Full text of Commercial and Financial Chronicle : January 15, 1959, Vol. 189, No. 5812, Section 1

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M16195,9

Beg, U. B. Pat. Office

Number 5812

Volume 189

New York 7, N. Y.,

EDITORIAL

business

What Business Must Do to

As: We See ft

Curb

President, The Prudential Insurance Co. of America

remarked

whether

that

about whether it may

was

will

recovery

vulnerable to far

place

that

have

essen¬

difficulties than any

cites

gov¬

expenditures and swollen deficits, par¬
ticularly if they are financed by sale of obliga¬
tions to the commercial banks, were cited as

likely to have untoward results in
It is now well known that recovery
did take place more or less as expected by nearly
all prognosticators at the beginning of last year.
It is

run.

now

major

perous

incomes will continue to
in

;

move

?"■

of business in all industries.

STYLES BRIDGES

HON.

The key

legislative problem of the 86th Session of the
will be that of handling matters dealing
problem is
generation

U. S. Congress

with the national economy. On how well the
resolved depends the future not only of this

but

generations

come

this

stated any more clearly and dramat¬

ically than in the words of President
Eisenhower

ahead

;

real

-r

that

"there

national security

can

without fiscal

stability."

■'

have already noted

$460 billion estimate for the last
These forecasts imply a
very slow growth of just over 1%

ing gross national product and an

quarter.

productively after several static years, there are increas¬
ing signs of impending economic illness.

for

Some observers

National

Product

will

reach

F.
Carrel

ttwb

If.

Dodge

Corporation

Sen.

during the year. Our own economists at Prudential are
considerably more optimistic, and I believe their expec-

Continued

24"

SECTION

page

increase of individual

the cumu¬
inflation which we have ex¬
perienced are beginning to be left. In contemplation of
that situation, the inflationary pressure of Government
Inflation continues not only to plague us but

lative effects of the creeping

121

by Mr. Shanks made at the "Crystal Ball Luncheon",

Atlanta, Ga., Jan. 14,

SECOND

Bridges

Styles

Continued

1959.

today

ANNUAL REVIEW AND

OUTLOOK ISSUE we
dealings oc¬

high and low prices of every stock and bond issue in which
curred on the New York Stock Exchange during 1958.

page

State, Municipal
1

in
1

country. The situation could not be

only $459 billion by the last quarter
of 1959, and the median estimate of
over
200 economists polled by the

the

show monthly

U. S. Senator from New Hampshire

produces

will be achieved.

Gross

♦An address

the

course

begin herewith—

University of Michigan estimate that

not fail to do infinite

indicated

economists who met recently at the

one time or another, whatever may be
the results within the relatively short period of a

DEALERS

to the

The statements

growth rate considerably
below normal. For example, seventy

damage at

page

the Pres¬
ident's
particular and
thoroughly
justified concern with the problem
of fiscal stability when he recently
came out with his proposal for a bal¬
anced budget even before the tradi¬
tional budget message which usually
comes shortly after the convening of
the new Congress. Despite the basic
good health of the national economy
with predictions of a record-break¬

look

a
popular mandate to' out-New Deal the New
Deal, will make matters still worse by policies

1959.

ress

maladjustments will linger to plague us this
year; and whether the Congress, many members
of which seem to believe that they have received

Continued

written especially for THE CHRONICLE,

provide the reader with up-to-the-minute official views

There is, however, fairly wide dis¬
agreement on just how much prog¬

place their ugly imprints upon the year ahead;
whether our failure to insist or even permit the
recession to do its normal work of eliminating

The frequently repeated screams about

probable trend of business in the current year•

question now is not whether business
will continue to improve in the months ahead, but
whether the fiscal looseness of 1958 and 1959 will

year.

to the

These forecasts,

starting a year which promises to be a pros¬
one.
Most economists and businessmen seem
•
agreed that output, employment, and

The vital

can

example of hardening hf business arteries in

penditures and a huge deficit have left their im¬
press upon the economy of the country.

which

opinions of government officials and of the

are

also clear that reckless government ex¬

and programs

custom, THE CHRONICLE features in

country's leading industrialists, bankers and financiers

industry the resistance to Variable An¬
nuities. Proposes non-emotional approach to capital out¬
lays, cooperation in restrictive credit policies; and in¬
creased efficiency, productivity, volume operations and
competition in labor and in business.

factors all too

long

moving forward, but not

the insurance

ernment

the

economic

economy

problems requiring solution,
and suggests what businessmen should do to help curb
inflation and lessen undesirable swings in output. Mr.
Shanks submits government's inability requires business
to take direct action; rejects the argument we cannot
achieve both high employment and stable prices; and

than

experienced to date." Increased

sees

without

less

"troubled

take

be induced by forces
worse

usual

our

individual

Insurance head

tially artificial in nature which may well leave
us

today's ANNUAL REVIEW ANQ OUTLOOK ISSUE the

1958,'>

appearing in this column on Jan. 16 last year, the
Chronicle

After Turn of the Year
As

By CARROL M. SHANKS*

In its review of the outlook for the year

about

price ^1,5° 8 c°py

administration

Business and Finance Speaks

Inflation, Instability
-

THE YEAR AHEAD

Thursday, January 15, 1959

and

U. S, Government,

■

State and

Municipal

STATE

Securities
telephone:

AND

Lester, Ryons & Co.

MUNICIPAL

628

California

Public Housing Agency

Bonds and Notes

Members New York Stock

BONDS

HAnover 2-3700

Angelea 17,

So. Hope Street, Los

Exchange

Associate Member American Stock

Exchange

t.rijtn;

miiiv:

Members Pacific Coast Exchange

CHEMICAL

UNDERWRITERS

CORN EXCHANGE

BROKERS

•

Offices in Claremont, Corona

DEPARTMENT

Burnham

and

MEMBEBS NEW YOKK AND

15 BROAD
CABLE:

STREET, NEW YORK 5, N.Y.

San Diego,

OF NEW YORK

Company

AMERICAN STOCK

California Securities

•

014-1400

Teletypes NY 1-708

Bond Dept.

New York

Net

Markets

Active

Dealers,

Maintained

The Canadian Bank of Commerce
(Rights Expiring March 17, 1959)

T.L.Watson &Co.

canadian

-I

' I<

OV'Tii '"O.T

Tl <!\m m I TIVTM/; •

25 BROAD

PIRST

&OOthu>e4t COMPANY
PALLAS

Block

New York Stock Exchange •

American Stock

Exchange

STREET

NEW YORK 4,

N. Y.

TO MONTREAL

•

PERTH AMBOY

NEW YORK

market.

for California's

;

wires to Toronto, Montreal,

Expanding

Ottawa, Winnipeg, Calgary, Vancouver,
Victoria and

Halifax

Economy
-

Doxraox Securities

;

AND TORONTO

goodbody &
115 BROADWAY

Municipal Bonds J

these rights at the

DEPARTMENT

Teletype NY 1-2270

DIRECT WIRES

Direct private

Inquiries Invited

CANADIAN

1 NORTH LA SALLE ST.
CHICAGO

MUNICIPAL BOND
DEPARTMENT

•'

-1

corporation

Co.;

MEMBERS NEW YORK STOCK EXCHANGE
BRIDGEPORT

offer to buy
current

bank stocks:

Members
'

1832

ESTABLISHED

BANK

Correspondent—Pershing A Co.

Banks and Brokers

Dealer

Chase Manhattan

Inquiries Invited on Southern

TELETYPE NY I-22M

COBUANHAM

•

Santa Ana, Santa Monica

EXCHANGES

Distributor,

•

THE

Pasadena, Pomona, Redlands, Riverside,

RANK

THE FIRST NATIONAL CITY

30 BROAD ST., N.Y.

Underwriter

del Mar,

Encino, Glendale, Hollywood, Long Beach,

DEALERS

BANK
BOND

DEPARTMENT

BOND

Aaioclate Member at American Stock Kxch

Exchange Place, New York 5, N. Y.

TeL WHitehall 4-8161

Tele.

NY 1-702-3

Bmtft of America
«

NATIONAL

si VSIVG J ASSOCIATION

300 Montgomery St., San

;

Francisco, Calif.

commercial

For Banks,

The

Brokers, Dealers only

Over

participate and give their

experience

years

reasons

for favoring

^
%
(The articles contained in this fornm

they to be regarded,

are
•

Large Trading Department

System

outstanding capital gains
potential, likely to out-perform
the market as a whole in 1959,

when you

select

Try "HANSEATIC"

National

should

?,i
high

change.

American Stock Exchange

34 Ms

120 Broadway, New York

•

PHILADELPHIA

•

price
of
341/2 and high-

CHICAGO

SAN FRANCISCO

Wires

Private

this

BOSTON

Principal Cities.

e r,
for the
following rea¬

sons:

(Page 2)

Corporation

Co., New .York

ViL'

Peter

The rub¬

B. B. Andrews

industry
very hard hit in the latter part

was

of 1957 and

the first half of 1958,

with the consequence that spend-

ing for capital equipment by the
industry dropped sharply,

Specialists in

rubber

This caused operations of National

RIGHTS & SCRIP

Rubber

Machinery to drop to defU
levels, with resultant divi-

cit

dend omission.

Since 1917

Now, the cycle of
industry is very
strongly upward,
and National
Rubber Machinery's earnings upswing is likely to be just as
strongly intensified on the upside
rubber

the

MCDonnell
INCORPORATED
Members

York Stock

New

American

120

Exchange

•

Exchange

Stock

the

BROADWAY, NEW YORK 5

was

rubber

the

downside

industry

was

When

hit

recession.

TEL. REctor 2-7815

City.

Steiner, Rouse & Co

■

year
reeaininir of

power.

"tested in a capital-gains cyclical

situation with definitely outstand¬
ing potentials for 1959.' /

dividend

generous

earnings condi¬
restoration of divi¬

and

Partner, Spencer Tra.sk &
New York City

the

$1.50 annual rate
within easy reach
prospective improvement

Members N. Y. Stork

the

Allied

Chemical

This

the

Buck Hill Falls Co.

Reading Co. 3Vss, 1995

Samuel K. Phillips & Co.

000

Members Phila.-Balt. Stock Exchange

Teletype
PH 375

this

year,

$10,000,000

Pennsylvania Bldg., Philadelphia

1956

high

Earnings have
r

e. - n

$5.44

minimum of
National Rubber Machinery,
National listed on the American Stock Ex-

Machinery,
the
chief
equipment supplier to the industry, will be a major beneficiary,
Other leading authorities of
top

N. Y. Phone
COrtlandt 7-6814

rubber

companies make
forecasts for the

bright

change,

is
but it has

not
a

active

stock,

considerable floating

supply, and it can be bought in
adequate amounts for those in-

similar

per

esti¬

mated
per

$3.35
share in

Established

Rubber

Teletype—NY

E.
S.

Humphreys/

authorities

McGraw-Hill

Prentice-Hall
also

big

see

been increased

by
tion

new

plant

processes and mew

the

indications

combina¬

facilities,

200
.

products? Also

point

toward

Denver—Lowell, Murphy &
Company, Inc.

OUTLOOK

im-

£ars

ahead.

impressed with

The

survey

business
new
a

January issue

timely

our

assesses

the
together with

prospects for

year,

selected list of securities

with

attractive investment

possibilities for 1959. Each

Research De¬
in this
publication topics of special

/ month

our

partment discusses
interest

serious-minded

investors.

Copy F on

•

request

growth pattern

of earning power
and; (3) new capable and aggressive management, I regard Allied
Chemical as one of the more attractive

quality-type

growth

stocks in the current market.
———-—-'■
" ' '
—

'•

G.H.Walker&CO
ESTABLISHED 1900
Members New York

Stock Exchange

ONE WALL STREET,

Cable Address:

NSTA

NEW YORK 5

Bridgeport

Hartford

Providence

St. Louis

"WALKERIAN"

Notes
Your

and

INVESTMENT TRADERS ASSOCIATION OF PHILADELPHIA
The Investment Trader's Association of
35th Annual Mid-Winter Dinner on

Hill,
equipment expenditures, estimates
a 20 %
jump in spending for new
plant and equipment by the rubber industry in 1959.

in the Grand Ballroom

With all

break

should

the bad

good

Rubber

& Co.

SECURITIES

proved operating efficiency in the

their

much

Los Angeles—Marache, Dolflemvre

N.Y. 6 COrtlandt 7-5688

new

White Plains

gains

industry in 1959. McGrawleading analyst of industry

Wire System:

Investment Bankers

has

power

August Hube»

for the

Trading Markets

Brokers

111 Broadway,

President of the Rubber Manufac¬
turers Associaiton. Such renowned

1-1127

Over-the-Counter

Tokyo, Japan

the company's
basic
earning

rubber

Rubber; J. W.

Yamaichi Securities Co., Ltd.

1958. I believe

Keener, President of B, F. Good¬
rich, as well as Ross Ormsby,

Telephone HAnover 2-4850
Bell

Co.,

Chairman of U.

1930

York, Inc.

Affiliate

1955

industry in 1959. They include
Harvey and Raymond Firestone, '
Chairman and President, respec¬
tively, of the Firestone Tire &

ftveeueomdCompaTU^

of New

peak of'

-share, in
a

write

Yamaichi

t:o

Securities Company

downward

1958.

over

Rubber,

Call

price of 129%.

from*

information

current

below

Pocono Hotels Units

For

Currently selling around
these quality shares are still

offices

branch

S T O C K S

briefly touches the
Allied Chemical Cor-

our

JAPANESE

well

American Seal-Kap Corp. is an
aggressive, efficient holding company,
which paid
considerably
more than present prices for National Rubber Machinery stock in
obtaining control—and even if it
did not intend staying in National
Rubber Machinery, it would be
likely to build National Rubber,
Machinery's operations in every
successful way possible to make,
the stock worth more than thepresent price around 23. If American Seal-Kap should want tosell its holdings, it would aim to
strongly
justify a considerably
higher price for National Rubber
Machinery stock than now cur-

wires to

lent. .One of the interesting cor- the basic managerial changes and
J?orai?
J?/? worked the progressive policies adopted,
National Rubber Machinery
-phe
present
view
of
future
in
1959.
For
example,
E.
J. ~Jn keeping with the space-age earnings
envisions
a
favorable
Thomas, Chairman of the Board tren<7u°
? times is a machine growth pattern which runs about
of Goodyear Tire & Rubber Co.,
extrusion of solid pro- like this—for 1959 between $4.25
says that the rubber industry will ^el
tor missile fuel. A com- ancj $4 50
share against about
have its highest volume of sales mercial
and household rubber -. $3,35 in 1958; for I960 between
in history in 1959, exceeding even garbage - disposal
unit has;, at- $5.50-$6; by .1963 around $7 per
the
year
1956,
when
National tamed exceptional success already,. sjiare and a later potential of about
Rubber Machinery stock reached
^an, in£ as
best in/the held. ^9 per. share.;- Vc;
341/2. Moreover, Mr. Thomas, the And, a "ew process lor the bagThe present regular
dividend
chief executive officer of Good}ess. curin§ ^
1S
rate is $3 per share,
year, says that Goodyear will inincrease the National Rubber
Considering (1) the shares at
crease
its
capital spending for Machinery Company s equipment 94 are well below the earlier peak
plant and machinery-to $70,000,- oroers materially.
0f ab0ut 130; (2) promising

Transp. Co. 3-6's, 2039

Birmingham, Ala
Mobile, Ala.

Exchange

Corp. J

Kap Corp., which now is helping
effectively to diversify and en-,,
large
company
activities.
The

NY 1-1557

HAnover 2-0700

pOra^0n
94,

JL Y.

New Orleans, La. -

article

highlights

American Stock Exoheng*

19 Rector St., New York 6,

Co.,

Every authority on the rubber
industry is agreed that the rubber
industry faces an excellent year

Phila.

Members New York Stock Exchange

Direct

AUGUST HUBER

payer

favorable

ber

Bought—Sold—Quoted

—

was

earnings.
Capitalization
is
simple,
with
long-term
funded
debl
at
$2,280,000 and common
stock
at
only
205,000
shares.
Slightly over 50% of the common
stock is owned by American Seal-

1956,

return

its

Teletype NY 1-40

WOrth 4-2300

Chemical

Trask M

1957 they

and I look for

23,

sold

but

Allied

of 1956, will be

selling

around

1920

Established

Louisiana Securities

August Huber, Partner, Spencer

current

ranid

dends

no w

Associate Member

see

tions,

This

stock

National Rubber Machinery Co.
is

Stock

Corporation

the

but

earning

under

Fairlawn,

(Page 2)
;

earnings

$1.01 and in 1958 there

A merican

New York Hanseatic

Consultant,

Members

the

nor

shown- in

per-share

1954.

deficit,

Ma¬

Rubber

be,

$3.53 in 1956, $3.25 in 1955,
$2.70

were

chinery stock,
listed

that

fact

and

For

serve you

conditions

were

Machinery

sell the securities discussed.)

the

Fairlawn, N. J.

National Rubber

industry

Economic Consultant

Nationwide Private Wire

Ready to

offer

PETER B. B. ANDREWS

geared for service
•

as an

intended

not

are

Alabama &

National Rubber Machinery Co.—
Peter B. B. Andrews, Economic

in Over-the-Counter

Participants and

Their Selections

particular security.

tursday, January .15, 1959

This Week's
Forum

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

Try "HANSEATIC"
•

Security I Like Best

inancial

anc

news

out and

Machinery Co. likely to
1959, the stock's price

soon

assume

ascending
likely
to
rise
steadily
throughout 1959. The company is
in very strong financial
condition,
with current assets of
$5,650,000

curve,

than eight times current lia*bilities
of
$660,000.
Cash
and
more

equivalent
twice

all

alone
current

are

than

liabilities.

nancial strength indicates

resumption of dividends

Fi¬

quick

earn¬

improve.
The
company's
earning power under good rubber
ings

CROSS

BALTIMORE SECURITY TRADERS ASSOCIATION
The 24th Annual

Mid-Winter Dinner of the Baltimore Secu¬
be held at the Southern Hotel on

rity Traders Association will

Friday, Jan. 16, at 7:30

p.m.

Dinner will be preceded by a
reception
Tariff for guests is $14. Dinner tickets

the National

Philadelphia will hold
Friday, Feb. 27, 1959,

of the Bellevue-Stratford Hotel.

beginning at 6:30
may

p.m.

be obtained from

N. Q. B.

David

Pindell, Lockwood, Peck & Co. Room Reservations should
be made with Jack
Wallace, Baker, Watts & Co.
Harry J. Niemeyer, Robert Garrett & Sons, is Chairman of the Entertainment
Committee.

•

•:

■

SECURITY TRADERS ASSOCIATION OF NEW
YORK
Members of the Security Traders Association
of New York
are
urging their members to make a contribution. to the Wall
Street Industries Blood Bank. The Red
Cross Blood Mobile will
be at the Sub
Treasury Building Jan. 19 and Jan. 20.
Members of the STANY Blood Bank Committee are
Andrew
-

Blank, P. F. Fox & Co., Inc.; Joseph Conlon, Grace Canadian Se¬
curities; Joseph Dorsey, Bache & Co.; Charles O'Brien
Murphy
III, Pearson, Murphy & Co.; and John J. Meyers,
Jr., Gordon
Graves & Co.-

OVER-THE-COUNTER

20-Year Performance of
35 Industrial Stocks
FOLDER ON

REQUEST

;

National Quotation Unreal
U Frwrt

stre./**** New

4.H.Y.

Number 5812

Volume 189

...

The Commercial and Financial Chronicle

(203)

I N I) E X

The Business Environment Ahead
By ROY L. REIERSON *

Vice-President and Chief Economist
Bankers Trust

Company, New York City

In arriving at a tentative forecast

w' "*

East

1959, Dr. Reierson directs attention to certain imponderables

v. -■

West:. The

vs.

Page

JWV company

Cover

whole., The banker-economist perceives future r
disturbances arising from deep-seated and insistent inflation-/*
as

tendencies; finds it paradoxical that a step-up in business
activity could spread inflation and thwart economic growth;*
/*/■£ and confesses difficulty in trying to reconcile the thesis that
ary

inflationary

;

The Outlook for Business—Wilson
Wright

What's Ahead in 19597—G. M. Loeb—.

stimulate economic growth : with past
growth; fate:t

pressures

;

—-James

Keeping America
V,.

/;: petitive position affecting dollar's acceptability and Treasury

financing problems.
The American economy enters
1959 in the midst of a vigorous re¬

Industrial production has

covery.

"been advancing month after month

since / 1

April,
while

local

governments

been

fairly

recessions

—

immune

the

which
to

have '

of de-

some

Land of

Opportunity—R. Perry Shorts

permachem corp.
ft. wayne

;

ntshes

Changing Export Position and Untenable Trade Policy
S. Piquet.:
/__
/_/_L

climb

is to

strong

a :

expected,

business'when

the

falter,

paper;

been'no

im¬

portant signs
of faltering so
far.

The

instruments

;

Ahead—Frazar B.. Wilde——

—_

silicon

state

business

de¬
Roy L. Reierson

the

account

good

economy in
recession.
setback

ness

severest

given

with

the

coping

recent

While

the busi¬

1957-58

also

was

record/ Al¬

though the heavy goods industries,
which had been especially hard
hit

last

still

operating
significantly below their previous
peaks, total industrial activity by
year,

are

the end of 1958 had regained prac¬

tically all of its previous decline.
In fact, the gross national product
in

the

final

estimated at

quarter

1958

was

annual rate in

ex¬

exceed the all-time record.
In

1959, however, new peaks are
sight for most of the important

indicators of economic progress—
industrial activity, construction,
and retail trade

well

personal

income and business profits. More¬

Starting

the

basic

direction

economy will remain
the year ahead.

outlays to continue to climb fairly/;
consistently throughout the year
ahead.

upward

sectors of the economy—consumer

Chamber

Philadelphia,

by
of

Dr.

Reierson

Commerce

Philadelphia,

Pa.,

before
Greater

Jan.

Business—

Members Salt Lake

slowed by
the

the impact of the

reces--

pace

„

(Letter

principle, whether the up¬
push imparted to the econ¬

to Denver

Lake

;

City

third
is

more dynamic
unpredictable onenational output, that

-■

Continued

page

Editor)—:

See It

Mutual

York

Stock

Exchange

Schenectady

Worcester

Teletype NY 1-1825 & 1-4844
Direct Wires to

123

San Francisco

Philadelphia

Los Angole

Dallas

Cleveland

Chicag

British Equities and

NSTA

Banks

Bankers

and

Observations—A.

Wilfred

___^___/

May

Reporter's

Public

Securities

—,_136

Prospective
Securities

—129

130

and

---135

Offerings

Security

105

Corner;

Salesman's

The Market.

•>

—

2
4

£—£

140

The State of Trade and Industry

Twice

1/
j

Weekly

Request

Company

CHRONICLE !
bUKUnitLt

FINANCIAL
FINANUIAL

Prospectus

1959 by William B. Dana»

Corporation

You—By Wallace Streele

The Security I Like Best—i_,

119

T ransistor

——117

—1—

Securities Now in Registration—^

—

Securities.,;.

Utility

Railroad

i_.

Report

Silicon

Our Reporter on Governments—

Our

——

__Li.

Notes

Reentered as second-class matter Febru25> l942
at the post office at New

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Publisher

President

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Chicago

Offices:
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135

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Pan-American

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other

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year,

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of
in

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(Telephone STate

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Possessions,
HERBERT D. SEIBERT, Editor &

Every Thursday (general news and advertising issue) and every Monday (complete statistical issue — market quotation
records, corporation news, bank clearings.
state
and
city news, etc.).

Glens Falls

inc.

40 Exchange Place, N, Y.

125

:
Chicago

Mackie,

—Cover

1-L

Thursday, Jauuary 15, 1959

TELETYPE NY 1-5

&
t

140

ST., NEW YORK 4, N. V.

TELEPHONE HAnover 24300

Singer, Bean

138.

Funds

News About

I UuiVv

New

129

Corp.

(Editorial)——

The COMMERCIAL and

Permachem

„57

CTflPlfC

rHLlLIIIlLU

Pacific Uranium

•

Einzig: "Investor's Decision

ment

* Government Loans"
1-L.
19
£rom Washington Ahead of the News—Carlisle Bargeron—i._ 9
Indications of Current Business Activity
/_—137

determined

by private invest¬
decisions, consumer buying
of durable goods, Federal spend-

—

Dealer-Broker Investment Recommendations

more
our

Expansion

Coming Events In the Investment Field

or conceivably even re¬
depends upon the aggre¬

also

Businessman's Bookshelf

gate behavior of the
but

United Artists

—I

Bank and Insurance Stocks

•

moderated
versed

Perkin-Elmer

Regular Features
As

from

Spencer Trask & Co.

JCY 1160

;

HA 2-9000

Nashville

Salt

Leon II. Block Reproves Changes in Securities Market

Demands'

DDrtlTDDEn

Boston

Teletype:

Direct wires

Savings Banks' Deposits and Mortgage Funds Higher in 1958—129

this

Volatile

On Foreign Income

Albany

/'/

—

immediate

The

Saul Fromkes Reports Home Owners' Incomes Outrunning
/
Their Mortgage Debt

WILLIAM B.

25 BROAD

Guaranty Trust Co. Urges Deferring Tax Payments

Published

Members

Co.—i;

Savings Bankers Predict Non-Boom

anything,/

future, however, the
direction seems
firmly upward;
together with the prospective
growth in the consumer sector,

Washington and You.

have specialized in

DIgby 4-4970

'? Metropolitan Life Insurance

sensitivity to general economic:
conditions may increase. For the

For many years we

City Stock Exch

Exchange PL, Jersey Gty
,

Message.,/

sion upon tax receipts; if

1959.

*"•'

J.F.Reilly&Co.,Inc

Second Successive Annual Rise in Death Rate Reported by

gov¬

these corlsumer and
public works sectors is enhanced,

1959 is the stalwart
provided by two major

other

ward

activity in

the

investors corp.

be given
/
-

highways, schools,
Good News, or
(Boxed)
community facilities1
likewise are in a steadily mount--, /There Must Be a Limit! (Boxed)
O. B. Joliannsen Hits Higher Gold Price Contradictions
ing trend. Contrary to some ex¬
pectations, this trend was not/, ///(Letter to Editor)/——

Underlying the general expecta¬
tion of a higher level of economic

address

N. Y. Federal Reserve Bank Optimistic

for

ernments

and

the

The Stalwart Supports

*An

american

cover page

President Eisenhower's State of the Union

Outlays by state and local

omy

support

the

declining during the reces-/ /.';/•
•- /
: ■ >
•'//
sion. Moreover, by the filial quar-;
ter of 1958, such expenditures were
the SECOND SECTION of today's issue will be found
our usual tabular record of the
setting new records — some 5% ■
high and low prices, by
ahead of their pre-recession levels.
'months, of every stock and bond issue in which dealings
Population growth, advancing em- > occurred on the New York Stock
Exchange during 1958.
ployment, " a n d rising incomes

provides a solid if unspectacu¬
over, despite some very real prob¬ lar push toward higher economic
lems that confront the business
activity in the year ahead;
Y* .-./'A/ v\
community, prevailing opinion is ri
that

re¬

has quickened with the
cess of $450
billion, which in cur¬ Federal
highway program and in-rent dollars is nearly 2% above
creasing budgets for other public
the pre-recession peak,
but this works.
Admittedly, these budgets
increase from
the
former
high are not immune to rising construe- >
mark reflects the advance in prices
tion costs, financing problems, and
rather
than
physical volume; the
like, and as such expenditures-,
"real" output
probably did not reach ever
greater amounts, their

transistor

AFTER

YEAR

the make it reasonable to expect these

was

years,

of the briefest

one

SPEAKS

THE

its;strength
the

FINANCE

TURN

were

rives much of
from

to,

volatile, forces

AND

THE

con¬

fidence

BUSINESS
.

table
goods and services, taken'
could not be accommodated in
today's issue will
together, did not sag even when/
in the issue of Jan. 22.—Editor.]
personal income and employment/

present

high

underpinning

they did in 1958, and

;

midwestern

of today's ANNUAL REVIEW
AND OUTLOOK
ISSUE, we present the opinions of
inforces the outlook when the up¬
-leaders in Government,
ward movement is resumed.
Industry and Finance regarding
Consumer spending on nondu-//the outlook for business in 1959.
[Commentaries which

have

;

corrugated

New Inflation

! The

of the total output of our economy,
their persistently rising trend-fur-*

in this rate

•

TTrand account for about two-thirds"

slowing down

Dept.

STREET, NEW YORK

Telephone: Whitehall 4-6551 \

—Howard

years.

Since these two categories

and

Our

business

postwar

„

—___

//Continued Improvement Expected in Steel Production
//"—Max D. Howell —_i_i-_w—
_/

WALL

/Outlook for Real Estate Securities
Market—Harry R. Amott__ 25
spending on nondurable goods and'. /Don't Force Anierican Labor to Start a Political
Party
services, and outlays, of state, and ;
—George Meany
/i_L__.
26

a s

P.~Hickok—

A Summary of Africa—Roger W. Babson/

■i

cash!

our

Obsolete Securities
99

—____.>

—

pleasure of

Can Banking Fill the Gap Opened by Rush Into Stocks?

half-decade's apparent below average economic

Believes management faces prospect of serious labor troubles
and demands; and notes worsening U. S. world market com-

Waggoner.— 14

easily exceeded by

the

„___

—

The Meteoric Growth of Mutual Funds—W.
George Potts
The Changing Insurance Industry—Leland T.

OUR COMPANY
—is

•

-•Morgan the Most—Ira U. Cobleigh—
"

THE PLEASURE OF

6
8

____.

economy

•

Economic Conflict—John J. Powers, Jr.__

What Are the Perils and Pitfalls of Small Business
Today?
—Reuben E. Slesinger—i__

problems for business and the

LlCHTfnSTEl

B.S.

The Business Environment Ahead—Roy L. Reierson

GNP for

which could create troublesome

What Business Must Do to Curb Inflation and
Instability
—Carrol M. Shanks——/__—_„
"

t...

of $470 billion

Articles and News

Publication,

an<* Qy°tation_ Record
Monthly
$45.00 per year. (Foreign Postage extra,
Note—On
the

rate

account of the fluctuations Id
exchange,
remittances for

foreign subscriptions and advertisements
mu6* be made ln New York fund8-

W!? V. FRANKEL & CO
INCORPORATED

39 BROADWAY, NEW

WHitehall

YORK 6

3-3960

Teletype NY 1-4040 & 4041
Direct

Wire

PHILADELPHIA

E<4

The Commercial and Financial Chronicle

(204)

present purpose

not

Observations

major

intended

ing

By A. WILFRED MAY

by some
arbitrary figure
ranging anywhere from eight to

ings

MERELY A FRAME OF

REFERENCE
"In

the

of speculative
calm, 1923» 1924 and 1925, the
body of legitimate and semi-legi¬
timate speculators, bankers, and
years

economists
had

reason¬

"2c. O

common

how

e v

stitution.

same

stock

anaesthe¬

Wilfred

May

was

fantastic

for

excuses

are

few

examples

buy and

hold.

for

the

former

investment

the

was

trust

And

there

the

recurrent

over-sanctify

the

functions of the stock market, per
the

thesis): "However much

speculative

may

one

Source

tremendous

actual

was

to multiply

prospective

1929

lieu

prevalent
of

should

economy

the outlook

Annual >:

state¬

issue.'

Review

this, Z

our

These

commentaries, especially written
for
the
"Chronicle,"
are
pre¬
ponderantly optimistic as to the
probable

course

There

and

trade

the

quite

are

wind

few

indicate

straws

that

the

made

present-day bulls
age of 20 feel particu¬
larly secure.
*
,

Purpose

•
.

"r:;

THAT TREK TO

of the

preceding

epochal

stock market boom and crash. Our

after

1929*, provides

with

interesting conclusions about
portfolio management. In the
some

stir

■"Will

Mr.

over

indictment

the

Schweitzer

making

other return trip to the relief rolls?

UNDERWRITERS, BROKERS

,We

i' VK'. :-v'£Y-».

Mr.

Harry Schweitzer,

75-year

old retired hospital orderly, his al¬

leged market "parlaying" of $9,000
of
welfare
payments
into
$21,000 in the past seven years
is
termed
"financial
wizardry"
and
"shrewed
manipulation."
However, if the gentleman had
stuck
to
his
hospital activities
eliminated

and

same area is'pushing the limit
practical capacity and is get¬
ting ready to; set new .order-to-

of.

delivery
who

for

coups

three

order bounced, into

February and
of the mar¬
ket is spreading to Pittsburgh and

March.

the

results

The

this

wizard's

longer-term holding are likewise
interesting. Analysis of his prin¬
cipal portfolio, which we have
been privileged to make, reveals
that

its

including
"finds"
and

"imaginative" issues,
loss-producing

such

Sapphire

East.

Hone, have over
four years shown an ag¬
gregate appreciation of 48% over
cost.
Had he simply bought the
Dow Jones issues on his portfolio's
mean
acquisition date, he would
have gained 50%.
So

in the

investor,

case

of all categories

•'

Some

their

mills

customers

holding of

arc
pleased

1886

to announce

ahead

steel

critical products.

and

linepipe. Demand for sheet
strip, galvanized sheets, and
terne plate is showing steady im¬
provement.
Tinplate
shipments
and

will

than double in January

over

relatively slow December.

Current market strength is

(4)
based

on
moderate
inventory
building and higher output levels
in users' plants. Yet to come is

the
as

expected avalanche of orders
hedge against a possible steel

strike at mid-year.
Steel service centers

ally

building
their
not excessively.

but

boosted

for

cold-rolled

were

W. E. HUTTON & CO.

admitted

general

leading exchanges

NEW YORK

the

mills

Boston

Dayton, O.

•

Philadelphia

Columbus, O.

Hartford, Conn.

Members flew york Stock Excbanejr and Other Principal

•

209 South La Salle Street

Baltimore

are

Lexington, Ky.

•

The

for

reason

buildup

this

hesitate

furnaces

until

start

Portland, Me.

Biddeford, Me.

•

Lewiston, Me.

Burlington, f

NEW YORK

A1ILWAUKEB

SAN FRANCISCO
GRAND RAPIDS

DENVER

LINCOLN

MADISON

ST. LOUIS

CEDAR RAPIDS

Co.
*
r:

INDIANAPOLIS

OMAHA

FORT WAYNB

steel
The
mills

the

additional
orders

They're going to be

Exchanges

ST. PALIL

that

they have

Teletype CG-2536

E*slon,Pa.

talking in

•

now

production will be gradual.

Chicago 4, Illinois

•

DEarborn 2-0500

have
orders

But it's doubtful there
overnight spurt in

year.

will

operations.

partners

Cruttenden, Podesta

CINCINNATI

Some
sheet

terms of near-capacity operations
at some time in the first half of

Members New York Slock
Exchange
and other

gradu¬

quarter as much as
above fourth quarter levels.

15%

William c. Karlson

are

inventories,

first

the

james r. cruttenden

Whitney m. Sewart

have

escapes.

(3) Hot-rolled bar demand is
picking up. So is the market for
oil country drill pipe and casing,

donald wales

donald r. bonniwell

already

users

narrow

some

January 1

hand-to-

the chance of being

run

caught short

in hand.

that

warning

that

buying will be risky busi¬
ness from here on out. They are
advising them to order farther

the difficulty

see

in bettering long-term
the name issues.

are

mouth

Petroleum

Micromatic

the past

Strength

The

(2)

continued holding of

Average,
his capital would have grown by
exactly the same amount, (a per¬
formance conforming to much of
the funds' performance record.)

schedules.
One J buyer
to place January ton¬
weeks ago had his

tried

nage

in-and-out

all

stocks in the Dow Jones

MUNICIPAL SECURITIES

since

the

DEALERS

distributing
i

of
an¬

is doling out plates on an alloca¬
basis. Another plate mill in

tion

had

Crash"—

1929

Auto Production

Business Failures

Some

remi¬

vague

"that

under the

MORE ON

and

analyzing the

earn¬

and

nation's

the

ments-appearing

press

CORPORATE

for

documented

For Our Present Orientation

'scarcity value.'
WALL STREET
Quotation
(Ex., it was imagined
that
it
—From Rags to Riches
would soon become impossible to
The above depiction of the New
An individual who has moved
buy utility stocks, which were al¬ Era
thinking
of
those
Boiling
from the relief rolls to the stock
ready selling at 100 times earn¬ 'Twenties
is
quoted
from
the
ings, at any price.)
writer's thesis for the Master of market, reversing the more tra¬
"(5) To evaluate stock prices, Arts degree at Columbia in 1932 ditional course, including his own
all one had to do

outlook

in the present year is exceedingly
bright. This viewpoint is amply

enthusiasm,

the

student
of
the
psychology
of
speculation, not of economics."

rowing money at 12% to buy
yielding 2% was investing.
"(4) Certain groups of stocks

stocks

Commodity Price Index

Despite the fact that the evi¬ steel market is tightening up, ac¬
dence
to
date
is > necessarily cording to the current issue of
fragmentary, there would appear "Iron Age,'* which lists some .of
to be almost complete agreement them as follows:
among
the
nation's
1 e a d i n"g
I (1) A Midwestern mill already
bankers and businessmen that the

doubt that it is inti¬

Trade

tS—

industry
throughout
the
year.
Particularly
significant
is
the
mately related to the steady and confidence voiced by
spokesmen
constructive building up of Amcr-;
for the steel, automobile and other
ican
business
and
the
mainte¬
key industries, whose output was
nance of high American standards
sharply lowered in the 1957-1958
of living;"
recession.
there

niscences

was

picture of lunacy. They are all
quite easily understandable to the

not

were

speculative at the time—that bor¬

late

and

and now again flamboy¬
in
the Sarasota region.

bles to be avoided.
above gospel could
In any event, we remind the
have been widely accepted may
present
doom-prophesying Casbe difficult to comprehend now;
sandras that the Dow Jones Av¬
just as the history of the South
erage
which collapsed from its
Sea
Companies, the Mississippi
3929 peak of 386 to its July 1932
Bubble, Holland's Tulip Boom, the
low of 41, is now, only 30 years
California
Gold
Rush, and our
52%
above
that "crazy"
recent
(and now again) Florida later,
boom
top.
Realization
of
this
Land Boom now seem to us the

believed that:

Common stocks

market

"How

Common stocks of wellmanaged corporations were al¬
ways a buy at any price.
"(2) All that a buyer had to do

had

middle

1920s,
antly

expected to stabilize
the market and prevent any im¬ for use as a frame of reference
to appraise present investor atti¬
portant deflation.
tudes and policies. This should be
"(10) Large
margin, require¬
additionally constructive in high¬
ments would prevent any wide or
lighting some of the current foi¬
disorderly decline.

"(1)

"(3)

into his cor¬

poration additional funds for more
a price less than the pre¬

which

That New Era's Credo

to achieve success was to

pay

stock at

level

the more dangerous as effective
stimuli to the speculative orgy.

was

the

Miami

is rather to provide
ing.
a
partial
inventory of specific
"(9)
An
important insurance
similarities and dissimilarities, in
of the safety of the market price

Retail

Industry

Our purpose

beliefs, their economic justifica¬
tion
indefensible, but embraced
by bankers, economists, and 'legit¬
imate' speculators, as well as by
gamblers; and for that reason all

"It

are
some
striking
with the cited split
proclivities, and the
ancillary Florida land booms—in

fund

lesser number of shares outstand¬

of these romantic 'New Era'

some

there

But

analogies,

and

decry

very valuable privilege
to
a
stockholder when

permitted to

vailing

market's
excesses;
theories
which they would have laughed at
four years previously.

the

"Here

that the
credit situation today is markedly
different).

example,

Carloadmgs

Food Price Index

and

For

realized

repeated.

dress

through the issuing of 'rights' he

the

and

—

dividends, etc.

accrued

Speculative Show that they wor¬
shipped all kinds of glamorous
beliefs

business

"(8) A

hypnotized

tized

represented it—through split-ups,

become

and

exactly

are

Production

Electric Output

State of Trade

circum¬

(the

now

the

individuals
had
so

exact

following excerpt from an.ad¬
delivered May 24, 1929, by
then missioning N. Y. Stock
"(7) A property's value was at
Exchange President, E. H. H. Sim¬
once enhanced by multiplying the
mons
(as
also quoted;; in our
paper
share
certificates which

Scarcely four
years
later,
these

and

then

financing through
tendency ;Jo.
stock offerings and tre-,

wholesale

Imehdous. brokers' loans was a per¬
manent and sound economic in¬

conduct

the

that

bought for the 'long pull,' and that
borrowing money for the pur¬
was no different than bor¬
rowing from the commercial bank

principles and
status

stocks should always be

pose

ably sane
;ideas^about
speculative
Vthe

40, depending on the industry.
"(6) Because the United States
is a marvelous country, leading
common

Steel

■U:-:The

reaction.

draw

stances attending a boom or a bust
never

Thursday, January 15, 1959

collapse—or even the timing

Nor is it
parallels
between the specific elements rul¬

imply

the necessary recurrence of a mar¬

ket

sure

Volume 189

...

The Commercial and Financial Chronicle

steel

quite a few
holding back in

steel market,

of the

among
small
casualties,
those with liabilities under $5,000,

are

users

Vice-President

sales

Commercial

commented:

failures
in

the

adjust."
.»
; Part of the strength of the plate
market is due to a buildup in
linepipe orders.
Some of this
large-diameter pipe is fabricated
from plate. In the Midwest, linepipe bookings are still gaining.
Tank fabricators also are revising
their plate orders upward.

ported

"Dun

•

American

The

Iron

rate

•

avet^e

Udlt

steel

185

the

®P-

companies
of steel

2,123,000 tons of ingot and Jrteed
castings (based Oh average week¬

for

production
compared with

and

the

from

since

the

28.

week

when the total
,

from

foodstuffs and

raw

general

use.

It is not

Food

Price

Down Noticeably.

;

1959

12,

these two groups,

There whs a noticeable decline
wholesaling and
The
Daily
Wholesalerr Com¬
service, exceeded their 1958 levels, in the week ended Jan; 6 in the
Wholesale Food Price Index, com¬ modity Price Index, compiled by
prevailed
Brhdstheetj: f. Inc., fell to
;
- piled by Dun & Bradstreet, Inc." Du»
Most of the week's downturn It fell to $6.24 from $6.35 a week 273.61 on pec. 30, the lowest level1
centered in the Middle Atlantic earlier,, a decline of 1.7%.
The for 1958, but rose' to 274.46 on
Jam 5. The index a-week earlier
States where, failures dropped to index was 2,7% below the $6.41

but dips from last year
in other lines.
%

was

.,.A.

^%ll0r€s involying^liat>xIities of

$5,000 or more dipped to 145 from
153 in the previous week and 173
a year ago. A decrease also pre-

was 274.50 and ,oa the corresponddipis occurred in of the similar date a year ago. *.%
Commodities q u o t e d higher '¥
regions including the

37 from 66. Mild
four other

Cokt^me^ 6^ fa@ejl29

1947-49)
as
actual rate of

equal to

about

75% of the utilization of the Jan.
1, 1959 annual capacity of 147,633,670 net tons compared with
production

actual
week

before, based

of Jan.

73.6%

the

DETROIT

utilization

1, 1958 annual capacity of

140,742,570 net tons.
For the

the

rate

like week

month ago

125.2% and produc¬

was

tion 2,011,000 tons. A year ago the

production

weekly

actual

placed at 1,538,000 tons
*

Index

was
■y.v

95.7%.

production is based
average weekly production for

STATEMENT

CONDITION,

DECEMBER

1958

31,

1947-1949.

Automobile
ended

week

the

units

133,390

over

production

Jan.

the

earlier

for

the

estimated

RESOURCES

sharp rise
output
largely re-

week's

totaling 97.663 cars
fleeting the fact that in the latter
period the work-week was limited
to 3l/2
days owing to the New
Year holiday.
This week's total will top the
120,184
cars
assembled
in
the
comparable week of 1958, when
auto makers were starting to cut
back
output owing to declining
sales. However, it is considerably
below the 147,357 units turned out
in the week ended Dec. 5, 1958,
last year's top production week.
Most producers are working five
days this week.
All Chrysler divisions and the
five
separate
General
Motors
Corp. divisions are on five-day
schedules

the

Three of G.M.'s

current

Cash

392,538,460.61

United States Government Securities

....

660,681,069.33

Other Securities

...

191,913,278.91

Loans:

....

i-:'-.

Loans and Discounts

Accrued Income and Other Resources

Bank Premises

Real Estate Mortgages

•

Customers' Liability—Acceptances

539,261,660.80
673,127,960.16

133,866,299.36

9,091,775.71

...

and Credits

15,597,874.35

3,976,886.35

$1,946,927,305.42
LIABILITIES

Deposits:

Commercial, Bank, and Savings

seven

Other Public Funds

Accrued Expenses

;

$1,627,638,052.94

United States Government

week.

joint BuickOldsmobile-Pontiac
assembly
plants are working six days, At
Ford Motor Co., four of the 13
Ford division assembly units plan
to work tomorrow, as does the
Wixom, Mich., Lincoln-Thuttderbird plant. Other plants are on
a five-day schedule.
%.
American
Motors
Corp.
will
operate on a six-day basis during
the rest of January, as against the
previous five-day schedule.
Studebaker-Packard Corp.,
where sales are tripling last year's
deliveries, is maintaining a 53hour, six-days a week production

Hand and Due from Other Banks

83,130,839.20
55,491,668.00

.....

and Other Liabilities

Acceptances and Letters of Credit

$1,766,260,560.14

28,708^177.37

3,976,886.35

Capital Funds:
Common Stock ($10.00 par

Surplus

974,000.00

value)

......

90,000,000.00

29,007,681.56

Undivided Profits

147,981,681.56

$1,946,927,305.42

United States Government Securities carried at $169,193,395.99 in the

deposits, including deposits of $11,810,317.78 of the Treasurer, State of

schedule.

foregoing statement are pledged to secure public

Michigan, and for other purposes required by law.

Based

on current activity, auto¬
production for the month
of
January is likely to reach
560,000 cars. This would be a drop
from
the 593,778
cars
built in
December, the
best month
in
nearly two years, but well ahead
of the 489,357 units assembled in
January, 1958.

mobile

#
,

BOARD

Howard C. Baldwin

amount

of electric

Ray R. Eppert

DIRECTORS

Ralph T. McElvenny

Nate S.

Shapero

John N. McLucas

Lawrence P. Fisher

F. W. Misch

Donald F.

Harlow H. Curtice

John B. Ford

Peter J.

C. E. Wilson

William M.

energy

Charles T. Fisher

Prentiss M. Brown

Trend

The

Henry T. Bodman

Electric Output Resumes Upward

B. E. Hutchinson

George E. Parker, Jr.

distributed

by the electric light
industry for the week
Saturday, Jan. 10, 1959 was '
estimated at 13,554,000,000 kwh.,
according to the Edison Electric
Institute. Output the past week
exceeded the level of the preced¬
ing week.
'
and power

Day

Monaghan

Perry Shorts

Valley

ended

Neighborhood Offices Serving [Detroit and Suburban Areas

For

1959
000

the week ended Jan.
10,
output increased by 11,190,-

kwh.

above

that

the pre¬

Member Federal Deposit Insurance

4*.

cost-of-

Wholesale Commodity Price Index
At 1958 Low
;
1

Output for the week beginning

Jan.

prices at the wholesale level.

Index

week ago.

meats

living index. Its chief function-is

*129.8% of capacity, and 2,085,000
tons

to show the general trend of food

Wholesale

edged to 20 from 16. Mortality in

hams,

tolls.

Lower,in

price Were
bellies,
butter,
cheese,
sugar,
cottonseed
oil,
cocoa, potatoes, and hogs.
The Index represents the sum
total of the price per pound of

„

contrast, the toll among
Wholesalers held
steady
at
21
while the commercial service toll

in the similar week

of prewar 1939

$100,000

corn, ryeoate,
milk,' coffee, -tea, peanuts,

eggs.

barley,

clined

week, re¬
& Bradstreet, Inc. At
level

excess

flourj wheat,

lard,

Geographic trends from
the comparable week of 1958 were
Manufacturing
casualties
de¬
mixed;
five
regions
reported
slightly during the week
casualties while four re¬
to 28 from 33, retailing to 76 from fewer
87, and construction to 24 from gions had the same or heavier

169

Jan.

against 21 in the preceding week.

industrial

down

ended

failing businesses had liabili¬

ties

Dec.

succumbed

week

and 30 last year. Thirteen of

preceding

lowest

ended

reported increases from the pre¬
ceding, week, with the East North
Central total rising to 34 from
29 and the South Atlantic to 15

28, 1957, casualties
were considerably less numerous
than in the comparable week of
iast
year
when 208
occurred,
About one-half as many businesses

capacity for the week beginning
Jan.
12,
1959,
-equivalent
to

week

Steel

and

institute announced that the

crating

the

and

continued

"They've been in the driver's seat
so Jong
they find it difficult to

were

ago

Business Failures_ Continue
Holiday Decline

normal

Pacific. States, off to 47 from 57.
On the other hand, four regions

which fell to 24 from 32

placing of orders above their
requirements. One steel

the

(208)1

vailed

vious week, and increased by 1>048,000,000 kwh. above that of
Despite the gathering strength the comparable 1958 week,
need the added output becommitting themselves to it.

they
fore
;

Nunjbef 5812

Corporation

The Commercial and

(206)

Czech ceramics factory

East Versus West—

for

The Economic Conflict

the

and

leading international corporation official focuses attention
trip to

ines

bits

heces
fo

growing

these

When

radio

tries become

Earlier

John

re-

decline

Powers, Jr,

critical
to

wants

:abinet

are

the

Russia

ihr.

the

Com-

-ninnvH
—
J

riiiW

heeirmino

"or"Finland

ieen

Now

though
in

Thic

nav'be

Fin-

to Russia. Russia

this.

even

nunists

Communist-dominated

Einlnnrl

30%

vaP

nni

<1^
«.,>*

fiiwi
fired. TraHowns the Ti/«ar.r.«
Trade was
weapon.

jeen

price

litical

are

economic

not

care

they
ever
get
coffee.
They
have
never
been
coffee
Irinkers.
The
Russian
samovar
urns

out

ibout

what

tea.

While
do

talk

help

this

reat
neighbor of ours to the
outh, temporarily in the throes of

muscles,

that

this

With

have

long-term,

construct

25 Million Dollar

yet even beto counter, except to a modest
fhrough* the efforts of U.S.

oil

Egypt,

drill-

for

these .' things

arises

the

becav

outside

These

West.

Lenin,

alone

and

other

many

to-

framework
economies

veloped.

which

re-imposed

the

old import duty
that the Presi-

very time
of Chile
was

ent

preparing to
isit the
United
States, Russia
vas
offering to buy Chilean cop¬

the

production,

Stalin,

match

soon

this

enforced

.effective

the

Stalin.

Are

free

blunt
we

ier.

nove

Argentina, the Russians

the most critical
point -

»f

the

Argentine

economy,
oil — offering
letroleum products in

exchange

......

government

making

Securities.

■'»...

.♦.

..,

•

In these

concluding moments of
panel today, my objective has

our

been

focus

already

debate

economic

attention

your

•«.,

begun.

Our

then.

less

All
come

one.

these

somehow

thinking

reality that

industry

are

great

are

wars

test

49,508,803.60

Loans and Discounts
Accrued Income Receivable

Russia

Buys Commodity

strength

the

This might be
aany

headlines

that

»eared

during the past

ecent

recession

lodity markets

the

have
year.

world

was

seized

upon

the Soviet bloc as an
opening
/edge in making new friends in

one-commodity nations of the
/orld, while traditional custom¬

such as the United States,
France,

were

Other Assets..

Cuba,

working

cotton

1,935,356.88

414,000.00

500,000.00

(957,500 shares)
(Par $12.50.)

Total

397,160.74

Lester E.

14,000,000.00

Capital Funds.

5,376,324.18
31,345,074.18

$416,378,159.49

Shippee, Chairman

Pomeroy

Raymond C. Ball, President

John B.

Day, Executive Vice President

Byrne, Chairman of the Executive Committee

The Connecticut Bank

from

Igypt, wool from Australia, New
■ealand and Uruguay, butter
from
lenmark, fish from

$416,378,159.49

Canada,

from

January, 1959

Undivided Profits

inventories. Russia linked itelf to the economies of a
number
f countries with
unprecedented
urchases of wheat from
ugar

2,986,465.32

Surplus......

Iritain and

ap-

The
com-

ers,

3,672,617.47

Capital Stock... $11,968,750.00
-

AND TRUST COMPANY

Iceland, citrus

.HARTFORD, CONNECTICUT;

*An address

by Mr. Powers before the
id-year meeting of the Pharmaceutical
lanufacturers
Association,
New
York
ity, Dec. 8-10, 1958.

26
MEMBER

FEDERAL

Offices—ready

RESERVE SYSTEM

•

to serve

MEMBER

you—in 18 Connecticut communities

FEDERAL

DEPOSIT

un-

ad-

the

grim

again at
be-

industrial

adversaries.

Capital Funds:

5,223^709.15

condensation of

ultimately

$375,524,645.64

Reserve for Contingencies.

1,248,506.29

Banking Houses

Surpluses"

Dividend Payable in

173,614,651.19

wool.-

times

once

for

were

Our

profit for statesmen have said repeatedly in
virtually no recent
months
that
the
major

Other Liabilities
.

able

Accrued Federal and State
Taxes on Inqome.

disaster

room

know what hit

are

our

competi-

He has

But

never

just

to the situation

Unearned Income

88,621,133.83

,.,,.«

war.

'State, Municipal and Other
>
Securities.

"We declare war upon you in
the peaceful field of trade. We
declare a war we will win over
the United States. The threat to
the United States is not the ICBM,
but in the field of peaceful production. We are relentless in this
and ^ wiH prove ^be superiority
our system."

3?, 1958

97,764^194.69

....

the

^nne tragic mistake by dismis.sing
the blatant thieat of Khrushchev
when he says:
*

new;

to show

shareholders.

U. S. Government
•

we?

declarations

now

LIABILITIES

union,

association

industry,

Deposits......
.'v.

1930s, we ignored the
warnings of Hitler in Mein
In
the
'40s, we disre¬

garded

him |

With

ours.

Cash and Due from
..

de¬

the

clear

Let's look at this

December

Banks.

free

Communists, government and in¬
dustry are one and, unless we;

with

level

INSURANCE

mP^titor but of a
pl^ f attack Indeed lor the,;
Pian Ol^attdCK. 3 Inde^^o^^he

of government and
will lose the fight.

Khrushchev

and Mao.

RESOURCES

•

the

His role is not that of

in.

his year, while Chile was in
dire
:conomic straits because of a bad
opper market at that time, while

and

the world have

difficulties, quietly and
ffectively the Russians begin to
Elsewhere in Latin
America, the
ame pattern is
developing. Earlier

oper¬

accepted economic laws within the

conomic

ove

The

known

war. Certain^,
Karnpf.

stalemate,

trade

not obliged

Coin-

the

the fact that the Third World War

tor

Russian

fho*ai£.n,?5ii0'^'engage in barter, or

domination, have always been his
first objectives, from Marx through

extent

presents

has

ancj

and

not

may

India

the

Posed

increased

not

working

po- »

dis¬

conflicts

type * of * action* presents * a

the fact that he may

ating

War Has Started

" d'

threat

defeat

■

threat

This

his

China

at Pearl Harbor left

have

suit

inventions of

and

all-out warfare holds great prom,ise for the Communist piind. He
thinks that way,. Industrialization,

to multiply these seemingly small

W1 what orbit- will
morrow.
*
*>

for

possibly

And why not? Down the military road,-as we have known that
road in the past, Russia and China

Ana it this continues, need I ask

Syria

•'

.y?i;

^trumentof

and^iinaide4 by uur Government.

sugar-relining, cement and
production facilities. They
providing not only credit's but

of war, bave become, finally, the

other

—

technique of modern
diversionary
tactic,
Economic forces, which have always been the ""underlying cause

warfare,

are

ing

••;

kCt

minor

and developed in

private, industry,

■

risk

gun

textile,

the

not based

its

JL vv5

consequent economic disaster and
the collapse of their dream. But

that stpry—
lowrinterest loans
*

War has already started. Tn fhinlr
To think
is
a
tragic; illusion,
Shooting may well have become

design, to construct and to in-

threat

read

industries

are
V.r

CT JL

otherwise

glass,

technicians

X-

Wi.r has nl.'PnHv starts

Tono,,

becoming increasingly-ap-

socialized

all

lead me to the inevitable
conclusion that the Third World

Japan,

de- "

labor

own

has

production facilities of the West,

Russia

Czechoslovakia"

You

ten

the priyate)y owned research and

„

■.

the

Russia

And

trip to a number
of Communist countries this year
and I can tell you that that visit,
plus these headlines, and many

the operation of an entire
pharmaceutical and chemical industry for the Indian Goveminent This offer includes the
production of life-saving medi-

Nasser.-and Arab Countries Enter
Agreements

v_.

industry cannot

I also made

are

a^°ys' and even
petroleum
Pllbduc^» c°tton and automobiles. cines discovered
Loan

basic

with

to do

ilia to

they

platinum, zinc, manganese, ferroA'
'

„

A.-■

Third World

in iac|ia they are going even further and are offering to finance,

lead—-.first

if to Ilex

indications

Russians

and

stand ready

may

Trade Machinery and
Equipment for Brazilian Coffee"

whether

tin

up—as

and

There

And

'Russians

The

sharp

the price of aluminum

compete.

because

Threat That Is

will

we deceive, ourselves in referring
this as a cold war. i^ It is the
Third World War, utilizing a
motivations.
Even
though Com- broad range of economic tactics
munist natrons are currently uh- *n Place
oi bullets, bombs and
able to produce enough pharama- battleships.
We are not in the
ceutical products to satisfy their midst of a series of irritating trade
domestic needs, it is evident that Problems between wars—we are
they intend to restrict home conwar itself. Our property, our
sumption if they believe the prod- liberty, our very lives are as much
ucts
will serve more
important at stake as they have been in any
political ends in export markets, shooting war of the past.

part

down, then

entire

W Jl J
which

coup in India and elsewhere by
stressing seemingly humanitarian

conn-

just in Great Britain, but
throughout the world, to the det-

exports go

seen

bloc

thai

targets,
employing techniques with which
v4

tend to make another propaganda

riment of United States and Canadian industry. Russia manipulates
the

loans,

build

countries

M«ht that the Communists in-

not

'Finnish Cabinet Forced to Resign
As Russians Stall Trade Pact"

Why.'

noHinulerlu

his

product

ends.

position all

It is difficult to i more,

particularly

supply and

manipulates the selling
his

litical

fixes

believe in patents.

