl-

elected

Ernest

to

retired by his own request to accept the position of Treasurer of
Williams & Reed, Inc. He was advanced to President of that or-

Total

__

total

Assistant

Zerbe

*

the

at

Philadelphia

of

23, Roger M. Dunbar, Assist-

In addition to

to

general affairs of the Federal ReCitv
He
and
Mrs' Hnhhs will serve System. Mr. Clayton will
make their home in
New
V^rlT ^Present the First (Boston) FedGeneral Hobbs' 37 vears of Armv eral Reserve District. Mr. Clayton
service Ss scanned both World ha.S taken an active part in the af"

office

'«.■?
Dec. 31,52

ACCOUNTS

Vice-President;
E.

Cash-

Harvey is President of the bank.

a meeting of the Directors of
Lynn Safe Deposit and Trust

Jan. 2.

Vice-Presi¬

to

Hruska to Assist¬

rreu

Floyd L. Greene

Col.

Trust

Vice-President;

Clark

Charles J.1 Wright to

doch
De

*

and

Jan.

on

Va., until February, 1949, when he

main

•n

CAPITAL

Assets

ant

At

Treasurer

W.

| ier; Leonard J.

$983,360.60

TOTAL LIABILITIES AND

common

dent;

President

was

Senior

to

| Walter

Presi-

Company of Lynn, Mass., held

of

Bank

1, the promotion of Paul M: Ped-

banker for

a

County

announced

Army

the

AC¬

COUNTS

tThis

*

Neb.,

the

158,360.60

CAPITAL

10,966,062

and

whose

325,000.00

profits

TOTAL

354,183,381

11,013,471

re-

Loans

$500,000.00

fund

Undivided

401,433,402

proiits

with

holdings

CAPITAL ACCOUNTS

t

Capital

disc ts

Douglas

common

Heaney,

board of the

*

U. S. Govt, security

Burplus

A.

least four times

_

Vice-President, Office of the Pres¬
ident, of the Colonial Trust Com¬

cash

$1,689,403.88

369,844,952
740,347,756

&

ersen

'

committees

resources—$42,199,507 $49,903,649
Deposits —-...
38,863,040
46,721,061

(not

LIABILITIES

1,503,939,733

722,148,023

The

the duties of Treasurer, Roger M.
Dunbar will continue as Trust OfSupervisor of the Internal Audit- ficer. Benjamin M. Hartshorn, Jr.
ing Division. Formerly, Mr. Mills was elected Assistant Treasurer.
was
an
accountant
with
Biggs "Charles W. Harwood is President

1,548,903.11

Including
subordinated
obligations shown below)

$

se¬

Omaha,

of

employee of the
October,
1939,
i§

new

:___

June 30, '52

1,583,577,281

holdgs.

Undiv'cd

an

since

Totol

TOTAL

Leans

*n charge of that office,

Gn

Mills,

bank

$140,500.77

liabilities

Govt,

S.

curity

C?LJ?s j1?!?

and

River

❖

-

DEPOSITS-Other

U.

Stark has become Vice-President

of the

the

Joining

East

and

corporations

institution's

George

^ advisoiy

Dec

Mortgage

deposits of individ¬

TOTAL

detroit,

mich.

S

meeting on Jan. 13. Mr. Greene is
Northport, has announced his re- chairman of the Board of General
tirement from active banking af- Refractories
Co.,
Philadelphia,

Commission

the

of

border

LIABILITIES

of

Dec. 31, '52

bank con-

Stockholders

ton since 1950, and

tor

Wars
4

^

shares for each share

new

stock.

the

Rockefeller^Center Xw

and
478,596.70

Corporate

bank.

that

of

„

A

pany,

'

guaranteed

Other

seven

Department, was Assistant Secretary and Assistant General Audi-

Hobbs will accept a

process

bank

detroit,
^

outstanding old share, while
Northport stockholders received

former member of the staff
New York State Banking

31
1953
On
rriui
'-•11

balances,

reserve

national

Huntington received one and onefifth shares of new stock for each f

_

retire from

ASSETS

Cash, balances
with other
banking
Institutions,
in¬
cluding

of Dec.

as

President of the First National of

York.

Brady will live in Carters Bridge,

York.

New

ap-

cf 31, 1952.

Mr.

New

of

Savings Bank Auditors and
Comptrollers Forum.

in accordance with a call made
Superintendent of Banks pursuant
of the Banking Law of

the

to

5,356,669

were

predecessor banks for stock of the

of the

published
by

93,382,071

4,450,289

Bank

idence, R. I., has been selected
N.

December 31,

on

|ncovt7s7cu7ity 128,185,082 128<269>633

u.

UndiY!d0d profits—

National

proximately $210,000,00

25 years, is now President of the
consolidaated bank. A. J. Davey,

x

York 5,

New

the close of business

664'o29',734 62i,'o74i280

278,762,584

Jersey

ChairmanCity Bank

tivities, including the
ship of The National

COMPANY
<
of

—_

97,766,369

dent of First National of Hunting-

Mullen have served

CORPORATION TRUST

099931349(552966821

resources

and due from

311.050,514

banking firm of Shields & ComP*ny entered into and performed
certain underwriting agreements

surviving

mich.

the First National
holdings
Bank & Trust Co., and the North Loans & discounts

resigned from the Board and his
industrial and banking ac-

other

Mohrman & Co.

THE;

Totai

Deposits'

sists of 47,600 shares of $10 par
Flyod L Greene and Fred Carpi Total resources 1i729,611,974
value common stock. To facilitate were elected to the board of direc- Deposits
— 1,638,913,640
the consoldiation the investment tors of The First National Bank cash and .due 452,048,365
from
banks—

a

Filene's Sons

&

of

resources

Hunt-

resources

the new

Bank

Detroit,

Dec. 31/52 Dec. 31/51

the exchange of the
outstanding
stocks
of
the
two

*

announced

was

by Benjamin Strong,

President.

member of

a

Council

Graduate

Assistant

:i:

Walter N. Rothschild, President
elected

York, and

National

First

the .Detroit bank,

per

Company of Paterson will
have 11 offices in Paterson,

$18,464,906 on Dec. 31, 1952. Caoitalization of

$60

concerning

of Manhattan Life Insurance Com¬
pany,

Fed-

ten University.

tJhemical Bank & Trust Company
cffices

Sarah

^jtwfsh PhifflropTes

of

of

Boards

-

of

member

a

trustee$%f

of

IsLwrenceCollegeand o^he

erS
the

*

.

members

new

nko

i<?

Hp

board

of New

£4th Street Branch in New York.
'

rat inn

total

with

County
.

in

now

liquidating

a

than

less

not

Clifton and Pompton Lakes. Total

First

the largest
Suffolk

as

bank

commercial

of

Bank

National

Suffolk

the

designated

Trust

receive

of

share.

Trust

&

Jan. 8. The merged

on

institution,

Bankers

and

ETC.'

and

Y.,

N.

Bank

will

tion

value

.Company of Northport, N. Y., was

CONSOLIDATIONS
NEW

Suffolk

The

the

Hunting-

of

County,

ton,

News About Banks

of

consolidation

Formal

A

Thursday, January 15, 1953

77U379

20,202;962

of Assistant Cashier.

He

became

Volume 177

Number 5186... The Commercial and Financial Chronicle

(207)
Cashier

in

the

same

rector

named

was

the

bank.

1929, Mr. Ivey

was

members

of

tute

of

its

executives

bank. He

of a major
of.the charter

one

the

American

Banking, and

Insti¬

was

of

one

the organizers and first Chairman

of the

Advisory Committee of the
Angeles Clearing House.

Dos

*

The

*

*

Directors

Bank

Limited

of

of

the

Midland

London,

Eng.,

that, in consequence of
advancing years, Sir William
Dugdale, Bt., J.P., D.L., has re¬
signed from the Boards of the

announce

Bank

and

of

Executor

the

and

common

Limited.

pany on Oct.

offering to

it for

stockholders the right

Bank

the

debentures

Company

the

general funds of Sinclair Oil

Midland

Trustee

Net

the

$808,982,000

1951,

and

in

the

full

year

Hill Richards Co.

to

$617,894,000 in the
nine months ended Sept.
30, 1952.

com¬

income

increased

Installs New York Wire

from

$30,$81,898,000 in

SAN

FRANCISCO, Calif.—Hill
390,000 in 1946 to
Richards & Co., investment firm
1951, and to $64,085,000 in the nine
with nine California offices, has
itures already made.
months ended Sept. 30, 1952.
to subscribe, at
100%, for $101,installed
a
direct
private wire
The debentures are convertible
Capital expenditures, estimated
758,900 principal amount of 3*4%
linking its San Francisco offide,
at approximately
$180,000,000 dur¬ into common stock at $44 per 155
convertible subordinated
deben¬
Montgomery Street, with the
share on or before Jan. 15, 1958
tures due Jan.
15, 1983 on the ing 1952, and which may-reach
New York Stock Exchange mem¬
basis of $100 principal amount of the same total in 1953, will con¬ and at higher prices thereafter.
ber firm of Bonner & Gregory in
The debentures will have the
debentures for each 12 shares held tinue to be directed largely to in¬
New York City.
of record on Jan. 9, 1953. The sub¬ creasing crude oil production and benefit of a sinking fund
designed
The local firm's offices, running
reserves, lowering transportation to redeem
scription offer expires at 3:30 p.m.
approximately; 60% of
costs through new and more ef¬
the issue by maturity. Under the along the coast from San Diego
(EST) on Jan. 26, 1953. The of¬
and La Jolla to Oakland and San
ficient pipe lines and tankers of terms of the
fering is being underwritten by a
sinking fund, the
Francisco, are interconnected by
group headed jointly by Smith, greater capacity, increasing refin¬ company will make annual sink¬
a
wire
network, and the EastBarney & Co. and Merrill Lynch, ery efficiency and expanding mar¬ ing fund payments prior to July
West wire will now mean that all
keting
15 during the
operations.
Capital
ex¬
Pierce, Fenner & Beane.
years 1963-1982, in¬
branch offices will have the bene¬
penditures during the five years clusive.
The
indenture
under
Net proceeds from the sale of and nine
fit of instant communication with
months ended Sept. 30,
which
the
subordinated
deben¬
Sinclair Oil Corp. is

National, thus be¬
of the nation's young¬

one

chief

est

to

bank loans incurred by

Sinclair Oil Debs.

On

dent of Citizens

coming

Of such
general funds, $40,000,000 will be
applied to retire a like amount of

di¬

a

July 12,
elected Presi¬

was

other corporate purposes.

Bankers Underwrite

1923, and later in

year

of

Vice-President

1918,

Cashier in

and

will

be

added

to

some

1952

10, 1952 to reimburse

of the

captital expend¬

aggregated

tures

approximately
during this period

$610,355,000;

Corp. which funds will be avail¬

Sinclair

able for capital expenditures and

:

$377,012,000 in the full

sales

increased

from

kind

being issued contains
or

limitations

of

the nation's financial center.

no

future dividend action by

on

Richards

Hill

any

L.

has

Lea

been

ap¬

j

Jackson & Curtis, 25 Broad Street,
New
York

NATIONAL BANK

City, members
the

of

York
E

OF

DETROIT

New

Stock

COMPLETE BANKING AND TRUST SERVICE

xchange,

it

was

an¬

nounced
by
Lloyd W. Ma¬

■:

STATEMENT OF CONDITION, DECEMBER 31, 1952

Manag¬

son,

ing Partner of
the

to

coast

coast broker¬

with

Paine,
Webber, Jack&

son

Victor

Lea

/■.

firm. Prior
coming '•

age

to

Mr.

1

Cash oh Hand and Due from Other Banks

$

452,048,365.48

1

.

.

722,148,022.91

j

.

r

.

142,427,949.88

.

of

United States Government Securities

.

Other Securities

;

-

was

Manager

RESOURCES

•

Curtis,

Lea

-

.

.

.

...

.

.

....

Loans:

the

Commodity Department of
Walston, Hoffman & Goodwin.
Mr.

-

quarters
of

will

Lea

his

make

Loans and Discounts
Real Estate

head¬

in the New York office

'

Paine,

Webber,
Jackson
&
but will be charged with
supervision of commodity activi¬

.

Branch

-

.

$

331,674,421.48
69,758,980.66

..

..

5,308,022.13

Buildings and Leasehold Improvements

Letters of Credit

....

3,885,674.61

•

v

,

2,360,536,43

...

said.

$1,729,611,973.58

members of

are

401,433,402.14

.

T

.

Customers' Liability on Acceptances and

ties in all of the firm's 37 offices,

"We

.

.

Accrued Income and Other Resources

Curtis,

Mr. Mason

>

;

Mortgages

all of the

principal commodity futures ex¬
changes and our business has been

steadily
said.

growing,"

Mr.

"The association

with

firm

our

expand

will

and

will

enable

•

Deposits:

to

us

be

United States Government

of

Mr.

to

Accrued

joined the commodity

he

II

of

price

oils

section

division

1946 until
and

the

the

1949 he

of

manager

serve

of

of

given

was

leave of absence to

12,851,326.21

1 783,000.00

Payable February 2, 1953

Common Stock ($10.00 Par

a

and

$1,638,913,640.35

2,360,536.43

.

Capital Funds:
Value)

15,660,000.00
45,000,000.00

Surplus

chief

as

fats

OPA.

Undivided Profits

*

-

.

14,043,470.59

...

74,703,470.59
$1,729,611,973.58

From

economist

was

the

121,168,983.59
46,326,204.81

Acceptances and Letters of Credit

1928 and later became
commodity
department manager. During
War

$1,471,418,451.95

.

Expenses and Other Liabilities

Dividend

department of Fenner & Beane in

World

.

Other Public Funds

work

hedging programs."

Lea

*

Mr. Lea

available

with trade clients in the develop¬
ment

r

Commercial, Bank and Savings

informa¬

of

area

price analysis.

also

Lea

service to clients par¬

our

ticularly in the
tion

LIABILITIES

Mason
Mr.

of

commodity

"

research

department of Standard
Brands. For the next several
years
he operated his own

United States Government Securities carried at $170,11,1 £4 L87in the for ego inn

research

Co. Mn

firm,
1951

Victor

he

joined

Hoffman

&

of

commodity

their

Goodwin

Mr.,. Lea.

L.

as

Lea

pledged to secure public deposits, including deposits of $16,751,339.29
of the Treasurer-State of Michigan, and for other purposes required by taw.: ''

statement are

commodity '

.

&

Walston,

*

manager

department.

BOARD OF DIRECTORS

organized,

course

the
first
in commodities for the New

York

Stock

more

than

Exchange

20

taught the

trading

v

years

in

course

principles

Institute

New

York

BEN R. MARSH

J. BOWMAN

PRENTISS M. BROWN

'

price

analysis for the old Stock Ex¬
change Institute and its successor,
the

B.

ROBERT

commodity

and

Institute

of

E. HUTCHINSON

HENRY E. BODMAN

He has

ago.

WALTER

DONALD F. VALLEY

W. DEAN

CHARLES T. FISHER, JR.

NATE S. SHAPERO

JOHN B. FORD, JR.

Fi¬

JAMES B. WEBBER, JR.

ROBINSON

CHARLES T. FISHER
•

GEORGE A. STAPLES

.

S. McLUCAS

R.

R.

R. WILLIAMS

C. E. WILSON

*

PERRY SHORTS

BEN

E. YOUNG

•

nance, ever since. As manager of

Paine, Webber, Jackson & Curtis'
commodity
continue his

department,
course

he

will

43 OFFICES IN METROPOLITAN DETROIT

in commodity

price analysis for the Institute.

Garden City

With Eisele, King

•

Harper Woods

•

Inkster

MAIN OFFICE—WOODWARD AT CADILLAC

•

Livonia

•

A.

HAVEN,

Harris

staff

of

Conn. —Edwin

has

been

Eisele

&

added

King,

to

the

Stout & Co., 177 Church Street.




Member Federal Deposit Insurance Corporation

Libaire,
-

-

Plymouth

•

Wayne

SQUARE—DETROIT 32, MICHIGAN

(Special to The Financial Chronicle)

NEW

are

Angeles Stock Exchange.

Paine, Webber Go.
pointed Manager of the Commod¬
ity Department of Paine, Webber,

&' Co.

mem¬

bers of the San Francisco and Los

the company.

1946

year

are

restriction

Victor Lea Joins
Victor

19

20

The^Commercial and Financial Chronicle

(203)

Reserve

Mining Go,

Arranges $148 Million
Private Financing
$40,000,000,

to

ing

Sale

bonds

the

of

under

Dr.

which

the

draw

Beaver

building

extensive
hard

deposits

iron-bearing

The

first

marked

bonds

the

of

outside

Its junior securities

•financing.

jointly

the

at

-

sale

the

Minnesota.

in

rock,

a

the Mesabi Range

of

end

eastern

taconite,

of

owned

Republic

by

are

Steel

Corp. and Armco Steel Corp.

CONDITION

OF

LONDON, Eng. — Although all
countries
(including the United
has

in

country
sta¬

in

lation

of

close

business

published

in

December

on

accordance

with

31,

1952,

call

a

made

the Superintendent of Banks pursuant
provisions of the Banking Law of

iby
"to

the

the

of

State

Cash,

balances

banking
and

of

Items In

cash

the

dol¬

earners

may

be
the

gold standard.
its

As

collection

United

$10,086,923.30

States

Government

obligations,

direct

guaranteed'

Obligations

is

the

Other

States

12,616,568.09

and

1,469,365.02

bonds, notes, and de¬

bentures
Xoans

discounts

(in¬

cluding $523.43 overd"pnt.)
.Banking

premises

tures

17,447,272.24

owned,

furniture

None,

and

fix¬

101,811,92

assets

TOTAL

So

long

in¬

as

currencies bear fixed

given weight of gold
sense

the gold

on

though they

even

For

in¬

value

the

are

of

of

gold of a certain
fineness. Payment is

weight and
not made in

gold
into

in notes

or even

gold,
in

expressed
contracted

but prices

the

currency

in

a

107,627.96

ASSETS

the

currency

assumed

to

re¬

main the same in terms of
gold at
time when the liabilities fall

is

It
not

are

lations

said

$42,199,506.80

only currencies which

maintained

against
to

in

gold

fluctuate

have

to

standard.'

stable

but
that

al¬

the

gold

fluctuations—

those of sterling between
$2.78 and $2.82 constitute the de¬
gree

of

even

tolerance

in

ard

under

the

had

ex¬

gold stand¬

generally

of the

sense

which
the

accepted

term.

LIABILITIES
Demand

uals,

partnerships,

corporations
Time

toward

and

$21,612,544.16

—

deposits of individuals,

^ partnerships,
,

There

deposits of individ¬

and

corpo-

United

States

Government

Deposits

of

litical

and

po¬

subdivisions

Deposits

of

10,339,150.52

banking
:

tions
'Orher

612,740.60

States

institu¬

checks, etc.)

473,961.25

TOTAL

DEPOSITS, $38,863,045.99
Other

liabilities

TOTAL

248,571.99

LIABILITIES

CAPITAL

$39,111,617.98

ACCOUNTS

Capital f
Surplus

$1,000,000.00
fund

Undivided

:

which

gold.

1,087,888.82

—_

CAPITAL

is

which
in

used

in

this'
cur-,

present

relations

to

of

the

cost

could

extent

an

of

living index

other index

some

$3,087,888.82

CAPITAL

tThis

as

basis

a

conceivably

at

stock

total

which

to

other

Loans

the

are

after

above
of

deduction

after

are

reserves

I,

William
above-named
that

best

the
of

of

of

reach

role

of

standard.
number

Pike,

statement

knowledge

and

is

true

of

the

certify
to

the

belief.

WILLIAM D.

be

C.

W.

KORELL)

SUMNER
B.

V.

FORD/Directors

TAMNEYJ




of

value.

based
A

of

on

rise in

he

advo¬

policies

crease

wages

on

tion

of

the

cost

standard

would

cost

of

entails
a

of the

of

without

of

productive

flation.

it

result

in

extent

to

would

operate

flaw

would

destroy

it

redeeming feature of in¬
To

the

unable

extent

to

which

to

insure

smooth

as

adjustment of earnings to the de¬
preciation of money it tends to ac¬

di¬

to

is

the

to

the

To

system

a

the main

centuate
caused

capacity

the

degree

of

hardship

by inflation.

Securities Salesman's Corner
JOHN

By

DUTTON

to

inflation

have

her

way

such

a

are

living index.
living auto¬

under

such

corresponding

in¬

payments made

a

it

make

possible

without

tears.

wpuld

It is true the

system

is

at

Investment Clientele

an

(Article 3—Part 2)
'Cultivate Investors
Last

week

Who

Will Follow Sound Investment

first

of

group

were

adopting any
of investments.

their

are

tion

people
portfolios,

of

Socialist

objective

far

as

as

they

policies, he puts forward the for¬

cerned.

mula'

the type of people in

under

which

thinks

he

it

Today

were con¬

shall deal with

we

it.

"

It

be

may

such

possible

illusions

have

in

countries

experience

no

inflation.

less

In

in

fortunate

coun¬

tries it is realized that the protec¬
tion provided against the effects
of

There have been many

which

advanced

to

define

what constitutes
will

only

try

attempts
well

as

as

investment.

an

describe

and

I

him

the

postwar

inflation

in

a stage was
reached when wages were adapted

daily to the rise in the cost of
food, the standard being the cur¬
rent

of

cost

certain

food

number

representing
calories.

of

a

Such

the inflationary vicious spiral.

long

So

effect

is

con¬

at

which

they are well
have
specialized

and

success

in

a

certain

field

endeavor.
Most
often they
people that have learned to
and

they

have

the

hard

lives
has

mellowed

carved

them.

time

its

the

as

"ups."

minded

and

They

will

insight

into

makeup.

If

are

listen

they

the

will

are

open-

fellow's

busi¬

your

know

it—if

you

are

discover

to

turity.

payments
on

a

of

sliding

disadvan¬

its grave

foresee

So

the

amount

long

Should

the

as

is comparatively

system
the

would
rise

however,
system

be

the

high degree

of

in

,

can

its

rise

in

have

interest

an

planning

"joint accounts."
in

a

and

it

likely that there is
ning" of any kind.

is

often

there
most

much

is

un¬

"plan¬

Women

application
introduce

uncertainty.

sliding scale system

is liable to defeat the constructive

bands, and who

are

world,

often

in

are

need

very

of

made

never

that

reasons

enough

money

to

his

labors.

Today Doctors

are

they

and

business is difficult

they

cause

If

better

seek¬

are

fice

hours,
and

make it

to

secure

reliable

alone
very

be¬

pressed for time.

are so

specialize

you

after

away

in seeing them
from their of¬

the telephone, and you
important, there is a good

volume "of

investment

waiting for

business

you.

Small
In the

Businessmen

small towns, in

urbs of every
and

the sub¬

city, there
who

women

are

men

businesses

run

making money.
These
too busy to give much
time to watching the stock mar¬
are

people
ket.

are

They

not

are

visited

every

day by some other security sales¬

They desire

man.

a

safe and

sen¬

sible plan that will build up their
for

retirement,

not

or
for
They want to in¬

business.

business.

speculate.

They

have
own

They have the time to

spend with

about

go

much

guidance. However, they are often
skeptical and you must be patient

and

job

you

principal,
more

are

lent

as

or

them

in

the

have

know

you

need in the way

of

will make

you

with

your

After

way.

count,

in the

investment

if

you

appointment

lawyer.

Investors

Women who have lost their hus¬

a

the

find

contrary.

properly compensate him for

sition

tolerable.
accel¬

the

"country Doctor" of the
past used to die broke was that he

you

prob¬

are

Where

home

will

you

old

an

Often

The best accounts

friction

of

one

will look

sav¬

joint solution to their

a

lems.

ma¬

who

sit down with them both and

un¬

of

wives

investments.

work out

you today
instances to

busi¬

a poor

you

will often find enough of speculation in their

They both take

their

investment

moderate

become

would

ings.

and

en¬

Moreover, the extensive appli¬
cation of the

In this group you

is

I think if

their

•

& Mrs.

shared their labors and their

based

the average Doctor
nessman,

vest,

f

ex¬

Professional Men

reserves

husbands

liabilities at the time of their

prices

invest¬

an

ment program.
Mr.

all

Contrary to the old adage that

„

that

your

keen

a

salaries, pensions,

deferred

patience you have
their account.

on

for

you

save

well

to

other

know

you

of

know

as

But they also have

story.

ness

like

logical, conclusion

wages,

and

pended

their

out

They

are

results
the

repay

Experience

way.

what the "downs"

system

It is liable to paralyze
terprise to a large degree to be

very

educated
with

stage be
is

a

the

scale, the entire community would

the

Often

ing to help them plan

to

all

erated,

certain

acteristics.

They
distinguishing char¬

don't you won't get very far try¬

adverse

Should, however,

reached

the

have

in this group.

its sphere of operation is

fined to those whose earnings are
not based on the sliding scale sys¬

able

people

its

as

limited

tem.

People

You will find many retired and
older

see

own

ing competent guidance and help
regarding their investments. Their

currency

During

will

you

ac¬

your

will

recompensed

Retired

were

such

that

the

(or her) to you.

depreciation through
the
application of sliding scale
systems
is far
from
adequate.

of

investor

an

and

men,

Treat

men.

if they

as

Possibly

The Real Investor

harbor

to

than

many

Group 3

Women

than

careful

often better money man¬

are

around

Group 3.

possible to" eat his cake and keep

business.

new

mother's, and

placed in group two and
decided that although it was pos¬

should not be directed toward this

for

counts

ideas.

own

become centers of influ¬

can

agers

we

modera¬

reversal

even

or

Rules"

Once
they
have
confidence in you

their

more

they

were
own

their

to

they
ence

to

group

up

them.

placed

not temper-

were

program

second

Those

with

buyers.
The
the out and out

suited

mentally

planned

two

security

speculators who

The

described

we

mean

necessarily

un¬

the

Building

Realizing that Socialism is inher¬ sible to do business with them,
ently inflationary, and that any following a planned program was
attempt at checking the inflation also not feasible, and our efforts

an

countries

of

agreements

der the agreements.

operation

If

large and increasing

the

instrumental

be

to

ceases

version

the

accordingly

ceases

saving.

which

become released

can

is depreciating and adjusts

commitments

forced

produc¬

no

capital investment

that the adop¬ who made
of living index according

tages.

on

the cost of

agreements

but

other

well

adoption

A

matically'
PIKE.

Correct—Attest:

JOSEPH

among

to

156,522.09

Secretary
institution,
hereby

above

my

deduction

of—

D.

exchange

on a gold standard
index standard.

the

all

production.

on

the cost of liv¬

in

He imagines

soon

appears

Likewise, as soon as the
becomes
conscious
that

public

be

can

fast

difference

or¬

Like

currency.

leaders,

ing.

and

toward

capacity

persistent classes

and social

continuous rise

kind

re¬

for

saving and

Mr.

the inevitable effect of which is

rents,

shown

as

Socialist

every

35,139.85

Securities

other

cates economic

and when such stage should
be
reached it would be correct to
say
that the countries concerned are

of

serves

(b)

of

standard

Britain

tive

purchasing

the

of

depreciation of the

of

above

forced

no

there

out in favor

their

spite

value

$9,258,868.22

shown

in

carried

and

purposes
as

standard

book

Fear"

of

comes

maintain

to

power

and

par

published

Place

basing the value of savings
living index basis in

principal

assigned

or

liabilities

secure

for
<a)

pledged

medium

a

index

minutes

any

|become

cost of

while the index would become the

MEMORANDA

Assets

recently
"In

of

$1 000,000.00.
'

his

consists

$42,199,506.80

capital

with

of

through a
that

10

make

to

en¬

they be¬
that their

as

conscious

always

ceases

to them.

moment

purchasing power of their

not

ACCOUNTS—

institution's

■common

that

LIABILITIES AND

have

a

gold would be reduced largely to
TOTAL

others

under

gold coins in circulation the adop¬
tion

The

is

depreciation

thoroughly

of was the
pace at which the cur¬
which wages,,
rency
was
depreciating that by
much less extent
the time the wage earners were in
other obligations are based on the
a
.position to spend their earn¬
cost of living index or some other
ings their purchasing power un¬
form
of
sliding
scale,
points derwent. a further
dapreciation.
toward the abandonment of
gold
The index standard has the in¬
as
a
standard of value.
Even in
effect
of
accentuating
countries on a full gold standard evitable
with convertible notes and with and accelerating the operation of

or

earnings

prices.

it

soon

that

their

the persistent
prices.
Wage

The increasing adoption

system

AC¬

COUNTS

at

are

stable

salaries and to

contacts
TOTAL

it

by all countries and
of

maintained

ex¬

unnat¬

not

a

departure from the gold
Hungary, for instance,
(in the
sense
of
the*

in

i,ouu,uuu.U0

;

profits

tendency,

article)

the

1,236.024.42

deposits (certified and

officers'

a

rencies

4,588,625.04
of

however,

standard
term

rations

Deposits,

is,

the

der

be-

may

abandoned

Narrow

re¬

are

as

isted

Other

of
a

in this

terms

such

vaults—™.

and

in

lowed
369,938.27

™

and

Einzig

everything is measured indirectly

due.

______

of

Dr. Paul

of value.

are

is

and

Aneurin Bevan

the

a

its

toward

This

of

now

In

which

is

agree¬

other slid¬

some

or

trend

entitled

system

under

watch

for

earnings.

the
standard

the

■

and

subdivisions.

political

of

name

implies,
gold

real

fully

come

con¬

money

conscious of
the rise and are doing their best
to hedge against the depreciation
b,y

as

on

wages

points

use.

and

value of which is

process

trend

lar

are

in¬

balances,

reserve

inflation

As

insure

to

time

on

gagements.

or munition
The "veil of money"
which conceals forced saving is
ing scale in other agreements re¬
removed if earnings adjust them¬
mains exceptional. Nor is the sys¬
selves automatically to me cost or
tem
by any means in universal
In
that
case
inflation
use in the sphere of wages.
But living.

living clause

rising

being

of

be

are

order

ural consequence of

re¬

considered

entirely

The inclusion of a cost of

ments.

tended

equivalent of gold and liabilities

other

with

institutions,

cluding

sphere

gold

are

ASSETS

the

to

convertible

York,

New

to

they

in

the

ensure

almost

forward

the decline of real earnings is pre¬
vented through the operation of

depreciation.

confined

present

not

of
in

rise

agreements and other

wage

the

cur¬

is

convertible.
at the

ac¬

reality

they

Company

gold

term,

standard

Broadway, New York 4, N. Y.,

the

generally

sense

this

convertible

Underwriters Trust

the

of

relation to

•of 50

suspended

in

cepted

gold

OF

of

means

require¬

their watches

many people to put

resulting from the de¬

sumption

inflationary

vicious

smooth adjustment of earnings to currency

standard
REPORT

the

Holds index number standard does

term contracts.

bilized

for

accelerate

spiral, when widely applied in fixing
■'

whose

development and processing of its

by

capital

situation, created by tne in¬
standard, with the habit of

dex

for

can

cline

rency

plant and other facilities

ern

achieved

This end

dency to accentuate and

mod¬

a

the

capa¬
or

to

Professor Schumpeter compared

consumption in

employ productive

because of the curtailment of

any

Bay, Minn.

The company is

old

community

on way of
adoption of an index number in place of a gold
standard, calls attention to the index number standard's ten¬

Bab¬

project at

construction

bitt and

will

needed for its

as

to

national defense.

to

appear

be

effected States)

was

company

down the money

big

to reduce current

.

Einzig, noling that Britain and other countries

arrangement by standard,

standby

a

the

city for capital investment

the company obtained

bonds.

force the

to

ernments

order

By PAUL EINZIG

loan

the

of

Under

have.

to

current

ments.

system inflation enables the gov¬

last
week from nine leading institu¬
tional investors through the sale
of
$148,000,000
first
mortgage
AVi%
bonds due June 1,
1980.
Glore, Forgan & Co. and Smith,
Barney & Co. acted as agents for
the company in the placement of
the

claibaed

Index Number Standard

down the first instalment amount¬

which

.

Mining Co. has drawn

Reserve

from

object of inflation and deprive it
of
the
main
justification
it is

The Menace of the

Thursday, January 15, 1953

...

and

right

their

what

of income, safety

capital gains,

or

ac¬

they

less

their

in the

same

accountant

you
po¬
.

or

These people make excel¬

investment

Next week

accounts.

we

will discuss spe¬

cific methods of seeking out these

investors, who,
be

looking for

in turn,

may

also

someone

like

you.

Volume 177

Number 5186 .The Commercial
and Financial Chronicle

(209)

.f-J

.

Freeman Grant V.-P,
Of

Byrne & Phelps

Byrne and Phelps, Inc., 44 Wall
Street,
New
—

York
M

i p a

c

Bond

1

stocks, for all
Total

be¬
at

associ¬

come

ated

and

been

m

e

&

adelphia,
the

stocks.

the

corporation

Nov.

on

30, 1952

Freeman

G.

Grant

sales "of

On

of

securities

founding partners of that firm.

SAN

2.25%
dated

was

and

Announces Expansion

consolidated

Treasuries.

debentures

1952 and due Sept.

1,

par. The proceeds from
offering, together with other
funds, were used to retire $111,245,000 debentures which matured

1, 1953 at

Dec.

&

Co.,

404

.

Jan.

Republic

1, 1952.

rAs

of

close

the

of business

to

1953, the total amount of
outstanding amounted

2,

Montgomery

Service of Bonds of the External Debt

$703,730,000.

San

changes,

Francisco

will

Stock

admit

A.

Eldredge, Tallman Adds

Ex¬

Ernest

(Special

M.

Bernstein and Frederick D. Simon

partnership on Feb. 1.
have been with the firm for

CHICAGO,

Both

Rardin

some

is

Eldredge,

se¬

years.

most

1 »IE

Ul

111.

now

Hartley

—

connected

Tallman

&

Co.,

John

Brest

service of the external debt

E.

with

July 20, 1948, and published in New York on Decem¬
ber 7r 1948, announces that holders of bonds in dollars,

231

pounds sterling and Swiss Francs of the direct and indirect
external debt of the Republic and the. Municipalities cov¬
ered

Parker, President and
Manager, said George L
been

has

appointed

Our

district

Reporter

and

the following have
joined the firm's sales staff: David

Dattner, Warren L. Fogg Walter
W. Hongler, Reuben F. Nevling,
Charles E. Rust, John H. May and
John W. Werrett.

Other

members of the staff

new

include Charles R.

Suter, statisti¬
cian, and Isabel Nuskey.
Mr. Parker also announced that

By JOHN T. CHIPPENDALE, JR.

The

government market seems to be on the backing and filling
course again, with investors evidently not inclined to put funds to
work unless they can get securities at prices they consider attrac¬
tive, which in many instances is near the lower reaches of the
trading range. The short end of the list has also been a bit on the
reactionary side, although it had been expected that the demand
lor these obligations would be sizable enough to give them a more
constructive

The

tone.

ment

expanded

offices

its

at

Walnut

1519

Street, Philadelphia.

The

fices.

on

the

and-

new

of¬

new

ground floor of the

building,

trading, statistical and other

facilities.
of the

An

outstanding feature

air-conditioned Riecke

new

headquarters, according
Parker, is an extensive
floor
mit

window
the

to

company

products

that

area

and

to

Mr.

groundwill

per¬

display

explain

assigned under the aforesaid Law No. .8962 for amor¬
tization:

.

-After

Public

investment

an

closed-end

type,
its

Corp.,
of

the

offering

the

company

holders

of

Service

is

common

stock

the restricted
trust

of

a

longer-term higher
be

coupon

the main

of

one

stock

at

the rate of

shares

$3.75

share

at

share for each two

one

held.

per

The

corporation

is

also

offering the privilege of sub¬
scribing
for
additional
shares,
subject to allotment, out of any

shares

subscribed

not

for

under

the exercise of rights.
The sub¬
scription offer will expire at 3:30
p.m., Jan. 23, 1953.

The offering is not being under¬
written. Stone & Webster Securi¬
ties

Corp.

heads

investment

an

group which had agreed to act as
dealer managers and to assist the

corporation
of

in

the

information

No

Treasury obligation.
of buying in

sources

obligations, with minor support coming from private

Change Expected During Coming Months
some

the

sub¬

scription offer

among

representa¬

tive

dealers

throughout

securities

the country.

shrewd followers of the money

markets

many

are

corporation to add further invest¬
ments to its portfolio as and when

authorized

by its board of direc¬

tors.

General
was

Public

incorporated

Service

in

1925, and has carried
investment

as

an

its

inception.

years

tained

the
a

Corp.

December,
on

business

company

since

For the past several

corporation

fully

has

invested




main¬

position,

fol¬

£19,112,464, US$109,858,500 and Swiss Francs
86,496,200.
: The Caja Autonoma de Amortizacion de la Deuda
.

Publica, in accordance with the provisions of Article 3 of
Law No.

8962, also

announces

that holders of bonds of

the external debt who assented to the

plan of service of old
the new plan under

8962, will be entitled to receive for the

interest at the rate of
'on

the basis

management, there is not likely to be

any

appears to be developing a better; appreciation of the problems
facing the money markets,' through a change in debt management,
than was formerly the case.

Apparently, the current focal point- in the debt management
in

likely to be

the

too distant future.

To be sure, there still i* considerable talk about

a 30-year 3% government bond
being offered. This even got to the
point where not only was a 3Vs% obligation looked for in some
quarters, but even a 314% issue was considered likely by those

that

are of the opinion that long-term
Treasury financing is some¬
thing to be expected in early 1953.

No doubt the

change in Administration has been responsible

for these opinions about the long government bond financing and
with time there will undoubtedly be alteration in debt manage¬
ment

policy.

However,

there are so many conditioning factors
to be taken into consideration, such as the international situation
and economic conditions, that changes in debt policy are quite
likely to be much slower and more deliberate than had been
expected not

long ago.,

so

Ventas de

of

Impact of Long 3% Issue
As to

bonds

provided in Law No. 5580 with respect to the

when

seems

to

there will

be

be

a

purely

an

on

issue

Money Markets
of long-term

of conjecture.

government

it
though the belief is now spreading that during the first
there is. not likely to be any offerings of long-term
Treasury obligations. A ^0-year 3% obligation, it is believed in
most quarters, is quite likely to be the issue that would be used
by the Treasury when, as and if conditions are right for such an
matter

However,

offering.

However, it is being noted that a long-term 3% government
obligation would have considerable of an impact upon the money
markets as a whole, and there would have to be
many adjustments
order

to

such a
development. What would be the attitude of holders of savings
bonds, the demand obligations, which can be turned into cash at
any time, and particularly those whose holdings mature in 1953?
Would the owners of the demand
obligations be content to hold
them with the Treasury offering a 30-year 3% marketable bond?
What about the savings banks and the purchases of mortgages
bring matters

as

a

on

of Chile....

US$3,745,661.

income of the 4th category

971,455.

companies...,
importation of petroleum for the

on

nitrate and

copper

Law No. 6155 of

industries

(Article

7th

of

237,714.

January 6, 1938)

US$4,954,830.

Up to the close of the year corresponding to this decla¬
92% of the dollar bonds, 98% sterling bonds and
95% of the Swiss franc bonds had been assented to Law
ration

No. 8962.

whole in line with

.

Pursuant

nance

to

the

extensions

granted by, the
the ierms of Fi¬

Government under

Supreme

Decrees Nos. 5563 and 3996 of May 31,1952

and June 9, 1952,

respectively, the period for

ac¬

ceptance of the exchange authorized by Law No.
8962

will remain

open

only until December 31,

1953, which is the date when the transitory
riod

pe¬

contemplated by said law terminates.

Holders

of

bonds

assented

to

$1,000 bond

on

5580 will be

Law No.

entitled to receive the aforesaid payment

of $13.37

and after February 1, 1953, against

entation and surrender for cancellation

of the two

corresponding to said payment, (in the

case

per

pres¬
cou¬

of the

City of Santiago, Chile Twenty-One Year 7% Ext. S.F.
Bonds, dated January 2, 1928, the said payment is to
be made against surrender of the one remaining coupon,
dated

appears as

made in

Salitre y Yodo

copper

Share in tax

pons

,

1952

year

$1,000 bond, calculated

revenues:

Share in the taxes

financial

district, is whether or not there is
offering of long-term Treasury bonds in the not

an

per

radical departures from

existing policy unless economic or other conditions force such an
alteration more rapidly than is looked for now. Accordingly, there

discussions

$13.37

Participation in the profits of the Corporacion de

things that must be taken into consideration, and the conse¬
of what might take place with an abrupt change in debt

half of 1953

Proceeds from subscriptions for
the shares will be used by the

was as

lows:

of the best informed

not looking
lor any really important changes^ in the debt management policy
during the first half of 1953,: They point out that because of the
more

dissemination

about

making these amortizations the balance of prin¬

accounts.

Despite all the talk to the contrary,

•

mon

Swiss Francs

retired from circulation/

were

cipal amounts of bonds of the external debt

following

record Jan.

9, 1953 rights to sub¬
scribe for 1,101,451 shares of com¬

and

US$2,438,500

£1,294,690,

2,929,700. These bonds

quences

General

following principal amounts of bonds were amor¬
year 1952 with the sum of US$2',531,000

Law No.

discounting

State funds continue to

and

Firm Offers Stock

percent or $25.

during the

well

impor¬

Closed-End Investment

2%

;

v

Law No. 5580 and who do not accept

opera¬

tant industries.

''

bouncing all over the lot again, with certain of these
obligations, particularly the most distant ones, seemingly pretty

the

the

tions of the nation's most

pressure

1952 at the rate of

$1,000. bond.

tized

The

have been

has opened

interest for the year
per

provide
the
company
with about 300% more floor
space,
thus enabling it to greatly aug¬

firm

by Law No. 5580 and which have assented to the new

plan under the aforesaid Law No. 8962, have been paid

Governments

on

which the monetary authorities
are keeping on the money markets, however, has evidently had an
effect, upon even the shortest maturities.
Nonetheless,, with some
ease
still looked for in money conditions, because of seasonal
factors, somewhat better temporary action .is expected in the
government market as a whole.
The longer-term end of the list as well as the intermediates/

the

approved by Law No. 8962

of

E.

manager

de la Deuda

Caja Autonoma de Amortizacion

Publica, in accordance with the readjustment plan for the

South La Salle Street.

ex¬

The

,

i-INANCIAL (JHnONiCEK)

tensive expansion of personnel in
the firm's history.

General

Chile

of

on

debentures

Calif. —J.

to

PHILADELPHIA, Pa. — H.
Riecke & Co., Inc., investment
the

.*

Dec.

investors, according to advices, continue to sell

corporate bonds with the proceeds going into the highest yielding:

Street, members of the New York

H. A. Riecke & Go.

announces

'

.

this

FRANCISCO,

Barth

Institutional

Nov!

18, another successful
offering was made of $72,445,000

securities

Bernstein & Simon

of

one

curities,

ing debentures.

$13,742,689. Net real¬

on

J. Barth to Admit

Phil¬

was

profit

preferred

or

part of the in¬

of

Dolphin

Co.,

of

at

cash

or

$789,876.

for-

1 y

r

assets

appreciation

Mr.

Grant,

in¬

of
may

on
that date amounted to
$662,817 and net increase in unrealized

elected

dent.

or

market value

ized

has

Vice-Presi-

a

group

common

amounted to

with, the

firm

or

bonds,

or

vestment in

G.

Grant has

industry

The corporation
time substitute cash

items,

that

Freeman

ticular

any

House,

announce

policy with respect to concentrat¬
ing its investments in any par¬
dustries.

.

.

especially those of the Veterans Administration? Would not a
30-year,3% government bond have an effect upon the savings of
'.'the people" as a whole, which have been piling them up in the
A successful
offering of $83,-"
savings banks? Then again, what would happen to the corporate
440,000 2%% consolidated deben¬
bond market if the Treasury were to offer a 30-year 3% marketable
tures dated Jan. 2, 1953 and due
obligation? The average yield at which the best corporate bonds
Oct. 1, 1953 of Federal Interme¬
are currently selling indicates that considerable of an adjustment
diate Credit Banks was made Dec.
would have to take place in order to bring them in line with a
18 at par through Macdonald G.
30-year long-term government 3% issue. Therefore, the conclu¬
Newcomb, New York fiscal agent
sion; that is being drawn by many money market followers is thai
for the banks.
The proceeds, to¬
a
change in debt policy is not imminent, unless the unforeseen
gether with other funds,
were
comes along and forces a new course of action.
used to retire $107,095,000 matur¬

FIDO Bks. Place Debs,

_

City,

i

u n

principally in common stock of
the utility, natural
gas and oil in¬
dustries. However, it has no fixed

21

of

January 2, 1949) together with

an

appropriate letter

transmittal, at the office of the correspondent of the

'undersigned

in

New

York

City,

Schroder

Trust

"^Company, Trust Department, 61 Broadway,
New York 15, N. Y. Letters of transmittal may be
obtained at the office of said

CAJA AUTONOMA

DE AMORTIZACION

AUGUSTO MERINO S.
General

Santiago
December 31,

1952.

correspondent.

Manager

DE LA DEUDA PUBLICA

PEDRO CASTELBLANCO A.
President

22

(210)

The Commercial and Financial Chronicle...

LETTERS TO THE EDITOR:

will

♦

again bring about devaluation this
increase the gold price when and

and

"

it is too late.

Sterling and the Dollar

For

Frederick Shull, Gold Standard

League official, commenting on
article, "Will Sterling Damage the Dollar?" by Franz I
Pick, maintains "Sterling" is a problem for Britain alone to
solve; and calls highly dishonest the proposal to mark up the

Banking and the
Security Markets

no

years

75

mas-

West

is

2%%,

about half a point
prime commer¬

or

bank s

There have been times,

Bank and Insurance Stocks
By H.

exceeded

the rate for money that

E.

put into the commercial loan
portfolio of banks. It is not at all

JOHNSON

inconceivable that in

savings.

Chronicle:
The article by Mr.
"Will

For example, the people
upward of $500 billion of

own

savings in the form of government
bonds. b*nk deposits and life Hi¬
surance benefits already paid for
Raising *be
RalslnS
official price
of

Franz Pick,
Damage the Dol-

Sterling

lar?" in your issue of Jan. 1, 1953,
should awaken our people to a

gold

would
of

$52.50

to

33 %%

mean

"devaluation"

the

a

dol¬

lar—robbing

the people of about

$160

of

of

billion

Let

value'*

"real

the

their accumulated

savings.

j

>

hope that the "new" Ad¬

us

ministration

will

have

the

cour¬

and forthrightness to support
this much of the "out¬

age

least

at

This Week
Insurance

Administration's"
policy,
namely, its "formal promise not
to change the official gold price."

stocks

sparkling market performance
for 1952. The general trend of both fire and casualty shares was
upward for practically the entire period and most stocks at the
year-end were considerably higher than at the beginning.
Some issues produced substantial gains in market apprecia¬
tion.

In

such

several instances

Connecticut State Chairman

G. Shull

realization

2009

Fraai Pick

and

retained

funds

earnings produced

maintained

interest

and

quite satisfactory."

"honesty"

in the

of the American dollar
being threatened by the
possibility of a repetition of the
"dishonesty" to which it was sub¬
jected in 1933-34.

Jan.

3,

1953.
.♦

Particular portions of Mr. Pick's
article on which I should like to
comment

under

appear

the

sub¬

headings,
"Convertibility
Pros¬
pects" and "The Gold Price." Un¬
der

the

"The

former,

outlook

for

is,

knowledge,

present time."
fear

says:

Sterling con¬
to
my
personal
rather
dim
at
the

vertibility

the

Pick

Mr.

And he

expressed

that without our support of
pound sterling "Britain's for¬

eign exchange and gold reserves
will
disappear and the sterling
might drop to $2—or even less."
But what happens to
"sterling"
is a problem for Britain to solve
—just as our problem is to look
after the welfare of the American
dollar.

Mr.

Pick

"The

says:

outgoing
made the

#

»

stocks have

Reply by Mr. Pick

(U. S.)

for

to

giving

Mr.

answer

the

me

F.

G.

Unfortunately, I cannot agree
with Mr. Shull's idea that Britain
should

left alone to

be

problem.

solve her

The

Common¬

wealth accounts for about 30% of
the world's foreign trade. If forced
to

lower

a

have

to

sterling rate,

suffer

financially.
well

Pick

by

means

entirely clear; but
est

to

ways

that

one

promote

is

not

of the

sur¬

"dollar

de¬

preciation" would be to raise the
official price of
gold, and thereby

automatically reduce the

"value"

The

Pick

we wbuld

commercially and

And Mr. Shull might-

remember

that

the

pound

"honest"

an

dollar to wake up: "Ac¬

sources

crease

price of $35
What

will

we

day the

one

have to

gold
ounce, to $52.50."

an

sibly be making such
claim?

Are
that

aware

gold

of

in¬

official

"reliable sources"

sources"

not

can

a

all

pos¬

fantastic
"reliable

monetary information
the "official

price" of

held firmly by our gov¬
ernment at $20.67 an ounce from
1837 until 1933; and that
was

Britain,
likewise, held the pound sterling
at

113

1821

grains

say
not

fine

gold

from

And would those

sources"

undertake

that such "honest" money
a

the

of those

world,

than

more

to
was

great factor in the economic

success

of

of

until 1914?

"reliable

100

two

nations,

throughout

and

those

that

highly

such

move

would

and

it

be

that

it

would




rob

fails

our

the

divi¬

stock splits have been made in the
past year.

or

Aetna

during
stock

1952 Price Range

Change

54V2

643/4

+10%

65

51%

671/2

911/2

+24

91%

67%

Low

High

Agricultural

Insurance

American Insurance

22

26%

+ 4%

277/8

22

American

511/2

59%

+ 8

603/4

473/4

31%

38 y2

+

47%

82%

+343/4

72%

79%

+

Boston

Surety

Insurance

Continental Casualty

„v

Continental Insurance

i

"Federal Insurance

87

100 "

+ 13%

83%

68%

71%

+ 15%

74

55%

Fireman's

Fund

55%

60%

+ 4%

61%

513/4

Firemen's

(Newark)

23

27%

+ 4%

28

227/8
53

of

people who bought government
and private
bonds, who had life
insurance and annuities and who

protested,

issue

ethical

no

created.

was

Hanover

Fire

132

Insurance

170

31%

39%

Security Insurance
Fire

States

&

Marine

Westchester Fire

the

cost

social

of

World

considered
16

I

paid

War

II

has

ing.

92%
have

annihilated

44

38

+ 43/4

26

than

again until
laws

of

popula¬

during
And, just as the

nations
all

after. World

been

inflation

the last 14 years.

longer

only

world's

other

War

now.

gravity cannot
thinking.

be eliminated by wishful
we

have

complete

to

like

it

or

not,

payment

we

for

World War II, which cost us about
$1 trillion and the remaining part
of

the

world

have

practice
will
of

us,

in

or

$800

billion

There

no

other

on

was

hand,

Jan. 2, 1952

was

rally

Dec. 31,

1952 which

high for the

fact

was

the

of

31, 1952

Nov.

on

carried

3

the

high for the

270.23.

was

to

averages

was

The

sub¬

291.90

on

thus 21.67 points

8.0%.
While

this

action

of

insurance

own

or

stocks

the problem of selection of the stocks which

able

position

course

at any

there is

a

particular time is

of

certain amount of luck in

happens to participate in

some

the probable trends and be in

a

are

encouraging,

very

For this

as

to the first philosophy;
minority subscribe to the last.
However,
in volume they run
a

pretty close together.

Loans

the

that account

volume

largest

reason

perhaps for

of any

cate¬

gory are what is known as syndi¬
cate loans. This is a loan that is

made not to

one

to

syndicate

a

who

whole
have

tribute

allied

to

new

standing

dealer alone, but

of

purchase

issues

issues

dealers

themselves

or

to

and

by
dis¬

already out¬
new

owners.

vital

importance.

holding

an

Of

BANK

issue which

and

However,

INSURANCE

program should consider

STOCKS

vidual stocks within each group.

choice

increase the price

order

call

or

subscribe

they develop. This is true of both industry selections and indi¬

either

which

money,

2%%,

rate.

position to take advantage of them

to

bank's

a

full

in the most favor¬

favorable development.

intelligent and successful investment

an

is

hold the averages.

it until the

carry

comes

on

pay

agreement

most individuals do not

or

Syndicate Loans

The gain for the

year.

period in terms of the Dow-Jones Industrials
or

loan

Industrial

Up until the election the group

to

perform

economic

Laird, Bissell & Meeds

the

Merrill Lynch Adds

anes¬

With Military Inv. Service

(Special to The Financial Chronicle)

is,

year on Dec.

Average

for

run

back, add to
his investment portfolio, and carry

gain for the average of 27.7%.

Dow-Jones

reason¬

Most of the banks in New York
were one

a

270.38.

in the market

issue

should

21%

a

the

sequent

thetics.

least,

the

This

deflation,

the

radical

cure

gold

about

186.81.

made little progress and in

countries

they did so
But, the historic

currency

Stocks

This group reached

was

On

resisted

I,

Whether

at 146.30.

when it

new

securities

whole, the gains made

a

time, the loan might

a

26

days, and
of this
arbitrage is

loans

the

month.

a

market for it

47

permitted

ten

or

be completed within

30%

major industrial, ytility or railroad group.
For example, "Barron's" insurance
group average started 1952

1934,

Armistice.

their savings nearly

by

Anglo-Saxon

be

of this writ¬

as

the

of

seen

not

until

the

partially paid for
tion

could

for

after

years

World

War

where

31%

54%

SAVANNAH,
Hollingsworth
with
ner

Merrill

Ga.
is

—

now

Joseph

(Special to The Financial Chronicle)

G.

connected

Lynch, Pierce, Fen-

FT.

tary

is

connected

Investment

& Beane, 7 Drayton Street. Y
Bluff Street.

;

\

with

Service,

.

Members New York Stock Exchange

Members New York Curb Exchange
120 BROADWAY,

GAINES, Ga. —Norman G.

Kraack

a

part, these

are

arbitrage

some

40%

+ 8%

most
or

week

+ 8

+ 53/4

called

is

Carrying this still further, the
dealer who is going to inventory

81

52%

as a

the
run

a

35

47

holding to
generally will

what

on

For

for

character

of the best of any

progress

which resulted from
it, had to be
paid for by currency deprecia¬
tion.

For the insurance stocks

2%

104

44

who

these

Banks

theory

2%

41%

'

take

inventory and
loan on the back

stove."

+ 18%

21%

Fire

dealer

to

my

the

will

run

able

+

a

securities

up

the

going

latter

charge

to

34%

pick

than

into

loans

39%

rate.

short-term carry, whether the col¬
lateral is
government bonds or

70

103

to

possible

philosophy, if

and

the

34%

32

Marine

&

lowest

numbers

this

92%

841/2

Springfield

of

43%

48%

and term

issuer, package them, get
down, examine the
generally get them
ready for delivery, the loan is
going to be on only for a few
days and should be accorded a
the

+22%
+ 83/4

thought:is
should vary

other

this

to

has

bonds

+ 7%

47%

a

from the

92%

38%

of

purpose

In

the

Holding

stocks.

131

se¬

This is

words, -if
the dealer requires money to clear
his
securities,
pick
them
up
downtown, package and deliver
them uptown, he should be ac¬

42%

St.

Fire

173

loans

on

interest

loan.

to

32

433/4

+38

Phoenix Insurance

United

the

70

Hampshire

Paul

of

35%

Insurance Co. of No. America
New

9%

+

school

of

according to the

on

Hartford Fire
Home

42

321/2

Since

then, the increase in the "cost-of-

had money in the bank.
As nobody

American

2%%

and

perfectly valid theory.

bonds

83%

marketable

more

by governments.

please put

33

1939.

tween 1%
cured

87

56%

ac¬

puts

Accordingly,
banks
this theory will charge
2%% on loans secured by stocks
or
corporate bonds, etc., while
charging a fluctuating rate be¬

rate

Fire Association of Phila.—

be

who

that hold

"I'm

100

+ 13

should

securities.

says,

70

rate

the safer and

up

lower

Fidelity-Phenix

loans, there are
thought. One holds

borrower

a

68%

62

to

to

81%

7%

42

1934

lower

a

corded

313/a

7%

from

that

a

dealers'

473/4

+ 7%

years,

to

383/4

+

stability lasted only five

As

83

7y8

of

rate

more

on

two schools of

dealer

Fire

mon¬

expensive
day-to-day
basis than 90 days or six months
money to business. This happened
in 1929 and has happened before.

corded
Point

Dec. 31

60%

overlooking the operation with

a

"dishonest";

depict

the change

41%

to my thinking at
other way out besides
people of billions of dollars of the the solution
of trying a
socially
"real value" of their
accumulated .disastrous deflation
which, finally,
to

with

53

We

that the U. S. Treasury
make a "paper profit" of

$11 billion by
marking up gold to
$52.50 an ounce is
fact

together

Prices have been adjusted where

34

years?

To say

would

shown.

are

Great

and

interested in

cording to information from reli¬
able

for the year

range

Glens Falls Insurance

Dollar

be

even

that rate

beginning and end of 1952 and the

1 952 Market Bid Price

money," as Mr. Shull
ceased to exist in 1914.

all

insur¬

prices of 25 major casualty and

"Honest

cause

as

bility of the dollar.

calls it,
following statement by Mr.
Since then, the cost of
World War
is, indeed, astounding, and' I

should

Inasmuch

had to be devalued in
September,
1931.
Only 18 months later, we
had to "suspend" gold converti¬

the dollar.

of

*

.

large buyers of the shares and undoubt¬

Jan. 2

letter.

sterling

-

-

you

opportunity

-

commercial

and

money

Another

dends

formal promise not to
change the
official gold price.
The

Mr.

were

Chronicle:

Shull's

?

9

long been known for their investment character,

these different funds

period

living" depreciated the purchas¬
ing power of our currency by 48%
to date.
During this period of in¬
promise
was held. Dollar
depreciation paid flation, in full knowledge *of the
for it, the easy way."
fact, we depreciated the holdings
Just what
Administration

•

Editor, Commercial and Financial
Thank

greater amount Of investment
on equity holdings well
higher, investmentJ results were
a

important factors in the market in 1952.

were1

price

*

rates

V

<

fire insurance companies at the

again

prime

banks

special factors

Pension funds, institutional investors and other large groups

Chapel Street,

handling

is

to

that with dividend distributions

so

In the table below the market

New Haven 15, Conn.

that

attributable

edly accounted for part of the rise in the various stocks.

Gold Standard League
Frederick

was

cash dividends or stock distributions.
The primary motivating factor, however, was the improvement in
general underwriting operations. Also, increased premium volume

ance

„

this

a

mergers, increased

as

FREDERICK G. SHULL
.

in

turned

tight

a

market the call loan rate would

ey

Insurance Stocks

—

cross

going

,

however,

when the call money rates has far
is

operation with "economic anesthetics."
Editor, Commercial and Financial

11

so.

under the

the alternatives of either trying a socially disastrous deflation
^vhich would cure us, or increasing gold price to perform the

-

have to continue to do

cial rate.

faced with

we are

6,000

Continued jrom page

of governmental skill
afraid that they will

am

FRANZ PICK
Street,
ter currency and gold.
The citi- New York 6, N. Y.
zens have always had to pay for
Jan. 9, 1953.
more

government has been able to

recent

price of gold. Mr. Pick in rejoinder asserts

than

lack
I

Thursday, January 15,1953

Mili¬

111

NEW YORK 5, N. Y.
Telephone: BArc lay 7-3500

Befl

Teletype—NY 1-1248-49

(L. A. Gibbs,

Manager Trading Dept.)

Specialists in Bank Stacks

I
-Volume 177

Number 5186*... The Commercial and Financial Chronicle

(211)
The loans
or

made either jointly

are

severally.

In the first instance
dealer is responsible for the
loan jointly with tne
otners, and
every

the second, each dealer is re¬
sponsible only for his proportion
in

of

the

loan.

Syndicate

such usually

do

not

length

of

time.

great
of

the

the

securities

expiration

for

as

any

When

the

all

sold

not

are

of

loans

run

at

syndicate

Another Year of Progress

agreement,

the loan is paid off
underwriter takes down

and each

his proportion of the unsold

secu¬

rities for his

own
account, there¬
making arrangements for
carrying them individually rather

THE

upon

GLIDDEN

COMPANY

than allied with other dealers.

Highlights, of Annual Report, 1952

Financing the Government Bond
Dealer
This

brings

to

us

third

a

and

sometimes

very
large field in
loans, the financing of the

dealer

government

nity.

bond

Their

from time

dealer

inventory

frater¬

positions

time

to

are
extensive,
banks,
being large owners of government
securities, feel a responsibility to

and many of the downtown

;

Glidden

:

•

the government bond market and
.'
wish to see the government deal..

well

ers

lower

financed.

to

the

Margins

are

-

bond

government

SALES-During fiscal

dealers, ranging from the discount
on
Treasury bills to two or some¬
times

three

points

long-term

on

government bonds.

Rates

and have varied from

below

the

above

the

pending
of

%

to

de¬

rate,

Some

banks

maintain

reached

pany's

that, of the entire

of

rates

is

rising.

profits
high and the

banks using a rate that fluctuates
from

day to

ment

bond

day,

invite

loans

by

$14,203,805 and in each of

govern¬

base is

In

tight money markets, banks

\

may borrow at the Federal Reserve

Bank

Tend

to

bond

dealers

point

over

from

day

a

Reserve

of

attitude

at

these

to

day

toward

they

Bank.

loans

These

The

sound

dealers'

government

It may be
very high, and has been over $2
billion within the last five or six
years;

the

on

other

hand,

price ceiling

on

oil

oil

this

facilities in 4953 should

at

the

New

York

The mechanics of

either

ers

other

the

on

securities

same

as

is

by

tions

the

or

28

at
rapid pace in
modern laboratories. Latest im¬

un¬

Spred Gloss, to be
early in 1953. Companion
to
highly successful Spred Satin, this
new
product indicates company's

soybean and

ties

adjoining plant, materially
increasing manufacturing capacity.

DEVELOPMENT-Agreement made

of year.

FINANCIAL POSITION—Work¬

Sangyo Kaisha Ltd.,

for

production of titanium dioxide
$3,000,000 plant to be built
by them in Japan as largest unit
in

new

latex base enamel,

marketed

continued

leadership in pioneering
paints.

in field of latex base

Caliber of personnel is at all-time

high. Training programs since 1946
have produced
many outstanding
young people who assure company's
continued

or

aggressive growth.

CONDENSED

CONSOLIDATED

BALANCE

Federal

Reserve

securities not

on

Assets

Liabilities

Current Assets

$ 68,288,532

Other Assets

2,275,535

v

being

distributed through the medium of
exchange, which are specifi¬
cally expected from the same reg¬

SHEET

j

the

regulations
of being made on se¬
exempt from the regula¬

of

Board,

fully producing crude chlorophyll.
Research continues

portant result of this research is first

reason

curities

at

success¬

lending to brokers.

from

exempt

Park, California, is

substantially

Both borrow under the
continuing
loan agreement with the banks.
For the most
part, dealer loans
are

Buena

exceed

keep pace with
expanding paint business, com¬
pany's wholly-owned subsidiary in
Canada purchased additional facili¬

ing capital at end of year totaled
$46,474,504, a record high. Net

lending deal¬

governments

being planned.

those of last year. To

with Ishihara

market.

not

now

vegetable oil extraction unit

its

ers on

government bonds has been
times under $150 million in

The

company's history.
Expenditures for additional plant

steadily declining
prices, which made vegetable
processing unprofitable for

most

deal¬

exploration is

made

were

condition in

2,284,739

by government's

plant

year, gross

$3,042,934

on

company's zinc and copper property
in California has
brought excellent
showings of ore. Underground

expenditures were
$2,701,388. All properties are in best

After

linseed meal, and

bond market changes.

year the volume of loans to

on

Exploratory diamond drilling

over

excess rates

and maintenance

outstanding October 31,1952.
earnings, while substantial,

affected

were

changes

the

as

the

shares

pay

PLAMT-During

taxes and all
charges, net was
$6,948,805 compared to $8,313,868

in 1951. Per share: $3.04

government
fraction of a

the rate that

Federal

volume

the

year.

of previous

earnings of

has substantial in¬

in Ishihara concern, one of

largest in Japan, and will receive
royalty payments. Company expects
this to be a profitable venture.

approximately $21,500,000,

additions of

correspond¬

quarter

terms, company
terest

apply.

last three

ing

lowering

their day-to-day rate, or encour¬
age pay-offs by raising their rate.

of its kind in Orient. Under the

to

com¬

$100,000,000 for first time.

$4.50 per share before

was

fiscal quarters exceeded

$1,905,242
than twice

worth in 1945. Total assets

which will allow

paint industry.

Pit OIIT—Before taxes, total

Other

more

EXCESS PROFITS TAX-1953

6.8% sales gain materially bettered

a

net

exceeded

only when the whole struc¬

ture

at

all-time

an

increased

$71,643,893,

nish Division's sales and

low rate through
temporary tight
money situations, and raise this
rate

worth

highest point in com¬
pany's history, with a dollar volume
of $205,113,304. The Paint and Var¬

money positions
that finance
this

banks

market.

a

ending

sales reached

*

the

on

the

low,
point

rate,

rediscount

:

are

of

rediscount

year

October 31, 1952, unit volume of

Property, Plant and Equipment

31,393,854

....

an

Current Liabilities

Capital Stock and Surplus
Earned

Total

ulation.

Assets

.

.

.

8,500,000

.....,>

32,603,967

Surplus

$101,957,921

$ 21,814,028

..:...

Long-Term Debt

39,039,926

.

Total Liabilities

$101,957,921

Wm. A. Ware Joins

Eppler, Guerin Firm
DALLAS, Texas

—

CONDENSED

Appointment

STATEMENT

of William A. Ware as an
associate
of the Dallas Investment
firm of

Eppler, Guerin and Turner,
delity Union Life Building,
been

announced

by

CONSOLIDATED

Net Sales

Fi¬

Taxes

P.

on

on

Income

—

Income

..

Estimated

Ware

has

Consolidated Net Income

been

14,203,805
7,255,000

Guerin, Vice-President.
Mr.

-

$205,113,304

Income Before Taxes

has

Dean

INCOME
■

6,948,805

aviation

manager of the Dallas Chamber
of Commerce for the last
several

In this capacity, he helped

years.

plan

the

enlargement
of

provement

other Dallas

Love

and

im¬

Field

aviation facilities.

■

PIERCE, Fla. —Hybert J.

curities

100

engaging in

business

South

from

a

se¬

offices

Indian ftiver Drive.




;

THE

(Special to The Financial
Chronicle)

is

sent on request

!

H. J. Williamson
Opens

Williamson

of the Company's Annual Report will be
i

.•

FT.

A copy

and

at

GLIDDEN

COMPANY

•

Cleveland

'

14, Ohio

«3

24

f

(212)

The Commercial and Financial Chronicle... Thursday,

Fraser,

Donohue

Canadian

Canadian Securities

As

"feeler

out"

market,

Minister

Douglas

nounced

the

Canadian

As might be expected, Canada's
boom during the past year has

failed

reach

to

pre-September

and

the

of

marked

advance

by

Abbot

proposal

to

float

a

Government

$100 mil¬
lion 25-year bond issue. The issue

a

level

the

over

of

Dec.

31, 1951.

Canadian.

Industrial

stocks

lost

ground,

of

1951

The

This, is the first time since 1950

stock

34.7

represented

provals

ap¬

million

total of 60 million shares for

a

the

44

listings. In 1952, 15
year
inspite
of
sharp
third (51.5 million shares) of a total of
quarter declines and a feeling 42 new stock issues (totaling 111
among many observers that some million shares) were Canadian, he
and oils broke about

even

the

on

prices

metals

upset predictions of Janu¬

;

for

various

base-

1952, by declining during the
The loss

year.

was

reaction to

a

lower prices for various base
metals. Mining companies in gen¬
eral, however, distributed record
dividends during the year.
The

aggregate value of listings
Exchange the lead¬
ing Canadian securities mart, rose

on

the Toronto

from about $12 billion in 1951 to
about $19 billion in 1952.
Value

of

trading increased from $1 bil¬
to about $1.3 billion.
Some

lion
30

million

and

growing enterprises
which
distinguish Canada today," Mc¬
Cormick added.
"We are making
studied

many

known

traded in 1952 than in 1951 to be

exact, 590 million shares
compared with 560 million shares
the previous year.

obtain

to

hemis¬

our

phere.
"Incidentally," he remarked, "in
adopting the name 'American' for
our
Exchange we had in mind
that

the

embraces

word

of

all

North, South and Central

Amer¬

ica, not just the United States."
of

number

Canadian

in

result of
that

oil dis¬

new

region.

Base-

metals followed
the trend,
but
industrials and gold mining shares

slid lower.
As

an index of the high volume
trading, it should be remem¬

of

bered

that

about

running ahead
Stock

ary,
York

this

of

time

last

Exchange

the Toronto

year,

the American

on

have

market

was

the

New

York

dips

the

on

Among these

western

in

oils

Thereafter- Toronto

v

obe¬

Canada.

trading

fre¬

quently exceeded that of the New
York Stock Exchanges. The two
centres

started

when

downward

a

to

draw

stock

two

set

the

the

months

new

recoveries

Toronto

lows for the year.
were made after

slump and there

was

turn toward the end of

especially in oils.

In

Ford Motor Co.

are

an

up¬

December,

But all sections

1

340

"N

320

V. '

\

have

continued

at

high
Regarding the expanded
volume of trading on the Montreal
Exchange, Mr. McArthur stated:
"The great interest of

in

ors

and

the

sources

quired

to

maturing

off

pay

re¬

continually

long-term

the

of

under

outlook

place

stock

among

active

stocks

splits
that
some
of the
the

on

list

Montreal Stock Exchange.

the

corporations

were

subdivided

whose

due

comes

in

1954.

It also has been announced that

the

Province of Ontario has filed

were

1975.

The securities

fered for public sale in the United
States

through
group headed by

realize

the
of

the

for

insensitive

are

to

the

imports, and that,

other hand, their

demand

imports is overly sensitive to
dips in business
activity

small

the free price

on

system, through a flexible mone¬
tary and exchange rate policy, is
prerequisite to any final removal

to^provide for capital ex¬
penditures in connection with the

The

I

have

talked

supply/of
have

soft

the

estimates

capital

for

the

program

construction

1953

the

over-

currencies,

suggested

that

and

I

reduc¬

some

in
their
quantity, through
monetary and exchange rate pol¬
icy, would help to reduce the de¬

this, taken

would result in

dollar

by

itself,

reduction in the

a

countries'

trade.

overseas

at

from

these

foreign

investment.

of

dollars

countries,
Canada

the

to

the

to

only

short

and

alleviate the

act

and

now

the

the

dollar

without

excessive

customs

Among
.1,

.

and

in

at

the

this

J.

Eble

reduce

CLEVELAND, Ohio —Parsons
Co., Inc. announce the election
Howard

J.

Eble*

as-

Executive

imports.

release

of

Canada's

the

long

dependence

on

will

program

est

run,

be

importance

of

in

the

great¬

merly an' officer of Wm. J. Mer-

fundamental

icka

that lays our allies open to recur¬

&

was

for¬

Co., Inc.

Parsons

200

&

the

nounce

Co.,

also

of

an¬

their

Inc.

removal

of¬

fices to the N. B. C, Building.

\

Currey

190
♦l

180

Cowen

&

s.-.

V

as

Partner

170

New

York

New

York

Stock

&

150

150
-

140

"\ WESTE1UN

130

01 LS

120

130

Exchange, will
admit David P. Currey, member
of the Exchange
to partnership
in

the

will

firm

in

110

100

Mr.

I.

from

Curray

partnership

31, 1953.

Bendix, Lukweiler & Co., Jan.

100
.X*~ •%

Feb.

withdraw

120

110

weakness

main

Briefly, invest¬
provide relief in three

may

first,

ways:

another

is

end

raised

matter.

national

delicate

The

issues

equity investment
abroad exist partly because of real
abuses in the past, partly because
of rising
nationalistic sentiment
in the present. To have the major
by

ante

up

few

a

will

dollars

do

Bank

millions of

more

fundamental

the

World

the

of

stockholders

nothing to solve
problem. More¬

this

and
since these
only stockholders of the

the

actually paid

have

that

Bank

up

subscriptions in full, or re¬

their

paid

have

leased

what

for

anywhere at the discretion
Finally, if we have

use

they

up

the Bank.

of

difficulty today in persuading lo¬
cal interests that a private corpo¬
ration is not a mere cloak for an

foreign power, how

imperialistic
much

difficult will it be to

more

persuade these people that this is
not true of

government corpora¬

a

tion, using funds supplied largely
by dollar area governments.
The

to

way

private

encourage

underdeveloped

in

investment

countries is not to create another
international

lending

but

agency

general elimination or
reduction of the present restric¬
in

capitalization
are

not

and

on

countries

on

the

earnings,

on

the

of

the effective control by its

equity capital when
interest resides out^

over

owners

the underdeveloped

side

which

earnings

of

cannot be transferred,

or

country.

Some Special Problems of In¬
ternational Investment
I have dwelt at some

soft-currency

length

on

proposed
International Fi¬
Corporation because I think
it embodies in an easily recogniz¬
able form what I conceive to be
the

nance

the

approach to

wrong

long-run.

problems of international invest¬
ment and economic development.
favor

of

our

skill

nical

countries.

to
capital and tech¬

encouragement

every

the export

underdeveloped

to

But

both

these

essen¬

tials must first be welcomed
then

and

treated by the coun¬
tries to which they are sent. We
fairly

deluding ourselves if
healthy economic
development can take place Vvhere
simply

are
we

think

that

governments and peoples are un¬

prpducing

160

1

economic

the

ring dollar crises.
ment

the

to

may
concentrate their
domestic investment on industries

Co., 54 Pine Street,
City, members of the

•

1(0

correcting

countries

Co wen & Co. Admits

.

'"V

capital.
With this end I am in
complete sympathy; but the means

I

the investment

Vice-President.

Mr. Eble

Bank,

international investment in equity

Can¬

the U. S. export market.
In

proposed

a

International

tariff

extra dollars to
countries would tend to

overseas
Howard

Corpora¬

Finance

affiliate of the
has in view
worthy object of encouraging

tion,
the

formalities

time the

same

way

so-called

The

track.

wrong

de¬

ada, especially, has much to gain
by reducing the preponderance of
U. S. goods among her
imports;

300

the

International

present unnecessary ob¬
overseas

Fund has so

proved something of a disap¬
pointment. But the newest pro¬
posal in this field is, I think, on

the majority

most

310

national finance; the
far

these

stacles to

the

Development. Of

construction and

these, the Bank has proved a use¬

tions

States

run,*

should

remove

barriers

International

repatriation

re¬

dollar-short

United

cannot

countries

that

institutions:

Monetary Fund and
Bank for Re¬

International
the

the
the

with

familiar

are

Woods

the

By

dollar shortage but maintain
volume of their export trade.
In

years
interna¬

our

a

and extended by
propriate devices of domestic and

lease

&

./

We

Bretton

to secure

took

320

new

rein¬
the ap¬

forced

V.-P. of Parsons & Go.

serv¬

countries,

330

y

/•

imports of goods and

more

ices

Howard Eble Exec.

pe¬

of

ating
tions.

are

about

tion

fortunately,

Commission

of

to

problems by" cre¬
international institu¬

Canadian governments

of Dollars

mand
for
dollars and therefore
Commission's construction relieve the apparent
shortage. Un¬

program.
cost

the Dollar Shortage—
Increasing the Supply

(2)

solutions

over, one would hardly think
would appeal to the U.
S.

Meeting

seven

be used

Power

IV

340

"\

A,

I

treatment

Britain's huge sterling obligations.
I realize that the so-called dollar

underwriting

an

companies
including Harriman Ripley & Co.,
Inc., and Wood, Gundy & Co., Inc.

Consolidated
Mining and
Smelting, Industrial Acceptance,

>

to

for

be of¬

to

are

Ltd.,

.a*

A

by step.
special

step

exchange controls, import re¬
Exchange Commis¬ strictions, and other special ob¬
stacles to healthy world trade.
22-year debentures, due on Feb. 1,

210

140

out

sion for the sale of $50,000,000 of

nu¬

/

170

that, after the rate has
been freed, removal of exchange
controls may have to be carried
need

tendency in recent

a

seek

tional economic

ful, if unspectacular, aid to inter¬

,

I realize

Securities and

Aluminum

1

\

remain.

registration statement with the of

a

of

/

.

merely because, after its
adoption, some problems will still

possible reliance

shares

210

"

market

lay
the

were

END 6STRIALS

160

prob¬

particularly the within their own borders.
Never¬
victory loan issue
theless, I feel that the greatest
totaling about $650,000,000 which

of

V •s!"LSEM ETAL5

exchange

whole

to forego the advantages of a free

issues,

country.

review

\

100

free

the

been
to

second wartime

invest¬

1JJL

-_A

that

solve

lem; there is no simple solution.
Nevertheless, it is surely unwise

on

is

President

as

to say, nor have

mean

said,

will

lure of cheaper

A large amount of money

Canadian,

continental

"Noteworthy also during the
riod

300

200

not

ever

times that amount.

Canada's future was always
in
evidence, however, and there was
a
steady demand for securities
that participate in the natural re¬

\

310

I do

I

rates

countries

interest and demand for Canadian

securities
levels.

JQCO

A

you

»■

be followed by an issue five or six

be advanced to the Hydro-Electric
Power Commission of Ontario, to

records

TORONTO STOCK EXCHANGE

330

may

to

of the Bank.

a

merous

price indexes dipped, strik¬

ing several
Brief

issue

new

address

approxi¬ However, this heed not occur, for
mately $189,000,000 "exclusive of there still remains the possibility
any expenditures which may be of increasing the supply of dollars;
Stock
Exchange, commented on incurred in connection with the and if we respect the natural
pref¬
the 1952 year-end dips in stock
St. Lawrence River power proj¬ erence
of
dollar-short countries
prices, but remarked that investor ect."
for "trade not
aid," this means

together

movement

in at the end of August.
For

successful, the

receive.

first

year-end review, F. G. McArthur, Chairman of the Montreal
-

New American

followed

were

diently by industrials, base-metals
and

bonds will

Exchange

Stock

dividend

unbroken

of from 10 to 40 consecutive years.

Exchange.. Back in Febru¬

however,

If

the

The proceeds of the sale are to

Ltd., with a record of
highest prices on the Can¬
adian exchanges were established 19
consecutive
dividend
years;
in the early months of the
Quebec Power Co., 32 years; Do¬
year.
The Northwestern oil shares minion Bridge Co. Ltd., 40 years,
started the year with a substantial and Imperial Oil Ltd., 38 years.
coveries

what kind of

sure

issues

of Canada

The

a

reception

more

of these sound but littleenterprises make up the

investment frontier of

A

more

efforts

Candian listings as we know that

shares

more

upswing,

it isn't too

and

en¬

long-term bond market

company

lower

ary,

the

new

shares stated.
were
over-priced.
Gold mining
"This is in line with our definite
stocks
closed
almost unchanged policy of helping obtain the capi¬
in spite of hopes for an increase tal to build and develop the
young

Northwestern oil

the Canadian Government has
tered

9

page

Canada in 1953 and Ait

Ca¬

Finance
has an¬

price heights.
will be handled by the Bank of
high level of
The high level of activity on the
Canada, The bonds will bear in¬
activity on the leading Canadian Canadian securities exchanges had terest at 3%% and be sold to
securities exchanges. Prices have its
impact on trading in Canadian yield 3.85%. They will be dated
not, however, followed a uniform shares in the United States. Ed¬ Jan. 15,
1953, and will mature
trend, but figures show that the ward T. McCormick, President of Jan.
15, 1978, callable at 100% and
volume of trading in 1952 was one American
Stock
Exchange, has accrued interest at any time on
of the
largest on record.
The pointed out that 12,'of 44 new or after Jan.
15, 1975, after 60
price index of Canadian shares, stock issues approved for listing
days' notice.
despite this activity, shows no in 1951 on his Exchange were
been

Continued from

Cos."

Oil

money

a

nadian

By WILLIAM J. McKAY

Brothers

January 15, 1953

friendly

dollar-earning exports
of producing
goods which other¬
wise would have to be imported
from the dollar area; second, dol¬
area countries may concentrate

lar

their
same

the

soft-currency

make

direct

vestments

countries

may

dollar-earning

in

the

dollar

in¬

area

it¬

self.
I

think

gram,

With Inv. Service

foreign investment in the
types of industry; and third,

of this investment

not

creating

as

an

pro¬

excuse

for

and

our

lieve

that

economic
draft

under

forced

to Communist

In

the

last

development

be¬

is

a

final

infiltration.

analysis,

investment

we

development,

answer

tional

And

capital.

foreign

to

delusion is doubled if

and

depend

interna¬
economic
upon

a

change of heart in the underde¬
veloped countries themselves.
I
believe this change will be easier
if those countries adopt the short-

»»♦#,

CO LDS

60

V

monetary and exchange-rate
policies I have already discussed,
run

UAR

APS

IUY




JUNE JULY AUC

SEP

obstacles to investment which

to transfer

nowhere

(Special to The Financial Chronicle)

~v

80
70

FES

any easing of the dollar shortage
by these means will make it easier

90

70

JAN.

DENVER, Colo.-r-Wayne E. Ellis,
Joseph P.Natale, Roger R. Scholbe,

high-sounding
international
institutions, hut as
a campaign to
reduce the absurd

and

9

DCT

NOV

DEC

Frank

connected
ice

Tharp

with

have

become

Investment

Serv¬

Corp:, 444 Sherman Street.

new

are

in those coun¬
tries where capital is needed most.
I emphasize this because there has
so

great

as

interest, dividends, and
out of these coun¬
tries; and the mere power to with-»
capital

draw

sums

will in turn

encourage

new

Volume 177

Number 5186

The Commercial and Financial Chronicle

...

(213)
investment and thus create

fur-

a

time

has

make

to

come

similar

a

ther improvement in the exchange

dash for freedom.

position of these countries. Never-

surprising amount of agreement
that ultimately this is what must

theless, the will must be there if
healthy long-run investment is to
be

encouraged;

assistance

and

program

institution

can

plan

no

investment

or

serve

or

substi-

a

as

tute.

VI
f

•

•

..

r

,

Frotecting Canada

,

So

far I

have paid a good deal
of attention to the economic
pol-

icies

of

have

already

of

deficit

less

tlement

We

the

of

States, is
have

may

form

some

to

sterling

direct

to

set-

a

balances;

defence

orders

where

possible

NATO

caution.

us

and

Both

prosperity will be far safer if
do

not

oversell

then

temper

Canada
our

mands

an

expanding world

econ-

especially when

we should be grateful that,
general, the spirit of economic
freedom seems likely more and
more to
become the spirit of the

resources

age.
Of course,

test.

environment

disadvantages.
one's

It

an

eco-

have its
pleasant to

may

is

nation

regarded

so

we

of imagination
a

severe

This is what

member

greatly

when

ficulties

still

but

we

en-

welcome

become

with

ahead

and

should

we

impressed

of

the

There

us.

is

investors

in

stands

that even now
confidently on the thresh-

rush

Canadian

old

national greatness

into

other

countries

to

securities

for

excuse

gloom

in

a

country

3'oung

of

our

in

But

suggesting this,

should not

sell

which

perity

wish

give away

or

part of the vast natural
upon

I

in Canada

we

any

resources

long-run proslargely based. This is

is so

our

particularly

true

of

those

re-

sources, such as water, which

to

necessary

velopment
power

industrial

our

either

or

as

the

in

.

attention

to

boundary

the

possible

water

from

Columbia to Alaska.
one

of

part

which
of

of

pio-

and elsewhere have drawn

press

of

of

is not surprising, therefore
responsible Canadians in the

that

our

de-

sources

process

duction itself.
It

are

water

ol

States.

the

in

We

This is only

general

include

must

loss

British

the

picture

shortage

rapidly developing

a

a£^a

United

.

should, I think, take

a

neighborly

interest in the needs
of the great American
northwest;
but we will perform a disservice
all round

if, in

an

of zeal,

excess

we

thoughtlessly alienate
birthright.
It
it

would

be
be

in

#£°rrV' T
the

possible

as

divers which, like

Columbia,

have their
iwye-iiieir

source
source

and major tributary system within
our
countrv.
The
oowor
would
country.
The power would
then be available to all
comers;
but it would be a Canadian
prod¬
The
ine

ciencate
delicate

about

rise

prooiems
problems

our

boundary

which

waters

not

m

it tee

only

opment
tion of

with

but

with

the

characterize the great

seaway system long
and

now

combina-

contemplated,
owing to the

happily,

insistence of

our

own

country, in

immediate prospect, for the
St. Lawrence River and the Great

more

Lakes.

Canadians

themselves

should
with

of

successes

the

this

acquaint

efforts

chairmanship of

guished

Canadian

un-

a

distin-

soldier,

scien-

tist, and diplomat, General A. G.
L. McNaughton. In short the Committee

is

an

experiment,

administration

law,

that

of

in the
international

deserves every

encour-

agement.

A

for

possible that there has been

into

that

by

enter

1953.

stiessing

in-

toward the road's securities.
an

fit

economies from the
sive
program
of property

to

greater

a

extent

from

ex-

of the Excess Profits Tax

later thjs year>

ge that

it may,

as

mos^ rag analysts expect that this
recent

period of consolidation
hv

nf thp

„nmp

of

in the

the

the

For

invPct-

11

of

operating
comprehen-

new

favorable.

remain
is

outlook

good.

A

I

must

conclude

possibilities

our

as

made

up

it

but

I

attractive

policy
A

current

at¬

capital

our

foreign

investment,

fiscal

policies.

a

knock

be¬

opportunities

conservative
favorable tax

a

and

return

to

more

con¬

servative policies in the U. S.

un-

^er republicans, the dropping of
way
the
gold excess profits taxes, may easily
is
the
way
it slow down the flow of American

instance,

I

find

this

1934.

While

legislation

capital into Canada and

tenuous nature of
lar position,

reveal the

strong dol-

our

Re

same

of

continuing improvement in operating
efficiency
Should
widen

$3

earlier.
that

the

££

a

speculative
issues
mentioned in the opening~paragraph.
Just
a
year
ago
the quarterly

the

amount

iq*9

1952,

of

nominally

share

more

earned

y®ar

a

On this basis it is possible
romnanv

mav

have

real-

results and to yield 6.6%

on the
basis of the current regular divi-

Edwin Jacobs With

L, D. Sherman Go.

the conversion

25

shares"

per

privilege

$1,000

true,

idea

bond

1951

there

$27,563,200

au to be converted
conversion

rate

mean

an

of

her-

pofcy
that

Bratter

adherence

to

the

in

should

enld

be

the

but

philosophy Mr.
attacking beis

'4 'V

not

inconsistent with that philosophy.
inn
W
itor nnslTinn America's gold
1tnr position, America «

buying policy is not wholly inconsis¬
tent with
the full
employment
policy either. When the U. S. rejects the full employment philqsophy and restores the substance of
the
gold
standard ^within
the

Daniel

SAN

J.

Cullen

FRANCISCO, Calif.—The

National Association of Securities
D
.

j
,

j

that Dan-

announces

„

\

„

ie* J- Cullen,

a

Senior Partner of

been elected Chairman of District

Committee No 2 (California and

Bratter

trade

debit

has

bought
she

gives

the

the

us

reverse

more

sold

from Canada
and

is

pre¬

adverse

U.

which

are

amount

return

S.

our

sub¬

trade

has

balance

been

balanced

invested

Here

.

,

>

,

to

29

in

wide-awake

again
States buys

come
on

resource

Americans.

when
the
United
as much from
Can-

a

ada as w« bay

f/'®rat"

Canada No
Bratter

.

is

garding Canada

Nafinn

Creditor Nat o
in

as

a

in

re-

creditor

na-

error

a

York
mitted

realtor

Jr.

partnership

to

Henderson

member

the

of

will

be¬

Exchange

James A. Corcoran^ Jr. will ac¬

quire

gold.
a

will admit William T.

Mitchel, Whitmer Admits

and

Mr.

City,

New

that date.

ter may find Capada more recep^jve
settling the balance in

^

Sons,

Stock

Mr.

22.

&

York

of the New York

members

Jan.

Admit

to

Henderson

Broadway,

^

~

F.

Henderson,

case;

development at handsome rates of

Jacobs

Charles

Exchange,

the

by Canada admitting capital funds
Edwin

C. F. Henderson

is

with the

it

Nevada) effective Jan. 16.

settling this debt by
gold.
As you know,

stantial-

the

Walston, Hoffman & Goodwin, has

balance, i.e.; the U.

has

from

sending

out¬

shares

to

Canada's gold policy

cause

than

at the current

increase

'be

llatl°n ™at adaerenca t0 I e £old

S.

30

of the Con¬
Were these
30

criticism

reconciled with the degree of defiatinn

a

spree

remained

Income 4 V^s.

managed

impres¬
sion that the U. S. has piled up a
debit position with Canada which
many readers will assume to mean

from

to

Elects Chairman

Canada has favored
a

$°T

Mr.

The

i

NASD District 2

BuTif'ca'S adopts*

vented

in

of

'

'

no^ show greater reverence, for.

shares.

would

is

g0

country,, Mr. Bratter can legitimately complain if Canada does

conversions had been in anticipation of the change on Jan. 1, 1952,

of

d

seems

outstanding
of approxi-

mately $17 million of bonds.

is

CanadaTeeds factoriesandlauin
and not eold fn Ottawa
.

Montreal, Canada

Jan., 12, 1953.

treason creditor nation, there

as

cut from 62V2
This was largely

stock

For

because

^

f

f«w

was

conversion

and

reason,

^a?ada *s

'

purely

through

same

mainUnftte

+

cently is St. Louis-San Francisco, dend. If the dividend should be
This common stock is by no means restored to the former
$2.50 it
considered as being in the investwould boost the yield to over 8%.
ment category. It is, however, one
of the regular quarterly dividend
payers, which is not true of the

cent to 50 cents.

the

muTas ^ for
full "e' 7am noT
defending
d°°tS!full employment philosophy
d'V!T year- higher than has been selling if
The stock
°
a"
little
flve times such
be the

it is ex-

One of the stocks that has been

dividend rate

Lnd Zv

^ease in the price of gold.

the

a




to

t?r

currency
.through U1f, luea U1 a md
ruliencJ
wof™*
rather than the gold standard, and
earnings before ,,
.

months

of
common
outstanding
Edwin Jacobs has become as1,754,257 to 2,581,147 shares
valuable con- and
per
share
earnings
would sociated with L. D. Sherman &
fribuUon to Uie revival of faith'suffer a dilution of nearly 25%. Co
30 Pine street
New
York
in the traditional
price mechanism However, as the. bonds now sell
when she freed the dollar in
Sep- well above conversion parity, and ^ty*
in their trading departtember, 1950, and removed all ex- there is no change in the conver-. ment.
Mr.
Jacobs
for
many
change controls a little over a sion privilege
impending such as years was associated with Blair F.
year
later.
In
other
countries wbuld tend to stimulate
action, it riavha,1(yh & Co
in
their New
there are legitimate differences of
is
considered
that
there
is
no
'
opinion on whether or not the
danger of any further dilution for York office.

Canada

For

setting

order

"The

from

wel1-

in

man

works

It

cZpared'wfth
than

im-

equipment

Zn°dUionstainZwn

industry
traffic

way

provements and
of recent years,

wide gains by some ot the invest- November,

Start USved iS

It is

indication of the benefits being

derived

vertible

Perhaps I have dwelt too long
on
the problems that face us as
we

some

of

group

standing

Optimism

man

Jan.

be

PolkvTecause

Following the conversion

Basis

a

of

193^

late

VII

"Chronicle"

for

of

will

we

strong dollar position

reflects

traction
cause

day

our

T

Committee, the due to the substantial increase in

Canadian section of which is
der the

and

gold

to

page 4 para 2, it was the
policy under Abbot that saw
Canada's holdings of gold and dolSt. Louis-San Francisco
that period retained in
theory a lar reserves climb from $500 mildeclared metallic standard of lion in 1948
In
to $1,741 billion in
recent
weeks
the general some time to come at least.
Thus, value,
by abolishing coinage and 1950.
tone of the railroad stock market there is considerable
feeling that declarin? rnntrartc for an amount
has changed
considerably: It has the dividend may be increased, of
monev
measured
the deP
^ seems to me the
become largely a speculative af- probably back to the old
$2.50 an- c]ared standard to be
against pub- U S strange
fair
as
contrasted
with
sold
the in- nual rate, in the relatively near
ijc
poiiCv
(Joint
Congressional t *
btrdn^e gpid policy because
vestment
nature of
the
buying future.
Resolution Junes,
the sub
the U S
during most of 1952. Thqre has
The
earnings performance of stance of a gold standard was cerbeen heavy buying of such issues
integrity of the gold standard for
the road last year is indicated as
tainly destroyed. It is therefore foreign gold
while-abandoning it
as New York Central, New York,
highly satisfactory on the basis a fiction to think that by continjn the area where it i<? needeH to
New Haven & Hartford, Baltimore of
published reports for 11 months uing to buy gold in unlimited
safeguard the sovereignty of the
& Ohio and Lehigh Valley, with
and traffic indications during the amounts at $35 an
ounce, the Unipeople ie
at home
a
Is not Mr
number of such stocks moving
final period. The road's revenues ted States is
maintaining the gold Bratter being
unrealistic in exsteadily
ahead
into
new
high were moderately higher than in standard single handed in a hosDectin<* other countries to attach
ground day after day.
The bet- the preceding year.
On top of tile world.
more
"importance to the gold
ter quality stocks, on the other
that it is indicated that the transTo my
mind, justification of standard
than does the U S9The
hand, have been trading in a rel- portation ratio was cut at least America's gold buying
policy is u S can
pursue its present gold
atively narrow range with many two points and maintenance ex- Bed up with its status as a credpolicy
without
endangering
its
of them giving up some ground penses
were
also
lower.
The itor nation, and is one of the most
fd]j employment philosophy
gradually.
showing with respect to the trans- inefficient means of discharging Canada cannot
follow
his sug¬
Apparently in the higher grade portation costs is, of course, the this international obligation.
For gestions without
abandoning that
issues there has been quite a bit most important consideration in this reason I do not favor an inphilosophy.
of profit taking.
Also, it seems the revived constructive attitude
J. W. POPKIN

devel- attracting considerable interest re-

navigation

M.

s article, "Should We Re
Our Gold
Buying Pol-

icy?" in the
8, is that of

One

largely

impres¬

Herbert

Examine

after

concerned

and

power

which will

is

power

®ra^e,r

overall
Mr.

from

change in the working of the
gold standard in the United States

Z wi'L'Jf at;1VUrltSdZi0n 0f P™"4 maVZs. "Finally,
Bira set ifp under the Canadian^ 56Ctfd that -the
Un?ted Slatestreatyof 1999 This dend neWS IS "0t y 3
Com

principal
get

I

cant

The

uct. '

sion

tion.

believe

standard

principle^ to develop within Can- pirati0n
ada
as
much
power

and Financial

Chronicle:
The

worked in the United States in the
1930s and the early 1940s."
It
seems to me there was a
signifi-

switching

wise

Editor, Commercial

sentence;

dustrial shares that stand to bene-

to

seem

our

importance

more

4'

standard than does the United States.

down.

overseas

trade.
,

expect other countries to attach

straw

self-interest through increased in¬
ternational investment and freer

to make it clear that

to

too

dif-

Policy

Popkin, Canadian economist, commenting on Herbert
M. Bratter's article in last week's
"Chronicle," maintains since
Canada is still basically a debtor and not a
creditor nation,
there is no reason for her to
buy gold. Declares it is unrealistic

re-

highly abroad; but the boom psychology that prompts even small

little

EDITOR:

Mr. J. W.

talking to

are

Our country is young, its economic system is strong, and its
capacity for growth will put our
terprise to

favorable

so

little

a

THE

Canada and Our Gold Buying

Canada's many friends abroad,
' Nevertheless, it is in a hopeful
mood that we should enter 1953.

economic sanity.
And, since
Canadian economic expansion de-

with

TO

we

Let

now.

private optimpublic caution,

partners; and we should
a
policy of enlightened

pursue

to

LETTER

our

long-term

our

to

have

United

repute

ism

nomic

in

should

we

I

good

We should be proud of the part
Canada has played in this return

indicated, the duty
countries,
primarily

clear.

contribute

As

should teach

us

be done.

the

surplus

Canada and
no

countries.

a

jn

Resources
/

is

omy,

.

Basic

s

But there

25

on

membership
^

Stock
the
to

Whitmer,

in the New

Exchange,

same

Jan.

22,

date will be ad¬

partnership in Mitchel,
Watts

&

Co.,

14

Wall

Street, New York City, Exchange
member firm.

26

Continued from page

prices

7

with

Yon Can't Eat Government Controls

the

before

decline in farm income,

the

that although
1952 turned out o
fact

The
year

is,

^ a rec-

Td Pl^'rZ f;frm

phX

lei

has

roduct

D

to speculation in

riceSonlfahT^eln'"the
making
1952^ opened with Ze
f"1

If

level

farm

prkes

at

of

105%

parity, but by the end of the year

!£ laritvle^lhfordth0ePPfLdst
^ nlir 2gtTvears
nearly
72 y
V

in

of

The net result has been that the

had left

amount farmers

the fact that the
duction

despite

volume of pro-

larger. The

was

for the

less

was

in-

new

has} been off 1tcially estimated at $14.2 billion
{compared to $14.3 billion m 1951

ioome

ship

fleeted in the retail price to the

Labor

consumer.

23%

before leaving Washington
I conducted a little survey in the

^d'ngin^cegf0fXy^'ani
day oul rfperations all ol the big

year

were

declines, as you
sharpest for

Good

Grade

Beef.

In

re-

spbnse to

my inquiry as to the
why, the answer was, "we
public what it wants—
why should we go to the expense
well Qf
putting on an educational probeef grarn9»

They,Flosedye+ar4.a^^t

25% lower than .at the start The

Jarm debt climbed above $14 bil-

nearly

3I^ lnf^ease

j

$2 billion during the year.
On

the other

.

hand, all reliable

predictions are that the income of
industrial

will

workers

reach

a

xecpra high in 1953.
are

we

reason

Three other chains
Good

Grade

Beef

in

were putting
their cases

for the first time, and selling it,
mind you, at ceiling prices, but
making no effort to push it.
while

prices

are

being beaten

If

on.

the

re-

consumers

table. By keeping meat prices to
price programs, such as we OPS ceilings, the retailers prevent
experienced, it will mean the normal price fluctuation
that a squeeze will be put on the iWhich would be caused
by supply
livestock producers because it will and
demand.
What
is actually
further
hold
down
the
selling happening,
is that
the
ceiling
price of livestock. And, if history prices established by OPS have
repeats itself, it will hold up the become the floor on meat prodprice of things a livestock farmer ucts.

has to

buy, including feed of all
kinds, wages and machinery.

i

imagine there isn't

a

stockman

within the sound of my voice who

is, that the farmer and would not be delighted to sell all
are

not

well

as

the

housewife

American

to¬

day

would

the

same

put together
seek

must intelligently

we

workable solution to

a

it.

off his cattle at the present OPS ceil-

city
consumer
they are, and the American
people had better be told about
average

thinks

at were not for

.sets

look

at

price control. But

the

facts!

not

been

reduced

proportionately

to the consumer because the mid-

The price of top fat steers on
the Denver market
dropped from
$40.25 a cwt. in August of 1948
to $34.50—yet in March of 1952
aretail prices on T-bone steak went
to $1.16 per pound from 85 cents
per pound in August

dlemen

are

utilizing the lowered

price of beef to absorb additional
freight and wage increases. The
one who suffers, naturally is the
cattleman and farmer,
I know the American

1948; chuck has been led to believe that it is
the producer who has been get-

Cattle

$30.30

a

If my information is correct, on
the present market choice cattle

less than

a

year

30%.