L*\J U J ]

Drug Industry to India"

commodity suppliers,
year,
they took a
of the British

this

on^

and

"Moscow Offers

political

Canadians, finally forcing

:entheadlines.

currency

their

Soviet

Over

-the

price

bloc

that

He is not concerned

law

West.

low-interest

leaves

aluminum market away from the

it?

refer to

few such

las

the

1 uate

land

suits

substantial

should

spent only for Soviet

purposes,

it mean? How

rubles

with

rates.

it will encourage inflation, it will
uneconomic
long-term,

not made for profit
achieve oolitical ends.

But what does

Let

for

hut-she is able to do
these sales

its political objectives it
dump, it will sell under cost,

private

influence

the

mand.

extend

believe that China could, undersell

Britain,

....

-commodities

"Russia Cuts World Metal Prices"

md television.

selling costs.
with

stages of industrially

just ahead.

years

the

massive

wishes

g00dS'

vVe hear about

3 v a

Lebanon

countries

that can

eco-

East and West.

commodities

o n

lomic conflict
between

„

irom

Take

Thursday, January 15, 1959

the

The Soviet

demonstrated

will

needed at home in the markets it

which these nations largely
depend for survival. Sale of these

the

o u

fruit

East.

achieve

zation, moves against the West,
selectively
d um ping
consumer
goods
and
equipment
sorely

upon

in¬

t i

r m a

and

clearly

T?rSfol«

„

read in the head-

Middle

has

but

battleships. He forebodingly observes we are making the
same
tragic mistake as when we ignored the clear warning of
Hitler; presents a clear program of non-subsidy help to Ameri¬
can industry to operate abroad and counter Soviet offensive; '
and speaks of activities that could lead to a modus vivendi.
we

the

Moves

war

maneuvering in Berlin and

China, already in the first crude

and

Every day

litical

Japan and Britain"

broad range of economic tactics in place of bullets, bombs

mention

streets

sign of

shooting, in Quemoy and the

Southeastern Asian Markets From

of Russian penetration,
than that

only

need

Russian-paved

"Peiping

number of Communist countries, and reports
Mr. Powers finds no other conclusion
the Third World War has already started—utilizing

recent

sensitive

much

even

the economic implication of the East-West conflict. Based

upon

too.

other

are

Afghanistan;
the
Bhilai
steel mill in India; a hospital, a
hotel, an exhibition hall and a
stadium
in
Burma,
all
strategically located to be seen by the
greatest number of Burmese.

Vice-President, Chas. Pfizer & Co., Inc.

Senior

munist efforts to disrupt traditional trade and economic patterns

Kabul,

Chairman of the Board

Of Pfizer International

work

areas,

By JOHN J. POWERS, JR.*
President and

Cairo,

highway-buildYemen. And they

ing project in
are

near

Red Chinese

Financial Chronicle

CORPORATION

Number 5812 .The Commercial and

Volume 189

strength

the

conflict

economic

in the

scientific,

resides

levels

our

private industry and investment.
But they have done nothing sig¬
to

nificant

the

encourage

of the

use

and

cultural

could

vivendi

Financial Chronicle

lead

least, with

mayingly effective unity of forces

business
a

modus

some:

parts

present Communist bloc. *
tried to summarize this

purpose

of bringing it into sharp

The

industry.

has al¬

enemy

this

launching

war,

nomic

offensive

major eco¬

a
a

world-wide
be in

frint while we still seem to

•

(Special to-.the financial Chronicle)

month

Home

agent of
Banks,

Loan

that $80,000,000

*4%

Bank

ST.

LOUIS, Mo.
is

with

—

Michaei

consolidated

Fusz-Schmelzle

Co., Inc., Boatmens Bank Build¬
ing,, members-of the New 'York
and Midwest Stock Exchanges.

Three With J.
:

SAN ''

FRANCISCO,

Calif.

Wilson

$834,000,000

principal *

•

—

Jr.,

and

now

debt

year

resources,

at this

due

period of the
is the usual practice of the

management of Hendrix PickardL

banks because inflow of cash into
the

substantial

banks is

and

Hall & Hall Adds

de¬

affiliated with J. Barth & Co.,

are

mand for loans smaller

during the

(Special to The Financial Chronicle)

winter months, Mr. Smith said.
intelligent;
404 Montgomery Street, members The cash inflow, he noted, is due
of
of the New York and Pacific Coast primarily
to repayment to the
Government and industry in this
banks of loans made to member
Country which Will match the dis¬ Stock Exchanges.

action

ana

to ensure

effective

Loan

DUBUQUE, Iowa—Quail & Co.,
Inc., has opened a branch office
in the Fischer Building under the

Retirement, from cash
of

Bryan R. Gentry, Richard S. Rush,
Bernarr

Home

Quail Opens Office

tions of the Home Loan Bank Sys¬
amount.

Barth

(Special to The Financial Chronicle)

(Jan.

15) will be paid off without re¬
funding. Retirement of the issue
will reduce outstanding obliga¬
tem

the

ALBANY, Ga.—French & Craw¬
ford, Inc., has opened a branch
office at 123 Courf Street, under
the management of Paul A. Fuller;

notes

of the banks maturing today

System.

French, Crawford Branch

of six

must pursue every possible course

fiscal

Smith,

Federal

announced

Bastunas

really meaning what they say, or focus. There r is obviously, much
could be said about
a little of both.
/
• more, that
ways and means of winning this
j In this, the decisive conflict of
war, but my principal message is
an era—this 20th Century Arma¬
that it is a war and that we of
geddon which will set the course
industry who under our way of
of history for generations to come
life must march in the front lines
'»—the United States Government
of that war, whether, we like, it
seems to be keeping its most vig¬
or not,
need an , awakened Gov¬
orous
weapon, American private
ernment behind hs. As individual
industry, on the shelf while it
companies and as an industry we
shoots missiles at the moon—and
at

Everett

Joins Fusz-Schmelzle
v,

institutions

FHLB Reduces Notes

Communist

the
\

today, that this is the war, or not

ready devised new techniques for

strategy.

either not believing, as I propound

disposal

subject of the economic conflict of
East and West, principally fur the;,

private industry in this struggle,

the

I have

(207}

FRESNO, Cal.—John L. Wisner

has

free .association

been

Hall

and

added

the

staff

Hall, Bank of America

Building.

position of preparing
shooting war that may

the perilous

•only for

i,never come.

•

"•.-

h-I
V'i -i

Bold Program

Suggests Clear,

„

U. S. S. R. and China are
determined
to
create
economic

■\ *The

diavoe in. the West by every pos¬

tries

underdeveloped

Detroit's hew 'Givic Center, '

coun¬

their

by tying

the world

over

the

sible means, and to win over

neutralist,

LEFT: f he-Spirit of*Detroit,
impressive bronze creation
by sculptor Marshall M. Fredericks, recently< made the long
trip from Norway u-p the St: Lawrence-Seaway to preside

aspirations for economic growth
to Soviet capital goods and tech¬
nology.
In trying to meet this
; onslaught, the United States finds
; itself in a dilemma. The govern¬
ment wants to counter the Com1

offensive "

munist industriali2atibn

the / underdeveloped nations,
j and has the finances to do so but
\irt

not the

technical know-how.

of industry want to participate in
the
long-range industrialization

of these countries.

programs

the'know-how

have

but

AS OF DECEMBER

evitably limited in the risks which
we

are

entitled

31, 1958

with our

take

OF CONDITION

STATEMENT

in¬

are

stockholders' money on such eco¬
nomic battlegrounds.

Why can we

RESOURCES
*
y
*"•'

;.J not get together?

offer major help,

mean

for such

subsidies—I

mean

loans

the

Vigorous

are

courage
1

140,504,711

re-

$336,304,596

Total Loans....

Other Real Estate...,

9,439

♦♦♦♦•♦lit

1,631,400

Federal Reserve Bank Stock..

Bank' Properties and Equipment..
Accrued Interest and
I

•

Prepaid Expenses...... •

•

8,577,825

4,562,754

•,♦♦•♦♦ ♦« Mill

Customers Liability on Letters
of Credit..♦♦♦♦♦•♦••it

171,699
162,610

Other Assets;.>.«,<«*.•,

like this

to permit and enAmerican private indus-

necessary

671,861

195,799,885

Real Estate Loans.......

new measures

99,845,018

Loans and Discounts

local enterprise..
Such a program would put gov-.
erhment
money
and
industry's
manpower,
time
and
skills
at
equal risk in a free and powerful
alliance.
•,'• '< i-Ci-l
earnings

346,225,378

«•««•. •

Corporate and Other Securities..........

payable in local currencies from

$156,777,023

Obligations.

I don't

loans.

State and Municipal Securities..

providing funds for long-term fi¬
nancing to American and local
industry. This can be done sim¬
ply by diverting a part of foreignaid funds

United States Government

indeed can
make industry a vital part of an
economic counter-offensive,/ by
can

■

Cash and Due from Banks..,,

An awakened U. S. Government

$954,939,603

T otaI.

try to counter the Soviet offensive

by operating abroad as a major
expression of U. S. international
policy.
The. occasional,
partialassistance programs offered indus¬
try by our Government are sim¬
ply inadequate; bold moves are
necessary in this type of war. Un¬
fortunately, the Government
is
meeting the need for imaginative
economic policies with businessas-usual banking
answers—and
that just isn't good enough.

LIABILITIES

Demand Deposits:

Individuals, Corporations and

Experience

another, the Under¬
nations will move to¬
ward some degree of industriali¬
zation,
Whether they will have
State-owned, socialized industries,

may

well depend

As the oldest bank in
continuous

take the fetters off American

in¬

our

dustry in this economic war.
i

A Possible Modus Vivendi

number

Communist

have

countries

and

urge

For

those of you

.we

will be better able

to .gauge

■

Total Deposits

$498,217,767
370,698,546
$868,916,313

Unearned Interest

,•

4,418,844

5,871,927

and Taxes

171,699

Letters of Credit

398,628

Other Liabilities

Capital Stock ($10.00 par value)

18,378,500

Surplus

42,000,000

Undivided Profits

10,096,214
4,687,478

General Reserves

Total

Capital Accounts

Total.

$ 75,162,192
$954,939,603

practices.

visited

who have not to seize
every
opportunity to do so.
By
meeting the Russian and his allies,

service, The Detroit Bank and Trust

in¬
dividuals, industries, and institutions in the broad
scope of its services—developed through unequalled
experience and a policy of sound banking and trust

Michigan with 109 years of

Company offers many important advantages to

the

upon

Government

decision

Liability

technical aid, or free local enter¬

prise

Savings and Time Deposits

Accrued Expenses

and

credit

Communist

26,793,863

developed

with

12,795,773

Other Public Funds

One way or

built

$458,628,131

Othe rs

U. S. Government.....

of
1

banking

service, the

its best, take advantage of the

sense

spirit

of responsibility, the experience

of The Detroit Bank

and Trust Company.

United States Government Securities in the foregoing statement with

par value of #72,535,000 arc pledged to secure public and other deposits
where required hv law* including deposits of the State of Michigan

amounting to #3,832,320,

their

measure,
to find clues to
future tactics, and commer¬
advantage when not in conflict with governmental strategic
their

cial

•

considerations.

portant

for whatever

im¬
there

equally
hope

Digitizedmay be that more contact
for FRASER

THE DETROIT BANK & TRUST

COMPANY
MEMBER FDIC

The Commercial and Financial Chronicle

What Aie the Perils and Pitfalls

Dealer-Broker Investment

•

Street, New York 5, N. Y.

Also available is

Duriron Company and memoranda
<

and Pepsi

Small
fintu

constitutes

Street

Graphic'
f

New York 5

N. Y.

;

Transfer

and

Rates

scene.

Com¬

problems

1,001

Wall

business

$10; yearly $50 (sample page of charts on request)—
Stephens, 67-C Nassau Street, New York 38, N. Y.
Ilolidays in the United States—Booklet listing legal holidays in
the U. S. and its possessions—Manufacturers Trust Company,
International Banking Department, 55 Broad Street, New
York 15, N. Y.
Japanese Stocks — Current Information — Yamaichi Securities

that

been

resulted

en¬

Market Outlook for

1959—Special report with list of 139 se¬
lected stocks for investment—Hornblower & Weeks, FC 62,
40 Wall Street; New York 5, N. Y.
Missile Stoek
Analysis — Reilly, Hoffman & Co., Inc., 141
Broadway, New York 6, N. Y.
/
New York City Bank Stocks—Year-end comparison and anal¬
ysis of 13 New York City bank stocks—Laird, Bissell &
Meeds, 120 Broadway, New York 5, N. Y.
New York City Banks—Comparative figures on 10 largest

few years.

Company, 16 Wall Street, New York

15, N. Y.
1958 vs 1957 — Comparative economic summary in "current
> comments for Investors"—Francis I. du Pont & Co., 1 Wall

■-/f

troubles

ous

increased

both

character.

The

ures,

change"—Exchange'Magazine, 11 Wall Street, New York 5,
N. Y.—20c per rcopy; $1.50 per year. - Also in the January is¬
sue are articles on "What's Ahead for the Steel Industry,"
.

-V.:'/

YYs

Outlook Tor 1959—Comment by stock groups (Booklet
H. Walker & Co., 1 Wall Street, New York 5, N. Y.

F)—G.

intensity

has
and

incidence of fail¬

receiverships, and

izations

seri¬

competition

reorgan¬

small

among

business

firms,

and
particularly
among
many that were quite successful
just a few years ago, indicates
that the

underlying

catastrophies
—and in

has

some

of these

cause

been

cases

—to understand

the current issue of "The Ex¬

Now,

number of these firms face

—

''" ■'. Y7 V?' YY-"

E. Slesinger

The unusual nature of selling
opportunities in the years imme¬
diately following World War II
and during the Korean affair, en¬
abled many enterprisers to start
concerns and show unusual profit
a

failure

reluctance

and to

apply ef¬
and recognized principles
of management. The promoters of
many of those concerns that have
fective

failed

have

been

their lack of
ternal

wont

factors

blame

such

ex¬

inability to

se¬

success

working capital and to keep
with the research and devel¬

cure

Over-the-Counter Index—Folder showing an up-to-date com¬

parison between the listed industrial stocks used in the DowJones Averages and the 33 over-the-counter industrial stocks
used in the. National Quotation Bureau Averages, both as to
yield and market - performance over- a 19-year period —
National Quotation Bureau, Inc., 46 Front Street, New Yotk

opment conducted by larger firms,
inequitable tax programs, and
rising labor costs. But probably
more

relied

start
Dr. R.

fold in recent years.

records for

are

of management

committed

in profitable

that

firms

"one-man"

man¬

enterprising

nessman,

been

fundamental has been

the

little

one

kets

and in the sellers'

mar¬

High

enter¬

top,

self.

at the managerial level it¬
is

not

for

uncommon

small business firm,

organized on
a
personal, basis, to try to keep
everything "in mind" and on a
"personal"-relationship in spite of
the complexities that develop as
production * expands, markets
grow,
and
personnel
problems
multiply. Failure to develop lines
of authority and responsibility as
well as failure to respect - these

Continued

tion, all too frequently, this busi¬
nessman will guard his position of
ownership too cautiously. He sel¬
effective

for

reasons

be from top to bottom, bottom to

the

selects

the

among

failure of management is ineffectrive
communications, whether it

period 1945-56 be
quite successful. In such a situa¬

dom

that such

wonder

prisers found it hard to weather
even minor business storms, v
Too Close Control

busi¬
with a good idea and
hard work along with good for¬
tune, could build a concern or

con¬

multiplying
many

adminis¬

themselves at
the brink of disaster?
To begin
with, it is necessary that the
concept of management be inter¬
preted
broadly enough by the
owners.
Too
many
small firms

f f ective

have

and

finding

agement.

Company of New York, Inc., Ill Broadway, New York 7,

splits, etc.

have

suddenly

management,

New York

Stock

errors

have

cerned with

copy

Street, New York 5, N. Y.

of the

have

those

effective

be well to ask, what

some

especially
•

F. W.

1959 Stock Market Outlook—In

It may

;

con¬

charts showing

control

possess

terprisers
over

lack

Managerial Errors

fronting small

Co.,

serial

tration.

The

monthly highs, lows, earnings, dividends, capitalizations, and
volume on virtually every active stock listed on the New
York and American Stock Exchanges covering 12 full years
—With dividend records for the full year of 1958—Single

banks—Bankers Trust

em¬

m porta n t
segment
of
the American

issue with

Stocks —1959

numoers

business

rates—Registrar

enter¬

the
to manage
properly
their
own
businesses,
rode the bandwagon of being able
to sell anything. In the more dif¬
ficult times that have followed, it
is

unmentioned

de-

able is current Foreign Letter.
current

terms ot

variously

ployees, amount of capitalization,
volume of sales, or
amount of
assets,
still

—

business,

some

years

prisers who did not
technical knowledge

of materials and manpower.

Competition—Study—-W. E. Hutton & Co.,

50 Church Street, New York 7, N. Y.
for Fifty-Nine—Bulletin — Bache &

type of management be¬
and- fraught

burdensome

tjie past few

projects for nuclear pro¬
pulsion of rockets and earth satellites with particular com¬
ments on Tracerlab, Inc. and Combustion Engineering—
Atomic'Development Securities Co., Inc., 1033 Thirtieth
Street, N. W., Washington 7, D. C.
Burnham View
Monthly Investment letter ■— Burnham and
Company, 15 Broad Street, New York 5, N. Y. Also avail¬

pany,

business, avoidable and unavoidable, are laid
bare in order to point up problems of small business and the
direction for improving them.
In exposing small business
pitfalls, Prof. Slesinver olaces greatest stress on management

Atomic Letter No. 44—Discussion of

—Booklet

important, the existence

this

long as we are on the sub¬
ject of incompetent management;
it is well to point out that within

Errors of small

14 Wall Street New York 5, N. Y.

Forecast

ing

with financial disaster.

Pittsburgh, Pa.

Metal & Thermit Corp.

But..as

Professor of Economics, University of Pittsburgh,

Co., 72 Wall
analysis on

Federal and State Stock Original Issue and Transfer Tax

noticeable.

particularly

comes v

By REUBEN E. SLESINGER

Cola Co.

Antitrust Policies &

Thursday, January 15, 1959

markets become scarcer and sell¬

Of Small Business Today?

It it understood that the firms mentioned will he
pleated
:
to mend interested parties the
following literaturet

Annual Review & Forecast—Bulletin—H. Hentz &

Recommendations & Literature
*

139

page

BONDS

subordin¬

ates, and when he does, often he

Legal for Savings Banks

vests in them little real authority

and Trust Funds in

responsibility. However, any¬
thing that reduces the ability of

New York

the

owner

function

can

To Yield Over

lead

impending failure.
No man¬
agement team or group stands
ready to aid in emergencies. This
incapacity leaves the company

;

Maturity

Security Adjustment Corp.;

without direction at the very time
that competition is increasing in

TRIa ngle 5-5055

intensity and more effective man¬
agerial supervision is required.

Established 1935.

Street, Brooklyn i, New York

Court

Buy and Sell All Securities

situation may lead easily
hard times or the sale of the

Such
to

company

under less favorable cir¬

cumstances.
Another

common
failing
in
small business firms in the
past decade has been the flooding
of management with many close
relatives,
often
selected
and
plaeed into positions of impor¬
tance without sufficient regard to
ability.
When it was compara¬

many

tively easy to sell and production
the

was

basic

problem,

petence in management

incom¬
was

not

World-wide satisfied

users

World-wide representation

4. N. Y.
Products

and Processes—Booklet A describing developments
alloys, carbons, chemicals, gases, plastics, and nuclear en¬
ergy—Union Carbide Corporation, 30 East 42nd Street, New
York 17, N. Y.
in

Real

Estate Bond
:

Stock

All of

these shares having been

appears as a matter

New Issue
<v

100,000 Shares

Averages—Comparative figures—

Continued

139

page

sold, this announcement
of record only. Prospectus on request.

Norwalk Tank

Company, Inc.

Class A Common Stock
(Par Value $1
For

per

Share)

financial institutions

Price $3 per

Presently active:

SPECIAL
f! '.

.
.

Air

Express International

G. K. Shields & Co.
15 William St., New

Republic Natural Gas
Tel.

DIgby 4-9755

TalU

tomers

FINANCING?

•

„

fc.

Talcott.} If you fcave loan
whose

porarily

York 5, N. Y.

James

Bell System Teletype NY 1-1632

Colorado Interstate

requirements

beyond

your

are

cus-

loaning

tem¬

policy,

Talcott, Inc. can help you keep
will and loyalty. If you're

good

with

faced

decision

the

loans, Talcott will
in

working out

limiting

cooperate with

you

financing program

; which you may wish to participate. Re¬

ESTABLISHED 1894!;

National Homes A & B

HAVE

their

YOU

ACCOUNTS REQUIRING-

member:
*

your

if you,: as. a banker, feel

client

requires

special

that

financing

Collins Radio A & B

STATE AND MUNICIPAL BONDS

beyond the services of a bank, Talcott
supply this additional working cap¬

can

CORPORATE BONDS

ital
your

Metal Hydrides

LOCAL STOCKS

until

such

customer

to you.

time
are

the

aga'n

needs

acceptable
'

•

COMMERCIAL

Troster, Singer & Co.
Members New York

The

RHODES-HAVERTY BLDG.
-

FACTORING

Security Dealers Association

Trinity Place, New York 6, N. Y.

HAnover 2-2400

FlNANCiNG AND

Robinson-Humphrey Company,Inc.

ATLANTA

WALNUT 0316

LONG

1, GEORGIA

DISTANCE 421

Teletype NY 1-376; 377; 378"
V
CHICAGO

NEW YORK
-

DETROIT

Xumber 5812... The Commercial and Financial Chronicle

Volume 189

being besieged with letters.
Senate

From

Washington

By C. BARGERON

of the least
advertised but highly important
issues, the matter of paid-TV is
being readied for another goagain,

one

around

Congress. The

promoters
have spent
something like
$10 million in

would,

skeptics
paid-TV.
J

It's

the

news

The

by radio.

needs

industry

ciation 35th annual dinner at the

But there will be

some

one way

are
to the feasibility

way

of the

the newspapers fought the dis¬

Field

Investment

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

Jaii. 15,

1959 (Philadelphia, Pa.)
Philadelphia Securities Associa¬
tion annual meeting and dinner

fore the FCC and Congress for the
last five years.

Rockefeller, Williams

The firm

Jan. Id, 1959 (Baltimore, Md.)
Baltimore Security Traders As¬

name

of Teden &

Association of Amer¬
ica annual meeting at the Hilton
Hotel.

Jan. 29, 1959

With Ellis, Holyoke

don

Chicago

ISLAND, Neb.—Gor¬

Robbins is

now

elation

Convention

(Special to The financial Chronicle)

dinner

winter

at the Sheraton Hotel.

PORTLAND, Oregon —Edward
T.

has

Lord

been

added

would

with

Ellis, Holyoke & Co.,
National Bank Building.
'

Feb. 6, 1959

First

staff of E. I. Hagen &

(Boston, Mass.)

Boston Securities Traders Asso¬

Bank

can

Building..

unification of

It
Carlisle

not

the only thing
he could get on

his

would be available

Bargeron

on one

set.

station.

If he wanted the present free pro¬

he would only have to turn
station that
is
producing

grams
on

FOR SAVINGS

NATIONAL BANK

and

them.
The promoters of

paid-TV

prom¬

ise to give shows such as the Met¬

ropolitan

available.

now

into

My Fair Lady, or
equally good and not

opera,

something

would have

Manifestly

they

NATIONAL BANK

present something

different, otherwise
prise would fall flat

their enter¬
its face.

There

are three proponents
in
field, the pioneer of which is
thq. Zenith Radio Corp. The other

the

tw*J

Skiatron

are

Zenith

OF CLEVELAND

Telemeter.

and

through a card
which, inserted in the machine
through a scrambling process,
would bring in the picture. Tele¬
meter

coin

operates

Skiatron

and

which

boxes

would

the

AS another important step

have

jlx

patron

that

House

bills

Senate

Interstate

Society for Savings and
of Directors of

the 6th

and

Committees

Other Bonds and Securities

the

We welcome the

204,871,260.90

..*•••«•

5,108,292.40
8,866.04

2,375,277.83
$391,911,460.90

LIABILITIES

$ 12,000,000.00

Capital Stock

Let

put

our

serve you.

18,000,000.00

thorough knowledge of the
and complete banking facili¬

Cleveland

licenses until

area

1,326,181.67

••••••••

Reserve for Taxes and Expenses

•

1,102,856.97

•

Deferred Credits and Other
Liabilities.

ties to work for you.

The

48,888,587.45

Surplus.

opportunity to

sion to not

any

Total

than 13,400 commercial

Federal Communications Commis¬

grant

thus becomes

Undivided Profits

Congress had the time to pass a
law regulating it, and asking the

done.

Other Real Estate Owned

largest bank in Ohio and 78th largest

among

...••••

Banking Premises

banks in the country.

of the committee that paidshould not be installed until

was

95,797,588.56

Loans and Discounts

total resources of $391,911,460,

sense

this

$ 34,861,587.72

Obliga-

tions.

Society National Bank of Cleveland, with

passed resolutions giving it as the
TV

Hand and Due from Banks.

Interest Accrued and Other Assets.

prohibit it.

Commerce

oil

United States Government

voted to unite these banks,

far, although both the

and

Foreign

Cash

effective December 31, 1958.

last session neither House

this

went

■'

Society National Bank have

they have been able
to block paid-TV through the in¬
troduction

the Board of Trus¬

the Board

would

far

At the

CONDITION

31,1958

RESOURCES

growing community

serve,

tees of

buy off all its talent and eventu¬
ally mean the end of free TV.
So

and the

innovation promises to be
big boon to Hollywood and the
theatrical talent. But the present
radio and TV chains—NBC, CBS
ABC—claimed

December

service for Society custom¬

ers

The

and

STATEMENT

designed to provide great¬
«

would drop the prescribed fee.

6,565,421.22

••••••••»•

352,917,001.04

Deposits
Total

Commission

$391,911,460.90

«•«••••

had

originally ordered a threeyear trial period limited to eight
markets with only one station in
a market.
The three chains fought
this bitterly.
They went on the
air with appeals that free TV was
endangered. The result was that
Congressmen were swamped with
letters running into the thousands.
The FCC has held up on the trial
period.
Chairman

Oren

Harris

Interstate

House

and

United States Government Obligations

$10,858,963.35
as

duced

Committee

has

WARREN BICKNELL, JR.

President

intro¬

The Cleveland Construction Co.

give paid TV enterprisers
one
station each to
experiment
with, but it first bans paid-TV. In
other words, the authority of the
FCC to order a go-ahead would be
taken from it and the proponents
would have to Come back to Con¬

In its

present mood they would never
get this. Their only chance is to
leave the authority with the Com¬
mission and at the same time fight
to prohibit any anti-

paid-TV legislation.
Had

such

legislation

be¬

fore the House at the last session,

it would have undoubtedly passed,
inasmuch
up

Chairman of the Board
The White Motor

all the members were

for reelection and they were

Consultant

President

WILLIAM HARVEY KYLE

CHARLES B. BOLTON

President, Payne-Bingham Co.

The Richman Brothers

Company

Secretary

Company
VERNON STOUFFER

ABE M. LUNTZ

The Luntz Iron & Steel

President

Company

RALPH S. SCHMITT
The Cleveland Twist Drill

Director

President

President & Treasurer

T. J. CONWAY

The Harshaw Chemical

Vice President &

FRANK C. LEWMAN

Company

The Stouffer

Corporation

The Fisher Brothers

Company

THOMAS COUGHLIN
Director
The

Murray Ohio Mfg. Company

ERNEST C. DEMPSEY

Attorney

Squire, Sanders & Dempsey
WILLIAM H. FLETCHER

come

Corporation

DRAKE T. PERRY

MERVIN B. FRANCE

Executive Vice President

ROBERT F. BLACK

would

in Congress

permitted by law.

the

bill at this session which

gress for affirmative action.

carried at

pledged to secure Public Deposits

DIRECTORS

*■

Commerce

required

are

Member Federal Deposit Insurance

PRESIDENT

Foreign

Retired

JAMES L. MYERS

CLARENCE M. TAYLOR

Chairman of the Board

President

Clevite Corporation

The Harris Calorific

LAURENCE H. NORTON
Director

The

the

affiliated

preferred

program.

E. I. Hagen Adds

(Chicago, 111.)

annual

Annual

the Boca Raton Club.

Security Traders Association of

(Special to The financial Chronicle)
GRAND

Nov. 2-5, 1959 (Boca Raton, lift.)
National Security Traders Aaso*

sociation 24th annual dinner at
the Southern Hotel,

Group of Investment

Bankers

at the Warwick Hotel.

Now

Philadelphia annual dinner at

the Bellevue-Stratford Hotel.

the other.

After all the matter has been be¬

;

story of the buggy
people who fought the

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

EVENTS

shenani¬

the Congress disposes

gans before
of the issue

Sheraton Plaze Hotel.

COMING

pick-up and it is claimed paid-TV
would give it to them.

although there

advent of the automobile, or

whereby the
customer, by
the payment
of a fee, would
be able to get

entertainment

old

and wagon

novation

semination of

Co.,
Inc., 149 Broadway, New York
TV promoters would be getting City, has been changed to Rocke¬
their feet in the door. Very likely feller, Williams & Co., Inc.

they

this

introduce

The expectation is that at this
session, if the Harris bill gets to
the floor, it will pass the House
and again the hopes of paid-TV
proponents will be in the Senate.
If a prohibitive measure is not
passed by Congress at this session
the FCC hhs promised that it will
go ahead with its trial program.
It is difficult to see how anybody
could get hurt under this program
but the networks claim the paid-

many

effort

The
stub¬

born.

Ahead of the News
Once

somewhat

(209)

Oglebay Norton Company

\
Company

JOHN S. WILBUR
Vice President

The Cleveland-Cliffs Iron

HUGH M. O'NEILL
President
Anchor Motor

Company

ARTHUR P. WILLIAMSON

Freight, Inc.

Chairman of the Board

Co., Ameri¬
.

The Commercial and Financial Chronicle

(210)

useful

January cannot be relied upon to

The Ontlook foi Business

the

Economist, Procter and Gamble Co., Cincinnati, Ohio

fiscal

$17.2 billion aggre¬
gate net increase in business and government expenditures this
year, compared to $18.7 billion in 1955; reveals surveys show
consumers and managers are in a relatively optimistic frame
of mind; assumes corporate profits after taxes may increase
$5-6 billion over 1958; and accepts premise that overall con¬
sumer prices will be stabilized during first part of 1959.
Dr.
Wright observes from the manner in which recent recovery was
brought about that the organization of our economy is being
changed; it is held to be no longer a market economy and,
thus, poses certain problems.

analysis is one
what people per¬

of appraising
forming different
political func¬

economic

indicated

to be more

the

duct

their

affairs.
this

with

begin
brief

data

seems

of the

consumer

the

from

that the attiude

to be

toward

buying is

favorable, to the extent that some

refer¬

ence

derived

conclusion

net

For

reason

the

increase in trade may be expected
until consumer attitudes are

the

evidence
con¬

changed;

cerning cer¬
tain presently

Third,

available

recent

surveys

of the
of busi¬

held ideas and

attitudes of the managers
nesses
indicate that they

attitudes.

to be able to increase their sales,

F i

r s

belief

Wilson Wright

gen-

erally held that the economy is
in the recovery phase of a typical
business cycle, and that the reces¬
sion ended/in the second
of

1958.

tified
ties

This idea has

Having established the premise,

cer¬

that both

by the recognized authori¬
the subject.
Because the

originated so re¬
be inferred that it

was

duration
enced

which

are

may

periods

reviewed

by the
sumer

Research

Dec.

18,

Center

Analysts

man¬

rela¬

are

frame

of mind,
is generally believed

activity

are

experienced.

Society,

Chicago,

not

that

serv¬

duced

by $3 to $4

1959

tained

will

but

not

will

increase

gov¬

inventories

con¬

tinued

expenditure
at

$3.5

high

relative

This

for'the

and

billion in
ment

services,

state

outlay,

tentative

with

and local

can

estimate

policy

level

the

1958.

increased

are

follows

the

from

liquidation

must

were

$3.5

govern¬

increased..

establish a
increased

tory

effect

Inventory Changes

Changes in Government

expenditure

authorities.

magnitude

change
political

the

present

Federal

investment

the

expendi¬

ture i£ yet to be determined. Even
the budget to
be presented in

use

are

second

Commerce.

These

manufacturers,

•

and

1958

the

cannot be

that

and

research
is something
unique, which may be
expected to produce a tremendous

the

each

end

and

business

retailers.

inventory

series

For

found

the

1958

reasons

justified

capacity-

the

persona
who determine such matters.

the

other

nessmen,

frame

hand

relatively

mind,

with

busi¬

optimistic

the

kind; of

general economic situation which

plant and equip¬
planned by the firms surWe may infer that the

describing, it would not be

Continued

page

Louisville, Kentucky
-V"

1|jU|

RESOURCES

Government Securities
Reserve

Other Bonds
Loans

92,912,400.48

Deposits.—_—

74,128,952.84

____

and

Interest

Bank

Stock____

and Securities.

450,000.00

9.491,859.14

...

Earned but not

698,154.69

Furniture and Fixtures
1.00

—

C I NOUNS N ATI,

Interest

$261,944,530.04

Statement

200.000.00
and

Letters

;

Capital

Credit

Issued__ A.

1,825,208.74

Resources.

Stock.

.....

1,506.423.81
1,825,208.74

State " and

from

Banks..

,and

Other

Bonds

Discounts

,11.

___.

r---;

Liability

;

and

Prepaid

154,279,376.41

;

Under Acceptances.:

Receivable

8,707,963.83

4,672,376.53

85,446,002.15
114,014,219.90

;

4,097,693.14
_z__

6,418.50

Expense

1,447,750.48

Resources

701,380.51

TOTAL

*3^3 373 181 ,45

LIABILITIES

are

than

one

quarter billion dollars

not included in this
statement.

Capital Stock
Surplus

($25.00

Par

Value)

$11,875,000.00
13,125,000.00

Undivided

Profits

5,444,917.33

Total

Reserve

Liability

CITIZENS

Capital Funds
for Dividends, Interest, Taxes, etc.
Under

Acceptances

30,444,917.33

5,028,657.19
6,418.50

DEPOSITS:

^Commercial,
U.

FIDELITY

Other

|s/nce

7 858

Kentucky

MEMBER FEDERAL

DEPOSIT INSURANCE
CORPORATION

LOUISVILLE

FEDERAL RESERVE

SYSTEM

•

Bank

and

Savings

Governments

330,837,713.89

—

Liabilities

TOTAL

Leading Bank

BANK 6TRUST CO.

Securities..

and

Accrued

1958

Bonds

Municipal

Bonds

Income

8285.160,586.70

subsiantially

Due

States

Banking Premises Owned

8285,100,580.70

Properties which

and

United

Customer's

2,020,469.91
17.620.409.91

in Personal Trust

Cash

Loans

5,000,000.00
10,000.000.00

Undivided Profits

14.339.89

Our Tiust Department holds

O H I O

of December 31,

RESOURCES

Other

Surplus

Credit..

2,063,954.20

Capital Funds:

1.00

Liability

1959..________

Taxes,

Interest Collected but rot Earned
Letters

(All Offices).....

Customers

—

Expenses

105.039.008.92

Collected

Real Estate

Other

January
Reserves

____________

Discounts

jilfjj^fjp UHIUR

Dividend Payment

Federal

LIABILITIES

Cash and Due from Banks_„____

so.

increase

appears

Survey of the preliminary plans
for the capital
spending indicate
that no large change in business

December 31, 1958

our

capacity actually is needed.
also find that profits
be expanded to the point

where

investment *in
plant
and
equipment may be taken as a
third important category of ex¬
penditure.; The McGraw-Hill Fall

ment is

large
and

plant

may

must

ness,

jveyed.

level where it is evident that

The outlook for changes in busi¬

this

most

these

investment

CITIZENS FIDELITY BANK AND TRUST
COMPANY

inven¬

Capital Outlays

CONDENSED STATEMENT

funds

plant
future.

large in¬
crease
in the aggregate volume
of investment in plant and equip¬
ment probably will
not be ex¬
perienced until sales are increased

net reduction of

investing

are

are increasing
productive capacity by doing

tories.

wholesalers

have

was

investment

near

equipment and

able, there

are

currently

volume

recov¬

investment

equipment in the

attributed

month

increase

ending of inventory liqui¬

dation.

been

apparent that more
being paid to formal
and
more
funds
are

sion

intended to represent estimates of
the book value of inventories held

have

new

October, the latest
computed by the Depart¬ t'month' for which data are avail¬

ment

ery

prob¬

and
improvement
in
technology
should
not
be
dis¬
missed by jumping to the conclu¬

policy

pertinent to note that the
inven¬

inhibit

research

on
gross
income in
1959, .therefore, may be approxi¬
mately of the same magnitude as

government

involved

others

and

research,

inven¬

tend

being directed to the performance
of this function,
our
history ' of

previous period
inventories are not

The

businesses

attention is

larger than those which

though

the

While

that,

period of
the
pay¬

made in the

even

obtain

conducting research for such pur¬
for a good many decades.
Actually
the
peak
in
patents
issued, on a per capita basis, was
experienced about 1S17 and has
been
declining
since
then.

gross

fact
a

remains

does

and that recogni¬
of this fact by the managers

poses

income

Moreover,

capacity

decline

present

nessmen

billion

by $6.7

ments to the factors of production

pro¬

increase

1.959

inventory

in¬

in Federal expenditure for

jection

inventory

when businessmen end

nominal allow¬

billion

obtained

rate

crease

kind

unless

case

fact

expenditure
providing ideas for
new products and improved tech¬
niques is popular and valid. Busi¬

would be to increase gross income

recent years.

By combining
ance

may

the

about

established

local

this

the

for research is

income, payments will be further
increased
by an equal amount.

ernment

and

The argument that

main¬

capacity
large,

excess

extremely

not

Yet

The

rapid
expansion of such investment.

re¬

the

capacity

variety

long-continued

ably will

present level.
If
this premise is adopted the effect

calendar year.

excess

the

of inventory policy
appraised by assuming

inventories

been

industries.

never

that

effect

may

has

excess

and

trade.

tion

payments in

state

found

there
in

inventories

Expenditure by state and local
governments is increased annually.
The magnitude of the bond issues,
authorized in
the
last
election,
supports the assumption that the
in

present

such

for

predictable in the present.

The

appears

goods and

ices will be increased

billion in the next

the

probably

be increased. The extent to
which!; these may be increased is

upon

investment

magnitude of the

Toward the end

may

that Federal

assume

for

expenditure

experienced for some
come, unless something

investment

ness

major cate¬
gory of variable expenditure. The
inventory statistics which I will

Spending

the

1958.

reasonable to

Business

We may begin with an exami¬
nation of the prospects for

Con¬

address by Dr. Wright before the

Investment

afforded

Attitudes, conducted by the

Survey
*An

Survey

situation

present

businesses

this subject except to say that in
the

the first quarter of 1959, or
during the second quarter, busi¬

the

elaborate

not

volume

technical

limited

will

sense.

for

finance

Federal

than

tories

October

and the

statistical

evidence

the

business

optimistic

that

ness

records.

Second,

conduct

varied when fluctuations in busi¬

recovery
which

remembered

responsibility

accepts
other

held

the

large enough to enlarge produc¬
tive capacity.
V :
-

ment will be

unusual happens.

1956-57

productive capacity
was
larger than the

may

months to

It should be

that

large change in inventory invest¬

in
government
responsible, or

group

possessed.

now

apparently
magnitude warranted by the pro¬
spects for sales. And in 1958 the

considerable period, with a
similar to that experi¬

consumers

ment

expenditure .totaling
billion.
This
that cyclical recovery has been $7
estimate,
of
the assumed increase in governbegun and will be continued, we course, must be adjusted when
the actual actions of the Congress ment expenditure for goods and
may
examine
the
outlook
for
f services or even be a larger factor.
changes in certain major cate¬ and administration become known.
gories of expenditure which are
^Before leaving this subject it is
and

cently it may
is generally believed that the re¬
covery process will be continued
for

agers

tively

specific
actually

goods

for

prospects

profits.

recovery

the

about

concern

quarter

been

expect

production and profits in 1959.
The optimistic attitudes indicated
by these surveys are tempered by

the

There

expansion

any

cross¬

charts which show that prof¬

portion of finished goods held by

under

be increased by increas¬
ing the volume of sales to more
fully utilize the plant and equip¬

con-

that

sense

number

looking

its could

remembered

actually
the

in'

control

months, but are dissatisfied with
the prospect of higher prices. The

c o n-

expenditure

They, also, appear
optimistic about busi¬

conditions

ness

sales.

maladjustment

some

large

are

terms of assortment, and the pro¬

Furthermore,
there
is
some
question whether or not Federal

expect

consumers

businesses

neither high

are

relative

managers

division of opinion manufacturers seems to be a little
politicians concerning the on the high side relative to the
desirability and magnitude of dif¬ total"'k magnitude of inventories,
ferent
programs
which require and* a little large relative to the
Federal expenditure. The varia^ volume of shipments.
tion in such opinions is extremely •'
In the present situation it seems
large.
' ■~v7m
reasonable
to
assume
that
no

durable goods.

tions may be
expected to do
in

that

that there is

low

may

Thursday, January 15. 1959

hand

other

the

1958, probably

nor

over

•

among

increase their expenditure for

and

aware

are

re¬

expenditure

effect

policy

siderable

direction

economic

1960.

University of Michigan under the
of Dr. George Katona,

that the present prob¬

assume

budgetary

Business inventories, at the end

ad¬

attempts to

will

duce

the

that

appraising the
in inventory

upon' income.

1959.

informed

are

ministration

Midwest corporation economist estimates a

lem

second half of

the

WRIGHT*

By WILSON

of; changes

accurate statement of
volume of
spending during

provide

6,987,865.72
67,608.82

8373 373 181.45

*Includes $6,195,139.40 of Trust Money on deposit in the
Banking Depart¬
ment. which under the provisions of the Banking Law of the State of Ohio,
Section 1107.12 is a preferred claim against the assets'of the bank.

124

Number 5812

Volume 189

The Commercial and Financial Chronicle

...

140 Broadway, New York, three
midtowhbranches and offices in

Morgan the Most

'Paris,

London,r has
'resources
of over $3 billion;, Its
average of commercial and indus¬

j.. '"

By DR. IRA U. COBLEIGII

Enterprise Economist

tribute

the most- elite,

American finance

the

merger

of J. P. Morgan &/

•

York.,..

t one d:

.the,right,you

emment

the internationally

you

does n't

Ira

to,"

•

"'guide

Cobleigh

These

was

the

best

banking

the

dis¬

ihifstodcd lite
tnis stoiied site

18M,

housed

most

the

address,

tinguished
Since

firm

became

has
lias

stem¬

ooth

'h° l«Tj

commercial and

vestment bank,

United

Telegraph, New
Central, General Motors, Du
Pont, Johns Manville, Standard
in

Pre-eminent
the

House

dozens

was

terminated

•

com¬

rtfj1.1.0

underwriter and syndicate
manager in the flotation of bil-

echelon of sustained top flight
part in the
unrivalled among financial
or reorganiinstitutions.

occasions J.

two
i

But time marches on. Morgan,
the great merger, is, itself, to be

major

our

merger

Morgan
i

x-,

merged with another

resourceful

thrice

banking

international

institution

national ti-

nancial disaster by its

—

renowned

i:•

& Co. helped to avert

large—Guar-

anty Trust Company of New York,

Guaranty, with

In 1895 it put up gold

leadership.

the

Ahern

main office at

functions

n <xfion

each

for

and

stock

for

4.4

Guaranty
shares of the

each

now
new

held. On

now

It has been assumed that the pres¬

dividend

ent

Trust,

rate

ent

NASSAU COUNTY, LONG

Guaranty

a year, would
In that event pres¬

sizable increase in

income—from

each share

The

now

top

new

Board

CONDITION

$10

109,386,352.59

13,664,727.83

Board

(now

;

163,754,454.91

7,135,000.47

6,307,261.85

1,669,589.60

1,369,742.64
1,692,225.53

Buildings

Furniture and Fixtures

2,047,574.80

$337,005,690.67

$384,054,915.59

LIABILITIES

glistens

Reserve for

Capital Funds

Taxes, Interest, Etc

Liabilities

Deposits

2,726,430.43
7,145,755.10
i

..$28,398,109.70
4,491,269.38

26,031,995.53
4,285,446.56
279,280.88

350,636,773.57

\ TOTAL

$384,054,915.59

306,408,967.70

$337,005,690.67

Serving Long Island
Member Fetferal

AMERICA
CONDITION

RESOURCES
Cash

Hand and Due from Banks....

U. S. Government

Deposit Insurance Corporation

Mr.
of

Mr.

Thomas

P.
S.

Morgan)
of

the

Board; and Mr. Dale E. Sharp
(now Guaranty President) will be
President of the merged institu^
And there's

$ 23,373,539.23

45,904,231.17

Obligations

Federal Agency Issues

1,597,572.91

Other Bonds and Securities

9,983,205.63

Loans

^(78,914,020.81

and Discounts

Real Estate

1,762,009.22

Mortgages

Customers' Liability for Letters
-

2,462,769.58

of Credit and Acceptances

Bank

48,407.97
1,019,500.20

Building Owned

Furniture,Fixtures and Improvements
Accrued Interest Receivable..:..

407,895.04

Other Resources

492,689.62

$165,965,841.38

$146,561,389.93

Deposits

1,251,899.06

Unearned Discount

Liability for Letters of Credit
and Acceptances

P..

the

Vice-Chairmen

$2,485,633.83

Less: Own Acceptances

2,462,769.58

22,864.25

in Portfolio

1,011,020.44

Reserve for Taxes and Interest

2,132,253.84

*Reserve for Possible Loan Losses
Reserve for Bond Investments

752,296.00

Other Liabilities

642,067.93

Capital Funds:

2,399,875.00

Capital Stock

lot of younger

Surplus and

both banks,
of
sustained
competence in depth,
rich reservoir of "top brass"

Undivided Profits 4,384,269.60

assurance

Debentures 3,750,000.00

managerial

Income

and

Reserve for Income

for the

to come.

years

this

Because

Debentures

exciting

strike

nounced

3-for-l

New

the

and

York,
same

time

$165,965,841.38
*

No. Josses

an¬

the

are

adversely affecting this reserve

known

exist.

T., it
didn't get its full share of pub¬
licity. The market, however, im¬
mediately and enthusiatically re¬
sponded, advancing the bid prices
of both stocks by more than 10%,

116 Fifth Avenue

the

528 Broadway •

split

the

stockholders,

New

Reserve

remains

that

all

York

approval

Offices
MANHATTAN

1400 Broadway

•

115 Broadway

318 Grand Street

State Superin¬

Banks, of The Federal

Board;

11,152,144.60

618,000.00

merger

approved, by both boards of
directors, during the newspaper

tendent of

1,898,027.41
;

Total

Street.

December 31, 1958

Guar¬

Chairman

(both

assent

10,000,082.29

Possible Loan Losses

with May & Co., 618

with

Chairman

Committee;

8,150,350.00
8,009,460.00

528,762.94

Profits

Undivided

8,314,165.00
8,185,835.00

Surplus

Other

and

Now

Capital

are now

Southwest Yamhill

was
,

57,452,166.28
139,188,563.90

57,870,124.26

Agencies

TOTAL

Jack K.

Lawrence B. Pagter,

LIABILITIES

management

Chairman

Board

14,377,380.44

....

Insured by

Assets

—

and

$17.60

chief executive officer

and

giving

$ 31,688,226.79
84,930,123.24

Other Loans and Discounts

Other

Jr.,

STATEMENT

talent coming along in

1957

$ 28,527,091.13

......

Government Securities

U. S. Government or

Bank

December 31 st

1958

ASSETS

Holman

NORTH

is, to.be Mr. Henry C. Alexander

tion.

Guaranteed

^Vith May & Co.

(Special to The Financial Chronicle)

PORTLAND, Oreg.

an¬

talent, experience and financial
judgment.
The Chairman of the

Lamont

ISLAND, N. Y.

Years Ended

Loans

Miles

COMMERCIAL BANK

held.

Morgan: Guaranty

Davison

cr/ M»cwnA

COMPARATIVE CONDENSED STATEMENT OF

Two

Wil¬

Bryan

shareholders will be

Morgan

accorded
nual

namely $4

be continued.

will

Municipal Bonds and Other Securities

of Henry

The'mechanics of the merger
call for delivery of one new share
of. Morgan Guaranty Trust stock

Executive

jhoiiioiv/J»«O<MK

management

igh solvency.

(now

Hand and Due from Banks

Calif.—

and

have become connected with Rich¬

Jarge corporations and individuals
-of 1

anty)

the

Rice.

(Special to The Financial Chronicle)

SACRAMENTO,

Morgan); Mr. J. Luther Cleveland

Cash

Wilson, and in the Tectonic

Building, Somerville, New Jersey,

nel and combined managerial ex¬

Morgan & Co. Inc.

lions in railroad securities; and it

transportation systems.

others

held;

Drexel, Leflingwell,
S t e 11 e n i u s, Morrow,
Whitney, Anderson, Davison and
Alexander have comprised an
"ames

was

cipal

•played a dominant
consolidation, merger
zation
of
many
of

ert S.

under

with'the v.

*0U1 generations of Morgans, such

others.

finance,
prin-

railway

Morgan

.leave

tradition of excellence and this basis present Guaranty stock¬
ln banking, the lengthened holders will own 79.6% of the
shadow of the Elder Morgan, has equity in the new bank, and
been carried forward through the Morgan shareholders, 20.4%. The
years, by the efforts and achieve- total
capitalization
of
Morgan
'"^nts of a series of unusually Guaranty Trust will consist of
f^e.1 men who have guided the 7,540,iJ00 outstanding shares, each
Morgan destinies. In addition to with a book value of about $70.

and

these great institutions will create

branch office at 90

York, under the direction of Rob¬

Richard Harrison Adds

liam

Corporation

Street, White Plains, New

York

Brands

earlier

between

^°"se °^Moi?an-

in-

great companies as
States
Steel,
American

Teiephone

choose

the House of Moiean

of such

herd

bLtog-anf

the corpo-

was

the

^orporated. which- has carried

had

architect and financial shep-

rate

some

are

Wl en u was teimmritecl> Wltn Co.,
lhe
formation of J. P. Morgan &

Morgan & Co., the most respected
and
influential banking institution in American history. Serving
as

It is

Grand

morganatic marriage!

The exceeding¬
mercial an3 investment banking. ly strong capital position of Mor¬
gan Guaranty Trust will permit
!t cou,d n0 lon^'
do both.
The partners decided in favor of a maximum legal lending limit,
vto any single borrower, of slightly
commercial banking. :rfhe historic
over $50 million.
partnership continued until 1940
Co.

ming from the original partnership, J. Pierpont. Morgan & Co.,
formed in 1862. This famed part-

name')"

commerce,

industry; and finance."
- contemplated
merger

agent for the

quirements of the Federal Bank¬
ing Act of 1933, J. P. Morgan &

light. Number

Street

Wall

Morgan achievements.: 'But there cellence; it will be splendidly
equipped to serve the banking
came a change.; Under the re- and fiduciary < requirements of

*
•

Directors

Who

re-:Jj
.

Who's

brilliant affair.

has opened

Offices

Branch

Financial Planning

,chain store banking, small per¬
Italy, Belgium, Germany, Norway, sonal loan and instalment financ¬
Austria and Australia:
:
:
ing. But with its skilled person¬

; Ihe sticks, . it
.--.doesn't
say,.
"I t

Board

virtual

GOV¬ *■">: The

AeU,^ piped up u. S. - investors, of the external
i1k°'ids
Great Britain,^France;

need

Trust

will be

Planning Opens

Two
-

•

house of
P- Morgan.
can

fiscal

and

corpora¬

Financial

ing

"How

British

largest

investment

French during World War

bank-

famous

the

100

pension

I, J. P. ^ new $4 billion bank, Morgan ard A. Harrison Inc., 2200 Six¬
Morgan & Co. arranged for the Guaranty Trust Co., of New York, teenth Street. Mr. Miles was pre¬
purchase of over $3 billion in war 'with capital funds of more than
viously with Wilson & Bayley.
supplies. In the 1920s J. P. Mor- i$500,000,000.
This
will
be
the
gan was the maj0r underwriter, ; third largest New York bank, and
responsible
for
distribution
to fourth largest in the nation. It will

see

•s:

banker

the

ing banks in many cities. It also
does a Luge business in corporate
and personal trusts. The Guaranty

bus slowly for the United States Treasury; and
gaped its way down• .it stemmed the panic. 6f. 1907 by
Wall Street.
It paused for a moassembling the cash to sustain
merit in front of Number 23 while
the solvency of certain New York
■;?.the guide in-:-banks.
•.
z* <>

and

trusts; fiscal agency
advisory service;
and ag a major dealer in govern¬
ment and municipal bends, Morgan
Guaranty
will
be
uniquely
equipped
to
function
broadly,
efficiently
and
profitably.
The
wedding of Morgan and Guaranty

tions in America, as well as lead¬

and

was

Long regarded

most

sight-seeing

The

and

$1,092,000,a "whole¬
sale" bank, its customers include
000.

name

Co., Incorporated, and the Guaranty Trust Co. of New

stared

Brussels

trial loans in 1958

elegant and eminent

of the

eve

(211)

and

absence

restraining antitrust action by
If all
goes well, Morgan Guaranty Trust
Company of New York should be¬
come
a financial reality by mid-

BRONX
352 East 149th Street

any

the

Department of Justice.

March

—

institution

and

foreign;

banking

—

personal,

781 Eastern Parkway

•

815 Broadway

465 Kings Highway

new

magnitude, carrying on, for the
benefit of 37,000 stockholders, rich
banking traditions going back to
the Civil War. In every phase of
commercial

BROOKLYN
1574 Pitkin Avenue

domestic

corporate

QUEENS
99-01 Queens

Boulevard, Forest Hills

14-15 122nd Street, College
Member Federal Deposit Insurance

Point-

Corporation

The Commercial and Financial Chronicle

(212)

this

over

despite uncer¬
trends and declining
business

securities

volume

1199441032

period

market

tain

Meteoric Growth

119944

break

than

higher than in
to market de¬

$40 million

1956. However, due

fi¬
nancial institution—the open-end

financial world..

mutual investment fun—is emerg¬

from the year

ing to take its place as an impor¬
segment of the American way

mutual funds, many have thought

the

Thus

Although the

tant

success¬

ful

launching
two

;

ones

b i g

Oct.

push

u s

new
r

inhas

the

record

•

growing invest¬

investment

open-end

companies are estimated to be
$12%
billion. Some forecasters

push

sales will

them

$20 billion of assets in five years—

possibly

billion

$40

another

This

rapidly

investment

sands of

new

Some

funds

stock

market

cent

study

companies

creating

are

holding

The

number

shareholder

mutual

open-end

funds at the end of the third quar¬
of

ter

1958

figures

These

over

was

3,500,000.

include consider¬
since many per¬

able duplication

hold

sons

than

one

investments

company.

increase

fold

shareholder

This is
the

over

accounts

ten¬

the

end

.1940.