Acting

in

couraged

faith

good

and

en¬

by the government, the

American

cattleman

in

1950,

9nr^

this

.serviSs If
services
of

the
the

increase
products. Assumjng that ^e purchasing power
price

o£

meat

in

sumer

the

available for the

1953.

The

international

0f

p0r^

remains

consumer

high

its

at

level, and with the

borne

Ulnryi947,

normal increase in the beef-eating

P°Pulation> 1 shouId imagine that
by spring there wiU be more of a

requested

eraders
g aders

300
3UU

the
the

demand

on
the part 0f the consumjng public for beef. I should
think this would stabilize prices

the

in

between to s0™ deSree-

days

•

.

.

OPA and

OPS, there was a voluntary grading system, and they
had 275 graders and 32
super-

Cattle prices aie being driven
down at the present time, no
doubt because there is an over-

visors

supply

the

in

market,

and

bad

Korean

situation,

Under OPS in

ca^^e

proximately

80%

of

the

packers

I

am

sure

of this

some

can

be

charged to the government's med-

ices

dling in the livestock business,
causing
a
downward trend in
prices and premature liquidation

of

con¬

government

grading

service.
I

do

not

know,

based on the
evidence which I have, whether
a
horde of untraiined, inexperienced
meat
graders
has
been
foisted upon the cattle industry.
I

would

welcome

sustains.-the

who
the

war,

the

the

claim

that

to get out
In all

rapjd
,he

evidence

any

view of
such has

a

which

]osses

if

industry

those

from under,

probability, to prevent too
liquidation and to prevent
face

trends continue it may

been

the

cattle

downward

these

be

neces-

for us
seriously consider
longer-range loans of some type,
and Some type of ceiling or floor
sary

case.

Some cattlemen of long experiand
sound

ence

judgment feel which many of you abhor.
the U. S. grade deterselling price the spread
Second, I think the cattle mduswere all factors that indicated an
between low choice and high good
including the retailer, the
expansion in the number of beef should be slight, since the division Packer, and the cattle ra ser, h s
cattl^ needed and desirable. In is almost arbitrary, based upon a 3'°b °f
J^crehandisin;S
1953, therefore, we face the pros¬ the individual grader's opinion Pe°Ple of the United States
pect of 93-million or more cattle, and judgment.
become educated, perhaps overover eight million
higher than any
As an illustration—if the spread odueated,
on the sub j ec t of
time in our history.
between U. S. choice and U. S. "choice' meat: whereas no cornhigh

consumer

and

the

purchasing

increased

power,

that

since

population, mines

_

good is 10 cents, whereas
the

actual

the

value

of

the

beef

in

or

upon

some

government agency, perhaps.
Since

U.

is

bringing
good, there

S.

choice-graded beef

P011^

o

whn

+

price category as compared with the high good is only
two cents, the situation would be
u

vantages to the consumer w o
wisely selects and ^es
grade of meaL I suggest that there

remedied

are

if the grading system
adjusted so that an intermediary grading between U. S.
choice and U. S. good could be

established

one

—

which

ceive

a

much

better break

definite advantages m the use

g00(* Srade mea

were

.

In my opinion, if the cattle industry engaged the services of
some
independent group to investigate the problem and to
launch an educational and mer-

would

chandising program tremendous
benefits could accrue, jrnd not

r

group,

de

Pafahle cifort has be

in fact

low

only natural that when the allow a category into which could
producer is suffering the be placed the marginal cattle.
losses he is today, he seeks to fix
This in the opinion of some,
responsibility for
the
situation would enable the
producer to resome

T

Jo do. !Rie

It is

upon

,

the

cattle

latitude

in

cattle prices declined
nearly 10% tire retail price of beef increased!

ize

a

°* hread declined from the

postwar

more money

than U. S.

are many who believe
that the solution to the
industry's

on

I

this

have

it is

subject. For
been

in

meat

a

favor

ca1ttle producers and

onIy

in the

sale of his high good cattle, which
at the present time are just a

shade

under the U.

quirements,

greater

grading. I real¬

tremendous problem—

would

J? otbers ,of

^r.^d!Jfp5y'

American consumer,

to 60

,

farmer got 68 cents and the

price of beef.
Instead of

aUon?rZSw" ?PS

SVpo^ln V?bkrlalt
pound
rib
a

roast.

on

'

mid-

farmlr gofib relte

going down six cents

elnsumers^oSd' dollaT and Z
"2 thenar"shareoTIhe
consumers' dollar

was

46 cents in

re-

are

producers, it

much

as

from 50

sand-pound

steer.

This

the-difference

mean

breaking
operation

even
or a

on

would

between

a

12-months'

ruinous loss.

Shall

Fight Renewal

I shall do
power

newed

to

of

OPS

everything within

see

when

that OPS is not
it

comes

to

an

•

my
re-

end

in the spring of the year. We will
then

have

a

voluntary, and not

in

this

audience

knows that the




October

—

four

cents

less

condition to exist

when it

can

be

easily remedied by the education of the consuming public. It

so

industry—the
industry and the reconstantly remind the
American public that in many inup

to the cattle

processing
tailers—to

stances

it

is

economical and
,

in-?

telligent to buy various grades of
meat.

It is high time someone educompulsory grading system. I will cated
the
military
purchasing
give thoughtful consideration to agencies also, that Good Grade
any suggestion which may emabeef properly prepared, is just as
there were on the average
nate from this group or from any
ap¬
good as choice,
proximately 100 government committee of this group as to sugI have only sympathy for any
graders whose services were re¬ gested
changes
in
the
present person
who
believes
that
the
quested by the various meat pro¬ grading
system
which
will
be American farmer and cattleman
cessors
who desired to have the helpful to the cattle
industry and will raise livestock on which he
meat examined and stamped with to the American consumer.
'
loses money.
the

U.

a

S.
government grade.
Such proposals as seem to be
than a (Now, the
pros and cons of why
valid and constructive will be
price of beef has year
earlier
and
the
smallest the meat packers found it advan¬
given my fullest support.
dropped
severely in
recent since Korea.
tageous to have government
As I have studied the present
months, and yet, this is not reNo
one
will
deny that food graded meat I will not at this situation in the cattle
industry, I
one

There is no rhyme or reason to

purchasing pattern.-The cattle
industry should not rallow .the

is
:

,

,

this

dollars per head on a thou-

,

,

choice

which

a

some

as

mean

S.

yet

and

forced to sell at

long time the opinion of
of

high of 23% in 1947, to 16% in it is recognized, also, by all of us
June> 1951- Out of the 16 cents that a human element enters into
that the consumer paid for a loaf the grading process.
I do not think,
however, that it
1951, to $1.13 of hread, the farmer's share was
in January, 1952.
Rib roast rose 2 6 cents.
A; is the immediate solution to your
from 85 cents in April to 88 cents
°ut of. everY dollar that is spent problem.
I took the time to review the
in January.
•
for fruits and vegetables, the
Farmers were receiving an farmer §ets 31 cents, and 69 cents records of the Meat Grading Serv¬
average of 3 cents a pound less went to the middleman.
Out of ice of the Department of Agricul¬
for their cattle in
January thanevery doilar spent for dairy prpd-. ture, to make sure of some facts
they were in April.
This would ucts
farmer got 54 cents and and dispel some myths that are
©rdinarily cause a reduction of
middleman got 46 cents. Out prevalent.
six cents a pound in the
Before the days of OPA, in
retail of every dollar spent for meat the
1940,
The Bureau of Labor Statistics reports that steak prices increased
from $1.08 in
April,

Every

the

present

^

which, remember,
by the packing in-

of

expenses
were

year,

undoubtedly

wP^pTlrmpH
industry

toe

+•

coming

Tllis

still

t

but

in¬ that

creased bis herds in order to make
more

1051, when OPS ceilings were im- According to the Bureau of Agrip»sed, to $27.50 in January, 1952. culture Economics the wheat
During the same period that farmers' share of the retail price

cents

those

r

of

Agriculture is correct, there will
probably be a 15% decline in the
number of hogs on
the market

of m^at a* wholesale

ad a

which

Department

the

My observations have led me to
conclude that, regrettable though
price differen- it may be, the fact is that today,
ting the lion's share of the money problems lies in the up-grading of tial of from 10 to 12 cents a regardless of price differentials,
that the housewife pays for food beef with resultant higher
prices pound.
too many American consumers
prices dropped from products.
to the producer.
If the spread between good and with more money to spend will
hundred pounds in April
Many of you know my position low choice could be reduced, in not buy U. S. graded "good" meat,
But again let's look at the facts.
consumer

pot roast to 72 cents from 59
cents,
and
hamburger to 77 cents from
57 cents.

lnf«/u

from

will continue to request the serv-

ing price, but the fact is, those
prices are not being offered the
producer while they are being
it. It's about time that a lot of charged the consumer. Whereas
The situation has very nearly
this "hog wash" that has been the OPS prices on live cattle are:
reversed itself in one short year.
spread by the controllers in WashPhime yielding 52% meat is $37
Although the supply of choice is
angfcon be exposed for what it cwt.; U. S. Choice
yielding 59%
actually is. It is about time that meat is $34.20 cwt.; U. S. Good still somewhat short, the supply
of good
is glutting the market,
the American consumer learn the
yielding 56% is $31.50 cwt.; Cornand prices have fallen over $9.00
truth
about
the
price
control mercial yielding 53% is $27.30
per cwt.
in one year. At these
amyth. Well do I know that the cwt.
prices you producers who bought
American consumer has been led
These grades on the market do
cattle two years ago, when they
to believe that
although prices are not
bring
anything
like
these
Mgh, they would go still higher if prices. The retail price of beef has were high, are losing your shirts.
jas

the grading

have

information

the

June, 1952, there drought conditions have prevailed
were
531 graders and 63 super{f1 1?aany
areas, requiring
visors, and it is estimated by the liquidation.
paying for the food itself.
Department of Agriculture that in
It is interesting to note that in
1953, if OPS is abolished, and we my own State of Kansas, reflectCattle Industry Has Problem
hope it will he, we will have 350 ing the lower prices for livestock,
I am not attempting to speak
graders and about 50 supervisors and the record crop of wheat,
to you today as an expert, since under the
voluntary system.
livestock producers accounted for
I am well aware that most of you
I mention these figures because only 46% of the total farm income
know more about this subject than I think it is
important that the during the first 10 months of 1952,
I do. I do know that the cattle cattleman realize that under
the compared to 66% during the same
industry has a problem, and that voluntary system of grading, ap- period last year,

ago, while good grades have suf¬
fered a more severe drop of 25-

markets, they still

constant

for

if

j

are

wholesale
main

supervisors.
The
qualifications

F]rst

spending 27% of their levels. Three-fourths of the graddisposable income for food, but ers were recruited from the packthey are eating better.

sumers

and

the

1935-1939. Today con¬

is bringing 10%

.have

"The fact

of

down -m the stockyards and in the

to live under controls

the stockman

Bureau

brined

hahdle

tory,
hired

consideration,

these for your

grading became mandathe meat grading services
a
total of 526 graders and

Statistics, consumers spent graders were at least three years
of their disposable income experience, actively engaged in

be willing to accept
quantity and quality of
^res were charging the full OPS food which cost 23% of dispos¬
able income in 1935-1939, the cost
would
only be 19% instead of
customers
an
adver- 27%. In addition to buying more
offered
But the food and higher quality food, the
point is- that for "OTmal operation American housewife is demanding
tJie retad outlets consider the OPS
better
service,
better handling,
ceiiing price as the minimum price better packaging, and all this costs
be charged the consumer and more money. And let me again
remind
her that
she
is
every one 0f them puts the price
paying
more for marketing and distribut¬
tag on accordingly.
Qne 0£
cbains refused to ing food of products than she is

n

Farm price

the

established

was

and meat

42

for food in

Retail Meat Prices Have Held Up

When the OPA

not

or

incomes.

^and a record of $16.7 billion m gjve
Jcnow,

whether

high is to be found
compare the relation¬
of food prices to consumer
we

"sed special "s

t

.

than in the previous year,

If

World

test

According to
a

of

food prices are

*

■declining—the eventual result can

■

memories

real

when

Or Beef Rollback Orders!

comparison discuss.) The fact is, that the pro- have attempted to seek some conprices we gram was initiated at the request structive solution to the problems
War II. But Of the packing industry.
which face us. I offer several of

in

high

seem

our

paid

wily be

15,1953

The Commercial and Financial Chronicle... Thursday, January

(214)

I know that price controls, rolland tinkering with slaughter quotas will not help your situ-

backs

will only add to your
declines, your losses — and disation—it

i

Number 5186

Volume 177

duces meat for

.The Commercial and Financial Chronicle

..

New York

pr0

consumers.

(215)

closing I want to say that the
of this industry
are to
be
congratulated on their ruggedness,

AIUaIiaJ

be subsidized,
The plan of Mayor Vincent R.
well understand that Impellitteri to levy a tax on "sales
Vi
Ailff*
K
subsidies and handouts carry with
or transfers of
them obligations and the loss of
securities" / to
the right to run your own busi¬
raise $25,000,/I i

m

An

ness

and

you
.

*4

r»

men

nnH

/in

ttri

+

1

suited in the exodus of

000
e

cepting.
There seems to be a tendency
nowadays to classify these rugged

the

that those

are

virtures

which,
if
practised and persevered in, will
bring us back to government poli¬
cies
well

in

have

that

stood

this

former days.

constructive,

free

x'

A

for

cry

Roscoe

enterprise

Garet

Garrett,

of

Ingalls

and

summed up some facts
fundamental to consider
when in March, 1951, he said:

The

if

it

knows

it

why

is

losing

New

Impellitteri,

York

American

intuition, that unlimited
government is the enemy of freewill

and

riom

the

in

end

devour

it?

"Times"

designec[

tory tax

to

highly

a

the

on

raise

income

gross

and

this

has

you

In

the

would
more

to abandon this proposal.
long run, this proposal
be

the

the
,

rise

and authority of

power

ernment

sudden

the

is

...

in

gov-

with the consent of

people.

"Continuously,

after year,

year

morning and afternoon, occasion
by occasion, the sphere of govern¬
ment expands the usages of com¬
pulsion become more and more
-

familiar, and the world of private
enterprise contracts.
"If

the

continues

this

sequel

revenues

"By

will

it

name

any

the

be

planned life, in which the individ¬
ual
for

will

have

exchanged

liberty

delusion of se¬
curity.
Events are impatient
and swift, and the fatal fact is
that many of them are irrevers¬
ible, at least for a long, long
status, plus
.

this

realize

To

time.

have

you

only to remember what the world

enterprise was like
generation ago"

private

of
less

than
I

So

one

leave

competitive. We
I

and

back,

roadblocks

As

Sincerelv

ROSCOE

the

amount

are

the

is

re-

Jargue, and vote.

Exchange

Firms.

and

American

have

reopened

We See

of World

"

of the

War

and
Fla.

Hotel

Surf
Mr.

in

and

in

Club,

the

Lyell K. Hill has

Dual

tained

private

wires

are

main¬

with the New York office,

assuring

The
,.

seasonal

offices

are

fully

equipped with stock exchange

services

the clients.

for

the

of

Bureau
national

convenience
,




.

growing number of veterans

$10.3 billion, will be for all

or

security

port

security

Investigation

—

have

Some of these activ¬

of the

program
program
a

Coast

of the Federal

direct bearing

on

our

the

of

essential to

half again as large would be "on

a sum

possible for Congress to do

undoing of these past fiscal sins is

our

as

and

time

some¬

*

for

attention

for agriculture, hous¬

programs

continued social and economic progress

lems

❖

program

—

*

including those directly concerned with na¬
in the light of the

security—-has been reviewed
for

this should be

place is definitely heartening.
of

time

in

Mr.

as

international

developments,

in the

matter of

running through

constant

adjust expenditure programs to make surfe they

ernment

grams..

be

must

into

coordinated

at the minimum level consistent with our national ob¬

ous

the

over

again is the

all too familiar claim

now

on

effort to prune
name

of defense

Planned outlays in

it to the utmost.
are

mass

put down as "untouchable," not¬

of evidence that very substantial

reductions could be made without impairing our security.

js plainly implied that outlays for veterans and for the
g^^tled farmer

are

equally to be regarded as sacro.

..,.

r

i

■■

'

ixl.

„i_

sanct. This latter may be so in a political sense—although
we

still harbor hope that the

new

Administration

may

an

immensely complex

or

sponsors

should not be, merely

it.
a

long list of proposed expendi¬

departments

or

all-inclusive

one

can

facets of gov¬

set

of

plans and

pro¬

work really begin

con¬

both the backlog of spending

sufficient

work done.

now accumu-i

fresh plans for the future. All the Admin¬
or

at least all the policy-making seg¬

new

for

next week. They must be granted

them

to

Congress is not

get their preliminary home
so new,

of

course,

Executive branch.

requires time.
We

budget submitted is the product of long and vigor¬

good deal

thoroughly studied, and all of them*

to be coordinated with the

jectives."
that the

a

Then and only then

structively

time

All of

and lopping this one off and reducing that one.

personnel,

our

save a

policies of the Administration which

it, will be

•

reflect

of the prob¬

ought to be, the financial expression

Reducing outlays is not,

ments of

"...

estimates

It should

today not only

or

istration

recommended

many

Dodge has pointed out, the budget of the Fedi ?

eral Government is

term needs of the nation.

Here all

that

getting down to business after January 20.

lated and upon

effort to

new.

helpful and the fact that it has been taking

light of the heavy tax burden, and in the light of the long"The

wholly
course,

months, and that various other

The situation in each of the

*

preparation of this budget, every Government

outlook

,

a

by which the Administration will be faced.

tures,

world tension that lies ahead of .us.

"In the

>

.

It is true, of

cussing with the incoming President

and

nation for the long, hard period of

strengthen the

two

some

of broad

to

;

Dodge himself has been giving the budget his close

research, labor, social security, welfare, and health—help
our

con¬

ahead.

Moreover, it is but reasonable to allow

document, but is,

assure

complexity of the prob¬

very

regime time to orient itself.

-

consum¬

budget cutting under modern

Time Is Needed

•

ing and community development, education and general
to

of the

Real

ditions must start several years

Mr.

i

difficult, *

a

consuming task if done intelligently,

reason

lems to be faced.

But

security.

"Others—such

ticker, and statistical and research
j

the

withstanding the

ticker, translux, Dow-Jones news

*■

as

Guard and the internal

instantaneous and unin¬

terrupted service.

appropriations

appointees have been studying their assignments and dis¬

remaining 13%,

ities—such

been

appointed Manager of both offices.

further

Now it is

Sun

Beach,

Palm

with $100 *

spending which has not yet been authorized

by Congress, and

approximately
continuing cost

a

fighting in Korea.

"The

are

Biltmore

to. that

unavoidable

ing anyhow by

II; in addition, they include the costs of

other activities of the Government.

Beach

branch offices in the Palm

♦

It

In the fiscal year

services and benefits for the

current

their seasonal

Add

fiscal year

new

spending authority previously voted by Con¬

wisely and prudently. In point of fact it is time

$11 billion, represent for the most part

Exchange,

Stock

of

.

Byrd is authority for the estimate that the

January 7, 1953.

These expenditures, which will amount to

;

-Stanley Heller & Co., members

as

ma¬

Dodge last week made note of some of
part of the outlays during the next.
even
longer have been fixed by Con¬

Government would start the
billion

will be for interest and for veterans' services and benefits:

-

of the New York Stock Exchange

the

to

,

Senator

the books."

1954 these pro¬
grams will cost approximately $57.3 billion.
"An additional 14% of budget expenditures in 1954

tional

Reopens Branches

obvious

have been put under
way

page

the road

the way out.
I shall work,

on
way

are

taken last year and in earlier years.
only have commitments been made on the strength
prior authorizations and appropriations but programs

gress.

vours

C.

INGALLS,
Association of Stock

President,

the

chant marine activities.

hoping controls,
the tinkering of

and

planners,
'That

on

are

am

reasons

Not

delicate

today with the

you

admonition, keep your livestock
industry free, fertile, rugged and

The

A very
large
12 to 18 months and

would raise.

measure

,

was

a

.

.

Mr.

them.

but

from first

to find the

;

triculate.

from

than

taxes

of

already

impossible.

quite feasible in

to be set down

are

thing to correct this situation, and to do it rather promptly,

be foretold. You do not have
ideological name for it.

may

Faced

period

City

cost

in diminished

other

the

to

sure

staggering political fact of

time

our

Be

time, nothing is to be gained from not
fully facing the fact that reduction in Federal expendi¬
tures will
inevitably prove difficult, and that immediate

which can only with great diffi¬
culty and much waste be abandoned in their incomplete
stage.
'
•
'

ing

question reduced to that form is

"The

Must

same

of

$25

paid by other businesses

that all the ideological words are- Continued

-

Facts
At the

financial firms in the City, in urg-

discrimina-

financial businesses at double
rate

mem-

importance of getting the

put aside. You look straight at the
thing itself; and the thing itself
is government.
*

be.

bership of this Association, which
includes over 300 of the leading

today

*

Last year

levied,

"The

and will not

gressional action

I speak for the New York

million.

"What has become of that deep

as

financial

a "*ax 011 sa*e or transfer of which this particularly vicious tax

securfl.jes»

world to the welfare state.

the

business already being threatened

prints the text of your outline of
a
long range financial program
"If
private enterprise
cannot for the City.
read it, and read it grimly, not
jt comes as a shock to this Assoomitting a few tears in the grave- ciation that you should request
yard of its own principles, then fr0m the Legislature authority to

-^r
lts *eyy

of

by the more advantageous smaller
fol- tax burdens
involved in
doing

Snyder,

pretty

iii- ?

center

business elsewhere.

the Dear Mr.
Mayor:

writer,

very outset. For our part, we are not
prepared to accept any such attitude, and we most ar¬
dently hope that the Eisenhower Administration is not

almost

world

In-

C.

lows:

Hon. Vincent R.
think

I

defeatism at the

reductions in amounts which should be
the course of a reasonable

the

President,

Roscoe

galls

from

■

views.

ment

transfer

these are the conventional claims of
To accept them would be to surrender to

course,

spender.

jeopardize New York's position

commun-

its

never

ginning of the change in govern¬

Now, of
the

the City and the State and further

ication

lngaila

was

greater than at the present
time, now when we are at the be¬

City

ams.

nation

The

several hundred

of

offices by national corporations
of in localities outside of New York

of

York, State.
was
bitterly
jf the City were to compound
attacked
by these penalties on doing business
the
Associa- in New York
by levying its own
tion
of
Stock transfer tax on
securities, it would
Exchange force irpre business away from

something to be discarded—but I
fundamental

ment

the trouble.

New

old-fashioned,

want to say to you

substan-

• i

.

levied by the State of New York

battled

treasury

as

ii.

from

the have brought about the establish-

for

m

a

tial number of financial businesses
the City,
Already the high transfer taxes

i

accept the hazards that
are accustomed to ac-

characteristics

really irreducible interest on public debt
possible savings are made to appear scarcely worth

—that

,

because you
V\

—other than the

I raitSaCllOIIS AHSCKGu

their refusal to

on

*iii

the contrary. The various other items of proposed
expenditure are so numerous, and each so relatively small

prove

City's Plan to Tax Security

In

men

27

can

before the

That, too,'
■

only hope that it will be only

new

but it has

a

.

%

short time

Administration will conclude, without dis¬

senting voice, that reduction in outlays of the dimensions
desirable, not to
or

five

years

say

from

essential,
now

can

be achieved this

year

only if in addition to greater

operating efficiency there is a vigorous reduction in the
^scope

of the functions undertaken by the National Gov¬
For without such a realization, results must

ernment.

remain far short of real

possibilities.

2B

The Commercial and Financial Chronicle...

<216)

This

13

Continued from page

principle

been basic to

West, for
almost

Let Us Not Sell (hu

with

a

in

the

will

go

contrary to his purposes to accomplish which the

somehow

was

made

inef¬

station. In substance this meant

these

of

Because

different

con¬

and reac¬
today of the Civil
3Law concepts, I wish in very gen¬
eral terms, to contrast some of the
cepts and the presence

tion amongst us

of-these two

characteristics

sys¬

tems.
was

developed

iby Rome, with a high
since
excelled.
Its

genius not

Civil

The

reached
factors

Law

provisions

deep into the elemental
that make men into na¬

the Mis¬

Rome was called

tions.

World, and in the
£%alm of law she retains, today,
the

of

tress

the

among

civilized

of

bulk

peoples, that proud position.
The Theodosian Code
Wow
tttae

little history: Following

a

of
the
somewhat
private codifications of

pattern

^earlier

"WE

more

The

people under this system
principle fully operative, but it have those rights, powers, and
seems, also, that there never was privileges, and those only which
a time when the executive power the
sovereign considers are for
whoever held it, and howsoever their good or for his advantage.
he secured it, was not more or less He adds or takes away as suits his
supreme in all the affairs of state royal pleasure. All the residuum
—legislative, executive, and judi¬ of power is in the Emperor. Un¬

kind

same

security talk.

of

Europe and
portions of the Near East for over for the head of

tions.

These

devices

failed

with

when

these

barbaric

yet
—the bulk of the civilized world
irruptions

ing centuries began to reassert operative, have suffered the re¬
themselves, and people began to sulting tragedies—loss of liberty,
look back to the provisions of the oppression, great poverty among
the masses, insecurity, wanton dis¬
Civil Law.
By the middle of the
regard of human life, and a host
12th century, the study
of the

Tribonian

Western

some nine years
and
•months later (December 25,

nine

438 )v
That Senate, which had long since
lost its power and was almost
menially subservient to the Emporor,
received the Code with
shouts of approval: "It is right!
So

be

it!"

accompanied

exclamations
for

oriental

of

by loud
flattery

the Emperor.

Rome;
with

they

will

ultimately

fail had spent their force

us.

The

Code

to

of

some¬

whatever in it.
We

should

understand

that

everything connected with the
Emperor was divine or sacred—
there
was
the
sacred
imperial
palace, the sacred imperial bed¬
-chamber,
the
sacred
imperial
wardrobe, the sacred laws, etc.
"The government was

absolute

an

a

Civil

Law

throughout Italy and
Europe
was
ardently

was

the

command. The Emperor
sole source of law. By

the simple issuance of
the Emperor could

a

new

modify

law,

less than two centuries ago
—have lived under this

of

the

relatives

of

these

evil

broods.

PEOPLE

perfect

of

the

Union,

a

establish

Justice, insure domestic Tranquil¬
ity, provide for the common de¬
fense, promote the general Wel¬
fare, and secure the Blessings of
Liberty to ourselves and our Pos¬
terity, do ordain and establish
this

Constitution

for

the

United

States of America."
Here

the people were speaking
sovereign, not as Emperor, nor
a small,
self-appointed group as¬
suming to be sovereign. The peo¬
as

other jurists (there were
Concepts of the founding
others) and with them to
Tlje Eastern Empire was now
Fathers
compile the laws issued since the being, pressed with the peoples
The Framers of our Constitu¬
time of Constantine, nearly 200 resident
all
along
their
land
tion
knew
this
history,
and
years before (306-337 A.D.). The boundaries; in three centuries it
planned to make sure that these
accumulations of laws were said would fall
a
relatively short
to be so voluminous as to
fill time in the more than 2,200 years enemies to human welfare and
2,000 books and some 3,000,000 of the life of the Roman Empire, happiness did not come to Amer¬
ica.
They were trained and ex¬
verses, estimated to equal 580 vol¬ West and East.
group of

residuum

them.

There

nine

—

perienced

in

the

Common

Law.

of

was

power

no

in

was

Emperor, no

lex regia here.
I

today deal only with a
simple elemental matters, and

can,

few

that but briefly.

Separation and Fusion of
Governmental
The

Functions

ment

Framers, in the Govern¬
they provided for, sepa¬

rated

the three functions of gov¬

ernment,

taken up.

and

each

set

of

them

separate branch—the leg¬
islative, the executive, and the-

up as a

judicial. Each was wholly inde¬
pendent of the other. No one of
them

might

other.

No

encroach
of

one

upon

them

the

might

delegate its power to another.
Yet
by the Constitution, the
different branches

were

gether, unified into

bound to¬

efficient*
operating whole. These branches
King John at Runnymede.
They stood
together, supported one an¬
were thoroughly indoctrinated in
other.
While severally independ¬
the principle that the true sov¬
ent, they were at the same time,
ereignty rested in the people.
mutually dependent.
It is thisNear the beginning of our Rev¬
union of independence and de¬
the great elements of the Civil once more the law of Rome re¬ olution, the representatives of the
pendence, of these branches—leg¬
people met in Philadelphia and is¬
Law, but none of them embody¬ sumed its sway over the Euro¬
islative, executive, and judicial—
sued their great
proclamation, the and of the
ing the principles of a free gov¬ pean continental world.
governmental functions
Declaration
o f
Independence.
ernment; the Pandects, declared
possessed by each of them, that
They solemnly announced:
The Code Napoleon
to be "the greatest repository of
constitutes the marvelous genius
"We hold these truths
to
be of this unrivaled
sound legal principles, applied to
One other corde may be men¬
document.
Tl^
the private rights and business of tioned here—a modern one—the self-evident, that all men are cre¬ Framers had no direct
guide in
ated
equal, that they are en¬ this work, no historical
mankind, that has ever appeared Code Napoleon. Having been ap¬
govern¬
dowed
by their Creator with mental precedent
in any age or nation," (Justinian pointed
Consul,
Napoleon
ap¬

autocracy, the state was thorough¬ called it "the temple of human pointed a Committee to make a
ly militarized, the Emperor in justice"); the Novels, a collection codification of laws. Napoleon as¬
•supreme

until

concept,
thing of normal life was resumed
sometimes more, sometimes less,
among the indigenous peoples, the
customs and traditions of preced¬ and, when the concept has been

Justinian

collect about him

and

There was no umes of 400 pages to a volume.
Moreover, the end of the 15th
by the Senate, no objec¬ Tribonian's compilations were in
century and the beginning of the
tion, question, or dissent; the Sen¬ four parts: A Code, containing all 16th saw the
opening of the Ren¬
ate did not so much as dot an "i" the
imperial
statutes
thought aissance. The fall of the Eastern
<©r
cross
a
"t". The Code was worthy of
preserving, from Empire scattered the learned men
-wholly the offspring of the Em- Hadrian (117-138 A.D.) to Justin¬ of the
Empire over the whole
porors; the people had no part ian; the Institutes, which contain
country,
learning
revived,
and
debate

THE

...

Ninety years later, in 528 A.D.
Justinian, Emperor of the Roman
Empire of the East, struggling to
preserve and build his Empire by
complete autocratic authority,
called
a
noted
jurist
named

;ate

It

up.

a

ifind presented
,

set

was

ple declared they were so acting
and did so by
adopting the Con¬
state, operating stitution.
They formally declared:
But, in fact, all this bred not se¬
2,000 years (sometimes the prin¬ under this concept, to establish a "We the
people
do ordain and
curity, but scarcity of grain, of
ciple lay dormant, but still there, dictatorship, and why and how establish."
This is the difference
materials, of men. The mere mak¬
during the period of the Roman there is so little bloodshed in its between
liberty and despotism.
ing laws, even in an absolute
Republics; sometimes it was ac¬ establishment. To be sure, there
Deeply read in history, steeped
despotism, does not change the
palace
revolutions,
there in the lore of the
tive, as in the days of the Empire, were
past in human
were partisan
great laws of nature and eco¬ West and
outbreaks, at times
East), it should be a
government, and experienced in
nomics—neither then now now,
of grave proportions,
but there the
vital portion
of the warp and
approaches of despotism which
for there can be no permanent
woof of the law of continental was rarely a great popular up¬
they had, themselves, suffered at
stability where men are not free.
rising to sustain a principle.
Europe.
the hands of George the
Third*
In fewer than 40 years from the
We must always remember that
these patriots, assembled in sol¬
issuance of the Theodosian Code
Gothic Influence
despotism and tyranny, with all emn
convention, planned for the
(i.e., 476 A.D.) the Empire of the
The Gothic barbarians, swarm¬ their attendant tragedies to the establishment
of
a
government
West fell notwithstanding the oping over the countries of the people, as in Russia today, come that would insure to them the
to nations because one man, or a
peration, under complete auto¬ Western
Empire,
brought with
blessings they described in the
small group of men,
cratic powers, of economic devices them their
seize and Preable.
governments of mixed
The people were setting
enacted to promote the welfare or
exercise by themselves the three
limited
and
elective
mon¬
up the government.
They were
of the people and to preserve the
great divisions of government—
archies, with their "popular as¬
bestowing power. They gave to
empire; some were the same de¬ semblies or national councils of the legislative, the executive, and the
government the powers they
the judicial. For now a score of
vices which we have been told the aristocratic
class, which gave
wished
to
give;
they retained
will rebuild our economic struc¬ their assent to
centuries, the nations and peoples what
laws, and were the
they did not wish to give.
of Western and Southern Europe
ture and preserve our free institu¬ basis of all lawful
authority"
The
that

Cregorius and Hermogenes (of the
time of Constantine),
the Emporers Theodosius II and Valentinian III (Augustuses) on March
26, 429 A. D., appointed by Im¬
perial Edict (the people were not
•consulted), a committee of jur¬
ists to prepare an official code,
«and prescribed what it was to
•contain. This Code was prepared
to the Roman Sen-

government

United States, in Order to form

Rights of People

that everyone did what he was
principles, being the in¬
strument through which men of told, and did not act without per¬
mission." There was a great body
equal genius, but with the love of
secret
police to report dis¬ cial.
mankind burning in their souls, of
der this system, the people look
Siave established
and preserved obedience; there was a "special"
Thus it was inevitable that this into the law to see what they may
secret police appointed to watch
liberty and free institutions. The
principle of the autocratic power do. They may only do what the
Constitution of the United States the ordinary secret police. These of the Emperor, the
executive, Emperor has declared they may do.
laws were framed to provide se¬
-embodies the loftiest concepts yet
This concept explains why, over
which was basic in the laws of
the centuries, it has been possible
framed of this exalted concept. curity. We of today have heard Western and Southern
its basic

new

1,200 years, with fective; sometimes such
efforts declared:
thousand years more in were treasonable and so handled.
over

the East, or until 1453 A.D., when

and maintained des- classified, and even the least had

potisms; the Common Law,

have those bodies to

to

law

theTurks captured Constantinople.
It seems that not always was the

Children Into Slavery
ihave set up

a

seems

Roman

Thursday, January 15, 1953

of

new

laws passed subsequent to

sisted in the deliberations.

Here

Code, to again the people were not con¬
It was compiled in four
errors
and supply omis¬ sulted.
sions in the Code. The new Code months, and is
said to be the
the

compilation of

the

correct

They remembered the Barons and

certain

an

which t©

upon

unalienable

Rights,

that

among these are Life, Liberty and
the pursuit of Happiness. That to

these rights, Governments
instituted among Men, deriv¬

rely.

As I

it, it was here that
inspiration came.
It
miracle.

see

the

divine

was

truly

a

secure
are

ing

their

just

from

powers

the

The
The

Legislative

people, not

Department

Emperor or
And a small group, were to make the
product of the Roman and cus¬ consent of the governed.
tomary laws, the ordinances of for the support of this Declara¬ laws through their representativeswhich the
Justinian
the kings, and the laws of the tion, with a firm reliance on the chosen by them.
olivine or sacred, the contraven¬ Compilations were
To make sure
based, except
Revolution.
This Code is firmly protection of Divine Providence, the representatives did not
tion of a given law, as was often the Theodosian
Code, disappeared
get out
We mutually pledge to each other of
proclaimed, was sacrilege and the after the publication of Justinian's entrenched in most of the coun¬
hand, they were elected for
tries of Europe and prevails in our Lives, our Fortunes and our short terms of office. The
punishment
for
sacrilege
was
Code, Institutes, and Pandects.
people
sacred Honor."
most of the Latin races.
•death. The laws issued and codi¬ These works were
could, at short intervals, displace
composed and
fied were designed to keep secure written in
They made good the pledge to unsatisfactory representatives and1
This Code Napoleon, like the
Latin, and later trans¬
or re¬

peal any previous law. All im¬
perial utterances were considered

this
and

was

published in 534. All of the

sources

.

.

an

.

on

absolute, unchallenged power lated into Greek.
authority of the Emperor.
While the absolute

to the last great

sacrifice, and in¬

originate with the legis¬
lative branch of government, nor

dependence

won.

power. It appears that in none of
the three codes did the legislative

spoke

Theodosian
power

of the

and

Justinian

Codes,

did not

was

The repre¬

elect

The

others
will

to

of

take

the

their

people,

places..
the

not

sentatives
of
the
people
were will of an Emperor, was to con¬
implicit in the Theo¬
then speaking, and
on the initiative of the
they spoke the trol.
people. All
it was boldly an¬
these codifications originated with things that were in their hearts,
Furthermore, the people speci¬
years ago, had provisions covering nounced in the Justinian
compila¬
the executive power; their pro¬ for which they were ready to die, fied in the great document, the
sach so-called modern
concepts, tions. | The Emperor had all
and did die.
No Emperor ever matters about which their
visions
were
dictated
which
our
by
that
repre¬
emigres and fellow legislative,

It is interesting to note
these laws, proclaimed over

that

Emperor

1500

dosian

was

Code,

judicial, and executive

travellers would
are

new,

markets,
socialized

as

have

us

believe power in himself. Some affirm this

black principle had its origin during the
taxation, reign of Augustus Caesar, some

price-fixing,

excessive

medicine,

conscription trace it back to Romulus and the

of labor,
anti-Semitism, inflation,
corruption in government bureaus,

the

relationship between Church

founding of Rome, 753 B.C.
The exact words of the Institute

exercise any control over
take any part in the delibera¬
the framers of the

power
or

tions of
that

branch

empty

code;

at

approval.
system was

most

The

voiced

rigors

an

of

containing this declaration read this
at times miti¬
sand State—all phrases familiar to
(in translation): "The constitution gated by a benign
sovereign, but
our ears. Under these
laws, "the of the prince hath also the force
only to the extent that he de¬
entire population was organized as
of a law; for the
people by a law, sired; legislative bodies might at
in one vast army. All,
including called rex regia, make a conces¬ times be set
up and function as
the highest officials, were
strictly sion to him of their whole power." he permitted; but
any attempt by




in these

terms.

To

have

done so, would have been his sui¬
cide.

sentatives could

sovereign
the

make laws.

power was in

legislative

branch

The

them, and
could

go

only so far as they authorized.
dissensions They lodged in the Congress the

Twelve years after the Declarat i

o

n,

spurred

by

among the Colonies which threatr
ened civil disturbances that would

have invited
reconquest, the rep¬
resentatives of the people again
met

in

Philadelphia in the same
Hall, and framed the Constitution.
The

Preamble

document

laid

to

that

down

inspired

the

great

sole

power

the

matters

them, and
As

to

none

already

residuum

laws

about

entrusted

to

others.

stated,

the whole
legislative powersovereign people, and

of

rested in the
the

make

they

Congress could not enter that
reserved domain without
express

Volume 177

Number 5186... The Commercial

and Financial Chronicle

(217)
from

authorization
This is the

to declare

the

people.

principle that operates
law unconstitutional.

a

conferred

powers

eral

the

imon

Fed¬

Government, and, second, to

We the people have all this power

determine the respective
rights of
litigants under the law. All the

in

judicial

hands, if

our

will but

we

exer¬

cise it.

powers of the government

to

were

be

exercised

by

the

courts.

Executive

The

Department

Here, also, safeguards

Not
only their knowledge of
history, but their experience, also,
taught them the ills of royalty

vided.

and

sent

kingship.

Washington, with
a
lofty,
pure
patriotism,
un¬
equalled, I think, in the whole
history of the world, had set them
the lesson, when, at Newburg, he
affirmed

that

he

must

view with

abhorence, and reprehend with
severity the suggestion of certain
elements

the

of

army that they
king, a suggestion, he
"seems big with the
greatest mischiefs that can befall

make him

said,

that

country."

my

might

(It

have

to

graved

copy

this

on

matter, hung
conspicuous places in
House.)
The

in

several

the

White

Convention

(Washington
President) provided for
the election by the people of their

Chief Executive—a President—for
limited

a

term.

Under

the

influ¬

of

Washington's lofty patri¬
otism, they failed to think it nec¬

ence

to provide limitations upon

essary

reelection. But, mindful of the les¬
of

sons

history, the Convention,
representing the people, bestowed
their President certain spe¬

upon

cific

only. He

powers,

they

did

stowed

upon

had

bestow.

not

the

none

They

chief

be¬

executive

all the executive powers they gave
to
anybody. Here, also, all the
residuum

retained

executive

powers

be

bestowed

is

by the
not

a

people.

The

sovereign Em¬

/

:

check upon the legislative

a

branch,
the
Constitution,
ecutive

people,
under
gave .the chief

certain

limited

the

country

to

Congress, he
legislation,. he

recommend

bills

of

Congress,

but

can

Con¬

gress can pass these bills over his

judiciary,

the

President

might

power

in his

not

his powers of appointment

to of¬

fice, by providing that the Senate
must advise and consent to certain
more

important

appoint¬

ments.

device

is

no

the

Presi¬

first to

give
import¬

considerable

the

provision

in

the

Europe.

in

the

except

the

of

specifically

as

is

field

other,

branch

provided;
(except as

provided

otherwise)

either

specifically
delegate

to

its

of

any

the other. These two

powers

We

the people

Constitution
Union

provided in

that

report

the

the

our

of

the

principles

are

Congress to secure its
The administration sup¬

in

port

Congress

elemental. So long as these prin¬

and makes every

The

observed,

free

our

cure, and no

amongst

up

I wish

tion,

despotism

are

se¬

be set

can

us.

now

in

Roman

the

it.

Marque

Land and
"To
but
to

the

Roman

Civil

existing
Law, re¬
govern¬

mental powers,

men

executed

were

refusing

to

program,

vengeance

at

in
is

as

along

go

some

traitors for

with

the

in their totality—

the

legislative, executive, and judicial. Roosevelt

and

the

Administrative Tribunals

administrative

to

power

commissions

laws.

make

This

This,

of

the

Water;

raise

that Use shall
"To

be for

provide
make

ernment

"To

and

Rules

and

a

Militia

for

the

them

the

measures

in

effect,

of

is

as

execute

the

forth

the

Laws

Insurrec¬

suppress

be employed in

may

Service

of the United

discipline
gress."

more Emperor
absorption of
legislative powers, the lex

These

prescribed

by

that

States,

by

Con¬

powers pre¬

Constitution

in

and

Congress.

body

But

laws

passes

to

implement these powers, then the
execution

One item more, before I close—•

war

the
all

are

when

the

are

scribed

they

of

these

laws

becomes

doubt

the

Who

plan

Is

Mis-Directing

And I may as well here as any¬

the

or

executive

of

President

tive.

But

dre

years, when the true history
of our detours from constitutional

to

agreements.

de¬

were

to

these

same

idea

ambitious

administra¬

bodies
as

that so legislate, also
judges of their legislation.

political

emigres,

who

trained in the Civil Law and

thoroughly converted to

the

trade

Emperor

alluring
to
is taking root.

Again,
tive

ropean

the

negotiate

The

(always

act

one

power

the

lex

.

some

more

Emperor,

more

lex

£,

tain

told that

am

in

matters, they exercise

cer¬

execu¬

were

part

imperial Roman:

by

the

was

support

the

of

them

the

free

power.

I will,

name one:

There

buying of the
people by

Roman

elaborate

distribution
the

—

banquets,

of

laws

corn

foodstuffs
from

come

those days—by providing the pec*-

ple with magnificent amusements,
such as gladiatorial fights, fights
between
wild
animals, and between savage beasts and humans

(such as throwing Christians tea
hungry lions), by providing nu¬
and
prolonged holidays,

merous

crowded with amusements of vari¬

kinds

ous

(we talk about

tion), by the triumphs
rious

recrea¬

of

victo¬
generals in which the gen¬

erals, bidding for popular sup¬
port looking towards lucrative of¬

fice, provided all the foregoing,
except the Christians.
All this
done without cost to the peo¬

was

ple.

Run

over in your minds our
present situation, and figure

own

how

inherent

in

such

with

powers

Constitution

the

office

which
the

or

ing

liberals,

among

them

being

with

him in time of

either

the

and

to

tutional.

declare

They

laws

are

unconsti¬

gradually—

ors

a

to

used

in

hold

their autocratic

effort to build here
lex regia either through a dic¬

tator

or

an

through

a

socialized, So-

vietized government that will

structive
time

of

civil

the

ordinary

rights

of

not

of
can

con¬

peace¬

apparently

fundamental

the

loudness

few

out

cry

mere

not

covered

our

or theinconvenience*

an

administration

justify

ernment in

by

instrument,
of

appearance

en-

those who have been
trying to ferred by Congress) may be of the
destroy the right and tradition of widest scope, including provisions
the Supreme Court of the United derogatory and even
largely de¬
States

mind
some

against the inadequacy of our sys¬
tem, I may observe that the merein
seeming existence of an exigency

Congress

war

in

which

of the

do v/s him.

upon

Having

powers

a

any

under

branch of

it;

gov¬

violation of the Con¬

stitution.

Nothing but such a ne¬
cessity in extremis as the compell¬

ing

force

of

conquering foe
branch of gov¬
assuming that the peo¬
ple had willed a violation of their
could

a

justify

any

ernment in

fundamental

charter

of

govern¬

individuals.

ment.
Moreover, it is to be saidi
However, to repeat, this author¬ of the
past that no necessity has
ity and these powers are to be thus
far arisen
in
our
history
measured exclusively by the ex¬
which could not have been ulti¬

statutory enactments of the

press

Congresi, passed pursuant to and
in

virtue of the duty and powers

mately, adequately met by consti¬
tutional methods. And history jus:tifies

the

further

statement

that

of

Congress to provide for the the
To the same point of further
cry
sometimes
raised
for
sions. If this be true—I fear it is. tablish the same sort of society. waging
of war by the United amendment of our
great funda¬
checking the executive power, the
States as specifically
This is the final Emperor
authorized mental charter to meet
step—
transitory
people
provided, through their
Presidential War Powers
the lex regia of the Roman
by Constitutional provision. They and
sys¬
pseudo-emergencies, the occa¬
representatives at the Convention,
But to return to the other item: are not to be considered as grow¬ sional
tem—in one place the
charge that we are gov¬
legislative,
certain restrictions to his conduct
the
executive, and the judicial One of the choicest morsels of ing out of, or in any necessary erned by an antiquated instrument
of foreign
affairs, by providing
dies of these emigres and one of way, concerned with, related to, or
powers.
embodying obsolete principles unthat treaties must be ratified
by
We the people have swallowed their most relied upon shibboleths enlarged by liis powers as Com¬ suited
and
irresponsive to the
the Senate. Moreover, our
diplo¬
mander in Chief.
all this. The courts have not con¬ (to mix my metaphor), is the war
needs of modern life, this cry and
matic
representatives
can
be
When
demned
So much for the war powers of charge almost always come from
it.
As
to
the
matters powers of the President.
properly appointed only by and
all else fails to justify some pro¬ the President as Chief Executive. those
who, from want of indivi¬
with the advice and consent of affected, we are now a despotism.
posed unconstitutional course, the
If it is established and
There is no imperial lex regia in dual or racial capacity, are incap¬
accepted
the Senate.
emigres and their fellow travelers all this.
able of understanding or appre¬
in one field, it is
It is directly contrary
easily extended
Thus, while the President is
fall back upon the war powers of
over others. It is
ciating the fundamentals of, or to
thereto.
only a matter of
given certain powers with respect
think
practically and creatively
time and our complacency. It is the President.
As to the duties of the Presi¬
to the enactment of
legislation,
But there is no magic in this dent as Commander in Chief of about, the problems of free selfnot
possible
to
condemn
too
the; Congress
is
given
certain
strongly this growing perversion phrase. As a matter of fact and the Army and Navy of the United government. There is every reason
powers with respect to the ad¬
to believe that those who under*of law, there are almost no Presi¬ States, without
of our constitutional principles.
going into great
ministration of the government.
stand the spirit as well as the word,
dential war powers in the sense in detail it
tive powers to enforce their deci¬

These
times

arrangements

spoken

of

as

are

some¬

checks

and

balances, and if they are observed,
they prevent any encroachment

by one branch of the government
against
another,
or
upon
the
rights and privileges which the

people

reserve to themselves.

The Judicial Department

The people, through their
repre¬
sentatives at the Convention, pro¬

vided for

judiciary which was to
judge the laws, to determine, first,
a

whether the laws

ment with

or

in

were

in

agree¬

derogation of the




Unofficial Diplomacy

Again,
upon

and

another

as

which these
check

the executive, in his conduct

of international

lomatic

relations, the dip¬

representatives

government

of

the

must

people provided

be, as we the
in the Constitu¬

their

is,

fellow
source

a

the

es¬

m^y be observed that a
political emigres and commander rn, chief is appointed
travelers use it, that
(as history irrefutably shows) for
of power inherent in the conduct of
belligerent opera¬

President

as

President

and

awakened

by the fact of war. A
short explanation will make this
clear.

tions; of armies in thWfield; and
to

this

end

the

commanders

in

chief have been given by their
sovereigns very large executive,
judicial, and legislative powers

tion, nominated by the President
and approved by the Senate. But

As a matter of fact and of law
the President of the United States

the

is a dual personality.
He is the
chief executive charged with exe¬

But to

cuting the laws of the country and

emy territory that a commander's
commission also endows him with

habit

is growing of
appoint¬
by the President of personal,
quasi - diplomatic representatives,
"ambassadors at large" they call
them, who "going to and fro in the
ment

earth and

—to

use

walking

Job's

up

and down"

phrase—bring their

'

powers

as
regia of the Institutes, aided and
our
laws
show, such
abetted by certain fellow travel¬ Chief Executive powers (conferred

power,

Finally, I

merely

Execu¬

of

none

war

Chief

as

But

They are pro tanto, the judiciary not too gradually—trying on us
all the tricks the Roman Emper¬
judging their own laws. This is
regia.

might dis¬

we

A few words in conclusion:

granted constitute the
of the

the

50 years ago regard¬

giving

permitted

other devices that

much government is giving
duty and responsibility of the) the
people, and the results of the
Executive, and the powers policy^
therein granted, and only those so

where, tell you that, in my opin¬
ion, built from observation over

any

this, let him read

bates of 40

ing

Should

inher¬

the

Chief Executive.
Obviously,
tions, these administrative bodies
government, is written, it will be addition to these war powers so
really legislate, not only in pro¬ found that
they were largely con¬ granted by Congress, the Chief
cedural matters, but also in sub¬
ceived and put in motion by Eu¬ Executive has all the peace-time
matters.

is

Chief

making regulations to enforce the

stantive

If time

giving

forces;
for calling

to

Union,

farther

in the whole situation.

and parcel of the

Gov¬

of

tions and repel
"To
provide

of

It is wholly gov¬
erned by Constitutional provision,
and
limitation.
Thus-far-shaft-

keep the Emperor in

maintain

Regulation

provide

the

commander-in-chief-ship*
either.

technique used to maintain the lex
longer regia of that
government, and to»

a

Years;

Navy;

the

this

ours,

support Armies,
Appropriation of Money

no

"To

in

cuss

and

Term than two

early

regia of Rome.

a

growing tendency for
Congress to turn over
to

our

one

these

of

compulsion.
some

There is

was

exponents

now.

order

and different

thou-go-and-no

our

polls against recalcitrant
lawmakers.
President Theodore

This is the lex regia. I
repeat, this
makes despotism possible — then

constitutional

new

of

on

Invasions;
for
organizing,
sup¬ arming, and disciplining the Mil¬
Theodosian days itia, and for
governing such Part

porters. While in

possible and often

under

a

ent

Captures

days, political reserving to the States respec¬
visited, either by tively, the Apopintment of the Of¬
denying patronage, or by social ficers, and the Authority of train¬
sulted from the concept that the
ostracism, or by active opposition ing the Militia according to the
head of the state had all
made

with

Reprisal, and make

of

"t," and with shouts of "It
right! So be it!," was hardly
a

provisions:

concerning

land and naval

is

In this
connection, I ask you to
keep fin mind that the despotism

supplant the sovereignly es¬

War, grant Letters

and

receiving the
Theodosian Code, without discus¬
sion, not dotting an "i" or cross¬

briefly to call atten¬
more
subservient than are
terms, to some
presidential
congressional
are making into our

constitutional system.

must

tablished

land,

constitutional

ules

bill

pass

Senate

general

inroads that

takes

effort to

the

of

ing

liberties

our

institutions

persons-

Executive, and the

"To declare
of

in

passage.

ciples

are

recom¬

legislation, but actually to
it, and submit it to its fa¬

draft

laws

the

President

state

chief executive not only to
mend

the

to

vorites

to

the Chief

otner the Commander in Chief.
As Chief Executive he enforces

powers are in Congress which is
given the exclusive power under

Influencing Congress

Congress and recom¬
Constitution giving
general au¬ mend
legislation.
But
there
is
thority to either branch to func¬ growing up the custom for the
tion

lodged in two

powers as
one

system,
is to adopt a politically unsound
passed by theory and to ignore elemental
There is no such thing as a Pres¬ Congress or
coming in by treaty, historical facts of all civilized
idential
Ambassador
under
the which latter, the making of treat¬
governments, autocratic or demo- '*
Constitution. This is another Em¬ ies, seems to be the
only law¬ cratic, the world over. When the
peror insignia.
Our Ambassadors making participation given to the
Commander
in
Chief
assumes
are
Ambassadors of the United Chief Executive
by the Constitu¬ these latter
powers, he becomes a
States, not Ambassadors of the tion, except the power of veto
usurper:
President.
We the
people have and the power to recommend leg¬
There is no imperial lex regia
swallowed that
islation just mentioned. The war
innovation, too.
when he sent the
ubiquitous
Colonel House to

should

There

President.

was

ance

in¬

others.

ex¬

ecuting of the laws, the people
imposed certain limitations upon

this

which,

however, once created, acts
dependently
of
either
of

men)

acquire too much

the

the

can

veto.

That

of

ex¬

legislative

functions; he reports the needs of

of

up

which, by the Constitution,
gave up the govern¬

ment.

veto

ting

execu¬

the

dent Wilson

the set¬

laws. But lawyers know that un¬
der the guise of
issuing regula¬

people

the

branch cooperate in

The

carries the innocent description of

is

power,

As

legislative branch and the

but
con¬

in the executive depart¬
lodged all the executive

peror, yet

the

judicial officers,

tive

by the sovereign people.

President

ment

Senate must advise and
to
their
appointment.

were

If the executive is to exercise
any
further powers, these powers must

were pro¬

nominates

the

and

its

was

President

various

nor

not be a bad thing
easily readable, en¬
of Washington's letter

an

The

the

harvests to

29

he is

Army

Commander

in Chief of the

and Navy of the United
States. The problem is simplified
if you think of the presidential

over

of

occupied
assume

these

enemy

from the existence

powers

like powers

territory.

in occupied

en¬

in the matter of the

of the Constitution will be able int.
the
a

future

way

in

as

the

past

to find

under it to meet all national

emergencies and yet

preserve

its

great principles and the republi¬
can form of government for which
it provides.
God grant we may not sell our
heritage of liberty and free insti¬
tutions, our God-given birthright,
for

a

mess

carrying
slave

us

a

of

sodden

poison that
and

our

pottage,

will

en¬

children

for

local government of his own coun¬

generations yet to come.

try, powers which to be operative

not sell our children into

Let

us

slavery*

fg*,

,

30

(218)

The Commercial and Financial
Chronicle

Centralt Mutual Fund Department

opportunities off the beaten paths
well as among better known

as

investments

have

just

been

As

re-

Growth

Stock

fund

mutual

Fund.

This

began operations in

nationwide

a

of

group

0f

the

Fund

is

to

Growth

growth—

that

result of

scientific

shifted from New England to Can-

Stock

Fund,
Long, President, said:

1

Hugh

"Investing in the dynamic

ieal

ging

drug

fields,

the

investments

in

report

Consolidated

values

for

in

areas

dig-

over-

Hooker
of growth investment.
of the
reasons
why

Engineering,

tories

of science

and

board

South.

marginal

aL.

—

^IIUTKAt INVESTMENT FOWP

Prospectus

from

dealer

your

or

branches

"Most

THE

ANNUAL

national distributors of the

during

Mr.

told

were

$50,988,000,
largest in the Fund's 24-year his¬

tory, as compared .with gross sale$
of $45,623,000 in 1951.

year-end the Fund's net
value per share was

asset

The

$9.92,

compared

cents

share

in

fiscal

41

1952,

mutual

fund

executive

re¬

ported that the Fund added at the

with $9.54 at the close

per

Fund.

Wilkins said gross sales for

the year amounted to

At the

rate

of

upwards

holders

of

month

a

in

1,700

share¬

1952 to

bring

theN total at the
all-time

y2

pared

as

year-end to an
of 96,000 as com¬

high

with

75,000 at the close of
preceding year. He said that

the

last year.

the average purchase of
Welling¬
ton Fund shares in 1952 was about

have

paf>er

Total

net

assets

increased

ap¬

com-

better if the excess prolits tax is
allowed to expire. "Practically
all units in the
industry, even the

'

AT

slightly

shareholders

year,

President of Wellington Company,

fund's

compared with 41 cents per share

and

paper

one

industry, in
its investment special-

addition to

NATIONAL

STOCK SERIES

industry has

resentative companies during the
the Fund's Past 15 years, the Putnam repreadvisory organization is retaining sentative said that the industry's
consultants working in the labora- outlook is good and will be even
That is

the

today in the fund's annual
report
for the fiscal year ended
Nov. 30,
1952.

folio

Electro-chemical Co., Durez Plas-

tics,

and

Services, Inc.

and

rose

$2,500.

proximately $2,000,000, from $9,panies," he continued, "make it
697,806 to $11,739,496 due
largely RAILWAY AND LIGHT Securi¬
a policy not to cut trees
any faster to excess of
purchases over re¬ ties
Company, the country's old¬
thanVhey can be replaced, with
demptions.
est leverage
replacement growth taking place
investment, company,
Because
Investors
Selective's announces a change in the Com¬
at a much faster rate in the
investment objectives are basic¬
pany's
name
to
The
Colonial
South"
ally conservative, with its port¬ Fund, Inc. Effective Dec.
22, the

areas

endless

research

newsprint

container
gone

requires in-

tensive

the

ada; whereas the kraft

W.

of American business

stable

assets

totalled

average

the

as

the oil and gas, electronics, chemand

in

pounds

Diversified

remained

a result, there of fiscal
1951, it was reported by
geographical Earl E. Crabb, Chairman of I. D.
S.
shifting around within the paper Distributions to
shareholders from
industry."
Mr. Werly explained investment income

period
promise

a

technological developments,
in
releasing the report
to
the
6,000 shareholders of Diversified

holdings in large
widely known companies in

showed

150

consump¬

the large'extent and, as
invest in. has
been
a
great

report,

and

In addition to
and

about

from

capita

than

better

largely

in-

vestment firms.

the

0f

in

companies going through
0f expansion and giving

November, 1952 with $11,000,000
of capital — part; of
which was
raised in an underwriting of its
shares by Kidder, Peabody & Co.
and

per

1932 to over 400 pounds in 1951."
Mr.
Werly, defining over-ex¬

disclosed

aim

leased to shareholders of Diversi-

fied

of

pansion as one of the industry's
American-Marietta Co
Franklin
early probiems, said that "this
National Bank, and others.
/condition has been rectified to a

search for growth

a

the

tion

By ROBERT R. RICH
RESULTS OF

total

increase

Mutual Funds

vestors

Manager, that paper's expanded
applications "have resulted in an

Thursday, January 15, 1953

...

shareholders

producers,"

concluded,

meeting of Dividend Shares Inc.,
held in Baltimore Tuesday, Hugh
Bullock, President, reported that

Mr.

"reported

near-record

profits

Werly

record

in

or

1951."

limited

ferred

to

stocks

phasis

rates

money

termine

bonds

will

the

pre¬
em¬

change was voted by the stock¬
holders at their
meeting Dec. 17.
James H. Orr, President,

possibilities,

continue

Fund's

formance, Crabb
At

and

with

selected

income

on

to

that

de¬

future

not

per¬

stated.

the

change

affect in

in

any

stated
would.

name

the invest¬

way

ment

policy of the company or its
capital
structure.
The
Colonial

the

year-end, the Fund had
30% of its total net- Fund, Inc., is a closed-end invest¬
invested in public utilities- ment company with a
diversified
senior securities and about
22 % . list of investments.
;
of its portfolio in
railroad securiTHE DIRECTORS of
ties.
'
"■'/
Incorporatedv.",
than

more

assets

,

,

.

Investors have elected
ONE OF 1952's largest percentage
George Ej.
DELAWARE FUND reported here
the Fund's net assets on Dec.
Aldrich, John J. Dunphy
31, increases m the size of a mutual
and
yesterday gross sales of shares to -Amory Parker as Vice-Presidents.
1952, totalled $119,426,292, a rec- fund was reported today by Dithe public of
ord high, compared with
James E. Gibbons and Harold L.
$34,480,363 in 1952,
$101,895,- versified Common Stock Fund. or
at the rate of more
268 a year earlier,
than $296,- Stillman will continue to
maintaining the As disclosed in the Annual Report
serye.
000 monthly.
as
positon of Dividend Shares as one to Shareholders, assets increased
Senior Vice-Presidents.
As of
of the dozen largest investment 150%, from
Shares
Dec. 31, 1952, total net assets of
$2,015,000 to $5,025,000
outstanding increased at
companies in the world.
Share- in the year ended Nov. 30; num- the rate of 13,800 a month last Incorporated
Investors
were
m
.

NATIONAL SECURITIES &
RESEARCH CORPORATION
Established 1930

firootlwoy

holders numbered

New^yorfc 5, N.

^

more than
6'0,gain of about 6,000 during

ber of shareholders
by 150%.
year.
Their average holding
Net assets value
approximately $1,000.
shares on Nov. 30,

000,

a

the

w?s

Mr.

Bullock

stated

that

every

also increased

to

year

reach

the

record

of

the

Fund's

1952, at $5.40,

c9mPa£ed with $5.02 at the begin-

represented
937

shares

standing

over

the

year

of

excess

of

■

1952.

This

of

165,-

number

previously.'

out¬

$136,000,000.
'*

I

.

of

increase

an

a

total

f

882,764 at the clo$e'

1

,

FREDERICK W.

elected
Street

The

'

.

PAGE

has

beeft

Viqe-President of Broad

a

Investing Corporation

and

National Investors

Fund closed 1952 with

Corporation, it
6,031 share¬
ning of the fiscal year, an increase
was announced
by Francis F. Ran^ing dividends, and that more than °
Quarterly income divi- holders, largest numuer m 7us
dolph, Chairman of the Board and
history.
: "
90% of these stocks have paid dends pald m
totalled 30
President
of
these
two
mutual
dividends- for 10 years or more. cen.ts per share, the same amount
WILLIAM F. SHELLEY has been funds. Mr.
Page has been a Vice^
Describing the management's eco- asriP
elected a Director and
member of President of

stock

owned

by the Fund is

pay-

>

^

nomic

outlook

^

,

•

report showed an increase
^, hul^iugs in the electric,
the' grave
problems confronting ulility,-oil, rubber and electronics
the new Administration
as
"the ^dustries. Holdings m the motion
Korean War, the ever-present Plcture industry were eliminated
threat of
Soviet aggression, the
ea^ y inthe. yeaf;
largest government debt and high■*n releasing the report, Hugh
mistic,"

Mr

"soberly

as

optisurhmarifced

Bullock

.

.

est

taxation

in

our

TT

history and a
hugh Federal budget sadly out of

recent history of Diversified

balance.

F1011 Stock Fund

^reslc^ph sa^

V

ONE
WALL

BUfLOCK

me

a

Canadian Fund,

high

tivity

the

continued,
of

his

with

their

views

should

favorable climate

enterprise
\ • j
+
•
i
level of industrial ac¬
the
year
is virtually

u;~u

A

a

of

talents

economic

private

«a

he

together

tend to create
for

obligation please send

prospectus on

stature

unusual

orthodox

mm mm mm <

no

the

appointees

[newyori
GENTLEMEN: At

the

President-elect,"
"and

STREET

:ALVIN

"Yet

for

underwritten
Rome.

by
necessary
deexpenditures, regardless of

fense

the trend of events

Address.

profits

advertisement is neither an
nor
a
solicitation
of
offers

of

any

only

these

by

the

units.

The

offering

offer
to

offering

is

to

"Generally

buy
made

circular.

Debenture

ings

conservatively,

to be

on

a

of

the

resented
at

the

fi!
ttle

L.

Bonds

separately—

§12.50

Offering Circular

JOHN

on

per

Senerally. It reflects the growing
impoitance of mutual funds as a
fPur,ce
investment income in
the long-range financial programming of American investors."
NET

ASSETS of Commonwealth
Investment Company reached
a
new

high

of $60,248,568,

31, 1952, according to information
just

released

This

reflects

by

the

company,

gain of 42% in
during 1952.
Number of shares
outstanding
increased from 6,212,732 to
a

assets

,r

,

.

„

WERLY, trustee
Fund
w

and

Putnam

partner

Management

There
holders on

and

with

the

underwriting

of

dent

and

Fund

of

Boston

Director

are

in

are

request

company's

Company, leading

in

state

the

he

is

also

Corporate Financing for
Small
Companies
Telephone:
5f East 42d
MUrray Hill 2-2243
New York

During the
Pany's sales

1952, the

year

in

were

St.

17, N. Y.

?" d,?U.ars m 193-6 t0
last

five¬

Commonwealth's
of

up

On

appointments, which were'
Tuesday by the Boards of

Directors of
Mr.

the

vestment

of

for

and

Broad

versified

research

Street

fund,

Investors,
well

as

for

funds.

Page has been active in in¬

19

for

the

of

Gas Co., and

a

for

RECORD 1952 sales of

Wellington

shares

were reported
today
by A. J. Wilkins, Executive Vice-

di¬

a

National

stock

fund^

Tri-Continental,>

Mr.

years.

director

and

growth

a
as

activities

Investing,

Page also

Brooklyn

He is

a

is

st

UniorY

trustee of the

<

Irv-:}

gradu-J

College and the-

Harvard Graduate School of Busi¬
ness

Administration and

of Glen

a

resident^

Ridge, New Jersey.

•

.

;

Fundamental Investors, Inc.

Diversified Common Stock Fund
i

Diversified Growth Stock Fund
»,v

318

individual
31

was

income

paid

from

and

i'"

is

Diversified Investment Fund

se¬

i

1952

13%

realized

the

cents

Investors

Fox-Martin,

distributed

Manhattan Bond Fund, Inc.
; in

'■0\
PROSPECTUSES

j

,

AVAILABLE

FROM

YOUR

LOCAL

Los

Angela

-

THESE

MUTUAL

INVESTMENT

FUNDS

DEALER,

OR

Hugh w. long and Company

San Francisco

ASSET

ON

Cleveland

security

rirrvfitc

NET

H

v7

portfolio

Dec

■,

I-

•.

iargest industry holdings we're as
follows:
Oil
(13.1%);
Public
utilities, electric (10.7%); Chemicals and drugs (4.7%); and Public
utilities, natural gas (3.5%).

weekly radio
program, "Your Mohey At Work"
on
WOR, Mr. Werly told Milton

Peabody's

new

made

ate of Dartmouth

Fund

are

will

of

over the

Kidder,

the

ing Savings Bank.

corn-

excess

vestment

Speaking

partner

a

Management and Research

Company.

He

United

halfgST,i "- lefQ,«ha+n

i

a

un¬

derwriter of investment
company
Boston

with

funds

1948.

books

The comPa^ Paki £our dis"
tributions during 1952.
A total
^ 281/2 cents was paid from in-

year,

Bond

Vance,

shares,

companies,
mutual

since

Presi¬

The

Boston, and Vice-Presi¬

&

two

States and also in several foreign
countries.

purities

sale/'growfh^1^
f§

$2 billion
fold iiiLicctsc,
iu
increase."

of

dent and Director of Canada
Gen¬
eral Fund.
A partner of

Sanders

the

associated

over-36,500 share-

the

every

of

Com-

1

work

Fund;
of

The company's shareholders

year.

made

|hls week that "diver-

nnmnan:^

manage¬

investment companies for the
past
,18 years, Mr. Shelley, is Chairman
of the Executive
Committee and
Director

investment

according to the report. This is
an
increase of 46% during the

of

sification of paper usage into such
as
frozen foods, handkerchiefs, towels, cups and milk bot-

to? th? dollar

end

which

an¬

retain this position in addition to

Associated

Dec.

on

over

share

HALL




,,

^
Putnam

lpadino
on

A

Corn-

Tri-Continental Cor-:,
poration, the largest of the closed^

to

by Kenneth L. Isaacs,

President.

ment

of

Growth

according

of the company's shares.

fields

available

Stock

than two thirds

meeting.

pany> said

$1,750. Per Unit

par,

appear

investment basis

more

J

n

is one of growth

Investors

Fund,

nouncement

outstanding shares of $20,000,000 with over 1,000 dealer
Shares, Inc., were rep- firms,
located •;throughout
the
in person or
by proxy country, participating in the sales

d

the

OFFERING PRICE

also

they

earn-

_

riIADIPC

shares Common Stock

stock

sound

I

Stock

Committee

Dividend

year

and

at

prices

capitalize such

Holders of

Bond

plus accrued interest

stock

common

to

4-

T

ln as?e^ ai?d shareholders far
0utstnppmg the muitual fund field

however, 461.

currently."

Each unit consists of

$1,000 6-10%—15

Since

V-» T

Executive
Massachusetts

8,580,-

would seem that net
earnings
in 1953 should not be
greatly different from those
of this
year.

100 UNITS

or

speaking,

it

continue

Manufacturing Company Inc.

60

narrow.

past

FELDT

Bonds

again

cannot help but
high, costs of doing busiwill be
heavy, competition

keen, profit margins

NEW ISSUE

Bonds

else

remain
ness

sell

something

because taxation

City.

This

are

in Korea. Net

hi

V'AnAMT

.

the

,

Incorporated
'•o:

value

Selective
and

per

share

Fund,

managed

by

of

Inc.,In-

Westminster

at

Parker, Elizabeth

New

Jersey

bn

Volume 177

Number 5186

Ihe Commercial and
Financial Chronicle

..

(219)
Continued

from first

page

ownership.
The
customer
may porate
delegate to the trust department are

Management of Tiust
Department Portfolios
■i

,

ri.

*££

j

bank. It differs j.
from other
depart-

vnnt-if

c

ments

than

.

oti

to

atrnn

an

the commercial

carries

,

ua1,4

which

and

•

the

the

sale

of

record

any

secu-

of

to all

corporation. The law requires

rights, etc.,
holdings. A separate invest-

arate

ment

file

A®4..?!1.
savings

was

or

practically

is

set

also for each

up

lar

thl
rnvlrnmeAt
U. fa. Government

,

.

,

q

high-grade bonds
of

failure,

he

ateiai
claims

in

primary
lor

all

other

in

a

case

trust

of the trust

data

names,

bank.

authority

of its members

in

matters

nature

Trust Investment
is

primary

authority

vestment

for

matters,

4-u^.

either

wl n

case,

trust

purchases

rities

matters

tion,

v

1 a

ttai

in-

iK

assets.

It

is

kept

informed

sonnel

regarding
of

trust

the

and

'^rZ^4.?4 *2^ Trn<?t
similar
thp

tors

advised

rnm.

about

ministrative matters bv

of

the

minutes

means

The work cf

is

of

the

Trust

usually divided according to its

technical aspects and is
allocated,
so far as
possible, to various desks
or divisions.
Each of these is han¬
dled

by

bers

wh

one

or

staff

more

o~ are" specTa lists"

respective

fields

For

mem-

in *

instance

are
usually separate desks
divisions for estates in
™

rnrnnlete

and

information

readilv

about

each

Types of

trusts,

testamen¬

no

is

the

various

tyPes of accounts found in
However,,

—

there

f in

hud
a trust
a

the
-—

ac-

handled fall

°

lowing categories.

°

CustodY accounts embrace the
Physical custody of securities, the

est and dividends with advice
credit, the preparation

of
filing

and

of

ownership ceitificates, advance
notice of
maturing principal and
its
prompt
collection,
and
the
preparation
of
periodic
state-

owner

frequently

broker

designates

dealer

or

through

custody

as

the

whom

are

real

agency accounts'
taxes
and
others!

estate,

Trust

departments
are
usually
equipped with all the latest mechanical aids and dpvipp^

c,,nh

Addressograph, International
iness

Machine

terns,

etc.

punch

All

operations

are

Bus-

card

these

«

sys-

specialized

supervised

by the

senior officers of the trust
department who also handle the
actual

administration

of

certain

specific

trust accounts.

The investment work of

.

trust

a

department is usually handled by
a separate division or
department.
The

various

men

in

such

de¬

a

partment specialize to greater or
lesser degree in specific industries
and

prepare

reports

and

Securities

to be

held,
are in
other tyPes of
accounts, separate and apart

truJH
from those belonging to other

acare accorded the same
as
the
banks
own

counts and
protection

commercial, savings or other
c°unt' depending upon the

^ructmns
carried

g've";
tbe

on

men

is

usually

vestment

f

trust,

trust

assigned

supervision
accounts.

of

In

these

the
a

the

in-

group

larger

departments, the supervision

and contact with customers is fre-

quently

assigpfed

to

account

ad-

ministrators

or
Supervisors who
closely with the analysts
and depend upon them for close

work

investment

information

and

ad-

vice.'
Information files
for each

are

security and

maintained
a

record




is

custody

guardian
or

estate

invest

may

personal

in

property
While

for

but

they

net cost is
An

also

only

constitute

for

expense

purposes.

and

not

the

income

pxpi>lltnr

thp individual

fiduciary

appointed

neAon wCAakL will
mfnister hk. estate after his
a

death

since

th

cstate appraised

£41debt 'that.
taxes

ana

aeots

AC4 and pontpsts
"e
troves

navs

ao'near
appear

tnat

the
eor
cor-

finaj

'ttat

imnrnnpr

claims' and then distributes the
residue in accordance with the deprpp

f

nrLpdurp^

th

nrnhafP

a
"

there

is

surcbarSed "for

COmPetent

minor

are

^dlufed a'ftef fhe Tx-Znths pelli,lg 4han
'^"provided b"/ law dudn| ™t?ue

even

estate
of

Purchases

assets

perishable

made

only
ymj

pai

a v»

the

can

obtaining

bo9^s.

this

type

of

ment.
as

if

also

It

is

opening

serv-

of

substantial

high

a

degree

^
after

the

person

account,

it can lbe easily ter-

with large holdreason

or

those who, for
do

not

this type of service. It is used by
many people who live outside the
financial centers to facilitate their

death

the

trustee

will

fees.

The

T

affairs

attorney's

trust

keDt

are

a4fea'v

cllKC+on

through the use of a
by the avoidance of

the executor's and

bate

a

money usuany is saveu

living trust

in

and

strictest

ail

necessity of
iot

court

what

avoids the

appearances

WidowsTS
wiaows are ex

manv

10

se-

knows

estate consisted of

waso^
^ialieS we?e It a^so
Whfch
wnicn

pro¬

assets

a'ee ouWi^ never

whJVhe

years

in

many

investment powers granted
instrument
may
be

trust

a

or

the approval of

com-

of

case

O]ne trustae, or in

co-trustees^ Some
the

trusts require

in-

an

a

^stee to obteirj
designated per-

an

S tK^«^
b""o retaking purS or13S
-.i

be

the"exDerience' or

skill

ister

i-

....

bS* advSntawr SuitTa'
best

••

.i.

•

*

i"

t

i

.

•

{^rXmtothe

size

of

for

tnem

used

re-

to

to

tne

refer

to

relationship

business

of

owner

ability, integrity, tact and specialized knowledge. Because of these
requirements, more and more peo-

Sonal

to

the

number

admin-

another

situation

or

when

an

created

property

real

it'

transfers

There

paid

to

individual

an

executor,

whether competent

or

porate executor is

always

job,

ready

for

not.

A

cor-

the

on

every

emergency
at tbe time of the testator's
death,
and its efficiency or

availability

in

handling the estate

is

not

af-

fected

by sickness, travel, absence,
By using a corporate
ex-

etc.

person

estate
An

vidual

of

or

per-

trustor

as

trustee,

as

to

to

be

of'(pension plans but also

or

all

is

the

court

indi-

will

executor

ap-

perform

in connection with

who

person

will

a

the

to

dies

is

capable

of

are

ere-

not capable

dling

physically of hanaffairs, or
pientally incompetent or
Every
incompetent
or

their

are

insane.

minor who

most

im-

what

are

are

"testamentary"
and
"voluntary" trusts. They are the
kinds that
are
most
frequently

Legal Background
Most of

controlled by the provisions of the
Prudent

Man

Rule

subject

and

the

are

of

mat

trusi

discussion

our

The person who receives income
or other benefits from a
trust for

limited

a

period,

14-PA4I

tenant,"

the
the

In

A

during

41A

ca^ed

A

^be

"1I4A

.b^e

The person who receives

remaining

ant's

usually
AAII A/4

*s

trust

termination
interest

of

estate

upon

life

ten-

called

is

the

the

"re-

mainderman."

business

set

in

up

a

be

trust.

after

placed

Such

payment

a

after

trust

of the

'investment oolicies
investment pi c

is

tes-

®

a

®

M

it is essential, in
we

first have
Federal

and

a

Rule,
opinion, that

understanding of
State

laws

and

also

that

or

investment

by

the

For

Prudent

instance,

is termed

y

a

broader,

restricted than those pro-

more

yided

company named in the will to act

"testamentary
trustee."
The
testamentary trustee administers

the

granted the trustee under

trust instrument may be

not

case

my

an

the

are

a

-■

cussion of the Prudent Man

which applies

trustee in such

Rule."

The leell-list concept
athtP,
'e|a'
y
Be70T going into detailed dis,

tator's debts, taxes and prior legaThe
individual
or
trust

cies.

as

in

regulations under which trust de¬
partments
operate.
We
should

"v

shall

undoubtedly know

you

.Ip^n^Man
Tpn, ™

powers

property
death

accounts

ated by court order to handle the
affairs of minors and
people who
are

the

these

Such a trustee is
coi porate
trustee,
appointment of a corporate
trustee assures the safekeeping of
the pension plan assets and continued preservation of them even
though the plan is discontinu
for any reason, and that those assets will not be commingled witn
ordinary corporate funds. The responsibility for a sound mvestsnonsibilitv
merd program
also
is
usually
delegated to the trustee.

(intestate)
or
Many people provide in their realize
to designate
wills that all or a portion of their

acting.

who

of

as

plan.
invariably a

The

fails

who

Guardianship

Two

of

known

b*s

corporate fiduciary

a

problems.

1A in

administrator

without

an

and

trusts.

only those that
involve investment

hold and manage the assets of the,
pension

tonight.

avoided,

of

where

others,

likely to

of

consider

portant

im-

misuse of the funds of the

are

types

many

will

main

control to the

or

the

are

We
are

one

exercise

may

influence

by a trust departpointed by the
simple to arrange the same
duties
savings account and, the estate

is not satisfied, or for
any other reason decides to close
a

whether

see

as'fter 4iftecent.^eaVs, There has been
SirhTve'teen. or'haw Tot had not" VnTy"a" ireat'increase in the

court

executor

estate

an

quire

as

a

is

,

„:pr,+1.r Qftor. uic ,qPQ+h

®

oft

trust

,

advantage, quite a swi^'iolhat"^ rf"pS:
swing 10 max type ui penAs such assets are
thereby causing substantial losses sion plan in which the assets are
usually held only for short periods to
a type of
person who can least invested from time to time in other
of time, estate investment transafford them. Choosing a
corporate than insurance policies. This type
actions are comprised largely of
trust department
completely obvi- is what is know as a "trusteed"
sales of estate assets, or the purates such a
possibility.
pension plan because it involves
chase of sort-term bonds.
Th
.
"trust" is generally the appointment of a trustee to
The duties of an

account.

This is the simplest type of
ice performed

living

wt7

a-p

exception'.

property,

after
c,ifcu

an

sales

or

with

revocable

perform its services for him effi-

little

more

in 4he

When prop¬

ma^be ™y
The
lliaJ

mistakes

a

j'

irrlS. rfS

The reasons for appointing a vested soieiy m
°rust dePartment as guardian for two oi more

Thi«

irnnwn

action

h

the opportunity of
seeing how the plan will work out
during his lifetime, but he can

transactions

6uaiuiau

later.

+hthe e?tate of
the estate.
The

"Probating"

as

rmirt

what

investment

accounting,

aP"

all

whnlp

a11

A

j.,th

t

,

must be authorized by the court,
or be confirmed a short time later
and' in any event at the time of

owed

,u_

P™dent way to place one s proper4y ln have Not only does 4he
4rus4'
trustor

Prudent

Suardians can be made subject
to later court confirmation. Guardianships have the advantage that,

to ad-

a

7t

t

A

authorized

court authorization must be
obtained for investment
purchases.
Sales of stocks and bonds by

or

tTlttTT

g

IIn

erty is placed in a voluntary trust,
a change in title takes
place.

obligations purchased for
veterans,

bv

a

"in-

It has the advan-

the trustor's lifetime.

a

Consequently, their prior

small.

,

or

principles of inbelieved to apply to

are

an

of

Th-

same

vestment

The

custody
are

ians,

or

™n?inu«
n^eiitv
flfrtw

real

any

trust is termed

a

"living"

a

it'

cir-

as

the

'

J

give

be stated that

may

by the court.

ac-

agency account.

deductible

a

tax

,

department

bave the time or inclination to
attend to the numerous details of
caring for them frequently use

smaller

of

ac-

a

accounts

modest

^0 m°nfy J? risks of

trust

respective

the

an

charged

agency

proper

or

In

Briefly, it

just

as

the

Such

tervivos" trust.

investments made by them.
Investment procedure for guardianships is cumbersome in that, with
the exception of U. S. Government

fees

detriment

another,

fields.

an

of

trust under

a

operative during his

taff^Af^nYn^nfA

Man Rule does not
apply to guard-

in-

one

departments, each

such

lifetime.

needful for

are

be

"voluntary,"

cumstances require."

de-

account is

as

and

Many of the reasons that
might impel a person to open a
custody account also pertain to

ac-

ings of securities

trust

disposition

count.

beneficiary

mendations for the
purchase, sale
or
retention of securities in their
,

to open

easy

such directions

orders

creating

a person may create a trust

that will

the management, investment, and

such

P™^y:jAU Income Is immedl- ecutor,^_all possibility that
ately credited to the customer's

recom-

,

in

agency

such

held, used and distributed by the
Securities are
bought, ple choose a corporate executor,
latter for the benefit of other desso*d anc* exchanged only on the The fees paid to a corporate exignated persons as beneficiaries,
instructions of the customer. The ecutor are no larger than those

are

accounVs'

books

An

will,

revoked

or

time before death,

any

Instead of
a

in any other manner most to
the
interest of the ward, and the court

customer

a

entirely, at

and any other of his
ward's money
his hands, in real
property or

make

The will and

changed,

'

may

into existence until after

come

the testator is dead.
trust can be

in

are usiially authorization.

his security transactions

^

addition

of

not

pre-

,

secu-

money on the trust

partment
count.
as

ann

to

carried out.

^

oversights

In

keep

may

uniformity in the anil
cations.

applied

names

tary trusts, guardianships,
escrows,
registration and transfers,

stock

of

sales

are

Fiduciary Accounts

There

.

designed to fit into the
Such customers are notified
about bond redemptions and
the
issuance of stock rights and thus
avoid the losses that
frequently

a

trust account.

pro¬

bate, voluntary

a

their ments-

there
ny

or

con

collection and crediting of inter-

trust denartment

a

A~1

a

of

Investment Committee
>

with

?ou

ad-

reports to it made by trust admin•istrative officers and bv the re
view

api

'.department

manner

kent

rt

available

their

lhfe( lnTeftmunt rand

is

4"

them.
uicm.

investment

assets

°f-i?!??!lci?5ie.sJan,do4h.erm.a4ter?
mittee

1

3

~

recommen-

As juu wu acc, this
you can see, was
-f il
i
/4
a/i
nwatrl
4-1a
file
is designed 4
to provide the
analysts and account administra-

market values,-the
changing needs

•

gener-

dations and the action taken

cerning
wxinug
a

of

by periodic reviews of trust assets
:prepared by trust investment
perstatus

vestment reviews and
j—j..

purchase

or

It

ally ^villains «iov busies ui an ntcontains also copies of all in-

com-

investment
a

ft

information.

aixj-

In
-

mvcsmicm
aa!

a

pertinent

exercised

involving the sale, reten-

exchange

trust

all
cffx

on

un

tn vi rf

and

ascer^

this

i-

memo-

upon

are

corporate

other

particu-

agreed

plan.

requirements of the
beneficiaries, the general investment plan agreed upon with beneh
ficiaries or co-trustees and other

caciuscu

—

contains

income

and

the

as

the appropriate

passes

it at'c

require-

randums about the financial status

are

although

■"

usually

an

by the Trust Committee.

mittee

"

of

purpose

income

powers,
the
manner
in
the
income will be dis-

which

Committee

authority is sometimes

*

the

the

special

ment

A sepa-

appointed to act

Wctmont

also

of

that

brought to it for decision.
rate

re-

suitable

the

is

guardians

and

same

opening

the

and in-

ments, the names of co-trustees or
consultants, if any, the invest-

from the trust

all

on

administrative

usually

date,

ages

agency

subsequent recommendations

for

regularly, tributed, encroachment provisions
accurate
minutes, and similar information. This file

keeps full and
passes

expiration

relationships,

trust,

department and some are from
the other departments of the
bank,
This committee meets
and

type of the

maindermen,

the

administrative
Committee. Some

are

such

terests of the life tenants and

trust

acts is the Trust

the

showing

date and

its

•

to

the

as

of

synopsis

instrument

+°nxu
trust>
their

addition
tne

oth

r

or

that

so

owners

against

The

bank

the ac9°unt' deluding the date of
acclul?ltlon and their costs. It
also includes

re-

a

individual

the

scribed by the Probate Code of
the
State of California.
Section 1557
of the Probate Code
provides that
"on application of the
guardian
or
any person interested in the
estate of the
ward, the court may
authorize and require the
guardian to invest the proceeds of sales"

regard-

.

depart-

whh

of It

or

mort-

an

case,

first

te trust a<fT.T This £ile c°n4ai,?s result from
a record of the
securities held in

commeiciai

in

.

matters.

then,dedse
ment

this

account

and

or

advice

held

investment plan for

x

a sep-

though it

In

^

apply decisions

exercise

notes

investment

securities

account.

amount

This

to

ing

of

real estate

He may also arrange to

ceive

accounts
^

the

each.

easy

regarding
nty,

4- u

and

handling

gages.

,

trust
j

v»

it

by

makes it

,

the

44-

hold

owned

savings
each other,

on

lL

showing

timinu

extent

many of its dealings
with other departments of the
bank
as

u

.

kept

aviav*!-

nv

greater

depaitments do from
It

+

rtvao

even

the

and

now

the management ot

31

renuire
,

Man

if the trust

described

particular,

trust

a

the

,

Rule

powers

in

instrument

trustee to

invest

,

pprfnin

only ln bonds ot

H^rrina
p

a certai

owns

property should the trust, pays out the income for tion;
or, it may authorize him to
security purchases and sales.
It
generally have a guardian of his the period of time specified in the
also is11ofte9, use.d b-v investment estate
keep the trust funds invested enand, usually, also a guard- trust, and ultimately distributes
counsellors for similar reasons.
stocks- or
jan 0f his
it may hold
,

No

person.

Under

an

agency

account,
a
customer
obtains
not
only
the
same services
provided in custody
accounts, but also usually relieves
himself
and

of

more" of

responsibilities

the

of

burdens

property

act
the

as

guardian

trust

of

bank

as

minors

can

•

the

principal

the

proyisions of the trust. Court mm narm

in

accordance

with

v

_

a

person

departments

equipped to act
estates

of

are

but
well

guardian of the
and

incompe-

tents.

The investment powers of

accountings
must

confirmations

be made from

of all actions t»ken

tary trustees.
cor-

and

The

time to

time

by testamenbasic

remember is that such

a

thing to

trust does

'

'

ti

ith

the retention of any of the onginai assets of the trust.

jar

provisions

are,

rnm+i'nholl
f^onunuea

Many simi-

of

course,

nn
vn, r\nnp

puy

>

32

(220)

The Commercial and Financial
Chronicle...

Continued

from

safety of principal and certainty regard to speculation, but, in re¬
they offered had a gard to the permanent disposition
Then too, a of their funds, considering the
dollar had substantially the same probable
safety of the capital to
purchasing power this year as be invested."

31

page

since its adoption of the Prudent
Man Rule to indicate whether the

of income that

great deal of appeal.

Management oi Trust
Department Portfolios

last.

least

At

price level
have

we

the

were

changes in the
much slower than

recently experienced.

However, starting in the early in wording, a Model Prudent Man
1930's,
these
factors
began
to Investment Rule Statute prepared
instruments.
the
Trust
Division
of
the
change.
Many supposedly
well by
The general authority for a na¬
Bankers
(5) Are all trust assets reviewed secured bonds and mortgages de¬ American
Association.
tional bank to engage in the trust
faulted and caused heavy losses. This Model Statute, in turn, prac¬
promptly after appointment and
business in California is found in
periodically
thereafter for
the The New Deal ushered in an era tically
incorporated
the
exact
the Banking Law of the State of
purpose
of determining current of deficit financing and low in¬ wording of the rule as stated by
California and in the related pro¬ value and whether or not
they terest rates. The price level began Justice Putnam. This was done in
visions of the national banking should be retained?
to rise and the threat of continued order to secure the benefit of well
frequently

in

encountered

importance, including
purchase and sale of trust assets.

laws and the Federal Reserve Act.
State

banks

by the

controlled

are

State

Banking

(6) State whether written asset inflation appeared. Trust invest¬
ment managers came in for a great
data are adequate.

only

review

Law.

(7)

Where investments arc-not

deal

criticism from

of

over

a

that

have

beneficiar¬

century of court decisions

The

ensued.

California

Prudent

Man

courts

considerately

have

as

long

been

treat

will

as

by

treated

Massachusetts courts.

they
the

Justice Put¬

in the concluding paragraph

nam,

of the

decision in which he

same

laid down the Prudent Man Rule,

of

matters

trust

California
trustees

In

adopting the Prudent Man
Rule, the California Legislature
passed, with only minor variations

Thursday, January 15, 1953

also

described

which

the

in

manner

should

trustees

consid¬

be

ered by the courts in the follow¬
ing words:
"Trustees are justly and uni¬
formly considered favorably",* and
it is of great importance to be¬
reaved families and orphans that
they should not be held to make

good losses in the depreciation of

stocks or in general of the capital
disposed of in strict ac¬
itself, which they held in the
cline
in their incomes
and
the
"In investing,
with
State
reinvesting, pur¬
fiduciary
trust,
provided
they
conduct
tional
banks
must
meet
rise in their living costs.
certain
chasing,
acquiring,
exchanging, themselves
laws, court orders or provisions
honestly and discreetly
requirements before establishing
No wonder then that there was selling,
and managing
of trust instruments, comment on
property and
a
trust department.
carefully, according to the
In order to
for the benefit of
unauthorized
or
another, a trus¬
illegal invest¬ a great deal of complaint in this
existing circumstances, in the dis¬
qualify to handle personal trusts
state and elsewhere that such a tee shall exercise
the judgment
ments.
and court trusts, banks first must
charge of their trusts.
If this
and care, under the circumstances
(8) Where the bank has discre¬ legal list was too rigid and that
were held
otherwise, no prudent
pledge bonds of certain specified
then
prevailing, which men of
tionary powers, are sound policies it stressed safety of principal ex¬
man
would
run
the
hazard of
amounts with the State Treasurer
followed
relative
to
converting cessively to the detriment of the prudence, discretion, and intelli¬ losses which
to insure the faithful performance
might happen with¬
It was gence exercise in the management
substandard or unsuitable assets interests of life tenants.
of such trusts.
out any lack or breach of good
argued that in most trusts the of their own affairs, not in regard
acquired in original inventories?
faith."
Regulation F of the Board of
beneficiaries who receive the in¬ to speculation, but in regard to
(9) Specify any discretionary
Governors of the Federal Reserve
come
during their lives, or for the permanent disposition of their
Investing Under the Prudent
System contains the regulations trusts containing investment con¬ some fixed
period, are usually funds, considering the probable
centrations in the obligations or
Man Rule
under which trust departments of
the
trustor's surviving wife
or income, as, well as the
probable
national banks must operate. equities of a single entity which
Having covered the legal as¬
family, or other close relatives safety of their capital. Within the
might be regarded as violating
These
regulations
incorporate
whose
maintenance and support limitations of the foregoing stand¬ pects, we can now turn to a dis¬
sound principles of diversification.
many of the provisions of Section
were the
trustor's first consider¬ ard, and subject to any express cussion of some of the things that
II
(10) What is the bank's general
a trustee may do under the Pru¬
(K) of the Federal Reserve
ation. It was pointed out that in provisions or limitations contained
Act under which the power to is¬ policy with respect to investment
dent Man Rule and others that he
a
period
of
declining
interest in any particular trust instrument,
sue
such regulations is granted. percentage in common stocks?
rates, or rising living costs, or both, a trustee is authorized to acquire may not do.
Under these
(11) Where trust assets include to confine
"A trustee shall conduct him¬
regulations, the
investments entirely to every kind of property, real, per¬
Board of Directors is responsible substantial
interests
in
closely bonds was to sacrifice the inter¬ sonal or
mixed, and every kind self faithfully." This means that
for the investment of trust funds held corporations, or the operation
ests of such life beneficiaries for of investment, specifically includ¬ a trustee must not profit in any
by the bank, the disposition of of unincorporated businesses or the
way at the expense of the bene¬
purpose of passing on to the ing, but not by way of limitation,
trust investments, the
partnerships, do trust instruments remainderman
supervision
He should not purchase
the estate without corporate
obligations
of
every ficiary.
of the trust
department, and for expressly authorize retention or any decrease in value in a
trust
property for his own ac¬
and stocks,
preferred
or
way kind,
the review of the actions of all continuance? If not, comment on
that
the trustor
in
common, which men of prudence, count, or sell to the trust any¬
many
cases
committees appointed
by the protective action taken.
neither intended nor desired. It discretion,
and intelligence ac¬ thing which he owns. He must act
Board for the conduct of the trust
(12) Do trust assets include sig¬ was contended, also, that
for the benefit of the trust and
proper quire for their own account."
department.
nificant holdings of securities or diversification in
must be frank and fair and not
The California statute
many accounts
The

California

provides that

Banking

both

state

The appointment of

vestment

committee

It must

and

and

made

na¬

trust in¬

concerns

required.

cers

a

is

composed of not less
than three members who shall be

experienced

ies

who

were

or

pinched by the de¬

Unfavorable
number of

directors, offi¬
are

interested?

comment

these

officers

on

a

questions would

universal

rent value and the

advisability of practice for banks

disposing of them.

or

The trust investment committee

is

required

cording

to

its

matters.

keep minutes

actions

on

all

These minutes

bank's

own

national

auditors

of

the

or

its

trust

scientious job for their trusts.
With

usu¬

as

a

background,

we

granted by the State of California

executive

com¬

can

to

department

of

the

at least

once
a
year
by a committee of
directors which shall not include

turn

now

all

to

trustees

where

investment

powers are not otherwise

provided

by the trust instrument.

examination

bank, also, must be made

that

a
discussion of
the investment powers which are

usually presented
approved by the Board of
An audit and

and to spare neither time nor ef¬
in doing a capable and con¬

fort

A copy

bank examiners.

Directors,
mittee.

to give meticu¬

lous attention to their trust duties

by the
by the

and

of its minutes is
to and

these

are

ally checked periodically

re¬

follows:

as

also

which

in

employees

or

As
ten

in

already stated,

tains the following very important

paragraph regarding the retention

not

years

corporate

ago,

California

were

about

trustees

restricted

to

more

as

recent years, as

progressed

as

inflation has
the result of deficit

of

trust

from

assets

the

which

Model

was

Statute

taken
fol¬

and

lows the court decisions

in Mass¬

achusetts:
"In the absence of express pro¬
visions to the contrary in the trust

of

these examinations is to read
portion of the questions asked
about individual trusts.

a

school

''legal

were

Similar

force

in

all

districts with

of not less than

had

list."

in

a population
20,000, and which

105

of

the

Bank

Act.

California

among the earlier
abandon the "legal list"
was

states

dent

Man

Rule

for

trust

invest¬

From

1830, when it was first
stated, to 1937, only six states op¬
erated

under

the

Prudent

tinue

Man

Rule, all

of

The

the

trust."

California

the

in

absence of provisions in the trust
to

the

trustees

contrary,

to

deposit trust funds in

savings banks
covered
surance

authorizes

by

up

to the maximum

Federal

Deposit

In¬

Corporation insurance.

It

as

about
the

not

the

years

Prudent

ahead.

Man

Rule

by

Judicial Court in 1830 in the

appraisements,
leases

or

and
proper
receipts for partial

municipal

real

as
re¬

estate

and certified

districts,

as

cer¬

well

bonds, if approved
legal investments

as

of

rule

the

first

laid

Massachusetts

Harvard

Trustees

was

in

College

shall

isting

tain

This

in

^

railroads, public utilities, and

file original or

down

Supreme
case

in

apply to all trusts now ex¬
or hereafter created. Where,

trusts

after
ments

now

existing or here¬
the term 'invest¬

created,
permissible by law for in¬

vestment

of

trust

to

that provided by

as

well

are

additional

as

safeguards,

included in Regulation F.

now

funds,'

He

other

for

stamp

trustees.

the as¬
rights, of the trust.
He
keep the funds of the trust

sets,

or

must

safely and productively
He

leave

cannot

invested

for

Amory.
have

length of time.

He must be alert
changes in particular

adverse

to

industries and

panies
when
In

in individual

dispose

and

undesirable
the

of

trust

committee

authorization

or

minutes

approval




record

of

all

com¬

securities

trends

absence

thorization

of

appear.

specific

au¬

in

the trust instru¬
ment,
it
is
questionable
if
a
trustee has the right to hire and
rely on investment counsel.
The
duty to manage the trust, as well
the duplication in management

as

costs, seem to be in conflict with
such

an arrangement.
It is hoped
that, either by statute or court de¬
cision, this right eventually will

be

given to trustees.

reasons
a

also

trustee

vestment

make

can

These

it

buy shares of

trust.

same

doubtful

There

an

if

in¬

recently

have been court decisions in Okla¬
homa

thorized by law for investment of

and Ohio holding that the
purchase of such shares is not an
unwarranted

funds,'

'legal

or

'au¬

investments'

delegation of author¬

ity.

five states have added

State

great deal of logic

un¬

unreasonable

for savings banks and

the

invested.

funds

trust

an

by

full distribution of trust
assets?

co¬
action

take

must

when necessary to protect

trust

vs.