The growth of open-end mutual

industry

into

the

nearly 4%

of the dollar value of all stocks

sistent

tire

over

past 19 years,

shown by the following tabulation,
based

report of the National

Association

panies
It is

the

Investment

Com¬

on 146 open-end funds.
particularly significant that

assets

open-end

funds have shown

mutual

steady growth

mutual funds bought

breaks, the
rather

sold

than

thus tending

give stability to the market in pe¬
riods of uncertainty.
What

one

Mutual Fund?

funds

are

security-

certificate which represents a

package of many securities. Mu¬
tuals
provide a basic financial
service whereby the average per¬
son
can
conveniently invest in
stocks and bonds. The investment
can

any

amount. It might be

$1,000, $10,000, $100,000 or more or
perhaps as little as $25 per month.
In a mutual fund, large and small
investors

alike

advantages

296,056

funds has been vigorous and con¬

$100 million
put

dividends in the

form

monthly and a re¬
showed
investment

ing the funds to liquidate securi¬
ties and accentuate the decline.
The
fact
is
that in
all recent

Mutual

amount

accounts

periods of market weak¬
shareholders would turn in
shares for redemption thus forc¬

largely due to

thou¬

investors each year

business.
new

expanding
is

in American

—investors
and

clecade.
of

billion

$322,381,000 to
estimated 1,500,000 sharehold¬

ers.

the country.

1940, mutual funds were vir¬
tually unknown to the average in¬
vestor. At the close of 1958, net

predict

$31//2

1957, mutual funds paid in¬

vestment income

'W. George Potts

over

1940 year-end,

media in

assets

of;

high liquidity of

ness,

additional purchases.

of the fastest

ment

with
of

figure at the 1957 yearend and a growth of over 2,600%
from the $447 million of assets at

been quietly
gaining pop¬
ularity in re¬
cent years and
today ranks as
one

assets

the

from

1958, this rela¬

tively

net

'61, 1958, of $12,281,441,000—

increase

mutuals

total

combined

Association

Companies

Investment

smaller
gave

National

the

earlier figure.

Because of the

that

■

bers

funds and several

of Jife.

Today theie are 146 open-end
mutual investment company mem¬

large

mutual

n e w

vital and dynamic new

receive

the

same

otherwise would be available only

large

sums

money.

Professional

American

Management:

is very

economy

The
com¬

plex with business and economic
conditions

continually

497,875

80
r

-L

91
98
103
110

115

125

135

143

1958

changing.

January 15, 1959

580,221
672,543
722,118
842,198

938,651

160

1,110,432
1,359.000
1,537,250
1,703,846
2,085.325
2,580,049
3,110,392
*3,640,000

3,931,407
4,146,061
6,109,390
7,837,524
9,046,431
8,714,143
*12,750,000

110

tens of thousands of se¬

is to invest the funds of its share¬

good and some not
good. For a small investor to
select and maintain an intelligent

holders in the securities of Amer¬

variety of securities is ordinarily
not
possible—for he lacks the
training,
facilities,
information,
ability and the time. This calls
for the services of professionals

There

are

curities,

some

ican

who

devote

full

their

time

the study
vestments and economics.
years

many

invest

ter

job

managerial

almost

tual

funds

ability

for

all

and
success
degrees of risk

Investment Income

mutual

dends
the

This
of

tion

payments from

securities held
income, after

the

divi¬

receives

fund

interest

many

fund.

management

by the
deduc¬
fee and

operating expenses (usually about
eight-tenths of 1% per annum of
average
net assets—the average

any

sets

combined

funds of the shareholders of

not

the investor.

ratio to average net as¬
leading funds in 1957

expense

The

securities

can

course,

and hence varying

newspaper.

Diversification:

management does the job it sets
to do—there is variation
in

proportionately small
charge. For example, the average
annual
charge
for
investment
management is about % of one
per cent. Thus, the management
fee for one year on $2,000 of net
assets would be $15—less than h
to

investors

out

in¬

year's subscription

mut

managing

the

themselves.

ploy professional investment man¬
agement with continuous super¬
at

few mutual
countries).

other

management must do a

than

By pooling their dollars, large
and small investors alike can em¬

vision

justify its existence,

fund

and

corporation

funds

mu¬

distributed

Distributions

pro

of the fund.

shareholders

rata

spread over many
securities and many industries in
are

183

0.79%,)

was

income

are

usu¬

by the fund quarterly
—four times a year. And because
there are many sources, some in¬
ally

much the same fashion as the in¬

made

of the very wealthy or
large institutions. An investor
come may reasonably be expected,
who "puts his eggs in one bas¬
although varying in amount—with
ket" by investing in one or a few
larger payments in good times and
companies may do very well or
smaller distributions in bad times.
very badly. The investor in the
early promise of the automobile
Security Profits
'
business who purchased General
In periods of generally rising
Motors Corporation
stock could
could
have
made
a
handsome security prices, mutual funds may
be able to realize profits from the
profit. Investments in the stocks
sale of securities and such profits
of many other automobile makers
are
distributed
to
shareholders
led to large losses in many cases.
usually once a year, near the fis¬
Mutual funds by spreading
the
cal
year-end
of the particular
risk over many companies and in¬
fund.
dustries endeavor to participate
The majority of mutual funds
in
the
over-all
general growth
would prefer not to pay-out cap¬
trend of American industry rather
of

simplest terms, mutual funds are
a pool into which thousands of in¬
vestors
have
brought
together
their surplus cash in order to em¬
ploy investment management that
possessors

421.675

1,284,185
1,311,108
1,409,165
1,505,762
1,973,547
2,530,563
3,129,629 '

vestments

and service.

A Pool of Money: Expressed

882,191

"Estimated

clines, net assets at the 1957 yearend were off some $300 million

: 341,435

1.957

sold. In 1957, sales

May, 1958, the mutual funds
industry crossed the $10 billion
of assets line to become "Major

653,653

1955—

th^e market by buying more secur¬
were

312,609

1956

funds, as a group, gave support to

293,251

486,850

1.952——-—

from sales exceeded re¬
demptions of mutual fund shares
during this week. Thus, mutual
money

ities than they

296.056

401,611

1951____

Industrial:: Stock - Average,
declined
6.9%.
However,
new

of mutual fund

$447,959

1947

Jones

Exchange.

Stock

York

1946________

the out¬
War, the
measured by the Dow-

Accounts

1948—

Korean

the

Shareholders

1945—

almost $100 mil¬

following

week
of

market

of trust accounts. Advises systematic, continu¬
investing regardless of price level so as to build up
investment over a long period of time.
New

the

accruing to owners, reviews

the

lion, while the number of share¬

use

Total Net Assets

(Thousands of Dollars)

Companies

119955304

almost

holders increased by about 100,000.

markedly improved changes in the make up and regulation of
this industry, describes the wide choice of funds to fit different
needs and the different types of funds; and lists the states
permitting

Yet

the assets of mutual

year,

funds increased

of the
bright outlook for what he describes is "one . of the fastest
growing investment media in the country". Mr. Potts provides
statistics showing present and projected rise of mutual funds,
"real" advantages

declined
1946.

from

York

New

the

Exchange

same

Company, Chicago, 111.

Chicago mutual fund department manager is convinced

outlines the

transactions
one-third

Department,

Manager, Mutual Fund
A. C. AHyn. &

Thursday, January 15, 1959

No. of

Year-End

ple, in 1947, the total volume of
Stock

By XV. GEORGE POTTS

League"

Growth of Open -End Mutual Funds

Calendar

certain of these years. For exam¬

Of Mutual Funds

ous

than in the possibilities of a

ital

few

distribution

gains

since

the

companies. The theory is to spread
the risk
of loss and accept an

"average" result, rather than seek
spectacular performance at the
greater risk of concentration on

100,000 Shares

retention of security profits makes
ion

Resistoflex

few holdings.

sole

markets.
Income

business of

open-end

vestment company

Law

order

Federal

such

that

payment

Continued

of cor-

page

Common Stock
(SI Par Value)

Established 1928
We

Offer

COMPREHENSIVE INVESTMENT
AND

Price: $31.75 per Share

DEALER

SERVICE
in

ALL CLASSES
The Prospectus may be obtained irom
or

brokers

may

the undersigned and such other dealers

OF BONDS AND STOCKS
including

lawfully offer these securities in this State.

PUBLIC UTILITY—RAILROAD—INDUSTRIAL

FOREIGN ISSUES

Bache & Go.

Particularly Adapted to Service Firms

are

With Retail Distribution

Carl M. Lock, Rlioadcs & Co.

Francisl.duPont&Co.

Paine, Webber, Jackson & Curtis

Ilayden, Stone &Co.

Shearson, Ilammill & Co.

Your

Prescott, Sliepard&Co.,Inc.

P. F.
120

William R. Staats & Co.

Inquiries Solicited

FOX

out capital gains in

avoid

in¬

(mutual fund)

the

However,
Tax

fund must pay

Investing Is Their Business: The

Corporation

good backlog and acts as a cush¬
for share prices in declining

CO., INC.

BROADWAY, NEW YORK 5, N. Y

Telephone

Teletypes

REctor 2-7760

NY 1-944 & NY 1-945

126

Volume 189

Number 5812

...

Edmund

Wagner,

William

Irving

NEW BRANCHES

:>i

Roderick

CAPITALIZATIONS

New

and Texas.

anty Trust Co., of New York, were
John P. Bochow and Reidar E.

has

banking

office

Chatham

to the

location.

new

The

where

he
an

As¬

needs of this

Southworth, Jr.

A. R.

Como-

Division

Control

Helm.
with

Mr.

302,002,034

appointment of Adalbert
Gontard, Jr., as an Assistant
of

Vice-President

was

an¬

BANK

FEDERATION

Gontard

•'

the

Assistant

bank's

associated with

AND

organizations. He
is a member of the Real Estate
and Mortgage Department Advi¬

rep¬

Southwest

which includes Colorado, Kansas,

CO.

TRUST

178,185,299

resource:.——

Deposits

Board of the Manufacturers
Trust Company, a member of the
Committee on City Administra¬
sory

Sept. 30,'58
160,362,289

38,807.430

banks
S.

rity
Loans

Govt,

Undivided

Director

28,977,680

secu¬

20.425,130

profits—

1,072,171

Central

rector

of over

buy

any

Di¬

Southwest

and

The Seaman's Bank for

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

banks
U.

Loans

January 15, 1959

has

1829,

ern

Harriman

Cash

Kidder, Peabody & Co.

Smith, Barney & Co.

Incorporated

Dean Witter & Co.

Stone & Webster Securities Corporation

State and

Municipal Obligations

insured

Banking

Incorporated

W. C.

Lee

Langley & Co.

F. S. Moseley & Co.

Higginson Corporation

Coffin & Burr

Incorporated

Laurence M. Marks & Co.

Spencer Trask& Co.

Stern Brothers & Co.

Incorporated

H. 0. Peet & Co.

Irving Lundborg & Co.

Barret, Fitch, North & Co.

1949.

has
been
transfer of
the latter office to its new loca--

John

Office

St.

the

active

Mr.

B. C. Christopher & Co.

Davis, Skaggs & Co.

Company of Kansas, Inc.

Lathrop, Herrick & Smith

Edward D. Jones & Co.

E. F. Hutton & Company

Foster & Marshall

Merrill, Turben & Co., Inc.

Incorporated

Prescott, Shepard & Co., Inc.

Milburn, Cochran & Company, Inc.
Reinholdt & Gardner

- —

•

Smith, Moore dc Co.

Ranson & Company, Inc.
Stern, Lauer & Co.

Company

Frank N. Warren & Company, Inc.

•

::>21,0«5^24.19

41,738^00.77

9 9

3J77JS7.89

T,051;472.32
l,255vW2;58

♦

•

•«

•

»••»•••

•

••• 9 9

9 9

>•••«•••

9 9

9 9 9 0

t» •

•«»4•«

#•

•

IncomeriRpceivabl©

»'•

•••!

Ameubts shown

257/440.29

$284,374,790.74

after deducting

are net

Valuation Reserves

LIABILITIES

Deposits
" %

$262,268,973.83

•.. *••*••• • •

xii,,.,,,,..,, ...

208,065.25

Reserve for Dividend Payable February 2
•Reserve for Taxes,

Accrued Interest, Expenses, etc.

796,387.25

• . •

3,478,371.99

Collected, Not Earned

1,660,291.92

Other Liabilities
Common Stock

$ 6,105,000.00

and

Total Capital Funds

18,462,700.50
$286,874,790.74

Total

In addition to the

above, assets held in the
total $79,742,597.44

Trust Department

Holling has been with the

Wolfe

came

River

East

1927.
Mr.

OFFICERS:

Alessi

has

been

with

the.

1933.

since

DeCoursey Fales of TheBank for Savings in The City of
Mr.

York, has retired as Chair¬
the Board. On Jan. 6 he

New
man

given

tees and

dinner by the Trus¬

Officers in commemora¬

C. Kenneth Fuller
Chairman of the Board, *

John C. Barbour

President

■

§■

cowles an mrus

Senior Vice-President
Carl R. Griffen

Senior Vice-President
Member federal Reserve

Emeritus,
Mr.
Fales will continue as a Trustee..
As

Chairman

The election of Robert F.

chant

Mar-

Executive Vice-President
for Savings was an¬

of the Bank

nounced
Thomas Investment

•

bank since 1927.

was

Burke & MacDonald, Inc.

9 -9-9

recent

tion of the occasion.

First Securities

•

57,265^35.71

*•99 9

8,895,000.00

Incorporated

Hayden, Miller & Co.

The Columbian Securities Corporation

William Blair & Company
Riter & Co.

Schwabacher & Co.

William R. Staats & Co.

Shuman, Agnev & Co.

Seltsam-Hanni & Co., Inc.

•

3,462,700.50

Lester, Ryons & Co.

G.H. Walker & Co.

Loans

and Fixtures:

TotaI

Undivided Profits

bank

Tucker, Anthony & R. L. Day

450,000.00

♦

•

Surplus

Vice-President

Mr.

Shields & Company

Alex. Brown & Sons

Robert W. Baird & Co.,

Bache & Co.

29,999^06.67

In.
1953 he became Manager of the 55

Hornblower & Weeks

Inc.

•

569,459.49

Discounts

Other Assets

Discount

appointed Man¬
Amsterdam Avenue

the

•

Houses^'i

Furniture

the
the following officers:

Rommel

63/162,664.45

•

orjGuaranteed

First Mortgage
Loans and

•

It*

Mortgage Loans re¬

..,.

♦.,,

•

46,251,729.38

...

Federal Reserve Bank Stock

O. Nodyne, Presi¬
East River -Savings

the

Obligations

Other Bonds and Securities

27,642,538

tion at 110 William Street.

Estes & Company,

Blair & Co.

Beecroft, Cole & Co.

the

122

of Condition

Office in 1947 was elected Assist¬
ant

Ripley & Co.

The

page

COMPANY

•.,

U. S. Government

office, Vice-President;
Holling, Main Office,
Gomer
A. * Wolfe,
Rockefeller
Plaza Office; and Fred F. :Alessi,
Amsterdam Ave. Office, Assistant

ager

Incorporated

under

of close of business December 31,1958

William J. Rommel of the Wil¬
Ernest

Lynch, Pierce, Fenner & Smith

stock of $2,500,000.

effected

into

Pa., with

Pittsburgh,

was

with

Bank

ASSETS

31/57
$

George

Mr.

Merrill

Pa.,

$700,000,

Continued

v>- v.:

Statement
as

Vice-Presidents.

Lehman Brothers

National

Pittsburgh,

TRUST

AND

liam Street

Goldman, Sachs & Co.

stock

Union

The

member of the

Dec.

NEW JERSEY BANK

45.904,231 .42,289,344
72,296,605
Undivided profits—
4,384,270
3,515,744
■"♦Figures include Bank of North America
and
Commercial State Bank--and
Trust
Company which were merged September;
1958.2
-\v.V '/
' ■/

election of

Glore, Forgan & Co.

effective,

business

Pittsburgh,

Company,

•!*

bank's management committee.

Bank, New York, r announces

Dillon, Union Securities & Co.

the

common

discounts--78,914,020

dent

029,000

issued

was

31, the merger of Allegheny Trust

merger

holdings

Mr.

Eastman

638,835

48.618,009

Pennsylvania National Bank,

Accrued

BIyth & Co., Inc.

:«•

certificate

Merger

165,965,841 151,083,073

Corporation

approving and making

He will also be

secu¬

(Par Value $8.7S Per Share)

The First Boston

3,044,617

NORTH

23,373,539

Govt,

Loans

Copies of lite Prospectus may be obtained from- any of -the.several wilderwriters only 111 Slates hi which such nnrdmrritrrs are .qualified to act as
dealers in securities and in which the I'rospectus maylepilby be distributed.

80,564,941
165,780,281

3,285,297

McKeesport, Pa., effective Jan. 1.

and due from

rity

Company

■

84,487,062
103,559,955

81,885,750

President.
the bank in

Mr.

Mills,

Marchant

joined

Alfred

1927, and is presently

Joseph F. Hammond

Senior Vice-President

System

Federal Deposit Insurance

•»

•

Executive Vice-President

Executive. Vice-President

1-i

S
5
—

CLIFTON
LITTLE

Corpcratiurt

„

offices1%

Norman Brassler

Edward H. Roden

discounts

rity holdings
Loans

public relations director of West¬

NEW YORK

banks
U.

•

25,051,332

140,561,390.135,289,289

resources—-.

Deposits
Cash

secu-

Undivided profits—

LONG

-77

- .

47,604,495

41,063,176

Govt,

common

York.

The Kansas Power and

? • >

banks
U.

48,883,757
58,094,748

been

Dec. 31/58 *Dec.

Cash and due from

■

BANK

AMERICA,

Total

Price $29.875 per

Robert J. Casey has been named

Savings,

has

& Trust Co., New

Bank

275,000 Shares

Common Stock

23,502,024

Undivided profits....

resources

Mooney

COMMERCIAL

;,/y

Dec. 31/58 June 30/58

270,308,131 274,839,135

172,588,529

discounts

CO.

TRUST

HOSPITAL

'■

310,399,705 311,024,859

189,105,441

___

:(!

$500,000,000.
'■

of these securities.

George

ISSUE

ISLAND

3,084,623

4,990,557 7

f; ffi

Deposits

secu¬

holdings.

sjc

Total resources—

183,475,051

—

Govt,

rity

elected to the board of Federation
NEW

■

;

107,498,408

Corporation.
chartered

'l itis advertisement is neither an

and a
Lower

Downtown

Manhattan Association, and a

09.707,294

1,242,892

discounts

28,640,708

80,100.170

holdings
&

Association, President

try

Cash and due from
U.

37,384,779

BANK

tion of the Commerce and Indus¬

154,534.1)05 148,578,252

——

profits—
■

PROVIDENCE,

Dec. 31/58 June 30/58

';
resources—

•i»

civic

and

ness

•

RHODE

Casli and due from

actively
number of busi¬

NATIONAL

ISLAND,

Deposits

remain

will

Butt

Mr.

sjs

s.:.;y:l$
Total

York; Vice-President
Director
of
the
Realty

■

Foundation of New York.

which

Total

At present, Mr.

the

office

YORK

NEW

Dec. 31,*58

and

'5 ;;

SECURITY

Industry Associa¬

and

.<■'

tion of New

symbolizes "Beautifully Bright."

joined Manu¬
Company in 1951.

Treasurer in 1954
von

York, is

this

Hong"

Yin

Gontard

appointed

resentative

Commerce

the oriental name

Board.

of the

facturers Trust
He

custom,

Hwa

C. Flanigan,

by Horace

Mr. von

Chinese

"Mei

Manufacturers

Trust Company, New

Chairman

banking

28,527,091
'
■

secu-

;

•

secu¬

rity holdings— 100,904,141. 85,076,372
& discounts 118,386,421 127,679,799

June 30/58

Govt,

7.--"

Wagner

Co.; Trustee, Citizens
Budget Commission; Vice-Presi¬
dent, Director and a member of
the Executive Committee of the

growing community,

has been given

The

nounced

expanding

,S.; Govt.

"92,423,447

93,971,490

—

Loans

holdings— 109,380,353 105,540,297
.Loans A; discounts 103,754,455 139,855,219
Undivided profits
* 1,898,027
1,953,596

Edison

built

been

Appropriately, in keeping

165

Broadway.

von

has

according to Chairman Harold H.
He is with the

troller since 1957.

bank's

the

meet

has

been
sistant

office

new

banks

rity

became President
of the bank on Nov. 1, 1958. * ;
He is a Trustee of Consolidated

;

1956

357,104,232 341,631,341

—

due from

Cash and

...

banks

-•

Member of the Board of Trustees.

Square which is being transferred

joined Chemi1

Deposits

the

350,030,774 329,900*,239

c a

with

384,054,916

resources—..

374,650,275

391,772,343

Ctish and clue from

Dec. 31/57
$

Dec. 31/58
■" $

"•1

Deposits

Jan. 12 opened its

Since 1919, Chemical has

maintained

field.

York,

Streets.

entered

■the

Total

1, it. was announced.. John D.
newly-constructed branch office Butt, having reached the retirement age, will retire as Chairman
in the heart of Chinatown at the
southeast corner of Canal & Mott on Jan. 31. " He will continue as a

and

then

John D. Butt

Wagner

Chemical Corn Exchange Bank,
New

tookhis
A.

Dec. 31/58

Undivided

Edmund

COMPANY

TRUST

ROCHESTER,

NATIONAL BANK

OF FREEI'ORX, N.

«jf

ROCHESTER

Totnl resources

been

MEADOW BROOK

THE

■■

LINCOLN

-Bank

s'':

'*7

:';.V VV.

Gundersen.

Southworth,
after graduating fro m
Da rtmou th,

Harvard

the

Bank of New York since 1942.
■

which is the third

Pennsylvania.

••

Elected Vice-President of Guar¬

Chair-

the institution,

largest national bank in Western

been elected a
Lincoln Savings

the

McRae

Mr.
»!»

■

public relations, advertising
promotional activities of

and sales

been

Bank, Brooklyn, N. Y.

*5*

sis

has

York,

Trustee

Missouri, New Mexico, Oklahoma

Augustus R. South worth, Jr. has
been elected Deputy Comptroller
of Chemical Corn Exchange Bank,
New York, it was announced by
Helm,

and

have

President,

Casey will be in charge

McRae, Executive

Vice-President

Harold

Doelger

Cancelliere,

Mr.

of all

Lawres

Manhattan Savings Bank, N. Y.

Bankers

and

OFFICERS, ETC.

NEW

REVISED

elected to the Board of Trustees of

CONSOLIDATIONS

will

said
*

Feb.

effective

Chairman,

title

keep.

Sav¬

been

also

has

York,

New

elected

for

which

Treasurer,

President

Bank

Seamen's

The

ings,

News About Banks

(213)

Chronicle

The Commercial and Financial

•

HALKDON

FALLS

PATERSON

•

PASSAIC

WEST I'ATEKSON

(214)

The Commercial and Financial Chronicle
'

■

trends

The

Changing Insurance Industry
By

LELAND T.

industry is put

notice regarding the eviden¬

underscores the

convenience

public and agents alike which
cine, banking,

and

economies

Mr. Waggoner
desired

some

have

even

issue

such

the

Life

recent

not

intent
concrete

coverage.

prove

such

honestly

have

whether

life

surance

panies

in¬

service"

com¬

and

compa

has

While the pre¬
dominance
of

people

nies,

one

than it

will

necessarily

that

and
T. Waggoner

Leland

indiv id ual

conversations
i
concerning the pros and cons of
the agency system as we in the
life insurance business know it,
and the totally different American

Agency system that is strongly
upheld
by
independent
agents.
Also, representatives and direct
writing companies discussed their

agent

one

will

have

the

needs;

economies

resulting therefrom and the
venience of

con¬

paying all of his in¬

with

surance

one

check

each

Others

prefer

whether

there

about

talk

changes or
trends towards multiple line un¬
derwriting.
Speaking of changes reminds
of

are

story about

years

old

Someone

age.

approaches to selling all lines of

gested that he must have

insurance,

man

sug¬

lot of

about

and

multiple

coverage

the
line

not

discussions
line

all

represent

the

seen

changes in his day. He re¬
marked: "Yep—I surely have and
I was agin' all of them."

He could

issue

Underwriter

entry of fire

and

the

and

marked

discussed

casualty

life

the

com-

companies" into

that

and

"there

unmistakable

multiple

underwriting and that within
last

few

years

this

for

urge

simplification has
combined
to
bring about an urge for multiple
line

trying

not

going to waste time

prove

that

there

are

underwriting in its broadest

key issues. Let's consider

two

three

insurance

that

the

first

companies

of life
which have

services

the

companies

enabled them to sign one authori¬
zation
allowing
the
insurance

company

draw

month

each

One, of, the speakers at the
LIAMA meeting said, "the public
does

not

demand

underwriting, in
care

multiple

line
it could n't

fact,

less."

one

this

sense

is valid.

public probably doesn't

The

even

un¬

derstand the term. It is also doubt¬

amount

proper

Secondly, let's consider the agent
the most important—in
this first instance, I refer to the
independent
general
insurance

—really

agent./In the past he has repre¬
sented, with the knowledge and
consent

and

there

has
on

nies

enter

believe

his

one

there

part

to do business with
or

the

one

think

public

individual

where it

agency

service—we

compa¬

fields, but

just

the

for

part

new

that

encourage¬

companies. True,^
been, perhaps, a

not

clamor
to

the

even

ment of various

full

prospect, or the insured.

the

for

have

can

that

there

yet a hardly discernible but

yet, nevertheless, present trend on
the
part of agents to represent
fewer companies, but to represent
them across the board.
If this is

.correct,

it represents a need for
to be multiple-line.;

his company

ful if there is any demand for lite
insurance
as
such.
There
is
a

Thirdly, let's consider the com¬
panies: Here, too, we find a wide
divergence of opinion. Some would

demand

prefer to believe that

life

for

those

insurance

money

after

the

things

will

to pay
to keep

money

off

which

provide—

mortgage;
family together

death

the

bread¬

right

would

winner; money to educate a little
boy or girl; money to provide an

way

income in old age.

some

and

Economy

our

business

is
not
changing.
They may foe
right, and in any event, they have

their

prefer

beliefs.

look

with the

Others

the

other

hope of ad¬
justing coverages and services at
future

would

There may be no public demand
for multiple line underwriting but

time

just

becomes

who

perhaps

agreeable to sit¬

there is

vague

others

necessary;

interesting to observe

ago—people

years

adopting

are

undreamed

almost

extent

trend

Convenience

according to the Natiional Under¬
writer

.Let's start with the most impor¬
persons in the world — the

trend

there should

insurance institution yield to pub¬
lic demand and initiate

it not for the fact that it detracts

be no doubt that it will continue."
The October issue of the Spectator
stated that not until the years of
the Second World War
did the

lnm

tant

Na7

the property field, and made the
observation

en¬

going

trend exists but

from the

the

^panies into the life insurance bilsfo*
ifeSs

all

not

each group.

Cites Observations

lional

have
I'm

Many people today agree thai
prefer to debate
the public, the
agents or the Companies. Frankly,
I tnink there's
something to be
said for each group.
Actually, the
subject would be academic were

impossible.

October

the premiums due.

The

most

check

who created it

out of the sand, but the
concrete might harden and make
this

Seattle,

billions believe it does.

distressing

put its head in the sand.

pull

It's

address

by Mr. Waggoner before
the
All-Industry Dinner sponsored
by
tbe Dayton, Ohio, CPCU Chapter.

place

try to" prove that a trend to¬
multiple-line underwriting
exists.
Obviously, many people
and companies with assets in the

sense.

Will Not Argue the Case
*An

premiums monthly,
everything else

insurance
well

ward

exists.

concern

in this direction and

month.

taking

sell

agency

handle all its insurance

ad¬

General

believe times are
changing in this direction. I do
personally
believe
that
sitting

that

means

kind of policy. We believe
means
that the public will be

able to have

innu¬

dresses

agent

there

merable

this

that the millenium

every

compa¬

were

any

proof

trend

his

once a

and disastrous than the ostrich whp

that agents will be
make all sales with one

any

Employ¬
Transamerica
and

Group,

ers

try to

fancy
the in¬

the

struck

and

come

stop,

strictly

life

mean

able

repre¬

sented

and

does not

nies.

Farmers of Los Angeles,

sup¬

have

people in and out of
surance
industry.
Certainly

casualty

companies such as the
Kemper group, St. Paul F & M.

back to wait for concrete proof of
the change which appears to - be

seems

number of fire
a n

which

—

caught

properly

you

Agency
Management Association in Chi¬ completely academic.
cago.
Present were nearly 1,000
First, much time is being spent
executives
questioning the term —"one-stop
from

and pay the Diners
month—he likes to pay

restaurants,
Club

Fore

tered the life field.

1959

Thursday, January 15,

companies

life field. A number of other
large

and

lieve there is."

questions, but
primarily points which seem to be

Insurance

which

I2i

(America

"If there is

evidence

fundamental

basic

meeting

exists

buys
and in i-the two or
only
four three years pre-authorized checks
Loyalty, Liberty- have been generally available, he
Mutual, U. S. F. & G., and Royal finds that it is too much trouble
Globe) do not*yet function in the to write individual checks, so—to
top

questioning

by stating:

concrete

to
trend

whether
attended

business,
eight are or are currently becom¬
ing multiple line companies, and
only four,;.are not.
Thus of the

com¬

ports a
trend toward multiple
lines, it's outrageous to make be¬

the profitable lines, and carriers the less profitable
lines, which cannot assist an agent or an insured to solve his

multiple line

brief

panies

the fire and casualty field,
writing
the
largest
property

un-r

two

for

entire

ended

needs for

one
.

whether

insurance "one-stop service." The insurance
refers, also, to dilemma of allowing "specialty" com¬

head

make

its

by the

said to be inherent in medi¬

are

multiple line

questioned the evidence of such
a trend.
For instance, on Sept. 29,
one of the leading insurance pub¬
lications, published by two close
friends of mine, devoted almost

The insurance

ments

WAGGONER*

President, Life Insurance Company of North America,
Philadelphia, Pa.

tiary trend toward multiple line underwriting.

towards

derwriting, although I would like

•

able and

demand for convenience

and

economy
in every
and servifceMn existence!

In the*

ices
to

clinic

dental

which

whether

they

not,

here

are

them

stay—are
most im¬

of professional serv¬

destined

people prefer to go

area

v.*c find

product

ting back and doing nothing, see
our
business today unmistak¬
significant developments,,

portant, offer an increased oppor¬
tunity to render service to the

where

care'ean

all

medical

taken

of.

care

This is also

grow—and

Member

public and to increase profit. Cer¬
tainly there is no criticism of this,
for certainly this is true in any
competitive
business.
Certainly

Federal Deposit

Federal Reserve

Insurance

System

Corporation

;

Detroit,Michigan
Statement of Condition December
31, 1958
j
;
;■
' ' '• y
\-'--yy\. y
.

yy.:. yyfy-y!.^

RESOURCES
CASH
U.

AND

DUE

FROM

GOVERNMENT

BANKS

$ 48,007,102.30

OBLIGATIONS....

STATE AND MUNICIPAL

169,722,522.81

RESERVE BANK

FEDERAL

For

ago.

service

banks.

inaugurated
He

over

likes

some

travel

the

and to eat in the finest

many

areas

are

growing stronger and more com¬
petitive every day. They intend
to and are getting a larger share
of

the market.
Last month, for
example, Sears Roebuck invested
an

additional

$50,000,000

All¬

state, its insurance company.

One

the

Allstate

executives

the

LIAMA
the
who

all

meeting declared, "it is
fire and casualty companies
are creating the
demand for

lines

order

cover

loss

450^000.00

HOUSES

•

2,576,416.00

Underwriters and Distributors

1,157,633.80

ASSETS...,

1,719,218.05
TOTAL

years

119,316,306.01

FURNITURE AND FIXTURES.<
OTHER

few

968,744.24

LOANS AND DISCOUNTS....
BANKING

direct writers

instance, in
some
metropolitan
areas, banks have started provid¬
ing curb service.'to transact what
was ohfoe one of the most dignified
of all transactions, the withdraw¬
ing and depositing of money. In
some
areas
a
man
increasingly
likes to pay all of his regular com¬
munity bills through a new credit

18,33L856.85

SECURITIES

STOCK

there
is
no
question that such
companies exist. For instance, the

professional

world

BONDS

OTHER BONDS AND

increasing with other
services — legal and
accounting. The public is increas¬
ingly
gravitating
to
the
bank
which
provides services not in
evidence

Member

RESOURCES

Corporate

and

Municipal Securities

$362,249,800.06

LIABILITIES
DEPOSITS

Specialists in

$334,392,167.91

OTHER LIABILITIES

CAPITAL (COMMON
SURPLUS

;

STOCK)
•;

UNDIVIDED

6,466,835.89

7,500,000.00

■

Rights and "When Issued" Securities

7,500,000.00

PROFITS

6,390,796.26
TOTAL

RESOURCES

$362,249,800.06

i*-

MC T) ONNELL & Co.
INCORPORATED

Established 1905

BANK ^COMMONWEALTH
MAIN

OFFICE, GRISW0LD CORNER FORT, DETROIT 31, MICH.
SERVING

GREATER

DETROIT

Members

New York Stock Exchange—American Stock

120

Exchange

Broadway, New York 5, N. Y.

Telephone: REctor 2-7800

Teletype: NY 1-3489

THROUGH 26 OFFICES
New York

—

Detroit

—

Chicago

—

San Francisco

Number 5812

Volume 189

ratios

undoubtedly an
of demand."; / }-v...

this

will

reflection

source

t-i Jet t

lines."

other

expense

Serious

The Commercial and Financial Chronicle

...

What's Ahead in 19S9?

indicate
important
- v,-;

■/;'

of this, it is doubtful
companies would put up tens
of millions of dollars to enter the
In

ByrG/ M.r LQEB Y.; ' ;"

than

stock

cases

they didn't
enable them to

and

convenience

the

companies to seek a complete bal¬
book.

observations

these

In 1958
cor¬

are

v",-

....

anticip

t i

business
d i t i

o n s

varying

realization

thatin*> the ' /future

in¬

will

companies

and

creasingly consider it: "unfair" for
an
agent to expect a carrier to
.

n
-

than

lines,

profitable

less

the

cost

cor¬

porate owner-

specialty companies — companies
writing only life, insurance or ac¬

ship

other
one line or two.
They cannot help
an -agent or an insured solve his
cident and sickness, or some

multiple-line coverage.

for

needs

Loeb

the

beyond

foreseeable future.
In 1958

off.

vestor

than

Fundamental Investors

in
cases inflated

buy.

was

head,

in¬

when the

year

used

his

and

market's activity and
the

influencing fac¬
stock market

year's

eyes

rather

followed the
strength had

year.

opportun¬
occur in
later in the

likely

rather

ment

demand—should

ancl

invest¬

develop

to accept profits

—could be used

have

predictions
materialized, still the

not

picture

pears

not

good

ap¬

the surface. The distor¬

tion caused by the decline in the
value of the dollar and a certain
amount

Chicago and New York City, has
announced the opening in Omaha,

Neb., of its newest regional office.
Wm. R. Oostenbrug is Regional
Manager assisted by William J.
Rex.

living

off

—

Nuveen's
nected

Omaha

office

con¬

by private wire with Nu¬

veen's main Chicago - New York
communications system. As one of
the

oldest

and

banking
United

largest investment

organizations

the

States

dealing in tax-free
Public Bonds (Municipal Bonds)
exclusively, John Nuveen & Co.
also

maintains offices in Atlanta,
Boston, Cincinnati, Detroit, Los
Angeles and St. Paul. The com¬
pany, now in its 61st year, was
founded in 1898 in Chicago by the
late John Nuveen.

capital

our

has made things seem better than

Now With Walston

they are. Our greatest danger to¬
day is complacency. The newest
to

threat

ing

industrial

our

that

the

well-be¬

combination

cheap labor plus modern machin¬
ery

abroad is outpricing

increasing number of world
kets.

think

mar¬

it is dangerous for

"it

We have all

can't

opportunities

EUGENE, Oregon—Robert Enright has become affiliated with
Walston

Broadway.
Pacific

Co.,
He

Inc.,

was

Northwest

101

East

formerly with

Company.

the

resources

honest day's work for

hon¬

Grant, Fontaine

(Special to The Financial Chronicle)

to win

don't sabotage ourselves by

day's

Two With

happen here."

turning soft. Our greatest need is
an

(Special to The Financial Chronicle)

We read about the situation

in France,

est

were

old-fashioned and. ultra-conserva¬

put accounts in a position to
advantage

broad

tive. While their direct

■

1959

develop¬
In

general way the majority felt
warnings were unjustified

Anticipated early

take

greatest success.

not

January 'but

buying and holding paid

who

his

are

the years.

and those that uttered them

best-buying

The

ities

many

this

disturbing

inese

I / expect 1959 to be more of a
year to buy and sell than to buy
and keep. It might in some cases
be-trifle too early to sell, but
in many cases it seems too late to

The

leaving the profitable ones to the

foremost

•

over

and

average

/'amount.

The

lie the

ments

1959

V A Year to Buy and Sell

;

reater-

handle

unless

1958

extent of
actual earnings recovery. Realists,
analysts and seasoned investors
may then again provide the prin¬
cipal buying at prices they feel
are justified.

cept
only
the profitable;; lines. ; tween expecThey were profitable companies. ;4 tation and
agents

but be¬

economist

quoted stock values

based

will hardly follow

year

tracks

OMAHA, Neb.—John Nuveen &
Co., national investment banking
organization with headquarters in

experienced have ex¬
pressed fears about our neconomy

should be the speed and

con-

;i
d e

tors

n g

feel

earnings
ability of the corporations them¬
the

Opens

Office in Nebraska

selves. At various times since 1933

and sentiment rather than facts.

Stock

have
successfully havfeisought^ business,, g'r e e s
from only
widened
the
one " or a/few small
number of lines—and would ac¬
spread ' be¬

new

the

prices, always

In the past "decadey

and

productive capacity and

should determine turns: out to be another 1927. That
lasting that fashion will be> rise -was powered by momentum

how

a^l&rge pert
centage
of insurance' premiums
have:'been written by specialty
companies—companies which most

•.:

fashion.

not

hind

The year 1959

doubt
implies still

are—this

they

another dilemma.

The

buying of equities again

the

became

rect—and again we have no
that

another

turns out to be

year

Refers to Dilemma

1958 unless the

Expects 1959 to be one of buy and sell rather than buy
and keep, and forebodingly reviews fundamental danger to our
economy which may materialize if we complacently act as
though "it can't happen here." ;

have encouraged

ance

market

rather

Offers Dismal Picture

the foreseeable future," Mr. Loeb doubts

1927.

public alike. But undoubtedly
loss ratios of all companies
fire and casualty

and

inflated beyond

1959 will repeat

the agents

desired

stocks

ordinary selection is almost

Observing that "The cost of corporate ownership is in many

the

than

mandatory.

believe this would
economies

John Nuveen
be

market

life insurance field if

provide

come.

expect 1959

ever

Partner, E. F. Hutton & Company, New York City
Author, "The Battle for Investment Survival"

spite

piuiiiiac

months to

OAKLAND,
Carminati

and

Calif.—Ronald
William

Holt

have become affiliated with.
Fontaine

Grant,
Co., 360 Twenty-firsfc-

Street.

pay.

Elects John R. Haire
ELIZABETH, N. J.
Haire

Inc.,

tors,

one

fective

offer to buy these securities.

$75,000,000

assume

t i

Province of Ontario

re-

v e

onsibilities

with

Funda¬

tors

was

elected

Twenty-five Year 4%% Debentures

also

the

John

two

Dated .February 1,

Haire

Mr.

Haire, born in Rhode Is¬
land, was graduated from Harvard
and

Law

School

the

Massachusetts

Before

joining

was

admitted

the

Price 98.50% and accrued interest
;»:•

,"'W,:>:

1950.

"bar

Stock

York

staff of the
Exchange
in

4 Copies of the Prospectus

and financial
aide to William H. Vanderbilt and
1953,

was

legal

secretary-treasurer and
a

Due February 1, 1984

1959

investment

other

companies sponsored by that or¬
ganization.

New

-4

vice-

president
o 1
Hugh W. Long
&
Co.,
Inc.,
and

(Canada)

vT.

April
Mr.

1959.

Haire

Inves¬

mental

solicitation of

ef¬

adminis-

r a

nor a

*. '

offer to sell

March

h i

y/.

Stock

Exchange

New Issue

The offer is made only by the Prospectus.

'''

New

York

the nation's
funds.
He is

•

president
the

This announcement is neither

ViceInves¬

largest mutual
resigning as
vice

John R.

—

elected

Fundamental

been

has

President

director

number of Vanderbilt

dealers

;

are

may

obtainable from only such of the undersigned and other
lawfully offer these securities in this State.

-v

enter¬

prises. He served the Stock Ex¬
change successively as special as¬

Harriman

the president, Secretary

sistant to

'of the

Exchange, and

vice-presi¬

Wood, Gundy & Co., Inc.

Ripley & Co.

Incorporated

dent.

The First Boston Corporation

Smith, Barney'& Co.

Phila. Inv= Ass'n to
Hear W. L.

PHILADELPHIA, Pa.—The first
luncheon
meeting
of
the

1959

Investment

delphia

Association

will

The Dominion Securities Corporation

A. E. Ames & Co.

Morgan
held

Jan.

23,

1425

Lehman Brothers

BIyth & Co., Inc.

Salomon Bros. & Hutzler

White, Weld & Co.

Phila¬

Friday,

McLeod, Young, Weir, Incorporated

Incorporated

Bell, Gouinlock & Company

Mills, Spence & Co. Inc.

Nesbitt, Thomson and Company, Inc.

Chestnut Street.

Guest
L.

Sherry's

speaker

will

Restaurant,

Walter

Incorporated

Burns Bros. & Denton,

Greenshields & Co (N. Y.) Inc

Inc.

Harris & Partners, Inc.

Morgan, President of The Wel¬

lington

Company,

managers

investment

W. C. Pitfield & Co.,

Wellington Equity Fund, who will
,

discuss

Inc.

Dawson, Hannaford Inc.

of Wellington Fund and

mutual funds.

Midland Canadian Corporation

Equisec Canada Inc.
.

Herbert S. Bengtson of
Roberts

Schmidt,

Parke, is in charge of

reservations.

January 14, 1959.

<■'

The Commercial and Financial Chronicle

(216)

could

Can Banking Fill the Gap
By JAMES P. HICKOK

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

financing cannot be left solely to banking, Mr. Hickok
that, investors' rush into stocks and desertion of fixed
income investments is not healthy for the future of our econ¬
warns

He also warns that resort to stocks as a hedge can
a
boomerang. The St. Louis banker deplores other
inflationary dangers in wage-price spiral and repeated Federal
deficits. As for the economic picture, he sees continuing nearomy.

There

are

picture. No
how

the

will

fare.

1959

come

ment

and

model

tighter again, and this

But

about

cerned

immediate

seriously

are

the

longer

inflation

now,
somewhat

for

con¬

range

than

bounds.

20
In¬

1959

keeping

monetary policies on the
other, have succeeded in with¬
standing any wild inflation.
Three Dangerous Factors

out-

Today, however, there is serious

that

worry

inflationary

forces

Reserve Bank of New York.

the

vinced that

stocks

common

are

Consequence of Rush Into Stocks
Since there has been
widespread
comment as to the unhealthiness
the

wage-price spiral and re¬
peated Federal budget deficien¬
cies, some observations relative to
the

other
but

the

ture

not

understandable,

healthy for the fu¬

our

economy.

must

strong bond and mortgage
money market, and we must have
attractive

tailers

market

for

govern¬

Traditionally,
been

inflation

Company

this

have

Re¬

enjoyed

current

continues,
become

stock

prices

York

Reserve

Bank.

Unemployment did not rise in

purpose.

usually

income rose $2.5 billion to a new
high of $360 billion, and the De¬

on a rise in busi¬
spending. Although
indicate that busi¬
nessmen
are
not yet planning a
substantial increase in plant and
equipment expenditures in 1959,

the

surveys

continued

duce

strengthening

businessmen

sights
In

somewhat
another

Reserve

ports

that the 1958 total would be
V/2%
than in 1957. With con¬

higher

incomes at

sumer

stage

was

set for

new

highs, the

record Christ¬

shopping

season. Data
sales for December

yet available, but there
more

The

spent

was

article

ever

noted

total

are

not

signs

are

Christmas

before.
that

higher.

major

element in the increased

consumer

spending

last

during
of

1.958

the
was

two

sharp

pickup in auto sales from the
levels

which

they

very

had

fallen in September and October.

CLOSE OF

Cash

York

the

past

commercial

banks

with

and

entered

moves

have occurred

startling rapidity and stem in

credit

sion

restraints

countries.

takes
of

relaxation of
number

expan¬

abroad

place within the framework
credit practfce, it

could
stage in the devel¬
opment
of
mass-produced con¬
sumer goods
and, in the process, a
set off

new

further rise in

living standards.

Gregory Harrington
Joins Taylor & Co.
BEVERLY

HILLS, Cal.—Greg¬
Harrington has become
associated with Taylor and Com¬
I.

ory

pany,

439

North

Bedford

Prior thereto he
son,

his

was

with

New York...

MEMBERS

"■Net after

New York Stock

Midwest Stock

American Stock
•
•

•

reserves

1958

■.

Reserve for Interest &

$391,772,343.06

LaSalle Street

2,344,254.80

Dividends Declared & Payable
February 2nd__

438,812.50
29.321,557.00

Capital Funds
Stock

-$10,325,000.00
14,000,000.00
4,996,557.00

Surplus

122 South

$357,104,231.54
831,715.33
1,731,771.89

General Expense

Reserve for Federal Income & Other Taxes
Reserve for Unearned Discount

Common

CHICAGO

$ 93,971,489.87
106,904,141.02
8,752,878.24
118,386,421.13
56,116,507.90
5,888,656.25
1,424,051.88
328,196.77

LIABILITIES

Deposits

Exchange

Exchange (Associate)

;

applying evaluation

Exchange

•
•

Other Income Receivable

Other Assets

Undivided

Profits

$29,321,557.00
NEW YORK

$391,772,343.06
TRUST

44 Wall Street
-

$410,871,571.01

•

BOSTON

30 Federal

DEPARTMENT

Assets

Lincoln Rochester

Street

TRUST
Main Office
Member Federal Reserve

System

183 Main Street

Shear-

Hammill & Co. and conducted
own
investment business in

BUSINESS DECEMBER 31,

Banking Houses

Drive.

Harrington was formerly in
municipal department of the
Los
Angeles- office of Eastman
Dillon, Union Securities & Co.
the

the

credit

consumer

sound

______

Interest

the

instalment

consumer

part from the recent

_________

Accrued

six
the

and many other
countries
have
broken

tradition

credit. These

S. Government Bonds*

Mortgages*

re¬

United Kingdom

Other Stocks & Bonds*
Loans*

Federal

New

during

RESOURCES
U.

the

Statement of Condition
OF

their

Mr.

Investment Bankers Since 1912

lift

article

Bank

that

months

demand might well in¬

consumer

partment of Commerce estimated

low

investment

substantially

months

primary

when

in¬
because of
the curtailment of outdoor activ¬
ities. In November, total personal
creases

expan¬

heavily

foreign

New

economic

that

capital

recent

the

that they will destroy their hedge
value.
Investors will have de¬

their

pend

with

shopping than

inflated themselves

Business

vigorous enough to take up
the slack in employment remain¬
ing from the recession will de¬

change-over from in¬
ventory liquidation to a gradual
rebuilding of stocks, according to

from

year

trend

common

concludes

field

that

buying

sion

the economy was appar¬
ently benefiting at the end of the
mand,

But, if

hedge
country.

The Federal Reserve Bank article

foreign

feated

INCORPORATED

record level in December

against

good

stocks

common

solve

threats

serious

tion.

for the third successive month. In
addition to increasing final de¬

retail

can

goods sector.

seem

rose

mas

the

when

series

considerably. Construction activ¬
ity, a mainstay of the recovery,

ment securities.
This type of fi¬
nancing must not be solely in the
hands
of
our
banking system,
where it only helps to feed the

have

record Christmas
season, and sales
of the-1959 model cars
improved

fires of inflation.

and

durable

November,

stock and

common

equities

have

u/n

November,

„

The rush to

securities markets may be in

order.

termination

disputes had given an espe¬
cially sharp boost to production

the

investments.

much

labor

con¬

only safe hedges against the ef¬
fects of inflation. They are help¬

the

abnormal and disastrous infla-

ness

Factory output appears to have
risen again, although
probably not
the

institutional—seem

advancing

according to the January
"Monthly Review" of the Federal

Finally, the investors of our
nation—large and small, individ¬
and

further

year,

sound basis.

December,

the economic
recovery under way
since the second quarter of the

economy on

and

cal

definitely

appears

task

fight hard

off

situation, which could lead to

Optimistic

Business continued to strengthen
in

increasing demands for
spending by the influential
political leaders today, we face a
dollar and

must

\ye

stave
our

strengthening of consumer demand will induce busi¬
capital spending which, in turn, will increase employment.

ness

the

American

Thursday, January 15, 1959

continued

"free

tremendous

Favorable aspects about the
recovery are reported by Federal
Reserve Bank of New York. Latest
report hopes that the

eco¬

securities, and other fixed income

the number of housing starts and

look for

military and

ing to increase inflation by desert¬
ing the bond market, government

farm

reduce

general business

the

in business, industrial, and

creases

reason

economy—local
national—will continue at a
our

N. Y. Reserve Bank

with deficit financ¬

productivity
on
the
one
hand, and the intervention of fis¬

are

other construction work.

Yet, the

industry,
outstand¬

world" commitments
have at home and
abroad, and

ual

but it has been kept
within

With

with

potential for extreme inflation.

years

getting

may

future.

the

done

particularly

not

are

business,

and labor have

ing job of increasing productivity,
there continues to be heavy and

Here at First National
about

good

every

high and satisfactorily expanding
rate for a long time to come. But

nomic

We have experienced a continu¬

automobiles

economists

Money is

we
concerned

ing

continuing unemploy¬

problem.

Bank,

the

decline in farm in¬

a
a

knows for certain

Some

predicting

clouds

some

one

favorable.

that

Although

ing.

and tighter money market but argues we must
fight hard against inflationary threats.

is show¬
ability to snap
back from the 1958 recession, and
there is every indication that its
currently rising trend will con¬
tinue at least through mid-1959.

There

believe
and

in connection

term recovery

amazing

Our government is
continuing to
spend beyond its income, and we
face pressing financial problems

become

limits

often successful pressure for
wage

gage,

The American economy

the

increases that go beyond produc¬
tivity. This one trend alone could
lead ultimately to an uncontrolled
inflationary situation.

Remonstrating that private and government bond, and mort¬

ing

beyond

Three factors should be cited.

Opened by Rush Into Stocks?
)

reach

normal control.

COMPANY
E., Rochester, N. Y.

Member Federal Deposit Insurance Corporation

Number 5812

Volume 189

The Commercial and Financial Chronicle

<2i7>

for rent.

They believe that acre¬
business blocks, and apart¬
ment houses are the best hedges
against inflation.

A Summary oi Africa

age,

By ROGER W. BABSON

(13) Highways. These are wide
well, tarred.
Most white-

Popular financial writer offers an abbreviated encyclopedia
about South Africa reflecting items of interest as a result
of
"■

recent

and

collar

trip to that continent.

So many readers

South

written

about

column

questions

that

Africa,

have

selected 16 of the most important

and

swering

an¬

them

here.

(1) Popula¬

•

tion. The pop-

t i

135

million.
this

total,
f i

about

million

v e

in the United States.

acre

This high price is due to the fact
that agricultural land lies only in
small

valleys between

high¬

the

lands and mountains.

(7)

Weather.

February; and its coldest in July
and

with

August,

freezes,

except

Africa

South

practically

the highlands.
becoming a

fast

winter resort for Europeans.

million
Roger

floods.

and

exists in great quantities.

This is
distilled, and the distillate
being used for gasoline for

being
is

sunshine.

much

and

used for

trucks; the residue is
tarring the highways.

(14) Minerals.r My reason , for <„
visiting Africa was to investigate;;
the diamond, gold; chrome, and .
copper
mines.
I was interested1
only in the richest arid longestnot

188il*fJ959

mines, of which there> are
many.
I especially like

too

those whose stocks

can be bought
by the purchase of American De¬

positary
listed

Receipts
the

Exchange.
mines

and

New

Too

•

many

short-lived

are

that

York

are

Stock

rnifcoh

African

and

p cans,

tion.

about

(15) Water Power. Africa leads
several all continents in
undeveloped
local banks scattered throughout
water power. Three of these possi¬
Africa; but South Africa has only bilities are now being developed.
four.
Each
of these
banks
has I am
especially enthused about

u r o

Af-

about

125

two million Dutch, known

This leaves

million Blacks, which

speak near¬

overcome
:

(9)

Banks.

There

irriga¬
-r-' f""-'";

speculative.

«5®EREHT0K TROST

are

ly 200 different languages. This hundreds of branches. I like Bar¬
the one at the Kariba Gorge on
language
barrier
prevents
the clays Bank the best, but all are
the Zambezi River. This will be
Communists from now geting any
equally good. Banks pay 4%%
hold in Africa.
interest on deposits; bank stocks three times the size of our Hoover
(2) Cost of Living. This is high yield about 9% to stockholders. Dam, and has the world's largest
all

is
very cheap, but it is very ineffi¬
cient. Most articles, textiles, etc.,
for

are

groups.

Black

labor

believe these

bank

offer

stocks

the greatest opportunity for

growth of any in the world.

are only
large cities in Africa; but
having a marvelous growth;
very
attractive
and
well
stocked,, equal to the best in any Forty-five years ago Johannes¬
American
city of similar size. burg had only a thousand people,
There are probably too many small all
living in tents.
Today the
retailers. The merchants are mostly population of this
city is over
600,000, and there are dozens of
Jewish, Malayan, and English.
skyscrapers.
My favorite cities
(4) Building. The Blacks live are
Cape Town, Durban, and
largely in thatched-roofed mud Salisbury.
huts, "while most of the whitecollar people live in very attrac¬
(11) Fisheries These are very
tive four-story apartments built prosperous,
and mostly on the
a

of brick tile covered with cement.

Southwest Coast.
so

(5) Hotels, Churchs, and Clubs.
the

are

same

any

American
more

city of similar size but
segregated as to race and

inheritance.

(6)

Farm

are

called

Land.

This

very

tails"

(cray¬

come

Completed iSSs

{bi-udol Oration

ClJl.//

their

mining stock, they

profit

use

STAT,0M # S" BR0AD 4 MARKET

S" BR0AD 4 HUDS0N #

iSgi. t<)26

PROSPECT

PENNINGTON

Mary G. Rofbting, PralJt'iil.Chairman

water
MEM»ER TEOERAl DEPOSIT INSURANCE CORPORATION

It will supply

to the copper mines.

greatest
now

number

There is

wild

beasts

remaining

this

earth.

huge collection in the

Kruger Reservation, 300 miles by
50

miles

visit

area.

this

was

unable

reservation,

where

they all run wild and have equal

opportunity

to follow their nat¬

ural pattern

for survival; but Mrs.

This advertisement is neither

The

Babson had the courage to go

herself, with
animals

offer

world peace

—

guide.
a

offer to sell

nor a

solicitation of offers to buy any of these securitie*.

offering is made only by the Prospectus.

These wild

suggestion

for

Not

January 13, 195f

New Issue

namely, by giving

equal

opportunities

tures.

Local

28 WEST STATE ST.

/«/ ' Waffiinqton cff. tffrfoeCfiiiq,
'

If all

men

all

crea¬

and beasts have

Investments. When
the South African people sell out sufficient opportunities to eat and
(12)

high priced, at $500 an acre and
upward, and can be equaled at

supply

Frozen fish and

"lobster

into the United States
free of duty; but a 45% import
duty must be paid on canned fish.
fish)

BuJfyt UBiiJcjt

(16) Wild Beasts. Africa has the

few

all

lake

in the dry seasons.

(10) Large Cities. There

Large Retail Stores. These

are

These

man-made

power

imported.

(3)

of TSbuaicjlA

very

Drought

and

freezes

American-

No oil of commercial grade
found in Africa. Soft coal

lish and other

Babson

rikaaners.

Eng¬

now

lived

(8) Rainfall.
Long periods of
drought are followed by terrible

Someday the floods will
Mulattoes, be controlled, but not yet. The
weather is fine for citrus, with no
about three
are

autos

South Africa has
its hottest months in January and

o n

Africa is esti¬

mated

$100

automobiles,

mainly

are

made.

have

workers have

which

the to develop, there will be

500,000 Shares

Com¬

build apartment houses munists.