Massachusetts

been

operating under this rule for
'authorized
trust funds the 122 years that have followed. or
investments,'
or
Superintendent of In this famous case, Mr. Justice other words of similar import are
(2) Are adequate history and
Banks.
It, also, included similar Putnam, in deciding that trustees used in defining the powers of
synopsis sheets prepared for each
bonds
and
certain
guaranteed could buy stocks of banks, insur¬ the trustee relative to investments,
fiduciary account and are they
checked against the trust instru¬ stocks, if approved as investments ance companies, and mill manu¬ such language, in the absence of
for savings banks in New
York facturing
ments by a
controlling or
enterprises, stated the other
modifying
responsible person?
and Massachusetts.
rule as follows: "All that can be provisions of the trust
instrument,
(3) Are reports of account prop¬
In the
past, when good bonds required of a trustee to invest is shall be construed as
authorizing
erly
filed
with
courts
and/or and mortgages could be
bought to that he conduct himself faithfully any investment permitted by the
others entitled thereto?
yield from 5% to 6%, there was and exercise a sound
discretion. terms of subdivision (1) of this
(4) State whether directors' or a
or

selling securities for the trust.
limited
the trust in¬
strument.
All these prohibitions,
or

His compensation must be

rubber

Statute,

decisions.

trust

on

can¬

buying

a
hold

to

terests

to

principle
and to adopt by statute the Pru¬

properly

authenticated, copies of
instruments, inventories and

He

in

The words "manage" and "man¬
trustee may con¬
property received agement" frequently creep into the
into a trust at its inception or discussions of the Prudent Man
Investment subsequently added to
it, or ac¬ Rule. They are significant words
Rule" was adopted by the Cali¬
quired pursuant to proper author¬ and
impose
many
duties
on
fornia State Legislature and be¬
ity, if and so long as the trustee, trustees. They mean, among other
came
effective Aug. 4, 1943 by in the exercise of
good faith and things, that a trustee must be pru¬
amendment of Section 2261 of the of reasonable
prudence, discretion dently active in the performance
Civil Code and the elimination of and
intelligence, may
consider of his duties. He must not dele¬
conflicting provisions in Section that retention is in the best in¬ gate his authority or become a

defaulted for 25 years;
bonds of foreign
countries, and of

.(1) Are there

facts.

commissions

take

instrument,

also states
that nothing
in the
the result of judicial
statute shall abrogate or restrict
Beginning with its
any active officers of the bank.
the power of the appropriate court
but a small number of
states, the adoption in that year by Michigan,
in proper cases to direct or
The examination of the
per¬
national most notable of which was Mas¬ the number has rapidly increased
mit the trustee to deviate from
bank examiners
there
goes far beyond sachusetts where trustees had long and
are
now
twenty-four
a review of the
the terms of the trust
trust committee's operated under the "Prudent Man states
regarding
that
follow
the
Prudent
the making or retention of invest¬
minutes. The examiner must sat¬ Rule." The
"legal list" of securi¬ Man Rule in unrestricted form.
ments.
isfy himself that all phases of the ties for corporate trustees in Cal¬ In
addition, ten other states have
trust operation,
The California Statute also con¬
including the in¬ ifornia was comprised entirely of adopted it in modified or limited
vestment policies, are
tains the following language re¬
bonds.
being con¬
Briefly, it included gen¬ form, the most prominent of which
ducted on a sound and
legal basis. eral obligations of the United was New York. This leaves only garding application of the Pru¬
Many questions on organization States, the State of California, and fifteen
states
that
still
limit dent Man Rule to previously ex¬
and conformance with
rules and its counties, cities, school districts, trustees to investments in bonds isting trusts, as well as to these
regulations must be answered
by and certain other districts; the and similar types of investments. created subsequent .to its enact¬
the examiner.
ment:
^
investment
Perhaps the best general obligations of other states As
men,
you
un¬
way to illustrate the completeness and
"The provisions of this section
their
counties,
cities
and doubtedly are going to hear a lot

so-called

a

restrictions

material

conceal

ing stocks,

only by includ¬
well as bonds.' In

ments.

until

con¬

could be obtained

undoubtedly lead to a forced re¬ financing by the U. S. Govern¬
or directors of the bank.
This com¬
vision of, trust policies. You can ment, it also has been argued with
mittee must approve all
purchases, readily judge from all of this that considerable merit that well se¬
sales, exchanges, and retentions of
the national banking authorities lected common stocks are the best
trust investments. It
must, at least intend that trust duties shall
be means of preserving the purchas¬
once a
year, review all the assets
taken very seriously by a bank's ing power of the corpus of an es¬
held in each
fiduciary account to board of directors and
its officers. tate or trust.
determine their safety and cur¬
I think it is now almost
The "Prudent Man

retaining

Rule reads

cordance

be

capable

Law

in favor

of

He is to observe how

confining
trust
investments
such types.
The combination

to

of

No
dence, discretion, and intelligence
manage their own affairs, not in have

men

of pru¬

section."

important
taken

court

place

in

decisions

California

During

their

thorizing
rities
end

the

Prudent
of

the
an

last

Man

few
a

years,

clause to

statutes

purchase

open-end

of
or

au¬

"secu¬
closed-

management

type of invest¬
investment trust
registered under the Federal In¬

ment company or

vestment
as

from

Company
time

to

Act

time

of

1940,

amended"

However, California recently de¬
feated a bill to
accomplish this
purpose.

The

purchase of shares

Volume 177

Number 5186

.,.

The Commercial and Financial Chronicle

(221)
in long-established and soundly
operated
investment trusts
for
many
small trust funds would
to

seem

be

desirable

a

affording them
'would

to

of

properly diver¬

a

interest

sified

means

in

stocks

be difficult

which

impractical

or

otherwise.

However, until this question is settled by court
decision or by legislative action,

"

secure

most

ably

will

purchase
shares.
;

in California

trustees

prob¬

continue to avoid the
of
investment
trust
.

.

v

trustee is required to ex¬
ercise a "sound discretion.'!
This
T The

has

interpreted

.been

by

the

Massachusetts courts to.mean that
4a

trustee should not invest

dis¬

a

■yj

man

might employ in the manage¬ engaged in the
exploitation of nature of the
account. A trustee
of his own property if he
wasting assets, such as most min¬
holding a trust of say $100 000 thA
only himself to consider. A ing and timber
companies, should income from
prudent man may, and often does, ^aot be
bought as this would im¬ a
surviving wife during her life¬
decide
that
the
possibilities of pair the capital of the trust over
time and which constitutes the
profit in connection with the pur¬ a period of time.
However, there sole source of support for her and
chase of a certain speculative se¬ seems to
b,e no reason why high- her minor
children, is likely to be
curity far outweigh its possibili¬ grade stocks of oil
companies with under pressure to not
invest loo
ties for loss and that he can af¬
large reserves, active exploration
ment

had

which^ payafaVto

ford to
In

the risks involved.'

assume

such

it

is

inature...

Sound

of

a

discretion

•doubtedly requires that

the

♦diversify

un-

trustee

a

investments.

trust

been

Trust

funds

have

regarded for generations
in

avoided.

prudent
must

character

man

as

in

.recognizing

this

that

asset,

one

any

will

vary

•with the circumstances prevailing.

of

trust

small

;A
♦

with

invested

be

well

provide

in

•conditions

government

about the
required.

be

other hand,, a large

the

On

funds will

the

child
might

certain

under

-

one

bond issue maturing at

time

a

education

college

a

thousand

few

a

dollars created to

trust

•diversified.

The principles of sound diversi¬
fication

well covered by vari-

are

text-books

•ous

on

investments.

Generally.speaking,a diversifica¬
tion or spacing of bond maturities
.should be; sought.
Over-concen¬
tration in bonds- of one creditor,
rone

the

trustee

a

judgment and

discretion

like

and intelligence in
employ in their own

affairs."

the

courts,

should

This

that

mean

that

suggests

trustee

a

select the

type of invest¬
ments that a prudent man would
select in arranging his estate so

as

to

in

case

nrovide

of

for

his

his

dependents

death

take

to

or

industry, or one area should
The tax status"-of the

be avoided.

determine

'.- V

.able to hold.;

from

business.

A

is

trustee

required to exercise

is of
This

trustees usually
minor proportions.

by

rather

be due to the fact that in the

may

has not been a very
number of definitelyVhighgrade preferred stocks to choose
from. In some cases, it may also
there

past

large

be due to the fact that some trus¬
tees feel

preferred stocks have too

had

frequently

discontinued

in

forced

been

common

their .dividends
and

times

bad

subsequently by the

stockholders to

compro¬

mise their right to

unpaid accum¬
ulations of preferred dividends in

order to

bring about their resump¬
tion.
However, the recent prac¬
tice of providing better protective
restrictions and, more particularly,
of incorporating substantial sink¬
ing fund provisions, have made
of

some

the

of

issues

new

pre¬

stock -more;attractive

ferred

to

trustees.

principles ; of diversifica¬
tion, of course, .should ,be care¬
fully observed in connection with
in:-

investments

it

since

is

in

common

this

stocks

.

that the

field

greatest hazards are encountered.
Many trustees establish rules such
that not

as

total

of

a

of the

than 5%

more

value

trust: fund

shall

be invested in one stock, nor more

20%

than

in

the

industry.

'

In the selection

"it should be

one

-

of investments,

noted that

exercise

must

of

stocks

the

a

trustee

judgment and

under the)circumstances then
prevailing, which men of pru¬
discretion and intelligence
•exercise in the management of

•care,

dence,
their

own

affairs.

A

separate

standard of prudence and
tion
tees.

is

not

To do

established
so

more

would

mean

conservative and the flexi¬

would
eventually.

thus

ard

However,
which

care

that trus¬

become progressively

Stand¬
be.' destroyed

bility of the prudent

,

trus¬

y/ould be to go in

circles and might
tees

discre¬

for

man

the

judgment

and

trustee must exer¬

cise is not the same that a prudent




much

expect

company

when he decides to sell

or to
buy.
top of the market, stocks
frequently sell on hopes and ex¬
pectations and people then tell

At

the

that

you

haven't

you

seen

any¬

thing yet. At the bottom of the
market, stocks often sell far below

not

greater care

or

in

smaller

trusts.

for

Lists of this kind
of

are

trZ\asSseZellHS thG Value
t e
infli+inn
However, continued
ahT VI recent years has re¬
the
liberal
of

nec¬

•

in

men

in

issues

stocks

and now

back

In

somewhat

are

over-invested

'such hi" difficult "
}' IP
long

to

and

be

trust

require

first

investment

some

places,

all

committee.

bonds

and

^be ubligation to consider both

.

by

PrinlTa.the probabIe safa'y of
the question
Principal also

on

the

list

pre¬ of

at

What

with their sound judg¬

difficult to define.

It is very easy

success

all the

much

are

improved if

aspects of the problem

are

question

sell

faced.
The

substandard

deposited

of

when

securities

in

trust

a

raises

level

ing.

to

originally

in

order

problems in

be sold

are

tion

the

to

not depressed

to

good

as

a

by

chased for

the

investment

com¬

ThSe °Uld r6aSe alsobuy a"
rhe question t0
arises

stocks'
*
.

to whether

as

stocks

when

they become muchr
These are, perhaps

account

only if first
over-priced.'
approved by the trust investment
an

trustee should sell

a

tim¬

are

to

in rela¬

general market level

prevailing,

price

may

market

If the securities that

then

mittee later. Frequently, the com¬
mon stocks on the list can be
pur¬

away

of

trustee

tations

ment based upon experience dur¬

run its
course, and then to
the courage to start
buying

anaaSet t0i.buymarket lever
a Particular
at what

stocks

proved

of

about

have

similar

pur¬

authorized

not be carried away by a specula¬

run

high mar¬
opportunity to weed out

n

tive wave and

allow their expec¬
short-term profits to

as an

the less desirable

again. Such investment timing is
result hard to achieve but the chances

be
purchased with the approval of a stock
and
department head and
are
ap¬

specifically, trustees must

to look forward to

invest in securities that are on the
departments use such nossibil tv
aa a
possibility of further so
inflation re- trustee's
guidance
list
only for preparing recom¬
involves

list

the

as a

conthmAH111 St°Ck prices and
tn
Pressure of benefiextenf numerous trust a accounts
USe them t0
greater

that must be watched

and

kets

custo¬

was

Also,

the vari¬ the

the

Some trust
a

use

than

previously.

department and ciariPc
reasonably limit the number of extent,

to

more

common

mary

preparing recommenda¬

tions for investment by
ous

a

certain sul
sulted

to expedite the investment

essary
work

amounts

too

younger

companies, or of less well-known
obligors, which may be purchased

ferred

More

tees and other investment
advisors

holdings in their
accounts, to invest the proceeds in
high-grade bonds, to wait until
the subsequent bear
market has

tary list is maintained consisting
of securities of smaller

to tskc.

one

another to

time

make

>

is

as

s^ch a

switch, and usually the sooner it
is done the better. The same
is

thing
respecting sales to reduce

true

any

.

over-concentrations.

It often

happens, of course, that
changes can be made imme¬
committee.
It is seldom that all
diately only at a sacrifice. In such
anv trustee
any
to decide.
It shouldthe securities included on a guid¬
cases,
the < trustee must
decide
be recognized, of
course, that it is
ance list will be purchased at any
whether the prospects for the se¬
often necessary to continue to
buy curities
that he wishes to elimi¬
given time.
some
common
such

di?icplt probIe™ for

,

a

beg the question and condemn
or bond by calling it spec¬

stock

ulative.

However, this feature of
Current purchases will be con¬
prudent man rule does not fined
usually to a much smaller

the

cause

tee

as

much trouble for

a

trus¬

group that are considered to be
might anticipate. Bonds the more desirable because of the
are
generally classi¬ level of the
market, the outlook
both the public and se¬ for the
particular industry,
or

as one

and

stocks

fied

by

curities

into

men

These

three

groups.

other

to

are frequently re¬
The prohibition against specula¬
by various names such
tion
in
the
handling
of trust
as
"high grade, medium grade,
funds also applies to transactions
and low grade," or "investment

caliber"

"businessmen's

invest¬

which

ments," and "speculations " Re¬
taken
gardless of the terms used, these
classifications
certain

are

which

are

indicate
bonds

widely

that there

and

stocks

recognized

as

are

An

ter.

stocks

at

high

*

saivef'JUSt aS years to buy neces¬
for many [t has been
highsary

priced

bonds

trust funds

However,
peculiar to

in

order

to

keen

productively invested
this
the

problem

is

not

trustee, since all

reasons.

groups

ferred

speculative

in charac¬

existing margin account

over

as

be closed out.

trust

faceft0' A a"d se?urity
sett.
setts

must
shrewd Massachu.
observed
"Thp

s has
judge°T

ESM® market is notoriously
snectt0 dIscover', except in retro¬
spect. At every level, skilled ob¬
servers

to disagree as to
"In and out" trans¬ its probable course."
.
a

asset

must

actions in the stock market to try
to take advantage of short-term

In

justify his holding them for
switching opportunity.

better

a

These decisions

this problem,

respect to

all

do is to try to exer-

can

market

frequently call for
skill, patience and

considerable

In

courage.

trustee

these

situations,

console

can

investment

every

himself

the
that

advisor

must

make

similar

that is

required of him is that he

decisions

and

all

exercise reasonable

cretion and

prudence, dis¬
intelligence in decid¬

ing what he shall do.

apt

are

tiustee

a

nate

Common Trust Funds
The trend toward the liberaliza¬
tion of the investment powers of
trustees has brought about also a

fluctuations, smart ' free nse sound judgment, taking into growing use
of
common
trust
having high investment merit and
rides" on
"hot issues,"
as
and the consideration the terms and re¬ funds by corporate trustees. Tobeing suitable for investment
practice by some individuals of quirements of the trust, as well as some
extent, this is a more revo¬
by prudent and cautious inves¬
financing subscriptions to govern¬
lutionary development than the
tors; that there is another group
_

of

bonds

and

which

stocks

is

ment bonds with borrowed money,

are all speculative in nature and
equally well recognized as lack¬
should be avoided by a trustee.
ing investment quality and as be¬
Trustees must consider the prob¬
ing predominantly speculative in
able income, as well as the prob¬
character; and that there is a
able safety of the capital to be
large intermediate group of bonds

stocks

in

proportions of

which

the

relative

investment

secur¬

ity and risk vary considerably.
The Prudent Man Rule requires

invested.

It

seems

requirement

clear that this

would

rule

purchase of defaulted
non-dividend
and

common

out

the

bonds

and

thf Flrcui£stances should become
prevailing at
Trustees
the time.

increasingly cautious about
chasing common stocks as

pur¬

the

market climbs to high levels and
nf
of

iZ°^ lf Possible, the creation
additional buying reserves by

more3!?
cyclical
1

r

more

stocks and

paying

preferred proceeds
stocks despite what¬

or

weaker and the
over-priced

by reinvestment of the

in prime-quality

bonds.

adoption of the Prudent Man Rule
because

such

funds

violate

the

long-established principle that the
assets

of

trust

one

must

not

be

commingled with those of another.
To
it

make
was

pass

F

trusts

common

necessary

possible,

for the states to

enabling statutes, Regulation

of

the

Federal

Reserve

had to be revised to

cover

Board

the op¬

eration
of such funds,
and the
tax
laws
had
to
be
top of a bull market is very- Federal
Attractive
"workout"
or
hard to recognize at the time it amended in order to avoid double
grade or speculative in character.
Now what the trustee does is to "liquidation" situations are not for occurs unless buying reserves are taxation by providing that com¬
a trustee to buy.
mon trust funds would not be con¬
confine his purchases of securities
rinHnd
t
i
to bonds and
stocks which are
However, the obligation of the during its latter stages, it will not sidered to be corporations. Cali¬

trustees

b®nds

to avoid the

or

stocks

purchase of

which

are

low

other

ever

attractions

they

may

thA
the

reallze tbat ^though

have.

some judicious selling

clearly high grade, or of invest¬
ment
caliber.
However, in the
case of certain trusts, particularly
large ones, some trustees will also
purchase discreet amounts of se¬

trustee

to

consider

both

income

be

possible to

take

advantage of

fornia is

of the 38 states that

one

have
authorized
common
trust
safety of principal is more the bargains that the subsequent
a*ways affords. The funds.
far-reaching in its effects. This
There are two kinds of common
requirement is especially impor¬ fpet that certain stocks were purtant during this period of low in¬
trust
funds
discretionary and
WW*5 a is not a sound rea- legal. A discretionary common
of funds
curities in the middle group if terest rates in trusts where there tion
is a conflict between the recipient
trust fund, as its name
applies,
they feel the security has def¬
f°n
indefinitely has broad investment discretion
inite, although not so widely rec¬ of the life income and the remain¬
fund.6'!.
if the
derman. Excessive caution in the funds can be used more produc- such as that granted under the
ognized. investment quality.
and

-

■

"Permanent

disposi¬

—

f°r holding them
pr?spectsJ change,

of
common purchase of stocks may unneces¬
or
undoubtedly sarily penalize the life tenant,
an
excessive
should select those with estab¬ while
holding of over-priced.
lished earning and dividend rec¬ stocks may be injurious to the
In

the

stocks,

ords.
nies

a

purchase
trustee

Common

if ?LOfl!y

stocks

and industries

of

that

compa¬

also

en¬

exceptionally
good growth
trends are especially sought be¬
cause the growth factor tends to
increase the safety of the capital.
joy

Stocks

a

the

right, he

0ZT™ fluctuation in t0 cause
?|tOCikS !■ apt the inwide

supplemen¬

chases

and

...The-

TW6 clearIy at bargain levels
•Trustees usually try to keen net

con¬

trust*caoitof

mendations

,

stocks

If

be

have to train themselves to over¬
come
these psychological hurdles

judgment than other prudent
but he must utilize his judg¬
ment in avoiding risks which one
who owes no duty to others is free

•

principles of diversification

doing.
to

sider suitable for the
investment more than half of a
of trust funds. Issues are
removed invested in
common stocks.
They
and added to this list from
time believe that a
larger proportion
to time.
Sometimes, a

and

to

-apply also, oLcpurse,to\tlfe: pur¬
chase' off preferred ^stocks.- The
-amount
invested
in
preferred

committee

of his own and his family's studied by its
analysts. The use of
requirements after his retirement these
lists
varies
considerably.

must;-be .'studied ing both good and bad times. The
the bmountvbf tax- term "speculation," of course, is

^ree. municipal- bonds it/is -desirThe

investment

care

larger, accounts
to

trust

men,

should undoubtedly be well

;fund

of

of

that in "general prudent men

care

such matters

invested

the

risks

view

rule is that

exercise

llimit

.be

and

The- sound

of

on

then

going

,lnc,ur risks by the-

"verboten."

'The courts have avoided

fixing a
the percentage that may

is

not

beneficial
"eason~fnade b°ndf
have

sacred

if

in

are

trustee

nthi hd Jxaying
large

losing them must be scrupulously

ticularly

proper depletion maximum
should not be bought.

case,

proportionate amount of the capi¬
asset, par¬
hazardous

maxhnumb<indS'tblit towith stablA
invest the
stocks

departments, and

people
must

if may be sound' accounting
their intrinsic values because of
judgment for him to buy a prop¬
While the practices
records. On the fears and of
vary con¬
forced liquidation. At
erly limited amount of it. Whether siderably, a trust
arnnf
' 3
trUSt P'OViding such
department will amplemoome for the
he gains or loses on the transac¬
times, people will give you
usually develop a so-called "au¬
tion is nobody's business but his thorized""
plenty of reasons why stocks will
or
"guidance" list of no
may
own.
go lower and why the bottom is:
bonds and preferred and common
purchase nf
But for a trust, speculations are stocks
?
stocks except when going to drop out of things. Trus¬
which
its
analysts and
a

tal of the trust in

one

33T

■

affording

a

large current

interests of the remainderman.
This
need
and

requirement,

as

well

to exercise sound

as

.

the

SO s, and data°f cannot be
the YaIl!e
economic
d

an

1 e

doubted, the importance of realiz-

hurdles
discretion, requires the trus¬ nurdles

individual problem and to plan
overall
investment
program

suitable for it.

Prudent

kind

common

hand,
ment

Man
in

used

is

Rule.

trust fund,

restricted

powers

This

California.
on

is
A

the

leg^l

the ot&r

in its

invest¬

and is designed for

trusts that do not grant broad dis-

cretionary

judgment

tee to treat each trust account as
an

°ther securi«4
m6 substantia"y

ment

mthl\mg the psychol°gical
that
involved
in
are

£°0d timing in ^vest¬
purchases and sales should

not be minimized.

It takes much

The portion which less courage to
return, but with an erratic earn¬
buy when the mar¬
ing and dividend record, should should be placed in stocks may ket is high or to sell when it is
be avoided. Stocks of companies- vary greatly, depending upon the low because that js what most

that

that

only

investment powers, or
by state lali/s
provide for a 'legal list or

are

a

controlled

specified

percentage

of

stocks.

Although the maximum partici¬
pation in a common trust fund is
A
_

Continued

on page

Si

.

34

(222)

The Commercial and Financial
Chronicle

Continued

from

trust

33

page

the

instrument

trustee

contains

will

know

of investments he

•i

kind

Man"

rule

which

do

which

of

contain

not

controls

those

specific

a

grant of other investment powers.
If the trust is handled by a bank,
it is necessary, also, to have a

background information is needed partments. Above all, the trustee
diversification and regarding the financial status and must be scrupulously honest, he
better supervision and administra- requirements of the beneficiaries
must not speculate, and he must
tion. It is claimed that they effect of each trust.
But,
terms
a
saving
in
operating costs and is essential to look at the terms exercise sound discretion in buythus make it possible to handle of each trust to see what invest- in£> selling or holding trust insmall trusts that otherwise would ment
powers
or
restrictions the vestments,
possible to provide them

greater

^

undesirable.

be

A

not many years ago

Bankers

can

that

54%

trusts

had

than

the

by

included

in

trust

the

about 73% had not
more
than $3,000 of income and
averaged $788 a year; not quite

an

t

annuaJ inco™e ot

•

In view of these figures,
the growth in total assets held by
trust

common

funds

not

is

sur-

In July, 1951, the Ameri-

prising.

Bankers Association estimated

can

that the total assets of such funds
were
approximately $600,000,000,
comprised
of
participations
of

funds

growth,

pension funds merit

cial discussion.

changes in

Since

spe-

1942, when

the Internal

Revenue

Code gave them important tax ad-

vantages,
have

private

increased

pension

in

1,000

to

plans

number

14,000,

of

administering the
Budget.
Reorganization

Federal

pians transmitted

organization
made

process

and

under

of

Act

number

a

improvements

the

1949

far-reaching
providing offi-

cjais 0f the executive branch with
more

effective

adequate

jobs.

I

organization

authority

believe

it

and

do
be

to

will

year

assure

in increasing
the efficiency with which the executive branch is managed.

such plans

of which

at least half

goes to trusteed plans.

large trusteed

Most of the
funds

Pension

are

now

being handled by the Jrust
departments of the big' Eastern

and Middle Western banks but

an

progress

being handled locally.

at

of

our

the

stable

This
means that normally in times of
high employment and rising national

income

ernment

economy.

the

should

Federal

Gov-

operate* with

a

balanced Budget.
In

the

deficit in the fiscal year 1954 pose
immediate and serious prob-

lem in tax

While I do not
specific recommendations, I do wish to make
it clear that in my 'judgment it
would not be wise to plan for a
large Budget deficit during a pewish

when the

over-all

amounts; however, during

the

dollars.

3

*

if

t

stock

common

This has

been

as

preferred and
investments,

brought about

by

the desire of
management to earn
a
better rate than that afforded

by high-grade bonds.

^™atedthat
1%

half of

in

It has been

'"T336 °£ 2ne"

the rate earned

on

contributions to the pension fund

ahnn/TocS?6* ^ al^mate cost by
to to 14/o.
aDoux

The
for

iz

of stocks

use

investments

as

fiscal

1950,

trusteed

pension funds now
to be predicated on the belief that since
newly established
pension funds may be expected to
seems

grow for many years,

if not

more

mands % to 50% of

such

net

finance
a

our

advantageous stock purchases will

P^YV° be remains to be seen,
r^e cfJrJf
ln yi?ld.J_n favQr
of stocks sp^ef.
continue; will the

.have the

placing the

trus-

courage to continue

same

percentage of the

bXttaes Till IL

during

viSry authorities' continup iT

mrsLhinvTmT?ToUbe
at

cost

for

gardless
The

of

markef
ma*ket

tneir
their

investment

limited

oortion

contributions

sTnd

and

novation

each
nf

in

yet

to

"

d
To

u

vahiee'
values?

year

of

a

stocks

°jut
be

seems

this

tested

bad times.

in-

by

aeain in

iosi

fiscal

dealing

ecncral

•+?

with

a

appi,oac.h usfd
trust




an

-

resnonse

the

Cnn

1950

They
snmlnc

of tax rates,

will

also

tion

to

in

with

dollars.

dollars

A

is

deficit

a

deficit

of

of

4

billion

5.9

billion

estimated

now

for

current fiscal year. An even

the

larger

deficit, 9.9 billion dollars, is estimated

for

Under
1950

the

fiscal

present

tax

and

on

serious

improving

considera-

the

equity

of

the tax system. The'injustices and
ioss
0f
revenue
arising out of

loopholes in the tax
up

eliminated

laws

should

Confidence

in

the

*"* ^iml?aAec\±om}ae™e.A?J™
equity of tax laws is essential in

full

lieu

1954.

year

law

'

number

a

increases' enacted fn

1951

Budget
The

will

terminate

The

in

excess

corporations

of
...

source

this

rencies

in

1954.

would

be

*""Dtse f"„
P

estimated Budget rethe fiscal vear
1954
iC-

°r.

.lsc?' y,,

e

comPared t0the current fiscal
revlsed est,mates of
receipts for
year

and

actual

profits
scheduled

is

individuals'

income

on
Dec. 31, 1953
increases in normal rates

Borrowing and the Public Debt
•

1953' and $274 billion by June 30>
1934Last spring
substantial
revisions both from the standpoint of
increased rate and increased intermediate yields

were

in the savings bond
signed to put these
issues

basis

on a

parable

with

announced

widely

deheld

nearly

the

on

therefore have

alternative

income

will

ex-

■

.

of

ot

!ke ^°"gress "? £ettmg termination dates was to
assure

of

the

°j\

the

United

In

aggressors.

have

been

forces

expanding

toward

fax

xnf„ iax

ion'ofthfcongre
Tf

^be

•

early

increases

mcreases

re-

en

en-

Navy

a

3

of

Congress'

,

mcreases are allowed to

The

full

readiness.

143

of

activities
of

certain

such

tional

is

Service System.

tional security depends on it.

We

$46.3

billion

cannot afford to lower these goals

1954.

This

until

billion

free

world

is

the

secure

menace.

category

military

in

the

an

increase

1953

fiscal

and

at

year

of

S6.6

1952.

over

serv¬

estimated

are

is

over

for

Selective

Expenditures for

all programs in the

an

ices

the

Committee

and

na¬

but

program,

supporting
stockpiling

the

as

Advisory

our

expensive

basis

strategic and critical materials,

Aeronautics,

Air

an

the

the research programs of the Na¬

21

divi¬

This

decline

$45 billion annually.

to

includes

gory

combatant

wings.

On

we

—

Marine
408

1955

year

to

fense, the military services cate¬

armed

goals

fiscal

continue

In addition to the military func¬
tions of the Department of De¬

been

ships with air support, and
Force

''

effect

of

the

year
ex-

(Fiscal

$1.9

billion

"

borLds
new

Receipts

Y'ears—:In

Direct taxes

$33,551

$33,394

833

895

940

profits taxes_„_

income

and

$29,880

21.467

23,700

23,300

8,893

9,795

9,869

550

Estate

Estimated

—____j_

Individual

Estimated

gift

590

590

4,000

4.298

'

on

re-

taxes___

corporations:

on

excess

Customs
Employment

taxes:

Federal Insur.

Federal

Contributions Act-

Unemployment

Railroad

Retirement

•

+S

the

7?

function.

estimated

It

also.

expenditures

esiimat«a expenaitures

fiscal

year

tures in 1952.
breakdown

1954

with

re-

A more detailed

of

expenditures and
new obligational authority
by major function is contained in Spe-cial Analysis B

•

259

271

280

Act—

735

650

660

Tax

Act

10

11

11

—

1,803

1,745

2.180

receipts

Deduct:

3,569

Tax Act-

Railroad Unemployment Insur.

Miscellaneous

a

Appropriation

to

Federal

old-age

and survivors insur. trust fund_"_
.__

-3,569

—4,000

-4,298

_____

-2,302

—2,511

-2,559

—-

Refunds of receipts..-

62,128

68,697

68,665

Budget receipts

Expenditures and

Authorizations

(Fiscal
"

Years—In

Major

Function
Recom¬

mended New
*

-

.-—

1954

Estimated

for 1954

$44,380

$46,296

$41,535

Authority

'

commerce,

resources

195?

Estimated

—.$39,727

secur.

&

Obligational

1952

.

„

Military services

Expenditures

Actual

..

Function—

Natural

By

Millions)

"

Internet,

year

ln

'

taxes

foreign relations

& industry.."
Expenditures and Authorizations
Transportation and communication
by Major Function

compares

1954

Actual

individuals:

on

Finance,

major

195? *

1952

Direct taxes

are taking) advantage of the
arrangements under which

fied by

Millions)

Item—

Holders of almost threeQuarters of the matUring savings

s

expire as scheduled, the Govern!ltien*:.wil1 lose about 2 billion dol1954.

of

of $35

allies

our

larger

divisions,

sions,

our

have

addition,

Depart¬

j^egin to

present rough estimates, that
level may be in the neighborhood

During the

and

we

Nations

the

should

of

This year we are
budgeting for
fourth fiscal year
following

ments.

?after Korea. Responsibility vised estimates for the current fis°" ^ ^ jal year and with actual expendi-

?

should

the

of

the

they reach the level required
keep our armed forces in a

to

Services

Korea.

the

recommending in

am

until

5>

on

fiscal

maintain

we

Defense
in

'

attack

the

invest-

rTfTT oblational authority for the fiscal
1954, classi-

view

of

state

Military

in

Budget, expenditures for the

decline

deficit.
.

If

expected

are

peak

military functions of

effect

no

result^ of the
obligational au¬

com¬

program,

more

mTT'T 195^ ThTpurpose
purpose
.

this

Congress

as a

new

force level I

both

Excises

The following table shows estimated expenditures and recom-

'

1954.

year

Budget receipts and expenditures,
and will

the

authority for their

their

reach

and

to

types of
equipment occur

thority, expenditures
to

lead-time

most

after

Thus,

1952 peak of

add

Income and

present tax laws.

on

P1,™ on March 31, 1954. Virtually
a11 of the excise tax rate increases
Tv

purchase.

in¬

long

for

has enacted the

to

amount

further

a

military procurement,

months

many

ment

same

the

of

and

weapons

they are required for ex¬
penditure. These transactions will
the

recommending

expenditures

purchase
foreign currencies from the Treas¬

terminate

corporations'

AT

am

Because

appropria¬

used

Department of
totaled $48.2 billion, and

involved in

ury as

fiscal

The estimates for 1954

1952.

based

receipts for the

demption at maturity,

on

The

obli-

new

reduction to $41.2 billion for 1954.

cludes appropriation estimates for
the dollar equivalent of the agen¬
cies' estimated use of
foreign cur¬

the

increases

on

and I

the

Budget

1951,

the

of

1952 it reached $60.3 billion. In
the current fiscal
year, it is ex¬
pected to drop to $48.1 'billion,

and

of

Budget

table shows

interest continues to accrue
bonds not presented for c§sh

and the

dollars,

Receipts

following

to expire on June
30, 1953. Under
the Revenue Act of 1951, the rate

will

of

disclosure

obliga¬

new

authority for the military

Defense

otherwise

or

against the Communist

democracy.

thn

mef our subsequent revenue requirements. The fiscal year 1952
ended

I hope the Congress

give

helped fcurrent fiscal year
to about $264 billion by June 30,

in !ars in revenue in the fiscal

investment

in

make

Army

consideration of the level

on

but they have not

1951

year

Budget
policy in our

crease fr°m $259 billion at the be-

RnrWt

a

balanced

a

and

substantial
r,roriuee

for

pay-as-we-go

a

These tax inereases

In

toPmy recommendations
oreTs ralse^Sx ratesTn

.

Summary
Thc

any

°n the basis of the present fis"
cal outlook and existing tax laws,
the public debt is expected to in-

Dav-as-we-co basis

vx~v\

nonein^

desirable

is

va

nnrnnoJo

actuarial

had

rearmament effort

1953 and 1954

How

policy.

make

Strive

to

and

year

cfrinL-^
necessary to sell
depressed
market.

hand

bear

in

credits, to promote ef¬
of the foreign

on

to

years

single time
in
mind the

as a

authority and expenditures.

gational

utilization

nist

surplus of 4.3 billion

Of the tax

tees

through

Government

nneamStd in st0cks ,?aSh -yea.!
dollar
averaging
basis, it
a

fective

credits

and wisdom would be to continue

After the outbreak of hostilities
jn Korea, I recommended that we

funds

on

1947

years

the

the

step is desirable in order to
adequate control over the

of such

properly

fiscal

four

the fiscal year

budgeting. functions

fighting and holding the Commu¬

are

J138 keerl

frfwor'a

to

econ-

During

four

In

to

obtain
use

and

span,

tional

regular funds of the Government.
This

the

through 1954

relationship between

and

u't

examine

1951

totals.

when business activity, civiemployment, and national income
are reaching unprecedented
heights. The course of prudence

a

a few years
ago, fixed in- omy was operating at a full-emsecurities, such as bonds and ployment
level, my Budget Mesmortgages, were considered to be sages called for balanced
budgets
the only proper investments for
and debt reduction.

such funds since the actuarial liabilities
they, were designed to
meet were also in fixed
dollar

o

appraise

following the end

years

World War II,

Until

of

to

legislation requires that
credits be budgeted and
reported in the same manner as

tions

an

come

nnmmnn

four

continuing increase in expenditures for national security
ancj the prospect of a substantial

jn

promoting

growth

0f

recent

approximately

rearmament program,

have

aim

S1??al*ei

are

reve-

The

Tax Policy
I

i t h

w

to

budgetary impact of our re¬
armament program, it is necessary

Recent

past 30 months,

continued

1953

credits

order

the

foreign

lian

of the steps needed to

In

of

been available

processes

ri0d

one

and

agencies

tend the authority in that act,
which expires April 1, 1953, as

It

to

certain
normal

the

now

being contributed

are

currencies have

ex-

desirable to

be most

always held that the
about $2 billion
Government's fiscal policy should

estimated that

a

of

annual

an

times this amount.

Re-

of

in

loss

nue

have

from

and

nearly 10 million people.

is

s

preparing

^

about
cover

agement

include

millions

foreign

Accordingly,

Budget

pirations will be

improve Govorganization and manis now a regular and

found to

Because of their size and

to

continuing part of the

their

.

Fension

actions

ernment

more

nearlyj 40,000 individual trusts.

trusteed

needed

1954

of

Government's financial operations
in the Budget totals.

Truman's Last

sur¬

$1,200)

$25,000.

continued }rom page 10

annual income of less

an

15

nnnp

144,000

of

1952

now

available

:

rnvtivvpd (mm

showed

total

a

administered

institutions
vey

Association

of

the

Until

to

made

survey

by the Ameri-

for

hundreds

in

pear

trusts

primarily for small trusts.
The ing an intelligent and well balhandling of many small trusts by anced investment program for an knowledge of the banking regulameans
of a common trust fund ordinary investor. The same basic tions which control bank trust dewith

estimates

can

law

of

the ' investments

limited
under
Regulation F to problems is very similar to that
$100,000, such funds are intended used in developing and maintain-

makes it

The
several

make, or is dollars of receipts, authorizations,
prohibited from making. In Cali¬ and expenditures
relating to for¬
fornia, he must be acquainted, eign credits and currencies for
also, with the so-called "Prudent which no comparable
figures ap¬

Management of Trust
Department Portfolios

i

that

so

what

Thursday, January 15, 1953

...

:

________

Agricul. & agricultural

5,268

6,035

241

458

275

88

1.923

,

2,056

2,016

2,061

.2,948

'

>

3,370

1,045

-

Labor

Housing & community development

]

252

735

8,011

4,097.

1,943

243

resources

7,861;

757

:

3,459

1,827

'.

'

268

1,455
278

509

69.1
"

"Eudcation

&

general

Social security,
Veterans'
General

research...

welfare, & health.-

services

&

government

171

2,491

benefits..--

1,411
5,934

for

272

•

-

4.863

,__—

Interest
Reserve

.

contingencies.______

288

2,594

2,579

4,546
^

"177
-

.

4,564

1,385

1,547

6,520
25

j

Adjust, to daily Tr^as. statement, >' —855

-

2,563
4,617
1.478

-

6,420

•

6.420

40

50

78,587

72.883

.

.

__;.

in part IV of this

document

Total

*

'

66,145

74,593

Volume 177

Number 5186

.The Commercial and Financial
Chronicle

.

(223)

The following statistical tabulations

Indications of Current
Business

Activity

AMERICAN
Crude

42

Ac"

oil

and

condensate

output—daily

(bbls.

average

§99.4

§2,240,000

98.2

107.7

2,213,000

2,236,000

2,083,000

6,515,950

6,594,200

117,221,000
24,306,000
2,975,000

6,186,700

7,077,000
24,023,000.

22,354,000

10,955,000

3,054,000
11,024,000

6,476,550
6,809,000
23,518,000
2,894,000
10,216,000

9,524,000

8,G53,000

8,785,000

9,598,000

129,470,000
31,142,000

135,344,000

114,362,000
50,658,000

84,996,000

-

(bbls.)__.

Kerosene

1

output

Distillate fuel

;

Jan.
Jan.

(bbls.)-

Jan.

oil

output (bbls.)_
Jan.
Residual fuel oil output (bbls.)
Jan.
Stocks at refineries, bulk
terminals, in transit, in pipe lines—
Finished and unfinished gasoline
(bbls.) at
Jan.
Kerosene (bbls.) at
Jan.
Distillate

fuel

Residual

oil

fuel

ASSOCIATION

(bbls.) at
(bbls.) at

oil

OF

KAnavw/VUa.

ireight

Revenue

ENGINEERING

oi

cars)

CONSTRUCTION

U.

100,461,000

103,685,000

49,459,000

6,803,000

43,662,000

(no.

of

cars.

10,478,000

u

a.

Private

construction

511,981

587,334

642,022

Public construction
and municipal
Federal

OUTPUT

(U.

S.

s i

SI

STORE SALES

EM—1947-49

OF

FAILURES

=

AND

INDUSTRIAL)

—

DUN

steel

METAL PRICES

Electrolytic

(E.

tin

(New

(New

Lead

M.

&

York)

(St. Louis)

York)

(East

St.

at

Louis)

at

4.376c

4.376c

4,131.

—

$55.26

$55.26

$55.26

$52. t

$42.00

$42.00

$42.00

$42.0.

34.700c

34.125c

121,500c

121.500c

121.500c

14.500c

14.750c.

14.000c

14.300c

14.550c

13.800c

12.500c

19.500c

96.10

7

13.000c

-J.

U. S.

YIELD

DAILY

12.500c

95.86

96.82

109.79

108.52

113.12

113.50

113.70

113.12

112.00

112.37

111.81

111.62

JOB.88

AVERAGES.

109.06

103.97

104.14
107.09

103.9".

109.24

109.60

108.70

112.37

112.37

112.56

112.93

2.80

2.72

3.20

3.18

'm. 13

2.79

13

3.21

:
„

an.

—.■—;—

■

Orders

«

,+___———-—

PAPERBOARD

(tons)-——
(tons)

Percentage

of

OIL,

AND

sales

Number

Number
Dollar

FOR

PRICE

3.61

3.33

3.22

3.19

3.24

3.04

3.04

3.03

403.7

3.01

408.7

40J.8

an.

13

1J

ON

188,958

Y.

Customers'

Number

of shares—Total
short

9

Dollar

of

Short

19,632

of

Other

sales

OF

MEMBERS

23,321

32,634

17,991

18,498

681,537

928,636

489,697

Total sales

ROUND-LOT

4,283

3,776

485,921

$27,115,753

542,038

$36,592,464

$19,946,318

229,990

359,783

149,240

,

Total

:

*

'

■

purchases

Short

229,990

•359,783

182,520

266,671

149~240

159,420

220,310

268,460

OF

Total

,

240,290

154,610

4,691,310

7,473,060

10,215,230

4,845,920

Short

10,054,720

956,120
152,140

Other
L

sales

85,530

•114,770

763,640

412,860

T

off

498,390

246,500

.314,900

Short

—r"
for account

—

!
.

.

as

175,745

SERIES

—

U.

39,550

17,690

FOR

IN

MODERATE

LARGE
as

CITIES—

of Nov.

V

15:

190.9

and

bakery

S.

DEPT.

393,377

381,699

246,007

263.8
—

and

—r-

foods

278.6
210.4

230.6

241.8

236.7

227.3

223.5

346.1

346.3

346.6

140.3

140.7

190.6

vegetables—

190.7

186.7

201.3

;

;

and

oils
—

_

;

i

202.1

207.6

143.9

fuels

158.5

143.0

99.4

—;

,

138.9

148.4

refrigerators
electricity.

and

144.8

99.0

97.4

204.6
174.4

168.4

13,218,000

*12,874,000

13,08.7,000

7,389,000

*7,134,000

7,279,000

5,829,000

*5,740,000

5,808,000

106.9

*104.1

105.8

141.5

*133.3

130.9

16,361,000

*16,015,000

16,09°.009

9,157,000

*8,904,000

8,913 000

7,204,000

*7,111,000

7,126,000

233

*229

219

234

*233

220

£6,676,000

£66,556,000

£2,1,993,000

$275,000,000

$275,0.00,000

$275,000,000

267,391,155

267,432,234

259,418,600

53,969

50,592

42,177

$267,445,125

$267,482,827

$259,460,778

623,859

626,043

666,762

$266,821,266

$266,656,783

$258,794,016

8,173,733

8,143,216

16,205,983

$267,445,125
6,084,343

$267,482,827

$259,460,778

7,635,969

4,294,675

$261,380,782

$259,846,858

2.353%.

2.345%

$255,166,1(«
2.308ft)

'.

EMPLOYMENT

■

206.3
156.3

»
-

210.8

AND

PAYROLLS—U. S. DEPT.
LABOR—REVISED SERIES—Month of

OF

September:
All

manufacturing (production workers)

Durable

goods

Employment

goods
Indexes

(1947-49

manufacturing

Payroll

Indexes

Avge.=100)
i

.i

(1947-49

—

Average=100)—

manufacturing

—__

Estimated

number of employees in manufac¬
turing industries-

manufacturing
goods

__——

—

INDUSTRIAL

goods

—

—a

PRODUCTION

BOARD

FRVORS

OF

19X5-39=1 «|»—Month

NEW

THE

FEDERAL

CAPITAL ISSUES IN

MIDLAND

OF

GOV-

RESERVE
of

Nov.:

U. S.

GREAT

BRITAIN—

BANK, LTD.—Month of Dec

GOVT.

As

Total
at

STATUTORY DEBT LIMITATION
of Doc. 31 (000's omitted):
face

amount

time

any

Total

that

be

may

outstanding

______—-—.—

gross

public debt

Guaranteed

obligations

—

1,609,973

1,684,280

729,795

189,080

192,440

114.120

1.408.577

153,540

1,369.609

715,577

1,597,657

1,121,979

1.562,049

829,697

owned

by

the
——

gross

public debt and guaranteed

obligations

1,200,499

Dec. 20

not

Treasury
Total

1,275,519

Deduct—other

gations

outstanding public debt obli¬

not

Grand

OF

Jan.

—

'

under

109.7

spbject

total

to

debt

limitation

outstanding

104.0

•

112.8

»103.2

96.8

Jan.

107.2

UNITED

STATES

new

days.

obligations, issuable
authority—-—.

113.7

As

112.8

112.0

General

annual
**

capacity

Nine days.

of

117,547,470 tons

GROSS

GUARANTEED—(000's

110.3

*94.0
*

above

111.4

101.1

I

101.2

__Jan.

109.6

.

-Revised figure.
(Includes 652,000 barrels of foreign crude runs.
SBased on
of Jan. 1, 1953 as against the Jan. 1, 1952 basis of
108,587,670 tons,
fEleven




274.1

218.1

—

407,109

Dec. 20

—Jan-

V

190.2

174.7

.

and

231.4

194.3

204.9

374,039

Jan.

.

farm

232.4

194.3

Balance face amount of

,

foods

188.6

232.3

products

Housefurnishings

33,070

228,317

(L947-49 —100):

con-mbdlties other than

$19,403,000

166.3

281,749

Dec. 20

r—

All

358,200
342,149

"

products

Processed
Meats

1

407,353
30,440

—

r

NEW

1,874,000

$18,757,000

212.8

164,140

—Dec. 2o

PRICES,

Commodity Group—
All commodities
Farm

85,300

362,937

sales

LABOR

273,620

of members—

!——

Total sales
WHOLESALE

5,700
158,440

Dec. 20

sales

Other

10,900
74,400

_,Dec. 20
Dec. 20

'

.

165,390

9,-800

263,820

265,440

■'—Dec. 20

—,

purchases

2,251,000

Outstanding-

—

^Tptal round-lot transactions
Total

74,700

6,500
258,940

Dec. 20

—-

—

INDEX

704,270

floor—

the

5,177,000

1,588,000

166.5

589,500

906,730

Dec. 20

—

—

Total sales
'

143,090

786,700

938,840

Dec. 20

sales

Other

f

initiated

5,865,000
3,027,000

753,360

Dec. 20

purchases

Short

•

479,350

Dec. 20

____

-t

transactions

Total

1,011,180

Dec. 20

sales

sales

-

.

953,000

$23,400,000

SYSTEM,

—Dec. 20

—

sales

Other
Total

5,068,000

—

213.7

7,671,450

-

,

3,586,000

198,390

floor—

purchases

612

$6,515,000

2,424,000

;

Durable

9,974,940

————

the

on

590

$5,853,000

226.0

Other

■

235,670

•

initiated

48

7,046,000

Ice

|

Dec. 20

—

transactions

71

61

1,875,000
_^r_

Sugar and sweets_

MEM¬

—

Other sales

62

$8,458,000

liabilities—iu—.

Beverages

All
■

9,819,050

______

sales

66

296

583

products

Fruits

All

:—Dec. 20

Dec' 20

Total sales

„

Other

■

159,420

Dec. 20

ACCOUNT

131

66

43

foods

Dairy

All

^

■*

FOR

121

280

76

FAMILIES

Nondurable

Dec. 27

——

_________

--1-'

TRANSACTIONS

5
'

r

288

—

Eggs

$22,433,856

—

77

45

PRICE

Cereals

3,230

924,353

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists in stocks in which registered—

.

All

545,268

2,576
678,961

(SHARES):

20

'

■

»

131

1935-39=10(1—Adjusted
All items
i__

Nondurable
*_

5

62

91

sales—

I4J

70

BRADSTREET,

liabilities

INCOME

-

—.—Dec. 27

—

62

330
,
'

Unadjusted

110

Dec. 27

sales

16

development—

18,589

Dec. 27

ACCOUNT

59

14

Seasonally adjusted

18,101

125

by dealers—

Round-lot

215

55

Miscellaneous

32,759

88

Dec. 27

shares

Short

34

125

.5

and

service

CONSUMER

$30,372,989

23,409

ROUND-LOT STOCK SALES ON THE NEW YORK
EXCHANGE AND ROUND-LOT STOCK TRANSACTIONS

FOR

Total

669,151

TOTAL

Total

40

33

117

120

number

Commercal

23,777

548,682

$25,125,125

purchases by dealers—

Number

352

29

liabilities
.Construction liabilities

Gas

840,614

sales

Round-lot

137

38

."V

107

Rent

28,426

-Dec. 27

——

141

136

37

; Retail

'

Dec. 27

—

125

Institutional

Clothing

Dec. 27

.

332

135

number

Fats

Dec. 27

sales

52

113

Manufacturing liabilities ——
Wholesale liabilities

114.58

$37,137,351

:———

shares—Total

1,023

49

314
;

Total number

**358,720

109.05

$26,891,345,

sales—.

sales

Other

457,365

108.50

Dec. 27

sales

Number

441,859

108.50

jt—.Dec. 27

value

Round-lot

$478,354

Dec. 27

sales

863

47

Fuel, electricity and

sales-

other

7

724

Construction number

**40

21,368'
624,121

——

Customers'

274

8

building

Commercial service number—

—

—

Customers'

Retail

wv-

—

other sales

49

247

ft

8

Manufacturing number
Wholesale

STOCK

—

37

47

226

Meats

Dec. 27

_________

45

'

—

FAILURES—DUN &
INC.—Month of December:

**151,952

91

Dec. 27

!

sales

private—

BUSINESS

COMMISSION:

purchases)

139
360

37

."