Kaiser Industries
This

is neither an offer to sell nor a solicitation of an offer
of these Shares. The offer is made only by the Prospectus.

announcement

any

Corporation

buy

NEW ISSUE

Common Stock

500,000 Shares

United Asbestos

(par value $4

per

share)

Corporation Limited

(No Personal Liability)

Price

►ital Stock
(Par Value

Price

$6.75

per

$13,125

per

Share)

per

Copies of the Prospectus may be obtained from any of the
only in States

several underwriters, including the undersigned,
in which such underwriters are

qualified to act

securities ami in which the Prospectus may

dealers in

legally be distributed.

Copies of the Prospectus may be obtained from the undersigned only in such States where the

undersigned

may

legally offer these securities in compliance with the securities laws thereof.

Allen &

Company

The First Boston

Corporation

Dean Witter & Co.

Carl M. Loeb, Rhoades k C*.
f

Francis I. duPont 8C Co.

Blair 8C Co.

Blyth & Co., Inc.

Eastman Dillon, Union Securities k Caw

Incorporated

1
i

Glore, Forgan & Co.

A. M. Kidder 8C Co., Inc.

McDonnell 8C Co.
Incorporated

January 9, 1959

Goldman, Sachs & Co.

Hemphill, Noyes k Caw

Golkin & Co.
Kidder, Peabody & Co.

Lehman Brothers

Schwabacher k Caw

The Commercial and Financial Chronicle

(218)

.than not despite the .fact that
its last 3-for-l split is still so

THE MARKET... AND YOU
By WALLACE

recent
a

new

that

isn't

logically

split candidate. It

was

wide swings,
fat downswing,
but showed good recuperative
power. The new shares have
already carved out a 50% im¬
provement over their low
since the split last September.
Zenith, which split last April
and consequently had a longer
trading life, ended 1957 with
the old shares selling at $129.
Despite the 2-for-l splitup,
given to
including

STREETE

Stocks had their

some

equipment and

recovery/ trend
carrier business

(A/ff//'./iff/ /'<(',(/

Af'ff ty/fj'/ ?/}t r/ (ft. i

Stocks

v/fifty? ft tit/fV/fj' /fftf/iiitf Crxr/ft'Hyed

Bonds

•

Commodities

•

Rails continued to show fair
<r*o

Jr///,,M„r. M,■VUut. J:®/.

fyffif/if %e,f,

//JOA

Illinois, Chicugo. Dixon

MM*.

Pennsylvania, Philadelphia, Bethlehem

Connecticut,

Danbury, Ilartford, Meriden, New Haven. Torrington. Waterbury • Michigan, Battle

Creek, Bay City, Flint, Grand Rapids, Kalamazoo
Memphis (Cotton)
Buenos

London. England

•

Aires, Argentina

•

Wisconsin, Madison • Tennessee.

Paris, France • Monte Carlo, Monaco

Caracas, Maracaibo, Venezuela

•

Beirut, Lebanon

Ashland, Kentucky
STATEMENT OF CONDITION AS OF DECEMBER
31, 1958

v..'

■

V"'-''

Cash

United

Hand

States

and

is still

Government

Banks

Securities

9,225,966.49

Housing Authority Securities-.
Agency Securities
Municipal Securities

Loans

Federal

and

Reserve

1,528,271.73

2,452,042.35

$19,425,198.06

Bank

51,000.00

Discounts

Fixed

566,026.21

ASSETS

LIABILITIES

forecasts about the 1959 stock where

a definite
policy of re¬
tiring shares is in effect, trim¬
ming - the capitalization - and
theoretically, at least," boost¬
ing the equity of the remain¬
ing ones. In 1957-58 Grayson
being,cautiously optimistic; acquired 41,600 shares, leav¬
cautious because of the high
ing 684,000 outstanding. But

market

compared to the usual
flood, for something of a new
note. The apparent reason was
that many of the houses were
described
as,
and admitted

levels

groups

in the market, optimis¬

•

and

the

still

are

available

in the market at less than half

tic

because further recovery book value. The
company did
general business seems as¬ show a drop in profit in the
sured
which
ought to find 1958 fiscal year although sales

reflection in

some of the
neg¬ were slightly
higher,
lected items thiat haven't par¬ Peerless Camera Stores

ticipated

here

the been added

market's

strong upsurge. cently and
Then, too, promise of vigorous volume in
action

combat

inflation

possible
since
the
battle against it was admit¬
tedly "at a crucial point" ac¬
serve

its

Federal

the

Board.

And

that

economy

re¬

gain

addition

that

an expanding
is promised.

Restraint in Motors
Autos

Re¬

section,

bred

the

were

with

restrained

volatile

even

American Motors,

best-acting
stock of 1958 with a price im¬

caution.*

own

wider

has

chain

projected from

seemed

cording

the

but

Attractive Neglected Items

but

than

dozen and

points above the stand¬

was

times

the

while

the

provement' of

still much fodder

latest

fiscal

names

which

year,

was

at the

ex¬

maintenance

This

exempt from
credit runs

out

early this year and the
for full corporate
taxes is acting as a brake on
45- to 50-times earnings.
any more ultra-glowing esti¬
mates of per share earnings
Cunningham suffered a bit
such
as
those that
were
in the 1958 fiscal year both
bandied around during the
because of chronic unemploy¬
ment in key areas where it spirited runup in the stock, v
[The views expressed in this
operates / and because sales
article do not necessarily at any
couldn't increase sufficiently
time coincide with those of the
to
offset ' higher
operating "ChronicleThey are presented
costs. With factories humming as those of the author
only.]
again, principally in the De¬
troit area, possibilities of a
Assoc. Inv. Sees. Co.
(Special to The financial Chronicle)
~
gain in sales are good.
much wider

market

pets

had

the bull

worked

to liability

-•

ANGELES,
G.

Evans

Calif.—Alex¬

engaging in a
Where some* wild price ao
securities business from offices at
tion has been blamed, in part, 1041 South Wilton Place
under
on the small
capitalization of- the firm name of Associated. In•vestment

era

when

multi-million

share totals

are

common.

The

Securities

Brittin & Co. Formed
(Special to The Financial Chronicle)

SAN MARINO, Calif.—Charles
Brittin

engaging

secu¬

rities business from offices at 2275

Longden Avenue under the firm

and

stock's

range

through all of

Capital

name

and

Brittin

Co.

Reserves

MAYO, Chairman of

CAMPBELL,

PALL WILLIAMS. Executive

BOONE LOGAN, Vice-Pres.

and

PAUL GRUMBLES, Asst. Cash, and Tr.
Off.

Member Federal

XV.

c. E.

I'OKD

Reserve System

Board

Trust

Officer

offices to

serve

The Connecticut

SEATOX, Vice-President

PICKLESIMER, Asst. Vice-Pres.

JOSEPH

DIXOX,
and

the

you

/
j

President

Vice-President

Cash.

CLICK, Vice-President

Connecticut

2,803,142.34

$32,150,918.97

service

617,097.24

LIABILITIES

in Southern

$2,186,045.10
_

Funds

Federal

Open Saturday mornings

KING, Assistant Cashier

National Bank

Auditor

Deposit Insurance Corporation

•

Company.

486,045.10

Valuation Reserve

•

LOS
ander

;

theory that cost-

made

payments.

bandied

1,853.77

OFFICERS

issues

18,549.24

JOHN

•,

selected

700,000.00

;

Capital Funds

Stores

1,000,000.00

Profits

TOTAL

cases

Robinson

180,750.11

—

Total

too,

are,
-

$29,148,477.28

Capital Stock
Surplus

JLoan

5%,

Taxes, Interest, Etc.

Liabilities

Undivided

items,

generous

$32,150,918.97

Deposits
Other

59,247.51

_«

for

trickle of Grayson

pense

Reserved

1.00

Other Assets

TOTAL

half

cutting by rails

566,025.21

Assets

Overdrafts

only

12,047,593 42

Bank Building
Furniture, Fixtures and fjOTPipment

Total

$16,973,155.71

was

fact, what mild specular the issues .involyech Cunning¬
tion centered anywhere near ham hasn't- been
conspicuous
the rails was directed mostly even
though its capitalization
to the railway
equipment is a meager 381,600 shares in
.

473,770.62
4504)00.00

Federal

Total Cash and Securities

industrials

Interest in Rail Equipments
$7,747,189.22

Public

Stock in

with

ing this week. In short, de¬
spite offering the high yields
for any market group, rails
have few persistent followers
which, again, is not a new
story.

ASSETS
from

Due

tune

by margins that were gener¬
ally meaningless. And the rail
average is far from being in
any
position to
scale v any
historic heights although it is
at its best posting since 1956.
The high that year, however,
fell short of the 1929 peak and
a

The Second National Bank

neglected

the

There

buoyancy and swayed about about

//iI'duJwti
:r/c,[t

other

apparent ." in its return is
in

flat 10 points,

year was a

final well above
average,
month of 1958 continues,
*
❖
*

There

if the

Thursday, January 15, 1959

more
than
416%, calming down consid¬
For a full week and a half
in the way of neglected items erably. Amer
ica(n nearly
—all of the sessions this year,
among
the listings where doubled output in 1958
in fact—the intraday reading
over
the previous year and
prices certainly don't seem
of the industrial average was
excessive in any way. Cun- jumped solidly into black ink
above
590,
on
one
session
of large dimensions".* Produc¬
for one ex¬
within three points of the 600 ingham> Drug,
ample, has been hovering tion is still moving higher but
mark,
but
couldn't
quite around nine-times the
a
big help to the handsome
average
reach it.
earnings and less than 11- profit figures were tax credits
*

Jar/,- ft

pickup last

inevitable

seem

profit-tak¬ before in history, at the peak
ing difficulties this week but of the 1929 frenzy—but there
with volume dwindling on the was much dissension. At the
irregularity. The high-priced equivalent of $100 for the new
items and other recent favor¬ shares after a 3-for-l split, the
ites bore the brunt of the sell¬
yield would be down to 3.3 %
and the price some 20-times
ing.
earnings. The argument
American
Telephone, no against this is that many utili¬
longer the sedate item it was ties which have been growing the new shares were able to
before the generation-old $9 steadily sell at less than 20- stand kit
$194 at 1958 ended,
dividend tradition was dis¬ times
earnings and their tripled in price on the year.
carded, was a bit prominent yields run well into the 4%
Temporary Casualties
among the casualties on occa¬ bracket. And there is also the
sion
as
the
Street
debated school that
still anticipates
Metals, chemicals and some
with some vigor the question valuable
rights offerings by of the specialties that had
of what would be the proper Telephone as has been com¬ carried the ball for the bull
price for this item under the mon since World War II. That market swing for so long were
the obvious casualties when
changed circumstances.
throws
an
unknown
factor
selling was prevalent) a notWhat Price Romance?
into the dispute.
unlikely development. About
A good many felt that the
*
*
*
the only thing the realizing
new
romance
added to the
Like Zenith last year, Ad- did
definitely was to stall the
issue ought to carry it to the dressograph was able to show time when
the
industrial
$300 level—only reached once superior action more times average will show a 600 read¬
ing for the first time in his¬
tory.
V::;%
'

new

would

rc""1

MEMBER FEDERAL RESERVE SYSTEM • FEDERAL DEPOSIT

INSURANCE

CORP.%

Number 5812

Volume 189

Investor's Decision

tion will be able to revive demand
,on the same scale as witnessed in
^recent

Equities and Government Loans
'/■.V ^ '■

months

v.'

The author also notes that the

prevail.

j.once

optimism for governments re-

But in

taking

long

run

that

loans and, for example, points out

ment

conservative investor

socialist

measures

Contrary to
widespread expectations, the ris¬
ing trend in equities that was
proceeding with few interruptions
throughout
;

LONDON, Eng.

;

—

concluded

has

Providence
rule

;

reaction is bound to be

ate

unfavorable to equities.
nationalization without

tion

not only

Fears of
adequate

compensation, additional taxation,
and other anti-capitalist measures

liable to

cause

fall in equi¬

election

the

before

even

un¬

the; Gallop Poll and
other
indications point clearly towards
*

Conservative

interest-

sue

victory.

policy of cheap
benefit

should

the

that
edged

money

gilt

Wage inflation
deprecia¬

Advises

Against Bonds with
Socialism

in terms of money

but

much

chasing

terms

Holders

power.

Looking

of pur¬

are

ever,

further

Roland Merreli, V.-P.

sur¬

prisingly
sharp reaction

justified if 1959 proved to be
a
year of deflation.
That would
mean a lowering of interest rates
causing a rise in the gilt-edged
market and a decline in industrial

the

ground
profit-tak¬
ing after a
prolonged

■on

dual

solely

planed
of

rise. What was

■">».

Paul

even more un¬

expected, simultaneously with the
setback in equities there was a ain

the
of

This

buying

foreign

due in part to

was

inspired

the Taking

by
the firmness of sterling that fol¬

return

lowed

the

convertibility

and

change,

There was a certain amount of
investment-switching from equi¬

ties

result

Government loans as a
the narrowing of the

difference in the

yield

the two

rate

bank

the

very

short

profitable in

take

run

advantage

rallies

temporary

ties.

Church

the

1953

Government
of

£89

million

amount

the

1958 their

ernment

short view, there¬

million

loans

to the

equities to
million.
By

and

£21

Com-

British
amount

holding of British Gov¬
loans declined
to
£20

and

their

holdings

there

may

such

Likewise, second thoughts about
immediate prospects of equi¬
ties are not altogether unreason¬

the

Church

England

able

though the year 1959
as a
whole will be a year of in¬
flation and will witness a further
able,

undoubtedly has deemed it advis¬
to transfer the bulk of its

the

even

capital into equities there can be
little hope for Government loans
to
remain
at
reasonably high
.

of securities. Many inves¬
prices. They have to decline to
tors regard it as a golden rule rise in prices.
During the next
levels at which they attract spec¬
that whenever the difference de¬ few months, however, it is not
ulators aiming at profits through
clines to an unusually low figure certain whether industrial firms
temporary rallies.
it is time to switch into Govern¬ will be able to pass on to the
So far we have been
dealing
ment loans.
This rule operated consumer the increased costs re¬ with the economic aspects of the
sulting from wage.in creases. relative merit of
equities and
Reasonably satisfactorily
in the

types

past and for this
number

quite a

reason

people

swear

it.

Profit margins
are

in many industries

liable to fall.

Government

consider

As-far as capital

its

Party to buy up the control of

loans.

political

Let

this

and

checked

offer of securities for

not an

securities. The offering is

sale

or a

Socialist

balance of pay¬
ments crisis. Taking a long view,
policies lead to

ernment loans is not

of the New York Stock

the

Merreli

Mr.

firm's

justified

anticipation of

been

has

Inc.

curities,

members

Mutual Se¬

engage

are

Robert

James

President;

Vice-President;
Broyles,

Jennings,

and

of the New York Stock

Harris, Upham Adds
1

Grisham,

Henry Reed

formed

been

securities business.

Mitchell; T.

(Special to The Financial Chronicle)

KANSAS
J.

with

Mo.— Thomas

CITY,

become associ¬
Upham & Co.,

McGreevy has

ated

Harris,

Baltimore

912

Secretary-Treasurer.

Avenue.

RATED AAA

Exempt from all present Federal
and New York State Income Taxes

If,
own

sale and change in price

and offer, subject to prior

solicitation of an offer to buy

New York State

NEW ISSUE

- •

Principal and Interest Guaranteed
by the State of New York

Diego Gas & Electric Company

San

Due 1984

4%% Sinking Fund Debentures

$100,000

294% Bonds

3% Bonds

Due June

Prices to
Dated January

15, 1959

1, 1985

& Oct. 1, 1983

Due January

yield 3.25%

Price to yield

3.15%

Due January 15, 1984

$100,000

$150,000

294% Bonds
Price

2V2% Bonds

Due January 1,

100% and accrued interest

Price to

Due January

1985

Price to

yield 3.30%

1,1988

yield 3.40%

$150,000

be obtained from such of the undersigned
legally offer these securities in this State.

Copies of the Prospectus may
as

may

2.60% Bonds
Due January 1, 1991

Price to

yield 3.50%

Salomon Bros. & Hutzler
Dick & Merle-Smith

Equitable Securities Corporation
■

•

R. S. Dickson & Company
f

Incorporated

Auciiincloss, Parker

& Redpatii

Ernst & Company
V Members

and

Stroud & Company
c

Weeden & Co.
Incorporated

Incorporated

„

120

New

other

Stock

leading

Broadway

Exchange,

Security

and

American

Stock

Exchange

Commodity Exchanges

New York 5,

Cooley & Company
231

January 9, 1959

York

So.

the

Exchange, on Feb. 1 will admit
Henry W. Reed to partnership.;

with offices in the Mims Building

Officers

department.

syndicate

Hammill & Co., 14
Street,
New
York City,

Wall

—

Exchange.

Manager

To Admit

Form Mutual Securities
ABILENE, Texas

Shearson,

made only by the Prospectus.

$15,000,000

ap¬

Shearson, Hammill Co.

even

Socialist

victory.

has

Merreli

pointed

therefore, the preference for Gov¬

•on

Higginson Corp.

Roland

now

aspects.

bound

likely
when

and

demand

loans

ernment

This announcement is

Vice-President
of Lee
Higginson Corporation, 20 Broad
put up the prices of equities.
Street, New York City, members
the same time the rise in Gov¬

firms

be justification
for some degree of optimism about equities increased to £73 million.
If a highly conservative investor
the prospects of Government loans.
fore,

Lee

the declared intention of the Labor

large number of leading industrial

depreciation.

gradually switching over to equi¬

more.

once

such

from

-missioners of England held

may

duce

Government

saved

in Govern¬
ment loans, but investors who are
concerned with the long view are

safely be anticipated. Fol¬
sharp recovery in the market for lowing on the successful return
convertibility the authorities
Government loans, especially in to
Ion g-d a t e d
and irredeemable may now consider it safe to re¬
stocks.

could

It may prove to be

profits causing a fall in equities.
Beyond doubt a further decline in
short-term interest rates in Brit¬

Einzig

which

situation in

loans

would

ing difference is ,too harrow

ex-

assumption that the exist¬

The

which could
not

Limbert

partner in Dean Witter & Co., 14
Wall
Street,
New
York City,
members of the New York and

ahead, how¬ Pacific Coast Stock Exchanges.
change of Government Mr. Limbert for many years was
an officer of Blvth & Co., Inc.
doomed to be hit both ways. They need not necessarily be adverse to
Cheap money and the
.will have less pounds, dollars, etc. equities.
and substantially above the yield
abandonment of the resistance to
To - vspend
ana
the
purchasing
on
equities.,.;Y;V>;•'-* V power of their monetary unit will inflation
liable to increase in¬
Moreover, it is
decline.. It is difficult to visualize dustrial profits.
Predicts Lower Interest Rates

There

was

Lee M.

market.

has condemned them to

could

the

fixed

other

bearing securities.

necessarily

disappear altogether, and
in which the yield on Government
loans could even rise permanently

year.

and

general and limited

hand, it is the declared in¬
tention of the Labor Party to pur¬

Taking. a long view there can
be no reprieve for Government

loans

M. Limbert will

Lee
a

Other

.,5/ Bonds

abrupt halt
soon after the

turn

view.

this

that

the

become both

the General Election the immedi¬

well arise in which the difference

came

un¬

No Reprieve for Government

■

1958

renewed

Dean Witter Partner
■

point of view. On the other hand,
should the political factor assume
the form of a Socialist victory at

less

apply in
Circumstances might

must

perpetuity.

and

On Feb.

choose between the two from that

are

with

contract

ensure

equities

•shortest possible

Stock Exchange

This will
demand

profit margin.

spring it is bound to affect
both
equities
and ^Government
loans.
There is nothing much to

ties

reality the

to secure

Lee M. Limber! to Be

the

flatter is only justified

in¬

possible Labor
on securities varimight have if instituted. V ^
^

As for
Party victory, he propounds different effects

in¬

the

possible, the Berlin situ¬
a crisis during

seems

"The present switching over to the

highly

ation should lead to

popularity of Government loans.

the Church of England has substituted

equities for bonds in its portfolio.
ous

even

will

all

consumer

in their costs and

wider

.for

view, he is pessimistic about govern¬

is bound

firms

lead to an, increase in the

■

in a position to pass

the

creases

-."a

<
„

demand

■

however,
increases

months,
of wage

Industrial

anticipated further decline in interest rate and bank rate.

fleets

many

influence

;

consumer

affair which will reverse itself in not too many
profit-squeeze ends and price-level rise resumes,

~. *

years.

Before

the

bonds in Britain is held to be

temporary

a
-

By PAUL E1NZIG

Current switch from equities to

..goods industries are concerned it
may take some time before infla¬

British

(219)

The Commercial and Financial Chronicle

...

LaSalle Street, Chicago 4,

111.

N. Y.

(220)

The Commercial and Financial Chronicle

abundance

Keeping America

Land of

Opportunity

Bank

of Saginaw,

mine."

time—and

our

who

one

of the outstanding great
when he

came

Mr.

living

are

the

our

would say—you

worked

don't have to be

make

er"—make

.share
m

blessings

mankind.

it's

trade

that

the

Socialism

grand thing about it all
great majority of our

Perry Shorts

thrift

and

labor

and

given brains and follow the sim¬

integrity
throughout
the
coupled with Free Enter¬
prise, have built up the strongest

ple formula of; Thrift, Hard Work

nation in the world.

Go d-

your

years,

and Old-Fashioned
If you

can't

attack

Honesty.

Boys,

money,

save

Shorts

New

Year's
the

Mich., Jan.

Toast

Day

Saginaw

Club,

Mr.

tem, but

pro v

the

Saginaw,

highest

1959.

Free

our

attack
*A

of their

Critics may

Enterprise

one can

standards

Svs-

—

and

lives—and

own

or a

greatest

UNDERWRITERS

—

DISTRIBUTORS

not

young

save

slaving for

that

Socialism

has

freedom

for

together.

the

people never go
There just isn't enough

"abundance"

Should also

soon

around.
He
discover that the
go

government hasn't any money to
hand
it

out

people, except what

collects in taxes from the

ple themselves, unless, of course,
it manufactures it against govern¬
ment debt, or simply prints it —
that

kind

money

rests

spells

our

people

economic grounds.

When

business prospers,

have pros¬

perity— more wealth, more fac¬
tories, more goods, more jobs —
and every law that hurts business
hurts everybody.
There is more
danger in Big Government than
in Big Business. It is Free Enter¬
prise that promotes our industries,
our

jobs,

it is

our

Free
not

and passes
And so surely,

patriotic duty to

Enterprise in

our

the

Nation and

permit socialistic philosophies

There

and

stake.

that

the

ture alone has

from

squeaks

last

for

then

tives

and

five

there

revenue

crease

their

The

taxes.

our

decrease

—

Pressure

only

income

who suffer

—

the

are

Established
35

our

Communists work

that

States

little

WHITEHALL

Standard

than

FOUNDED

and

ment

can

BROKERS
in

our

11 Wall Street, New York 5
\

CHICAGO

120

offices in the United States

and Canada

MEMBERS NEW YORK STOCK EXCHANGE AND
OTHER PRINCIPAL

SECURITY AND COMMODITY EXCHANGES

2-4600

TORONTO
uptown offices: savoy hilton

Co.

exchange

BROADWAY, NEW YORK 5, N.Y.
Telephone: REctor

INDIANAPOLIS

1899

york stock

boston

chicago

montreal

•

200 fifth avenue

philadelphia

in.

start

Only the
widespread

only the

Govern¬

the

ruins

people

vote

bonus

happy

them—and

they

another

appreciation for

established

the
be¬

another
or

yet

every-

pension,
price

another

support (without providing means
to pay for it), your hard earned
dollar goes lower and lower.
If

United States and Canada

new

takes

Spenders know that

and commodities in the

members

off

and

stop it.

keep
it

six decades of investment service.

THOMSON & MSKINNON

time

the

full-tax-

L. F. Rothschild

started this

1933

these

their patronage and
cooperation over

listed, unlisted securities

large

usually

Inflation is the politicians' cock¬
tail

while

Anniversary

friends

worth

ideas

can

inflation—and

We wish to
express to our clients

1885

Government

1959

60th

debt been

our

Our Government

3-3414
>

been

Our

System Teletype—NY 1-535

Dollar

it is today—and never

Socialistic

TELEPHONE

NEW YORK 5, N. Y.

the

gan
its
"Pump
and
Priming"
spending sprees—and it can never
stop it until it restores Sound
Money again and quits spending

in¬

Co.

the

Gold

paying citizens. Millions of mem¬
bers
belong to these
Pressure
Groups and Co-ops and they are

1920

WALL ST.

Bell

from

the

AUTHORITY REVENUE OBLIGATIONS

Boland, Saffin

ability
foreign

any

attacks

inflation when it took

with

1899

group

a Nation's debts grow).
with the Nation's cur¬
rency and you jeopardize all val¬

from

and

defeat

Monkey

na¬

Groups

fear of our

and

grow

outgo, and the Co-ops

our

I have

meet

(and

government's
but

not Lincoln Repub¬
Lincoln
stood
for

are

(for

before has

transacting

freedom

they

licans

United

advantages over our full taxpaying businessmen against whom
they compete. They are not con¬
loss

government

equal rights for all)—and yet they
are demoralizing both parties and
threatening the stability of our
government. If Democracy means

of millions of dollars of unfair tax

retaining

and

ues.

the

advocated

quickest way to
country is to destroy its
currency. Never before has our

$1,000

every

the other, are
(for

Democrats

economy and pronounced "public
debt as the greatest of dangers"),

ruin

Associations

description)

with

Jefferson

Even the

Co-opera¬

are

Mutual

Jeffersonian

theory

the

billions of dollars of business per
year and being allowed hundreds

cerned

not

financial field, I be¬
greatest problem of the
day is the Defense of the Dollar.

years,

over

on
hand and tax-advantage-

one

lieve

agricul¬

(hundreds of them of
and

minor¬

Sound Money

Farm in the country.

every

And

and

Furthermore, these Spenders
the

the

than doubled

amounts

now

and

time

laws to pre¬
restrain

our

within that worry me,

government spending
and

State

about

organized

seeking Co-ops

foe —it

to spend taxpayers' money
large groups of votes are

when

power

all.

loudest gets the grease"—and few
lawmakers have the courage to
refuse

in¬
our

ities?

horse-and-buggy days

wheel

both

discrimination

the

anything surely it means Tax
Equality and equal privileges for

Veterans'

are

demanding

old

—"The

ones

preserve

survival.

Pressure

costly
benefits. They practice the slogan

ture

The true welfare of

prosperity around.

AND

peo¬

its

growing by leaps

are now

bounds.

constantly

offer

promise of greater abundance
exchange for freedom—but his¬
tory shows that abundance and
a

constitute

predicted

Groups, Farm Groups, Labor
Groups, Pension Groups, Educa¬
tion Groups, Foreign Aid Groups,
and a host of others—and they are

should

man

and

threat

quickly learn that the only allure-' government

furnishes

NEW JERSEY MUNICIPAL

These

group of bureaucrats.

trouble.

and

structure

dangerous

their money and invest it wisely.
They will then be running their

living it

its

workers

Groups

our
government to
give up its
"seed corn" for their special bene¬
fit and thereby bleed and weaken

corporations—and do

have

anchor."

predicted
that
Pressure
Groups would gradually pressure

and

they

was

then

buy control

even

government

theory, "Your Constitu¬

tion is all sail and

has

Commu¬

our

halls,
Isn't

anchor in

vent

night

and

freedom—now

your

form

put

"You

keep

it without any bloody revolution.

and

s—broadest ownership,

wage s,

said

years

All

successfully

1
ORIGINATORS

can

own

Every

combined

their
R.

use

who

man

mile; where

dictator

vs.

legislative

independence,

Franklin

day

their representation in

National.

War

Colonies had

their

won

cratic

Thursday, January 15, 1959

working

Groups

Revolutionary

American

Benjamin

now

Socialism

and

be Honest, in order

people have always been thrifty,
hard
working and honest — and

All

have

you

—

ism

nism

mistake about that.

Enterprise

And the

Any

can

Free

1 d

top.

themselves

its

you

"Hard Work¬

the

ment

his

of
i f

somebody

every

the

finally

crease

the

have

divert

ideal

—unless you are honest.

win

structure

it." And in 1857 (over 100
ago), Macauley, the great
English
scholar,
expressed
the
opinion thlat while
our
Demo¬

good reputation.
Nobody will trust you far or long

chance to rise
and

much
see

important

maintain

every

has

man

not

And you must

opportunity
where

of
you

What

saved.

outstanding man
and profession is

land

when

buy shares in
almost any business corporation in
America. Right now, we have an
economic system that beats Stat-

what you save that counts. Also,
Hard
Work
is essential.
Every

good
living here.
Our country
is

and

earn

exceptionally
brilliant

chance

Every fortune
positive
that

proof

to every young man I

sons,

haven't

you

success.

chal¬

men

and terms "sound money" our greatest prob¬
lem of the day in the financial field.

America's

its

Pressure
After

politician tell
low income groups

our

saved $100

pressure groups,

Surely,

ideals.

then worked like beavers to climb

men

needed/'

was

weaken

its

times,

our prosperity.
The
in scores of our large
corporations today were once poor
boys
who saved
their
money,
bought their companies' stock and

seeking their opportunity to prac¬
"old-fashioned honesty/' thrift and hard work; deprecates

grandest Nation in the world.

This

that

top

Shorts advises young men
tice

things of

can't share in

Michigan hanker pinpoints the present dangerous features of
economy and laudably predicts President Eisenhower will
one

good

ancient

And don't let any

Saginaw, Mich.

our

history "as

the

Horace, the wise old philosopher,
said, "If a better system is thine,
impart it; if not, make use of

you

be recorded in

Back

lenge to the world today.

By R. PERRY SHORTS*
Second National

life.

;

rochester

geneva, switzerland (foreign
representatives)

Volume 189

our

money

ated

since

Number 5812

made

today were depreci¬
prior to World War I

has

Carlisle

much as France's money now is,
$100 would buy about 2 pounds of
hamburger. But, of course, the

world

politicians

President Eisenhower has

don't

all

this

that

basic

immor¬

the

which makes our Govern¬
ment's promises worth less and

less, is rarely even considered by
many
of our politicians today.
My earnest hope is that some day
before it is too late, our Govern¬
ment will declare
a

National

and

enforce

policy—free

competition

resting

and fair
Sound

that

when

ever

and Progress.

"Ye who have faith to look with
fearless eyes
at
And

needed.

when

Free

business

the

\A Here

then, are some of our na¬ world was war, and the vast bat¬
tional problems which our young tles had thus far gone overwhelm¬
men are facing. Study them care¬
ingly in favor of the Axis Pow¬
fully, protest against the wrong ers; when the Allies decided as
and fight for the right, always a last resort to pool their Euro¬
keeping
in
mind
that famous pean forces and launch one co¬
warning—"To sin by silence when lossal attack against the enemyDwight D.
Eisenhower
we^should protest, makes cowards it was
out of men. The human race has whom they selected as the Su¬
climbed by

the

protest." And also

the

member

words

forces

evil

win

world, is for enough good
do

re¬

Edmund

"All that is necessary for

Burke:

the

men

bined

been

before

never

battle

known.

the
physical conflict in the
history of mankind for on its out¬

Leadership

was,

doubt,

greatest

And now, let us consider the
leadership under which our great come rested the continued life of
Nation
has
developed.
Thirty- '47 allied nations throughout the
three men have occupied the Pres¬ world and the freedom of hun¬
idency of the United States—and dreds of millions of people (in¬
only 3 are still alive. Today we cluding you and me)—ancl the re¬
are
toasting our present Leader. sult was unconditional surrender

the

one

tragedies

the

Dwight

been

the

death had closed their

careers.

with Washington and Jef¬
ferson and Lincoln—and so it will
was

with

President

Eisenhower.

It seems that greatness cannot be

War

Eisenhower
United

that time

was

over,

home.

came

States—and

York
York

ior

tain if you stand too close.

business,

worth is measured
of

his

assets

history,

worth

must

excess

over

be
his

man's

by the surplus
his liabilities,

great man's

measured

preservation of Free Enterprise
our
people—and Efficency,
Solvency and Morality for our
Just

net

by the

accomplishments

his failures. War Heroes

are

tem of Government

whole

our

lives to

our

will

of Gulf Investment Co.

name
was

formerly

Douglas

with

Bark & Co.

"Or

Distributors

Underwriters

acquire

coun¬

—

Municipal
7

York

Read

under

the

Securities

Crouter & Bodine
a
branch office at
man¬

agement of Warren G. Ewin and
George A. Buffum.

New Grimm Branch
CARLISLE, Pa.—Grimm & Co.
have

opened

Northeast
the

branch office

Public

Square,

management

under

John

Fowler, Jr.

Chas, Gordon Securities

Underwriters

HONOLULU, Hawaii —Charles
Gordon

Securities,

Limited

been formed here to engage

has
in

Distributors

securities business. Mail address
try and its ideals of freedom—the
noblest cause we know. Though of the firm is P. O. Box 2905.

A MESSAGE TO YOU

East

Co., 120 Broadway, New
City, members of the New
Stock Exchange.

Townserid,
have opened

sys¬

is being chal¬

lenged by a foreign power, let us
rededicate

from offices at 811

business

JENKINTOWN, Pa.—De Haven

thought. At this

one

crucial time, when our

Wiest

Government.

Fla.—Richard A.
a securities

conducting

Lexington Street under the firm

Industrial and

un¬

tiring efforts even beyond liis
physical strength, to the promo¬
tion of "Peace on Earth," and the

discerned except from a distance.
its
presence,
our , eyes
are
dimmed. You cannot see a moun¬

Forms Gulf Inv. Co.

New De Haven Branch

from

has devoted his

Ellis, Jr., Secretary-Treasurer.

mot

1956, he was elected President

fully recognized until after

World

membership in the New York
Stock Exchange and on Jan. 22
will become a partner in Jacque¬

100

enemy.

American history that the great¬
ness of our greatest men has not

After

Robert

into the hands of one man

power

This

Our Nation's

Francis

tion of such stupendous faith and
had

nothing."

Jacquemot to Admit

concentra¬

voluntary

offices

from

securi¬
William

Shields & Company

armies

The

business

been
East

Commander of their com¬
and navies and air

preme

forces.

ANGELES, Calif.—Harry
is engaging in a se¬

Jones, President, and

Mosco

Bennett

curities

„

In the early '40s,

chief

the

Opens

whatever anguish rend 4102 West Fifth Street. He was
your heart,
"...
previously with McCormick & Co.
That God has given to you the
priceless dower
To live in these great times, and
bear your part
;
In Freedom's crowning hour;
That ye may tell your sons who
see the light
High in the heavens, their her¬
itage to take— T saw the powers of darkness put
to flight;
I saw the morning break.'"

his

the

then

and

LOS

of death and

that out

Midland

business. Officers are

ties

Rejoice,

His whole life has been one of

World at large.

strife,

know

night shall rise
The dawn of ampler life;

Gay Street to engage in a

LAKELAND,

H. M. Bennett

—

offices

with

formed

has

Company

Investors

Beyond the tragedy of a world

standing great men of our time—
and one who came when, he was

Country,

to sail proudly
enlarging Strength and

country

our

will

world

mankind.

have

the

when

day
the

Ohio

COLUMBUS,

BOSTON, Mass. — James A.
Hutchinson, Jr. has become asso¬
ciated with Northeast Distributors,
Inc.,
50
Congress
Street.
Mr.
Hutchinson
was
formerly
for
many years a partner in Hutchin¬
son &
Company.

together to establish and
maintain
enduring freedom for

by the

service—first

Midland Investors Open

Hutchinson, Jr.

(Special to Tut financial Chronicle) »

stand

waves of time, history
will record him as one of the out¬

upon

the

Nations

Free

purifying

mit

breaking

hence,

years

prejudices

jiolitical

unselfish

few

been forever washed away

and Stable Money—and thus per¬

F reedom

been

of World Peace—and I

cause

believe

said
when

Hero, a great Peace
a great Statesman in

Wgr
Hero, and

ality

come

James A.

With Northeast Distributors

sorely tried by * the ap¬
parent strength of evil, yet we
have faith that the dawn is surely
spirits

To my mind,

needed."

great

spending. The tragic thing about

always

men

they are

like
Sound
restrains their

because it

Money

issues.

"Great

by our vision may now be obscured
by by turmoil of the times and our

Peace Heroes
World Statesmen

war,

and

peace

(221)

Financial Chronicle

The Commercial and

...

Dealers in

CORPORATE AND MUNICIPAL SECURITIES

IF YOUR

TAX BRACKET IS 50% OR HIGHER
A

year

ago,

under this

CORPORATION

(then

caption,

same

around

100)

we highlighted the
attraction of GR1NNELL
predicated on income tax considerations to

1SOO WALNUT

Apparently

the

GRINNELL is
A

point

now

then

selling

made

over

ST., PHILADELPHIA », PA.

PEnnypocker 5-2700 •Teletype■. PH-4

holders in the higher brackets.
was

$200

recognized

sound

discerning investors.

Members: New York Slock Exchonga »

share.

American Stock

Exchonge (.Assoc )

•

New Vork BArcloy 7-4641

Phitodelphio-Boltimor. Slock Exchange
♦

Boston Stock Exchange (Assoc.)

similar opportunity, we believe now existi in

INSURANCE COMPANY based

the

same

the stock of AMERICAN NATIONAL
considerations which gave GRINNELL its

appeal — proven management, a leading industry position,
strength not generally recognized.

plus certain elements of

WHY?
We remember when

life companies

were

selling not too long

ago

25 to 30 times

reported earnings while growth industrials sold at 20 to 25 times. Today so-called
growth stocks sell 30 to 35 times earnings but the life stocks are still available at a
25 to 30 times multiple.
Clearly the current buyer of quality life stocks has

two-fold advantage, since

(1)

The industry is relatively insulated from economic swings
hand, and

(2)

The investor acquires his position today
relationship
the

the

one

normal price-earnings
opposed to the boom price-earnings ratios expressed by
on a more

blue-chip industrials.

may write or
Philadelphia office to get our views as
to why we believe AMERICAN NATIONAL INSURANCE
COMPANY
offers substantial capital gain potential.
accounts

primarily interested in capital appreciation

phone Mr. P. T. Scattergood at

our

BOENNING &
Established

Members

field

from

industrial

Investment advisers, fiduciaries and trustees supervising trust or invest¬
ment

In the year

lot of money—$6,207,047,259
America's expansive economy. It's
cumulative example of the experience and versa¬

also

WALNUT STREET (2)

LOcust 8-0900

Stroud's financial leadership.

tility that contribute to

CO.

STROUD

1914

NEW YORK:

add

in fact—toward financing

of American Stock Exchange

PHILADELPHIA:

stocks.

That's helping to

123

state

common

of Philadelphia-Baltimore Stock Exchange

Members

1529

Company participated in a
underwritings, covering the financial
and municipal bond issues to issues of

just past, Stroud &

total of 262 security

So.

COMPANY,

Broad

120

INCORPORATED

St., Philadelphia 9

Broadway, New York 5

•

PE 5-7330

WO 4-8400

115 BROADWAY (6)
COrtlandt 7-1200

PITTSBURGH

•

ALLENTOWN

•

LANCASTER

(222)

The Commercial and Financial
Chronicle

been.

Also, there

Our

Reporter

Governments

long

operation,
the

much with

its new money
stayed
very

conventional

was

decided

The

obtain the additional funds at this
time

type

The

financing.

that

Treasury
so

offering of a
21-year bond in a modest amount
($750,000,000) did not surprise the

cash

financial

not

$750,000,000

will cut

district

much

too

for

by most

cialists.

The

one

element

of
result, the Treasuray

spe¬

back its weekly offering
bills, with the regular 91-dav
issue being
reduced to $1,400,000,000 while the 182-day obliga¬

since

market

money

additional

offerings before the end

March.

real long-term issue was looked

with

market

money

sur¬

flotation tion will be held at $400,000,000.
decrease
in
was
the
amount
of money the This
offerings
of
Treasury
asked for; namely, Treasury bills will begin on Mon¬
By obtaining the
$3,250,000 instead of the well pub¬ day, Jan. 19.
additional
licized $2,000,000,000.
money
at this
time,
The 16-month note which was the Treasury will also be in
a
used to raise the bulk of the new position to meet the attrition that
prise in the

new money

could

($2,500,000,000) also was
pretty
much
what the
money
market had been expecting. This
tissue was used as a replacement
dor the Treasury bills which had
money

used

been

raise

needed

due

First World

The 4%

4.07%,
were

of 4%

and
notes,

rate

the $2,500,000,000 of
due May 15, 1960,

The

99%,

at
total

amount

yield

Treasury borrowing of $3,250,000,was considerably in excess of
the $2,000,000,000 to $2,500,000,000
led

believe

would

borrow

money

raising

explained by

the
in

area

has been

new

venture.

Well

Received

appeal

interested

bond

the

not

was

which

last

money

large issue

for

those

that

putting money
savings type of obligation.

made to order for pension

was

funds, both the private and public
ones, as well as certain savings
and loan associations and
savings
banks.

also

indicated

individuals in not
went

for

bond—not
but

also

the

with

was

funds

new

?//,

sales

other

The, instalment plan, which adds
the attractiveness of the new

commercial

209

South

bers

Note

The

Yield

16-month

also

found

buyers among commercial banks,
particularly the institutions that

west

Attractive
note

inflation

strong

has

month note alsp made it. an attrac¬
tive obligation, although there are

outstanding

Anniversary

1959

dates

which

Govern¬

after tax yield.
that some
of

that had

been

give

ma¬

better

It is also reported
institutions

those

buyers of the 182-

the

Salle

New

and

the

firm

been

for

and

Shares,
fund.

Admit Four Partners
SEATTLE, Wash. —
Marshall,
820
Second

Brokers and Dealers in

members

INDUSTRIAL & RAILROAD SECURITIES
UNLISTED INVESTMENT STOCKS

•

lecturer

Finance

member

Co.,

with

and

has
2161

Exchange,
Leo

the

New

Feb.

Foster

American

opened

UNDERWRITERS

Avenue,

Beach,

agement

admit

Sandstrom, John K. Mar¬
shall, A. Joseph Peaper, and Kurt
H. Olsen to

NEW YORK 5, N. Y.

under the man¬
Richard M. Botts.
;

Amott, Baker Branch
POMPANO

BEACH, Fla.—
Amott, Baker & Co., Incorporated
has opened a branch office at 121

was

Southeast

13th

Street

under

direction of Robert S. Rhodes.

headquarters

the

Established

1919

firm's

R. S. Dickson

office, in the Fidelity
Building. Mr. Peaper will make
headquarters in the Portland
office, Southwest^.Sixth Avenue
Oak

Street, and Mr. Olsen
Eugene, Oreg., 55 West 10th

Philadelphia

DEALERS

Securities

Spokane

DISTRIBUTORS

partnership. Mr. Sand¬

& Company

INCORPORATED

his

2-4949

Teletype NY 1-724

Member

Midwest

CHARLOTTE

St.

Columbia

Atlanta

Stock

Exchange

NEW YORK.

Greenville

Direct

Wire

CHICAGO

Richmond

Raleigh

All

Offices

L. F. Rothschild Go.

Celebrates 60 Years
L.

F.
Rothschild
&
Co., 120
Broadway, New York City, mem¬

INSURANCE STOCKS

bers of

(vovrriiiiH'iil-MiiiiH-ijial—Corporate

the New York

Stock Ex¬

change,

are celebrating the 60 th
anniversary of the firms founding

Pershing

1899.
In

the firm maintains two offices

Securities

Chicago, Montreal,
Rochester, and

and

NEW YORK STOCK EXCHANGE

—

Brokers

•Ionx C. Legg & Company
1899

York Stock

Exchange

Curtis

passed

away

120

the.

American

Stock

Exchange)

WOrtli 44500

from
'

■'

•

...

;

••

...

New Hutton Office
Atlanta

NEW YORK

BROADWAY, NEW YORK 5, N. Y.

Teletype NY 1-749-51

1926.
&

LOS

•

American Stock
Exchange (Assoc.)

Philadelphia-Baltimore Stock Exchange
BALTIMORE

EXCHANGE

Jan. 7 at the age of 79. Mr. Curtis
was
President of the old
New
York
Curb Exchange (now
1924 to

Members
New

STOCK

John W. Curtis
John

Established

AMERICAN

Philadelphia,
a foreign rep¬

resentative in Geneva.-

Underwriters

Co.

MEMBERS

addition; to the home office

up-town New: York City, Boston,

—

Avenue,

Corporate and Municipal

Stock

will

ANGELES,

Calif.—E.

Hutton & Co. has opened a branch
office at 4155 Wilshire Boulevard
under the management of Darrell
J. Bogardus, Jr.

Private H ires

Beverly Hills

Houston

Buffalo

Los Angeles

San Antonio

San

branch

York

fi¬

staff

man¬

analyst for

their

Dealers

Magazine,

the

Kalakaua

Waikiki

part¬

investment

Inc.,

office

years.

analyst with Glore, Forgan &
an

Northwestern,

New Honolulu Office

American

mutual

strom and Mr. Marshall will
make

formerly

was

Selected
a

Com¬

Foster & Marshall to

Stoc\ Exchange

•

Earlier in his career, he

Co. and

Tor\ Stoc\ Exchange

Telephone REctor

associated

number

counsellors

agers

Casualty

HONOLULU, T. H.—Walston &

Security Supervisors,' in¬

vestment

Karlson

Finance Association.

Mr. Wales
ner

contributor

Exchanges, Robert A,
Managing Partner, has

have

men

Wales

nance

Mid¬

announced.

Adams & Peck

wire

Mr.

Street, Mem¬

York

Continental

pany.

Stock

the

Podesta,

favorable

return.

Private

William

the

bank

individual classification.

because

BROADWAY

K. Cruttenden

were

day bills went into the 3.25% note

120

James

Treasury issues and from savings
Commercial banks, with
sizable savings deposits, were also
reported to have been among the
important buyers of the new 4%

turity

and American

Bonniwell

cash,

which

ment issues with comparable

Members l^ew

They are Donald Wales. Donald
monetary authorities will have important amounts of sav¬ R. Bonniwell, James R. Crutten¬
not be making any changes
in ings deposits. It was evident that den, Whitney M. Sewart and Wil¬
policy as long as the pressure of the return of 3.45% for the 16- liam C. Karlson.; The latter four

year

Our 35 th

Donald

accounts.

presently

YVa.es

government

with

the

Donald

that

few instances

only

obtained from

borrowings and there

that the

spokesman for the

1924

amount
a

the highest

are
no
indications in sight yet
that the large February refunding
will See any reversal of this trend.
It is believed in most quarters

Government
its

since

new

000

which the financial

WplSIWWWPiSSl

issue.

Government has had to pay for its

the

had

into

con¬

bond, calls for payments of
June, and the 25%
by Jan. 23, the issue date
paid since the of the
bond; 50% by Feb. 24, 75%
Whitney M. Sewart
fourth
Liberty bond of World
by March 23, and full payment by
War I.
The uptrend
in money
CHICAGO, 111.—Five new gen¬
April 23. This kind of payment
rates in
the past months is re¬
will appeal to those buyers that eral partners have been admitted
flected
in
the
higher cost the are
into Cruttenden, Podesta &
not in the
Co.,
fered

bonds,

15, 1980, were offered
Treasury at 99 to yield

priced

3.45%.

War

and
were

Government bond, due

15, 1980, is the first long-term
obligation the Treasury has of¬

Feb.

3.25%

Highest Bond Rate Since

new

Needs Anticipated

$750,000,000

the

$15 billion

Jan.

Later

out of the

refunding operation of February.

money.

The

come

Issue

21-year

offered

was

the

disturb

much

the future purchasing
the monetary unit.

power of

Bond

The Treasury in

raising

Cruttenden, Podesta Admits Five Partners

not

are

very

about

cern

By JOHN T. CHIPPENDALE, JR.

lessened

there is

Thursday, January 15, 1959

indications

are

that the fears of inflation

going

Chicago

Minneapolis

Francisco, St. Louis

Dallas

Detroit

New Orleans

Wheeling

Hartford

Pittsburgh

Youngstown

the
*

Number 5812

Volume 189

...

centers, another new oxygen steelmaking plant, as well as many

Continued Improvement Expected
In Steel Production
By MAX D. HOWELL

•••*

New

K-\.

City

York

v,r'

;•*

process

result,

proved

will be announced later.

Spokesman for iron-steel details why the industry's dynamic, j
developments will continue in 1959. Notes, however, impact of \r

Labor Costs
;

Despite the fact that steel pro¬

duction declined 25% in 1958, as
imports,-rise of hourly labor costs and fact that total
;;
i compared to 1957, the estimated
wages and salaries in 1958 did not drop as fast as output. V;.

steel

The

new

1959.

during

continue

will

output

year's

.be 100

will

ingots and. steel for castings
110 >

million

net

tons of ingots
for

steel

and

castings, bar¬
ring unfore¬
inter-

seen

t i o ns,
compared

ivith about 85
•million

tons

.during *195 8
117 mil¬
lion
tons ; in

able

1955.
Max D. Howell
I ,J n
recent
months, the :.
output has come a long way up
the recovery road.
Monthly pro¬
duction was 55% ; higher in the
year

.month of November
to the low

nine

million

tons

the

initial

six

months

year.
-

steel

the

earnings of the iron and

industry

higher1 in

were

only slightly

third

the

quarter

case

certain

the:

CITY,

under

the

J. —L. L.
branch

has opened a

Co.

Boulevard

Hudson

2322

direction

of I.

Sil¬

verman.

of steel by the oxygen
the development of de¬
sign information for steel struc¬
tures;
improvement
of
coking
coal quality, and growth of con¬
tinuous
annealing of tin plate.
Iron ore explorations were wid¬
output

Jaffee, Leverton Admit

process;

ened and new

ore

Jaffee, Leverton, Reiner Co., 39

Broadway, New York City, mem¬
bers of the New York Stock Ex¬

change, on Jan.
Jack E. Schuss to

devel¬

sources

/
t

Sincere Co. Branch
GAINESVILLE, Fla.

♦

Sincere
& Company has opened a branch
office at 243 West University Ave.
under the management of A. Bur—

dett White.

Stieglitz
STREET

NEW YORK

contributions to pensions,
insurance,
social security,
and
supplemental unemployment
benefits, which are now more

15th will admit
partnership. *

5, N. Y.

pany

....

somewhat
lower production rate$, iron and
steel companies have gone ahead
with a wide variety of capital im¬
provement programs."They are
better equipped than ever before.
Among the principal new projects
are rolling mills of various types
and sizes, sintering plants, con¬
tinuous annealing lines, research

times

six

than

high

NEW

estimated

The

payroll

1958

salary employees) of
companies reporting to American
(wage and

and Steel Institute was over

Iron

MEMBERS

TELEPHONE

they

in 1949.

were

the

office

ores; progress in direct re¬
duction processes; increases in the

Included in these costs are com:

individual

Undaunted

The net

the

products.

was

•

The advantage of

exports; over imports" has
decreased, and the ad¬
vantage has virtually disappeared

made in the last half of 1958 than
in

especially

areas.

steadily

About

steel

concern,

total

compared

point last April.

been

Seaboard

of consider¬

the cause

have

the record

Fane

for quality steels; im¬
methods of beneficiating

Land

,Fane Opens Branch
JERSEY

casting

payroll post for oped.
1958, despite the rising rate of op¬ wage earners in the iron and steel
Each company in the iron and
erations.
They'-• were up 2 % " as industry
increased
about
10%
steel industry is striving to keep
compared to second quarter , of during the same interval.
Em¬
abreast of the march of progress.
1958 and down 26% as" compared
ployment cost per hour worked
to the third "quarter of 1957.
In by production and maintenance The industry's dynamic develop¬
the first nine months of 1958 the : employees
rose: from
$3,216 in ment will continue in 1959.
profits were 44% below the total i957 to $3,471 during the first half
for the corresponding part of 1957. of 1958, and approximately $3.60
These
figures
are
reported
to during the second half of 1958. As
American Iron and Steel Institute compared with the first half of
by companies representing around' 1956, • just
before
the
current
93% of total steel output. s three-year agreements were con¬
cluded, wage and related costs per
Steel Imports
fhour worked rose from $2,855 to
Halle &
Recent increases in-the amount
?approximately $3.60 in the latter
of iron and steel ".products being part of 1958, an increase of 74.5
52
WALL
imported into the ; United States cents or 26.1%.
:

in iron and steel

uptrend

The

vacuum

hourly

average

production

growing use of selfin blast furnaces;

iron

The amount of the increase

1959.-'
.

increased.

been

have

capacities

potential
will
probably rise to a record
high annual level at the start of

•

sinter

the national steelmaking

•'.sir/-

•

the

utilization of the

Steelmaking
also

cluded:

fluxing

facilities.

other

Vice-President, American Iron and Steel Institute,

Executive

(223)

The Commercial and Financial Chronicle

STOCK

AMERICAN

NEW

CHICAGO

EXCHANGE

COTTON

YORK

N. Y."

BRANCH OFFICE

NEWARK,

INC.

EXCHANGE,

ADDRESS

CABLE

"PEACEABLE,

EXCHANGE

OF TRADE

BOARD

COMMODITY

HANOVER 2-9050

EXCHANGE

STOCK

YORK

billion, as compared to $3.8
billion during 1957. This is a de¬
cline of about 13%, against the
$3.3

of 25% in steel production

drop

mated

1958.

1957 and

between

The esti¬

employment dur¬
522,000.

average

ing 1958 was

(The figures above cover em¬
ployees directly engaged in the
making and sale of iron and steel,

UNDERWRITERS AND DISTRIBUTORS

companies accounting for 94.9%
of the 1958 steelmaking capacity
of the industry.
They do not in¬
clude employees in other activ¬
ities.
On the basis of the reports
from these companies, it is esti¬
mated that the 1958 payroll of the
in

Ingalls & Snyder
Members New York Slock
Members American Stock

100

Exchange
Exchange

Bell

Teletype NY 1-1459

System

SECURITIES
•

000.)
Russian

—

MUNICIPAL AND CORPORATE

[hourly and salaried employees
engaged in the making and sale
of iron and steel] was $3.5 billion,
while the employment was 550,-

BROADWAY, NEW YORK 5, N. Y.

COrtlandt 7-6800

•

steel industry

and

entire iron

CORPORATE FINANCING

past

the

During
knowledge

PRIVATE

Industry

Steel

Russian steel industry.

delegation of steel and iron
ore
experts visited
the Soviet
Union. Later a Russian delegation
came to the United States.

Van A j.st yak, Noel

ican

Although

Soviet

the

...

in¬

steel

States, it is operating at capacity
and produced about 60 million net
tons in 1958. Furthermore, it has

plans for exIt will play an impor¬
tant part in Russia's determina¬
tion to defeat the United States in
an economic war of great dimen¬
sions. Russian steel products can

& Co.

Members:
New York Stock

American Stock Exchange

Exchange

373 SEVENTH AVENUE
NEW YORK 1, N. Y.

52 WALL STREET
NEW YORK

5, N. Y.

dustry is only about 40% as large
as the steel industry in the United

The Market Outlook for 1959

•

much

year,

gained about the
An Amer¬

was

PLACEMENTS

Philadelphia Office
Room

831, Western Saving Fund

Building, Broad & Chestnut Streets

extensive long range
f

pansion.

139 Selected Stocks for Investment
Our

year-end Special Report contains both a general

discussion of 1959 prospects

paying
ing

If you

list of 139dividend

stocks with returns currently

common

up to

and

or more

would like

(calculated
free

copy,

rang¬

1958 dividends).

just write

call

for FC 62.

expected

creased volume in
Most

will

heavy steel products.
In 1958, for the

second year, the

Weeks

York 5, N. Y.

*Midtown: 400 Madison Ave., at 47th St.

(17)

Dl 4-6600

India

and

Ford

The

Founda¬

practical

*Open Thursdays until 9 PM
Members

BOSTON

NEW

Principal Stock Exchanges and Chicago Board of
YORK

CHICAGO

PHILADELPHIA

PROVIDENCE

ROCKFORD

CHARLOTTE

DETROIT

PORTLAND

CLEVELAND

BANGOR

WORCESTER

PEORIA

MEMPHIS

„

dian
to

the

expanding In¬

rapidly

industry

steel

come.

Trade

in the

technological

forward

areas

United

New

practical

States.

and Other Exchanges

NEW YORK 4, N. Y.

Teletype: N.Y. 1-210

Telephone: HAnover 2-0600

FORT PIERCE

BALTIMORE

LAKE WORTH

New York

Washington

Baltimore

Fort Pierce

the

MIAMI BEACH

PALM BEACH

GENEVA

LONDON

AMSTERDAM
v *

Direct Wire Service:

progress

Developments in¬

•

Correspondentsi HAVANA, CUBA

steel

rapid rate in

value

York Stock Exchange

25 BROAD STREET,

WASHINGTON

During 1958, the iron and

industry's

Members

CO.

HIRSCH

years

Dynamic Developments

went

management

training to a substantial number
of
carefully
selected
engineer
trainees from India, who will op¬
erate

PL 1-1900

Securities

the Government

cooperated with

providing

Hornblower

Corporate and Municipal

steel industry, at its own expense,

tion, at the request of the United
States
Department of State, in

40 Wall Street, New

world markets.

exports

these

Underwriters, Distributors and Dealers

in¬

appear

Miami Beach

Lake Worth

Palm Beach

The Commercial and Financial

(224)

whether

Continued from first page

We See

not they burden
nipulators were too shrewd to
budget, can hardly press demands during the de¬

the official
fail to

have

similar effect

the

upon

economy
less certain,

more or

if,

—

these, has called fiscal year it is estimated that whether
among wage
sharp attention to some of our there will be in government or

earners

capitalists, rarely yield to

surplus farm products gentle persuasion.

worth

about

have

brought us.* With ap¬ by July 1, 1959, government
parent approval he says that ^expenditures for storage, in¬
"Federal grants and long-term terest
and
handling of its
loans to assist 14 major types

agricultural inventory will
of capital improvements
in reach a rate of $1 billion per
our cities will total
over
$2 year."
members are flushed with vic¬
billion in 1960—and this fig¬
It is particularly unfortu¬ tory which they think owes its
ure is double the
expenditure
nate that the President, de¬ origin to a desire of the rank
of two years ago." Without
and file to reinstate much of
spite his strong words about the New Deal and the Fair
coming up with constructive
moderation in fiscal affairs, Deal—with the word "moder¬
proposals, he points out (this
proceeds himself to advocate ation" omitted from the dic¬
♦See "State
of
the
Union
Message"
a number of
Starting on page 29.
projects which, tionary. The President has
forward with the prom¬
ise of a balanced $77 billion
come

is under

announcement

offer

to sell or

securities. The

circumstances to he construed as an
solicitation of an offer to
buy any of these
no

offering is made only by the Offering Circular.

Southern Gulf Utilities, Inc.
(A Florida Corporation)

the

engage

reference
what

primarily in

acquisition, ownership, construction, control
supply and sewerage

Offering Circular available

per

ROSS

the

they

may

budget

to it, to

Thursday, January 15, 1959

thus

bring

ourselves? That is

they question

great disadvan¬ faced

which

squarely

Bache

Meanwhile, they have
been active in politics with
result that the election

turns

word

the

upon request

vir¬

tually

way.

Group Offers

offering of 100,000 shares

Corp. common stock
price of $31% per share is

being made today (Jan. 15) by

New Dealers have

worked

their

out

being offered, 50,000 shares are
being sold for the account of the

already

arguments

to defend themselves

company and
of

account

50,000 shares for the

selling stockholder,
Edgar S. Peierls, President of the
a

company.
Net

proceeds from

the

sale

BOwling Green 9-7565

the 50,000 shares of common stock

by the company will be added to
general funds and used for

its

various

corporate

purposes,

cluding
making
leasehold
provements,
purchase
and

and hence

big business must

attacked

and

made

the

and

other

tile to

point out to these fol¬

lowers of false economic

gods

that it is in the field of labor
that

the

obvious

and

bald

monopoly exists.

tems

caused it. Are

now

to per¬

already under

recovery,

*way, to add to those ills and

.from

for

high

use

sys¬

handling corrosive materials.
fabricates
various

from

similar

use

design and installation of systems
in

which

The

its

products

company's

principal plant

used.

are

executive

offices

located in

are

Roseland, N. J.
Upon completion of the current

the economic ills which

move

mit

re¬

resins

products
in such systems, and pro¬
vides engineering service for the

for

and

The recession failed to

products

resistance

villain of the piece about in¬
It
also
flation. It appears all but fu¬ resins

financing, outstanding capitaliza¬
tion

the

company

will consist

of 614,873 shares of common

stock,

value.

par

W. H. Morton

Co.

INCORPORATED

Suite

3811, 20 Exchange Place, New York 5, N. Y«

into consideration the rise in

ANOTHER NEW SALES RECORD SET
BY LOW-PRICED MISSILE STOCK
Third

stock

And this is

ling

sales

quarter

growth

has

top of

800%

volume

once

again

this

set

dynamic

new

mark.

steady rise in sales total¬

years!

This

bullish

news,

not

heretofore published,' has not
yet been reflected
in the market
price, still

HAnover 2-5620

customers

assures

continued

growth—
AMER. BOSCH

SPERRY

IBM

CHRYSLER

PHILCO

RCA

BENDIX AVIATION
more

phone for

our

unique situation, write
fact-crammed analysis. Mailed

without

1960

and

the

field

space

hyste¬
explorations

bid fair to

hard-earned

funds

even

no means confined to

Washington even if some of
threatening from other

141

Broadway

Please send

ice

your

BE 3-3030
analysis

New York 6, N. Y.

low-priced "Sleeper" in Missile Field.

quarters

Phone-

Address

one

degree

done
It

in
no

the

nation's capital.

longer possible to

doubt that the upward
pres¬
sure

ent

upon wages

and virulent.

is still
Labor

you're

general

your

come

economy

great many

from the

in. We

can

scene

and

securities,

want

information.

help with information

of Japan, information

people can't; and

particular

your

ask, there's

telephone,

charge

obligation, and

pres¬
ma¬

Nomura Securities Co., Ltd.
61

Broadway, New York 6, N. Y.

Telephone:

BOwling

Green

9-0186

write:

Brokers, Dealers and Investment Bankers

com¬

special studies tailored

needs.

Feel free
as

away

another be attributed to what
has and what has not been

Name-

j(Please print full name
legibly)

can

OPPORTUNITIES

can't read Japanese,

panies, information

those

Keilly. Moffman & €<>., he.

you

if you can,

That's where
the

But the hazards of the
year

Perhaps

taxpayers.

are

INVESTMENT

de¬

larger outlays in
already taking billions

the

the
or

JAP A A

miracle. Public

about

obligation.

Dealers

STATE AND MUNICIPAL BONDS

hailing distance of $77
billion, it will be hardly less

G.E.

about this

—

keep Fed¬

fiscal

mand much

DUPONT

To learn

Underwriters

within

ria

outlays

than

UNDER $3
Character

in the event able to

eral

in¬
im¬
in¬

the cost of

living; sometimes
it is
merely an unblushing ap¬
peal for more. Many of the
newly elected members of
Congress made promises of
greater liberality in largesse
as
keynotes of their political
campaigns. If the President is

pricing"-—that is to say rather stallation of machinery and
arbitrary setting of prices at equipment, and for working capi¬
tal.
.i-f"
a level to
yield unreasonable
Resistoflex
Corp. is engaged
profits. This, of course, can
principally in the design
and
happen only if there is lack of manufacture of specialty
hose,
competition, so the story goes, hose fittings and hose assemblies

already has its hand in the
public till is demanding more.
Sometimes it is a plea to take

New York 5, N. Y.

ington, barring, of course, underwriting group managed by
general condemnation of Bache & Co.
Of the total number of shares
corruption and the like.

some

every interest or ele¬
ment in the population which

SECURITIES, INC.

year,

ol Resistoflex

any
Wash¬

from

the

Resistoflex Common
Public

re¬

greatly discourage

action

suffering

should

1959, gets under

mands.

the

future

All Demand More
In such circumstances

Underwriter

99 Wall Street

proceed, without

Deal program
they would like
to see made official.

systems in Florida.

Offering Price: $2.35

balanced

evolve the sort of "bold" New

and management of water
.

whom

mination to

(par value five cents) }
Company intends

budget is anathema in its own
right are stating their deter¬

127,659 shares Common Stock
The

budget; the opposition is not
even
waiting to see what is in
the budget message, but is
screaming that any such idea
is "unrealistic," and those of
them

OFFERS

when

against
charges that by aiding and
But the big danger this year
abetting labor unions, they are
so far as
government is con¬
fomenting inflation. Inflation,
cerned seems to stem not from
so
they now say, is not the re¬
what the Administration does
sult of deficit
spending or
or does not
do, but from the
monopolistic demands of labor
Democratic
party whose unions, but "administrative

hands

$9 billion. And

months

upon

tage, but it is now plain as a
pikestaff that they were
merely awaiting a more pro¬
pitious setting for their de¬

economic sins of recent years
and to the crisis to which they

This

pression

is would be

they are
alleged need for "bold" and time with obvious uneasiness carried forward by use of
not to say dismay) that "out¬ funds which have been arbi¬
"imaginative" action without
delay — and, we are afraid, lays of the Department of trarily created by the com¬
without much sober study — Agriculture for the current mercial banks. It is likewise
certainly do nothing to reas¬ fiscal year for the support of unfortunate that the Presi¬
sure the thoughtful observer. farm
prices on a very few dent, apparently in a sober
farm products, will exceed $5 mood, has
nothing more to say
Typical Examples
billion. This sum is equal to about
the
behavior of the
The President himself, with
approximately two-fifths of labor unions than he has said
no clear record of
loyalty to the net income of all farm before
mere exhortation to
time-tested principles of
operators in the United labor and business to act with
.sound public :policy in such States.
By the end of this moderation. Monopolies,
matters

Chronicle

are

Number 5812

Volume 189

(225)

The Commercial and Financial Chronicle"

...

corded

Outlook for Real
^

President, Amott, Baker & Co., Inc., New York City

real estate security

past performance of

prices and charts their future. Claims: the immediate outlook
is anything but unfavorable; over the longer term values could
rise substantially from their present level; and commercial
real estate in well situated growing communities still offers

real

the

reviewed

last

ago,
poor

into

way

con¬

ditions at that
time left much

mate is great¬

ly improved
for

now

have been

reco

rather

tial

verin'g
rapid¬
from the

ly
recession
had

which
couise

the

Amott

Harry

well

pretty

its

run

concluding my summary of
of the real estate

activities

for

of-

1957,

securities

market

fered

following comment for

the real estate

the future: "Today,

investors

securities market offers
a

broad

The

gift,

school

behalf

cieties,
entire

National

School

with

nomics

and

Hotels

Corporation

in financial

common—up

Mrs.

July

18,

other

and

; Slade

Sanders, do
the v Helen Slade
Sanders Memorial Scholarship in

hereby

create

the Graduate School of Journal¬
ism at Columbia University in the
City of New York; The principal
amount of this Scholarship is to
be $14,000.
It is the wish of the

Executive Committee that the in¬
on this principal amount be
annually, in perpetuity, for a
scholarship to assist a worthy
graduate student with good
come

died last
School of
-

selection

buying

portumties at good yields.

used

at - grounding in economics and with

schools

Columbia.

writer-:

financial

IDAG

have reaped substan¬

ago

year

Corp. common^—up 5V2

Utilities

Appoints

op-

More-

points

profits.

sue

stock index re-

real estate

20%

second

Walker to Staff

1970,

2s,

mortgage

wicu

Chanin

stock—up 25 points to 122;

Building third mortgage Is, 1970,
with

Carl M.
Members New

1958—up 10 points to 80; Kramon
Development Corp. first fee and

Loeb, Rhoades & Co.

Tor\ Stoc\ Exchange, American Stoc\
principal Commodity Exchanges

4%s, 1962—up 8 points
Madison 52nd Corp. first
6 points to

leasehold

Exchange

and

87;

leasehold 5s, 1962—up

NEW YORK 5,

42 WALL STREET

points to 122;

stock—up

Broadway Building first 4%s,

165

N. Y.

York Cor¬

New

Allerton

and

with

income 5s, 1965,
stock—up 5 points to 97.

poration

Underwriters and Distributors

sharp recovery in real es¬
prices in 1958 re¬

The

tate

security

early awareness of in¬
generally to the demise
of the short-lived business reces¬
the

flects

Corporate and Municipal Securities

vestors

sion,
ENGLAND

LONDON,

York

Ithaca

Auburn

State:

Middletown

•

Elmira

Syracuse

•

Utica

Hornell
Watertown

•

chronic inflation

& Co..

Belts, Borland

Richmond, Charlottesville, Va.

...

.Chicago, III.

Denver, Colorado Springs,

& Company....

Boettcher

Grand Junction,

Pueblo, Colo., Chicago, III.

Nashville, Knoxville, Jackson, Memphis,

J. C. Bradford & Co.....

Clarksville, Term., Atlanta, Ga.

Pittsburgh, Pa.

Chaplin 6c Company
E.

Clark

Coofey
Dittmar

Philadelphia, Lancaster, Germantown, York,

Company

Edwards

Pa.

Hartford, Conn.

.. .

....San Antonio, Dallas, Texas
St. Louis. Clayton, Mo., Springfield, Belleville,

Company, Inc..

Si Sons

III., Houston, Texas, Little Rock, Ark.
Keokuk. Iowa, Shreveport, Lake Charles, La.

Jacksouville.

Chattanooga, Tenn.

I.......

Elder Si Co.,

.Chicago, III.

Fatwell, Chapman & Co

.Charleston, Parkersburg, W. Va.
Johnston, Lemon Si Co
.Washington, D. C„ Alexandria, V a.
Loewi Si Co., Inc...... .Milwaukee. Applcton, Beaver Dam, Chippewa Palls,
Green Bay, Jaticsville, Madison, Racine, Waukesha,
Waller C.

Lyons

Mead, Miller

Piper, Jaffray
Prescott

Wisconsin Rapids, Wise.

Ky.
& Co
.Baltimore, Aid.
Si Hopwood........ Minneapolis, St. Paul, Rochester, Minn.,
Louisville, Danville, Lexington, Bowling Green,

Si Co

Billings, Great Palls, Mont.

Si Co... .Cleveland,

Shaker Square. Canton,

Columbus, 1 oledo, Ohio

.Dallas, Texas

Sanders Si Company.
Sutro

Co ......San Francisco,

FOREIGN
Grecnshietds Si Co.
T.

Los Angeles, Beverly

CORRESPONDENTS
Montreal, Canada
Toronto, Canada

Limited

Richardson 8i Co

Paulo A.

.Sao Paulo. Brazil

Bromberg

Julio C. & Diego Roldos.
Securities Co.,

longer term values could rise sub¬
stantially from their present level.
Those who are concerned with the

Ian Porter Si Co

securities

so-called

excess

economy are

growing

rapidly

PRIVATE WIRE

in¬

creased amounts of consumer

indicator

one

required.

Offices,

additional

goods,

and business

housing

facilities that will be

Add

this

the vast

technological changes that are go¬

goals. Traditionally, also, it is

taking stock and making

new

plans.

look forward it is well to remember

getting ahead financially there is more
be considered than earning and saving. Your

savings should be invested wisely so that they,
in turn,

will work for

investing small

the

ability

ties is

most

How

you — as

hard

more
we

possible.
money

recognize "good values" in securi¬

important.

recognize value?

That has been the business of
107 years.

large amounts of

we are

people than at

believe

and manufac¬
in
public works programs, the

any

time in
from

clients profit

our

firm for

today doing business with
our

history

our

advice,

•

ing on in business
turing,
our

that must be
difficult

maintained and it is not
foresee
our

from

May

the necessary increase

huge military budget

Markets through Branch
Correspondents and their connections in over 100 Cities
throughout the United States and Ca^iada

our

du¬

but

rable

SYSTEM

population
the

and, traditionally,

that in

great pe¬

the

and

economic

real

still provides one

estate,

ture inflation.

well

communities,

of the strongest

hedges against the spectre

Boston*

•

Providence

upward.

situated in growing

40 WALL

apart

periodic adjust¬

temporary

Commercial

growth,

of fu¬

assist YOU?

Estabrook & Co.

that the future curve

ments, must be

Providing immediate access to Primary

our

expansion that lies ahead.

riod of
Our

overlooking the needs

future

the

capacity

over

are

do better and work harder towards

achieving
time for

.Caracas, Venezuela
Iokyo, Japan
Melbourne, Australia

Ltd..

holidays

prices -Will
continue their upward climb at
the same rate in 1959 as in 1958,
the immediate outlook is anything
but
unfavorable
and
over
the

Montevideo, Uruguay

Mercantil De Inversiones S. A..
Yamaichi

Hills, San Jose, Calif.

problematical that

estate

real

Hardy 8i Co..

Wausau,

The

January is the time for "beginning again" —
resolved

Outlook

Near and Future

While

(Correspondents
6i Strudwick

effects of our
problem.

and the longer term

Geneva

Stroudsburg, Pa.

Anderson

prudent evaluation of the

stability and vitality of well sit¬
uated real estate in our economy

Regis Hotel, New York City

St.

New

Fed¬

acting on* behalf of the
Directorate .and Member¬

Helen

for

Federa¬

journalism.^ 7"%> "r

Sanders, who
attended'the

Journalism

National

ship, and desiring to give tangible

grounding in eco¬
particular interest

Executive

and

the

evidence of their love and esteem

presented to the
L. Hartley Smith, on
was

the

presenting the

eration of Financial Analysts So¬

scholar¬

ship for financial Writing in Co¬
University's Graduate
School of Journalism.
•.
•
V

Officers

"The

Committee

magazine,

to create

the resolution

text

federation

TORONTO, Canada —The In¬
liquidating 1958, in the School's first annual
vestment Dealers' Association of
dividend equivalent to approxi¬ Journalism Forum.
Mrs. Sanders led in establishing Canada has announced the apCites Real Estate Indexes
mately 3 additional points; Lex¬
ington Avenue
& 42nd Street "The Analysts Journal" in 1944, pointment
of
William
Stuart
justwhat does the record show?
Corp.
(Chanin
Building,
New
Amott-Baker
Real
Estate
and remained its managing editor Walker to the permanent staff at
York) class D common—up 9%
Bond and Stock Averages — two
until her death. She was the wife the head office in Toronto.
points to 24%, and 551 Fifth Ave¬
sensitive market indices which nue
"Units"—up 9% points to 53.
our firm has compiled and pubAmong the real estate bond is¬
lished monthly for more than two
sues,
some of the largest yeardecades — tells the story simply
and convincingly. In the 12 months to-year gains were recorded by
the
following: Chanin Building
ended Dec. 31, 1958, our 19th is-

by the late spring of 1958.

the

financial

some

months

classification by type

the

Com¬

a particular
interest in financial
of course, have been 16% points to 33; Sheraton Cor¬ and analyst under, the name of ; journalism."
■■■ •
;
*,
in
no
way
responsible for the poration of American common— Helen
Slade, she wrote widelyr
8% points to 18%; Statler
economic recovery that has taken up
for financial magazines and ap-j
place these
past six| to
eight Hotels Delaware Corp. common—
months, it is a fact that investors up 4% points to 10; Knott Hotels peared in numerous panels arid'
who had the foresight and cour¬ Corporation common — up 5% seminars. One of the last of these
age to buy real estate securities points to 22; General Realty & was her appearance on May 28,

business cli¬

and

the Bankers Trust

gift follows:

lumbia

property; the percentage changes
for the year were: six hotel stocks

the

While

the

realty companies."

desired,

begin * now— ing bonds—up 3.9% and eight of¬
psychological attitudes fice building bonds—up 12.2%.
of
investors," in general, remain 7. Among the more ! active indi¬
depressed—to accumulate real es¬ vidual stock issues those which
tate equity stocks and bonds of recorded the sharpest price gains
the better. grade, well managed in 1958 were as follows: :Hilton
while

Certainly,

in-."memory of
Sanders, a founder
of
"The
Analysts

future. Prudent

should

investors

recession.
economic

advance of from $828 per

The

the

gift

inflation.

securities; market a "year
the business outlook was
and we were well oil our be realized in the

estate

Scholarship Created

$1,000
bond at the beginning of the year
to $380 at the close of 1958.

Henry S. Sanders, Vice-Presi¬

dent of
pany.

representative issues) moved
6.2%. During this period
A $14,000
the average price of the 19 stock
Helen Slade
issues climbed from 33% on Dec.
and
Editor
31, 1957 to 43% on Dec. 31, 1958,
Journal," a
while the bond averages recorded
will be used
ahead

Helen Slade Sanders

—up
41.4%; six apartment and tion of Financial Analysts Soci¬
apartment hotel stocks—up 41.8%; eties, which publishes "The Ana¬
seven
office building stocks—up
over, the market's present average
lysts
Journal.",; Mr.
Smith
is
level provides a strong base from 12.2%; * three hotel bonds —- Up President of the national federa¬
which large capital gains could 4.4%; four apartment hotel bonds tion. The income is to be used an¬
—up 2.5%; four apartment build¬
nually to assist a student in the

strong hedge against
I

gain of 30.2%..

same

of 19

By II. R. AMOTT

When

average

period, our - real '
estate bond index (comprised also

Estate Securities Market
Mr. Baker reviews

the

For

Investments

STREET, NEW YORK

Hartford
•

•

Pouchkeepsie
Springfield

Financial Service Since 1851

Members New York and Boston Stock Exchanges

'26

The Commercial and Financial Chronicle

(226)

which

Don't Force American Labor

movement

our

has

been

20,000,000

dedicated for the last 75 years, to
make this

better America.

people who should

Thursday, January 15, 1959

;

at the turn of the century.

opposed

be covered under that law.

some¬

being socialistic,

was

And

We are for better housing. We
thing that was European in con¬
better do that aren't satisfied that millions of cept, something that was foreign
making this a better people have been moved out of to the so-called American idea of
America—than by improving the slums,
because "there are many individual reliance and individual
a

in what way can we

To Start
By

GEORGE

Political Party
MEANY*- ; V;

labor political party if the
legislative objec¬

Role

would

talk

record

who

millionmore

past.

and

are

And

you

facing a terrific chal¬
challenge to our country
challenge to the trade union

movement.

Because

very

nature

things

the

■

democracy
such

have

achievement

democratic

lenge

the

question

challenge to
the life of the

trade

over-all

the

challenge which our country faces,
a
military challenge, a scientific,
an
economic challenge, a chal¬

knows the

use

wasting

time

union

about

that

this

threat is directed

the

bor's

move¬

George Meany

cannot
can-

maintained, under any
type of government than
type we have here in the

other
the

United States.
v

Everything
sion

do,

deci¬

every

make, must be made in

keeping with the tradition of the

''From

Merger

the

ter scientists, better

come

forth.

Engineers, and

talk by Mr. Meany

Convention

the

Just

America,

what

labor's

representative of millions

American

citizens, in meeting
this challenge, in making its con¬
tribution
to
meeting this chal¬
lenge?
I
can

contribution

best

make

here

home

that
to

meet

movement.

not receive higher wages
gift—the employers did not
gather together in a smoke-filled

before the
New

York

and

room

AFL-CIO, New York City,

take

the

trade

problems

simple,

movement

sound

objectives

for

Well, I would like to point out
that" every single achievement of

the

position that the trade hhion movement in the
it was good for America to pay
past 75 years which has made life
higher wages. They paid higher
wages because we forced them to lor the
community, every single
pay higher wages and we forced one of these, things was opposed as
them
to
recognize the fact of being socialistic by the NAM, and
American

union

the road to Marxist Communism."

challenge, to strengthen and
maintain the democratic way of
life, is to carry on the work of

this

trade

did

future,

labor.

keep

of this

face

our

turn

by those who refuse to learn, refuse to believe that there is a to-

the

morrow,. and who prefer to live
in the past./. v;'T—■ /■' r/;:'/ *•:/•/;"-'A*-'

face to the

our

that will come up, to¬
next month and next

morrow,
year,

'»

turn

as we

mind

Take

i.rm.lrnr

the

purpose

Every, worker in

what

TTni+o/i

Ctnton

today covered by workmen's
compensation.,-That was opposed

75 years ago.

The No. 1 ob¬
jective of the trade union move-

Our

1891

Sixty-Eighth Year

1959

ment is to build

•

DEALERS

•

DISTRIBUTORS

PRIMARY MARKETS
IN CONNECTICUT SECURITIES

simple, sound

•

Bell

face

look

Bridgeport

New London

Waterbury

Is there any employer today, in
his right mind, or any public official who would want to do away,
with workmen's compensation,
which merely states, as a principle
of government, that-a worker's

loss of income through accident or.
injury on the job is a proper,
charge against industry?
The eight-hour day, when it was
fought for by the ITU spearhead¬
ing the drive some 50 or 60 years

that also

ago,
fact

socialistic:;'*In

was

employer,

one

quoting from

the Bible, said it was all wrong to

fly in the face of the Bible, which"
said
"Six days thou shalt labor
the seventh."

tried to eliminate the

;

WJL'

•

trieH

cut

down

lsm* When we tned t0 cut down
industrial

homework, tried to

keep children in the homes and in
schools

and

from the fac¬
socialistic. ,V

away

tories, that also

was

wfc

tnn

'
'
socialistic.
have heard enough of
this socialistic charge.
It gets to
the point where you pay no atten¬

Well,

tion to it at all any more.

IUSI1

riglll

roads

this

the

WdyS

West

IUr

It is all

ine

Coast,

1 Ull

that

country could expand, it
Continued

page

was

109

the

future

•

♦

•

♦

LOUISIANA

Municipal Bonds

stand¬

and

the

domestic
have

scene

Barrow, Leary &

yes,

—

international

our

Phone 3-2573

problem; we have our interational
cooperation through the
ICFTU, and we are making our
contribution
for
strengthening
democracy in other lands, building
standards

but

what is

people

Co.

Investment. Securities Since 1934

activities, but f am going to just
direct my attention to the domes¬

515 Market Street

SHREVEPOET,

LOUISIANA

there—

problem here at

our

home?

BROKERAGE SERVICE

OUR YEAR-END

Minimum Wages and Other

STOCK 6- BOND

COMPARISON & ANALYSIS of

Domestic Needs

Well, in the legislative field we
have
the question
of minimum

13 New York

The Minimum Wage Law
just 20 years ago

wages.

went into effect

last

for Banks, Brokers and Dealers

millions
be

and who
a

Members New York Stock

Exchange

Members American Stock
Exchange

Broad St.

Telephone DIgby 4-7800

MEETINGHOUSE LANE

SOUTHAMPTON. L. I.. N. Y.

where

case

workers

who

this

the

trade

law

Will be sent

request

union

fighting for the peo¬
ple of the country as a whole, be¬

Laird, Bissell & Meeds

cause very, very,
very few of our
members have ever been affected

directly

the

Minimum

MEMBERS

120

the indirect

But

lions

people

effect

mil¬

is something that

know,

DU PONT BUILDING .1"

WILMINGTGN,. DEL...
,

concerned about.

Our program is7
the minimum wage to at

raise

least

dollar and

bring

in to

quarter, and

coverage

YORK

AND

AMERICAN

STOCK

EXCHANGES

least

BROADWAY, NEW YORK 5, N. Y.

Telephone BArclay 7-3500

substandard,

about and something which we are
to

NEW

Wage

Laws.

wages
MAIN ST. &

covered

ate not covered." This is

movement is

New York 4
Teletype NY 1-733

Bank Stocks

week, and today we have a
wage
of $1.
We still

should

Hardy & Co.

City

minimum
have

■

tic

Dasnbury

socialism.

This,

particularly to labor's action

course

Teletype Nil 191

that* the

repassed.

of the

purpose

ing the life and building
ards for people.

New York HEcior 2-9377

was

We have many types of activi¬
ties, we go into many fields: legis¬
lation, political, so-called social'
contacts, cooperation with other
organizations; but every one of
the

NEW HAVEN

course

when labor fought for it way back

trade union movement of improv¬

Members New York Stock Exchange

could

represent.

these activities is directed toward

Ghas. W. Scranton & Go.

State Federa-

spearheaded a
drive, in 1911, I believe to change

the standards

of life and work of those that

UNDERWRITERS

The

time

compensation.*£
the United States
the

irnmr

was

that

workmen's

still

movement

tion

this socialistic *4 business.
If you and xest
don't like something the other felWhen

union-low proposes; you say,''Well, that's
It is in the record that socialism-'that's just a step down

the American

un¬

after it was passed
by the Legislature and signed by-

the Governor.

law

itself in the scientific field,
that we carf make America better by making these1 children bet-

the world

rest

are—this did not

to have the law declared

the State Constitution

the children of

are

op¬

rugged

constitutional

age

better sents

better

are

was

so-called

as a

the

American trade union movement.

State

role
of

States

role?

The
we

and

children

achievement, this building of a
higher standard of life, is the record

not

for

are

future of this great country unless
their opportunities for higher edu-

leading nation of the free world.
Naturally the question occurs at
a time
like this, just what is la¬

this

because

exist,

wages.
This
by anyone who

clothed

our

than

educated

United

ment

educated/: So

be*

history of America for
If we have bet- cation are expanded, so that we
life, if our people can meet the challenge that pre-

better

are

movement,
type of

better

the last 75 years.

housed, if

this

/"v
; /
•
Yes, in New York State the State

far

for

tcr standards of

workers

are

the children of America, the boys
and girls of'high school age, cannot make their contribution to the

way

for

be denied

—and they

of better

program

gift from political lead-,'
trying
to
emphasize
that
this ers or as a gift from the so-called
frequent Charge of Socialism
challenge exists. Every intelligent great captains of industry,' who; V Now, all of these things which I
man
and woman knows that we took part in developing America have just mentioned are characare facing this threat from a dic¬
in the days of the so-called in-1 terized by those who oppose us as
tatorial form of government, and dustrial
revolution. .This record socialistic. It is a very funny thing,

nation is with¬
out

There

chal¬

citizen.
must

who work

those

cannot

confronts the entire free world.

the United

States

good trade unionist
first of all a good
Every action that we take
a

the

lenge that not only confronts the
United
States
of
America,
but

here

must

posed

Americanism.

ment.' :

from the experience of the

tribution

initiative, something that

housing through cooperation with
state, local and Federal govern¬ Manufacturers Association went

;\4r

of life by raising the standards of

lenge,

dedicated to

Yes, we have made democ-,: Federal" aid to education.
work. We have made a conIn this nuclear and atomic

racy

political activity.

live

schools, we
are • for
giving the children of
little, if for no America, sail*' the;- children
of
than to gain what America; a decent1 place in which

purpose

can

Past

perhaps,

whor still

slums.- So the labor movement is

time like this, but I think we

other

other way. The union leader takes exception to
the charges of "Socialism"; outlines current labor goals in the
new session of Congress; and advises business to follow the

the

idle,

should look back

any

old method of

those

wages,

Labor's
It

trade union movement could not achieve its
tives

in other words,
for the people we represent.

Industrial Organization, Washington, D. C.

life

for

work

An aroused Mr. Meany minces no words in outlining labor's
views of certain domestic events and threatens, as did his

predecessor Gompers, to form

—

standards

■

President, American Federation of Labor and Congress of
/

Job

* "*

V-

PHILA. NAT L

Bell Teletype NY 1-1248-49
BANK

BLDG.

WALDMANNSTRASSE

PHILADELPHIA, PA.

160 W. BROADWAY

44 WHITNEY AVE. J

NEW HAVEN, CONN.
225

S. STATE ST.

ZURICH, SWITZERLAND

SALEM, N. J.

DOVER, DEL.

Number 5812

Volume 189

...

The Commercial and Financial Chronicle

p,f.

Policy

Senior

than half the imports from share of the European import marall other nonmember countries in ket for passenger cars will have
1955. Of greater importance than increased from 48% to 62%, that
more

the tariff is the preference of

engineers in consuming countries (hs
in the. United States) for products

of France from

18%, and*

14 to

that of Italy from 10 to 11%, while
the proportion supplied by the
of their own domestic industries. United States and Canada will4
with which they are familiar, as have-declined from 12 to 4%.

U. S. exports to the ECM countries
will be unaffected by the new tar-

in International Economics

Specialist

T-

About 40% of the $2.1 billion of

By HOWARD S. PIQUET*

■{1Q

uiieci upon u. s>. a. exports

;

27 *

(227)

(27%) went to Europe—$2.1 bil—
:lion to the ECM countries and $2.0
billion to the other countries/

One Changing Export
And Untenable Trade
:'r

■

***

Legislative Reference Service, Library of Congress,
Washington, D. C.

•

^f*feJ^?nJJSCh„e35K>rto "l that nationalized power and transwell as governmental requirements
coal, iron and steel scrap, copper

\*L

?nn a^rC??rntStf'

effect
Market tariff changes to commence
( Jan. 1 on U. S; exports; notes new import problems for il. S.
.caused by expanded American investments in western Europe;
and reproves our foreign trade policy which, he claims, since
1934 has emphasized tariff-reduction rather than an increase
in Imports.
Mr. Piquet ascertains that our self-contradictory
policy of "avoidance of injury" has now reached an untenable
/point where it -no longer can continue, and recommends two
of three alternatives said to be open to us. yWould provide
"adjustment assistance" to labor and capital displaced by imports
Tariff consultant to Congress and author measures the
of

♦-*»;

»:rJ:

Market
And U. S.;Exports

v
in*
mg

lone
long

■ ■

tip do
i^qver

^
to

is that one

than

the

same

prosperity

the
s».

wctra

I shall .summarize
what I said then. Those who wish

refer to pages

can

124-159 of the American Manage-

Association's

country

breadth of the market lor its

economic
economic

age

products

„^rted
Ef.

that these

trade

Presently

are

beine*

the estab-

Common

i est industries and

area

iacilitated

are

better able
economic

changing
than-

othpr

inriusindus-

toaTit^U be 12 to
15 vkr^fore the Common Mar4et attains itl obiect^e of f?ee
fact

J^ai^>ng the six member
efve

coun-

trips will give our industries
tries wUl
our industries
■"An

address

time
time

by Mr. Piquet before the

international Management Seminar of

the

Y™kr'c"ty"aThr'^:wo«*,S"re°ns»d
this address

Knd «aref
ization?

are

Ttal-

markets.

28%

the

com-

countries is ^comg?W.
® '2 % m 't?e fUmt.ed

siofle of attempts bv
XcouSteies t^Drotect S

The ara-

automobiles

countries

American exports ot auto-

un-

American

+bp.

chemical

indimtrv

the ECM. In the longer-run, howthis-may not be the

'Cver>

case.

there will* be
incentives for American
event,

any

and

other industries

jump the tariff barriers of Europe
by establishing foreign subsidiar¬
ies, following the pattern set by
the

automobile

technical

industry.

language

In the
economic

theory there will be a tendency
"product mobil¬

for international

a y 311 countries to piotect mobiles have been declining stead- ity" to. be supplemented by "facown domestic agriculture
ily since the 1920's,-as American'jwmohi'litv"

their

Other exports to the ECM
tries

about 32%

undoubtedly
These

American

the

are

lines

coun-

.eompanies have surmounted for:eign trade barriers by constructaffected. .jng their own factories and assem-

.thei

total—

which

industry and European

bly plants abroad.
•

New

American

Import Problems

probable

that

investment

expanded
in

western

United States.

chinery, machine tools and auto-

-m0bile,s

and

certain

kinds

the

tremendous

made

gence

eco-

study ports
Intelli¬

from

the

will

area

Continued

Unit (London), the German

page

-Netherlands, countries which will

their tariffs under the
ECM Treaty.
Machinery of various kinds accounts for the bulk of the ex-

" i0

be expected that

f y,i

Wester" Europe willthe nextgreat
attain few
growth in
economic

DOrts

that will

al'ferfpd

;

outWeighed if western Europe

1955.

offers the United States a larger
iotai market- Since the common
external tariff is to be based on
the avera^e rates of the six c0.un:
tries' some rates wiU b« raised

from
a

little

the

p:||

Duffy-Mott

;-y

1*-:

Giant Portland Cement

I J

Laboratory for Electronics

f
\<%

$300

million, whereas imports from
the ECM countries themselves Of
4 amounted to $765 million. Imports ir|

Lone Star Steel

% -a

of machinery from all other coun- I
tries, including the United King- ^
while others will be lowered. Gen- dom, totaled almost $500 million, M
eraUy

the

speaking>

tariffs

of-

West Germany and Benelux will
be increased, while those of France

and Italy will be decreased.

Germany is by far the largest

||||

European producer and exporter
of machinery, with the continental

|ll

United States exports

none

of the six countries do

•

Members New York Stock Exchange

|| 1

from

Specialists

all

tries.

industrial

other nonmember

from

coun¬

W,e have direct wires to the
t

W-h

¥4
11

the tariff

Jfnc.
Members

30 Broad

SECURITIES

American

Stock

Exchange

Street, New York 4, N. Y.

the

Teletype

WHitehall 3-9200

NY 1-515

it is considerations of

quality and market taste. Further¬
more, many buyers prefer goods
that .are produced in their own
country, even if it means paying
a somewhat higher price.
In some
lines and in some countries quotas
are
still a major obstacle to im¬
ports. An illustration is the French

imports of electrical

ma¬

are

from the United States
small compared with imports

the ECM countries them¬
selves, accounting for slightly

Durham

Greenwood

Grand Rapids

Denver

Farmington, N. M.

Harrisburo

Huntington

Indianapolis

Kansas City

Laurel

Minneapolis

Philadelphia

Portland, Ore.

San Francisco
Spartanburg

Victoria, Tex.

i?i
W::&

among

s « 7/

Potsdam

St. Paul

Muskooeb

Rock Island

Santa Ana*
Syracuse

Pittsburgh

Washington

Rome, N. Y.
San Antonio

Santa Fb

Toronto

Malonb

Nashville

Phoenix

Salt Lake City

Jopun
^

St. Louis

Houston

Jackson

Los Angeles

Montgomery

New Orleans

quota on imports of piston engines
and paper-box machinery*
ECM

Detroit

Chicago

Dallas

Fayetteville, Ark. Fayetteville, N. C Fullerton

chinery

Telephone

Des Moines

Baltimorb h

Burlington

Cleveland

Cincinnati

barrier to trade
specialized

principal

some

Boston

Beverly Hills

l/l

Ashevillb

Albuquerque

Albany

the ECM countries.

The
in

following citiest

I-'?

Only

kinds of machinery is not so much

emdt?. ^Ble

Corporate Teletype: NY 1-865 • Municipal Teletype: NY 1-1691

jf
j

in West Germany,
which is a net exporting country,
do imports from the United States
come
close to equaling imports

xf&MtAold

Telephone WHitehall 3-7600

-J

machinery
from
the
United
States
equal
either- imports among
the ECM
countries
themselves
or
imports

||i
m
wm

'
.

United

over

primary trading markets in

: .;

thp

•

Imports
totaled

expands its over-all economy a-d :states

We maintain

f j

jecades
AUh

jf .j

increase

imports

Associate

growth of our^More than half the exports of
-i
SO it IS to be expected that the these goods go to West Germany, o *
creation of a large free trade area Belgium - Luxembourg, and the / i

$1 billion.

INVESTMENT

come

The "Affected" Sector

market taking over 50% of all her M
to all machinery exports. Her total net -1||
cbce^countries totaled $15.4 billion in exports of industrial machinery
1955. Of this amount, $4.1 billion to all countries, in 1955, exceeded
in

those of the author alone

greater proportion of U. S. im-

By 1970, according to
by the Economist

yA-VAWVA-\WA'YSSA'V>

Market,

trad

tariff

FCM

in West

even

ex-

of the United States has

Thl

.relatively hieh.

civ

fnnr«5P

pirpiimotanpfK!

•RVpnnh

ECM

stands to lose from the creation of

chemical

.
.,
,
ports tnat win oe aiiected by tne
' h . th
,
t
thp'S^n/r
imports by the
nf
will hp pxnorters ( Like
Although, in the shoit run, the ECM countries of the four main
I most nreferential systems
the tariff discriminations that will be machinery groups (industrial maECM will discriminate^against our brou^ht into being by the Comchinery, electrical machinery,
mon Market wil1 result
!n ths dis" metal-working machines and malikplv to be effected—the exDOrt/Placemc;nt of certain United States -ehine tools, and office machines)
i industries
industries—tena to be our healthitend
eai n
exports, these displacements will amounted to over $1.5 billion in

groups to be affected by

-lishment of the

tries

other

doubtedly will encounter keener
competition in western Europe
than ever before. In the short run,

strong

European tarms on autpmonues

nmWt

the huge free chemica'ls>

Just as

"The

volume

American
American

nnsitinn

and

adjust

ian

published last July.

ctron^pr

automobiles

American 'aaH/uUurafexport.-°is Gern?an.y and Bmelux

not clear. -The fact

tJ?e Siowth oi that continent. Bar-

first
nrst

otherwise

.Al»eric;an agricultural expoits is

The

European Common Market: New
Trontier for American Business,"

The
lhe

rela-

Autos

Euronean tariffs

are

In the same

products.

Fiquet

Therefore,

; 4

Tariffs
»•

less,
than

that time.

subsidize

prices,

Proauc"OIb ai?a 0inerwise piotect
domesblc agriculture will ; be

t«

goods* and
&"oa!5 dim

oti

Dro

gross

they were at

ment

law-

create new
"idustry are most directly com- the ECM countrie^ themselves1 are European countries will ueaicfjew
^"uiuifCB wiu
i"
^oo
t petitive. They consist principally-/, Euivi countnestnemseives are jmp0rt problems for the United
Adam Smith observed 182 years
^ manufactured goods such as iiiaS
States.
As more American firms
wiiViL depends in laige part
m
establish branch plants in Europe
Rations, riSpnpnSdiC.ii^?ai3 hart on dustrial machinery, electrical ma- rn^/ted States

more,

greater detail

ihe araa wiU increase'

-•
—
■
•
for -•
by the' ECM Treaty to regulate

.agricultural

countries accounted for more

The

Association

trade of the free world.

Management

and

prodPc*s United States can expect

body" dti

slightly more
national

equaling
of the

30%

every reason to believe that it will American chemical companies

an<i grai!5 countries, although it is probable
P^P^t^tipiis, vegetable ods and .that, in absolute terms, its exports

accounted for 15%

nroduced
proaucea

4^eHfAln"0«r TJmZ

than one-fifth of the total foreign

American

.valid

nf TinUfld

be affected by various tively large increase in its exports
agricultural programs.
Included of electrical machinery to the ECM

states evnnrts

exports.

In fi iJrM
?°LS eaJ
SelmL rather
i
six-ECM countries doubtful however, whether the

product of the United States.

meeting of the

and
ana

services

IF ebruary

are

o70.

+nn+^
that might,

uniica states exporxs
1956 amounted to

million
mi nion

The

? I

andU there

electricity

year the six countries constituting
the ECM had a population of 162

few

tions that were
made

O^aK;

•

tion-of

rhararteriypd

scaie production, is on an export
basis. As tariffabolition within'
common Market area" pro-"gresses German firms should find
Tnt^r
themselves in an increasingly

area

oi total U. S.

observations
i

the

*2 8 billion and

again

months.

•* ••

TTniteH

toe job

,'every

not competitive with European

-are
'

Common Market is - indicated by

compared with analyzing what already has happened,
does not have

-'miidriM* themselves
countries,;,

^-/rhe.iniportance of the European

nrognostications,
piugiiusucauuiis,

term
ieim

in which to adjust to the new tat-

of mak-

One of the advantages

European Common

The European Common

P°rt companies use domesticallyman?/ e«ulPment'
n
The future, consumption deelecfr.ical machinery m
six member.the ECM eountues .will consumpand which mined by the increased be deterraw

The Ge]Pman chemical industry,
which

Tulsa

Whittier

Seattle
Unci

Wichita

(228)

The Commercial and Financial
Chronicle

The New Inflation Ahead

By FRAZAR

B. WILDE*

President, Life Insurance Association of America

President, Connecticut General Life Insurance Company
Director, Committee for Economic Development and Chairman
of the

Commission

National

Money and Credit

Insurance industry's spokesman issues a monition

about infla¬
obtruding from several fronts, Mr. Wilde asserts that the
challenge of inflation is "not one that we can continue to talk

tion

about and not do somehting

about" and, in explaining why the
outlines the
alarming threats and danger points confronting us. Prior to dis¬
cussing dangers and problems of inflation, Mr. Wilde deals with
present superficially peaceful scene is a paradox,

of the

some

While

confronting
sian made

our

has

ness

for

problems

nation

Rus¬

are

Russian influenced,

to the fact that

busi¬

own

tain

major

our

must face

specific matters concerning the insurance industry.

some

alone

cer¬

combination

re-

structive

espe¬

are

c e

years

con-

the twister

our

Frazar

B. Wilue

are

life
We

the

Life

Meanwhile,
will

suffer

stature with many people.

This

Special

that

for

lem

the

and
conclusion

quite

have

not

the

MEMBERS
New York Stock Exchange

American Stock Exchangi

Midwest Stock Exchangb

Commodity Exchange, Inc.

contrary.

that

has

Two

things
find

Broadway

acceptable
the

The first

do.

which

program

this

the

Congress

Teletype: NY M973

six

from

highly

10 Avenue de la Gare,

EMANSTOCK

CO.J

Lausanne, Switzerland

to Lausanne,

Switzerland

hours

con¬

are

let

say

the

just this.
competent groups
have

spent

para¬

to look at this

superficially

First,
which

filled

with

arise

threat

the

always

peace¬

threats.
several

Russia,

come

with something new just when we
begin to hope for a period of rela¬
relaxation.

Last year it was
This fall there is th£

the Sputnik.
new

seven-year
plan
Berlin situation —

the

and

perhaps

new

atomic airplane.

our

determine

very

properly,

military

whether

program

ade¬

quate.

Total defense expenditures
have been increased. The
present
indications are that in the next
fiscal

they

year

the

The

past,

items

further

it has
the Ad¬

dollar

increases

The

military
budget and the complementary
budget,
the foreign aid funds,
have the dual impact of increasing

Washington and
other places working with various
government spending and increas¬
people, including government staff
ing the price level. Furthermore,
men, to try to evolve a solution.
We
have
undoubtedly
contrib¬
many

uted to

the

all

where

are

there

now

ground for belief that

and

will

the

not

national

Con¬

passed, it is
likely that enough of them will
be
passed to increase the total

volume of public spending.
The third concern is the strong
that

organized

every

group in the country is urging its

ieaders

produce

in¬

wage

Even is those cases where

crease.

contracts have been set for periods

running into the future, there
many

and

wage

negotiated.

These wage increases

being

the

basis

requested
that

the

part

increased

living in the country, even
though it hasn't changed in recent
months,

has

made

increased

rates necessary.
If
this situation

pay

added

even
on
a
reasonably optimistic
basis, the outlook for inflation can
be quite alarming.

This
not

challenge
that

one

talk

about

inflation

can

continue

and not

something

about. Inflation involves a radical,
unfair, and dangerous redistribu¬
tion

national

our

Continued

product.

J>age

some

recognition of the special prob¬
lems arising in our business both
in respect to
its long-term
ac¬
thrift

aspects.

tion,

will

do reach

have

solu¬

continuing

second

chore; that is, to do a bet¬
ter job of enlightening the
public
and their legislative
representa¬

c),nAWiance Company of cTtmrnu

tives about this special nature of
our
business.
Furthermore, the

exceptionally high taxes imposed
upon

our

business

by state

FOUNDED

1903

laws

must

always be remembered in
developing understanding of the

reason
■1

why Federal taxation

not follow the

Laidlaw& Co.

Business

can¬

typical pattern.

UNDERWRITERS
Political

Some companies in our business
have made progress in

national

problem

•

DEALERS

Participation

meeting

Founded 1842

DISTRIBUTORS

which

Corporate and Municipal Securities

not

unique with us; namely, the rela¬
tionship between all corporations
and politics in
In

MEMBERS
New York Stock
Exchange

American

Stock

Boston Stock Exchange

Exchange

Midwest Stock Exchange

American Bankers Assn.

New York State Bankers Assn.

Investment Bankers Association
Canadian Stock
Exchange

democracy.

recent years there

increasing

its officers and
employees as citi¬
in a democracy.

zens

This

fortunate

which

has

reversal

prevailed

years
in too many com¬
panies—a policy of frowning upon
political activity by employees,

Boston, Mass.

•

Bloomfield, N. J.

Washington, D. C.

•

Oil

•

Princeton, N. J.

City, Pa.

•

Montreal, Que.

Toronto, Ont.

from

the

president

down.

This

policy is a denial of the major re¬
sponsibility of citizenship in a
democracy. The form and degree
of

individual

certainly

participation
are
to the individual. The

corporation's part is to be
pathetic and nonpartisan.

Mead, Miller

for

many

Street, New York 4, N. Y.

Securities

tendency

for cor¬
poration officials to speak out on
the
subject of participation
in
politics and the responsibility of

policy

25 Broad

Active Markets in Local

has been

sym¬

The

—

Nouf

York

Stock

Exchange

Members

& Co.

—

American

Stock Exchange

(Associate)

Philadelphia-Baltimore Stock Exchange

CHARLES & CHASE STREETS, BALTIMORE 1, MD.
Telephones! Baltimore—LExington 9-0210
Bell

New York—WKitehall 34000

System Teletype—BA 270

Direct Private Wire

Neto York

Correspondent

Carl M. Loeb, Rhoades & Co.

;

115

solution

its

cost

Any formula, no
plausible, will require

and

are

of reopening clauses,
rates
are
being re¬

cases

be found.

methods

cost

better understanding of

problems, and
point

lature
gress

military budget

items.

present

add to

may

ministration's
further

will

Congress,

people,

money.
While
bill calling for increased
expenditures in every state legis¬

are

reaction, and

is to review

new

every

evidence

seems

government

for
must

Today the general price level
rising. But when we come

the addition of

other words, bills which

things

is not

tive

ones; in
look to

which

The present situation is
dox.

lic services

is either useful

increased.

strong, sin¬

business

our

been made

months

If and when
Cable Address*

that

effort has

and

This will obvi¬

connection

behalf

our

Our

Treasury.

counting

though it

we can

matter how

New York 5, N.Y.

let

the truth.

were

may

CORPORATE, MUNICIPAL & FOREIGN SECURITIES

been

not

is unfortunately just

overcome

situation

making. A public

serious in its impact

That

the

another of the prob¬

our own

misconception

UNDERWRITERS - BROKERS - DEALERS

Thursday, January 15, 1959

Perhaps not, but at least
try.

ful

clarified

has created
lems of

Several

1929

part

contribution to the national
budg¬
et.
We know that the facts are

last

Private Teletype

the

have

new?

prob¬

be said that

more
or

scene it is
that we, as a
Those
threats
been
skillfully
avoid our fair spheres.

business,
have
maneuvering to

ESTABLISHED

one

of too many people

cere

Emanuel, Deetjen & Co.

longer has

years

You

exposed to it in all arenas.
The question arises: Can
anything

greatest problems and needs.

our

The fact that this has been

ously do the most good
are proper. Special
policies which vincing the public that
lend themselves to misrepresenta- good citizens.

York City.

Telephone Dlgby 9-0777

taxation

fair, permanent formula is

120

Federal

life insurance companies under

many

serious

industry scarcely needs to

told

policies to meet special situations

address by Mr. Wilde before
Insurance Assn.'s 52nd annual

meeting, New

the

losses, and the business will lose

ex-

*From

Because

as
false as they ever
this type of selling will not

policyholders

and

partly by individuals trying to

1930's.

the

survive.

long

had this problem in the '30s, cre¬
ated partly by the depression

the old-discredited

just

were,

insurance and its advantages.

are

arguments are based on discredit¬
ing level premium insurance and

the

level premium

theory

ones

busi ness;

namely,

the same
"twisting"
The vehicle provided
- cash - value-in-earlypolicy.
The arguments of
to

is the high

the funda¬

mental

unintentionally giving aid and

occasions.

numerous

been

Federal Taxation

led

technique.

tack made up¬
on

basis re-established.

comfort

at¬

a con¬

Now, to the amazement of most
us a
relatively few companies

the

few years the fallacy was ex¬

posed and sound selling on

cially unneeded

that

seems

with
responsible
departments, came to
rescue
of the
policyholders

insurance

ponsible.
One

the cash value reserves of
policyholders for the benefit
"twister." The companies,

tion, misunderstanding, maximum idea that executives and other
these
expenditures .are, largely
borowings and unwarranted tax employees of corporations should
non-economic in a direct sense.
avoidance, and which may be in¬ make some of their time and en¬
They do not produce assets which
equitable to other policyholders ergy available to be useful citizens
have immediate
earning power.
are not calculated to further the
operating with the party of their Defense
spending is bound to be
interests of the business or in the choice is
practical democracy and
costly. We can and do accept this
long run the individual company very much needed.
burden to the maximum extent
which enjoys
a
short-run sales
If corporations do not
encourage necessary.
On the other hand,
success at the expense of its future
political participation, and
they there is no reason for us to panic
reputation.
have rarely clone so in the last 20
and throw away the book of com¬
In my opinion this type of prac¬
years, the effect is to turn
the mon sense and
offer a blank check
tice, if continued, will lead to a responsibilities of
citizenship over to the military simply because
rising tide of protests by insur¬ to groups which
may not under¬ items are labeled for defense.
ance departments—or even
by the stand the problems of business or
Another
concern
is
relatively
Federal Government, which seems which
have been propagandized
new; namely, today, after a state
to be looking for an
opportunity into the belief that business and or
national election, contrary to
to
override
state
supervision — industry are their- enemies,
v '
our
historical pattern when can¬
and the answers which they are
I must turn now to a matter of didates
often
ran
on
economy
likely to furnish
may
not
be
deep concern. Inflation has been platforms, many bills are intro¬
happy ones for the business of
mentioned from this platform on duced for the
enlargement of pub¬
life insurance.

the

and the standards of the business.

are

our

the

problems
which

ploit
of

Volume 189

Number 5812

These
sums
are
tremendous,
air
striking
powerful deterrent to even when compared with the
marvelous resiliency and capacity
general war. Large and growing
j
portions of these units can depart of our economy.

Our

State of the Union Message
Pres. Eisenhower submits to
realistic balanced
most prosperous

national
tive in

Congress what he describes

budget for
in

perspec¬

defense. Turing to the domestic economy,
he emphatically declares war on inflation and looks forward to

President Eisenhower's

;

annual

tends

appoint

chart
1o

the

Congress

sage

State

seventh

Union

in¬

committee

our

ng-t e rm

goals
extending

ex-Presi-

Hoover's

lieves
1

uneasiness
of

cause

The

1931.

President

one.

Committee

Yet

Trends

Social

destruction

mass

reached

has

peoples

be¬

g-t e r in.
guides are
necessary
to
spur us on to
steady progress.

the

belief

the

be¬

part of

arrogance,

fear

catastrophic:

o n

world

through

that

miscalculation

such

realize that there

attack,

could

war

launched.
Pres.

Eisenhower

the

peace

than

today's

calls

ever

for

im¬

the utmost in the nation's resolu¬

foreign

tion, wisdom, steadiness and un¬

problems, the President impor¬
tunes against extremes in national

remitting effort. We cannot build
peace through desire alone. More¬
over, we have learned the bitter

Turning to

domestic

mediate

defense

"sensible

and

measures

mends

and

recom¬

posture of de¬

fense"; also blue-prints an end to
wage-price spiral and deficit fi¬
nancing, and calls for certain civil
rights and labor legislation.

that

lesson

The

message, delivered Jan. 9
opening Session of the 86th
Congress, follows:

Con¬

This is the moment when

begin

and the executive annually
their co-operative work to

build

gress

better America.

One basic purpose

promote

strength

side

with

liberty

and

opportunity.
As

doctrine

ommunist

disdain

international

obligations, solemnly undertaken,
is
their announced intention to
abandon

their responsibilities re¬

specting Berlin.
As

which

Communists

except where such

are

in the 170th

party

treaty

pro¬

success

law for rule by force.

old

ment

answer to a question as
history. It is: Can govern¬

based

upon liberty and the
rights of man, per¬
manently endure when ceaselessly
challenged
by
a
dictatorship,

God-given

hostile

mode

our

controlling

life,

and

economic and mili¬

has

progress

the

have

made

been

development

missiles.
siles

strides

Great

scien¬

highly
;;; ;

been

gratifying.

ballistic

Intermediate range

mis¬

being deployed in
operational units. The Atlas inter¬
are

now

continental

ballistic

missile

has been marked

gram

development

units

pro¬

by rapid

evidenced

successful

recent

have

Missile

tests.

been

estab¬

lished and launching sites are far

along in construction.
aircraft

New

the
our

that

fly at twice
are entering

speed of sound
squadrons.

have

placed

orbit, which have
gathered information of scientific
importance never before avail¬
able.

latest

Our

trates

satellite

illus¬

steady
advance
in
and
foreshadows
new

our

rocketry

developments in world-wide

com¬

munications.

Warning

constantly

systems

improve.
submarines

atomic

endurance

historic

made

Polar

North

have

records

one

pledges

own

of the greatest obstacles to

Yet

in substituting the rule

must
strengthen
institutions
of
peace — a peace that rests upon
justice ■— a peace that depends
upon a deep knowledge and clear
understanding by all peoples of
step

by
the

the consequences

great

tary power of great and growing
strength?
For us the answer has always

step

of failure in this

purpose.

■

achieve this

peace

been

seek

found, and is still found in to prevent war at any place and
the
devotion,
the
vision,
the in any dimension. If, despite our
courage and the fortitude of our best efforts, a local dispute should
flare into armed hostilities, the
people.
Moreover,
this
challenge
we next problem would be to keep
face, not as a single powerful the conflict from spreading, and
nation, but as one that has in so compromising freedom. In sup¬
recent decades reached a position port of these objectives we main¬
of recognized leadership in the tain forces of great power and
free world.
flexibility.

morale.

replacement
of
older weapons with new ones:

nary

have

these

par¬

Both

waste.

this

can

and

loyalty.

sure

efficiency

forces

she

and

seek technical and other

agreements that may help to open
up
with some promise, the is¬
of international disarmament.
America will never give up the

sues

the

hope

her

can,

that eventually all nations
with
mutual
confidence,

their

armaments. At
elsewhere we con¬

Geneva

tinue to

Working by these guide lines I
believe with all my heart that
strength

year.

must be devoted to

budgetary plan.