**179,761

228,894

96

INDEX—

N.

117
331»

,

:

All other public

4op.-

178,124

_______

short

'

.242,594

(customers' sales)—
orders—Customers' total sales-

of

Customers'

.

£66

Odd-lot purchases by dealers
Number

—

utilities

fcnstlnCClon

UC

Conservation

3.51

3.21

13

Jan.

EXCHANGE

(customers'

;

other

telegraph

26

3.33

3.50

3.35

Dec. 31

ODD-LOT ACCOUNT OF

shares

value

3.22

3.51

3.35

f259,914

—

SPECIALISTS

SECURITIES

—

3.23

3.51

+342,725

period—

i.

AND

and

31

■

103

33

public

12

23

304

3.07

3.23

13

Dec. 31

REPORTER

orders

of

of

100

by dealers

of

end

DRUG
=

DEALERS

EXCHANGE

at

!

45

29

19

Miscellaneous public service
enterprises

3.00

Ode..31

—.

(tons)

AVERAGE

Odd-lot

3.04

—Dec. 31

—

activity

STOCK TRANSACTIONS
LOT

3.06

-n.

—

_——.—

PAINT

1949

2.97

3.03

ASSOCIATION:

Production

orders

——

INDEX—

received

Unfilled

2.98

13

an.

—

Group

27

3.2(

3.00

an.
—

Group

COMMODITY

NATIONAL

"

2.7(

'an. 13

_

MuuDX S

•

'*

»

13

(an. 13
-

___—

33

12

1

_—

'

an.

;

Industrials

-

"•

an.

Baa

■

107.09

.

,

Aa

Railroad Group
Public Utilities

39

34

Other

102.30

106.74

109.06

1

108.88

103.97
106.74

(

.Jan.13

Government Bonds

Average corporate
Aaa
;
—_—.'
A

institutional—

nonresidential building
Military and naval facilities—.
Highways
!

27.425c

109.42

.Jan.13

—

u

3

*

BOND

and

Hospital and

24.200.

95.85

.Jan.13

__—

38

11

Nonresidential building

'

109.24

.Jan.13

—__—

141

95

18.800

7

.Jan.13
_

59

136

33

19.000c

7

24.200c

.Jan.13

u.

MOODY'S

Pl>

103.000.

7

.Jan.13
_

61

__

Sewer and water—

24.200c

.Jan.13

—

104

48

58

Educational

.Jan.13

—

Railroad Group
Public Utilities Group
Industrials Group—

I ■

4.376c

24.200c

.Jan.

__

Baa

Other

16

34.875c

.Jan.

A

,

157

7

.Jan.

—

i.

—

:

89

7

.Jan.

—

at—
at

Aa

.

163

.Jan.

—

109

49

_

7,665,643

.Jan.
-—

189

107

Railroad

QUOTATIONS):

.

190

recreational

Public utilities

All

6

434

187

building

construction

Residential

Jan.

J.

Farm

78

8,140,257

6

435

-

and

Telephone

195

7,713,155

6

18

421

Miscellaneous

9,195,000

3.185,429

8

18

,___

Industrial

MOODY'S BOND PRICES DAILY AVERAGES:
U. S. Government Bonds

•

136,100

Jan.

Average corporate

,

94,800

10,035,000

copper—

Lead

Aaa

763,000

"93,600

Jan.

-

Domestic refinery at
Export refinery at

»"

746,000

91,500

Jan.

lb.)—

(per

Religious

A

_.

(per gross ton)
Scrap steel (per gross ton)

Zinc

489,000

3

.Jan.10

iron

Straits

507,000

COMPOSITE PRICES:

Finished

Pig

7,650,000

146

935

90

!

<nonfarm)II_IIIII

Other nonresidential

Social

3

82

1,048

925

127

alterations

Educational

3

3

1,988

1,033

865

Commercial
IIIII
Warehouses, office and loft buildings—'
Stores, restaurants, and garages

77,511,006

Jan.

Jan.

$3,011

1,924

953

;

50,796,001

Jan.

100

$2,787

1,789

!

Industral

53,320,000

*6,520,000

$2,513

(in millions):

H_~

Nonresidential building

84,816,000

Jan.

—

96,740

37

and

197,622

104,636

OF

building (nonfarm)IIIIIIIIIII
dwelling units

Additions

359,004

103,132

70

DEPT.

$653,365

457,364
230,435

18

S.

of December

$792,435

472,410

construction

Hospital

:

BRADSTREET, INC
IRON AGE

70,846,000

Ago

223,184

—III"

construction

New

128,307,000

80,572,000
21,383,000

$798,725

~~

III—~II

Residential

$266,707,000
138,400,000

138,136,000

83.083,000
101,955,000

117,758,000

c

$264,618,000
126,482,000

INDEX—FEDERAL RESERVE

AVERAGE

(COMMERCIAL

8

$185,038,000

MINES):

EDISON ELECTRIC INSTITUTE:
Electric output (in 000 kwh.)

•

188,604,000

Jan.

BUREAU

Bituminous coal and lignite (tons)
Pennsylvania anthracite (tons)
Beehive coke (tons)
DEPARTMENT

8

Jan.

.

COAL

135,062,000

Jan.

t

State

$323,666,000

Year

Month

S.—

__

CONSTRUCTION—U.

new

Private

563,689

8

residential

LABOR—Month

610,116

8

U.

Nonhousekeeping

719,159

Jan.

__

of that date:

Previous

DEPT. OF LABOR—Month of
October

BUILDING

43,158,000

520,671

Jan.

construction

are as

VALUA¬

THE

Additions, alterations, etc

NEWS-RECORD:
Toiai

OF

New nonresidential

<

26,417,000

563,085

Jan.

PERMIT

AREAS

2,865,000

ENGINEERING

—

URBAN

omitted):
building construction

Total

*27,790,000

Jan.

either for the

are

Month

CONSTRUCTION
IN

S.

New

*

freight received from connections

(number

BUILDING
TION

134,425.000

27,266,000

Jan.

_

Revenue

loaded

137,016,000

Jan.

AiViLlviCAA

100.3

(000's
3

of quotations,

cases

Latest

All

Jan.

in

or,

i

of

each)

Dates shown in first column

that date,

on

production and other figures for the

cover

Year

Ago

Jan. 18

(net tons)

Crude runs to stills—daily
average
Gasoline output (bbls.)

CIVIL

Month

Week

PETROLEUM INSTITUTE:

gallons

month ended

Previous

Jan. 18

to—

ingots and castings

or

month available.

Week

capacity)

Equivalent

week

or

Latest

AMERICAN IRON AND STEEL INSTITUTE:
Indicated steel operations (percent of
Steel

latest week

of

Net

Dec.

DEBT

DIRECT

£ND

omitted):

31-

fund

balance

debt

Computed annual

rate

-

36

The Commercial and Financial Chronicle...

(224)

to about

I would be inclined to use the

290 in the industrials and 112

rally to back out of long com¬

rally.

Tomorrow's

in the rails is

Markets

Walter

advancl

An

*

*

Says—

fared

haven't

well.

*

Despite this rally I consider
the present market unsatis¬
factory.
Instead of buying
them in anticipation of a rally

Whyte

that

mitments

likelihood.

a

article

do

not

coincide

expressed in this
necessarily at any
with

of

those

the

The

most

week

budget message. That one was
supposed to have been such a
shock

tremendous

couldn't

market

took

side

a

tion

held

The

The agency predicted the
would

390,000

*

*

call

truth

more

no

than there is in

it

to

of the

some

"remarkable."

be

will
cars

industry's total production this quar¬
It expects 481,000 cars and 111,000
month, compared with a total of

Scheduled to Show Slight Increase Above

in other areas of metalworking, says "Steel," the weekly

10%

to

give for the current set¬
I

back.
such

if there's any

doubt

Three

answer.

four

or

weeks ago I said in this space
that the storm warnings were

and suggested taking to
cover.
You can wager if I
thought so there were others
who thought the same way.
My conclusions were not
based on any inside informa¬
tion, no more than that avail¬
able to any number of people

up

who

read

can

well

as
%

*

I.

as

a

and

of inside informa¬

tion,
were
can

assuming any of them
anything. But I
hazard an opinion that

this

worth

over

by

isn't

reaction

current

number of points.

a

*

*

*

As this is
on

being pecked out
Underwood, the Dow

the

Industrial
around

108.

averages

the

284;

rails

dustrials

from

bigh and about
in

the

*

*

mark the limits of
Yet there
:a

longer

are

a

other

The

have
up

Jan.

time

when

pected. In

a

tons, while

'

.at

reaction

more

than is

of

*

a

was

A month
year

ago

98.2% of capacity and output totaled
output stood at 107.7%, or 2,236,000

ago

when the capacity

esti¬

smaller the

was

••

Car

industry for the week ended Jan. 10, 1953, was esti¬
8,185,429,000 kwh., according to the Edison Electric In¬

■

Grain

was

lower

revenue

week's

total

before

represented

a

decrease

of

47,031

cars

or

cars, or

in

wheat

Passenger

production

car

in

the

United

States

last

week

made

a strong recovery from the holiday-shortened
previous two
weeks, according to "Ward's Automotive Reports."

The
to

extent

of

the

rise

above

the

previous

week

(revised)




,

the Dun

&

the

exception of

were

corn,

generally

slow

reflected

domestic

and

export de¬

Trading in grain and soybean futures was more active.
daily purchases on the Chicago Board of Trade last
totaled 47,800,000 bushels, as against 29,100,000 a week aga

week

and

51,500,000 bushels in the like week last
in

the

domestic

flour

confined

year.

their

continued to lag as;
activity mostly to small lot
replacement bookings of hard and soft wheat bakery types. Cocoa
advanced
shorply at the close after displaying a firm tonebakers

and

jobbers

market

influenced to some extent by
and by short covering and.,
hedge-lifting for inventory purposes. Warehouse stocks of cocoa
were up 1,723 bags for the week, totaling 46,845 bags.
This com¬
pared with 104,256 bags a year ago. Following some initial con¬

throughout the week.

The rise

was

the dock strike in the New York

fusion

coffee

the

strike.

workers'

area

little

showed

market

for refined

Demand

effect

sugar

from

the

dock;

expanded sharply

at

the week-end, largely due to

the pier strike. Supplies of refined'
limited, however, and refiners reported only sufficient rawon hand to keep running for a short while.

Domestic

spot

prices

cotton

within

moved

a

narrow

range

the past week.

The trend was mildly upward during most of the
period but a sharp reaction at the close left prices about un¬
changed for the week.
sentiment

was

aided

by trade and commission house

buying and year-end mill price-fixing which tended to offset tax:
selling and liquidation induced by continued slow export demands

Support
in

was

final

the

also furnished by a pick-up in the goods market

day of the

year

textiles

generally.

Trading

in

and

volume

compared

with

and a more optimistic outlook for
in the ten spot markets continued;
84,600 bales in the latest week.

totaled

the

bales in

85,000

preceding

period,

and1

100,700 in the corresponding week a year ago. The cotton parity
price for mid-December was reported at 34.10 cents a pound, the
same as a year earlier, but
dowp slightly from 34.22 cents a month
ago. CCC loan entries during the week ended Dec. 26 dropped to>
109,630 bales, from 155,933 a week previous. Entries for the season

through Dec. 26 were reported at 912,211 bales,
835,000 to the same date a year earlier.

as

compared with.

trucks in the comparable 1952 week.
Canadian plants turned out 6,574 cars and 2,025 trucks against
3,414 cars and 1,974 trucks in the prior week and 3,989 cars and

3,116 trucks in the comparable 1951 week.
re¬

Business Failures Turn Upward in
v

Commercial
week ended

Jan.

and

industrial failures

8 from

Post-Holiday Week

rebounded

to

163

in

were

were

used to stir shoppers' interest.

rather pleasantly

to clearance sales.

ago

when 164 occurred, they remained

was

estn?

mated

by Dun & Bradstreet, Inc., to be from 2 to 6% larger than
year ago. Regional estimates varied from the comparable .yearago levels by the following percentages: New England +1 to +5;
a

East

0

to

+4; Midwest and South

+3 to

+7; Southwest -f4 to,

+8; Northwest and Pacific Coast +2 to -f 6.

or

the

Winter

similar
wear

more

week

drew

a

for apparel than

year

wide

earlier.

interest.

Coast augured

were

clothing in

well for

-

iii either the prior

Clearance sales of

Men's

dashery offered at sizable reductions

and Pacific

year

easy
somfr

^

cessful promotions of Spring

a

scare-

Retailers in

The total dollar volume of retail trade in the week

about

with

when

surprised by the spirited consumer;

the

the

years ago

Reduced-price promotions of seasonal merchandise and
parts

holiday low of 89 in the preceding
week, according to Dun & Bradstreet, Inc. While casualties were
even

Higher Levels the Past Week

parts of the nation in the period ended

quite match the unusually high level of two
buying was rampant.

cars

28,377 trucks built in the United States, against 79,125 cars
and 21,589 trucks the previous week and 62,590 cars and
23,040

most

on Wednesday of last week, recovered noticeably from the
postholiday lull in the prior week. Most merchants chalked up larger
sales receipts than in the comparable week a year ago but did not

response

made up of 105,223

and

indicated,

intermediate

■

Average

credit terms

Total output for the past week was

*

an

'

demand.

amounted

33%.

It aggregated 105,223 cars compared with 79,125 cars
in the previous week and
62,590 cars one year ago.

ex¬

cies, it is quite possible that
there will be

'

•

Market receipts of corn were small and prices strengthened
despite the recent announcement of a decrease in the pig produc¬
tion. Oats prices declined with offerings more than ample for the

Retail trade in

Holiday Week

a

sumption of the down-tenden¬

V

■

.

Trade Volume Rebounds to

15% below the corresponding week in 1951.

United States Auto Output Soars to 33% Above

these, plus

a

pound of

7.7 % below the corresponding week a year ago, and a decrease of

99,342

factors, of

there's

Straight Week

during the past week.

Shoppers spent

But

in 1952.

as

mand and the large supplies of wheat overhanging the market.

This

freight for the week ended Jan. 3, 1953,
which included New Year's Day holiday, totaled 563,085 cars,
according to the Association of American Railroads, representing
an increase of
42,414 cars, or 8.1% above the preceding Christmas
holiday week.

should

of

the corresponding date a year ago.

on

with

limited

Loadings Rise 8.1% Above Preceding Christmas
Holiday Week

The

States.

week

its chief function is to show the gen¬

'

•.

markets,

Bullish

Loadings of

the

similar

Commodity Price Index Turns Slightly
Higher in Latest Week

compared with 310.66

were

472,274,000 kwh. above that of the pre¬
ceding week when output totaled 7,713,155,000 kwh. It was 519,786,000 kwli., or 6.8%, above the total output for the week ended
Jan. 12, 1952, and 1,204,584,000 kwh. in excess of the output re¬
ported for the corresponding period two years ago.

considerably

*

the

power

The current total

a

the

Continuing its irregular day-to-day movements,

stitute.

position, call for

now

that

announced

The amount of electric energy distributed by the electric light
mated at

Mountain

and

in

Bradstreet daily wholesale commodity price index closed at 280.98
on Jan. 6.
This was up slightly from 280.61 a week earlier, and

sugar

and

businesses failed

many

Wholesale

Electric Output Approaches All-Time High in Latest Week

decline.

they're least

Institute

mated output was 2,083,000 tons.

nasty way of

any case

the technical

5, the actual rate

2,213,000 tons.

in¬

their heads at

Steel

an average of 99.4% of
capacity for the week beginning Jan. 12, 1953, equivalent to 2,240,000 tons of ingots and steel for castings.
In the week starting

Paradoxically, these unknown
lactors

and

Iron

capacity for the entire industry will be at

bave to be taken into account.

poking

American

operating rate of steel companies having 93% of the steelmaking

character, that

range

as

Business

needs.

they

basis

1952, this trade weekly

Regardless of what happens, "Steel" points out, the United
has more capacity than ever before to supply the steel

*

current 283-285 range

from

the

industrials

technical

over

States

high of about 295 and

a

month

a

influencing caution in order-taking, it adds,
question of what course General Eisenhower, after he is
inaugurated as President, takes to end the Korean war. A sharp

the rails about 114.

On

with orders carried

on

Another factor

six-point dip

the

but of those that book

activity, and accompanying
steel demand, will remain strong through the first half of this
year. Too, there is growing belief that good business will continue
into and through the last half, states this trade publication.
is

casualties than

more

eral trend of food prices at the wholesale level.

is

steel

Influencing producers to go slow in booking second quarter

recent

Before

down

a

a

rails.

turned
made

their

for

orders is the conclusion that industrial

are

That makes it almost

nine major geographic regions failures rose
A large part of the increase was concentrated

reported

Weakness

about

ten-point decline in the

the

31 foods in general use and

declares.

*

question from a
viewpoint is what will
they do from here on. I must
again emphasize that I have
sources

demand

quarterly basis, a good
many are not accepting orders now for delivery beyond April
on
the most-v/anted products.
Many of the mills are already

The chief

no

the

Some mills normally book orders for not more than one

burdened

con¬

This was a rise of 1.1% over the previous week at
$6.16, and the
highest level since Nov. 23 when the index also registered 6.23.
Compared with the year-ago figure of $6.61, the current number
shows a drop of 5.7%.

keeping producers
cautious in booking new business. They don't want to be loaded
with more orders than they can fill.
in advance,

busi¬

and

Moving upward for the third successive week, the Dun &
Bradstreet wholesale food price index for Jan. 6 stood at
$6.23.

under domestic levels.

whole,

step-up in our offensive might intensify steel demand.

market

of

areas

,

the

On

More

trade

The index represents the sum total of the price per

helping of the domestic sales along
making their bid with prices ranging

reaching for

are

Eastern Seaboard

from 5 to

pat answer

wholesale

,

is hurting the business of United States nut
and bolt manufacturers and is making itself felt with increasing

the
*

six

one-half

Increasing competition from European countries, particularly

returns.
*

in

year

Wholesale Food Price Index Rises for Third

magazine of metalworking.

*

last

1952, including the Middle Atlantic, New England, South Atlantic
and Pacific States.
The only marked decline from a year ago
took place in the East North Central Region where less than

France and Belgium,

They

but

and trucks in the like 1952 month.

campaign promises that you
hear before the Big November

I don't have any

than

dipped slightly in the East North Central
Five

Previous Week

pressure

11

in the Middle Atlantic, Pacific and New
England States. No
change appeared in the West North Central Regions, while failures

this

assembled

be

Steel Output

a

convenient explanation.
only trouble is
that

there's

steady at 16 and commercial service at 7.

succumbed

In

production had dipped below Ford and Chrysler during December

ter

from

25

struction, but mild dips from the 1952 level occurred in other lines.

because of model changeovers.

trucks

that is what I

Now

and

it

slip.

*

very

take

the prewar total

Manufacturing and trade mortality rose sharply, with manu¬
casualties climbing to 30 from
16, retailers' failures to
from 41, and wholesalers' to 20 from 9.
Meanwhile, construc¬

90

They are presented as
the author only.]

The State of Trade and Industry

the

that

and

facturers'

those of

5

page

1951

with liabilities of $5,000 or more rose to 138 from
previous week and exceeded the 129 occurring last year.

during the week.

President Truman's

was

from

widely accepted

for the reaction of last

of

with liabilities under $5,000 increased to
did not reach the corresponding 1952 total of 35.

nesses

cause

week

Failures
78 in the

Chronicle.

s=By WALTER WHYTE =
Continued

in the similar

193

1939.

Those

views

[The
time

below the

of 380 in

Thursday, January 15, 1953

a

sportswear

week:

women's

and

haber¬

in rising demand. Suc¬

some

cities in the South

favorable shopping

season

Wdlvme 177 'Nuinber-5186The Commercial and Financial Chronicle

(225)

| to come. Shoes

were more tfrequently purchased than in the sim-

ilar week last year.
' *
The recent lull in trading

»

markets

to

came

to be

recent

j inventories,
ments

of the nation's wholesale

many

as buyers placed sizable
The total dollar volume of wholesale
moderately larger than that of a year ago.

Encouraged

by

in

season.

trade continued

buyers

in

surge

shopping and the reduction in

less reluctant

were

to

beyond immediate needs than they

Department store sales

extend

their

commit¬

were a year ago.

on a

country-wide basis, as taken from
the Federal Reserve Board's index, for the week ended Jan. 3,
1953, increased 5% from the level of the preceding week. In the

;

previous week

^

increase of 59%* (revised)

an

that of the similar week of 1952.

'

1953,

increase of 12%

an

was

] ment store sales registered
Retail
but

trade

failed

to

in

New

approach

reported from

was

For the four weeks ended Jan.
3,
For the year 1952, depart-

reported.

increase of 1% above 1951.

an

York

the

price level is still close
peak, but during this year
it will probably slide off a
little,
especially because of somewhat
lower prices for food
(incidentally

to

close in the past week

a

| orders for the Spring

consumer

the

past

broad

factor

displayed activity,
enjoyed in other parts

1953, decreased 4% below the like period of last

(

preceding week

In the

year.

increase of 46%* (revised) was reported from
1951, while for the four weeks ended
; Jan. 3, 1953, an increase of 4% was recorded. For the year
1952,
,

an

that of the similar week of

volume declined 7% under the

preceding

year.

j
♦The large increases shown for this week reflect in
part the fact that this
year Christmas fell on Thursday and the week
therefore included three days
of heavy pre-t.hristmas shopping as
compared with one day last year when
Christmas fell on Tuesday.

I

swing and which creates dissatisfaction with older dwellings,
(4) The situation of high busitax rates and declining
prof-

ness

its

what

in

lower

level

1953, but not

(It

is

of

retail prices
greatly lower.

very

interesting

.

AU

to

note

that

,

prices in the recent Sears Roebuck

1953 has

been

based

the

on

con-

optimistic
business
definite

diate
that

forecast

in

threats

period.
we

for

1953, there
for

general
are

the

There

some

interme¬

is

year of

been

turndown. The question is not as
to their existence but rather as to
will

come

been

(5)

of

postwar

the

out,1

indebtedness

corporate

has

oversupply 1,100,000 houses built in 1952, in<of civilian goods even while we creased outlays for public works
are spending at
the rate of $50 of a needed character, especially
billion a year for defense. All this highways, schools, and other pubbe

Bnay

accurate forecast of

lie

buildings, will take up much
situation that will develop some of the slack.
day, but the present aspect of the
(4) Thus consumer income will
world picture for 1953 raises some continue at a high level and
posdoubt

an

a

to the imminence of these

as

sibly show

small net increase

some

In other words, when we stop accumulating new debt, the portion
°* '"cpme saved for the payment
°* old debt bas *} unfavorable
effect on spending. In this respect
-1'1

^

remember

developments. As we look at the as the composite result of the
Communist
build-up in Korea, high rate of employment (which
the precarious French position in perhaps will decline a: little
by
Indo-China, the Ominous stirrings the end of the year), continued

down-spiral

in the Middle

reaching

East, the unrest in

increases, though less great

wage

Africa, the Communist infiltration than those in 1952, and farm inin South America, and the in- comes which clearly will be somecreasingly shaky economic and what lower,
political situation in the NATO
(5) Since taxes on individuals
countries,

agnize
fthe

the
it.

cold
The

forced

are

we

the

unwelcome

Kremlin

to

date

to

rec-

fact

is

will

be

not

increased

and

may

that possibly decrease slightly, dispos-

winning able income will keep

with

pace

and we are losing any rise in total consumer income,
Administration takes The total figure can well be at or

war

new

office with

clear mandate from

over $240 billion,
people * to initiate
(6) The spending rate, or conpolicies that wilt reverse
this versely the savings rate, seems
trend. In the light of these facts, unlikely to change much.
Actually
longer-continued and quite, pos- the savings rate moved up to 8.6%

the

a

American

sibly higher defense expenditures of disposable income in the third
can
readily be envisioned.
Be- quarter of 1952, a considerable incause
of
Washington fumblings crease over the first two quarters,
the

and

brazen

subordination

of

but

presumably it declined again
national safety to purely political in the fourth quarter. It is a fair
objectives, the cutback in the pro- guess that the American people
duction

of

weapons

ously jeopardized

in

the

1952 seri- will again
de- billion in

fense program.

at least $17

save

whole

1953.

Liquid

or

$18

savings

Consensus of Expectations
The

fore,
of

at

consensus

is

that the

business

present, there¬
volume
be

consumer

debt

probably increase at the

same

time.

general

activity will

increase; also

will

|

will

well

It

is

to

not

be

forgotten,

likewise, that 1953 will be

a

year

of large maturities of E bonds.

together this adds

up

to

All

prospect
volume of

sustained throughout most of 1953.

for

Specifically

consumer spending, auite possibly

as

the

expectations

are

in

follows:

(1) Government spending on total
goods and services will
be

higher in 1953 than in 1952, de¬
fense
expenditures
running
to
gome $53 billion.
Although! there
will be a real effort to achieve
economies/ the
to

be

that

we

results
will

get

are

likely

more

for

dollars, not that fewer dollars
will be spent. Actually the expenditures for. 1953 are already comtnitted in large part.
v
cur

I

-

(2)

Capital

spending by busiHess for plant and equipment will
continue at a very high rate during most of the year. Again much

relatively

a

excess

(7)

of

The

good

$220 billion.

prospective

price

pic¬

'ure £ one of considerable stability.

Barring

big

changes

in

the

international situation, there is no
likelihood of explosive inflation
in 1953.

has

The wholesale price level

been

some

declining slightly for
time and probably will con¬

tblue to edge downward. Prices
of
sensitive
sensitive commodities, espe-

clall,y ,those traded °n. f"tures
markets
well

are

back

to

in

most

instances

pre-Korea

levels;
there
are
now
relatively
few
scarce materials.
The high level
of business activity indicated for
1953, however, will preclude any
marked price weakness. The trend
of agricultural prices will prob-

this spending is already comjnitted, and reliable surveys of the
long-run plans of industry support ably be moderately
downward, but
of

_

Sei^7,i.1?tthi\capital.fpe.nd,ing the price„
1953 will not be
greatly below
will
En




course

.

s"PP°rt
be

tbe

program

functioning.

the

which

very

and
out

With

the

pros¬

S.

while certain sectors of the

pausing to take
will

something like

be

going

enough
the

econ¬

industries

certain

and

omy

are

slack, others
ahead vigorously
up

that the total effect of

so

readjustment is substantially

minimized.
These
trends

particular

and

tendencies

long-run

are

the

on

3%

a

extend

accom¬

their customers.

overlooked

also

is

the

Not
fact

that the character of the appoint-

creates

bias toward inflation. In

a

other

words, the present system
of wage adjustments results in ad¬
vances

in

outrun

the

money
rises
;

o-

g

f

1

fnrpehnHnwa

pince

?

which

wages

in

productivity.

—

.

v—r-

hourly earnings haves

'

|™ment ioneshadows a con- been advancing in industry as
wj10ie
than three times
servative he., potentially defla- fast
5P,vahw

1(1

more

'

^
To

(6)

.

economic

uation

in

the

likewise

l16.

and

^ u"~

political sit-

Western

European

countries. The NATO rearmament
into

the

their

the
and

economic

Kremlin
now

In the long

this kind of wage adjustment
for inflation; but in the

run

makes

short run, particularly at times
when business is undergoing some

readjustment,

recovery, as
doubtless
foresaw;

Stalin will do everything

deflationary
force

these

advances in
be sharply
because they will

rates

money wage

are

a
as

...

be considered

ke. e_ ec^

i

stable

productivity.3

as

can

curtailment

of

business

spending

by companies whose
margins are seriously

possible

profit

ened

threatened.

to disrupt these weak¬
economies still further. His

statement at the 19th Spviet Con(2) Our rapidly increasing ca^
of
the
depression years of the gress was a virtual declaration of pacity to produce consumer goods
1930s have almost been made up. economic. war.
In this situation and
services
places a
heavy
Also the spurt in capital goods the United States at thq very least burden on
marketing. Yet in this
spending growing out of defense feces a decline in exports; but postwar period not only has the
requirements and accelerated by more serious than this is the basic vigor of the promotional and dis¬
the provisions for fast amortiza¬ fact, now beginning to emerge, tributive
process been impaired by
that unless this country is willing the
tion will not last
flabbiness inevitably accom¬
indefinitely. To
to accept a large volume of im¬
be sure, technological factors and
panying a prolonged sellers' mar¬
growth factors, not to mention or- ports our whole policy of seeking ket but marketing has increas¬
II but also out

dinary replacement, still call for J:0 organize the free world for defense against Russia is going to
relatively high capital expend¬
fall apart.
itures; but at some point in the
not too distant future the shift
The several factors just com¬
will be from a catching-up proc¬ mented on are among the prin¬
ess
to a normal-growth process. cipal ones that can cause a more
Then
the
danger will be that or less serious period of readjust¬
business will not be accumulated ment in our economy at some time
debt

new

old

rapidly

as it pays off
with the conse¬
deflationary
effects
just
as

quent

marked
not

as

the

earlier,
to

the

(3) The number of

new

ing places built has for
exceeding

the

households

there has been

dwell¬

some

time

number

of

Again
catching-up sit

conjunction
The

tion.

before

of

formed.

a

as

and

the

re-

question

existence

factors but rather

mentioned.

been

the next few years. As

over

obligations,

of

to the timing

their

opera¬

timing could still fall
end

of

1953,

that

the

major test is

ingly been subjected to
ing

strait jacket

of

a

paralyz¬

confused

and.,

befuddled

government
policies
respect
to
competition, a

with

state of affairs aided and

abetted,
unfortunately, by some academic
thinking. Intelligent and vigorous
competition is the essence of mar¬
keting; and at the stage which has.
now
been reached, we ought to
wipe the government regulatory
slate

clean

with

a

and

whole

start

over

again

concept of

new

petition and of the

ways

com¬

in which

best be stimulated and pro¬

the

it

ar¬

but

trend of the past two months
gues

is

these

tected.

can

per-

acute "housing £aps more likely to come in 1954.
uation,
but the
Factors to watch particularly are
shortages has now been over¬
inventory and the volume of new
come; and actually last year the
orders.
It is a little disquieting
number of new
dwelling places

3 See

Sumner

H.

Chicago Association
Industry,
Ncv. 24,
Commercial
Dec.

4,

and

Slichter, speech t«
of Commerce and1
1952,
reported u»

Financial

lot

Chronicle

1952.

that total business inventories to-

bv'M^'th^increase'iif thef
by all
tne
/c

increase

ber of families.2

put his finger

in tne

rumnum-

Still nobody can

the time when
this particular residential building
cycle will draw to
are

at

least

da* are reIative* h'«h and

orders are faning off somewhat.

on

two

a

close. There

factors

that

are

tending to prolong it, namely, the

Long-Run
-

A

few^/omments

certain

long-run

and

accelerated

are

Of Garrett & So.

in order

aspects

of

on

our

American business society:

move¬

into

Kentucky Bankers' Association in Louis

St
Thursday,

Oct.

23,

1952.

(2) The technological factors al¬
point strongly upward. With
the development of synthetics, the
so

Edmond Brown V.-P«

Aspects

(1) The growth factors, includ¬
ing the all-important one of pop¬
more and
point strongly upward.
more
distant suburbs
and
the ulation,
Even by five years from now a
technological arid stylistic revo¬
lution in housing which is now in projection of current trends can
give us a population of 170 mil¬
1 Speech
lion, a gross national product of
to Mortgage Bankers' Asso¬
ciation of America in Chicago, Sept. 29,
$400 billion, and consumer ex¬
1952.
Reported in Commercial and Fi¬
penditures of $275 billion at cur¬
nancial Chronicle, Thursday, Oct. 2, 1952.
rent prices.
2 See
Sumner H.
Slichter, speech to
continued

ment of household

of

The

be

to

serious deficiencies in plant
equipment arising not only

of World War

cost

of the large U.

to

5.s

where

The

refundings which face
Secretary of the Treas¬

modation to

accompanied

point

re¬

same

favorable side, but the picture is
possibility grows that not wholly one-sided.
For
in¬
the
recent
rapid
expansion
of stance, here are two present-day
bank credit to business will soon
developments which must give us
come to a turning point.
Such a pause:
contingency is enhanced by the
(1) Our present machinery of
extent to which banks are now
wage
adjustment, as Professor
borrowing from the Federal Re¬
Slichter has so often pointed out.
serve in order

liqui?fatio1nQPq pr*vate.jndeJ$"
the

increases that the in¬
periods of economic re¬
adjustment can be much more

the

rate,

can

we

this

this year will be handled
through the issue of long-term

vicious

Unquestionably

new

a

_ba"_
us

Most of

vividly

developments, the

evitable

ury

private debt has much greater degovernment debt.

so many new

possibility

and

readily absorbed; that is, these
into

period.

new

complex, embracing

adjustments can be of a rolling
hardening ten- character, similar to 1950 and 1951;

the

some

(4) As the economy becomes so
larger and so much more

much

two

borrowing has in fact been on
increase during most of the

securities at

gone up 85% since 1945, and per¬
in 1952. sonal
indebtedness
118%, while
nearly reached its peak, that capi(3) Construction also will connational income during this
tal spending for plant expansion tinue
period
at a high rate.
Although
has risen only 52%. The payment
will clearly taper off, and that the residential
building probably is
industrial capacity of the country slated for some decline from the of debts has a deflationary effect
c

broadened

and it Is assuming
greater social responsibilities.

industries

the

A brief

idly, than government debt.
As
Professor Slichter recently
pointed

has

greatly. Management is bettertrained, it is becoming more pro¬

now

nearly

dency of interest rates.

Treasury

indebtedness, both

for

fits

also

pect that

perspective:

trend, which has

There

picture

serious recession. These

Private

the past five except
year 1949.
Unless

downward

enough of them
into play simultaneously

well publicized.

were

inevitable..

when

a

on

years, is shortly reversed, a slow¬
down of business
spending seems

doubt

no

gradually accumulat¬
ing the ingredients of a business

time

taxes

recession

are

the

of

earnings.: In 1952 total business fessionalized,

the earnings

corporate and personal, has been
growing rapidly, much more rap¬

an

inroads

corporate earnings after taxes

Notwithstanding this relatively

tention that defense spending has

is able to turn out

the

the

(1)

the high level of $27 billion spent

of

cause

any

Ingredients of Downturn

our

Business Future?

the penetration of the secrets of
the atom, the door is open to a
large and extraordinarily brilliant

management

substantially curtailed in 1953 be¬

mention of them may help us
keep

Which Direction the

chief

on the lower than in 1951, lower than in

about 9%.)

average,

all

page

the

which may

potential threatening factors have

from first

of

one

petro-chemical industrywide

store

to cause

Continued

threatens

new

growing science of electronics, and

sumer

of the country.

According to the Federal Reserve Board's index department
store sales in New York City for the
weekly period ended Jan. 3,

full

help depart-1 sources
of
investment
funds, "cluster," to use the late Profesbusiness).
The con- namely,
accumulated
earnings, sor Schumpeter's term, of entreprice index, however, will Note, for
instance, the recent an- preneurial developments.
<^5
not go down very
rapidly, because nouncement by one of the large
(3) It is now widely recognized
of the retarded rise in rents. Thus
retail chain organizations that its that
the point of view of business
we may
probably look for a some¬ store expansion program will be

ment

¥.ld™™teLBo?\ire, down'

week

gains

a

its

91

DALLAS, Texas—Garrett and
Company, Incorporated, announce
that
come

in

Edmond

L.

Brown

has

be¬

Vice-President of their firm

charge

curities

of

the

corporate

department.

se¬

Mr. Brown

formerly manager of the in¬
vestment and unlisted department

was

of

the

Dallas

office

of

Beer

&

Company.
Garrett

&

Company have also?
as of Feb. 1 their

announced that

offices

will

be

located

on

the

ground floor of the Fidelity Union
Life

Building.

38

<::c)

The Commercial and Financial Chronicle

Thursday, January 15,

...

1953

*1:
* INDICATES

Securities

Now

in

Registration

★ ACF-Brill Motors Co.
Jan.

^

12

(letter

Dec.

NEW ISSUE CALENDAR
January 19, 1953
Kansas City Power & Light Co

Underwriter—None, but Vilas & Hickey, will

15

(Bids

Insurance

filed

Co.

ot

America, Broadview,

1,000,000 shares of capital stock

New

York

Nyal

III.

Co.

Price

surplus

working capital.
Kansas

Pan

Montreal

otherwise entitled
with

21/2%

stock

to

fractional

dividend

shares

paid

Dec.

in

(White,

Culver

To^ acquire leases and for

corporate purposes.
To be named by amendment.

Budget Finance Plan, Inc. of California

(around

capital.

English Oil

one-cent

to

be

par

first

common

offered

stockholders under

a

to expire

stock

at

50

cents

a

14-day

standby).

each

28

Certain

shares of stock held
(for
stockholders have waived

their rights. Price—At
par. Proceeds—To
repay
500 of outstanding notes and for

drilling

working capital.

Underwriters

—

Dallas

Gas

expenses

•

Ontaijio

..Common

Corp.)

United

Boston

|'

&

Common

Bonds & Pfd.

CST)

by Kalman

(Offering

be

to

Bros.

.

,

be

Commercial
(Kidder,

&

and

First

Eoston

(Dillon,

(Offering

to

Corp.)

Read

&

Co.

Inc.)

Dillon,

Read

&

Co.

(Paine, Webber, Jackson

New

York,

&

&

Common

Curtis)

February 10, 1953
Chicago & St. Louis RR.____—Bonds
(Bids

be

to

invited)

/

February 17, 1953
Con. Edison Co. of New
York, Inc
(Bids

be

to

Niagara Mohawk Pr. Corp..
(Bids

be

to

—

___Bonds & Common
.

...

February 21, 1953
Maryland CasiMlty Co

;

Common

(Offering

to stockholders—underwriters may include
Lynch, Pierce, Fenner & Beane; First Eoston
Corp.; Lehman Borthers; and Paine, Webber, Jackson
Merrill

and

&

Son.

Underwriter—Wm.

;

C;

Underwriter—None.

York.

4

Underwriter—James

C.

'

>

T.

Dewitt

*

.

&

Co., Inc.,

.

(letter of notification)

.

Proceeds—To expand

ments. ■;

,

current operations and for work¬

,v"

'

.

be

furnished

by

amend¬

0;

t-

• Empire Millwork Corp., Corona, N. Y.
*
Jan. 13 (letter of notification) 10,000 shares of commonstock
(par $1). -Price—At market (about $8.62V2 peri,
share).- Proceeds — To Benjamin Ginsberg, the sellings
stockholder.

New

Underwriter

—

Van

Alstyne, Noel & Co.,

York.

V

■.

17, 1953
Light Co.——Bonds

to

be

invited)

24, 1953

to

be

—Bonds

—

invited)

underwriter)'

April 7, 1953
Light Co.—
to

be

Texas Electric Ser.

Bonds

invited)

Co._

(Bids

to

—Bonds
be

Chicago
Orleans

Public
(Bids

be

Inc

invited)

-

4

,

Whether you are offering a new issue—or publicizing your
services in the marketing of securities—you reach more interested^
use

the

Preferred

invited)

Service
to

general investing public—you reach '
advertisingr
in the Chicago Tribune, the midwest's "leading business1,

prospects in Chicago and the midwest, at a single cost, when you.'
&

Chicago Tribune.

vou°se t ""mors? fron/your

"

—^

*

April 14, 1953
New

Professional buyers and the

both investment markets most effectively when your
appears
and financial newspaper..

April 13, 1953




Schrey.

Electronics & Nucleonics, Inc., N. Y.
1
Nov. 10 (letter of notification) 1,200,000 shares of com-*
mon
stock (par one cent). Price—25 cents per share.

Curtis)

March

.

(Bids

offices

Fred

March

Florida Power &

all

of

ing capital. Underwriter—To

invited)

(Offering to stockholders—no

to

'

Co., Philadelphia, Pa.
,
99,p00 shares of common
stock (par one cent).
Price—$3 per share. Proceeds—
To acquire leases and drill wells. Underwriter—Hopper,,
Soliday & Co., Philadelphia, Pa.
'
-

—-Bonds

invited)

March 27, 1953
Merritt-Chapman & Scott Corp.—-—Common

Cleveland

Street, Dallas

Proceeds—To Detroit Trust Co., co-executor

Estate

Washington, D.

by

Dec.

Sylvania Elec. Prod. Co.-__Debentures

(Bids

San Francisco'

Commerce

-

Ekco Oil

Dallas Power & Light Co

Private IVires

1506

—

12,

1952; rights to expire on
share. Proceeds—For new

Inc.)

February 9, 1953

(Bids

Philadelphia

New

Common

stockholders—underwritten

Office

per

^ Econo Products Co., Inc. ;
Jan. 8 (letter of notification) 300,000 shares of
common,
stock (par 10 cents). Price—$1 per share.* Proceeds—For
expansion and working capital. Office — 17 State St.,

Southwestern Public Ser, Co._-Bonds & Preferred

Southwestern Public Ser. Co

29,

• Eagle Valley Telephone Co., Eagle, Colo.
6
(letter of notification) 400 shares of preferred
stock.' Price—$100 per share.
Proceeds—For improve-'

Notes

Co.

Dec.

Jan.

invited)

Credit Co
Peabody

of one new share for each

rate

at

of

Price—$130

& Co., Detroit, Mich.)

ments.

-

Pittsburgh

the

Roney

February 3, 1953

Mississippi Power &

Boston

of

.

& Hutzler)

to

share).

per

Salomon

•

Light Co.

Manufacturing Co.
'
Dec. 22 (letter of notification; 10,000 shares of commonstock (par $1).
Price—At market (approximately $3.25

February 2r 1953
Pennsylvania RR.__
—-Equip. Trust Ctfs.
(Bids

per

Underwriters-

Detroit Hardware

........Common '•
by

&

1, Tex. Underwriter—None.

invited)

stockholders—underwritten

as

construction.

.-.--Preferred

Equip. Trust Ctfs.
to

held

shares

(Offering to stockholders—underwritten by Lehman Brothers
and Blyth & Co., Inc.)
/
(Bids

construction.

new

share for each

new

Jan. 30. Price—S35

of notification) 562 shares of common,
being offered for subscription by minor¬

ity stockholders

Inc.)5,

Common

Albany, N. Y

(letter

(no par)

Jan. 26, 1953.

Louisville Gas & Electric Co.v

State Bank of

li

stock

Ryons & Co.)

Southern Ry.

one

on

New York.

Dallas Power

Dec.

Debentures

A. E. Ames & Co.; and McLeod, Young, Weir,

and Lester,

Proceeds—For

—Lewis & Co.,

Co.)

&

Wood, Gundy & Co, Inc.;
Barney & Co.; Dominion Securi¬

January 29, 1953
Budget Fifianee Plan, Inc.__^_-_

15 at the rate of

held; rights to expire

it Crown Cinema Corp., N. Y.
Jan. 5 (letter of notification) 240,000 shares of Class A
stock (par 50 cents) and 60,000 shares of Class B stock
(par 10 cents) in units of four shares of Class A and one
share of Class B stock.
Price—$4 per unit. Proceeds—
For production of five films, for working capital, etc.
Office—270 Park Ave., New York 17, N'. Y. Underwriter!

underwriting)

-

(Reynolds & Co.

of

and

Morgan Stanley & Co.

States)

Inc.;

Corp.; Smith,

Dallas, Texas; Carl M. Loeb, Rhoades & Co., New York-

New York

share.

Common

Co.,

Co.

filed

10 shares

Co._

Ripley

16

of record Jan.

January 28, 1953
(Province of)

(HarWman

volume

617,669 shares of common stock (no par)
to be offered for subscription by common stockholders

Common

a.m.

increased

an

Co.

Power

Consumers

Dec.

Hogle & Co;

11

finance

To

—

Underwriters—Kidder, Peabody &
First Boston Corp., both of New York.

The

Merrill

1953

in

Price—To be supplied by amend-

of 10 years).
Proceeds

•

$1,014,-

Rupe &

and

per

subscription by common
plan of debt readjustment; rights

Byrd Oil Corp., Dallas, Tex.
$1,750,000 of 10-year 5%% convertible sink¬
ing fund mortgage bonds due Nov. 1,
1962, to be offered
for subscription by common
stockholders at the rate
for

Inc.;

Common

Oct. 22 filed

bonds

Co.

(2/3)

$25,000,000 of junior subordinated notes
convertible into common stock for a

be

(to

business.

1953

Boston

filed

ment.

Beane)

Co

for

Feb. 15, 1953. Price — At par in
$1,000 units
(one $1,000 note plus warrants, exercisable after
July 1,
1953 and prior to Dec.
31, 1957, to buy 2,000 shares).
Proceeds—For working capital. Office—270 Park
Ave.,
New York 17, N. Y.
Underwriter—None.

of $100 of

Co.,

&

____

,

★ Bymart-Tintair, Inc., N. Y.
Jan. 8 (letter of
notification) $150,000 of 5-year 5%
promissory notes (and warrants to subscribe for
300,000
of

&

Co._____

&

(Bids

Under¬

.

13
1973

Credit Co.

period

Debentures

Iowa-Illinois Gas & Electric Co

com¬

Underwriters—Reynolds & Co., New York, and
Lester, Ryons & Co., Los Angeles, Calif.

shares

Co

stockholders—no

iJ. A.

ties Corp.;

(1/29)

Jan.

EST)

a.m.

-

.

it Commercial

January 27, 1953

■

150,000 shares of 60-cent convertible pre¬
Price—To be supplied by amend¬
$10 per share). Proceeds—For working

share)

Blyth

Fenner

First

Weld

to

ferred stock (par $9).
ment

Inc.;

Pierce,

Corp.
(Offering

First

drilling expenses and
Underwriter—E. I. Shelley Co., Den¬

—

,

Service

January 26,
Canadian Prospect Ltd.___

Co.,

Bristol Oils Ltd.,
Toronto, Canada
Sept. 25 filed 1,000,000 shares of common stock (par $1).
Price—Approximately 64.48 cents per share. Proceeds—

•

Co.

(The

Proceeds—For

mon stock
(par five cents). Price—25 cents per share.
Proceeds—To repay notes, and for

equipment.
ver, Colo.

Pub.

Bank of the Manhattan

10,000 shares of class A
&

Proceeds

public offering.

Equip. Trust Ctfs.

(Offering to stockholders—underwritten

Big Basin Oil, Inc., Holyoke, Colo.
(letter of notification) 1,100,000 shares of

new

11

CST;

noon

January 23,

Minneapolis

Dec.. 8

Dec. 22 filed

Republic

common

Bishop

unit.

per

RR.___

Lynch,

Shares, Inc., Minneapolis, Minn.

writer—None.

Central

(Central

Underwriter—Woolfolk & Shober, New

par
($20 per share).
capital.
Underwriter—M. H.
Minneapolis, Minn.

and 255,000 shares of common stock (no
to be sold in units of two shares
one share of common stock.
Price—$3

For working capital. Business —
Underwriter—None.
Company intends to offer securities to broker-dealers for

EST)

a.m.

(par $1)

par—stated value $1)

Common

(Lids

buy machinery and for

Price—At

11

Corp., Philadelphia, Pa.
500,000 shares of 6% cumulative preferred

of preferred and

January 22, 1953
Illinois

Price—50 cents per share. Proceeds

working

Bonds

Hart)

&

stockholders—Bids

to

1952.

stock (par 50 cents) to be offered
initially to common
stockholders about Jan. 20; unsubscribed
portion to pub¬
lic. Price—$1.50 per share to
stockholders; and $2 per
share to public. Proceeds — To

stock.

Savard

(1/26-30)

Products

filed

1

due

Office—Room 308, Texas Eastern Bldg.,
Underwriter—W. C. Doehler Co., Jersey

(letter of notification)

and

Prospect Ltd.

of

Code
Dec.

Bonds & Preferred

(Offering

* B. and H. Incorporated, New Orleans, La.
Dec. 24 (letter of
notification) 30,000 shares of common

11

Offering

filed

24

stock

(Kidder, Peabody & Co.)

con¬

16,

Pipeline Producers, Inc.,
Shreveport, La.
5 (letter of
notification) 599,000 shares of

Bank

Co.)

West Penn Electric Co

American

Dec.

Co.

&

Northern Indiana

working capital.
Orleans, La.

iCo'mmon
<fc

January 21, 1953
(L. C.) & Corona Typewriters, Inc.^Common

Smith

brokers.

stock (par one cent).

ISSUE

Manufactures electrical equipment.

Beane, McMullen, Park & Hard and Ernst & Co., will

Shreveport, La.
City, N. J.

Common

Marache

(Bids

Underwriter—None, but Merrill, Lynch, Pierce, Fenner

—To drill wells.

Inc.)

Transportation Commission

common

Price—At market (approximately $22.50
Proceeds—To reimburse company for funds

nection

Jan.

Otis,

Ohio Power Co

(no par).

as

,

Engineering Corp

(Shields

holders

act

&

January 20, 1953

supplied to Bankers Trust Co., New York, for apportion¬
ment and distribution pro rata
among common stock¬

&

(J. O.)

City, Mo.

share).

Common
Common

——

(Granbery,

1,000 shares of preferred
par
($10 per share).
Proceeds—For
Underwriter—McDonald-Evans & Co.,

^ American Machine & Foundry Co.
9 (letter of notification) 4,916 shares of

per

Inc

American Sulphur Co

Ross

Corp., Kansas City, Mo.

Jan.

stock

Airways,

Bonds

EST!

a.m.

—

(letter of notification)
Price—At

REVISED

303,595 shares of common stock (par 33J/3
which 235,000 shares are to be issued upon
exercise of share rights and 68,595 shares are to be sold
for account of selling stockholders.
Price—To be sup¬
plied by amendment. Proceeds—To company to be used
for operating expenses to pay for future exploration and
development of leases, etc. Underwriters—White, Weld
6c Co., New York, for an undetermined number of shares;
balance through a Canadian underwriter to be named
later. Offering—Expected week of Jan. 26.