America

security program for the

a feeling of regret that so
much of our effort and resources

advanced by

are

available in
shaping the

impart

efficiency and avoidance

creased

prelimi¬
of this

Any survey of the free world's
defense structure cannot fail to

The secondary aim is in¬

defense.

cdming fiscal

sensible posture of

will
assist

mutual

ticipated in its development.
The aim is

that

recommendations

time

many

personally

hopeful

committee

for the
coming year has been planned on
the basis of these principles and
Over

assistance

and the relative em¬
phasis which should be placed on
military and economic aid.

budget

considerations.

military

our

programs

ending

defense

this

committee

appraise

The

effective our con¬

system of col¬
Recently I have
of eminent
Americans of both parties to re¬
asked

unceasing technological
advance, we must plan our de¬
fense expenditures systematically
and with care, fully recognizing
that
obsolescence" compels
the
never-

seek new ways

lective security.

these

make

tribution

inefficient, costly, and

Continued

that

equally sure

page

fields

LISTED and UNLISTED SECURITIES

the

some

including

Active Markets in all Local Securities

than

CHRISTIANA SECURITIES

four years of intensive effort. At
the same time we clearly recog¬

DELAWARE BANK STOCKS

So¬

recent

viet accomplishments in this par¬
ticular
technology
are
indeed
Syndicate Dept.—Duncan Miller, Mgr.

brilliant.

Trading Dept.—Neill

Under the law enacted last year

Department of Defense is be¬
ing reorganized to give the Secre¬
tary of
Defense full
authority
over
the military establishment.
Greater efficiency, more cohesive
and

Dept.—Hugh C. Wallace

Research

LAIRD

reaction to
the many
advantages we are already noting
from these changes.
speedier

emergencies

O'Connell, Mgr.

Municipal Bond Dept.—O. Chester Jones, Mgr.

the

effort
To

days

of a strategic de¬
protect the forward

Constantly

extremes, for vacillation between
destructive

boundaries of freedom.

by complacency. We must avoid

extremes is

part

Sea.

given only as a mat¬
history; as a record of our
progress
in space and ballistic

that

supplies
ployment

and

All this is

nize

pected to contribute what it can
in sharing the heavy load.
Each

dated; it is continuous. Hence we
swayed in our calcu¬
lations either by groundless fear
or

In these
common
each nation is ex¬

rangements.
undertakings

under the

voyages

COMPANY

«®

MEMBERS:

are among

York

New

Midwest

Chicago

Stock Exchange

Board of Trade

Exchange

Stock

American

Exchange

Stock

Commodity Exchange, Inc.

Costly Armaments
few

These

point

up
Nemours

our

and

greater developments pre¬
occupy the major portion of the
Nation's

scientists.

armaments

But

these

that

remember

DELAWARE

WILMINGTON 99,

highlights

steady military gains.
We
are
rightfully gratified by the
achievements they represent. New

Del. Trust Bldg.
Telephone 6-7741

Bldg.

Telephone 6-7741
Bell

Teletype WL 89 & WL 486—Private
New York Office 61

Telephone to New York Office

Broadway—Telephone BOwling Green 9-4900

must

imposing

purchased at great

are

cost.

National

security programs
nearly 60% of the enFederal budget for this com¬

account for

NDUSTRIAL,

PUBLIC UTILITY,

time

RAILROAD

AND

MUNICIPAL

weapons

are

exceed¬

ingly expensive.
into

Atlas

our

$35,000,000 per missile on
the firing line.

investing an
aggregate of close to $7,000,000,000 in missile programs alone.
This

year

Other

new

•-

YORK

STOCK EXCHANGE

AMERICAN STOCK EXCHANGE

48 WALL STREET,

(ASSOCIATE)

NEW YORK 5, N. Y.
'

9
TELEPHONE HANOVER

2-9500

TELETYPE N.Y. 1-344

BUILDING

cost

some

times
We

are

for

research,

test and evaluation
systems.
atomic

$50,000,000

submarines

each,

STOCKS

—

8-4241

& COMMODITY

BONDS

—

EXCHANGE <fe

EXCHANGES

COMMODITIES

SPECIALISTS IN LOCAL SECURITIES

& Preferred

Christiana Securities Co.—Common

Bank Stocks

Wilmington & State of Delaware
NEW

OFFICE

YORK

—

120

BROADWAY

Bell Teletype NY 1-1248-49

Telephone—BArclay 7-3500
PHILADELPHIA OFFICE

much.

ordering fighter
which are priced at 50
much as the fighters of

are

buying certain bombers
gold.

PHILADELPHIA NATIONAL BANK BLDG.
AND CHESTNUT STS.

Telephone—LOcust 7-6226
SALEM, N. J.,

OFFICE

—

160 W.

BROADWAY

ZURICH, SWITZERLAND

now

that cost their weight in

—

BROAD

while

World War II.
We

WILMINGTON 99, DELAWARE

MEMBERS NEW YORK STOCK

special types will cost three

aircraft
times

—

weapons

latest

Our
will

NEW

billions

development,

MEMBERS

PONT

OTHER PRINCIPAL STOCK

introducing
armed forces will

average

Laurence M. Marks & Co.

TELEPHONE OLYMPIA

The over-all cost of

SECURITIES

Laird, Bissell & Meeds

ing fiscal year.
Modern

joined with nearly 50 other
in collective security ar¬

have

must not be

armed

shattered

only

nations

months

successfully

vast strength is

own

part of that required for depend¬
able security. Because of this we

must

System

Security

Collective
Our

avoided.

five satellites in

missile

other free
do

the past year.

therefore,

safety.

our

with swiftness

move

ter of

Communists of their

governments have had
throughout time — a satis¬

tific

mechanisms.
Indeed,
demonstrated
disregard
of

the
the

forces

nation's

the

both

perspective

and

weapons

for¬

tactical

other

over

once

vides within itself for self-enforc¬

of the Republic, our nation
must continue to provide—as all
year

factory

than

Our

consequence, we can have
confidence in any treaty to
a

ing

meet today,

and

to be mere scraps of
The most recent proof of

their

unites us: To
security,

and

agree¬

practice
paper.

at the

international

ments, historically considered by
us
as
sacred,
are
regarded in
C

can

training

Keeping
world

and

Our military and related

Possession of such capabilities
helps create world suspicion and
tension. We, on our part, know
that we seek only a just peace for
all, with aggressive designs against

ahead,

remi nescient
dent

when man's power

time

and

security, might tend to under¬

mine the economy and,

and precision, when requested by
Threat Is Continuous
friendly and responsible govern¬
We must guard against feverish
ments, to help curb threatened building of vast armaments to
aggresison. The stabilizing influ¬ meet
glibly predicted moments of
ence
of this capacity has been
so-called "maximum peril."
The
dramatically demonstrated more threat we face is not sporadic or

fearful proportions.

five to ten
years

position

of leadership in an era of remark¬
able productivity and growth. It
of

national

Ground

World

We have arrived at this

is also

balance

mations

the

Such expenditures demand

naval fleets.

our

accomplished.

Uneasiness

Mes¬

declares he
a

can

matter

planning for defense. At every
Program Accelerated
turn, we must weigh, judge and
Needless
Similar forces are included in select.
duplication
of

our

the time when tax reform

Missile

defense, the President calls for balance and

planning

bases

minutes.

Concerned about the cost of

expenditures which, in the name

their

from

that is expected to be the

a year

history.

our

are

useless

the. nation will thus avoid

formidable

forces

(229)

The Commercial and Financial Chronicle

...

DAY, STODDARD & WILLIAMS
44

WHITNEY AVE.,

DIVISION

NEW HAVEN

TELEPHONE SPRUCE

6. CONN.

7-6851

The Commercial and Financial Chronicle

(230)

Business and Finance Speaks After the Turn
Continued from first page

rities.

spending beyond income is inexcusable. Such, of course,
can only result in further increase of the national debt.
Such increase gradually erodes away faith in our cur¬
rency, wmch is inflationary in itself, but also since a
large amount of the debt is supported by short-term
bank loans, it in turn serves as a base for furtner ex¬
pansion of credit by the banks holding the notes.
of faith in

The erosion

the dollar should

have

Quite
received

issue,

Furthermore, in the case of the pound, its converti¬
bility is at a rate substantially above the low limit of the
established range. The German deutschmark is one of

the

strongest European currencies, and that has come
in the relatively short time since World War II
despite the industrial and economic devastation which
Germany suffered in that war. Indeed, today. Germany is
largely a creditor nation for the rest of the European
about

economy.

it can be found in the huge drain
which has been made by foreign
past year. The situation
has become sufficiently serious so that there is some
alarm in regard to the volume of our currency which
can be supported if the drain continues.
In stating that the chief problem of the present Ses¬
sion of Congress would resolve around economic mat¬
ters, I am by no means unmindful of the Soviet Union's
challenge to us in the space age. A year ago when Con¬
gress convened it was in the cold awakening light pro¬
vided by Sputnik 1. Today, it is in the re-awakening light
our

as ranking minority member on the
Committee, and my year of experience
Congressional Space Committee, I am com¬

my many years
Armed Services

the

new

pletely aware and alerted to the military, technical and
.propaganda value of the Russian achievements.
Our response

to the Russian challenge, although mil¬
itary and scientific in nature, is inextricably a part of
the economic picture. We
certainly must provide the
funds to meet the

ing must be

challenge, but in so doing the financ¬
long-range basis which we can success¬

on a

fully maintain into the foreseeable future
deficit

any

relative

spending

technical

indeed be closed
be

effort, and then
In the

soon

our

must

possible but it will have to

b»«is

rather

itemized

all fronts

gap

than

one-short

let-down.

matter of

eminent

Any

program.

well

military superiority.

superiority

Within

must be pre¬
the front
involving

oil

the

past

year

Khruschev,

behalf ol the Soviet Union, has declared
complete and
total economic war on us in his effort to
control the
world. It goes without saying that
on

often follows hard

ideological dependence
heels of economic dependence

the

and

struggle for world domination can be as well
won
by the Soviet Union through the economic front
as through the
military. We must no longer underesti¬
mate

the

effect of

capacity of
economic

being able to channel the productive
slave population in an attack on vulnerable

sectors

free

world,

particularly

ilave population is fed

that

an occasional increased
portion of
goods and is given to drink the heady wine
of breathing national achievement.

consumer

There is

cause

for alarm

outlook. I have merely
the problem ahead of

full

confidence

American

whole picture and

and

from

will

effort

even

pessimism in the

candidly stated the full gravity of

gained

people

and

energy

rise

have

past

the

done

with

the

experience

that

the

necessary

output

will

the

defense

Defense Department.
improved operating results of Emerson for
expected to be bettered in 1959.

The

always prevail

over

preservation of their freedom
those who are slaves.

All

indications point

and

improvement

life, insurance industry had
measured

industry. Signs of such improve¬

and

period

1957. This had the effect of
inventories in the hands of

reducing

manufacturers,
dealers

should

1958 with

earnings materially better than for the

distributors

„

force
As

casts.

and

alone

was

greater
expected

will

than

the

The
are

sales

television

less

expected to rise by about 20%

over

are

improvement

declined

rates

sharply ancl

the

forecasts

1959.
life

insurance

sales

the

year

appears that these
in relation to consumption

;;

and

paper

products

.''-vV

used

are

made

suggest

for

ucts of this

$11,000,000,000 industry. While it is expected
improvement will be gradual through the year,'
seem not
unlikely that the year's output would
reach 32,000,000 tons, a new
record, exceeding that of the
previous peak year, 1956.
;
/
V -A
that this

Malcolm
•

^Thus, after a period devoted to the modernization of
plants to improve the productivity of
increasingly com¬
pensated labor, the development of new and broader

Adam

for our products, and a belt
tightening on indirect
costs, the paper industry is beginning on its next
cycle
of growth. It has been estimated, both
by private institu-

uses

\ V
:;:v;
companies

insurance

*
•

tional

and by the Department of Commerce
in a
1957 report, that the nation's need for
paper by 1965 will
be 40% greater than the 1958
production: The industry is
in splendid shape
financially and with facilities and
raw materials to meet this
growing need as it

from 1958,;and the '
expected will prevail
•

over

should

the

sources

the years.

develops

im¬

the economy brought, about by the up¬
swing in general business which should generate a larger
volume of personal
income, although there ' will, of
course, be competition from other sources for these dol¬
lars.
Mortality experience should again be favorable*
due to the high level of
income, our ever-improving
standard of living, the rapid
progress in medicine re¬
sulting from stepped-up research programs and ad¬
provement in

vancements

sick,

methods

treating

the

aged

and

STANLEY C. ALLYN
1

should be
insurance

exceed

much

those

for

better than

1958

and

average year

ment

show

costs.

these two
to

for the life

business

depends

California

1957,
and

the

that

segments of

upgrade.

plain that the

seems

came

now

our

This

latter

short-lived recession,

part

end

during
practically all

economy are on the
renewed

growth,

need

approximately

certain

during

revenue

for

the

C. Ally*

industry's sales will total about $2.5 billion. A rea¬
expectation for 1959 is an increase of 10 to 15

From

the

the
Edwin

Adams

but the changed political
Congress raises the possibility

renewed easy money policy which
vent the commercial banks from

above this level for the industry
the

standpoint of

our

own

as a

whole.

company,

incoming

during 1958 exceeded

rather checkered

any previous year despite
pattern of general business condi¬

tions. Sales of cash
E.

banks,

new

time

sonable

per cent

substantial

complexion

office
a

which lies ahead, I believe in¬
in general
can
view
1959
with justified confidence.
Consum¬
ers' disposable income is rising, em¬
ployment
is
up,
governmental
spending and total population are
Stanley
increasing, and inventories for the
most part have declined from
the
high levels of late 1957 and much of 1958.

excellent year for
that

dustry

orders

seems

occurring

the general economic outlook
improving. Although an explosive

the

it was in 1958 which by
standards should be considered,
as

having been

'record-keeping-',

increased

these favorable economic factors, there is sound reason
for the office equipment industry to anticipate substan¬
tial sales increases in 1959. For the year just concluded,

look, therefore, for the volume of1959

for

When the need lor mechanization is measured against

seems
not to be of such
volume that it should result in
any
substantial expansion of bank loans.

ever-increasing degree.

year

however,

same

between

"boom" level is not indicated lor the

perhaps than
any other upon the general level of business
activity
and the monetary
policies pursued by the Federal Gov¬
began

when

ADAMS

President, The Bank

with; j rising

Squeezed

mechanization

banking

forces, business is turning

automation

The

faced',

are

clerical

This

industry. Record-keeping and paperwork problems
no sign of abatement
and, at the same time, busi¬

EDWIN

1959

year

nessmen

it *

industry.

should: increase the already high
demand for the products and services of the office
equip¬

the

whole

Chairman of the Board,
y
The National Cash Register
Company

The

as improvements in facilities
used for this
The year 1959 should witness
accomplishments,

will

;

well

purpose.

which

it would

-■

Increased

during

months.

the general economy
would, there¬
continued growth through 1959 in the
demand for the packaging,
graphic arts and other prod¬

over

it is

which had been sub-

of the nation that their
consumption closely
parallels the trends of the key economic indicators of
Disposable Personal Income and Gross National Product.
The present trend of these factors and the
favorable

an increase over those 'for, the
previous year, and this trend should continue in"
1959, due
to the higher yielding investments
put.on the books in

1958, the commitments carried

result

inventories, in
converters, distributors,

activities

for 1958 will show

level of interest rates which

the

was

eighteen

normal

near

fore,

earnings of the life

extensively in all of the manufacturing, service, trade,
distribution,
education,
cultural,
and
entertainment

then

past

end, however, it
are

paperboard

Paper,

find

1958

of the second

1959 production should approximate the rate of

use.

difficult

ranidly

«o

Investment

last year. This

Beginning

months' period, it was an excellent year Tor the invest¬
ment of life insurance company funds. £;%■>

creased
Benjamin Abrams

inventories
and that

during ;;

come.

some

stantially^v liquidated

Adams

insurance

new

amounts, the major
portion of which will be carried out through the sale of
government securities to banks with consequent increase
in government bond
portfolios and deposits.
Ordinarily
these developments would seem certain
to result in in¬

than

receivers

good year in 1958

a very

standards

coming year the government will be
obliged to resort to deficit financing

$500,000,000 in sales in 1959.

1956.

r»P r>anapitv
of capacity:

replenishment

present trends,- the
excellent for a con¬

steady

Although

item

William

another year in the financial history ;;
of
this
country in which interest

supply

this

normal

Q9.%
92%

likely that

and consumers,

banks.

first intro¬

that

contribute

;

months to

the

stereophonic

were

ADAM

its

Based

tinued

all

the latter part of 1958
and
which
met
with
almost
universal
acceptance. The unprecedented de¬

point where the total produc¬
year will probably
be

half demand

enter 1959,

prospects

the

half

about

It is

achieved.

was

loans

./■

instruments, which

mand

was
was

general business
upward swing with
optimism- the prevalent note in fore¬

Another factor which
points to an
improvement in sales
forthenewyear
is the wide interest in
duced

the

continues

and

1959.

reported as practically identical with
operating ratip

early months by the Asian flu, con¬
tinued at a satisfactory low level, .,'
a healthy increase in insurance

ancl

therefore,
in
itself,
give the industry a good start

v I

Jjj ' 1957.; The November
tihnnf

and

same

-•f

Company

tion, for the

1958

written, overall earnings and dividend < payments
policyholders.
Mortality rates, al-; 1
r"
though somewhat affected in the

1958

first

to the

Phonograph Corp.

material

Paper

accelerating alter
the
usual
July ^ shutdowns, activity improved
throughout the balance of the year

gm.

comparison with many other lines of endeavor, the

which

appear in the latter months of

ales

our

ADAMS

Regis

and

President, The Penn Mutual Life Insurance Co.

ernment.

sales and profits lor
ment began to

/T
-r-J

the hands of

MALCOLM

BENJAMIN ABRAMS
President, Emerson Radio

St.

they have the benefit of the
clear blueprint of the
part they must

and

above;

ratio

of our

when
a

;

During the first half of 1958 the paper and paperboard
industry operated at only 86% of capacity, the lowest
in several years, but an actual
output only 7%
below that of the most
productive six months in history,

appear
22.—EDITOR. >

play in it. They again will demonstrate what has
always
'Cen true down
through the pages of history, that free

men

President,

further increase in order to meet the greater demands

rose

crash

superiority to the Soviet Union

continuing

rather than in

secu¬

WILLIAM R.

today's

is based upon the general improvement in economic
conditions, as well as the interest on the part of the buy¬
ing public in higher priced instruments.
An increase
in the sale of radios is likewise expected, particularly in
those incorporating transistors.
—;:y;.
As in 1.958, military business in this industry will show

reserve

I, after a short nap in which we thought we
had somewhat closed the gap revealed by Sputnik. After

government

were

economy,

of Lunik

r';'

could not

reasons,

of Jan.

volume-

the

nations and nationals within the

•on

"Chronicle"

the

-i

increased

toward the end of the second quarter

are

gold

our

further indication is needed of decreased world

faith in

for publication in

for mechanical

of the Year

those shown for 1958.

be accommodated herein. These will

late

too

Thursday, January 15, 1959

sentence, 1959 should be another good year hi
the banking
business, but it is impossible confidently td
predict that net earnings will be appreciably

policy

If any

number of statements either

been

European currencies. The announce¬
by the nations involved, instead of
causing a drop in their currencies in relation to the dol¬
lar, as would have been the case a few years ago, re¬
sulted rather in their remaining firm.
;
convertibility

STATEMENTS

SUBSEQUENT ISSUE

dramatically brought home to those who have not been
able to see it before in the announcement of the free
ment of this

from

revenue

...

might easily pre¬
realizing any increased

high

pace

registers to individual merchants set
throughout the year and chain and depart¬

ment store orders also were ahead of the year
reason

market

for
was

the

continued

strength of the

the introduction of

new

before.
cash

machines

One

fea¬

tures, such as automatic change dispensing. Others were
the continuing trend toward suburban retailing, with
resultant expansion in shopping centers, and the swing
to self-service beyond the food field. Also important
were

their

the

efforts

operations

by merchants to tighten control over
because of rising costs and slipping

Number 5812

Volume 139

exert

In-addition to meeting larger demands for bank loans
of these, factors will continue to
demand for registers in " in 1959, the banks will probably be required also ta add

All

margins.

profit

dynamic in recent years. Despite a very substantial
increase in accounting machine sales goals for 1958, NCR

with more than 100 per cent of quota.
securing these results was the success
company's-electronic bank posting machine, the

finished the year

major factor in
the

this

Post-Tronic.' Since

machine

cornerstone

the

company's bank automation program and since addi¬
tional units in this automation program have now been
the

anticipating further gains in
of other.new :
accounting machine developments scheduled for release
for -sale,

released
the

we are

the

...

■

record-breaking

year

ARDEN

President, Robertshaw-Fulton

.y;- ■'

While

automatic

r>,

Controls Co.
~

controls

subject early in 1959.*
improve, the railroads will be
stepping up their car repair programs and placing more;
orders with their shops and the car builders for new
freight cars and other equipment. The long-term ou.t->
look for growth of the American economy is bright
which makes it clear that transportation facilities must i
be enlarged and improved to serve this growth. Whether -

private enterprise sources will produce the huge amounts
of capital funds to pay for these necessary improvements
depends on the establishment of a more favorable climate'
in the transportation industry which will permit fair and •
adequate profits for all public carriers.

have

general

activity,, which i

business

became apparent in the fall of 1957, had an immediate'
and- drastic effect upon the railroad) industry which

continued throughout 1958.

with 3.35% for 1957,

outstanding recent contribution to
the gas industry."
X
':
y
r Housewives had long thought their

volume

For the Class I railroads

offered

the

ultimate

and

perfection.
But now, the
device makes possible the same

cooking

•

on the top of the
that the homemaker has come

to enjoy in her oven. Today's shop¬

demanding that their ranges
new control,
identified by

pers are

have

Thomas

the

T. Arden

the "Burner with a Brain."
'
Heavy emphasis on research will accelerate develop¬
ment of totally new controls, and will speed the sophisti¬
cation of present products.
During 1959 we will com¬
plete a new research center at King of Prussia, in
suburban Philadelphia, with greatly increased capacity
to step up completion of many product development.
projects already under way. During 1958, RobertshawFulton opened a new research center at Anaheim, Calif.,
where a number of projects aimed at production of new
control devices now are nearing completion.
Nineteen hundred and fifty-nine will be a good year
for the controls industry, and beginning in 1960, there
may be a tremendous upsurge as part of the next cyclic
growth of the nation's economy, strengthened by pre¬
dictable new family formations.
1
We are now preparing for the expected business boom
in the 1960s. Recently the firm announced that it will
build a huge new plant at New Stanton, Pa., to specialize
in automatic gas controls, and has just announced the
creation of a new division at Indiana, Pa., which will
specialize in the manufacture of precision electrical con¬
many as

trols.-

•

volume

'.For

diminished, the

costs

and payroll taxes has grown from

Wabash,

our

000,000. We also expect improvement
in our net earnings over those of
1958.
Additional
growth - of about
10% is expected in the number of
branch offices which

our

subsidiaries

Donald

•

The

them

strong points in the economy in 1959 as we see
an increase in
total personal incomes, con¬

some

services,
auto¬
stimulation from the

demand for consumer goods and

high

increase in over-all production notably in the

motive and hard goods

fields,

some

recent stabilization of the currencies of Western

and for

increase
future
use

confidence

the

income

and

consumer

the

consumer

ALEX

continuation of higher than

"normal" unemployment,

revenues

Continued

New York City

prospect is for a further and substantial increase
in the volume of earning assets and deposits of the com¬
mercial banks in 1959.
Bank earnings should compare
costs

year

ago,

although operating

continue upward.

Following the sharp liquidation of
business

inventories last

year,

MTIONAL CITY BANK

busi¬

managements in 1959 are likely
to be replenishing their stocks, es¬
ness

mm
..'3—1

for

real

i)
:

H. Ardrey

having reduced his

consumer

estate

active

residential

tained

credit financing. Demands

mortgage money likewise promise to
in the wake of the greater volume of
building now underway, even though the
present high level of housing starts may not be main¬
remain

M
1

instalment debt somewhat during the recession, is now
in a better mood to buy, and automobile sales .in par¬
ticular should be considerably improved, suggesting a
renewed increase in

throughout

the

year.

■fi

»:

Alex

The consumer,

j | | j I I'lU) Jy. j'j

pecially since orders and sales are
mounting. Capital investment pro¬
grams, too, are no longer being cut
back, and while considerable unused
capacity reduces the chances of an
immediate resumption of the busi¬
ness investment boom, outlays espe¬
cially for cutting costs and raising
efficiency
will
probably
increase
during the year. All this is likely to
mean larger credit
requirements by
business.

own

credit.

: The

favorably with those of

his

Factors
which may somewhat offset some
of the
favorable indicators are, in our opinion, such things as

ARDREY

Trust Co.,

job security and thus increase his

healthy condition of business in general.

President Bankers

Europe

countries, and continued high defense spending by our
own government. These factors, we believe, will tend to

immediately ahead, for
vigorous expansion of markets for automatic controls,

Barnes

are:

tinued

We look to 1959, and the years

operate. In the very near future, we
^
'
will be opening our 500th consumer finance office.

gross

own

to our customers) to increase
approximately -10% to about $250,-

anticipate at least an 8% improve¬
for 1959. All departments
being streamlined and re-arranged to improve their

On the

ment
are

our

loans

$3,118,000 to, the Wabash operating costs on an annual
In only the past five years since 1953, the portion
of our revenue
dollar which must be paid out for
wages

both

company, American
Investment Company, we expect our
notes
receivable
(which represent

basis.

cents to 53 cents.

see

at¬

market.

the national
t

doing business, taxes, materials and supplies, and wages
continued to rise.
For example, wage and payroll tax
increases
which
went into
effect in
1958 will add

salaries,

national economy as it is affected by
the consumer and his behavior in

ventories, although practically all commodity shipments
were off with the exception of grain and grain products.
traffic

weaknesses and strong points in our

the. poorest in the,
Arthur K. Atkinson
history of tho company since 1941.:
However; when 'finally tabulated, / <
they will be' sufficient' to cover- contingent interest
charges and the requirements for sinking funds, as well
as
the dividend on preferred stock. The drop in 1958
revenue
can
be largely attributed to the general cut¬
back
in industrial
production and depletion of in¬

1958

consumers.

tempt to plan for 1959,

will 'be

the

expect

the American

prospects are much brighter.
net results for

,; As

the consumer finance industry of which'
our company, American Investment Company, is a
part,
to resume its normal growth in 1959. Last year, the con¬
sumer finance industry experienced a "wait and see at¬
titude" on the part of its customers,

Railroad traffic
of the year

end

DONALD L. BARNES

;

Wabash'r Railroad

1958

precision cooking
range

the

still
although business
conditions have generally improved
at

President, American Investment Company of Illinois

has not recovered,

ranges

As business conditions

President, Wabash Railroad Company
recession

American Gas Association "the most

new

for*
the;
regulatory policy for surface transporta¬
special subcommittee is expected to begin'

legislation, it also recognized the need
and correction of faults involving

extensive investigations into this

the need

gas

through

study

tion, and

generally anticipated ^as a whole, 1958 carloads of revenue,
for suitable controls in new products for in-™
freight will total about 15% lower
dustry, the home, and transportation, future years will.; than for 1957 and 20% below 1956.
bring innovations which will significantly increase they :.As a reSult, when the 1958 figures
™ntrnic
controls industry's growth.
In this
are tabulated, the net railway operconnection, we can cite as an ex¬
ating income of«the railroad indus- ■
ample the new thermostatic control
try .will- be? about> 20% below 1957,
for gas range top burners, developed
indicating a ^rate -of return on the <
by our firm, and
called by the
investment of- only 2.70% compared
vv

•
-

\Viy-

.The

THOMAS

passengers.

Government's

-:f'_\

1958

further

real possibility
that credit requirements may be enhanced by inflationai*y pressures. • Our resources of manpower, materials and

We expect it to be

the combined efforts of many •
in better transportation, including
strong support from the press, as well as from labor
and industrial organizations. After the Senate acted on'

unbalanced budget and ;
dustry1 wide stimulus; which"ill be provided during';:: the prospect of "ahother. turn'of the wage-cost-price..
1959 by the advent of. new-products, but we do know
spiral in 1959.' As a consequence, at a time when major *
that it will be significant.
In our own company, for
foreign, currencies have become stranger, the interna¬
tional position of the dollar has weakened. The develop¬
example, approximately 80 per ; cent of the products
ment and prosecution of an effective public policy to
being sold today were not on the market ten years ago.
stop inflation is the most urgent problem confronting
(Jn the face of good economic conditions, a constantly
our economy
growing market, and the introduction of additional new
today.
products, we cannot help but>be optimistic. The year
1959 will mark the 75th anniversary of the founding of
ARTHUR K. ATKINSON
company.

produce the maximum
supply the needs of

interested

groups

has nevertheless

in sales.

shippers and

accomplished

sizable increase ''

our

abilities

During the year, some of the problems of the transportation industry were dealt with in the Federal legislation repealing the 3% excise tax on freight bills and
enactment of the Transportation Act of 1958. This was

-As the year moves ahead, there is the

of bank accounting.;-A. number

area

our

probability still show a substantial deficit over the next
12 months.* In addition, a huge volume of shortdated
Government, debt outstanding will need refinancing.
The Treasury is expected to seek to place some of its
securities-with, individuals and savings institutions, but
as of today,' it appears that the Treasury will have
to
rely upon the commercial banks to a considerable extent
in; 1959.*•
TW..V,

and

amount of transportation service to

holdings of Government securities: Despite the
improvement in business, the Federal budget will in all

accounting machines has proved even

for

field

The

,effectiveness

to their

1959.

positive, effect on the

(231)

The Commercial and Financial Chronicle

...

•VfT;

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(3

(—

i !

I U-r

i iHr£4ri.

g k zz
a

fc.

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—-IJ~j

STATE AND MUNICIPAL BONDS
St., N. Y. 15, N. Y.,* 77 Branches in Greater New York
Municipal Bond Department • Teletype NY 1-708

Head Office: 55 Wall
.

Member Federal Deposit

Insurance Corporation

page

(232)

The Commercial and Financial Chronicle

the

extractive industries.
The percentage was deter¬
mined by legislators—not oil men—in 1926 and has been

Continued jrom page

feeling on the part of the consumer that prices are
"too high" which will require additional efforts in sell¬

systematically

ing and advertising, and increases in taxes at the state
and local levels.

Since much of the consumer's behavior in the market
to

seems

psychological in nature,

unfavorable

and

favorable

the

his

factors

balancing

will

its

assure

continued

dustry would

would

re-examined

them

since

ever

The

validity.

same

credit which

consumer

the American

will

consumer

implement his buying power this year.
analysis indicates that the consumer will use
his credit with moderate confidence in 1959. We do not
Our

drinking

a boom in consumer credit similar to that ex¬
perienced in 1955, but we do expect improvement over
we

saw

1958.

any

appear to us to increase the
demand for cash installment loans: first, an increase in

able

population in the

nesses

second,

the

heaviest

brackets generally considered

age

users

consumer

credit

wider acceptance of consumer credit

generally favorable economic climate and

tion

confidence

consumer

plus

these

and
way
a

should increase the demand for the services of
finance

sets

some

for

pressure

credit

consumer

return

consumer

of federal

cannot

con¬

time,

even on

fects

Consequently,
justification for federal controls of

the

see

credit and

consumer

believe that such controls at this

standby basis, could have disastrous ef¬

the forward progress of our
economy.

Generally speaking, we look for 1959 to be a year of
prosperity for the economy as a whole and for Amer¬
ican

Investment Company expects to be
geared to react quickly to any
changes in the economic

of this

probably not
do

closely

conversant with con¬

The tremendous growth of the last

ficult and it would

seem

nearly im¬

;

to continue the growth of;
these past years.
We are
pretty much of a tourist
center. The opening of the U. S. Air
,

Academy, just north of ColoSprings,
together with
the-

State's

Centennial, to be celebrated^

during the year 1959, should insure
unusually heavy tourist business.
I

would

assume

that private

struction might maintain the
pace of
the last few years but that
public
business
construction
might
show some
tapering off in the year
to come.
We are not in the center

Barney

agricultural district, but there seems to be an
abundance of hay and all
feed, and ranges appear to
be in excellent condition.
Many of our cattle people
anticipate a steady price as the demand for
replacement

FRED

ress

does

1958.

Company economists

estimate

demand in the United States
will increase by about
and that of the
rest of the
Free

by about 8%.

and

the

and

balance

demand

are

lative
1959.

assured

issue

Undoubtedly

greater than

Bartlett

justifiably
assume

the

oil

that

political-legis-

most

pressure

hotly debated during
in Congress will be

to cut the depletion
percentage below
This rate, contained in
income tax laws

ever

the 27^2% rate.

same

v/v.p ::

The

air

year

recognizes that those who search for oil
greatest financial risks of
any engaged in

are

JOHN

SONNABEND

As most of

Amidst

Hotel

tion

Corpora¬
America

the

spent

lies

business

moderni¬

zation of

existing

facilities to keep
pace

continues to expand

machinery

at this time last

run

over

the

predicted by many, our
In respect to tim¬

lagging industry—which always overshoots

parent.

Bergen

into

fairly stable in 1958, de¬

in the first ten months.

being

made

This is

beer and

year

decline

has

ap¬

industry.

were

the

demands
will

and

the

future

motel

suffering

from

require

this

industry find itself
obsolescence?

much
over-

less

industry found itself suffer¬
ing from those ills borne by the boom money of the '20s.
The thought
repeatedly occurs that ventures in this
field must be approached with caution.
Though the Hotel
Corporation of America has opened six facilities in 1958
and has reached agreement to

operate 11

ties now either in

other proper¬

planning or under construction, man¬
agement has considered the nature of its operations with
great care to be certain that its
thinking is attuned to
the requirements of the new
period.

designing the facility, hotelmen

whole

are

confronted with

new

range of problems. Check-in
directly from
automobile, guest room convertibility to both living
and sleeping quarters,
soundproofing and deflecting au¬
tomobile headlights are some of the innovations
HCA

and other organizations are
tant. Ideally, the
tures

consumption has been
15.3 in 1957.

legalization, each

seems

the

This

reaching

packaged

ripe market

71.4% of all business travel is
automobile.
Population increases and

1951, there

finding increasingly impor¬
property should combine the best fea¬
downtown city hotel and the motor hotel.

of the
means

motorist

the facility

can

accommodate

the

transient

and

the nearby residential and business com¬
munity's need for restaurants and public meeting rooms.

Modern distribution methods,
pack¬
aging and self service have all been
factors in ithe enormous
growth of

Since

Bonnabend

Despite the Hotel Corporation of America's enthusiasm
for the potentials of this
market, there are danger signs
which should make everyone cautious, Motels
are being
built at the rate of 3,000 per year. In

industry.
enjoying

food industry. But it may well
be that it is one of the
principal rea¬
sons for the static condition of the
beer

the motor hotel

trends, the above figures indi¬

the

than 20 years since the hotel

only 1.3%.

capita

concomitant increases in the number of automobiles
the highways will result in
greater demands placed

expanded

beer, they are drinking less. The per
capita consumption of beer increased
from 7.9 gallons of beer in 1934 to a
high of 18.6 in 1945. Since then, the
per

According to the best available evidence, 85.5%

expansion

light of economic and weather conditions, sales

slipping,

motor

were

Chairman and President,
International Breweries, Inc.

were

the

43,356 motor hotels with 823,764 units while in 1956 there
56,243 properties with 1,124,560 units.

pick-up.

BERCKMANS

brewing business

new

pments
expansion
o

of all vacation travel and

Will

BRUCE

with
1

eve

That the motor hotel field is

However,

future.

year

the future of the

and in

contracts do not

six-month

much

hotel field.

necessarily refers

immediate

questions

implementing its
philosophy that

Jonn

refrigerating

our

many

industry-wide
uncertainty, the

v:';*■•'/. '

was

BERGEN

There was much specu¬
both the extent of the impact and the measures
to be taken to adapt their business to the new travel era.

resources

extended periods of time this appraisal

ours

imagination to move
cope constructively with

and

p-up.

own

our present markets, to continue
combination wherever and when¬
favorable.

the advent of the jet age raised

and exhibits elements of strength which are most

encouraging.

the

than held its

and

their ef¬

for hotelmen about their future.
lation

BENEDICT

conditioning

the regional

Hotel Corporation of America
In 1958,

and

time

cate the static nature of the
While
more
people are

today, profit margins will

rest

know-how

business currently is better than it

nomic

remain slim,
competition within the
industry for portions of any increase
in business- will
continue to be very
spirited.
Percentage depletion may well be the
can

the

Chairman and President, Respectively,

as¬

While 1958 again proves that beer
sales are resistant to downward eco¬

Fred

new

rather surprising as beer declined 1.4% in the
prosperous
year of 1957 and the increase in 1956

squeeze

hotel

have the

truly

and

has shown

was

anticipated.

you

•

...

clining only about 2%

year.

ADMIRAL

President, Frick Company

In the

part, they will be with
at least through 1959.

The basic economic
problem we
continue to live with is
over-supply.
This problem has been
aggravated
the past two years
because the
growth of' demand for oil products
did not materialize as

the conditions

ever

women

requiring

to achieve

The effect of these drives is to put

in the

For the most

better

year

,V,

negative factors.

4%,

political-

past

expand by merger

problems to solve

service

and

legislative problems peculiar to the
oil industry which have
adversely

and

production

tools

and

Last year the

economic

supply

and

men

pressure

further consolidation of

has

recession, there

While

ahead

that

increase was 2% and for
the remainder of the Free
World 8%.
Besides the general

business

needs

with confidence and

year

declines and lags a bit in the

domestic

past

the

during
1958. Substantial progress was made in
integrating the
packaging, advertising and merchandising of the various
beers and
ales; namely Iroquois, Frankenmuth, Old
Dutch and Silver Bar. This should be
completed by the
end of 1959. Also, it is our firm
intention, in addition to

others. This is part and parcel of prog¬
calling for alert attention and intelligent action. It
not demand alarmed action or aimless running

The

ing,

which

affected

new

know there will be

about in circles.

and

popular priced
behind its
The large semi-national popular

International Breweries

California.

the

healthy volume of

business will participate in the trend.

The demand for petroleum
products in 1959 should
somewhat better than the modest
increase

been

meet

'•

breweries

local brands, who in turn will have to
step up
forts to maintain their positions.

attention than

economy

BARTLETT

Chairman, Board of Directors,
Socony Mobil Oil Company, Inc.

cattle is very good.

have

and

occurred

continue

beer

the

It will be reflected in larger

continuing

con¬

World

but

areas

Competition among

increasing competitive

rates

'We approach the

raao

interest

surance

and

possible

Force

and

well

national distribution.

homes

1958

charged borrowers will remain
generally at about their present levels. While there may
be increases in some areas, interest rates will not be a
preventive factor in seeking money for expansion or
purchasing. At the same time, interest paid to savings
depositors will remain at the present figure.

as are many other contributors to your
have great confidence in the
growth

community.

will

consumers

condition of the industry

premium priced beer.
priced brands will continue their efforts

in-migration, particularly

optimistic feeling

numerous

J'■'£}! S'.'Vv-v''

stage for 1959.

gains in the 11 western states will
sharper rise. This is because of the con¬

resources

depress ion."Ay ill have reached
.'

scope,

heavy

Loan

the

brand,

will

then;fhat

over-all

did

homes, as well as provide funds for
purchasing automobiles or appliances.

10 to 15 years makes
comparisons ■>.
for the immediate future
rather dii'-,

Armin

than

business and industry, finance

ditions elsewhere
we

Credit

President, The Colorado Springs National
Bank, Colo.

forum, but

there

even

tinued

opin¬
upward trend which we

1959.

are

believe

show

ARM IN B. BARNEY

going to build

are

year

there

The battle among the
industry's giants will concentrate
the local level.
The number one volume beer pro¬
ducer will open more markets for its

busi¬

some

the

automobiles.

national

wind during this
year. Unexpected situations, such as a
prolonged strike in the steel industry,
could, in our
not reverse the

down

age.

advertising and promotion budgets. Marginal producers
will continue to either close their doors or merge.

$105 in goods and services
produced throughout the country in 1959 for every $100
turned out during 1958.
Although this increase will be

company, American

ion, hold back if

Beise

Company. We feel, however, that 1959
viewed with both optimism and caution. As
a

expect in

this
sell

Investment

must

slow

the

would

challenge and meet it with force.
During 1958 individual optimism
was not daunted;
people continued
to buy and build; our
economy be¬
gan to catch up with production and
make the adjustment.
Presently we find ourselves on
solid
footing
and
moving
ahead
strongly. This will be most evident
during the first half of the year.

factors

gesture toward controlling
inflation. Such controls, in our
opinion, would have lit¬
or no effect on the causes of
inflation.

tle

and

this

But the nation's stamina was more
than
sufficient to deal with this

of life.

companies.

There

trols

buy. We knew
some
people and

hurt

continua¬

two

industry,

1960s.

will be stronger than ever.

effort.

Two additional factors

individual.^consumption is viewed with

However, the current static

proof the American economy has
strength in depth and can shake off a solid punch, we
had it during 1958.
Just a year ago there were more
goods ready for market than people were willing or

expect

the demand for consumer credit which

needed

the

since

born

own

half of all beer consumed

As the

lower

by the

about

CLARK BEISE

President, Bank of America National Trust &
Savings Association, San Francisco, Calif.

use

of beer has followed the

over

While
alarm

spending in 1959.
direct bearing on the amount

percentage

Today, well

tendency is to drink less beer at
out, this undoubtedly has been a major
factor in the lowered
per capita, consumption.

the amount and direction of consumer

This, of course, will have

Thursday, January 15, 1959

home than when

and eventually, of necessity, there

up,

take-home

pattern.

is in the home.

be increases in the prices of oil and oil products.

determine

aged. For the first three quarters of 1958. packaged beer
represented 79.8% of the total.

Should this rate be reduced, I am convinced that the
search for oil would be curtailed, costs within the in¬

The motel
Bruce

Berckmans

ket for the
hotel

seen

increase

proximately only 10% of the total beer output

1934

was

industry represents an important new mar¬
hospitality industry, but the downtown city

continue

Property values, guest

industry.

draught.

will

ap¬

pack-

equally important factor.

units, and gross volume of
business still exceed the motel industry. The Hotel Cor¬
poration of America's confidence in the importance and
room

stability of this field is expressed in their agreement to
operate a 350-room hotel now under construction in New

Number 5812

Volume 189

and

Orleans

The. Commercial and Financial Chronicle

...

be part of

1100-room hotel which will

JOSEPH L. BLOCK

the Boston Prudential Center.
As

postwar era modernizing their properties.

doubt that many

There

hotels have been hurt by competi¬

The

tion, wage increases and rising costs of supplies.
have

which

hotels

The steel
or

industry has excellent prospects for record

record operations

properties through modernization.

their

situated

This belief is a

operations.

cornerstone of HCA

jet age has ramification^ in the hotel

The arrival of the

In addition to property maintenance, hotels

industry.

stationing

business will

become

greater problem as

;

trip home

find making the return

can

However, businessmen may take more

made with ease.

of jet transportation.
the population increasing and more people hav¬

trips, the

ing more time and the means to take more

[

planning, hotel-

intelligence and caution applied to their
build

can

men

industry designed to meet the

sound

1959 should prove an im-

challenge of the coming years.

portant year in determining the character of the

With

motel business is bright.

of the hotel and

future

industry's

Joseph L. Block

A. BIMSON

CARL

Phoenix, Ariz.

We enter 1959 with the economy

This

business

for loans by most segments

demand

heavy

strong upsurge.

evident to Western bankers with a

especially

continued

even

of strengthening

face

the

rates.

posits

are

interest

Both demand and savings de-

individ¬
throughout the country gen¬
erally have shown a conservative
front,

consumer

attitude

by
not
; themselves and we
-

than

see

are

about

result of either

that steel

the

Carl

pares

If there is

million tons.
both

ing months, which now appears to be evident, we may

77% of the

borrowings but it is antici¬

increase in individual

reduced

on a

the previous buy¬

possible strike, I

in the first six months.

This

com¬

be well in line with repayment

the

first half
new

average

and

the

of the projected figures for
entire

year

1959 would be

1959 capacity of the United States Steel

Industry and represent
1947-1949 average,

Nineteen

should

fifty-nine

expenditures

consumer

see

better

that

than

the

balance

There

supremacy cannot be overemphasized.
Russia's seven-year program ending in 1965 has a target
of 100 million ingot tons of capacity. This proposed
growth, which would increase Russia's present capacity
by two-thirds, is about twice as great percentage-wise
as
this
country's substantial expansion in the past
seven

years.

Despite this Soviet expansion, there today are some
who would tax away our corporate profits, or
them away with uneconomic wage in¬
creases, at a time when our industrial resources are so
vitally needed.
groups

bargain

even

index

continuing its modernization and expansion pro¬
in 1958, U. S. Steel spent $341 million for additions
and replacements in the first three quarters and had
authorized projects to be completed requiring expendi¬
tures of $740 million at the end of the third quarter of
1958. Since 1945 U. S. Steel expenditures to give the
nation more and better steels have totaled almost $4 bil¬
lion. This has been done despite mounting costs and a
tax allowable depreciation far from adequate.
gram

figure, based

Completed or in progress in 1958 for increasing the
efficiency and capacity of blast furnaces was the con¬
struction of four new sintering plants in the Pittsburgh,
Youngstown, Ohio, and the Chicago areas; other projects
include

new

pipe mill at Lorain, Ohio, which will be
facility of its kind ever to be built,

most modern

replacing several old mills, with an annual capacity of
237,000 tons; a new engineering building in Los Angeles;
a new structural and blooming mill and a new slabbing
mill in the Chicago area; new primary and billet mills
and another electric furnace in the Pittsburgh area;
new tin plate manufacturing facilities in
California;? a

the

•

There is

automobile

sales

the demand for furniture and hard white

and in

goods

which

will

improvement

possibly mean

rechanneling of

larger

percentage of disposable income into these areas which
were

expenditures in 1957 and 1958.

Business
for

the hardest hit by the curtailment of con¬

among

sumer

spending for

inventory should be stronger with increased confi¬
in

dence
sumer

the

at the

evidence of stronger

and

economy

demand

Government

plant and equipment and

new

reflected

year-end

sales

Wertheim
Members (Njat York

120

BROADWAY

spending is also expected to be sustained

high levels of recent years, and, unless there is

NEW

YORK

unexpected improvement in the international situa¬

tion, will continue with

us.

The greatest danger, in my

opinion, is that of excessive deficit financing with its
ultimate

effect

the

price

general

level.

Inflation,

whether
to

The

both

creeping

not, will eventually do

people than

coming
state

local
Let

will

budget
a

so as

strive

time when the

for

necessary

capital

hope, however, that the Federal

not to be

expenditures

greater

see

authorities

Government

harm

amount of international unrest.

will

year

and

improvements.

any

for

better

party to

consumer

balance

the

rapid rise in prices

is still

quite critical of

present day high cost of the items he wants to buy.
A

rising price spiral could

strike
The
many

again trigger

buyers

detrimental than the slump of 1958.

fact

that

items

for

the

consumer

extended

can

periods

defer

purchases

time

was

again

brought into sharp focus in 1957 and 1958. Let's not
forget this fact in our urge to force a further stimula¬
tion of

our

economy through needless deficit financing.

Co.

Slock Gxchange

con¬

figures.

■

Continued

of 135.

strengthening in housing starts.

evidence

in¬

Our need to combat inflation and maintain the coun¬

three years.

every

to the

try's industrial

two

past

fuel

is confronted with the ponderous task of meeting
probable $12 billion fiscal 1959 deficit, with resulting
inflationary implications.

capabilities.
*

add

gress

the

million tons, and the 1955 record of 117

The

not

flation fire. In Washington, the Con¬

inclined to

with about 85 million tons this year, the 1955-1957

average of 115

million in the last six months.

pated that these will

strike

Bimson

good public acceptance of automobiles during the com¬

See an

might start out

production in that period will be at

level

same

approxi¬
Although

On this basis the total ingot production for the year

debt

installment

$20

which will

this rather rosy outlook, I believe steel ingot

would be between 110 and 116 million tons.

offspt by increases in other forms of
consumer
obligations leaving a net
about

believe

$400 million since the middle of 1958
and the drop has only been partially

decrease

part this will be to replace inventory liquidated during
the past year but there undoubtedly will also be some
build-up of stocks to guard against the possibility of a

ing in anticipation of

disposable personal
Auto debt has dropped over

income.

into the market.

able factor in steel consumption this year.
A certain amount of buying for inventory accumula¬
tion will add to the steel demand in the first half. In

basis

normal debt pattern

come

the second half of next year

extending
not likely to

over

Government spending for capital goods will also rise
and, as the year progresses, the private sector of the
heavy construction industry should also show some im¬
provement. It looks now as though our railroad friends

will also

Roger M. Blough

1958.

over

mately 47 million tons in the last half of 1958.

uals

of at least 30%

tween 55 and 58 million tons as compared with

the

production in the first half of 1959 will aggregate be¬

both businessmen and consumers.
On

crease

Based

the part of

feeling of optimism on

improvement

well informed individuals in the auto industry of a mini¬
mum of 5,500,000 cars for 1959 would represent an in¬

steel strike in July.

rising in our section of
and there is a general

the country

agreements terminate on June 30 and
prior to that date the companies in
the steel industry are faced with the
task of negotiating new agreements

steel (is
the automobile
industry
which, I believe, will show marked
compared with 1958. The predictions of

A decision by the Supreme Court late in the year clari¬
fying the rate-making procedure of gas pipeline opera¬
tors is releasing some large pipeline projects which will
doubtless be followed by others and become a consider¬

adjustment

President, Valley National Bank,

minds

consumers'

nection

trips because of the convenience
With

Of greatest importance in this con¬
from the point of view of

businessmen

operations in the first half of 1958.
Despite this prospect, : the 1959
S. economy will be confronted
with the challenge of further costpush inflation, the inflationary ef¬
fects of Federal deficit spending and,
importantly,; the ever-growing need
to strengthen our industrial and
scientific might to meet Soviet eco¬
nomic aggression.
The
present
three-year labor
U.

should
increase
their pur¬
chases of durable goods, and housing
construction should continue to rise.

Week-end

steel

third

which

representative meeting the steamships.

the

new

industry, rapidly recovering from
postwar recession, has prospects of reaching
an operating rate of about 80% of present capacity dur¬
ing the first six months of 1959—an increase of approxi¬
mately 45% over ^sharply curtailed
the

confidence

representative at the airport much in the

Inland is with

United States Steel Corporation
The American steel

employment and personal
underpinning a growing

incomes

selling their services to the modern traveler, such as

: manner

Rising

increasingly will find it necessary to develop techniques

year

making capacity and big additions to
finishing facilities.
Steel
production
has
improved
steadily since the low point of last
April.
The trend should continue
through the first half and very likely
throughout the year.
\

problems are those who have maintained the appeal of
,

in 1959 and the

should
high levels of production and sales for individual
companies. Included among these will be companies
near

M. BLOUGH

Chairman of the Board,

see new

these

successfully weathered

most

ROGER

President, Inland Steel Company

industry, hotels have spent more than $2 billion

in the

(233)

INVESTMENTS

page

The Commercial and Financial Chronicle'.

(234)

Continued from page

yarn

the installation of

auxiliary facilities for plates at Fairfield, Ala.
In the field of research, U. Si, Steel announced

in ,1958

the world's widest thin gauge alloy
and stainless steel sheets, "sandwich" rolled for defense
missiles and aircraft in a new technique developed and
refined by U. S. Steel. Another is a missile steel with
a
tensile strength level of 280,000 pounds per square
inch, or six times greater than that of ordinary sheet
>
steel. Still others are vinyl plastic coated sheets of beauty
and durability, and patterned vitrenamel sheets in many
colors for a wide variety of applications.
;
The year 1958 was a difficult one for the steel industry,
with an operating rate of only 54% of capacity during
the first half, rising to an estimated 74% in the fourth
quarter. Although there was substantially greater ingot
vcapability than in earlier years, the estimated 1958 out¬
put of 85 million ingot tons reflected sharply reduced
levels of operation. However, the gain in second-half
output made it possible for the industry to end the year
on a stronger tone enabling
us to look forward to con- •
tinning improvement in 1959.
Actual use of steel in 1958 was not as depressed as the
the development of

1959,

portant segment of

Aggressive research and product and process develop¬
ment and improvement are basic policies in our busi¬
ness.
By this means we increase the usefulness. of
Fiberglas materials, expand our markets and thus main¬
tain a high level of operations and employment.
We
expect further improvement in sales and operating re¬
sults in the year ahead.
'

President,

operating rates would imply. During the first three
quarters of the year steel users consistently bought less
eteel than they were using on their production lines.
Steel

shipments fell steeply as a result.
By ordering less steel than they were using, thereby
depicting inventories, customers were able to alleviate
a financial burden when their income was falling, and,
the

time

same

reduce

which

inventories

had

been

1956 and early 1957. During the 15-month
period ended last August, total customer inventories
appear to have been reduced by the equivalent of 15
million ingot tons to the lowest level since 1950.
The decline in steel output last year was not just the
built

result

figures

liquidation, however. Preliminary
that steel consumption in 1958 fell

inventory

suggest

15-20% below the record total of 1957.

Although a modest amount of inventory rebuilding
apparent during the final quarter of 1958, steel
etoekpiles are still believed to be inadequate to meet
the steel consumption needs of an economy that has sub¬
stantially recovered from a sharp though comparatively
was

However, the
virtually every

has been turned, and based on
measure of
business activity, it now
seems clear that our economy reached
the bottom of
the recession last Spring. Since then, there have been
continuous substantial gains in total industrial produc¬
tion, personal income, new orders, consumer spending,
and in steel production.
The

industry

corner

reasonably expect

improved ship¬
major steel cus¬
industry, farm implements,
appliances, machinery, and automotive. Probably the
largest gain in shipments will be made to the automotive
industry which moved up sharply in November and
can

in the next

tomers

the

six months to

such

major question lies in the area of business spending
on plant and equipment.
According to government sur¬
veys, there, has already been a small gain in capital in¬
from

the

low, but there is no cer¬
tainty that there will be a significant revival in 1959.
However, termination of this decline of spending re¬
the basic

summer

uncertainty and it is reasonable to

there will be some
business investment.

modest

pose

T.he
to

quickening

have

gains

mand

of steel orders already has begun
delivery schedules. As lead times

the corresponding months; of 1959 may mean
increase in ingot production.

net

broad

Residential, commercial

lines

and public building
high level, only partially offset by a lag

construction.

Our

than

(1)

the

appears

most

terial in small

that

they will
widely used ma¬

boat

construction

1959; and applications in
products

other
Another

many

are
H.
Boeschenstein
expanding.
growing use for Fiberglas is as reinforcement in papers
polyethylene and other films.

and
A

new

1958 is

•

the

All in

(b) Bank
lesser

should

depending

increase

upon

Federal

greater

Reserve

Polarizing lighting panel
being introduced.

the

over

years

our

•

developed

during

The market for Fiberglas decorative fabrics
has grown
rapidly during the past year with the introduction of
pew types and designs In texturized fabrics:
Now, with

lor Corn Prod¬

year

Insurance

Inspection

Company

machinery line of insurance

to continuation of the premium

look

growth

the totals of

1958

both written

earned

and

and estimates of the writ¬

year

final

months

two

last

the

for

have

reports

not

for
been

in general business
during the latter half of
and the early part of 1958.
decline

the

activity

Any estimate of the
line of insurance

prospects for
during 1959
two moi/e.

this

economic sense, means

the

of the general economy on

existing policies and on the
It is

abatement of competition. It does
that business, agriculture, la¬

effect

the

and

year,

by policies due to expire during

affected

will

premium'volume of renewal

unrelated• factors:

writings

B. Brainerd

Lyman

account

into

take

less

neither abandonment of self-interest
nor

that they have had
7

The Hartford Steam Boiler

1959

which

forces which hold influence
an

bright

which are great
number of the
expected to find

completed at the time of this writ¬
ing.
However, it is noted that the
rate of growth in 1958 was not as
as
in the previous two years
-a
situation due, in part at least,

volume of new business.

anticipated that renewal premium volume in 1959
The great majority of boiler

of 1958.

that

exceed

mean

policies

and machinery

bor, government—all those concerned

are

and

therefore, the volume

aiiy

year

tiative

will

Greater rewards

properly
are

customers, but
as
a
result of providing them with
better products, better service, and

economic

fully

growth

realized

thus

and

year

In 1956 the writings

substantial

increase

over

the

expectations are that renewal

Predictions for general improvement

and

equipment

effect
William T.

true

that

wants here and abroad.

also expected to have a beneficial
It is

responsive

fluctuations

general

business

activity since the need for property damage coverages
changes appreciably only with prolonged treijds in the

However, a growing percentage of the writ¬

economy.

ings in this line represents premiums for
or

spond

readily to general business fluctuations and

to this extent the

output
our

can

anticipated increase in manufacturing

be expected to produce increased writings in

line of insurance.