(Kuhn, Loeb & Co. and Carl M. Loeb, Rhoades & Co.i

American Alloys
Dec. 15

11

(Gcarhart

Underwriter—None.

stock.

Canadian

cents),

(Smith, Barney & Co.)

(par $1)

to be offered to agents of Allied Van
Lines, Inc.
.60 per share.
Proceeds—For capital and

•

Nov.

broker.

as

Allied

ITEMS

Straus, Blosser & McDowell, Chicago, 111.
—Postponed temporarily.

notification) 6,000 shares of common
(par $2.50). Price—At market (about $5.87per
share). Proceeds — To Investment Co. of Philadelphia
for 4,000 shares and William S. Wasserman for
2,000
act

PREVIOUS

and

of

stock

shares.

ADDITIONS

SINCE
•

,

..Bonds

.

•

•

11

advertising, call
vprti«in(r

vertismg

your

acrpnrv

agency

THE

WOMD'S

ad-

or

or

Tribune representative.

a

d

C

Qfahltt*

ATE ST

.

.

NTV/SFAFER
,

,

,

The Tr,bu.ne «'ves to each da>
tables

and

reports

the

given them in America.

s market
largest circulation
J

-

Volume 177

Number 5186

...,

The Commercial and Financial Chronicle

(227)
English Oi! Co., Salt Lake City, Utah
(1/26)
3,435,o83 snares of cowuoa siOcjk, oi which
750,000 shares are to be offered
publicly, 250,000 shares
are to
be reserved for officers and
key emplovees and
options, and 2 435,583 shares in exchange for oil and
gas

oil

Jan, 5 filed

properties and interests therein. Price—At
par
share). Proceeds—For acquisition of
additional
ties

and

Lake

leases.

Underwriter—J. A.

Hogle

&

($1

and oil

V Israel

products for resale in Israel. Underwriter—

Montreal Transportation Commission

Securities Corp., New York.

(Canada)

Israel Industrial & Mineral
Development Corp.
Oct. 6 filed 30,000 shares of class A stock.
Price—At par

($100

Dec.

per

ment.

per

City, Utah.

filed

(1/20)

$18,000,000

of 414% sinking fund deben¬
Price—To be supplied by amend¬
bank loans and for general

1, 1973.

Proceeds—To

funds.

—

Co., Salt

31

tures due Jan.

share). Proceeds—For industrial and mineral
development of Israel. Underwriter
Israel Securities
Corp., New York.

proper¬

repay

Underwriters

Savard & Hart,

—

Shields

&

Co., New York, and

Montreal, Canada.

if Mutual Trust, Kansas City, Mo.

Systems, Inc., Erie, Pa.
(letter of notification) $;i00,00o of
15-year 6%
sinking fund debentures dated Nov.
1, 1952 and due
Nov, 1, 1967.
jPrice—At par and accrued interest.

if Jim Creek Mines, Inc.^ Spokane, Wash.
Jan. 6 (letter of
notification) 70,000 shares of common
stock. Price—At par
($1 per share). Proceeds—For ex¬
ploration and development.

ors

ceeds—To

•

Erie Meter

-

Dec.

9

None.

Smith

&

loans

and

working capital.
Erie, Pa. Underwriter—

Avenue,

Root,

Erie,

Pa., will, act

7

(letter of notification)

ferred

stock.

3,000

Minn.

shares

of

5%

of

common

Lehman

(par $1). Price—$5 per share. Proceeds—To ex¬
pand magazine. Address—P. O. Box
456, 3082 Mary St.,
Coconut Grove, Miami 33, Fla.
Underwriter—None,

if Foster Wheeler Corp. *
30,032 shares of
be

offered

of

to

.

certain

corporation and

Stock
•

officers

and

19

other

its subsidiaries

Option Plan."

General

Dec.

stock

(par $10)

a.m.

New

Office—1819

•

1,101,451 shares of common stock (par 10
cents) being offered for subscription by common stock¬

Bear,

Stearns

&

Co.

So.

*

Corp.,

V

—

f,

*

*

<

V': '

Ohid>^;*;. Y* V

12

filed

16,871

shares of

exercisable in 1953.

are

(no

a

subsidiary. The options
Statement

;(letter of notification) 3,300 shares of .common
(no par) to be issued in full payment of real estate
purchased from The Eagle-Picher Co. '
' • -f
"V"-'

★ Lassiter Corp., Charlotte, N. C.
8 (letter of
notification) 1,000 shares of class A
(par $5) and 1,000 shares of class B stock
(par $5). Price—$10 per share. Proceeds—To a
selling

Jan.

Gyrodyne Co. of America, Inc.
filed 350,000 shares of class A common
stock
(par SI); to be offered for subscription
by stockholders

stockholder.

Underwriter—R.

S.

Dickson

&

of record Dec.

22, 1952, on a pro rata basis; rights to expire on Feb. 28, 1953. The offering will include
50,000
shares to directors, officers and
employees of the com¬
pany and to certain individuals and firms in
for services.

payment

Price

-i—

,

copter.
None.

Office—St;

$5.75 per share.

Proceeds

For

—

of

prototype coaxial heli¬
I., N. Y. Underwriter—

James, L.

lotte, N. C.

if Haulover Park Fishing Pier, Inc.

by amendment. Proceeds—For
improvements. Underwriters

supplied
additions and

property

—

Lehman

Brothers

and

Blyth & Co., Inc., both of New York.
Magma King Manganese Mining Co.
Nov. 12 (letter of notification) 553,500 shares of

common

Jan.

(par 10 cents). Price—50 cents per-share. Proceeds
working capital. Office — 532 Security Bldg.,
Phoenix, Ariz. Underwriter—Weber-Millican Co., New

—For

<

8

(letter of notification) 60,000 shares of common
stock (par $1).
Price—$4 per share. Proceeds—To con¬
struct fishing pier.
Office
220 Miracle Mile, Coral

York,

j

—

Gables 34,

Fla.

Underwriter-^-None.

Hemisphere Western
Dec.
.

.

Oil

Co.

(par

ceeds—To

Bldg., Oklahoma

Winner &

23

cents

common

share.

per

City,

Okla,

Pro-

Office

Underwriter—

Meyers, Lock Haven, Pa.

Honolulu
Dec,

Price—25

acquire working interest in oil wells.

—Cravens

stock

cent).

one

Oil

(letter

common

—

Indianapolis Public Loan Co., Inc.
Dec. 30 (letter of
notification) $75,000 5% sinking fund
debentures, 1965 series. Price—At par (in denominations
loans.

and

$1,000

each).

Proceeds—To

reduce

bank

Underwriter—City Securities Corp., Indianapolis,

Indiana.

shares

of

one

stock.

common

shares, 500 have been sold

share of preferred and

Of

remaining

to

2.000

directors and

two

common

1.500

are

to

be reserved for directors and sales
representatives. Price

—$70

per unit.
writer—None.

Proceeds—For

working capital. Under¬

Iowa-Illinois Gas & Electric Co.
Dec.

.

30 filed

and

60.000

of

cumulative

preferred stock (par
$100). Proceeds—To repay bank loans and for new con¬
struction. Underwriters—To be determined
by competitive bidding. Probable bidders: For
bonds, Halsey, Stuart
& Co. Inc.; Harriman,
Ripley & Co. Inc., Union Securities
Corp. and White, Weld & Co.
(jointly); Equitable Secur¬

ities

Corp.; Gicre, Forgan & Co.; Harris. Hall & Co.
(Inc.); Lehman Brothers; Blyth & Co.,
Inc.; The First
Boston Corp.;
Smith, Barney & Co. For preferred. Blyth
& Co., Inc.; Merrill
Lynch, Pierce, Fenner & Beane;
Glore,,Forgan & Co.; Lehman Brothers; Salomon Bros.
& Hutzler and Union
Securities Corp. (jointly): Kidder,
Peabody & Co.; Harriman, Ripley & Co. Inc. Bids—Ten¬
tatively scheduled to be received at 11 a.m.
fCST) on
Jan. 27 at

Room

tional Bank

T, National Safe Deposit Co., First Na¬
Bldg., 38 Sot Dearborn Street, Chicago, 111.

Isbetrol Corp., New York
Oct.
par

29

filed 49.500

C$100

crude

oil

per

shares of

common

stock.

share). Proceeds—To finance

for Israeli

Price—At

purchase of

enterprises and to purchase crude




Offering—Date indefinite.

stock

(par

$2)

of

one

and

warrants

to

common

purchase 20,000 shares

common

stock at $6 per share to be offered in units
share and warrants to purchase four additional

shares.

Northland Oils, Ltd., Calgary, Alta., Canada
21 filed 1,000,000 shares of capital stock (par 20
cents—Canadian) and subscription warrants for 600,000
mares, of which the stock and subscription warrants for
100,000 shares are to be offered in units of 100 shares
of stock and

subscription warrants for 40 shares. Price—

852 per unit. Proceeds—For drilling of additional wells
and to purchase producing wells.
Underwriter—M. S.

•

Nyal Co., Detroit, Mich. (1/19)
(letter of notification) 200,000 shares of common
(par 10 cents). Price—$1.25 per share. Proceeds—
To repay loans and for working capital. Underwriter—
Dec. 28

stock

Gearhart

Ohio

&

Otis, Inc., New York.

Edison Co.

Dec. 11 filed 479,846 shares of common stock (par $12)
being offered for subscription by common stockholders
of record Jan. 8, 1953 on the basis of one new share for
each ten shares held (with an oversubscription privi¬

expire on Jan. 23,
1953:
Price —
Proceeds —^ For repayment of bank
loans and for new construction. Underwriters—Morgan
rights to
share.

lege);

$35.25

per

Ohio
18

Dec.

Power

Co.

(1/20)

filed

$22,000,000 first mortgage bonds due 1983.
Proceeds—To repay bank loans and for new construction.
Underwriters—To be determined by competitive bid¬

Halsey, Stuart & Co. Inc.; The
Corp.; Union Securities Corp. and Salomon
Bros. & Hutzler (jointly); Kuhn, Loeb & Co.; Harriman
Ripley & Co., Inc., and Stone & Webster Securities Corp.
'jointly); Blyth & Co., Inc.; Glore, Forgan & Co. Bids—
To be received up to 11 a.m. (EST) on Jan. 20 at office
of American Gas & Electric Service Corp., 30 Church
Street, New York 8, N. Y.
ding.

Probable bidders:

First Boston

•

Ohio

Power

Co.

(1/20)

Price—$19.87V2 per share. Proceeds—To Clifford
S. Strike, the selling stockholder.
Underwriter—Granbery, Marache & Co., New York.

100,000 shares of cumulative preferred stock
(par $100). Proceeds—For new construction.
Under¬
writers—To be determined by competitive bidding. Prob¬

Mex-American Minerals Corp., Granite City, III.
3 filed 113,000 shares of 6% cumulative
preferred

Blyth & Co., Inc.; Dillon, Read & Co. Inc.;
Ripley & Co., Inc., and Stone & Webster Se¬
curities Corp. (jointly); Glore, Forgan & Co.; Lehman
Brothers; The First Boston Corp.; Union Securities Corp.
and Salomon Bros. & Hutzler (jointly).
Bids—To be
received up to 11 a.m. (EST) on Jan. 20 at office of
American Gas & Electric Service Corp., 30 Church St.,

Nov.

stock

(par $5) and 113,000 shares of

cents)

to

be

offered

in

units

of

common
one

stock

share

of

(par
each

class of stock.

Price—$6 per unit. Proceeds—For work¬
ing capital. Business—Purchase, processing, refining and
of Fluorspar. Underwriter ;— To be
supplied by

sale

amendment.
^

Mid-Gulf Oil

Refining Co.
(letter of notification) 400,000 shares of

Nov. 10
stock

(par five

cents).

Price—60 cents

per

(1/27)
Jan. 7 filed 164,000 shares of common stock (par $1) to
be offered for subscription
by common stockholders at
rate

of

new share for each eight shares held.
Price
supplied by amendment. Proceeds — To retire
5,841 shares of $6 preferred stock (at an estimated cost
of $613,305)
and for new construction.
Underwriter—
one

be

Kalman

&

Co., Inc., Minneapolis, Minn. Private place¬
mortgage bonds is also planned.

ment of first

if Monarch Fertilizer Co., Muskogee, Okla.
Jan. 6 (letter of notification) 2,000 shares of common
stock (par $100), to be offered in units of 10 shares or
multiples thereof * (including 110 shares to be issued to
K.

able bidders:

Harriman

New York

Jan.
common

share. Pro¬
ceeds—To acquire additional properties. Office—927-929
Market St., Wilmington, Del.
Underwriter—W. C. Doebler Co., Jersey City, N. J.

—To

Dec. 18 filed

8, N. Y.

if Ontario

&

ic Minneapolis Gas Co.

(1/27)

$8,000,000 of first mortgage bonds due 1983

shares

(par 25

(F. H.)

Co., Hartford, Conn.
Sept. 10 (letter of notification) 5,000 shares of

10

Insurance Exchange
Corp., Walla Walla, Wash.
Nov 25 filed 30,000 shares of
common stock
(par $10)
and 14.000 shares of
preferred stock (par $50) of which
28,000 common shares and all of the preferred stock are
to be offered in units of

stock

common

Representative—George
Searight, 50 Broadway, New York, N. Y. Telephone

of

Republic Co. (Inc.), Chicago, 111.; Blyth & Co., Inc., New
York; and Merrill Lynch, Pierce, Fenner & Beane, Ne^f,
York.

•

of

snares

corporate purposes. Underwriter—B. V. Christie & Co.,
Houston. Tex.
Dealer Relations

McGraw

.

(no

$500

10,000,000

cents). Price—$2 per share. Proceeds
For drilling of
exploratory wells, acquisition of leases and for general

A.

shares of cumulative preferred stock
Price—To be supplied by amendment. Pro¬

Stanley & Co.

(Glenn), Inc.

WHitehall 3-2181.

Corp., San Francisco, Cap
of notification) 500 shams o:

par). Price—At market (approximately $50
per share).
Proceeds—To W. M. Roth, the
sellirg stock¬
holder.
Underwriters
Schwabacher & Co. and Dean
Witter & Co., both of San
Francisco, Calif.

of

12 filed

—

3.(letter of notification) 1,196,000 shares of

stock

McCarthy
June

(1/22)

filed 80,000

7

Gerber, Inc., New York.

ir Louisville Gas & Electric Co.
(Ky.)
(1 29-30)
Jan. 8 filed 200,000 shares of common stock
(no par) to
be offered for subscription
by common stockholders of
record Jan. 29 at rate of one new share for each seven
shares held; rights expire Feb. 17. Price—To be

stock

.

Jan.

Co., Char-

■

Nov." 13

"engineering and construction

Underwriter—Smith, Hague & Co., Detroit, Mich.

Nov.

effect've Jan. 7/'
-

Chemicals, Inc., Detroit, Mich.

if Northern Indiana Public Service Co.

par)

common stock

stock

-

Nielco

ceeds—For construction program. Underwriters—Central

stock

Underwriter—None.

Airways, Inc., New York (1/19-23)
100,000 shares of capital stock ( par $1).

Nov. 19 (letter of notification) 34,800 shares of common
stock. Price—At par ($5 per share). Proceeds—To liqui¬
date notes. Office—8129 Lyndon Ave., Detroit
21, Mich.

(par $100).

common

Co.,

filed

be supplied by amendment.
Proceeds—For
working capital and general corporate purposes. Busi¬
ness—Operation of mail and passenger helicopter serv¬
ice
in New York City. Underwriter—Smith,
Barney &
Co., New York. Offering—Expected week of Jan. 12.

Under¬

to be issuable upon exercise of
options to purchase com¬
mon stock held
by certain officers and executives of the
company and Wesco Foods

23

Underwriter—Tellier &

Offering—No date set.

Price—To

(jointly);

Hanley Rd., St. Louis 17, Mo.

New York

Dec.

Kroger Co., Cincinnati, Ohio

Dec.

holders of record Jan, 9 at rate of one share for each
two
^shares held (with an oversubscription
privilege); rights
; .to expire on Jan. 23.
Price—$3.75 per share.
Proceeds—
»To
add
further investments
to
company's portfolio..
Dealer Managers — Stone1- &
Webster Securities

-

•

writer—None.

Public Service Corp.

Jan.-6

Proceeds—For working capital.

Co., Inc. Bids—To be received up
Jan. 19 at Suite 1730, 165
Broadway,

on

Tungsten Corp., Mina, Nev.
(letter of notification) 4,000,000 shares of com¬
(par one cent). Price—Five cents per share.

stock

Co., New York.

Jan. 7 (letter of

filed

★ Glidden Co.f Cleveland,

Nevada

York, N. Y.

(EST)

Underwriter—Invest¬

Fund, Inc., Kansas City, Mo.

mon

Price—$6.15

■

.New York, is representative.-"-'

and

&

beneficial interest in the

Proceeds—For investment.

Nov. 21

(1/19)

• Kennard Corp., St. Louis, Mo.
notification) 8,063 shares of capital stock.
per share.
Proceeds—For working capital.

to

"Restricted

a

Brothers

to 11

key employees

under

Underwriter—None.

Harriman Ripley

:,

•

,

common

Ave.,

Co.

stock

Jan. 5 tiled

1114 Second

filed 200,000 shares of

13

trust.

Inc.; Glore,
Forgan & Co.; Blyth & Co., Inc., and Lazard Freres &
(jointly); The First Boston Corp.; White, Weld &
Co. and Shields & Co.
(jointly); Smith, Barney & Co.;
Kuhn, Loeb & Co., Salomon Bros. & Hutzler and Union
Securities Corp.
(jointly); Equitable Securities Corp.;

pre¬

Price—At

par ($100 per share).
Proceeds
working capital. Office—820 Northwestern Bank
Bldg., Minneapolis 2, Minn. Underwriter—None.

—For

* Florida Opportunity Bulletin, Inc.
Jan. 9 (letter of
notification) 6,000 shares

—

Jan.

mortgage bonds due 1983.
Proceeds—To repay bank loans and for new construction.
Underwriters—To be determined by
competitive bid¬
ding. Probable bidders: Halsey, Stuart & Co.

distributor.

as

Office

Kansas City Power & Light Co.
Dec. 18 filed $12,000,000 first

for

* First Acceptance Corp.,
Minneapolis,

Jan.

Spokane, Wash.

Pro¬

bank

repay

Office—1602.Wagner

*

39

A.

9

filed

(Province of)
(1/28)
$50,000,000 of 22-year debentures due Feb.

Price—To be supplied by amendment. Proceeds
—To go to the province's Hydroelectric Power Commis¬
sion, whose expansion program is reported to total about
1, 1975.

$189,000,000.

Underwriters

—

Harriman Ripley &

Barney & Co.; Dominion Securities Corp.; A. E. Ames &
Co., and McLeod, Young, Weir, Inc.
•

Pan

American

Sulphur Co. (1/19-20)
capital stock (par 70 cepts)
to be offered for subscription by stockholders at rate of
one new share for each 2% shares held.
Price—$7 per
share.
Proceeds—For new construction and working
Dec. 24 filed 499.325 shares of

Underwriters—Kuhn, Loeb & Co. and Carl M.

capital.

Loeb, Rhoades & Co., both of New York.
Paradise

Valley Oil Co., Reno,

Underwriter—None.

139

For

exploration and development

—Aetna Securities

expenses.

Corp., New York.

Price—

At par (10 cents per share). Proceeds—To drill six wella
subleased land and for other corporate purposes. Un-

m

fice—c/o Nevada Agency & Trust

• Montana Basin Oil
Corp. (N. Y.)
Sept. 19 (letter of notification) 300,000 shares of common
stock (par 10 cents).
Price—$1 per share.
Proceeds—

Nev.

Aug. 20 filed 3,000,000 shares of capital stock.

Schmitt for land, and equipment). -Price — $1,000
unit of 10 shares.; Proceeds—For property and im¬
provements. Office 7^ 412 Court St., Muskogee, Okla.

per

Co.,

Inc.; Wood, Gundy & Co., Inc.; First Boston Corp.; Smith,

ierwriter—None, with sales to be made on a commission
(selling commission is two cents per share). Of¬

basis

N.

Co., Inc., Cheney Bldg.,

Virginia St., Reno, Nev.

if Permachem Corp., N. Y.
Jan. 6 (letter of notification) 300,000 shares of Class A
stock
(par 10 cents).
Price—$1 per share.

common

Underwriter

Letter withdrawn.

Continued

on

page

40

<

*0.(228)

The Commercial and Financial Chronicle...

Continued

'

from

Standard

39

page

Proceeds—For further development, testing and research
and for working capital. Office — 270 Park
Ave., New
York. Underwriter—Peter W. Spiess
Co., New York.
•

Pinewald

Finance & Construction Corp.
(letter of notification) 5,600 shares of 6% pre¬
ferred stock (par $10) and
2,800 shares of common stock
to be sold in units of two
preferred shares and one com¬
mon share
being first offered on Jan. 15, 1953 to a restricted clientele, but open to the
public after Feb. 13,
1053.
Price
$26 per unit. Proceeds — Working cap¬

t Jfan.

"

5

—

ital for construction of homes.
-

Address—Box

174, Bay-

ville, N. J. Underwriter—None.
7

(letter

of

notification) 7,951 shares of common
subscription under the company's

Employees' Stock Purchase Plan.

<of

—

heavy duty

transmission chain, prockets, gears,

power

Office—Longview, Tpx. Underwriter—Dallas Rupe
Son, Dallas, Texas.

Regent Manufacturing Co., Inc., Downey, Calif.
Dec. 31 (letter of
notification) $150,000 of first mortgage
bonds, of which 130 units will be issued at $1,020 each

■and

40

units

at

$510 each. Proceeds—For building and
equipment. Office—11905 Regentview
Avenue, Downey,
Calif.

Underwriter

Hopkins,

—

Harbach

&

Angeles, Calif.

Co.,

Los

(letter of notification) 20,000 shares of
common
stock (no par), of which
3,100 shares are to be issued to
certain officers for services
rendered and to Reid H.
Ray
Eilm Industries,
Inc., for 25,000 feet of film. Price—$10
per

share. Proceeds—For
working capital. Underwriter—

None.

Ar Rtmrock Drilling Co., Inc.,
Englewood, Colo.
Jan. 6 (letter of
notification) 200,000 shares of common
stock, of which 75,000 shares are to be issued in
payment

>

of oil and gas leases and
interests.

.

Price—At

par

dhare). Proceeds—For drilling and
equipment.
2831
So.

Lincoln

St.,

Englewood, Colo.

None.
-

($1

per

Office—

Underwriter—

if Rochdale Cooperative
Services, Inc.,

Washington-, D.

C.

(letter of notification)
20,000 shares of common
(no par). Price—$1.53
per share.
Proceeds—For
expansion program. Office—26th and

stock

,

r

Underwriter—None.

if Shepard Gardens,
Newark, N. J.
Jan.

•

Virginia Sts., N.W.,

Washington 7, D. C.
13

(letter of notification); 100 shares
of-preferred

stock to Federal

Housing Administration

and 28 shares
members of the
cooperative. Price

of common stock to

—For

preferred, $1

share; for common,

per

$995

per

share. Proceeds
For payment of
expenses and other
monies required to be
put up by FHA in connection with
project. Office
24 Commerce
—

—

St., Newark 2, N. J.

Underwriter—None.

lative preferred stock.

of 6%

cumu¬

.

Sinclair Oil Corp.

record Jan. 9 at rate
$100 of debentures for each
12 shares of
common
held. Rights will
expire on Jan. 26. Price
At
100% (flat). Proceeds—For
capital
expenditures, to re¬
pay
of

stock

—

$40,000,000 bank loans

Pierce, Fenner
Smith

and other
corporate purposes.

&

Barney & Co. and Merrill
Lynch,
Beane, both of New York
City.

(Alexander),

Inc.

16

(letter of notification)
6,625 shares of common
stock, of which 3,625 shares are to
be sold
and 3,000 shares in
immediately
January, 1953. Price—At market.
Proceeds—To Alexander S.
Cochran, a director, Under¬
writer—None.
•

Southern California
Edison Co.
Dec. 11 filed
500,000 shares of common stock
(par $25).
Proceeds—To retire
bank loans

tion.
-

Underwriters—Blyth

Expected
today.

—

at $37.75

per

and

for

13

filed

to be offered for

of

common

subscription by
(with

rights to expire

on

at

the rate
an

Jan.

construc¬

of

(2/3)
stock

common

one

new

(par $1)
stockholders

share for each

oversubscription

16,

amendment.

privilege);

Price—To be supplied
by

Proceeds—For construction
program.
derwriter—Dillon, Read & Co. Inc., New York.
if Southwestern Public
Service
Jan.

1978

13

filed

Price

Probably

293,462 shares

of record Feb. 2
12 shares held

new

& Co., Inc., New York.
share. Offering —

A Southwestern Public Service
Co.

Jen.

a

$700

Un¬

of

(2/3)
first mortgage bonds

debenture,

three

shares

of

due

and for expansion
program.

Read & Co. Inc., New York.




Statement

Westshore

Hospital, Inc., Tampa, Fla.
(letter of notification) 30,000 shares of common
stock (of which 1.250 shares will be issued
to Dr. Samuel
Dec.

G.

in

made

Arizona.

Hibbs

•

Underwriter—None.

Offering to be
and future policyholders of
certain specified officers and directors.

Sweet Grass

New

R.

per

Himes

share).

for

services

rendered).

Proceeds—For property

York

8

(letter of notification) 300,000 shares of common
stock, (par one cent). Price—$1 per share. Proceeds—•
To purchase for U.S.A. from
Invex Corp. of Sweden to
manufacture a repeating match and also to
purchase the

Oils, Ltd., Toronto, Canada

necessary machinery and equipment for said manufac¬
turing. Offices—150 Calle Tetuan, San Juan, Puerto
Rico,
and 42 Broadway, New
York, N. Y. Underwriter—None.

Exchange at time of offering. Proceeds — For working
capital. Underwriter—F. W. MacDonald & Co., Inc., New
any

John

($10

if Wondermatch Corp., San Juan, Puerto Rico, and
Jan.

July 29 filed 375,000 shares of common stock (no par).
Price—To be related to quotation on the Toronto Stock

Offering—Expected at

and

and equipment expenses. Office—349 Plant
Ave., Tampa,
Fla. Underwriter—Louis C. McClure &
Co., Tampa, Fla.

initially to persent

company and to

3

Price—At par

Insurance Co.,

Phoenix, Ariz.
Dec. 22 filed 1,000,000 shares of capital stock
(par $1).
Price—$1.50 per share. Proceeds—To qualify to do busi¬
ness

common

—

preferred

time.

Exploration Co., Fort Worth, Tex.
(letter of notification) 1,200,000 shares of com¬

Dec. 5

Prospective Offerings

stock (par 10 cents). Price—25 cents
per share. Pro¬
ceeds—To drill oil and gas wells and for
acquisition of
mon

Oct. 15 directors expected that additional
financing will
be undertaken in 1953 to meet the
major part of the in¬
crease in the estimated cost of
the

expansion program.

The

—For working capital. Office—1 Main
St., Houston, Tex
Underwriter
Scott, Khoury & Co., Inc., New York.
—

Boston

Corp., and A. E. Ames & Co., Ltd.,
dealer-managers in stock offering to stockhold¬

as

in Oct. 1951.

ers

Arizona Public Service Co.
Dec. 30 it was reported
company is considering sale ol
additional common stock.
Underwriter—Probably The
'

Toronto, Canada

Aug. 21 filed 300,000 shares of common stock (par $1> to
be offered first to stockholders and then to the
general
public. Price — 60 cents per share. Proceeds—For ex¬

.

First Boston

gas

•,

;

>..»>

;

*

"

-

<

,1

.

)
issue and sell,
.

probably in June, 1953, about $15,000,000 of first mort¬
bonds.
Proceeds—To repay bank loans and for
new construction..
Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey; Stuart &
Co. Inc.; Lehman Brothers and Stone & Webster Secu¬
rities Corp. (jointly); The First Boston
Corp.; White,
gage

United Petroleum &
Mining Corp., Bismarck, N. D.
Nov. 17 (letter of
notification) 150,000 shares of class A
voting stock and 150,00 shares of 4%-ciass B

-

non-voting

Price—$1

per share.
Proceeds—To purchase oil
Office—222 Main Street,
Bismarck, N. D

Corp.

Arkansas Power & Light Co.
Dec. 15 it was reported
company may

properties, and to drill a test
welL
Underwriter—None, but offering to public will be
handled through brokers.

and gas leases.

First

acted

Offering—Not expected until end of January.
Torhlo Oil Corp., Ltd.,

;stock.
;

^

Aluminium Ltd.

properties. Underwriter—Peter W. Spiess Co., New York.
• Texas Western Oil
Co., Houston, Tex.
Nov. 12 (letter of notification) 100,000 shares of common
stock (par 10 cents). Price—50 cents
per share. Proceeds

-

Weld & Co. and Merrill Lynch,
Pierce, Fenner & Beane
Underwriter—John G.Kinnard & Co., Minneapolis, Mum-^
(jaintly); Equitable Securities Corp. and Central ReUnited Security Life,
Phoenix, Ariz.
public Co. (jointly).
Dec. 2 (letter of
notification) 75,000 shares of class A
Bank of the Manhattan
Company (1/23)
common stock
(par $1) and 2,500 participating units to
Dec. 19 it was announced Bank plans
offering of 250,(
be sold in units of 30 shares and one
participating unit.
additional shares of capital stock to its stockholders on
T»-

*

*1-

^

rr!

1

o

n-

n *r •

—Life

per unit. Proceeds—To increase capital and
Office—7 Weldon, Phoenix, Ariz. Underwritei

Underwriters^ Inc., Phoenix, Ariz.
(Pa.)
(letter of notification)

Wagner Electric Corp., St. Louis, Mo.
(letter of notification) 1,700 shares of

Dec. 22

common

(par $15). Price—At market
(approximately $50
share). Proceeds—To stockholders entitled to re¬

Louis, Mo.
if Water Island, Inc., Virgin Islands, U. S. A.
Jan. 6 (letter of
notification) 2,300 shares of 6% noncumulative preferred stock
(par $100) and 69,000 shares
of common stock
(par $1) in units of one share of pre¬

ferred and 30 shares of common stock.
Price—$130 per
unit. Proceeds—For improvement of
property and work¬

ing capital. Address
St. Thomas Harbor, Charlotte
Amalie, St. Thomas, U. S. A.
Underwriter—None, sales
to be made through officers
(Walter H. Phillips, Presi¬
—

dent, and Floride Phillips, Treasurer and
Secretary, both
of 34 East 51st
St., New York City) and members of
NASD.

West Coast Pipe Line
Co.,

Dallas, Tex.
$29,000,000 12-year 6% debentures due Dec.
15, 1964, and 580,000 shares of common stock
(par 50
cents) to be offered in units of one $50 debenture and

Nov. 20 filed

share of

stock.

Price—To be supplied by amend¬
ment.
Proceeds—From sale of units and
1,125,000 addi¬
tional shares of common stock
and private sale of $55,000,000 first mortgage bonds, to be used tcr build a

mile crude oil pipeline.
Co. and Union Securities

1,030-

Underwriters—White, Weld &
Corp., both of New York. Of¬

fering—Expected in the Spring of 1953.

&

Co. and Union Se¬

Corp., both of New York. Offering—Expected in
Spring of 1953.
>

West Penn Electric Co.
(1/21)
Dec. 19 filed 264,000 shares of
common stock
to be offered for
subscription

by

22,

on a l-for-15

common

ized

preferred

authorized
shares.

to

were

to

vote

increasing author¬
7,500 shares and
600,000 shares from 300,009
on

50,000 shares from

common

stock to

No immediate

financing planned.

Carborundum Co.

Jan.

6

Clinton

F. Robinson, President, announced that
family, and various foundations and trusts
established by them, plan to sell
approximately onefourth of their holdings of 71% of 1,500,000
outstanding

the

Mellon

shares of Carborundum Co. stock.
Offering—Expected
during first quarter of this year. Underwriter—The First
Boston Corp., New York.
Registration — Expected in
beginning of February.
'

,

Central

Maine

Power Co.

Dec. 27,

William F. Wyman, President, announced com¬
pany early in 1953 intends to issue and sell $10,000,000
of first and general mortgage bonds. Proceeds—To re¬
fund outstanding short-term
notes.
Underwriters—To
be

determined

by

competitive

bidding. Probable bid¬
Co. Inc.; Coffin & Burr, Inc.
Corp. (jointly); Blyth & Co.,
Inc. and Kidder, Peabody & Co.
(jointly); Merrill Lynch,
Pierce, Fenner & Beane
and
White, Weld &- Co.
(jointly); Harriman Ripley & Co., Inc.; Salomon Bros,
& Hutzler. The company has no
present plans to issue
ders—Halsey,
and

The

Stuart

First

additional

&

Boston

common

stock.

if Chicago Great Western Ry.
Jan.

9 William N.

the company

Deramus, 3rd, President, stated that
is planning issuance and sale of $6,000,009

collateral trust bonds to be secured by
$9,000,000 first
mortgage bonds held in the treasury. Proceeds—To pay
off $3,000,000 of notes and for working
capital. Under¬
—

To

Cinerama

Dec.

11

it

be

bidders:

determined

competitive

Halsey,

&

Productions

by
Stuart

Co.,

bidding.

Inc..

Corp.

reported corporation may sell $5,000,00©
(probably common stock). Underwriter—*
May be Hayden, Stone & Co., New York.

of

•

was

securities

Consolidated Edison Co. of New

York, Inc. (2/17)]

Jan. 6 company announced it plans to issue and sell
$40,-

•

of record Jan.

f

7 stockholders

Probable

(par 50
cents). Price—To be supplied by amendment. Proceeds
—Together with other funds, to-be used to build
pipe¬

Underwriters—White, Weld

,

Jan.

writers

West Coast Pipe Line
Co., Dallas, Tex.
Nov. 20 filed 1,125,000 shares of
common stock

the

(par $10). Underwriter—Probably The First
Corp., New York.

if Butler Manufacturing Co.

•

stock

one

shares

Boston

69,725 shares of 5% cu¬
mulative convertible preferred stock. Price—At
par ($2
per share).
Proceeds—For payment of debt, equipment
and inventory and for
working capital. Underwriter—
Graham & Co.,
Pittsburgh, Pa.

per

one-for-ten

basis. Stockholders will vote Jan.
23, on
increasing capitalization from 2,500,000 shares to 2,750,-

a

000

Video Inc.
Dec. 29

-

KIT!

curities

and 20,000 shares
of cumulative
preferred stock
(par $100). Price—To be
supplied by amendment. Pro¬
ceeds—To repay bank loans

Underwriter—Dillon,

Sun Fire

line.

Co.

$12,000,000

Bids—To
Jan. 21 at office of

on

Price—At par (10 cents per share). Proceeds—To
pay for options.
Office
222 Patterson Bldg.,
Denver,
Colo. Underwriter—None.

10 shares of common stock.
Price—$1,010 per
(pre-organization subscriptions). Proceeds — For
production of demonstration units. Underwriter—None.

paid

convertible subordinated de¬
bentures due Jan.
15, 1983, being offered for
subscrip¬
tion by common
stockholders of

Dec.

of

ceive fractional shares in connection with
stock dividend
Dec. 15.
Underwriter—G. H. Walker & Co., St.

Sinclair Oil
Corp.
18 filed
$101,758,900

Dec.

Underwriters—Smith,

(EST)

a.m.

if Western Empire Oil Co., Denver, Colo.
6 (letter of
notification) 35,520 shares of

unit

Frice—At

Nov. 10 filed
298,735 shares
jof
^
to be offered to certain officers common stock (no par)
and other
employees of
-''the company and its
subsidiaries under the Stock Pur¬
chase and Option Plan.
Pri^e—$39.50 per share. Pro¬
ceeds—For general
corporate purposes. Underwriter—
None.

,

units

surplus.

par ($10 per
share).
Proceeds—For working capital.
Office—Manheim Pike,
Lancaster, Pa. Underwriter—Alex. Brown &
Sons, Bal¬
timore, Md.

•

11

stock.

Price—$120

o

A Shirks Motor Express
Corp. (Del.)
Jan. 8 (letter of
notification) 20,000 shares

(jointly); Harriman Ripley & Co. Inc.

Jan.

ploration of oil and

Dec. 31
•

of

Texas Oil

.Jan. 6

,

stock

common

company, 50 Broad Street, New York 4, N. Y.
effective Jan. 9.

Underwriter—None.

(Donald G.), Cismont, Va.
(letter of notification) $70,000 of 6% debentures,
300 shares of 6% cumulative preferred stock
(par $100)
and 1,000 shares of common stock
(par $1) to be sold in

York.

if Reid Ray Television Productions,
Inc.,
St. Paul, Minn.

additional

be received up to

—

etc.

&

& Co.

stock and

Manufacturing Co.

.Sept. 25 filed 250,000 shares of common stock
(par $1).
$2 per share.
Proceeds
For machinery and
equipment and new construction. Business—Production
Price

if Star Air Freight Lines, Inc.
Jan. 13 (letter of notification) 1,250 shares of common
stock (no par).
Price—$100 per share. Proceeds — To
purchase capital stock of Quaker City Airways, Inc.
(Pa.) and for working capital. Office—2 East 33rd St.,
New York.

be

purchase about
Monongahela
Power Co. and for
general corporate purposes. Under¬
writers—To be determined by competitive
bidding. Prob¬
able bidders: W. C.
Langley & Co. and First Boston
Corp. (jointly); Lehman Brothers and Goldman, Sachs

$5,000,000

^ Stevens

stock to be offered for

Powers

Feb. 9. It is expected that
subscription warrants will
mailed on or about Jan. 23. Proceeds—To

Nov. 7 filed

Dec. 29

• Pitney-Bowes, Inc., Stamford, Conn.
Jan.

Sulphur Co., New York
1,250,000 shares of common stock (par 10
cents). Price-—$1 per share. Proceeds—For construction
of plant and purchase of new
equipment and for working
capital. Underwriters—Gearhart & Otis, Inc., and F. L.
Rossmann & Co., both of New York.

Thursday, January 15, 1953

(no par)

stockholders

basis; rights to expire

on

000,000 of first and refunding mortgage bonds, series I,
due 1983. Proceeds—To repay bank loans and for con¬
struction program.

Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey^ Stuart &

Number 5186

Volume 177

...

The Commercial and Financial Chronicle

Hutzler (jointly).
Bids — Expected to be received in
February. Registration—Probably late in January.

Co.; The First Boston Corp.

Co. Inc.; Morgan Stanley &

Bids—Expected to be received about Feb. 17.
Culver Corp., Chicago,
22 it was announced

Nov.

III.

company

Dec. 15 it

to
total ol

proposes

offer to stockholders on or about Jan. 26, 1953, a

surplus.
t

Jersey Central Power & Light Co.
was reported company plans to issue and sell
$9,000,000 of first mortgage bonds due 1983. Underwrit¬

(1/26)

that

(229)

Underwriter—Merrill,

Jersey Power & Light Co.
was announced
company'plans issue and sale
about $4,000,000 first mortgage bonds due 1983. Un¬

of

15 it

derwriters—To

share basis;

bidders:

Probable

Dallas Power & Light
15 it Was reported

Dec.

Co.

and Shields

may

Hutzler; Glore,
Forgan & Co.;,Kidder, Peabody & Co.; Harriman Ripley
& Co., Inc.
Offering—Probably in April, 1953.

issue and sell in

March, 19531 about $9,000,000 of first mortgage bonds.
Proceeds-^Eior construction program. Underwriters—To

competitive bidding. Probable bidStuart & Co. Inc.; Salomon Bros. & Hutzler;
Boston Corp.; Lehman Brothers; Kidder, Pea-

determined

be

by

Long Island Lighting Co.
Dec.
,

ders: Halsey,

"The First

body & Co.; Equitable Securities Corp.; Union Securities
Corp.; Harriman Ripley & Co., Inc. Registration—Ex¬
pected Feb. 16. Bids—Tentatively scheduled to be re¬
ceived

March 24.

on

Equitable Gas Co.
Nov. 20 it

announced company may offer early next

was

$10,000,000 of preferred stock. Proceeds—To repay
$8,000,000 of bank loans and for construction program.
Underwriters—May be determined by competitive bid¬
ding. Probable bidders: Blyth & Co., Inc.; Kidder, Peabody & Co.; White, Weld & Co.; The First Boston Corp.;
Merrill Lynch, Pierce, Fenner & Beane.
Meeting —Stockholders will vote Jan. 20 on authorizing an issue

preferred stock (par $100). Offering—Ex¬

pected around the middle of February.
<•

First National

20 it

Dec.
to

announced bank plans to issue and sell

was

stockholders

stock

additional 100,000

an

$10)

(par

Bank of Atlanta, Ga.

basis of one new share for each
rights to expire Jan. 30. Price—

a

on

shares of capital

it

15

announced

was

credit

tfie

in

amount

Louisiana Power &
it

15

in mid-year

company may issue and sell
about $10,000,000 of first mortgage bonds.

(jointly); Blyth & Co., Inc.;
White, Weld & Co. and Shields & Co. (jointly); Salpmon Bros.
& Hutzler; W. C. Langley & Co., The First
Boston Corp., and Glore, Forgan & Co. (jointly); Merrill
Lynch, Pierce, Fenner & Beane and Kidder, Peabody &
Co. (jointly); Harriman Ripley & Co., Inc.
it Maine Central RR.
it

8

reported

was

$17,000,000 of bonds.

Proceeds—To increase capital and sur¬
plus. Underwriters—Equitable Securities Corp.; Courts
& Co.; Merrill Lynch, Pierce, Fenner & Beane; RobinsonHumphreys Co.; Clement A. Evans & Co.

writers

$30

per

share.

Florida
i

7 it

Jan.

Power & Light Co.

(4/7)

reported company plans to issue and sell

was

company

may;

sell

an

issue

of

Proceeds—For refunding.

Under¬
competitive bidding.
Probable bidders: Halsey,
& Co. Inc.; Kidder,
Peabody & Co.; W. C. Langley & Co.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane; Blyth &
Co., Inc.; Glore, Forgan & Co. Bids—Expected possibly
some

To

—

be

determined

by
Stuart
-

time in February.

1983. Proceeds
—To pay bank loans and for new construction. Underwriters —To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Kuhn, Loeb
%& Co.; Harriman Ripley & Co., Inc.; Lehman Brothers;
The-First Boston Corp.;. Merrill Lynch, Pierce, Fenner
«& -Beane; Shields & .Co,; White, Weld & Co.; Carl M.
;Xoeb, Rhoades & Co.tand Bear, Stearns & Co. Bids—
/Expected April 7. .Registration—Tentatively planned for

^ Maryland Casualty Co., Baltimore, Md. (2/21)
Jan. 8 it was announced the company plans to issue and
sell about 400,000 shares common stock (par $1), rights

; March 2.

it Merritt-Chapman & Scott Corp. (3/27)
Jan. 7, Ralph E. DeSimone, President, announced that
primary rights would be issued to common stockholders
of record March 27, 1953, to subscribe toadditional

$15,000,000 of first mortgage bonds due

f

•

,

,,

.

.

Follansbee Steel Corp.

A. Follansbee, President, said the company
plans additional equity financing, totaling about $4,500,'000.
This-may be done through a rights offering to
stockholders.
Proceeds—Together with funds from pro¬

•Dec. 16, M.

for expansion
Underwriters—May include Cohu & Co., New

posed $29,500,000 RFC loan, would be used
program.

"York. Offering—Expected

in February.

reported early registration is

was

Co., New York.
Garrett Freightlines,
Oct. 17 it

was

Inc.

announced company has applied to ICC

for authority to

issue and sell $1,100,000 6%

convertible

Proceeds—To retire
outstanding debentures and preferred stock and for new
equipment and working capital. Underwriter—Allen &
Co., New York; Peters, Writer & Christenson, Denver,
Colo.; and Edward D. Jones & Co., St. Louis, Mo.
•debentures due 1967. Price—At par.

General Public Utilities Corp.
Nov. 15, A. F. Tegen, President,
jmestic subsidiaries may spend

construction in 1953.

new

announced that its doaround $80,000,000 for

Of this total, $15,000,000 wili

provided internally leaving about $65,000,000 to be
financed by the sale of securities.
Subsidiaries expect
to sell around $49,000,000 of bonds, debentures and pre¬
ferred stocks and GPU will furnish about $16,000,000 to
'be

them.

obtain the funds from bank loans,
the sale of common stock or a
If present conditions continue
GPU would expect to offer addi¬

GPU expects to

the sale

of debentures,
■combination of these.
well

into

next year.

tional shares to stockholders rather than resort to bor-

Towing. Merrill Lynch, Pierce, Fenner & Beane acted as
■clearing agent in last stock offer.
Gulf States Utilities Co.

•some

was

determined

—To be

by competitive bidding.

Probable
& Beane and LehWebster Securities

'bidders: Merrill Lynch, Pierce, Fenner

Brothers

tman

(jointly);

Stone

'Corp.
Illinois Central RR.
~the

&
i

/Bids will

be

(1/22)

to noon (CST) on Jan, 22 at
Room 301, 135 East 11th Place,

received up

company's office,

5, 111., for the purchase from it of $6,000,000
■equipmexit trust certificates, series 36, to be dated Feb.

Chicago

and to mature in 30 equal semi-annual instal¬
and including Feb. 1, 1968. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Bear, Stearns & Co.
1, 1953,

ments up to

Iowa

Southern Utilities Co.

Dec. 31 it

was

announced company plans to issue and sell

$7,000,000 first mortgage bonds due 1983. Underwriters—
To be
determined by competitive bidding.
Probable
bidders: Halsey, Stuart & Co.; The First Boston Corp.;
KMder, Peabody & Co.; Lehman Brothers, Bear, Stearns
<& Co., Equitable Securities Corp. and Salomon Bros. &




shares held

on

(with

basis of
an

one

new

share for each five

oversubscription privilege); rights

on April 14.. There are presently outstanding
($12.50 par) common shares, including shares'
for scrip.
Proceeds — For working capital.

expire

550,282

Weld

Co.; The First Boston Corp.; Kidder, Peabody
&"Co. (jointly); Harriman Ripley &

&

& Co. and Drexel

Co., Inc. and Union Securities Corp. (jointly).
•

Mississippi Power & Light Co. (3/17)
15 it was reported company may issue and sell in
about *"$12,000,000 of first mortgage bonds due
1983.
Underwriters—To be determined by competitive

Dec.

March

bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
White, Weld & Co. and Kidder, Peabody & Co. (jointly);
Merrill Lynch, Pierce, Fenner & Beane; Union Securities
Corp.; The First Boston Corp. and W. C. Langley & Co.
(jointly). Bids — Tentatively expected on March 17.
Registration—Expected Feb. 11.

Monongahela Power Co.
sale

it

11

near

announced company plans issuance and

the middle of 1953 of $10,000,000 first mortgage

Underwriters—To be determined by competitive

bonds.

bidding.
W. C.

was

it

Public Service Inc.

(4/14)

reported company plans to sell
first mortgage bonds due 1983,

was

of

about

Pro¬
Underwriters—To be de¬

ceeds—For neyr construction.
termined by competitive

bidding.
Probable bidden:
Halsey, Stuart & Co. Inc.; Lehman Brothers; KMAw.
Peabody & Co. and Stone & Webster Securities Corpt
(jointly); Equitable Securities Corp.; Union Securitfee
Corp.
Bids — Tentatively scheduled to be received
on

•

April 14.
New

York, Chicago & St. Louis RR.

22

announced

company

it

(2/10)
plans to issue and sell

$10,000,000 of refunding mortgage bonds. Proceeds—To
retire $2,250,000 of short-term debt and for
working
capital.

Underwriters—To

be

determined

by

competi¬

tive

bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Kidder, Peabody & Co. and White, Weld & Co.
(jointly); Morgan Stanley & Co.; Smith, Barney & Co.;
White, Weld & Co.; Kuhn, Loeb & Co.; Union Securities?
Corp.

Bids—To be received

on

Feb.

10.

it Niagara Mohawk Power Corp.
Jan.

8

it

(2/17)
disclosed company plans to issue and sell

was

$25,000,000 of general mortgage
1,000,000 shares of common stock.

bonds

due

1983

and

Proceeds—For repays
of $40,000,000 bank loans and for new construc¬
Underwriters—To be determined by

ment

tion.

competitive
(1) For bonds — Halsey,
Stuart & Co. Inc.; Morgan Stanley &
Co.; Kuhn, Loeb &
Co.; Kidder, Peabody & Co.; The First Boston Corp.
(2) For stock—Morgan Stanley & Co. and The First
Boston Corp. (jointly); Merrill
Lynch, Pierce, Fenner &

bidding.

Probable

bidders:

Beane, Kidder, Peabody & Co. and White, Wold & Co,
(jointly). Bids — Tentatively expected to be received
about
mid-February. Registration — Expected about
Jan. 20.

-

'

-

• Northern Indiana Public Service Co.
Jan. 7 it
sell

announced that company plans to issue and

was

additional

$23,000,000 of new securities in tfaa
(in addition to 80,000 shares of cumulative
preferred stock now in SEC registration). Proceeds—For
an

future

near

construction.

new

Oklahoma Gas & Electric Co.
Nov.

it

13

sell

additional

basis

company plans to issue aiut
stock at about a one-for-ten

common

shares of

(2,411,945

determined

'

announced

was

Proceeds—For

new

by

stock outstanding).
Underwriters—May be

common

construction.

competitive

bidding. Probable bidders:
Brothers; The First Boston Corp.; Smith, Bar¬
& Co. and Harriman Ripley & Co., Inc.

Lehman
ney

Airlines, Inc.
reported company plans early registra¬
400,000 shares of common stock. Proceeds
—Together with other funds, to be used to purchase attDec.