These

predictions for

economy

and occu¬

use

business interruption coverages which do re¬

pancy

for

upturn in the economy permits the company to
some 450 industrial products

are

large portion of the business it not imme¬

will

diately

in the economy

increased expenditures for new plant

boiler and machinery writings this year.

Brady

largely turn
upon the all-important factor of unity. While the com¬
pany will move generally with prevailing business con¬
ditions, we have great hopes that 1959 will be the best
year the company has ever known.
The basis for this
optimism is first an improvement in the economic climate
throughout the country, along with the continued abun¬
dance of those agricultural commodities—corn, vegetable
oils, and peanuts—most important to the company; sec¬
ond, the soundness of our business, which in recent years
has become increasingly diversified; third, confidence in
.company plans and projects now in the works; and,
fourth, the vitality of the Corn Products organization
which is alert to the manufacturing and marketing op¬
portunities implicit in growing populations and growing
The

showed

of the country and

re¬

have ever be¬
But whether it is to

during

premiums in 1959 will prove to be greater than in 1958.

values.

of renewal writings

third, preceding year.

line

at the expense of the

this

written for three-year terms,

will depend to a large extent on total writ¬

ings of

rewarded.

to be earned not

now

the

ings"

every

Unity, in

ing to a forecast based upon actual
writings for the first 10 months of

1957

many group

soups,

well

LYMAN B. BRAINERD

years.

business in the year ahead—
thereafter—will depend increasingly on

economy.

premiums for all companies engaged
in this line set new records, accord¬

policy;

Knorr

which has characterized the business for the past several

earning assets of the bank should

President, Corn Products Company

unity among the

" '■ 77v;'7,v7 ,^7

In the boiler and

WILLIAM T. BRADY

and

all, 1959 should be

Company.'/

forward in

be better than in 1957.

Prosperity for most

business today, as the grocery
continuous and solid growth.

Continent,

And

-7

deposits

extent

are

wide acceptance overseas

President,

slightly;

line

the

the banking pic¬

ture indicate that

(a) Bank loans will be

research

and

markets as a major source of company
Important contributions are expected from the

same

ucts

(a) An increased pressure for inflation;
(b) Bank deposits will have a tendency to increase if
Federal Reserve policy remains constant.

The effect of these relationships

our

in the United States and Canada.

dicate

(4)

service

customer

Best Foods brands, many of which are

and effect of monetary policy would in¬

course

cus¬

overseas

favorites

(b) Mortgages and real estate loans will depend upon
housing starts, which evidently in the past year have
been in excess of family formations and would indicate
a
leveling or slight reduction;
'\7':77'.'7/7\:;/
(c) Corporate bond financing—we anticipate' con¬
tinued fairly high level;
(d) Government borrowing (municipal, state and Fed¬
eral) will be up sharply.
v
•
*
"
/
The

marketing!

products

grocery

share in this expanded market.

newly acquired

the

growth.

•

From the standpoint of demand and supply of money
and credit, it looks as though
/'
'

(3)

and

to
BorthwicUr

(b) Business spending as indicated by private invest¬
ment for plant and equipment, though up slightly for
the first quarter, presents a cloudy picture for the rest
of the year; inventory, spending may increase slightly; '
(c) Government spending as/indicated by fiscal re¬
:
:
quirements will be considerably higher. ' •
(2)

increasing population and ever improving stand¬
ards ol living lias made possible the dawn of the
super¬
market age in the world market. With more than 50 years
.'of manufacturing and sales experience abroad, we look
-

Consumer spending
we
be- : Andersen
will
continue for
the next
:
■
/ :

quarter at the present level;

Fiberglas reinforced plastics ma¬
terial^ have become significant com¬
ponents in aircraft, missiles and
become

tribute to and

ness:

lieve

grocery industry sales is now approximately $75
billion, and it is expected that by 1965 it will reach $100
billion. With our present reservoir of talent and experiv/enee, I believe we are in an excellent position to con¬

Factors

(a)

" *

Total

anticipated developments:
of strength and weak-/

our

business is in the midst of

last

pages

industrial

important frontiers in

the

year,
as
well as a tighter money
policy,
rising defnands
for
bank
credit, and higher interest rates.
In summarizing our outlook fpi";
1959 the following outline presents

fore witnessed.

than

be expanded in the
coming year.

completed,

in these

greater depth than

fort-Conditioned Home" program
launched in 1958. This
program will

rockets.

just

year

anticipated

surgence

625

the

additional centers of research operations.

leveling-out process and subsequent
economic recovery have developed as
we

both

Advancement

The coming year should see

builders, who con¬
40,000 homes,
participated in the Fiberglas "Com¬

structed

tary policy, and the level of money

better

products in these
fields have excellent
acceptance and
we benefit from this active
demand.
More

assistance to

rates.
In

.'/

tomers, and that progress irt' research is resulting from

goods—will have to create a set of
conditions under which risk and ini¬

President, Owens-Corning Fiberglas Corporation

monc-

;

Our company is
entering 1959 with a strong upward
trend in sales but with continued
rising costs in doing

industrial

./...'

■-,/

with the production and distribution

HAROLD BOESCHENSTEIN

credit, changes

research. The company provides technical and
;.

must

to protect their inven¬
tory position becomes greater. Consequently, a certain
amount of inventory
building may be anticipated in the
coming months. In total, the change from inventory
liquidation in the first half of 1958 to inventory building

business.

for

in this type of

lengthen, the need for customers

continues at

chief determinant in the de-

certain to work to the benefit of the

move

consumer.

By joining the facilities of the two firms, the new com¬
pany is now able to offer a wider range of customer
services and accelerated progress in product and basic

1959 necessarily depends

large

be the

was

American

sup¬

pace

effect

pany,
.

part on national and international economic
political developments. Barring the effects of inter¬
national crises, I believe domestic economic trends will
in

moves

; and The Best

and

construction

December.

vestment

outlook for banking in

-X The recent merger of Corn Products Refining Company
Foods, Inc., to form Corn Products Com¬

;;

(a) Business and commercial loans will be up slightly;

chart recession.

ments

BOKTHWICK

Executive Council, American Bankers Association
The

will move ahead at
the part of consumers

company

is the demand

pace

premium quality grocery products.; The homemaker
today is a highly sophisticated shopper, she insists on
reputable brand names of know quality. She wants con¬
venience and style. With more than 30 different leading
: grocery items, the new Corn Products Company is well
Vprepared to cater to this sophistication.
"
t

San

business.

our

why the

reason

for

National Trust and Savings Bank
Diego, California
-,iv■

The First

•

faster

ANDERSON

Another

i'r

Thursday, January 15, 1959

trial products and uses should broaden sales to this im¬

fabrics being introduced, we expect

broader sales in this field during

coal cleaning plant in Utah, and

new

Coro-dyed

new

♦

indicate additional demand for insurance and
designed to safeguard increasingly

inspections

equipment.

pensive

which it supplies to more than 60 basic industries. The
company's research program for developing new indus¬

premium volume is anticipated in the boiler

power.

line

insurance

ex¬

Thus, continued growth of

increase distribution of the

chinery

general upward trend in the

during

1959.

and ma¬

Number 5812,... The Commercial and Financial Chronicle

Volume 189

HARLLEE

matic

BRANCH, JR.

(235)

appeal should

continue

attract

new

industry

•

services play

The

fairly ' new concept of merchandising complete
The four-state area of the Southeast served by the
telephone service to homes and industry—extensions,
Southern Company system, Alabama, Georgia, North¬
iSpeakerphones, "The. ELECTRONIC SECRETARY," dialwest Florida and Southeast Mississippi, looks forward in...
lighted phones and many other new items—is widening
1959 to another year of growing industrial development, : .'the horizon
for internal'- growth Within the industry. V '
:quickening - commercial
activities, : % All indications point to continued broad industrial and
and an expanding population.
»
residential development in Florida through
1959, and
The recession of 1958 had a relathe telephone industry should continue to parallel this
tively minor impact on the diversi- o ^growth.
%,
fied economy of the Southeast. The •<
' V.

establishment of

NORMAN BRASSLER

the expansion

■

industries and

new

of existing industries

rate.
In
: v
Executive Vice-President,
New jersey Bank & Trust Co., Paterson, N. J.
period, January 1September 30, 1958, 130 new indus¬ 'Vv It is our considered opinion that the economic outlook
trial plants—each involving a capital*
for the Paterson-Passaic-Clifton Area for the immediate
investment of $50,000 or more andfuture is for a continued rise in business activity.
This
rise will probably -be at a much slower pace than has
employing at least 10 workers—were
located on the lines of our operating
•been experienced, in the. recovery of
the last half year. Part of this up¬
companies.
These - new
industries
;
ward but slower trend will be due
represented a total capital invest¬
ment
of
Harllee Branch, Jr.
to the influence of national business
$42,590,000 and afforded
'* *'
developments" and part will be due
employment for 8,000 persons.
■
to strictly local developments.
"
'
In
the
same
period, 80 existing plants invested
/'
Manufacturing activity is expected '
$48,480,000 in expanded production facilities, creating
to increase slowly through the mid¬
employment opportunities for an additional 3,790 people.
dle of next year.
On the positive
The Southern Company service urea, where textile
proceeded

gratifying

at'a

....

'!*

v,"
,

■S

formerly

other

overshadowed

types

^September 30, 1958, paper and allied products

of the recession cutback anct,

accounted
This, was

•inventory cycle,
increase

equipment was third with $83,155,000, or 11.3%.
Our
lessening dependence upon highly cyclical textile manu¬
facturing riiakes for greater stability in employment
and purchasing power.
a

attractions

are

chemicals, plastics, metal-working plants,
y

reflected in

steady industrial growth in 1959. Among
which the Southeast offers especial

Various economic

point in the
that the exacted

stockpiling should be
greater volume of man¬

Since

:%%"%'

ardsticks show that the percentage

relies essentially upon the -economic
territory it serves, it is obvious from
the foregoing that the outlook for expansion of de¬
posits and loans is good. There is no question in our
minds that this growth will continue and that the strong
and aggressive banks will play a more important role in'
continuing the development of the economic resources
of this prime industrial and residential area.

CHARLES
Norman Brassier

been

which

For

can

United States. Bank deposits
increased 84.7% compared to 51,7%.

for the

income

1.5%.

(1947-1957)

increased

has

compared

preparation for 1959, they face some pressing
problems: how to overcome the corroding effects of the
cost-price squeeze; how to avoid the oversupplies that
have had

has

(1947-1957)

increased

22 5%

sales (1947-1957)
creased 75.3% compared to 38.8%.
9.9%.

Department store

between short-term outlays
replacements and long-term in¬
vestments for growth; how to increase
an
already great public acceptance
for
its products—in short, how to
tack and trim in a year that appears
to offer more favorable opportunities
for profit but at the same time car¬
ries over some of the uncertainties

The Southern

The

in¬
.

growing demand for electric power.
Our generating
capacity increased from 1,500,000 kilowatts at the end of
1948 to more than 3,700,000 kilowatts at the end of
1958. Electric energy supplied to our customers increased
from 7.9 billion kilowatt-hours in 1948 to nearly 19
billion kilowatt-hours in 1958. The number of customers
810,000 in

industry,

any

substantial

trends in

local

recovery in the period ahead.
manufacturing are in part a re¬

Company

served increased from

textile

only about half of its size of ten years ago,
expected to face some -further loss. Rubber, an¬

of previous years.
One thing seems to be clear: it will

flection of th6 overall patterns being set' in the economy
as a whole.
Nationally there has been a long-term shift

system has greatly enlarged
:its facilities in recent years to Keep abreast of an ever¬
•;

The

1948 to approximately

;
,

emphasis from production of goods to services. Since
our
local area is more concentrated in manufacturing
that the nation as a whole, it has been more seriously
affected by the slow growth and accompanying cutbacks
in production.
On the other hand, the certain recent
trends offer the local area its most encouraging prospects. First, in manufacturing itself, the growth of printing, and paper indicate increasing diversification of the
area
and less dependence on the limited number of
manufacturing industries which formerly dominated the
local scene. Secondly, the growth of nonmanufacturing

balance

expecting

compared
have

conditions.

effect

adverse

for

nondurable goods industry, is also anticipating
further cutbacks. In durables, electrical machinery,
which has had a phenomenal postwar growth, is not

Value added by manufacture (1947-1956) has in¬
111.7% compared to 87.7%. Manufacturing em¬

ployment

local

such

profits in recent years; how to allo¬
cate expenditures to achieve a good

some

creased
4

reflect

not

same

which

all-out

will it be

boom

year;

nor

for maintaining the

year

rigid restraints and safeguards
were brought
into play as a

Charles S.

will

necessity during the uncertainties of 1957 and
Having stopped to mark time and take stock of

itself, the industry is again ready to move forward der
cisively. Its spirit is one of restrained optimism.
In recent months prices have strengthened. There are
soft

spots

some

but-these are the exception

lines,

Continued

be maintained.

CARL

BRORE1N

President, General Telephone Company of Florida

DEPENDABILITY- NATIONWIDE COVERAGE

factor that has made
the state a haven for northern vacationers, and retirees
and outdoor fun-loving people who have set up perma¬
nent housekeeping, has also been a contributing factor
to Florida's economy. Last winter,
Florida weather, the appealing

state's coldest

past 60 years, had a disturbing

effect
of

record

We Make Markets

Detroit

■

Confidence in Florida's

economy

Lynchburg

Woolrych, Currier & Carlseii
Berwyn T. Moore & Co.; Inc,

t :,

•

John W. Yeaman

H. A. Riecke & Co., Inc,

Pittsburgh-Arthurs, Lestrange & Co,
Portland (Ore.)--Z ilka, Smither & Co., Inc,
St. Louis—
Fusz'Schmelzle & Co., Inc•
Stm Francisco
Walter C. Gorey Co,

Banks, Brokers & Dealers
.

.Mason & Lee, Inc,

Martinsville

'Philadelphia--

King and Company

Underwood, Neuhaus & Co*, Inc,

Angeles

Louisville--

general level of econ¬
omy, conditions remained at a higher
level than those in many other sec¬
Carl. D.. Brorein
tions of the country.'
r
Florida's heavy reliance, on the
citrus industry rand tourist trade is being continually
diminished - by the steady flow of diversified industry
.

Los

-Baker, Simonds & Co,
Coburn & Middlebrook, Inc,

Houston

ered Florida's

rihto the estate.

Rapids

Hartford

Securities

vegetable crop, and greatly de¬
ceased the tourist trade. •
:
While the effects of winter low¬
ter

Grand

Over the Counter

win¬

almost entirely eliminated the

Dallas Union Securities Company

Dallas

Inquiries Invited

Spartanburg

I
is reflected in the

A. M. Law & Company,'Inc,

steadyzpopulation-rise.and high level of business activity
that took place during 1958, while most of the nation

.'
r

.strongly ielt .the effects, of the general business recession.
Newlfamilies continued tojmove into the state last year
at the:.xate ;of 1,900 per week; .Reasonably-full employ-

ment

was

maintained. Record retail sales and bank clear-

zings were recorded.. Real estate development and new
construction held»a?iiighslevfel.. *

telephone industry, which gen[ erally rmoves with the tide of industrial and residential
-development, showed resultant gains through 'the year.
The.-availability jof/adequate communications and trans/ portation facilities and power,-combined with the Cli¬
Most ^certainly,, -the

Telephone HAnover 2-2400

.+U&-

Association' c

NEW YORK 6, N. Y.

74 TRINITY PLACE

Troster, Singer & Co.
Members: New.York Security .'Dealers

Wm. H. Tegtmeyer & Co,
J. N._Russell &. Co., Inc,

Chicago
Cleveland

temperatures (extreme by Florida
standards) destroyed much of the
citrus crop—although the dollar re¬
turn was. about as high as usual,

......

Wyllie & Thornhill

Charlottesville-

the'

agricultural segment
Florida's economy. The 20-degree
on

Wire# to;

Private

during

the
the

Bridges

matter of

.1958.

1,500,000 in 1958. Our planning for 1959 and succeeding
years is based on the assumption that this rate of growth

their

sleeves in

other

(1948-1958) have
Total cash, farm

26.8%

BRIDGES

As the canned and frozen foods industries roll up

Finally, the growth of certain manufacturing industries in this area has continued rela¬
tively unchecked throughout the recession, and their
'outlook is for further expansion.
Three industries in
particular share this role—food, paper, and printing. The
three together account lor about 15% of present man¬
ufacturing activity locally and have had an average
.growth of over 7% in the past year.
:
The pressures on the downward side in manufacturing

largely

greater than the gains for the nation as a whole.
example, per capita income (1947-1957) has in¬
creased 64.2% in the four-state area comoared to 53.9%

President, Libby-McNeill & Libby

gains in the four states of Alabama, Florida, Georgia
and Mississippi in the period since World War II have

banking

conditions of the

ufacturers' orders.

for

synthetic fibers, and the like.

On an overall basis, retail trade outlook is also favor-r
able, even though the downtown shopping areas con¬
tinue to be adversely affected by the growth of the
new shopping centers.
Downtown merchants are striv¬
ing to increase traffic flow by improving parking facil¬
ities and bus routing.
It is uncertain how successful
these efforts will-be over the nearer term but may prove
productive over the years, depending upon the amount
of cooperative effort put forth.

locauy,

/have .reached the low

30.8%

industries

therefore turn in the least impressive performance

is only in the early stages of its re¬
covery
movement.
Secondly, 'we

$225,960,000 of new plant investments.
of the total.
Chemicals and chemical products?
.were
next with $86,205,000, or 11.8%.
Transportation

•for

We look for

may

;of all nonmanufacturing activity locally.

side are three main factors.
First,
manufacturing has borne the brunt

•industry, is now characterized by a wide diversification
of industrial activity. In the period January 1, 1953, to,,

the

nonmanufacturing, the next six months will prob¬
show increasing activity and employment oppor¬
tunities. This will apply to practically all segments of
nonmanufacturing except construction, In this sphere,
there has been a very, sharp expansion in.
recently ears,
-both in private and public construction.
Private con¬
struction; however, no longer exhibits the strength of
a few months ago when private
housing starts/provided
ran extra boost.. With no sharp upturn in sight in plant
expansion by industry, the local. construction picture

manufacturing

ably

growth of the construction industry, of trade and serv¬
ices, and of government employment.

nine-month

the

activity in the area reflects the increasing role which
in the economy. This is reflected in the

and new residents.

President, The Southern Company

•

Teletype NY 1-376; 377; 378

page

The Commercial and Financial Chronicle

(236)

Continued jrom page

HERBERT P.

35
President,

rather than the

Profit margins are still

rule.

too low,

however, to allow a fair return on investment. A good
defense against narrow margins is a vigorous offensive
to increase sales. Hence, 1959 will see the same spirited

The

Neither inflation nor

course

between the two.

Capital expenditures have been confined largely to
projects promising an immediate return and to keeping
plants and equipment irt good order. In contrast to fore¬
casts of a decline of capital expenditures in all manu¬
facturing, the food processing industry expects to increase
expenditures for plants and equipment in 1959. We our¬
selves are turning to long-term projects as part of our
program of planned growth. Among them are plans for
a
new canned meat
plant which should enable us to
improve our business in this line. There are, in most
lines, adequate facilities for production—the big problem

The

industry's resourcefulness in creating new tastes

a familiar story.
Every year sees a wide array of new
products to capture consumer interest. In this day and

processed foods compete with everything else in the
vast catalog of consumer products.
How much of the
consumer's disposable income will be spent for food de¬
pends to a great extent on the industry's ingenuity in
increasing popular demand. Fortunately, there is still no
tax on ingenuity.
age,

em¬

and

ately, at least through the first half
of the year.
Competition may pre¬
vent

Herbert P.

Buetow

these

even

from

modest

PRENTICE

Trust

commercial recession

of the

the

starts.

year and

steel

and

recovery

With the rest of the

industries

made

about

products.

tions for 1959

the

country, 3M will probably enjoy

prospects of

number of
planning

a consequence, we are

the basis of about

our

newer

our opera¬

10% increase

1958.

HARRY

April

and

recession,

banks

felt

Mills, Inc.

October

tion

was

The

Thus,

1959.
H. Prentice

Browning

the

background for
in banking
in
Gradual recovery in loan vol¬
prospects

should result in gross revenues
from that source about equal to 1958.
ume

anticipate more active demand from processors,
particularly of metals, from finance companies, and from
instalment
buyers
of consumer durables.
Moderate
can

growth in inventories

part by

bank

at all levels will

financed in

loans.

Mortgage lending will not
abate, and will continue to press banks for available
time deposits. Loans for heavy construction purposes
more

will remain below their 1957 level.
Investment income should equal or exceed last year's.
We assume that the freedom of the
money market will
not

compromised

politically

that yields will reflect the

inspired

measures,

demand for funds,

sincere efforts will be made to market

and that

federal debt

new

instruments to non-bank investors.
In

light of the foregoing general predictions individual

banks may give continued close attention to the
of

increasing

services.

revenues collected

Too many such

means

directly in exchange for

charges do not yet

recover even

all direct costs.
In 1958

banks,

well

industry generally, have

suc¬

ceeded, in the main, in checking the rate of increase in
expenses.

They have learned methods

cost controls.

most fruitful

may

favorable

return

one

banks

adequate

efficiencies.

generally

But the trend for banks
as

the year pro¬

1959.. Banks must help themselves

charges,

cost

controls,

and

operating

pro¬

contracts

than was the

case

economic

activity

reasonable to believe

gross

1958.

Research

and

from 1.6 billion dollars in 1956 to

estimated 3

billion dollars for fiscal

This

increasing

emphasis

re¬

search and development will require

highly

trained

well

technical

staffs

broader spectrum of inte¬

gration of diversified skills. Compa¬
so equipped will be in the best

nies

competitive

position.

Our industry must have the cour¬
George

M. Bunker

foresight to invest a large
percentage of its earnings in facil¬
ities and research and development programs, especially
in vi*w of the fact that this stepped up pace toward to¬
ward research and development contracts will seriously
affect the industry's rate of earnings since research and
development contracts are traditionally less profitable
than production contracts.
age

and

scientific and technical advances

The

recent years

national production

year will
neighborhood of $465 to
billion — up $30 billion from

the

control

exert

This

will

lead

Department

competitive

the

rate

defense

increasing efforts

of Defense

basis

put the
cost.

The trend in defense needs

expenditures.

the part of the

industry

still

changing. The emphasis
but surely shifting from conventional aircraft
guided missiles, so that more and more old style fa¬
cilities for the production of air defense
weapons will
are

is slowly
to

become
over

surplus. The
our

era

conventional

industry; the requirement

structures

now

is far

complex; it calls for
and

tro

a corporate set-up embracing elec¬
electro-mechanical capability in missiles plus

solid experience in

prime contract weapon systems man¬
agement. This need, if not already obvious, will become
crystal clear in 1959.

1958.
The

and

largest factor in the increase

will be

consumer

services.

spending for goods
the

result

BURTON

President, Anchor Post Products, Inc.

in¬

The

outlook for

.•

employment and higher
wages, total personal income can be
expected to rise as much as $18 to
$20 billion.
Making allowance for

business for 1959 is very bright.
New orders received in the latter
part of 1958 were con¬
siderably in excess of orders received in similar prior
periods, so that the backlog of unshipped orders on

that means added consumer spending power of
$14 to $15 billion—and will require that much additional
*
production/

mately 33% greater than the backlog
of orders on hand at the
beginning

creased

Harry A. Bullla

of 1958.

Inventory liquidation subtracted about $5 billion from
production during 1958. To make up that deficit and add
slightly to inventories which have been depleted too far
will call for $6 to $7 billion in output.
Government spending will increase at all levels. Only
a portion of the increased
expenditures approved by the
last Congress were actually expended in .1958. It seems

work

that

seems

Residential construction showed a strong upward trend
during the last half of 1958. I believe housing starts will
continue at a high rate in 1959 and that the value of such
construction will be somewhat higher than in 1958.
While there are a number of uncertainties, such as the
maintenance of farm income, the foreign situation and
the prospective Federal deficit, the positive forces for
economic growth are very powerful, and I look for good
business in 1959.

The Food

Industry Outlook

Industry will share liberally in the economic

upturn which is underway. For many years about onequarter of family expenditures have gone for food. I
believe that proportion will continue in the future. As
increasing industrial activity brings higher incomes to
more

people, more money will be spent for food.
At the present rate of growth our
population will reach
193,000,000 by 1965 and 228,000,000 by 1975, according

to Census Bureau estimates.

will
of

the

represent
the

orders

first

half

amount

billed

the

1958.

business is sold direct
to the homeowner and
although we
our

find

more credit restrictions in con¬
nection with financing such
.sales, it
is also a fact that many of the home¬

come to a halt, and a small in¬
the fourth quarter. Business is

moving cautiously in expanding productive capacity, but
there is need for continued improvement in productivity.
I look for a small increase in capital
investment, perhaps
$1 million.

for

complete

Much of

to have

is estimated for

are

1959,

first half of

to believe that Federal
expenditures next
will increase at least $3.5 billion and that state and

crease

approxi¬

assured that the work

we are

excess

was

Most of these orders
be completed in

1959

local governments will add another $3.5 billion.
The decline in business expenditures for new plant and

equipment

will

reasonable
year

our

hand at the end of 1958

taxes

Food
earn

their capital funds in 1959

of steady improvement

gresses and beyond

seems

total

$470

of net income gain in 1959.

either of the prior two years.

should be

effects

Further refinements here may well be the
source

be difficult for
a

and

automobile industry.
is for continued im¬

goods and services next

substantially
below
year ago, and the reduc¬
only partially offset by

affords

1959.

that
of

improved yields on investment port¬
This

models and labor diffi¬

outlook

provement

folios.
business

new

culties in the

running
a

largely because of change¬

buoyancy in loan volume and
loan interest rates. But by year-end
bank income from this prime source
levels of

the first

subsequent month has shown im¬
provement. The pace was a bit slower in September and

over

was

upward since

Industrial production hit its low point

over

devel¬

rapid and have made possible such extraor¬
dinary improvements in weapons that we cannot afford
to supply the defense establishment with the traditional
old weapons and the revolutionary new ones too. This
fact is basically responsible for the government's effort

every

carry¬

has been

trend

and

development
expenditures already have increased

have been

BULLIS

Chairman of the Board, General

economic

research

compared to

over

Former

into

duction

poor

another good year. We expect established items in the
31Vf product line to reflect the generally higher levels
of business and industrial activity. Again, we are opti¬
mistic

in 1958 with air¬

contracts

'59.

agriculture.

during the first half of 1958, some of
the
worst
months, statistically, of
the

channeled

•

than offset by general strength and by important
gains in such other basic industries as construction and

forces.

credit for

automobile

level

same

spending dropping off as missile spending increases.
these funds, a substantially greater portion will be

past eighteen months.

and

craft

BUNKER

President, The 3Iartin Co.

expected that the nation's defense expenditures

retrospect we see that 1958 was a good business
that the slump in these two key industries was

Because of its position in the economy, banking expe¬
riences delayed effects of the reces¬

sionary

when

will continue at about the

few months, served to make it more apparent
than ever that the American economy truly has a broad
base.
Recession thinking was accelerated in early '58
of

quarter, of 1958.

At year-end 1958 many economic indicators point to
nearly total recovery from the sharp industrial and

GEORGE

Chairman of the Board and

The recession and the subsequent recovery, all in the

The

Company, Indianapolis, Ind.

exceedingly optimistic.

opment

which add firmness to the business structure.

BROWNING

President, American Fletcher National
Bank

great stability during the recent economic de¬
the outlook for 1959 and the years ahead is

and

today's favorable
outlook must be given the recession of last year. Many
business and industrial firms are better managed because
of it. Greater efficiency and better planning to anticipate
rises and dips in the business cycle are noticeable effects

space

opportunities ahead, the Food Industry con¬
tinues to invest millions of dollars annually in research
and in new plants and equipment.
The Food Industry

the final sales tag.
Some

protective pack¬

With such

increases

being completely noticeable

Chairman, International Development Advisory Board

aging-

cline

higher levels

industry. Wholesale
prices of industrial commodities are
expected to advance only moder¬

is to increase sales in order to make the most of the in¬

dustry's production capacity.

products with greater nutritive values, more "built-in"
convenience and taste appeal and better

showed

consumers

be a pronounced disposition to pack more conserva¬
tively, which has not always been the case in the past.

middle

particular segment

ployment and individual income, and
continuing high levels of expendi¬
tures for goods and services by both

any

productivity,

characterized the past two
years are leveling off.
This is perhaps the most sig¬
nificant dvelopment of all, since it puts the industry in a
position to liquidate inventories in a more orderly and
profitable manner. No one can predict what the situation
will be when the new packs come in, but there appears

Food Industry must grow in order to ^erve the
increasing number of people. It must grow still
to keep pace with the desire of the American peo¬
ple to upgrade their living standards, including their
diets. That provides opportunities for new and improved
more

importantly in the rise. Instead, it
is expected that generally good con¬
ditions in all phases of business and
industry will contribute to higher

The oversupplies that have

oversupplies nor abnormally low packs are
healthy. Oversupplies usually generate a cycle of pricecutting which makes heavy inroads into profit margins,
while a poor crop year means loss in volume and con¬
sumer resistance to the resulting higher prices.
The ideal

boom in

of the economy is expected to figure

were all too conspicuously present in periods of oversupply. There is another defense against the cost-price
squeeze which processors will no doubt include in their
plans—a vigorous program to increase efficiency in both
production and sales.

Neither

Co.

for the economy to reach new high
Encouragingly, this also looks like firm
•;%
■"

ground.

competition throughout the industry as has been the case
in preceding years—but probably without the somewhat
feverish and ill-conceived promotional schemes that

Thursday, January 15, 1959

ever

Manufacturing

forecast

The

BUETOW

Minnesota Mining

ground in 1959.

owners

have

Burton

than

any

saved
We find

money

prior period.

that this business is

are

increasing

fices

growing and we
number of salesmen and branch of¬
give proper service to our prospective

our

in order to

customers.

All reports indicate the State and Federal Government
will continue spending for improvements
necessary to

keep

abreast

the expanding

population.

These

im¬

provements, particularly the highway work, will mean
continued expansion of our business. We now sell road

guard, sign posts and other highway products, as well
fencing, to help regulate traffic and make -our high¬
ways safer.
We have anticipated the continued population growth
as

country and in addition to opening new branch
force, we have increased
manufacturing facilities by adding additional ma¬
chinery in order to step up production. We liave also
invested in machinery and equipment to do more manu¬
facturing than at any previous time. For example, we
now buy rods and draw our own wire which >is fed to
our chain link weaving machines to manufacture fabric
our

offices and increasing our sales
our

Previous to the latter part of 1958, we had
always purchased the wire direct from, the steel mills.

for fence.

Volume 189

Commercial and FinancialThe
Chronicle

Number 5312...

We have also purchased

equipment to manufacture hard¬
previously purchased from others.
Engineering Department has developed a new
line of aluminum die castings and we have purchased
the equipment to manufacture them.
We expect that
these improvements in manufacture and design will fur¬
ther improve our competitive position and will result
in increasing our wholesale business.
In order to further develop our business, we have in¬
creased the advertising appropriation. On the whole, we
are
starting the new year 1959, and looking into the
fittings

ware

adopted by the new Congress convened recently,
fiscal situation will deteriorate faster next year.

our

From

very optimistic attitude.
Our budgets
increase in our Company's earnings in 1959.

with

future,

forecast an

WILLIAM H.
Chairman

of the

BURGESS

Board

expected that, if such
they will be long-term in
multi-year commitments for
the
It is programs of this kind that make the Federal

programs

nature

with

future.

budget
upon

accelerated

in 1959, based
which have already

Federal
been made

Industry

Avionics

commitments

the
budget
for an

for

expanded missile program, and the increasing percentage
of the purchasing dollar allocated to
v
electronic and avionic equipment. •'<
As we move into the space age,
•

•

commitments

Budget

Federal

are

when

reduce

believe

our

form

free

such

1954

expenditures

outside

billion,

action

this category where we find

which

may

popular,

many

even

The

Federal

desirable,

Texas

company's

Gas

Texas

now

Government

the

United

for

funds

into

avoid

decrease

States

can

debt

and

meet

our

increasing

support

general

These

the

Senator

which

changes

(D.)

when

times

are

HARRY

HON.

BYRD

than

country

against

occurring

are

should

men

have

date

analyze

indis¬

the

putable fact that free enterprise democracy is the source
of this country's greatness. There is no doubt that de1
velopments such as those in atomic
energy, rocketry, etc., have placed
us upon the threshold of a new era.
In
addition,
this country
is
experiencing great increase in
population.
While we may have unduly ex¬
ploited our resources, they are still
.

Our

and

productive

know-how
yet unsurpassed.

are

These are

elements

led

of all mankind.
Our free enterprise democracy is
the greatest system the world has

tively for the good

looked. The

demands

this
for

private

health,

finance,

now

subsidizing business,

transportation,

agriculture,

education,

localities,

States,

in¬

izing

descended to

of cheapening

the

Federal

our

ment

and central¬

have

which is obvious,

level of state socialism

barrelage through its
ucts

constructive

lies

free enterprise

the

company's first underground storage facility for

Cincinnati,

Ohio.

Three

underground

will be placed in service along

The

with,

requirement

to become

that we

This basic

weak.

concern,

I indicated before.

democracy is being undermined.

for the future.

In these

underground

storage

soundness

would

Our

In our

line,

Our

further enlargement of underground

attention during 1958

and expansion programs

newly

circumstances, how

well

was

centered primarily

urgent.

immediately.

with balancing the

fear

for

with

company

history, and placing

constructed equipment in service.

exist.

can

the

concentrated

making greater supplies of gas available

We must start Federal

Such recovery must start

enlarging

and

improving

transportation service.

dependable basis and

petroleum

our

soundness

the

future

does

not perpetuate national

Continued

ping inflation.

the

WM V. FRANKEL & CO.
r

•

O R r

un¬

Telephone: WHitehall 3-3960

future.
With

only two bona fide exceptions, we have been on
a deficit financing basis for 29 years.
The fiscal situation
deteriorated faster this year than in any comparable
peacetime period to my knowledge.

Private

Wire to:

Philadelphia

Between January and June, we

moved from estimates
of virtually balanced budgets in the past and current
years

TELETYPE NUMBERS:

to combined deficits totaling $15 billion.
the

present

rate,

Federal

agencies

than $400 billion in five years.

Federal debt of

prospect.
the

This would be

spend

This would mean

than $300 billion

would

the highest national debt in

history of the world.

raise

within
are

the statutory

seven

months.

forewarned.

recent election

Federal
,

limit
This

Some

was

on
was

people

the national debt twice
unprecedented.
are

mandate for

now
even

But wc

contending the
more

dangerous

spending activity.

more programs

for nonessential spending should be

N Y

1-4040-41

N Y

1-2684

is in immediate

During the last session of Congress we were forced
to

(

Broadway, New York 6, N. Y.

national

debt, and spiraling inflation.
This
situation jeopardizes our system of government and our

O RATED

not

solvency and integrity

continuous deficit spending,

through

products
"

budget, reducing the debt, and stop¬

This is my concern.

dollar

checked

fiscal

Efforts were

can we

military preparedness.

Assurance of
now

clean-up operations from one of the largest construction

of fiscal sound¬

assurance

have allowed our¬
requirement of our

have

espe¬

storage at the eastern end of the system.

to all of us as individuals, and
to every segment of our people — labor, management,
agriculture, finance, professions, government, etc.
fiscal

developing

capacity

cially in the Houston-Beaumont area, the origin part of

to our customers on an even more

I think the situation is
recovery

LPGAS

system is equally vital

With

caverns

fractionating and

one

future—economically or militarily; I would anticipate
the period ahead with enthusiasm for my children and
with pride in the contribution of my own generation.
Without solvency and sound money there will
be
neither solid economic progress nor national security

miles north of

storage

will also be concerned with

company

additional

govern¬

hope fully to develop the great potentialities which lie

fiscal

Of special im¬

year.

LPGAS at Todhunter Terminal, about 30

the

subterfuge for sound

enterprise. Its evils are histori¬

present position there is
ness

carrier petroleum prod¬

portance will be completion and beginning of operations

cally documented wherever nations have stooped to it.
Herein

common

pipeline system during the

democracy is

and

money

Government,

if not admitted.
Social

Little Big Inch Division will
concentrating on
building up

Our

dehydrating plant, and truck and rail loading facilities.

process

power

requirement, and it must never be over¬
system is based on solvent government and

sound money.
It is in this
selves

there

But

evolved.

ever

controlling

continual

ahead?

which free

enterprise democracy should thrive,
and proceed soundly and construc¬

Harry F. Byrd

Carpenter

subsidization.

tremendous.

capacity

inflation

destructive

years

The Federal Government is

By the

interest

winter.

increased

one-fourth

Eastern's

the

presently operating un¬
derground storage area for natural
gas, to supply the peak demands of

tax dollar, and chronic inflation

dividuals, etc.

from Virginia

prudent

every

not

democratic government.

power,

does

the purchasing power of our money 52%.
American dollar is now worth less than 48 cents

industry,

accelerated rate.

rates
V

tax

Orville S.

given the economy in
William
H. Burgess
this program.
Taxation based on
the anticipated increase in the
national gross product should continue to adequately
support such a program if deficit spending is avoided.
Therefore, the Avionics Industry will continue to grow
the

present

investment,
prudent business, sound financing, national security, and

supply extra quantities of gas to
customers under long-term con¬

company's

except

Inflation destroys fixed incomes, provident

military spending that could
extremely adverse effect on

ment

have

the Federal debt is now taking more than

bills

by the 1939 index.

govern¬

concentrating

tracts to meet peak market demands.
This
will
include development of

reduced

The

exploration to

space

future

lias

out

cents

of sig¬

Corporation.

from

Interest

will

year

Leidy and Tamarack storage
pools in northern Pennsylvania, con¬
struction of a new pipeline lateral,
loops and a new compressor station.
The added storage capacity will aug¬
ment that of Oakford
storage, the

its

pay

commitments.

another

our

of this nature.

were

Federal

Transmission

Division

election

The

CARPENTER

Eastern

win the
present stalemate of the cold war by
keeping Russian military expendi¬
tures

spending is for sub¬
subsidy programs are bottom¬
less pits for Federal spending and contribute to sky-high
inflation.
Most of the proposals following the recent
'■

and

money,

our

the development of facilities to
expand our new winter
service program, a program designed

domestic-civilian

the

for

And many of these

Revenue

high level. These expendi¬
will eventually be channeled

urgently needed to preserve

anticipate that 1959 will

nificance

75%.

inflation.

ORVILLE

but nonessential.

Much

nonessential

•

President, Texas Eastern Transmission Corporation

defense, atomic
energy and foreign aid categories have increased from
$19.1 billion a year to $33.4 billion. This is an increase

sidies.

government, the value of

enterprise system.

understanding, recent great in¬

spending have not been for defense
They have been for domestic-civilian

aid.

being made for military weapons
systems to maintain technical mili¬

tures at

reduction

programs.

not

tary superiority as well as to

for

crusade

Federal

and foreign

Since

Message of

of the Union

expenditures.

necessity

the

roots

grass

enacted

are

huge

to general

creases

It is in

projected

growth

our

programs

Further

us.

Contrary

Electronic Specialty Co.
;

difficult

of $14.3

President,

and

new

experience

hope the President's State

January 9 will inspire the people of this Nation to a

Our

(237)

page

The Commercial and Financial Chronicle

(233)

Continued from page
R.

urban development and more and better roads.
The lengthening of the life-span of our citizens

banking in Puerto Rico in 1959 is dis¬

The index for

favorable

tinctly

reflecting

the

continued

growth

which is conservatively expected

Puerto Rico's economy

expand at least 7% over 1958.
Capital investment has risen from
below $100 million to $250 million
with an investment per worker ris¬
to

tional rights shall incur

pected,
for

■

supply

of business activity following the rolling

the mainland is still on the ascendency
—it is to be hoped that this will be a balanced one and
not take the form of abortive excesses and speculative
on

overexpansion.
of the expansion is evident by the in¬
telephones standing at over 63,382 versus 52,012
in 1957 and 40,688 in 1956. Also, in the consumption of
kilowatt-hours of electrical energy of 117,386,000 versus
102,300,000 in 1957 and 82,338,000 in 1950.
Income tax collections are at the annual rate of $50,700,000 versus $46,800,000 for fiscal 1957.
:r
Puerto
Rico has been allotted $6,297,000 in Federal

indication
of

•

funds for highway improvement for the fiscal year start¬

1959.

operations have grown at a faster rate than the
economy—loans expanding 180% and private
deposits 130% compared with the estimated 70% in¬

general

crease

the

product and were equal to 74% of
deposits. Puerto Rico's inclusion in the 2nd Federal Re¬
gross

District

serve

collection point also has expanded
the
Commonwealth. The banking system is comprised of 13
the

as a

par

mobility of funds between the mainland and

banks

with

branch

network

offices

over

with

branch offices contemplated.

new

HON.

EMANUEL

U. S. Congressman

the

addition

CELLER

(D.) from New York

The first and most apparent
gress

change

over

substantial

deplore

ideological labels, nontheless,
convenience, most of these new mem¬
can

will

be deemed

play

"liberals."

important

role

for

new

While

purposes

They
in

and nut

these

new

legislation

come

are

fabricating

directed

jobs

and

must

the

result of the

leadership

legislative

positition in the world.
gress can

tive

and

provide

a proper,

Certainly,

our

the

this

involves

Emanuel

Celler

military position

chretaker

foreign aid appropri¬

relative to

will

have

appropriate

spent for the current year for
defense.
In spite of the recent
glow of

convinced
than

that

have

certain

quarters, the country still faces serious domestic
These are not
only economic problems, but
they are the normal
growing pains of an expanding so¬
ciety. The plain fact is that we have
more people than
ever before and
they are demanding more services
Thev
have definitely registered a
protest against the
standpat
conservatism of the Administration.
The people need
problems.

schools

with

enhanced aducational
facilities
better paid teachers. Recent
Russian technological

and
suc¬

cesses, as

exemplified by the Russian
Lunik, have made
aware of the American educational
lag. If the
Administration is not, voters are aware
that educational
status quo is national suicide.
The nation also
us

acutely

the new

wants and

Congress will give them

was

for

1958

history. If

tion's
gear

economy

again!

public housing

year,

do that well

starts
,

going

our

selves

ments

hi)'58,

na¬

increased

casts

our

niques,
share

major

sales

last

year

covered

the

"carry

should

begin

strength."

with

already

re¬

speed that confounds

O. W. Caspersen

But recovery has been uneven and

many

And

indicators

the

pace

slower in

the

still

are

continued

months ahead

below

the

last

peaks.

recovery bids fair to
be
than it has been since last

Until the production index and the employment
and surpass former levels we cannot
say

reach

fully recovered.
indications the production index will recover
completely sooner than the employment index.
Busi¬
we

are

all

benefits

ness

hire

from increased .productivity

increased

period

workers.

additional

and

attention

This

cost

the coming

into

market

operated

company
areas

has

re¬

year.

Industry fore-.,

With

*
a

million

dollar

re-"

Hawthorne, Calif., home of American
Corporation, a wholly owned subsidiary
was

into

eat

the

before

natural

cutting in
production

has

result

recession
new

and

gradually at¬
then

some

named

honor

A. L.
Freedlander, Chairman of the Board, one of the
pioneer researchers in natural and synthetic rubber de¬
velopments. It will be devoted to basic research in
urethanes, by far the brightest star to appear on
Dayton
Rubber's horizon since the
company , built the,^world's

excess

consumer

during the

consumer

has

been

durable

credit.

recession

credit

some

goods

has been concentrated.
had

less

than

does not justify the
The record of

repayments.

impressive.

slow-down and

consumer

executives

Christie

this

dedicated

about

ment

1959.

Dayton Rubber. The center

ex¬

adjust¬

pessimists.

moderate—much

Latex Products

ones

The

Recovery can definitely be marked
starting last April. Considerable

been

of the tire market.

center

said:

should

of the recession loss has

continuation
technical progress and efficient
marketing tech¬
Dayton Rubber is going to get an increasing

Earlier
search

tire

expect higher sales

new

motion

the forces of recovery
to emerge and gather

repayment

■

sulted

but

economic indicators mildly down for
months in 1958. By mid-year

fear

dollar

establishment
of

for

Now what about

virtually 100% tire production at

number

adjustments,

some

high

plant.

1958

impact.

now

Experience

sharper than

was

unemployment.
Because
rising indexes, business sentiment will be good, but
boom conditions—when production and employment sur¬
pass the last peaks—will probably not come before 1960.

">
company's 62-acre Springfield site leaves plenty
of room for future expansion, a move that has been re¬
peated many times in the far flung network of plants.,
As the Springfield operations
grow, there will be a

branches

and

full

progressively

The

successful

The run-off, indeed,
post World War II

pessimism than the

nation.

gradual transition

it takes time for
in motion to work them¬

out

their

ert

two

our

plant lin Springfield, Missouri. When
completed early in 1959, it will be
the most modern V-Belt plant in the

the Dayton

'A';

economy

once

•

multi-million

new

sales,

tain former levels in the production index first and

or
even
closing down some plants,
Dayton Rubber announced it would
a

record

CASPERSEN

efficient, plant and equipment.
All in all, 1959 should see the recovery

In the Spring of 1958 when many
firms were cutting back production

build

forecast for

our

"In

run.

our

do when the

can

with

highest'point in

we can

year

warranted.

forces

that
and

every year.

recession

was

fabricating
Southeastern

1958, opened with considerable apprehension

then

In
.

the

so-called

The

optimism

inancial

money than the
cannot afford the lux¬

economy.

Congress

the Soviet

must have

position
negotiate with the Russians,

the expenditure of

over

recession

would

index

„

think what

left by

;

Administration proposes, then
ury of a false
military

higher standards

year. Preliminary
indicate the firm has topped .-the 1957 record ■
$83,613,850. And it certainly won't stop with
We're
going to continue to
■ /
•
i

sales reached the

effective balance between mili¬

J* strength from which to
if

market.

substantially

the

areas.

through

facts

lower la¬

our

hump and we are
going to keep climbing. During 1958,

be vitally involved in
at restoring America's

carefully studied. We

expects record sales
brighter outlook for the coming

We're

tary and economic aid.
Union will be

CHRISTIE

company

1959.

leadership, nevertheless, something has to be done
this Congress
will, I think, rise to the occasion. I am

ations, that is,

make

living for the decade ahead can come true.
spite of these problems, 1959 would appear to be
one of good business activity, and the
long-range future
appears to be bright.

grow

the

and realistic

got

there

sales

While I do not believe that Con¬
perfect substitute for effective execu¬

hoping for substantial

customers

the

in metal

figures

vacuum

directed

program

programs.

even

foam

how deep and how long the business
recession, under

way,
new

dreamed-of

control.

business cutbacks

President, Beneficial Finance Co.
S. Case, Jr.

President, The Dayton Rubber Company

Administration, this Congress will,
a

the

of vibration

year of

we're

The year,
George

for

before

Dayton Rubber's establishment of
plants and sales offices throughout

greater productivity on present
formation of new jobs.
These problems

be solved

the field

history.

Our response to this problem is to
make, on our ma¬
chinery, items that heretofore have been made by other
processes/ It will be successful, but the overall problem
of few import restrictions on products coming to the
U. S. A., and many import restrictions in
foreign coun¬
tries, needs more governmental attention.
High individual and corporate income tax rates, plus
restrictive depreciation allowances prevent the accumu¬
resources

move

gathering our momentum. Operating econo¬
mies and increased production facilities should combine
to make '59 one of the best
years in Dayton Rubber

Meanwhile, we find ourselves priced out of foreign mar¬
kets, even those without high tariff walls around them.

'V.-.v'!*.V

research

Our

our

of foamed in place appli¬

Another bold

of their products abroad because of tariffs
bor rates,
we lose a substantial
part of

Our

jeopardizing

tinued

and

danger signals flying for all of

bushings to
mill rollers. Future plans call for developspecial elastomers for precision, parts and con¬

the future will not

industries.

below

and

Nautilus,
a
potting*

infinite variety

'furniture market

large as they have been in
jthe past, but they still will be sig¬
nificant as we are not curtailing our
There

Navy's

furniture market. The result has been
vastly improved
service and a substantial increase in sales in the
key

Demo¬

independence and status of the Fed¬
eral courts will be
passed.
a

1959.

the

ment of

April.

Court curbers experienced in the last
session will be compounded. In view
of the complexion of this
Congress,
it is doubtful whether
any legisla¬
tion

during

aloft

gone

methane
\

:
to

giant steel

moderniza¬

CLOWES

curbing; the powers of the Federal
judiciary. The difficulty which the

substantially

industry, and its might be one of
^ U •;

the

legislators will be strongly felt
when Congress comes to the consid¬
of

complete; line

'*;•'•

cones

The division markets natural and synthetic rubber in¬
machine parts ranging from tiny

expenses, improving qual¬
bettering service.
Unfor¬
tunately, cost reductions do not keep
pace with higher costs, but, without
the
expenditures
that have
been
made for modernization, our profit
picture would be much smaller or
perhaps non-existent.
As yet, we are not getting the full
benefits
from
our
recent
building
program, but most of these benefits

should

has

foam

for

dustrial

reducing
ity, and

cratic

eration

Co.;

expenditures in

nose

Recognizing the sales potential for highly engineered
molded rubber products,
we
established a new sales
division with a fabricating plant in Three Rivers, Mich*

1958 slump was greater than ex¬

Sessions'

Lamson

86th Congress and give a liberal twist
to the consideration of all
legislation.

The presence of

are

missile

cations.

upturn in 1959 could be more
confident of a reasonably good, year

best.

lation

the last Con¬

number

Democratic members in the House and Senate.

bers

most

for delicate electronic

turers

tion programs are showing results in

U-"'';

Bank

bolt

the

our

Rafael Carrion, Jr.

number are ex¬

tourism dollars.

•

the

industry. >

equipment and wherever
.lightweight structural support is needed. The: division
has stepped up sales of liquid chemicals to manufac¬

Sessions

the

From

agent

the expected

mild.

than

CASE, JR.

President, The Lamson
As the extent of the

pected to break ground soon further
serving as an attraction for the invisible

ing July

\ ^

urethane

sanctions and punishments. Only
Leviticus by

GEORGE

products. Tourism and manufactur¬
ing has advanced at a greater rate
than agricultural production. Three
new
attractive
resold hotels hav*-

be harkening to the voice of

giving liberty to all the inhabitants.'

cation with new distribution outlets
created by thriving Supermarkets for
vegetables, fruits, poultry and dairy

■

resulted

foams

That Act imple¬
but limits enforcement to

Amendment,

14th

the

ments

then will

crease

rhave

Civil Rights Bill stronger

judicial decree. Civil Rights legislation must be expanded
so that violations of a statute guaranteeing equal educa¬

Agriculture, once the mainstay of
the economy, is going forward with
modern mechanization and diversifi¬

adjustment

•.

than the Celler Civil Rights Act of 1957.

(

The recovery

■'•
,-V
rising tide of urethanes virtually engulfed the
company's sales department. The growing number of,
potential applications for urethanes outstripped
the
mushrooming demands. With the formation of a Plastics
Division, the coordination of the company's Marietta,*
Ohio, and Hawthorne, California, production facilities

need

million.

Thursday, January 15, 1959

'The

Congress will concern itself with legislation to accom¬
plish this goal.
Engraved on the rim of the Liberty Bell in Philadelphia
are the words of Leviticus—"Proclaim liberty throughout
the land to all the inhabitants thereof." To make good
that proclamation, we

ing from $4,000 to $8,300. Labor in¬
come has also risen and is now $670

been opened and a

first synthetic auto tire jn 1934, seven years before Pearly
Harbor gave it dramatic significance to the man on the :.
street.

has

presented us with a new problem in providing for our
aged. It also provides us with the opportunity to develop
these citizens as a new, productive force in our society.

CARRION, JR.

President, Banco Popular De Puerto Rico,
San Juan, Puerto Rico

Naturally

there

has

increase in repossessions
areas

But

the

seasoned

anticipated.

where

unemploy¬

increase has been

finance

company

•'

The consumer not only kept up his
payments, but,
contrary to the expectation of some, the heavy load of

did

debt

not

recession.

lower

consumer

buying

power

during the

For various reasons, in spite of the

recession,

disposable personal income—that is take home pay with
the tax bite taken Out—is actually several billion dol¬
lars higher at an annual rate than in 1957.
And

consumers
have
not been
salting the increase
in any greater proportions than in 1957. In the
year of recession they spent at an annual rate in excess
of last year. The sustained spending by consumers has
kept the recession from sliding into a dangerous tailspin.
Only they haven't been buying the same things. They
are spending $2.5 billion more on soft and non-durable
goods and $6.5 billion more on services than last year,
but they are spending $4.5 billion less on automobiles

away

and

other

While

consumer

staples,

durable goods.

durables; have not
doing well, other durable goods with sales appeal
have been doing very well.
Sale of farm and home
freezers, built-in electric ranges, electric water heaters,
among

consumer

been

and

food

Because

waste

they

rabies indoto

disposers exceeded those

haven't

bought

much

of 1957.
consumer

last y.ear^consumers .haven't used,

du-

.quite

Volume 189

Number 5812

much consumer credit.

...

There has been some run-off

course, there
is always the spectre of further sharp
inflation which unquestionably would cause an increase
in the average loss payment without a commensurate

ill consumer credit receivables.

Cyclical swings in the purchase of consumer durable
goods

inevitable with,

are

use

the

nature

credit.

consumer

durable

swings

are

inherent

velopment

goods.

drawn

over

period

more vulnerable to cyclical
vulnerability is in the nature of

fluctuations. But
durable
to buy

economy

in the

and-not

them.

which

a later year.
This de¬
primary insurers' in the
they have been striving

ever seen.

Of 1958 will continue through the

coming year, recording *

steady but not spectacular gains. Naturally, retailers as
a
whole will expect their volume of sales to follow

An insurance company seeks its profits not only from
its underwriting activities but also from its investment
income. In the investment area the industry has turned

through on this gradual, upward trend.
But volume by itself is not enough if the margin ol
income and
profit is unsatisfactory. In the year just passed, many
gain.; This phase of an insurer's operations is
^Indications are that automobiles and other consumer
directly dependent upon the overall business economy - companies, in both industry and merchandising, includ¬
durable goods will be more prominent in 1959 consumers'
and if 1959 shows the generally expected improvement ■ ing some of the best known firms in the country, saw
in
national
their profit margins squeezed.
budgets. That means an increase in the use of consumer
T
economy,
the operating figures and the
credit in.1959,'
^". balance sheets of -insurance companies will benefit ac- r
.;.,•
...y,.-.r..v-.W
I believe that the challenge for 1959 will be for ca¬
cordingly. >
;
•
;
pable, aggressive management to insure both the volume
;
.
..
y
WALKER L. CISLER b,'
and the profit necessary to give the stockholders a fair
*T
The; fortunes of the' American professional reinsurance
return on their investment and at the same time provide 1
President, The Detroit Edison Company • ;
^ industry are tied closely to those of the primary com- the capital funds for the orderly growth that the future'
The Detroit Edison Company looks toward 19597 in !:; panies.1 If what seems to be the probable improvement
m primary
I have confidence that this can v
underwriting results takes place in 1959 the *" will surely require.
Southeastern Michigan, with measured optimism. Dur•
^• reinsurers could receive benefits to an almost propor- • be done.
irig the final weeks of 1958, as the automotive Indus:
tries began to achieve their planned production sched- yVtionate degree. ; .
L. L. COLBERT
•
ules» industry generally experienced
a
definite
upturn, and
there are
President, Chrysler Corporation
;
GEORGE L. COBB
signs that broad advances in general
After a year in which automoble sales dropped far
y
President, S. H. Kress & Company
l-'ypBbusiness • activities are under way.
below the average of recent years, there are many inJBefore. making a forecast for 1959, I think it well to
least one automobile manufacdications of a substantial improvement in the market for
*urer bas
increased its production
emphasize that in any given year the economic trend, be
cars during the
coming months.
it. good or bad,'will not be uniform in its application
iPNBfr&ft'jl
scbedules for the next several weeks.
Although it is always hazardous
to various types of business, nor to individual companies *
'II,
W■
We see a modest increase in home
to make predictions about the size"
in any particular field. One of the
i^^Bl•* building and are anticipating that
of .markets, and especially about the
about 27,000 new homes will be com^reat strength of the variety store
automobile
market,
present
signs)
*• pleted in our service area in 1959.
chains, such as S. H. Kress and ComWR"r
indicate that this year the industry'
This is not up to the figures of 1955
pany, is the fact that we cater to
jj|
2
could sell about a million more cars '
,-the broadest possible mass consumer
^|^H { and 1956, yet is about 23% more :'v
at retail in this country than in 1958. *
^ban the 22,000 homes which were
%|r market, and the tremendous diver- ;
The estimated number of retail sales
of merchandise which we offer
completed in 1958.
All results so
^53 °i; passenger cars in 1958 is approxiBHPHNMMHII
far point toward a continued growth
JHL; Ajf/.i:1 to the public is legendary — and
vt
mately 4,600,000, including imported
Walker
L.
Osier
in the domestic and commercial apgrowing more so every day.
carsWe
Chrysler Corporation
/ ■■■
•
pliance sales as well as in electric
It is also true that there never was
believe that in 1959 the total will
A
heating.
7; 'time when competition was keener"
be in the neighborhood of 5 V2 milVThere has been a decrease in commercial business
■
in the mass distribution of goods.
in the larger urban districts of our service area. How¬
lion* And with
combina■
Food 'chains
are
selling non-food1 Hk & *
tion of market factors, it could go
ever, this has been more than offset in the development
items;" discount - houses are multi«■■■
as
high as six million, including
of commercial businesses in the large shopping centers
L. L. Colbert
'Plyi11^; variety stores are frankly
about 400,000 imported cars.
of the suburbs.
Considerable construction activity is
invading the department stcre field;
Here are some of the reasons for
lieorge l. Cobb ' and drug stores seem
anticipated in 1959 for office and service purposes. This,
to sell most
of course, means to some degree increased opportunities
anything.; Downtown merchants are ► anticipating a good market for automobiles next year:
the

goods,

;

attention

Speaking now of 1959, I believe that the healthier
business tone which became apparent in the second hall <

the

pay more

has

leave

'vigorously to extricate themselves.

will

publicizing the true economic factors that have given »
America the highest standard of living that the world
to

premium rates until
state* from

sad

same

utilities which can
of time.
This makes the

that in the future management

would

increase

the widespread

without,

These

Such durable goods are bundles of
be

(239)

The Commercial and Financial Chronicle

use

consumer

•

of "consumer credit
"•

*-v

„

' ■' *V.^

excellent result with respect to both

capital

•

...