Probable bidders: Halsey, Stuart & Co. Inc.;

Langley & Co. and The First Boston Corp. (joint¬

ly); Kuhn, Loeb & Co.; Kidder, Peabody & Co.; Glore,
& Co.; Lehman Brothers; Equitable Securities
Union Securities Corp. and Salomon Bros. &
(jointly); Merrill Lynch, Pierce, Fenner &
Beane; Harriman Ripley & Co., Inc.

Forgan

it

19

was

tion of about

ditional equipment.
Underwriters—Emanuel, Deetjen &
Co. and Hayden, Stone & Co.
(with latter

handling

books).
Pacific Northwest Pipeline Corp.

Aug.

29 company filed a second substitute application
with the FPC proposing to construct a 1,384-mile trans¬
mission line extending from the San Juan Basin in New
Mexico

and "Colorado

to market areas in the Pacific
Estimated overall capital cost of the
project

Northwest.

is $179,000,000. Financing is expected to consist of first
mortgage pipe line bonds and preferred and common
stocks, and is expected to be completed by April, 195&

Underwriters—White, Weld & Co. and Kidder, Peabody
& Co., both of New York, and Dominion Securities
Cor?..
Ltd., Toronto, Canada.
,
Pacific

Dec.
Dec.

Orleans

15

Pacific Northern

Metropolitan Edison Co.
Dec. 15 it was reported company plans to issue and sell
in May about $9,000,000 of first mortgage bonds due 1983.
Underwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Kuhn, Loeb
& Co. and Salomon Bros. & Hutzler (jointly); White,

Corp.;

reported company plans to issue and sell
additional stock this coming spring. Underwriters

Dec. 22 it

stock

common

will

common

a

Underwriter—None.

planned of
$12,000,000 of bonds. Underwriter—Eastman, Dillon &
7 it

stockholders of record Feb. 21
one-for-two basis). Underwriters—May
include Merrill Lynch, Pierre, Fenner & Beane; The
First Boston Corp.; Lehman Brothers; and Paine, Web¬
ber, Jackson & Curtis. Meeting—Financing is subject to
stockholders' approval on Feb. 10.
(probably on

reserved

-it Food Fair Stores, Inc.
Jan.

going first to

New

Dec.

Light Co.

Rhoades & Co. Offering—

Probably in May.

$10,000,000

& Co. and Lehman Brothers

Jan.

curities Corp.; Carl M. Loeb,

Dec.

Underwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Kuhn, Loeb

six shares held Jan. 13;

determined by competitive
bidding.
Halsey, Stuart & Co. Inc.; SalomonP
Hutzler; Kidder, Peabody & Co. and White,
Co. (jointly); Smith, Barney &
Co.; Union Se¬

of

announced

was

&

Weld &

be

bidders:

company

ley & Co. (3) For bonds, to be determined by competi¬
tive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc. and The First Boston Corp.
(jointly); W. C. Langley & Co.; Smith, Barney & Co.
Dec.

Bros.

•

has established a
$40,300,000 extending to
Dec. 1, 1953, to be refinanced by the issuance of new
securities. Underwriters—(1) For common stock, prob¬
ably Blyth & Co., Inc. and The First Boston Corp.
(jointly). (2) For preferred stock, may be W. C. Langbank

year

of $20,000,000

(jointly); Equitable Securities Corp.;

The First Boston Corp.; Salomon Bros &

(3/24)

company

& Co,

Cleve¬

Co.,

New

' Dec.

ers—To be determined by

rights to expire Feb. 9. Price—At par ($2
per share).
Proceeds—For investment. Office—105 West
Madison Street, Chicago, 111. Underwriter—None.

&

^

23,640 additional shares of common stock on a share-for-

competitive bidding. Probable
Halsey, Stuart & Co. Indt; White, Weld & Co.

Turben

land, Ohio.

AX

17

Telephone & Telegraph Co.
R. Sullivan,
President, announced that
in 1953 will borrow some $125,000,000 from
be refinanced later in
year, probably by offer¬

Mark

company

banks to

ing of bonds
bidders for

and

additional

common

stock.

Probable

bonds:

Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co.; White, Weld & Co.; Lehman Brothers and
Union

Securities

Corp. (jointly). Stock would be of¬
stockholders, without underwriting
American
Telephone & Telegraph Co., parent, owns 91.25% cffered to

Pacific

common

shares.

Hutzler

Narragansett Electric Co.
Dec. 26 it was reported company has appllied to Rhode
Island P. U. Commission for authority to issue and sell
$10,000,000 first mortgage bonds, series D. Proceeds—To repay bank loans and for new construction. Under¬
writers
To be determined by competitive bidding.
—

Probable bidders:

Halsey, Stuart & Co. Inc.; Kuhn, Loeb
& Co. (jointly); Salomon Bros.
& Hutzler; Kidder, Peabody & Co. and Stone & Web¬
ster Securities Corp.
(jointly); Lehman Brothers and
Goldman, Sachs & Co. (jointly); Union Securities Corp.;
The First Boston Corp.; White, Weld & Co. Offering—
& Co. and Glore, Forgan

Expected early in 1953.
•

Pennsylvania Electric Co.
Dec.

15 it

was

in June about

and

reported company plans to issue and tell
$9,250,000 first mortgage bonds due 1933

like amount later

a

on.

Boston Corp.;

Equitable Securities Corp.

it Pennsylvania RR.
Jan.

it

6

$5,000,000

and

Probable
Bros. &

(2/2)

reported that company may sell between

was

$7,000,000

bidders:

Halsey,

13

of Cleveland

stockholders of record Jan.

2,

1953 were given

125,000 additional shares of
capital stock (par $16) at the rate of one new share for
each six shares held; rights to expire on Feb. 2. Offer¬
ing is subject to approval of stockholders on Jan. 13.
the

right to subscribe for

Price—$36

oer

share.

Proceeds—To increase capital and

equipment trust ceriificates.
Stuart & Co. Inc.; Salomon

Hutzler; Kidder, Peabody & Co. Bids—Expected

about Feb. 2.

Public Service Co. of

National City Bank

Jan.

Proceeds—For construction

Underwriters—To be determined by competi¬
tive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Kuhn, Loeb & Co.; Kidder, Peabody Co.; The First
program.

Nov.

3

it

was

announced

New Hampshire
company

plans

fo

issue and'

sell

approximately $5,000,000 of bonds in May or June,
1953, and in the latter part of 1953 to issue sufficient

common

repay

shares to raise about

bank

loans

and

for

$4,000,000.

new

Proceeds—To
construction. Un'oj-

Continued

on

page

42

-

42

(230)

The Commercial and Financial
Chronicle..

Continued

jrom

writers—To

be

1953 in the amount then
permissible under its

41

page

determined

competitive bidding.
Probable bidders: For bonds, Halsey, Stuart & Co. Inc.;
The First Boston Corp. and Coffin & Burr, Inc.
(jointly);
Kidder, Peabody & Co.; White, Weld & Co.
For stock,
^
Xidder, Peabody &; Co. and Blyth & Co., Inc. (jointly);
Harriman Ripley & Co. Inc.

Peabody & Co.

stock

I Rockland
Light & Power Co.

Dec. 5 it
29 on

through sale of bonds, and preferred and common stock,
viz: $5,500,000 of first mortgage bonds and
$5,500,000
prefererd stock in 1953 and $6,000,000 bonds, $6,000,000
preferred stock, and $1,000,000 common stock in 1954.

&

•

(J. O.)
it

was

shortly

stock.

Engineering Corp.

reported

with

—Granber.y, Marache
Dec.

of

SEC

Proceeds—To

San

letter

a

& Co.,

it

was

reported

the

Jan.

6

on

it

was

announced

400,000 shares.
Corp., New York.

Underwriter

plans

&

Jan.

it

been

announced

additional

bonds

that

the

during

the

reported

$20,000,000 debentures

Texas
15

and

Sept.

expects

to

approximately

in

if

—

indeed

that

(.

drug companies are selling,
I believe
that, with; seasoning, this
stock, traded over the
counter,
-

-

could sell at 15 times
earnings or
more.
Current market price is
about 13^, and there are
shares of

common

622,180
stock ($1 par)

presently -outstanding. In addition,
there

Even

in

stages,

their

R. B.
r

WILLIAMS

Manager, Research Department,
Kidder, Peabody & Co., New York
City
Members, New York Stock

these
to

products

are

1953

sales

and

enced

earn¬

and

prospects
While larger

Mead Johnson

This

conservative-type

considerable appeal

holding, regardless
from

present

high

"confidence
level/' busi¬
and

ness

of

equity

for

the

peaks

1953

trends
for

the

'

term

limiting

logical

Mead

producer
such

s

now

lum"

these

than

assets

the

book

new

milk

value

amounts

per share, and
stock has a net

approxi¬
Ratio

of

would

such

that

seem

to

more

a

be

background,

product

there

gained

is

much

than

products

addi-

pected to show some considerable
improvement in 1953 earnings.
Unless

general

should

happen

sharply,

a

estimated
1952

of

business
to

trends

recede

quite

gain of 10 to 15%
sales

around

$1.15

per

pears

over

and
profits for
$29.5 million.and

probable.

Several

share, respectively,
new

ap¬

While

ject.

one

and.

important

drug/nutritional products
anticipated this year—none of

which has yet received much
pub¬
licity except in clinical circles.




the-

long

company

more

of

its

With

First

This

central

Telegraph Co.'s $35,000,000 of
since

the

latter

vember. must have
to

:

of

some

the group.

the interest of all

now

Even

the

the

' '

part of No¬

been

relief

a

smaller

firms
•••'"

-

been

at

now.

however,

has

the bonds when
decided to let

syndicate

go,
down about IA points
under the price paid for the
issue,
it meant
loosening up of capital of
such firms for
employment else¬

where.

'
.

The

bonds,

better

naturally

in

now

moving
free market, aie

a

currently quoted around 99% bid
and 100 asked.

Common

Edison

Bankers

Stocks Lead

were

busy this week
bidding for common equities of
public utility firms. Among these
was
the "standby" operation on
617,669 shares for Consumers
Power Co., for which the
success¬

moved

ful group named

total compensa¬

tion

which

of

$120,850

out to 19.56

averaged

A cents.

Other bids

ran

'

up

to the equiv¬

>

alent

Preferred

number of

more

of 22.342

share.

a

Common

holders of record Jan. 15
titled

less

or

looming into sight
were
encouraged no
by the splendid reception ac¬

to

subscribe

for

are

one

piring

present

least^some part of its
in that direc¬
•

improved outlook for
1953 and beyond, this stock should

bidding at 100.419 for
rate, the

about

,

.

,

,,

,

in

the.

issue field appears to center

new

.

...

_

..

/"■

■

4 35 %

note
110

that there has been

pickup

ment

in

expected

demand

during

inquiry

is

continues to be of

around

fixed.

sparse

it

propers

^ J?

any

was

the

best

for

of

the

$36,975.

pay

syndicate

here

group of¬
The

win¬

planned

re-

share.

a

dealer cop-

Heronymus & Brink man

*

With Central
Republic
iSpecial to The Financial
.

Cancrerrcu:).

'SHEBOYGAN, Wis.—Mrs.
Heronymus

and

Eve¬

Magnus

G.

Brinkman have become
associated
with

syndicate

been carrying the
sold portion of Pacific

top Of* $37.08

a

lyn

Clearing the Skies
Dissolution

3

second

a

cession of 40 cents

in-

issue in months.

which had

/

offering at 37% with

fina.lIv

Several of the larger

bidding interest

or

past

but

ning

suranee companies are understood
to have come in for sizable
blocks,
jj, fact jt was
reported that pre-

,

Such

~

Jfy. "Rurally were cheered by
}?e ^1SV ?***!. W I.C g5.ee^

reinvest-

the

-

^

.

little

*

t'

brought

share, with

fering'to

a

~

,

The latter Situation
naturally is
not conducive to
any rush to bring
out new debt
offerings. Observers
„

common
a

bidding
indicated, had an-

basis

30.

fering of 500,000 shares additional

re-

about
:

ex¬

Southern California
Edispn's of¬

price of 102^ to yield'
4.33%. Other

on

Jan.

on

encountering substantial subscrip¬

4.44%

was

close

tion first hand.

a

'"groups, it was
ticipated, reoffering

^..

Emphasis, at the moment,

a

stock

the

Sueh offerings
recently have been

offering

Bought by bankers in competi¬

offered at

an

perform at least moderately well

week's

at

en¬

share

for each ten held with
rights

dividend

'■

though

accommodating

more for short-term
and commercial lend¬

this

in

slipped

rediscounting their

of
150,000 shares of Ohio Edison'Co.
preferred stock.' * * "*■"• ""<*•* ?

„

to be some logic in the be¬

tion.

&

3V4S

a:

issues

corded

sub¬

background of several of the
company's scientists', there would

are

a

Inc.; The

end

itself

the

research efforts

were

directions such
might assert itself.: ~

Ohio

similar

products have specific application around new
equity issues. The secin the field of geriatrics
(old age ondary
bond
market
currently
ailments and treatment thereof). seems to be
undergoing another
In view of population trends and of its
nervous phases.

appear

of

for

some

Treasury,

With

estab¬

reference to the

or

lief that at

ethical
are

als.

avoids any

ex¬

to', hesitate

.

line of pediatric nutrition-

is

disposition

a

buyers

ing rates have

.

by. The First

Co. Probable bH-

Co.

Co.; Shields & Co.; Merrill Lynch,
Pierce, Fenner &
Beane; Harris, Hall & Co. (Inc.); Carl M.
Loeb, Rhoades
& Co.; Salomon
Bros. & Hutzler.
'

lost

are

lished

protein

.

borrowings

,

&

Corp.; Union Securities Corp.i Kidder,
Peabody

&

its members in

through ownership of this equity.

de¬

mineral

tives,

Boston

anxious seat at least until
it is convinced of what
lies ahead
in money rates.

it

early in. 1954. Stock

'

■

include the

underwriters

added

R. B. Williams

ders for bonds:; Halsey, Stuart

equity been paying

capital of
per
share.

may

being

and

;

the

The

or

be handled

may

Boston Corp. and Robert W.
Baird &

ury

awaited

products,

the

An

Reports have been persistent,
and with due effect on the
Treas¬

the

plans permanent
may

between

stock may be offered late in 1953

Federal Reserve Bank late
today.

tive

to

of

elements in the investment
field,
underwriters as well as investors,

'•!

Obstetrical

sale

$7,000,000 and $8.000,0o0
$2,000,000 to $3,000,000 of preferred
indeterminate number of shares of common

acceptable
paper,
has
to 1%%' for
many months

declining sharply from 1943
1948,
rose
steadily
through

1951).

and

financing, if negotiated,

But just

to

spe-

stock.

conservative

be about to unfold.
and

announced that
company

bonds and from

rediscount rate.
1939 bank
charge for

$9.50

Against

quadrupled.
efforts

was

Perhaps if the air

demand

after

cereals,

cial

from

Nov. 26 it

up in re¬
price to probable 1953 earnings is
cent
months..
It
appears
likely
only 11 times, and a yield around that
the investment market will
be
5% appears indicated.
on the

imexpenditures
the

of

in working
mately $4

materially
or

lower

37%-38, and

velopment appear to be toward a
broadening of the base and a wid¬
ening of the profit margin (which,

as

"Pab-

vitamins,

around
common

that

are

Research

"Dextri-Mal-

tose,"

statement

company
has been
under way for the
past few years.
Production and distribution meth¬

nutri¬

tional

appears

year.

been

range of

actually

Corp. (jointly).

list and high-grade corporate
the low side of
bonds, that a change is likely in

level.
Net
predicated
on
a

52-year-old

have

on

was

experi¬ Appears to be centered
around the
both 1932
weekly meeting of directors of the

in

average

The
central
reason
for
con¬
tinued confidence in this
situation
is that a quiet
renaissance in this

benefits

of

is

anticipate 1953 pay¬
ments totalling no less than
the

Indications

John¬

it

profits

the 1936-52

ex¬

to

oroved.
Research
have been tripled

the

leading

a

factor,

The record indi¬
company

1938.

price is much

encour¬

capital

penditures in connection with new
products may represent a short-

ods

market.

are

good

to de¬

as

The stock,
furthermore, appears
to be thoroughly deflated from
a
statistical point of view. Current

profits.
Dividend

all, is generally stable

mand and price.
cates that the

ex¬

ings. The ultimate potential for
them may also be for a
very sub¬
stantial increase in revenues and

aging.

.

bit clearer in

business, first

of

marketing

pected to contribute in noticeable
amounts

Exchange $0.70 paid last

son,

earlier

are

5,000 shares of 5% cu¬
mulative preferred
($100 par) and
$900,000 3%% series notes.

has

The defensive characteristics
of
the stock,
moreover, are impres¬
sive.
The type of

Security I Like Best

spell.

a

was

Wisconsin Public Service
Corp.

indicating

potential

occurs

&

reported that
following completion of
financing by Dallas Power & Light
Co., Texas

it

issuance

continually upsurging stock tions,

a

com¬

Utilities Co.
it

financing prior to June 1, 1953, which

York.

(4/13)

throughout 1953.

tical

Paine,

—

first

market

by

sale

was

Continued jrom page 2

The

and

Underwriters—To be determined
by com¬
petitive bidding. Probable bidders:
(1) For stock, Kid¬
der, Peabody & Co. and Merrill
Lynch, Pierce, Fenner
& Beane (jointly);
Kuhn, Loeb & Co.; Union Securities
Corp.; Salomon Bros. & Hutzler. (2) For
bonds, to be
determined by competitive
bidding. Probable bidders:

months -of

be determined

Halsey, Stuart & Co. Inc.;
Securities Corp. and Lehman Brothers
(jointly);
Blyth & Co., Inc., Smith, Barney & Co. and
White, Weld
& Co.
(jointly); W. C. Langley & Co. and The First

reported company plans to issue and sell
mortgage bonds due 1983 and 80,000
shares of preferred stock
(par $100). Proceeds—For new

15

3

Boston

issue

Underwriter

Electric Service Co.'

it

.Underwriters—To

Union

-

stock.

common

may sell about $11,bonds.-. Proceeds—For new

reported company
may issue and sell in
June, 1953, $10,000,000 of first mortgage bonds and be¬
tween $14,000,000 and
$18,000,000 of debentures. If com¬
petitive, bidders may include:

(2/9)

plans

company

company

mortgage

Washington Water Power Co.
Dec.

of

$9,000,000

construct pipeline

company
first six

was

reported

first

—

Hutzler,

Webber, Jackson & Curtis, of Boston, and New
Registration—Tentatively scheduled for Jan. 20.
Dec.

was

Electric Service Co. and
Texas Power & Light
Co.* sub¬
sidiaries (which see) the
parent plans to offer additional
common
stock to stockholders.
Underwriters
Union
Securities Corp., New York.

'

'

15

proposed

construction.

$32,518,500.1 On

had

it

13.

Lynch/Pierce,-'Fenner

Texas
Dec.

—

—

550,000 shares of

22

derwriter—Kidder, Peabody & Co., New York.

sell

19

and

(jointly); The First Boston Corp.; Union Secu¬
Corp.; Hemphill, Noyes & Co. and Drexel & Co.
-(jointly); White, Weld & Co.; Lehman Brothers. Offer-ing—Tentatively expected in May.
'

by directors (probably
share). Proceeds
To increase capital
Underwriter
Salomon Bros. &

sale of about

Gas Co.

to

'

Sylvania Electric Products Co.

wa^ reported company is considering an offer
additional common
stock, first to stockholders. Un¬

Southern Natural Gas Co.
Nov. 3 FPC authorized
company
facilities estimated to cost

-

per

surplus.

Dec.

Jan. 8 it
of

*

Co.

Expected on April
scheduled for March 5.
—

rities

some

•

it South Carolina Electric

conditions.

Bids

Beane

company

New York.

stock to 500,000
The First Boston

—

market

—

increasing authorized preferred

from

to

around $25

on

>

plans to issue and
Louis-Louisville division first

St.

(jointly); Hemphill, Noyes &

(jointly).

Boston

bidding. Probable bidders:
Halsey, Stuart &
Inc.; Kuhn, Loeb & Co., Blyth &
Co., Inc., Kidder,
Peabody & Co;,and Merrill

for each three shares held Jan.
29; rights to expire Feb.
20.
Price
To be determined

Underwriter

will

of

First

Lynch, Pierce,

Co.

.

announced

was

The

petitive

State Bank of

and

stockholders

it

Salomon

Albany, N. Y. (1/29)
15, Frederick McDonald, President, announced that
company plans to offer (following approval on Jan. 27
of increase in
capitalization) 101,725 additional shares
of capital stock (par
$10) on the basis of one new share

common stock
financing in the near future. Under¬
writer—Blyth & Co., Inc., New York and San Francisco.
^Seaboard Finance Co., Los
Angeles, Calif.

vote

Inc.;

Dec.

(1/19-23)

company

/Jnew

Halsey, Stuart & Co.
Kidder, Peabody & Co.

.

•

it

construction.

and White, Weld & Co.
(jointly);; Morgan Stanley
Co.; Kuhn, Loeb & Co. Bids—Had been tentatively
scheduled for Jan. 22, but
offering has' been deferred

New York.

that

bidders:

$10,000,000

due

15

000,000V of

&

Diego Gas & Electric Co.

29

Dec.

Co.

notification may be
a
block of common

covering
selling stockholders.

,

mortgage bonds. Proceeds—For refunding. Underwriters
be determined by
competitive bidding? Probable
bidders: Halsey, Stuart & Co.
Inc.; Kidder, Peabody &

&

12

an

Corp.;

and Merrill

Texas Power &
Light Co.

(1/29)

—To

Webster Securities
Corp.; Lehman Brothers; W. C.
Langley & Co.; Estabrook & Co. and Kidder,
Peabody &
Co. (jointly). Common stock will
probably be offered
for subscription
by stockholders.

filed

Co.

Registration—Tentatively

reported company expects to open bids Jan.
issue of $3,600,000 equipment trust certificates.

23

sell

(jointly); Stone & Webster Securities
Corp.; Lehman Brothers, Bear, Stearns & Co. and A. C.
Allyn & Co., Inc. (jointly); Merrill Lynch, Pierce, Fenner &
Beane; Estabrook & Co. (2) For preferred—Stone

Jan.

Railway

Beane

Drexel &

(jointly). Any

Southern Ry.

Dec.

For

Fenner &

was

Probable

Hutzler

^ Ross

Hutzler; Union Securities
Corp.; Kidder, Peabody & Co,

be via stockholders.

may

Bros. & Hutzler;

determined by com¬
petitive bidding, Probable bidders: (1) For bonds—Hal¬
sey, Stuart & Co. Inc.; First Boston Corp. and Salomon
Bros.

financing

Southern

—

Co; Inc.; Kuhn, Loeb &
Co., Lehman
Brothers and Blyth &
Co., Inc. (jointly); Salomon Bros.

&

time. Probable bidders for bonds:
Halsey, Stuart & Co.
Inc.; Kuhn, Loeb & Co.; The First Boston Corp., Blyth
& Co. Inc. and
Kidder,

Nov. 12, F. L. Lovett, President, announced
company ex¬
pects to raise about $24,000,000 in the next two years

Underwriters

Halsey, Stuart &

by the sale of additional first mortgage bonds or other
securities in such amounts as
may be appropriate at the

.

Proceeds—For expansion program.
bonds and preferred stock
may be

mortgage

indenture, and to provide for othpr permanent financing

by

.Thursday, January 15, 1953

un-

Telephone

of

Central

Chicago.

officers of
man,

Inc.

Republic

Both

were

Heronymus

Company
previously

and

Brink-

Volume 177

Number 5186

.The Commercial and Financial Chronicle

..

(231)
Continued

.4

Utility Securities

A Favorable View
National

Association

Utility Regulation

on

of

Railroad

and

("NARUC") of Washington, D. C. has

tory powers

but

nevertheless

serves

as

Utilities

Commis¬

capitalistic system that would be
the
strongest
bulwark
against

official regula¬

no

sort

of

Socialism

clearing-house
commissions, and its delibera¬
influence the policies of individual
state commissioners.
Therefore, the 1952 report of the Committee
on Corporate
Finance, with its analysis of the impact of inflation,
is of particular interest.
The report was presented by the late
for the

tions

a

views of the various state

and

Harold A.

Scragg (who

Universal

the rank and file
of

Once

rot

1942

Utilities—
Class A

Class A
Class A

'j

and

Electric

B

Natural

Telephone

The favorable

.

39.1%

46.9

48.9

If

Gas

Companies

35.9

showing of the railroads

to

54.3

38.0

Companies

50.9

(when

well

as

As

V

have

increased

their

debt

average

slightly—but it remains too high, perhaps,

on

The increase in

well

of

owners

homes,

.

fall

reserves

At the

same

are

keyed to original cost

much

wider

Enterprise,

the

the

relative

merits and

demerits

of

various securities

financial practice is
rent

imperative, the

more

so

because of the

cur¬

inflationary period.

Gains which appear to be realized
today
from low interest rates and tax
savings may prove to be illusory.
Proper debt ratios should be
determined, not on the basis of seem¬
ing savings, but by careful analyses of1 the relative risks and

volatility." r
While

Mr.

Scragg's

conclusion was thatl utility debt ratios
he also emphasized the need for
raising the
level of utility rates. "The Commissions have
been industrious in
keeping rate increases to modest
proportions—perhaps too much
so—as is evidenced by many repeats in applications. What might
have to be done ratewise in order that the
utilities will continue
to be able to obtain the new
capital needed on reasonable terms
should

be reduced,

.

In view of the sound
principles of corporate finance, set forth
in the report, it is to be
hoped that it will receive wide and careful

<

-

.

reading by the members of the

\^irious state and Federal Commis¬

sions.

from

The

Love

etta

in

its

will

be

about

struction

Americans

with

the

County National

the

State

of

Bank

Oklahoma

at
Is

Mari¬

closing

affairs.

All creditors of the Association
therefore hereby, notified to present
claims for payment to the
are

undersigned,

Marietta,

at

Oklahoma. !

,

CLEVELAND,

C.

McMAKIN,'

Liquidating Agent.




Ohio—Ralph

T.

Hisey has become associated

with

Francis

on

I.

Pont

Avenue.

nreviously
Weeks.

du

with

Mr.

&

Co.,

Hisey was
Hornblower &

to

of

current

can

a

par

with the

enjoys.

now

of

Enterprise

ship

and

end

that

our

business

mrough

owner¬

profit-sharing,

to
American

every

enjoy economic
freedom.

as

Second,
we

can,

collectively,

for

the

by

would

individually and
the American

civic

February 2,

CORPORATION

No.

.payable
record

74, 20tf

1953, to holders of

close of business January 20,

at

the

Directors

has de¬

stockholders of record at
of
business
February

to

close

16, 1953.

Secretary

William C. Douclas,
January 8,

Chairman

1953.

c

R

0

R

O

R

coodAEM

o *

T I

A

COMMON DIVIDEND
DIVIDEND
The

of

Board

Stores

Directors

Corporation

•eclared

a

dividend

of

■hare

of

have

regular

cash

Franklin

this
day
quarterly

twenty cents
(20c)
per
outstanding
common

all

on

payable

January

on

stockholders

record

of

1953,

30,

January 20,

In

addition,

the
on

declared

record

8,

stock

to

Directors

dividend

on

stock payable
stockholders of

1953.

ALBERT

January 9,

Vice-President

1953

NOTICE

*

The Board

of Directors

has declared today the fol¬
lowing dividends:
$1 .25

share for the first

per

quarter

of 1953

Preferred

the $5

upon

Stock,

payable

March 16, 1953, to stockhold¬
ers

of record

business
75

at

the

February

cents

close

16,

share

per

Common

RUBENSTEIN,

Executive
DATED

of

common

1953,

April 20,

Stock,

of

1953.

upon

the

payable

March 16, 1953 to stockhold¬
ers

of record

business

at

the

February

close of

16,

1953,

The Goodyear Tire & Rubber Co.

By W. D. Shilts, Secretary
Akron, Ohio, January 12, 1953

The

Greatest

AMERICAN VISCOSE

Name

CORPORATION

in Rubber

new

—

<mal of

Just

cose

on

in

recent

of record

business

on

manufacturing

company,

with

organization

Pacific

Coast

in

areas.

Box S-13, Commercial & Financial

Park

Place,

New

as

of the close of

January 19, 1953.The

also

declared

a

divi¬

dend of fifty cents (50^) per share
on the common stock payable
March 2, 1953, to stockholders of
record

The

sales

5%

a

Company's
May

Board

the

organizations

purchase metal prod¬

York 7, N. Y.

1953,

1953.

Parker

January 8, 1953

of

a

Corporation at their meeting
January 7^ 1953, declared the
regular dividend of one dollar
and twenty-five cents ($1.25) per
share on the 5 percent (5%) cu¬
mulative preferred stock payable
on February 2, 1953 to stockhold¬

$1,000,000 CAPITAL

25

Board

quarterly dividend of $.25
per share on the capital stock of
the Corporation, payable March 2,

share

per

February 1 4

on

Directors

Chronicle,

The

clared

Dale

ers

or

SCHNEIDER,

Dividend Notice

forces

same

and

rec¬

1953.

The Directors of American Vis¬

their economic freedoms.

to

com¬

PUNTA ALEGRE SUGAR

The Board of Directors has declared this day
the following quarterly dividend:

owners

helping Americans to participate

available

Cumulative

1953, to stockholders of
ord

SYSTEM, INC.

in

harnessed toward the

these

$4.25

payable February 16,

pany,

Vice-Pres. and Treas.

as political
the voice of

becoming

like,

of

•

i,

quarterly

a

Preferred Stock of the

NOTICES

well
as

short, to see
the forces of publishing' and ad¬
vertising,
of
broadcasting
and
televising—together with all the
forces

January

THE COLUMBIA

GAS

of American business.

as

the

on

four-

the

urge

America

held

declared

dividend of $1.06 K per share

a portion
$51,850,000 con¬

mav

people to demonstrate their faith

in

1953,

defray

a

DIVIDEND

o

influence,
business, to pro¬

use

tree

I

meeting

A.

have

we

counselors

in

The Board of Directors at

sale

period beginning 1953. Prin¬
cipal project under this program

are

in advertising, do

we,

1010

Euclid
G.

/

•

over¬

year

status

it?

Midwest

(Special to The Financial Chronicle)

the

program

mote the idea that everyone who
wants
to
can
have
a
stake
in

'

COLUMBIA PICTURES
CORPORATION

was

1953.
can

First,

plant

Joins F. I. du Pont

NOTICE

from

cost

NOTICES

1950,

have been

stock

offering

used

the

of

his home Jan. 10.

away at

people
system in

our

For

past.

individual

ucts

LIQUIDATION

in

ma¬

will still be far below the increase in
general prices. The assurance
of the
ability to raise capital is, of course, vital to the public

interest."

current

itock

are

constantly
in progress and the
possibilities of a swing away from utilities
because of-their
increasing debt ratios and declining real dollar
earnings and market values cannot be ignored. A revival of sound

Forsch, partner in Spencer
at B. Koch & Co., New York City,

it

Advertising's Role

'

Carl Forsch
Carl

un¬

share.

per

Proceeds

Phillip L. Groover

American

political freedom he

as

partnership in the firm.

600,000
was

stock

the

Ways must be found to make
possible economic freedom, if not
security — economic freedom for

1939, utility stocks are valued at only about
one-sixth above the 1939 level. On the
surface, the situation tcday
does not yet appear to be
dangerous and a strictly practical apyproach can, perhaps, disregard the inherent question of fairness
to utility investors of
prior years. But market reappraisals of the

■

The

quo.

sur¬

will admit

to

Cuimuoii Stock

income-producing

saiisfied

What

Scragg, "it is not

22

subscribed and the books closed.

extensive

more

and

Free

more

the

never

of almost double since

I

destroys the

self-evident that the

expect

are valued in
the market not much
above the level in terms of nominal dollars
as in
1940.
While the
composite of common stocks has shown an increase in dollar value

..

70 cents

Portsmouth, Ohio.

Irving Weis & Co., 60 Beaver
Street, New York City, on Jan.

bys-

acquisition
equities is the key .to

of

prising that utility stocks

_

not

or

or

in

short of the amount needed to
replace older plant.;
time utility rate increases are far below the
general

.

of

the future than has been received

and hence

increase in wages, incomes and other
prices.
"Under these circumstances," said Mr.

'

of

for

is

paid quarterly at the annual rate

faith

later

or

useful

appears

as

the

on

requirements

public distribution

company's

dividends

utilities1

Energy Commission's

DIVIDEND

Since the
the

,

..sharply, depreciation charges

,

true

through

more

as

-

,

sooner

of shares

therefore represent only about half as
many real dollars today,
he said. Although utility construction costs have
moved upward

>

of

Economic

American

property

On the other hand, utility earnings and dividends remain
substantially unchanged in nominal dollar values from 1940, and

-

the

Whether

investors in industrial stocks, have not been hurt
much by
because the value of their investments has
increased
roughly in proportion to the declining purchasing value of the dol-

,fllar.

Social¬

power

near

per

Ways must be found

profit-sharing
ownership
of

inflation

I

of

fear

backfire

a

jority
and

people,

Atomic

yesterday (Jan. 14)
share by a banking passed
group headed jointly by The First
Boston Corp. and Collin, Norton &
of

electric

Irving Weis Admits

distribution

heart and soul of freedom.

eventually (mainly

farms

build

which

of debentures into stock).

Scragg pointed out that

the

tenr^. The alternative is Socialism,

wnich at the end of 1952 had reduced its debt ratio
to about 40%
and which hopes to reduce its ratio to

Mr.

that

Statism or Totalitarianism.
managing Director of tne

in

factors,

telephone debt may be largely
temporary, since
are heavily weighted with the Bell
System

through conversion

and

the

the

project

us.

of The Toledo Edison Co.

Co.

15

the

to

figures

33%

op¬

ways the
or
Enterprise
Capitalism can be made

won't do it.

might disrupt the industry as the automobile and truck
formerly
disrupted rail transportation. The sharp rise in the debt ratio for
the natural gas companies
appears due principally to the financing
of huge new pipeline
companies on a thin equity basis, but this
policy now appears less warranted because of the rapid rise in the
cost of gas in the
field, and the lag in obtaining rate increases.

the telephone

Public

dividual
statesmanship
in
the
public interest." But words alone

ratio

new

'

other

no

that

ply

additional shares of common stock

said recently. "Belt interest
dictates the highest order of in¬

only
the assumption that

the commerciakuse of atomic
energy, or other basic

the

Free

have

goal

of

one

comprising the Ohio Valley Elec¬
Corporation which will sup¬

Edison Common Stock

NAM

roads bought in their junior bonds
cheaply),
elimination of debt through reorganizations. The

utilities

at the

business

—

better for all

need

ism,

is not due to the sale

some

the

as

electric

provides

and

of

and

is

son

Bankers Offer Toledo

$12.25

majority.

this

aim

an

dertaken

American

play ball

the

in

work

we

1

(there have been only negligible sales) but in'■ stead to
the retirement of debt out of earnings
during the wartime
period

Fail

for

American

of common stock

-

->st

<?

system

Utilities-

owners!

it, the victory

see

means

,

B

I

willing to

.

and

management—for

ship that will make possible eco¬
nomic, as well as political free¬
dom, for all Americans who are

1950

49.4%

;

*

less than that

no

is

generating station
Maumee Bay, near

on

tric

have helped our countryparticipate in political free-

worthy of all of

Free En¬

a

to demonstrate the kind of leader¬

1

I

be

portunity

page 8

Railroads

and

would

As

of the report shows the following changes in
the ratios ofTong-term debt to total
capital:
I

It

steam

new

be built

which will have as its
initial installation a
single 135,000
kw. turbo-generator.
Toledo Edi¬

dom.

owner¬

Lessons of Eisenhower Victory

'trading-on-the-equity' is increasing in magnitude constantly,
disregard of yesterday s abuses ana ot tne impact ot neavy nxed
charges on credit standing and financial stability."

Class

capital

all

in

.

a

Toledo,

ownership,

the enterprise and initiative of

on

Such

A table on

of

men

terprise System—a system of en¬
terprise and initiative, depending

again, as in the 'twenties, the
desirability of high debt ratios is being argued on the basis that
the payment of
relatively low-fixed charges on the debt portion
of the capital structure
permits higher returns to stockholders.

•

private

ship, would indeed be

sketching the history of railroad and utility finance and
regulation, Mr. Scragg pointed out the danger of too much debt
financing at this time. "Most of us regulatory people are condon¬
ing higher debt ratios and ever-thinner equity components in the
„

forms

in contrast to government

was

capital structures.

other

ownership and con¬
means of production.

trol of the

After

utilities'

and

years

government

publications may

Chairman of the Committee, and also
Chairman of the Pennsylvania Public
Utility Commission) and it
was also signed
by a number of Commissioners in other states.

.

is

Fight Marxism by Giving
Employees Stake in Profits

By OWEN ELY

The

10

page

to

Public

sioners

from

43

February 16, 1953.
payment of the common
on

stock dividend

was

til March 2, 1953,

as

deferred

un¬

the Corpora¬

RAYMOND
CONCRETE

Heavy Construction

day declared
dend

savings. The dividend
ferred stock,

basis,

on

the

pre¬

being on a different
deferred.

was not

WILLIAM H. BROWN

Secretary

N. Y.

.

The Board of Directors has this

of the dividend funds for

sixtyday period after the first of the
year w ill result in substantial tax

CO.

Soil Investigations • Foundations

tion is advised that the retention
a

PILE

140 Cedar Street, New York 6,

of

75^

Common

a

quarterly divi¬

per

share

on

stock, payable

the
on

March

3,1953 to stockholders of

record

on

M.

M.

January 20, 1953.

UPSON, Chairman of

W. V.

Board

McMENIMEN, Presid<

January 7, 1953

t

-

44

The Commercial and Financial Chronicle...
Thursday, January

<232)

on.

r"#.'? ;<&•

i

;V. <>■

with,

been

has

view to seeking

a

greater harmony, between Con¬

11®®IS

V

up;

basis of accord ^ancL

a

consultation

constant
set

■

that

ever,

BUSINESS BUZZ

15,1953

White House than

gress and the
'

foo&ce

A

Behind-the-Smie Interpretation*
from the Nation'*

Wfcff

JTjL I Hv

Capital

has existed in

60**»0flATia<v

eration.

lit *'

M"<i 'i

f

i

A.

WASHINGTON,

considerably more which
be saved toward reaching a

haps

C. —Mr.

D.

can

The job of balancing
Budget in fiscal 1954 isn't
going to be nearly so staggering

balanced

*

thing.

and

the

it looked until

sis

week

a

making

installed

Congressional
avid

are

Republicans
is

enact

to

not

.

alto¬

gether out of their reach.
Mr. Truman figures

billion

will

Federal

be

that $78.6
spent by the

in

acted

In figuring how accurate Mr.

"When his

estimates

controls

,

in-

ared

the

would

this

Government

cost

error

Now he puts it at

$74.6

paltry

billion,

probably

again

rev¬

great
the

strain.

In

these

reductions

in

meets

1954,

Millitary Spending
Falls Far Short

Another sign of what is going
on are the figures for "all secu¬

rity"

spending.
Mr.
Truman
guesses
they will amount to

in reducing Federal

progress

spending.

Now the

official

aides gave General

Eisenhower,

the

President-elect, was "ap¬
palled" by the dangerous world
situation. Mr. Truman is, as is
related, letting defense spending
be cut back.
The Secretary of
the Defense, on the other hand,
tells Congress solemnly the dan¬
from Russia is

ger

always

has

call for

no

as

been

great as it

and

there

is

rity" expenditures

would

hit

a

before level¬

ing off. Unofficially the chatter
up to recently has admitted the
possibility they might level off
at $60 billion.
So Mr.

Truman's figures hint

that they are going to level off
^at not less than $6 billion below
the unofficial peak and $11 bil¬

lion below the solemn target of
-a

year ago or

less.

Mr. Truman's figures

rleurly

indicate

seem

that

to

defense

upending is being cut back, and
the target lowered.
From the point of view of bal¬

ancing the Budget in fiscal 1954
and achieving a modicum of tax
reduction, what has started out
as

a

cutback

erated for

could

budget

be

accel¬

purposes.

Raises Foreign Aid
In his

estimates, Mr. Truman,

while denying that he is propos¬

ing

new

legislation

or new

pro¬

grams, in effect contradicts him¬
self

by proposing
to
budget
$7,861 million for foreign aid in

fiscal 1954, more than $1.8 bil¬
lion above the $6,035 million he

in

the

current

fense

1952

the

lor

foreign aid is most vulner¬
able, and approximately $8 bil¬
is

out

of

the




of

rage

the

De¬

Department when it

by
that

the

House

the

Defense

was

in

earlier

Depart¬

ment be required to conform to
total

a

spending

billion?

limit. of

Even if there is

no

$45
fur¬

ther cutback, the military serv¬
ices

will

spend

$44,380

million

this year, or below this proposed

ceiling.

and

ual front of

last

one

Monday,

said

are

So

decision

out

time

some

of

discussion

of

a

far

cooperation

have

May Gang Up

on

Oil Imports

It is reported that there

possibility of

an

is

was

in

There

was

of the most powerful leaders in

coal producers, the United Mine
Workers,
coal - carrying
rail¬

Congress

roads, and the independent oil
producers to try to put across

ments,

in

Congress this year a quota
upon imports of petroleum. Such
an

in

alliance
one

time

one

came

with¬

vote of

getting this pro¬
posal approved by the Senate.
The oil industry
generally fig¬
ures that imports of petroleum

were

conservative

-

definitely

than

the

It

may

the

and

found

the

Congres¬

Administration

what

out

to be

take.

of

process

refrained

views

of

weeks.

from

in

the

restating

last

Committee

of

crude

one

.

become

unavailable

even

private

comment

ably

There has been

definite de¬

a

cision that the responsible lead¬
ers shall not sound off on new

>

more

policy—they

the

may

state

or

agreement with Administra¬

Eisenhower seemed to grasp the

tion

problem clearly. There-

difficulty
him

pend

the

in
fact

upon

getting

across

that

must

no •

he

Congress,

It

to

men

is

de- /

out

on

not

what

the

predicted

liaison

the;

for

the

between

since

the

the

Administration

definitely

observers

morning
must

be

have

of

and

Profit

*

Sharing^

printed

"The

from

Handbook"—P

en s

i

o n

re¬

Financial
Planning^

Company,

260 Madison Avenue,
New York 16, N. Y.—Paper.
Recommendations

provements
ternal

in

for

Im¬

Federal

the

In¬

Revenue

Laws—Pamphlet
—A.
F.
Tegen, General Public
Utilities Corporation, 67 Broad

Street, New York 4, N. Y.
Trend
in

the

The

—

of

Government'Activity

United

States

Solomon

Bureau

Since

Fabricant
of

1900,

—

Na¬

Economic

Re¬

search, 1819 Broadway, New York:
23, N. Y.—Cloth—$4.
Willis
Father

Haviland
Air

of

Margaret

Ingels

Carrier:

Ther

Conditioning

-—

Doubleday &c.
Company, Inc., New York City—
Cloth—$2.50.
—

that

this

TRADING MARKETS

Campbell, A. S. Pfd.

Farrington Mfg. Pfd.
Farrington Mfg. Com.
Keith, Geo. E. Jr. & Pr. Pfd.

FIRM TRADING MARKETS

Polaroid Co. 1st & 2nd Pfd.

SECURITIES

Riverside Cement A & B

Rockwood Co. Pfd.

Southeastern Public Serv. Com.
Ei¬

PARL MARES & P.O. INC,

and

Congressional leaders which

seasoned

policy

will
necessarily
work
ideally. It is reported, how¬

Establish Liaison

senhower

Pension

Plans—Meyer M. Goldstein—

American Piano A & B

FOREIGN

slack.

—

shall be.

was

barrel of domes¬

tic capacity with no

gener¬

ally-accepted GOP policy—until
they have reached a compromise

be reported that Mr.

Its

States,

Possessions

and

Booklet—Advertising Department,
Manufacturers Trust Company, 55
Broad Street, New York 15, N. YV

tional

oil

use every

for

about

their objectives.

million barrels

daily during 1953.
Without these imports prospec¬
tive consumption would prob¬

couple

United

in

chairmen

have

.

Holidays
Territories,

give
men

a

and products will amount to the

equivalent of

Eisen¬

Already certain

have

senti¬

by reputation, of
President-elect's entourage.

both

those

recognition that the sentiments

alliance among

thing

in Congress who had taken pub¬
lic positions on certain issues,

talks

a

that

is

It
and

frank

a

this

hower's official family wants.

getting Mr. Eisenhower |

followed.

is

have

Mr.

heart-to-heart

kicked

policy jointly. In other words,
used to sounding off for 20 years
without checking in with any
one,
the
GOP
leaders
have
agreed that hereafter they won't
try to make policy before they

nominated

some

who

write

Congressional

leaders shall cooperate to make

of

and
elected,
their
prospective usefulness in getting
legislation through Congress
was something less than zero.

Congress

The

to

sional

Eisenhower
that however useful Gov. Dewey
and some of the "liberal" crowd
were

let

to

Instead, the basis of the deci¬
sion

conveyed in clear

to

-

that they are not
try to grab the ball
away from their President.

Dewey's ardent flock fig¬
ured they were going to cut
down Senator Taft, several in¬
fluential gentlemen in the House
and Senate began to get busy.
The word

-

agreed

going

Congress and the new President
than the mere problem of pa¬
tronage dispensation.
When the word began to come

language

;

around with General Eisenhower

broader

some

with

now

Inc.

governmental wis¬

ticket.

leaders

ago.

between

that

is

Powell

been

the

Interspersed among these meet¬
ings there has been a great deal
basis of

L.'

WaddelL, &; Reed,

decision to work together
reached.
It is not a

a

has

ing out the not simple details for
clearing appointments.
It was
reported that the fundamental
differences, if any, were
smoothed

turier

Mrs. Cou¬

—;

dom.

to have been devoted to work¬

So

question.

Hence here is elbow room, for
®ot less than $2 billion and
per¬

howl

from

up

That liaison

If the mood of Congress is
any
guide, even a level of $6 billion

lion

went

voted

fiscal

year.

GOP lead¬

New York, one several days ago

out of New York

relaxing.

Remember
which

estimates will be spent for such
purposes

and other

with General Eisenhower in'

ers

:.

(Special to The Financial Chronicle)

General is reported to have said
frequently he has no intention
of dominating. Congress, or of
posing like Truman as the resid¬

paper.

Mr.

Administra¬

:lpeak of $65 billion

on

Recent meetings between Sen¬

}•

■

Spending Limit No Curb

secu¬

cessful Administration, has been

established'
ator Taft

year.

tion line had been that "all

'v" ">

-

NASHVILLE, Ga;

will expect to make much great-:

•

about $50.4 billion this year and

$54.1 billion next

'1: A

With Waddell & Reed

"Just ignore that peak—while I was making the line
I sat on a thumbtack!"

GOP

the

t

will.

Canada."

by the session of Congress

high side, even if the retir¬
\
Changing Emergency
ing Chief Executive hasn't any i
Mr.
Truman
in
his
annual
further interest in selling an¬
'message to Congress appears to
other emergency.
If so, $78.6 j
think he has straightened out
billion is a lot more than the
the world situation pretty well.
Government will spend in the !
A few weeks ago he reported
next fiscal
year,
even if
the
that after the fill-in he and his
Administration and

R;v Angus, 304 Bay Street,
Toronto;" as their/ consultants in

an

the

Eisenhower

that they have retained

Ewart

first

on

Congress did not do some oper¬
ating on expenses, which they

Brothers,
1
William
Street; New - York City, members
announce

i er

is

Lehman in Canada
Lehman

to let EFT die

loss from this in fiscal 1954

which
,

Truman

Angus Consultant for

of the New York Stock Exchange,

but

side.

Mr.

re~

and may or may not coincide with,
the "Chronicle's" own views.)

Republicans in

propose

billion..from

j

of $10.8 billion on the high S

So the record infers that

(This column is intended to

full year the loss would be $5.4

a

trifling

a

over

fleet the '-behind the scene" inter^
pretation from the nation's Capital

lost

be

additional

Last

August he scaled this down to
$79 billion.

take

the Labor Department an
attempt to settle pressing labor
disputes.

„

ris¬

is $1.8 billion, not too

year

billion.

$85.4

in

Steelman
to

A corrected estimate of the

he fig- i

ago

John

no

June 30 and lapse the 11% per¬
sonal tax rise as of next June 30.

enue

a year

be

*

taxes.

Thus, just

would

However, the

*

Congress

higher

or

reported

commitment

a

White House"

from the lower rates of taxation.

llated to "sell" the horrible need

direct

.which

revenue

usu¬

not

are

thinks

has

from

will in the main offset the

come

ally is a mile too high in guess- *
ing what will be spent,' even i

f

Durkin

ing personal and corporation in¬

Truman might be, it is necessary
The rec¬

to look at the record.

ord shows that Mr. Truman

the

1951, will die Dec. 31.

Administration

The

to

from Mr. Eisenhower that there

>

boost en¬

personal income tax

fiscal

in

Government

1954.

for

labor matters. It is also

that

Finally, Mr. Truman's estimate
of $68.7 billion for revenues for
fiscal 1954, the same as 1953, is
made upon the assumption that,
as provided by present law, the
Excess Profits Tax will expire
June 30 and an average 11%

that

them

ask

and

advisory committee to
him determine policy on
an

help

,

is

intend

to

businessmen

"will

corollary is

gen¬

Secretary of Labor,
to
approach

as

said

form

so

or

the two-piece tax reduction deal
the

~

Predicts Greater Income

obvious

An

Jr.-: M

1954

start on tax re¬

a

duction.

'

ago.

fiscal

Budget in

a

Durkin Woos Business

is

Truman's final Budget points to

than

-

.

Martin P. Durkin, when he

|g§iWMimiM

•one

more
,

{i

said

Nov.

5

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50 BROAD STREET...NEW YORK
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it Eisenhower is to have

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wm*
M

■

■

HUbbard 2-1990

Teletype1*
r

BS 69

'