(

■

•

,.,

for

employment in service type jobs.
the industrial field, further diversification

banding together in joint promotions to

and

changing industrial pattern is being experienced through
the greater utilization of the natural resources of South¬
eastern Michigan. A large new cement plant and a sili¬
con
mining project are examples. The established in¬
dustries which -are reapproaching normal production
levels have plans for further capital investment though
it' seems'unlikely at this time that many such projects
will be activated before the last half of the year.

Through research and development, many new appli¬
cations and uses of electricity are rapidly moving for¬
ward.'New horizons are continually opening up for the
use of
electricity in the home, on the farm, in retail
business and in industrial production. All of these, we
believe, will mean continuing growth.
JAMES
v.

President,

(1) The 1959 models have been well received by the
public. Helping to excite the consumer's interest are

meet the com¬

petition of shopping centers in the suburbs.
; While
the greater publicity has been given to the
technological advances of industry, the current changes
M

many

in methods of distribution and retail selling are remaking
the commercial map of the nation.
Obviously these
conditions place an increasing premium on the skills of
scientific4management.
" 7

bigness can
bandied
predict

produce, and strange economic theories are
around, such as getting more for doing less. I

advances. The newand more important

model year in the history of the automobile
business with the single exception of 1955, and they
should continue to be an important market stimulant

(2) Hundreds of thousands of prospective buyers post¬

any

Without regard to the efficiencies that only

attractive features, including basic re¬

than in any

mistake has been made in the past, it is the
fact that management has concerned itself so much with
selling merchandise that we have not given sufficient
thought -to, selling the free enterprise system which
makes the whole thing possible. Bigness gets criticized
If

and

new

styling and numerous engineering
model changes are more sweeping

their new-car purchases during the months of
economic uncertainty in 1958, and we believe a sizable
poned

percentage of these people will be in the market for new
cars in 1959. Retail sales over the past six years have
averaged nearly six million a year, but the widespread
.

...

Continued

on page 40

CATHCART, JR.
Corporation

Reinsurance

General

">In the field of property and casualty risk-taking, one
has to be somewhat guarded in making forecasts.
Un¬
foreseen events of major proportions such as a number
of wide-sweeping windstorms, or a sharp inflationary
swing in the economy, can turn a
year of marginal profit into a year
of underwriting loss. This is true not
only in the case of an individual
BFFI
company, but for the insurance inW
-

MEMBERS
NEWYORK STOCK EXCHANGE

MIDWEST

STOCK

AMERICAN

EXCHANGE

STOCK EXCHANGE
(ASSOCIATE)

7 Nevertheless, the American insurance

reinsurance

and

developed

capital

industry have

resources

and

protective techniques of risk spreading to a point where the market
can
successfully
withstand
shock
losses, at least up to the cost of those
which
have occurred
in the past.

Hk
Wmpi
&<$>W

unlikely disasters of even
greater magnitude and also barring
a
marked
drop in the purchasing
Barring

power

able to

of the dollar, it
assume

considerable

that 1959 underwriting

improvement

the last three

Incorporated

A- Cathcart, Jr.

seems reason¬

years.'

over

results will show
during

those witnessed

•/

property and casualty insurance industry has
been travelling through its worst historical cycle during
which many millions of dolars of underwriting losses
; The

A sustained p^ripd of underwriting
generally sets the stage for a "Succeeding period
of satisfactory results.
Adversity inevitably forces an
improvement in general rate structure; a reduction in
costs of marketing and processing; discouragement of
much uninformed and reckless competition to the point

have been suffered.

Underwriters and
of

Public

and

Industrial

Municipal Securities

losses

Utility,

Distributors

nee

1912

elimination; and a more sympathetic understanding
the part of rate regulatory bodies (regulatory agen¬

cies being political in nature are reluctant to impose
higher rates on the insurance-buying public, but in the
final analysis they are even more reluctant to allow
an inadequate
rate level to threaten solvency of weak
insurers).
These

factors

have

for corrective action

all
to

been

reflect

work.

itself

takes

WMM mmm
BOSTON

time

insurance oper¬

ating results, but during the latter part of 1958 we have
seen an
improvement in operating figures and there is
reason to hope that this trend will continue in
195.9. Of

CHICAGO

other

Illlii

The Commercial and Financial Chronicle

(240)

weather

postponement of car buying pulled 1958 sales well below
It is reasonable to expect that, with im¬

this average.

conditions, 1959 will come closer to
being an average year lor the automobile industry.
(3) Throughout 1958 there has been a strong and
steady demand for used cars, and used-car prices have
this is clear evidence of

firm. We believe

remained

could

itself

express

1959.

sales

new-car

transportation

strong, continuing demand for automobile

Higher used-car prices will also mean better trade-in
vaules for the new-car buyer.

(4) A great many consumers are in an excellent fi¬
nancial position to purchase new automobiles if they
choose. Personal savings have risen steadily since the
first quarter of the year. Personal income is at a record
level. And throughout 1he year automobile installment

have

been

paid off faster

than new debts were

assumed. From October, 1957, to October,1958, there was

decline in automobile installment

steadier

faster and

debt than in any 12-month period
War

since the end of World

II.

(5) There is evidence that 1959 will be a very good
year for business generally. The national economy is
showing many indications that it will continue its re¬
covery from the recession and expand steadily, though
perhaps only gradually, in the year ahead. Surveys in¬
dicate growing confidence among both consumers and
businessmen.
And
improvement in confidence could
mean

real

lilt

for

business

general

automobile industry in particular.
Here are other recent signs of

and for the

economic

strength:

Consumer spending is at a very high rate. Present rates
of expenditures by Federal, state and local governments
at high levels. Factory producton has shown definite
gains in recent months. Liquidation of business inven¬
are

tories is tapering off, and in some industries there has
been a flow of new orders to replenish
dwindling stocks.
Residential construction activity is high. And expendi¬
for

tures

industrial

new

plants and equipment in the
first quarter of 1959 are expected to continue the
up¬
ward trend which started in the present quarter.
The car buyer is being presented with a
very wide
choice of brands, models, colors,
engines, suspensions,
transmissions, and prices. In addition to the 16 makes
and

237 models of U.

at least

55 different

S.-built cars, he can choose from

of imported cars in a wide
of prices. And cars produced in this country are
giving him the greatest variety of body styling and the

broadest

range of

optional equipment he has

ever

en¬

joyed.
this

wide

selection

of automobiles, and with
working hard to make up
for a below-average
1958, competition for the customer's
favor will be very active. We at
Chrysler believe 1959
will be a good
year for the automobile buyer. We think

manufacturers

will

and

able

that fits his

means.

should also

dealers

find
And

he likes and

|Car

price

that is good for the buyer
good year for the industry.

year

HAROLD

COMFORT

President. Borden Company
The year 1.959 will

Earmngs

should

sales should

good year for our company.
an
all-time high, and dollar
a

reach

be close

to,

might possibly exceed, the

optimism.

healthy

This will have

disposable
portant

The year

1959 promises to be the biggest year in our
Substantial increases are expected in Gross
National Product, national and personal income with
history.

some

our

income,

the

well
to

(1) In

should increase by

ac¬
Harold

(3) Construction
that of

Comfort

markets

tion,

The

beneficial

rate

our

effect of

these

consumer

acceptance in the

areas

non¬

met

in which

They should be in national

of the

rate

under

the

rate

expanded
somewhat

will

program,
similar to

that

of 1958.

(5) Interest rates will continue at high levels and
possibly increase further. Tight money policies on the
part of the Federal Reserve in an effort to avoid the

inflationary

increasing

this

factor

outlook

The

favorable.
the

will be a significant
Inflationary pressures are sig¬

bank earnings should be ex¬

COPPERS

for

the

food

industry

Sales volume should climb to

1959

new

very

levels and

at which the industry has moved in recent
years should pick up additional momentum in 1959. Not
pace

hard

hit

the

year,

benefit

food

from

recovery
There
of

some

industries

goods

other

general
underway.

are

economic

expected

shortages
in the

ahead.

commodities
The

food

plant and equipment has
up-to-date

consumer

during the
past
business stands to

the

now

agricultural

year

industry's
been

never

productive. These
factors, plus the steadily increasing
demand
of
a
growing population,
should assure the industry of a ready
market for a greater abundance of
food products.
Competition in our industry will

George H. Coppers

intensify in the coming year. The
keen
struggle for shelf space and
position in the retail food outlets is never-ending, and
it will heighten in 1959. We will have to make heavier
demands of our marketing plans and strategies to suc¬
cessfully meet stepped-up competition. Advertising and
marketing efforts will have to be boosted to stimulate
consumer interest and buying.
Food

processing companies and manufacturers are
and more research, activity which should

doing

result

the

products.
had

pressure

respect.

economy

come.

GEORGE

rolling

and

last part

overall

President, National Biscuit Company

discount

some

year

rela¬

(4) Continued increases in savings are anticipated at
commercial banks and other institutions, but the rate
of increase may be slightly lower than in 1958, especially
if consumers increase their buying as anticipated.

)

our

construction
Another

for

two

chemical

increasing population
our

chemical

years,

plant
and

constant

Consumers
better

product

program

introduction

have

come

and

new

expect

better

them

prepared to deliver.
But
can
be allowed to proceed

and

new

will

ready

America

consumer

incomes

sales. With some
of homes equipped with
refrigeration, many with

freezers, housewives
their

are

groceries.

cream

and

than

1959 as a materially
and the best year yet for the
they are right, and I think they

helter-

interest

rates

banks

year

for

the

tors

and

The

changes

repeats

itself,

interest

rates

and
in

using
can

1958.

every

hope for

gins.

Interest

the

low

rates

they

today

farm

new

For those who

electric

greater

factors

growth

are

behind

sales.

set

records

new

buying their

Unseasonable

summer

will

growth

manufacturers

ductivity

in the earning assets of commercial banks. It
noteworthy that total loans outstanding at all com¬
combined

actually

higher in
the recession year 1958 than in the boom
year 1957. In
the year to come, a rising trend for business
presumably

will

add

business

needs

for

averaged

bank

credit.

en¬

couraging economic climate, furthermore, will stimulate
the purchase of new homes and automobiles which
will
in turn be accompanied
by more demand for real estate
and consumer loans.

Some

during
banks

observers, noting the expansion of bank loans
postwar period, are questioning whether
be willing to add to their loan
portfolios.

the
will

They note that the ratio

All

willing to

can

;

fight with 5
fine year.

wage this

CORETTE

per

the

Average

and

customer

projected
use

per

residential and commercial customer

side compared with the

banks

are

customers

consumption

Sidney B. Congdoa
years prior to the 1930s.
A favor¬
able economic climate in 1959 also should
bring further

mercial

relentless.

sales all
expected to record
highs during the coming year.

the

were

still

available resource to improve performance }.
success in the fight against tightening mar¬

vigor and determination, 1959

are

average be higher, than

must

industry is looking forward to another record-breaking
performance with residential, commercial, industrial and

If history

will

waste

President, The Montana Power Compariy

usually' does,

1959

With the Nation's economic recovery expected to con- '
tinue at a moderate rate in 1959, the electric
utility-

that

usually

policy

war

economy.

partly

the

com¬

President, Edison Electric Institute

rise
along
This partly re¬
flects basic supply and demand fac¬

with

The constant pressure on margins will increase the
necessity of finding better and more efficient methods,
not only in production but in every aspect of the busi¬

their customers prosper.
why an upward trend
benefits

balance

proper

established, popular varieties with which most food
are closely identified.

reason

business

nation of methods and costs in all phases of our opera¬
tions. No company, however strong its present position, '
can afford the luxury of complacency.
Only those firms '

Ohio

1958

economy.

regard

in the food field will have to continue the close exami-

CONGDON

business analysts visualize
year

without

operations

South

rising

milk and ice

be, it also is going to be an excellent
banking.
As the servants of the
business
and
family
units which
make up the overall economy, banks

with

continue at

should

the monetary authorities.

expand.
We are planning both to
enlarge
diversify chemical foreign operations during 1959.
completely integrated methanol plant in Brazil,

cream

the

This applies especially to housing which
one million dwelling units.
Tight money

factors

now

increase

One

1959

under consideration.,

ice

and

should

on mortgages
are
slightly
expanding housing construction.
Local government construction for schools and public
services should equal that for 1958. Highway construc¬

prosper
our

marked in the

field,

90%

1958.

should exceed

creased emphasis to our cheese business.
In the industrial

cellent

production

will

moves

has increased.

should benefit

prices, however,

y-y.

growth in earning assets,

10% from the 1958 levels and should

expected. Livestock
tively firm.

overall

products, now in the
laboratory stage, should be ready for test marketing
before the coming year is over. We will
also give in¬

stream.

yy/y

(2) Total agricultural income and cash farm income
will be almost equal 1957 totals, but net income will be
possibly 5% lower than in the excellent year of 1958.
The huge crop surpluses hang over the market at least
the first six months.
Lower soil bank payments are

better

distribution in the first half of 1959.
Several other significant new

under

activity.

1959 suggest it also will be a good year for banking.
With interest rates at a favorable level and a moderate

industrial

1959

economy by limiting its
but rather to gear the supply of credit
growth in the economy's physical volume

In summary: Good prospects for the

approach the all-time high reached in December, 1956.
Most mineral production will be slightly higher than in
1958 with an upward trend both in production and prices
of metals in significant contrast to one year earlier.
Lumber production should continue the increase which
started last June; demand for housing and other con¬
struction materials are significant in this respect.

Most
our
organizational
major realignment of

they have been introduced.

Our

mortgages

Chairman of the Board,

However, earnings will be higher since

continue

half

another, repayments

installment loans already outstanding are

large that the relending of those funds Will take care

living
stable.

first

the

finance

objective is not to starve the

Ralph J. Comstock
costs should
be
relatively
Patterns in
segments of the economy should be somewhat as follows:

and

somewhat

For

needs.

consumer

credit supply,

increase

will

incomes

Consumer

cash

to the rate of

high

new

1959 probably will be
For one thing, banks
all of the expanded

excessive.

monetary authorities logically may be expected
acquiesce in the moderate banking growth which
would be required to finance full recovery in 1959. Their

The National City Bank of Cleveland,

coming year.
Two of our major new
products—Super Starlac
fat dry milk and Instant
Whipped Potatoes—have

and

than

called

levels with possible decreases in unit
costs.
Profits
should
be
larger.

food

We have
terminated some unprofitable
operations.
This has resulted in a slight decline in dollar volume for

with excellent

will

Sales

1955.

rather

The

from
October,
1959, should be
quite similar to those prevailing
from
late
1954 through the
early
part of 1955. Automobile and hous¬
ing development, however, will not
be quite so dramatic as they were
in

the

not

ness.

marketing procedures,

will be

seem

of most of the loan demand in those classifications.

1958, through June,

SIDNEY B.

ming from these changes will be reflected in
operations.

moves

would

growth, as evidenced by the fact
1920s the ratio ranged between 65%

cash requirements of business, inasmuch as greatly im¬
proved corporate earnings will fill a substantial portion

trade

and

duction

will

and

continued

but

adjustment that always

of profit

with

compared

October,

Furthermore, loan growth in
moderate

will increase at the same rate,
upward adjustments
which began in the last quarter of
1.958 are anticipated. Trends in pro¬
omy

is about over;
the economies and efficiencies stem-

1958.

corresponding somewhat to that of

Not all segments of the econ¬

1957.

million.

im¬

purchase

pe¬

last

Nevertheless, there

recovery.

during

(7) Employment will increase by one and a half mil¬
lion, unemployment will decrease by more than one

companies such

47%

was

70%.

predict

initiated early in 1958, have
already
shown encouraging results. The
riod

of increase

the rate

durable,
rising population trend

and

that
and

Security Bank of Idaho, Idaho

President, First

company.

Changes

1949

climate
in
1959.
beneficial effect on

favorable

structure

banks

panies

The

also

the

Retail trade should be good including that of au¬
tomobile sales.
Stable prices are generally anticipated.

consumer

factor

non-durable,
goods.

Thursday, January 15, 1959

to be room for further

COMSTOCK

(6)

for my

reasons

Economists

business

mercial

38% in October of 1954 when the economy was coming
out of that recession and 30% in the comparable month

skelter,

several

are

two

past

•

nificant factors.

record levels of 1957.

There

the

■

RALPH

deterrent

With

the

favorable.

brands

range

sales

cream

historic weather cycle, however,
hopeful that the coming summer months will be

are

ice

affected

has

Viewing

years.

proved economic

debts

•
.

Continued jrom page

which

■

•

of loans to deposits at all

com¬

anticipated
see

expanded

that

in 1958, and it is
industrial use also

distinct upturn in 1959 as

and
use

To meet

seek

increased

pro¬

lower costs through
of electric power.

the

predicted increase in

the demand for electricity, the elec¬
tric utility industry expects to keep

right

J. E. Corette

on adding to America's power
supply during the next 12 months.
Last year, investor-owned power companies
invested
$3.8 billion in new plant and equipment, or $100 million
more than they invested in 1957.
Construction expendi¬
tures during 1959 will at least equal the 1958 total, and

Continued

page

Number 5812

Volume 189

The Commercial and Financial Chronicle

...

(241)

not

Second Successive Annual Rise in Death Rate

The

States, due to widespread outbreaks of respiratory disease,
following epidemic of Asian influenza, reported by Metropol¬
itan Life Insurance Company statisticians.
Mortality from
diabetes

and

cancer

unchanged

from

the general death rate for
higher than it

the United States is
was,

the

in 1956, the statisticians of
Metropolitan Life Insurance

Company report. The rise is due
largely to widespread outbreaks
of respiratory disease in the early
months of 1958 which followed the

War II

World

The

however, was
quite moderate. The death rate for
1958 is estimated
to be 9.6,per
1,000 population—the same as it
was
for 1957—which is only 2%

country

has

1,000.

and

per

influenza

from

pneumonia in

States,

rose

markedly

will

1958

1905,

our

narrowed

disparity

suc¬

these dis¬

for the year as a whole will

eases

investment services in all fields are
dealers

York and

New

our

Chicago offices which have direct private wire connections
offices in

fifteen

principal Canadian cities and London,

England.

result of the

Exchanges

enable

Canada

execute

net

orders

prices

all

United

Stock

States

The

and

found

Biddle &

while their de¬

serve

Wood, Gundy & Co., Inc.
Now York

Chicago

incidence

two

Montreal Stock Exchange

Exchange
Stock

Exchange

A. E. Ames & Co.

disease

the

Limited

UNDERWRITERS AND DISTRIBUTORS

the

A. E. Ames & Co.

1 9 5 8

However,

concentration

saw

these

A. E. Ames & Co.

unvaccinated
points up the need to accelerate
the
vaccination
program,"
the

Incorporated

Toronto
cities

Beetm

New Ymrk

mortality

BUSINESS ESTABLISHED 1889

1958
continued at the extremely low
level of the last few years. Al¬
though 1958

Head Office—36

ENGLAND

14 CITIES IN CANADA AND

OFFICES IN

the

among

Exchanges

Members T or onto and Montreal Stock

relatively high proportion of
paralytic-type cases.

the

was a

"measles year,"
in

increase of nearly 60%

frequency over 1957, the

case

number

Limited

principal

poliomyelitis

years

Childhood

Wood, Gundy & Company

the

deaths

relatively

was

CANADA...

small.

Mortality among infants is ad¬
versely affected during periods of
high incidence of respiratory in¬

King St. West

1, Canada
London, England

of Canada and in

How

fections, and consequently the in¬
fant mortality rates in 1958 and
1957 showed no improvement over
that

1956.

your

This is the first in¬

our

past experience can be

guide to its future

the long period of

terruption in

rapidly declining rates. Neverthe¬

Does your

raise

Company want to

capital in Canada?

If your company

plans to establish

Our

less, the 1958 infant mortality rate
is about a sixth lower than that

underwriting and distribution of Canadian

recorded 10 years ago. Maternal
mortality has not changed appre¬
ciably between 1957 and 1958, re¬
maining at the very low rate of
about 4 per 10,000 live births.

in Canada—and if you

expand its busi¬

wish to finance this

by issuing securities—we invite
Business Development

you

move

consult

our

and Com¬

ment

Limited, with 16 offices throughout Canada and
a century

% i'A i.

decrease

the

reflects

from

motor

of underwriting and distributing

outlook

excellent,"

"The

trol

private wire

memberships in all Canadian stock

'fY/.Y'.
my,

changes,

accidents

vehicle

ac¬

for

the country's

health in 1959 and the years ahead
is

our

system, coast-to-coast network of offices, and

can put you

ex¬

in immediate touch

with the Canadian markets you

need.

We provide prompt, accurate service to
American

cidents.

Our Canadian affiliate, Nesbitt, Thomson

nearly half

securities, combined with
'

little lower in 1958 than the

"The

pany,

from

long and specialized experience in the

before. Part of the improve¬

year

fatalities

Department.

toll

death

The
was

ness

Stock Ex¬

Jan. -15th will -admit
David A. Dawn to limited part*nership.
*
*
change,

Canadian

reflects in large
part the effectiveness of the Salk

past

with

bers of the New York

Investment Securities

methods of

the statisticians.

say

major task ahead is the con¬
disease, especially

of chronic

banks, dealers, and institutions

interested in Canadian Government,
o-i

Municipal and Corporate securities, and
maintain active markets

on a

Net U.S.

basis where desired.

diseases of the circulatory

experience, offers prompt, efficient service and accu¬
rate,

up-to-date business and financial information. In

addition,

we can

and timing

provide competent advice

new

the

type

issue financing that will best meet

system
which have become
increasingly important with the
growth
of
our
population
of
and

cancer,

elders.

benefit
health

your

company's current requirements.

Please call

The
as

nation's

various

services

health

programs

continue

for

30 Broad

insurance."

Canadian

New York 4

HAnover 2-8875

140 Federal Street, Boston 10

HAncock 6-3355

Affiliate—

W. C. Pitfield &

With Patrick Clements

25 Broad Street,

Street, New York

HAnover 2-9250

Members

NESBITT, THOMSON AND COMPANY, INC.

Pitfield&Co.,Inc.

de¬

velop. An important factor
in
promoting the use of these serv¬
ices is the rapid growth of health

write Mr. Murray in our New York office.

W. C.

will

Co., Ltd.

of the

Investment Dealers' Association of Canada
<

•

.
.

•»

(Special to The Financial Chronicle)

Associates—

HOLLYWOOD,
Smith is
rick

now

Clements

Calif. —Ira

affiliated with Pat¬
&

Associates, 6715
Hollywood
Boulevard. He was
formerly with James L. Fallon

Co.

Hugh Mackay & Company
Member of all Canadian Stock

;

Childhood

and

Branches

Governors

Butcher
Sherrerd; John L. Bradbury,
Dolphin & Co.; and John P.
Dempsey, Kidder, Peabody & Co.

Mortality Continues Low
Members

Canadian

Blair

Company, 42
Broadway, New York City, mem¬

statisticians comment.

Wood, Gundy & Company
Stock

Pacific Coast

D. H.Blair to Admit

;

James W. Heward,

margin the 5,894 cases reported in
1957, the statisticians estimate. In
sharp contrast, in 1955 about 29,000 polio cases were reported, and
in
1952 nearly
58,000. The low

affiliated with

Toronto

and

Stock Exchanges.

B. Brock,
Secretary;
Seward, Yarnall,

Co., Treasurer.
to

New York

the

Alexander
Co.
Inc.,

Carroll

Names
were:

encouraging.

newer

number

cases

Poole, of Poole &
nominated
for
Vice-

in 1958 exceeds by a small

cases

"The

funds if desired.

The

FRANCISCO* Calif.—John
Searcy has been added to the
staff of Dean Witter & Co., 45
Montgomery Street, members of

annual

Orpheus

the

treatment.

vaccine.

facilities

These

Stroud

taken

ward

Club's

Donald

Co., was
President;

been

are

the

Club, Philadelphia.

finitive evaluation will take time,

present prospects

Feb. '5,

tuberculosis

that the mortality from

ap¬

available to institutions and
to

ceeding months, and the outlook is

proximate that for 1957," the stat¬

Established in

level, and

sugar

held

meeting

Drugs

recently

SAN

•'

effective in controlling the blood-

The

our

"The death rate

have

orally

the early part of the year. In the

rate

below

been

particularly for

1957.

Dean Witter Adds
(Special to The Financial Chronicle)

has announced.. The election will

half of all deaths in the

over

United

in succession

mortality

account for

now

He ward, of Butcher &
Sherrerd, President of the Club,

mortality from diabetes in
likewise was little changed
that

President

for

James W.

The

from

Bodine; John H. Derickson, Jr., Blair & Co.; Walter D.
Fixter, J. W. Sparks & Co.; Rus¬
sell W. Schaffer, Schaffer, Necker
& Co.; and Russell
C. Schuler,
The First Boston Corp.
'

Pa.—Charles

Municipal
Bond
Club
of
Philadelphia for the coming year,

certain sites among women.
,

Crouter &

the

Continuing its long-term down¬
trend, the death rate from
decreased slightly to
7 per 100,000 in 1958, it was re¬
January-March period of 1958, the
The tuberculosis
death
death rate from diseases of the ported.
rate has dropped more than 50%
heart, arteries, and kidneys was
nearly 600 per 100,000, an increase in the past six years and about
of 8% over the like period of 1957. 75% in the past decade, mainly as
well

the all-time low of 9.2 established

the

which

kidneys,

above that for 1956 and 4% above

now

impact of the epidemic was

particularly
great
among
older
persons with chronic disease. Con¬
sequently, the death rate from
diseases of the heart, arteries, and

increase,

tection of cancer,

1958

the antibiotics.

in 1954. For 11 years

pre-

prior to the
of sulfa drugs and

years,

widespread use

epidemic of Asian influenza in the
closing months of 1957.
The

immediate

the

vailing

nominated

been

isticians state. In view of the in¬

of William H. Hobson,
DeHaven
&
Townsend,

Jr.,

E.
Hoerger, of Merrill Lynch,
Pierce, Fenner & Smith, Inc., has

creasing proportion of older per¬
sons, who are the chief victims of
isticians note. "The mortality from cancer, this record may be viewed
as
somewhat encouraging. Some
these causes in the two years is
are
being re¬
the highest in about a decade, but significant gains
corded as the result of early de¬
is still less than half the level pre¬

1958, for the second year in

row,

PHILADELPHIA,

almost

Nominating Committee was

composed

Receives Slate

cancer,

for

tically at the same level in 1958
as in the preceding year, the stat¬

slight decline from accidents. Outlook for country's future
health regarded as excellent.
In

from

accounts

now

one-sixth of all deaths, was prac¬

with

year,

mortality

which

The

Phila. Mun. Club

Cancer Toll Constant

Moderate increase in general death rate in 1958 for United

appreciably different from

the rate for 1957.

Exchanges

The Commercial and Financial Chronicle

(242)

Continued jrom page

COX

of capability
brought into service, of which 10,200,000 kilo¬
13,600,000 more kilowatts

will

by electric power companies.

watts will be added

merely the beginning of a rapidly-

The 1959 estimate is

in our
To

expanding economy.
the

serve

1957 level.

domestic customer totaled 3,385

high and 211 kwh over 1957.

new

During the post-World War II period, use of

electricity

has been increasing at the rate of about
10% per year. This long-range trend was interrupted in
1958 due to a decline in manufacturing activity but
by industry

coming

other

tax-free

government and

1959, it will be more

During

agencies.

inform the
American people on the benefits they receive from free
competitive enterprise and about the disadvantages of
tax-free government encroachment. In this campaign to
bring about better understanding on the part of the
public in problems that are vital to them personally, the
electric utility industry will not be alone because all
important than ever before to educate and

bonated beverage industry seem
the results for the fiscal year

Although

for

dividends

On June

to be substantiated by

1958.

in sales and

duty of 1.7 cents
The

increased

production from

West

noted that labor

bottling plants will

John J. Cott

which they serve.

the

fast

has

the

Spain, Malta,

The increase

industries

which

northern

areas

Master Fran¬

coun¬

West German

South

Florida

take

General business adjustments presently

under

effect

way

the

con¬

permits

state

truck

Florida

crops.

Caribbean

area

The

decline

early 1958
where.

and Latin

not

was

Bank

further opportunity

is presented to

debits

trends

sales

tax

available

well

skilled

climate also

same

;vast cattle
within

market

countries

late

in the Miami

the

first

the

which

same

1957

and

area

else¬

months

nine

1958

period

increased by 4%.

year

ago.

The average

1950 has been about 7%

employment, construction

collections,

indicates

slowed down to this lesser pace.

developments is the

other allied products.

ment of

warm

occurring

severe

new

progress

the

activity

and

expansion

has

The bright spot in these

being made in establish¬

industries in Florida.

large share of the

weather during the Summer of 1959, are positive forces

industrial growth is taking place, in Dade
County giving

which should result in

greater balance to

banner year for 1959.

I believe

that other industries have passed through their periods

in the immediate past and although de¬

Miami economy which

has been heavily dependent upon tourism.
is

hardly

popular winter tourist

curtailment of buying power has not greatly affected soft

year.

If soft drink consumption is continued

at its normal rate,
we

for

have
the

warm

of expansion and

stated above, if

Summer in 1959, the earnings picture

carbonated beverage

interesting.

business should

very

our

the

season

business

national

economy,

other periods of the

For this reason,

South

growth.

apparently

activity

banking
tential

Today, there

recovery

accelerated.

and

With

traditionally

noticeable difference in activity between the

pressed conditions affected some consumer buying, such

Florida

here

the market with

and

ability to

the

time*

same

keep its product
preferences and-

exclusive one-quarter inch recessed
In the first four months of 1958, this

high filtration Parliament offering the exclusive ad¬
a

recessed filter sold

almost

billion

ciga¬
had

•

companion
in another
way the new and increasing\attention which the company
and the industry give to marketing. The step coincided
with the introduction of a newly re-engineered and more
effective Gold

Introduced

should

again

in
be

tremendous

Crest Marlboro filter.

nationally in 1955

as a

••

'■

popular-priced filter

cigarette concentrating on flavor, Marlboro, in 1958, con¬
tinued its steady sales gain?. In its first year, 1955, Marl¬
boro became a national leader selling 6 billion cigarettes
compared to the 283 million cigarettes sold the year
before

Marlboro

1958 the brand

changed its brand personality. During
enjoyed sales of approximately 21 billion

cigarettes.
Morris

also

recently added a new marketing
advertising for Benson & Hedges, its
premium price quality cigarette. The advertising explains
dramatically and simply that by paying more for Benson
& Hedges a smoker gets more in the form of a custom
quality cigarette. In today's improving national economy
and with the increased number of
smokers, there is a
definite place for a premium priced,
premium quality
cigarette such as Benson & Hedges which combines a
high quality product with a unique package and appeal.
While

based

its

early reaction to this

successful,
on

too

early

new

approach has been quite
definite predictions

make

present sales increases.

Additionally, sales of the company's brand cigarettes
continue to maintain their industry position
among nonfilter cigarettes which now share the total
market almost

equally with the filter brands.
In

1959, Philip Morris Inc. will broaden its scientific
opening of the new McComas
Center in Richmond, Va. This will
give the

research horizons with the

Reseaich

the most modern facilities in the industry and
anew the expanding role of research in
prod¬
planning and sales.

company

emphasizes
uct

underway

the outlook for commercial

presents

sales

•Philip

for

cigarette
company's

phase with consumer
Y
Philip Morris completely re-engineered and reblended
Parliament as a high filtration brand and placed it on

Further study of the economy, as shown in

push sales forward, geared to the demand for food and
These facts, combined with

the

constant

dimension

business

higher than for the

each year.

such

drink purchases.

demand.

W. Crum

Ralph

American

rate of growth, however, since

of adjustments

line

Marlboro, which broadened its appeal to smokers last

The

growing

June when it also appeared in a soft package
to its now famous flip-top box, demonstrates

producing various kinds of

areas

of total

Harry Wootten, the industry's accepted independent
analyst, recently reported that this new Parliament has
made the greatest percentage gains of any cigarette in
1958, 235%.

establishing plants in

are

40%

....

rettes at popular retail prices. This was as many as
been sold during the entire previous year.

Miami is the focal point.

dustry. However, with business adustments under

demonstrate

vantage of

thriving citrus industry

and intensified

ranges

tinued forward progress of the carbonated beverage in¬
way

our new

of filter

growth

other nat¬

advantage

Bank deposits have also

■

' \v..- '
high filtration Parliament ciga¬

%,<'

....

success

filter last January.

recently, aircraft, electronics, engi¬

figures.

the

provides

the

were

other industries,

in hous¬

manpower and warmer climate.

short time at least four

or no

conditions

public

new

January, 1958, and the continu¬
ing sales gains recorded by the company's filter-tip Marl¬
boro
in the
popular price range dramatize the fast-

steadiest

attendant expansion

rette first introduced in

growing

one

of total volume.

they represented approximately

ago,

year

sales.

area.

ural resources.

activities should be significant

closes, should have little

For

•'

In times like these, banks should

during future years in changing our sales and earnings

1958

economic

they want is the most significant event of 1958 for
industry, for this is the basis on which esti¬
now being prepared on 1959 predict a further gain

and in 1958 accounted for about 47%

CRUM

neering and similar industries

be operating in the

alone. These growing

utilize water, timber and

Germany,

and

rebuilding of stocks. It should be
negotiations in the U.S. copper and steel

number of smokers.

in the industry's sales this year.
Philip Morris Inc., 1958 also was another year of
encouraging progress and marks the fifth consecutive
year in which both earnings and sales topped the previ¬
" ous
year's totals.
This reflects mainly the new and
greater strength and popularity smokers have accorded
the company's cigarettes in a highly competitive market.
Thus, the approach of 1959 finds our company in par¬
ticular, and the industry in general, in positions of
strength and high optimism.
The industry's capacity to cater to the rapidly chang¬
ing tastes of a continually growing smoking market lifted
cigarette sales in the United States to an all-time high
record of about 428 billion in 1958.
The previous peak,
set in 1957, was 409.4 billion cigarettes.
The increase is
nearly 4.5%..
'
Y
:
Sales of filter-tip cigarettes continue to set the pace
;

longer play a passive role but must show aggressive
leadershp in order to guide the progress of their com¬
munity.
In no other area of the
country does this have more meaning
or
importance than in Florida and

the

Mission Division throughout all

Within

during the

demand,

market research

of 3%

ing into Florida include pulp, paper
and chemical plants concentrated in

further indicated by

tries in Free Europe.

care

by about

the cigarette
mates

needed employment. Industries mov¬

executed with Adam Consolidated Indus¬

our

take

tastes

criminating

tries, Inc. for the manufacture and distribution of Mission
Products for

coming

properties

new

adequate

1957

continually ;
YY
development of this ability to give the customers

The

what

utilities, etc., we have
also attracted an increasing number

distribution and the interest in American soft

chise recently

area

Cullman, 3rd

increasing

industries will be opened in mid-year.

ing,

Kuwait, Lebanon, and British East Africa.

drinks generally is

should permit needed

for

In our particular company, we
new inroads in such coun¬

in foreign

will

year,

pound.

/new

have made

Newfoundland,

1951

supply of copper in 1959, available from
production of existing properties as well as

Florida

countries is continuing to grow rap¬

Jos.

long-term population growth trends
in the Nation.
Together with this
rapid influx of new residents calling

necessarily follow usual economic
conditions but depends upon climate.
Soft drink consumption in foreign

tries

1,560
effect since

world

particularly

does

business

our

1,730

1,350

the legislation

1958

30,

suspending the duty on copper imported into this country
expired.
This resulted in the automatic imposition of

Miami

not

idly.

1,190

__J_

(est)

•-

ciga^Y

topped the previous

by which the industry has been able
to meet successfully the highly dis- ;;

the

1,575

increas¬

The fact that

tion to product and

President, The First National Bank of Miami, Fla.

recession caused reduction
most
manufacturing

that

1,367

4.5% dramatizes the extensive atten¬

result

Foreign

Commercial banks reflect

published financial
reports during 1958, the soft drink
industry coincidentally suffered from
reduction in earnings although the
gales picture did not necessarily fall
into line. This past Summer, the soft
drink business suffered drastically
from unseasonably cool weather, but
despite this fact, domestic sales in¬
creased, substantiating my previous
contentions

1,466
1,278

1956

1957

RALPH

who

companies

become

has

all-time record set in

The

last year regarding the car¬

I made

good

that

expect

U. S.

area

that

which

rette sales in 1958

supply, and prices had
the abnormally low

industrial production, greater automobile sales
building construction. We anticipate that
the foreign demand will continue to be good, although
not as good as in the record year 1958.
Figures on de¬
liveries to fabricators for the last three years in thou¬
sands of net tons^ahd .estimates for 195^

President, Cott Beverage Corporation
Comments

ulation

and increased

COTT

JOHN

was

sales record in 1958,

new

ingly selective.

from

improvement.

industry face this problem.

business and

demand

industry conquered the
challenge of a growing smoking pop¬

month's

one

This, in turn, led to the industry's
the company's 1958 peak sales.
To set

of rising

toward government

from

competition

unfair

and

than

cater

the cigarette

By" the

U. S. demand will increase

1959

In 1958 the

year.

individual company in

and

producers'' stocks

less

with

1958

it continues to combat the trend

control

C»x

will bring problems for the industry

year

point reached in the first quarter.

during the coming year.
The

the
the

their

to- increase

year

recovered

loads

industry looks forward to increased industrial

the

increase
in
and before

improved.

prices
the

consumption,

Charles

industry, developed the ability
successfully to continuing
changes in consumer demand.
,•
/

production. Also in the sec¬
half, the extremely; low world

balance

stabi¬

Curing 1958, average annual use of electricity per
kilowatt-hours, another

lizers.

copper

companies

amounted

residential use per customer

built last

industry, and Philip Morris

The outlook for 1959 is for further 0

of the industry's most significant built-in

one

for

end

The constantly increasing
is

brought

ond

pected to continue at the rate of more than three million
annually and, with new family dwelling starts in 1959
estimated at 1,200,000, the industry has* a sound basis

era

copper

foundation

rates of

Contributing to this demand was the addition of one
million new customers, more than 85% of whom were
new
residential customers.
Population growth is ex-*

for optimism.

firm

the cigarette industry
of further long-range growth
and

the

copper

\VY Y'>W:v

out into

enc* of the year it was necessary for

billion kwh over the

of 10

increase

in the second half of the
improvement in general busi¬

demand

in 1958,

the requirements of defense establishments,
the electric industry generated 641 billion kilowatt-hours

electricity,

Philip Morris Inc.

move

based

production.

reduce

: will

1959

However,
ness

including
of

year

of its electric customers

needs

companies generally

copper

CULLMAN, 3rd

President, Philip Morris Inc.

just closed was a difficult one for the copper
industry. In the first six months the domestic demand
lor copper declined to a point where it was necessary
for

Thursday, January 15, 1959

The year

growing expansion program, and in 10 years the electric
utility industry will be adding more than 20 million
kilowatts per year to keep abreast of consumer demand

JOSEPH F.

President, Kennecott Copper Corporation

approximately

The company's diversification
program, launched in
mid-1957, took a second step forward last April with the
acquisition of Polymer Industries, Inc., a company well
known

the

industrial

adhesives

and

textile chemical

po¬

Continued

page

Volume 189

Number 5812 .The Commercial and Financial

Continued from page

ous
injury to any domestic pro¬
ducing interest. The easy way out

facto¬

American-controlled

from

excess

protection,

had

ropean-type

automobiles are al¬
ready causing some alarm.

tion

imports.
point'

competitive

this

where

the

reached

policy

can

United

the

of three pol¬

one

Congress

the inclusion of

all

trade

insisted upon
"escape clause",

revert to

policy of protectionism
to
that which prevailed

similar

Under: between the close of World War I
which has been and the Smoot-Hawley Tariff Act
companies, since most of the for¬
strengthened several times since of 1930. That this would be a dan¬
eign plants probably will be es¬
tablished by larger corporations. 1947, the President is authorized gerous policy, in view of the bi¬
impose polar non-Communist — Commu¬
c
The establishment of the Euro¬ to increase duties or to
nist world
in which we live is
pean Common Market, therefore, quotas, if necessary, whenever any
underscores the need for a flexible import increases t to a point that fairly -evident.
the Tariff Commission ascertains
Second, we can continue our
foreign trade and tariff policy.
The United States will - need to seriously injures, or threatens to avowed policy of reducing tariffs
to stimulate foreign trade and to
negotiate realistically with the injure, domestic producing inter¬
ests.
Congress has been increas¬ reestablish a multilateral trading
ECM and other countries for
prompt tariff changes. There is ingly fearful of tariff reductions system* Were we to follow such a
considerable
doubt whether the as they have become more and policy consistently and ruthlessly,
more
meaningful.
however, a number of weaker in¬
present Trade Agreements Act and
Ever
since
1934 emphasis has dustries and establishments would
Program is adequate for the pur¬
been upon the reduction of tariffs be displaced by imports. Although
pose.
.J"',
rather than upon the increase of the number of workers displaced
r
U. S. Foreign Trade Policy
imports, so that, at the present would be relatively small, it would
painful to them.
Practically
From the close of World War I time, we have the phenomenon of be
to 1930 the United States raised the United States (as well as other speaking', such a policy would be
countries) trying to reduce tariffs politically unthinkable at the pres¬
its tariffs until
th^yi reached the
without actually increasing com¬ ent time.
\
highest point in their history.
We could, however, pursue such
In
1934
there was an
abrupt petitive imports. Much of the ef¬
fort
of
the
inter
departmental a policy but, while doing so, adopt
turn-about, with the passage of
the Trade Agreements Act and the committees that are charged with some sort of "adjustment assist-,
the
responsibility
of preparing ance" program for easing the ad¬
inauguration of the Cordell Hull
trade
agreements, has been de¬ justment of the capital and labor
Reciprocal Trade Agreements Pro¬
voted
to ascertaining which tariffs that would be displaced by im¬
gram.
Under this Act the Presi¬
dent was
authorized to make can be reduced without injuring ports to other lines of production.
Such a program was proposed in
agreements with other countries domestic producers.
All of this is an integral part of ;a minority report of the Randall
for the reciprocal reduction of tar¬
iffs and for the amelioration of present trade policy, notwithstand¬ Commission and has been embod¬
ied in a number of Congressional
import quotas. Between 1934 and ing that the rationale of a multi¬
bills. Such an arrangement is pro¬
the close of World War II many lateral trading system is that in¬
this

clause,

ternational

trade

should

develop,
made. The
as
closely as possible; in accord¬
that such reduc¬
ance
with what economists
call
tions would lead to increased in¬
ternational trade and, ultimately,1 the Principle of Comparative Ad¬
Expressed simply, this
to the re - establishmment of a vantage.
world-wide
multilateral
trading principle means that countries will
system, at least for the non-Com¬ gain if they concentrate their pro¬
duction and exports on products
munist countries.
such agreements were

vided

for

tion

Economic Community.
Third, we can abandon

upon

alto¬

gether the idea of stimulating in¬
ternational trade along' the line of

comparative

and

advantage

em¬

international

neva

was

conferences

the

fol¬

years

most

the

"water,"

concluded

settlements

the

during
o

multilateral trading

the

preliminary

number of
"Some

cases.

received

workers

3,300,000

deferred

under

and/or

negotiated in earlier
.

hikes

Rate

supplemented by cost-of-living adjustments in

were
a

showed.

estimates

but effective in 1958.

years

"Raises most often averaged 12
10 workers

with six out of
amount'.

majority

cents

hour,

receiving at least this

'•' V'*,

increases

cost-of-living adjustments

;;•'••••

;

VT 1 1

"""%

other,

system.

than

negotiations also-received increased supplementary
benefits."—U. S.
These facts
ters

are

doubtless

are

regarded in

indications of "social

But

Department of Labor.
many quar¬

progress."

they? Does that not depend upon other

facts not cited—whether,

for example, these wage

earners

increased their contributions to

at least

proportionately, and whether they

were

already receiving

not

production,
were or

larger share of current

output than their part in production

warrants?

HARTFORD

ORS*
.

;

*•
EQUITABLE'S

NEW, YORK

■

\
PHILADELPHIA

WIRE SYSTEM

PRIVATE

SOUTHERN

LINKING

EASTERN

AND

MARKETS ./

produce many lines,
textiles, pottery and

compete al¬
price basis.
high-quality

products that
exclusively on
produce

can

want to avoid seri¬

Such

policy might be incon¬

sistent, at least in a narrow sense,
with
the unconditional most-fa-

We Are

Actively Interested in all Issues of

voredmation

and

policy

bilateral,

involve

would

polyangular,

BROADER MARKETS.

agreements with respect to speci¬

ARKANSAS MUNICIPAL BONDS

trast

Firm Offerings

Firm Bids

fied products and specified coun¬
tries. It would lead to an increased
"channelization" of trade in con¬

Quotations

envisioned by

present

lead to increased trade..

Practically speaking, the United

STEPHENS, INC.

States

philosophies

STEPHENS

114

East

Stephens,

Giss,

Founder

Doyle Jones

LOS

Ernest Butler, Jr., Asst. Secretary & Asst..Treasurer

Guy Freeling

J. William Trimble

Murrelle Watkins

Raymond Thornton, Jr.

Charles Hemann

George L. Cook

•

■

E..

Sam G. Harris

Kennedy

ANGELES,

Gill

Kenfield

Bryan Sims

Henry Moore

system

with

the

Any

will put you in immediate

office

entire network.

has
E.

joined

EQUITABLE
Securities Corporation

Calif.—Eldon

DALLAS

ATLANTA

the

Kennedy,

staff

6363

was

with McCormick &

Co.

shire
:

wire

up-to-the-minute

(Special to The financial Chronicle)
..

Joins, K.

Spcretary-Treasurer

private

markets,

and faster execution of orders.

Equitable
touch

extensive
broader

Bell Teletype LR 181
-

the

clear, positive foreign trade policy.

George W. (Skeets) Dickey, Vice-President.

Jack T. Stephens, President
W.

the

represented

for

is, we fall short of having any

Little Rock, Arkansas

Telephone FRanklin 4-8241

Vernon

between

choose

second and third alternatives.

BUILDING

Capitol Avenue,

can

Equitable's
makes

quotes,

(Formerly W. R. Stephens Investment Company)

BETTER EXECUTIONS

unregulated

avowed
policy of
"equal-treatment." But, it would

Inquiries Invited in Local Securities

•

open,

kind of trade that is
our

the

Wil-

formerly

■

1958

of the workers covered by

products, including many kinds of
machinery. It would be possible
for us to make agreements with
such countries providing for the
limited
importation
of
certain
kinds of goods with limited ex¬
emption from the escape clause.

policy is self-contradic¬

increase trade and re-establish

However, by the close of World
II

She

On the one hand, we want

tory.

lowing continued to reduce duties.

War

most

of labor cost and, there¬

Present

series

Japan can
other

fore, most adaptable to countries
having low wage standards.

Tariffs and

(the GATT). and in

other

centage

party to the original

General Agreement on
Trade

Ge¬

conference

result

a
■

year,

unrestricted.

plywood, bicycles and
other products with a high per¬

of multilateral, as opposed
bilateral, agreements. At a large

gram
to

workers, 3,500,000 obtained increases

specialize if trade were completely

hardwood

pro¬

affected approximately 6.800,000
—

these

•v1

competitively. They include such
products as pottery ' and chinaware,
certain kinds of textiles,

of tariff reduc¬

embarked

and

"Of

pean

which

were

In 1947 the United States accel¬
the tempo

employes,

estab¬

treaties

the

they enjoy the greatest phasize, instead, trade along the
of absolute advantage.
An
"slashed" from 200%, ad valorem, degree of comparative advantage, .line
relative to other countries.
industrialized country with a lowto 100%, or from 100%
to 50%,
since the law allowed the Presi¬
Yet, the philosophy of "avoid¬ wage standard, such as Japan, can
dent to reduce them to 50%
of ance of injury," to which we are produce many lines of goods com¬
with
our
own,
even
their 1934 levels. In 1945 he was committed, tends to block the im¬ petitive
given additional power to reduce ports which, by the nature of the though they are not always the
lines in which the country would
them to 50% of their 1945 levels. case,
are
the most troublesome,
erated

put

lishing the European' Coal and
Steel' Community and the Euro¬

avowed hope was

tariffs

for about 85% of employes

by major collective bargaining contracts.

workers.

agreements.

cases

year

„

panies and American labor, as well
as friction between small and big

some

negotiated

were

bargaining situations, each covering 1,000 or

■

adopted,

between

this

rates

These

icy lines.
injure domestic producers.
:
First, we can abandon altogether
In 1947, the same year that the the idea of tariff-reduction
and
new
multilateral
approach was trade stimulation. We can openly

labor could cause fric¬
the investing com¬

effect

into

covered

speaking,

Broadly
States

"Increases in wage

longer

Possible Lines of Action

been

—

be reduced without

now

tenable.v

Increased

European

have

Good News, or

wher¬

tariffs

reduce

can

encouraging

it became

imports of products
made with American capital and

they

ever

squeezed out of the Tariff Act and
increasingly difficult to
reduce duties without threatening

The increased imports of Eu¬

ries.

been

has

Oui Changing Expoit Position
And Untenable Trade Policy

(243)

Chronicle

•

HOUSTON
HARTFORD

•

BIRMINGHAM

GREENSBORO

•

NEW ORLEANS

PHILADELPHIA
'

322 Union Street

Nashville 3, Tennessee

•

MEMPHIS

JACKSON

Two Wall Street

New York 5, New

York

The Commercial and Financial Chronicle

J344)

Continued

from

not

page

fields for its technical skills and achievements.

will double its present research, manufac¬
turing and office facilities in Springdale, Conn. The
expansion will add 12,000 square feet of manufacturing
area and 8,500 square feet of laboratory and office space.
The expansion is based on an encouraging future backed
by a .substantial increase in sales during the past year
and

The acquisition of

Milprint, Inc., a leading company in
packaging, in July, 1957 launched
the diversification program of Philip Morris.

Philip Morris, with its strong capital structure, regards
its diversification

as an important new
capacity for future growth.

source

program

of added strength and

cigarette industry and Philip Morris are.highly
optimistic about the outlook for 1959. The smoking pop¬
ulation is

increasing and cigarette sales are running at
peak levels, with long-term forecasts predicting contin¬
ued gains and a sales level of 500 billion cigarettes by
1965.
The
benefits
of
modern
research, marketing

manufacturing technologies make it possible for the

CURTICE

HARLOW II.

Motors Corporation

President, General

1959

of good

business

Since the low point of the recession last

stantial

degree

April, a .sub¬
place in most

has taken
The annual

recovery

sectors of the economy.
rate of new housing starts has shown
a

lar

value
been

of
at

construction

record

period of inventory
us,
and the
expenditures
for
new
equipment appears to
is

behind

the

coming

will

insure

1959.

and

ican

scenes in the past. Expanded
growing population, and increasing
of family units,

economic activity, a
numbers and sizes
are

of the factors in

some

our

econ¬

ing.

this

extends

industry

that

will

the

life

whole, I

the

for

best
Louis

say

Dawson

individual's

special needs,
changing economic pic¬
move

the part

for this

reason

1958,

re¬

nomic

uncertainty that is experienced causes most peo¬
ple to think mpre about security. This concern for the
will

ance

result

Americans

numbers

record

during

financial

turning to life insur¬
1959 to provide them¬

rail
all

they

economic
The

People

Harlow H.

Curtice

peak.

new

Most important for the future has been the substantial

improvement in business and
should

effect

consumer

in the months ahead have

confidence.

further

This

stimulating

the trend of various business factors.

Recovery of the automobile industry was hampered
during the latter part of 1958 by labor uncertainties and
strikes. Dealers were unable to build adequate inven¬
tories of 1959 model passenger cars until
shortly before
the year end. Despite

this, deliveries to retail customers
annual seasonally adjusted rate of

were
running at an
approximately 53/2 million units.

anticipate that, with

and with

try itself, this rate of 5Va million units
annually will be
maintained throughout 1959.
That is my estimate of the
number of

passenger cars the industry will produce and

sell in the domestic
market this year.
The key factor is confidence.
It has been demonstrated
time and again that the
public can and does postDone
the purchase of consumer
durable

goods like automobiles

when confidence is shaken.
The

principal

threat

mounting confidence
currently appear to exist is inflation, and
ticularly inflation caused by the pressure of

would

A major

prices.

leaders
creases

nation's

wage

responsibility of business

productivity.

construction

been very much
volume of work

than that of

volume

executed

for

predicted

the

for

the

was

of work

has

The executed

slightly greater

year

The

expect in 1959 will

mechanics.

properly staff
sections

construction

of the dip

assume

added

ex¬

with

coverage.

number of

can

premium

funnel these funds into

DEBUTTS

President,

Southern Railway System

South, and particularly that area
which is served by the Southern
Railway System, is
good.
The "recession talk" going the rounds in 1958
apparently had few, if any, listeners in the South.
Along the lines of the Southern
alone, more than 330 new industrial
projects were undertaken or an¬
during

represents

30%

over

the

increase

the previous year.
announcements
of

training

$340 million and

reflection

they must
If

the

they

country.

have to

were

rate

same

Diversification

their

may

operation

be supplied

that a complete
shipper is another

It would result in faster,

The

must

movement

opportunities

will

the

cheaper, safer and more
freight.

average
measures

report.

report

Department

Among

stated

other

that

the

of
a

Harry A.

DeButts

dur¬

brightened considerably last

in the Southeast
as

whole.

It is

year

with

passage

The Transportation Act of 1958.
However, the industry's
rate of return on net investment last
year was
only

2.7%.

This

"peanuts," when compared with the re¬
turns of other industries, when related to the essential
war,

and when

weighted against the nation's need for modern, progres¬
sive

railroad service.

The recession accounted

labor setup

earnest

the advances of modern technology.

Only a modern suc¬
industry can offer the security to its employees
they want and are entitled to. The situation calls
for a very high degree of statesmanship by their leaders
as well as by those of management.
I
that

The important challenge, the most vital decision the
industry must make, is whether it will be the great
transportation agency of the country or a continually

shrinking, less important factor in the transport field.
If we meet our problems by retiring from every field
where the going is rough, we will deserve the minor
place that such an attitude will put us in. We will de¬
serve the waning interest of the public and the Congress
that will certainly follow such a course.
No major railroad can prosper, can long exist by .it¬
We are basically dependent one on the other. The

self.
fact

that

offer

transportation for people and
important place in the country,
is one of our greatest attractions.
Recognizing our in¬
terdependence, we should be slow to take unilateral
we

can

property to and from

the

matter

any

withdrawal of service, without
can build
we

will

Review of 1958
Economic

conditions have

shown

decided improve¬

ment

during the last quarter of 1958. Missouri Pacific
carloadings earlier in the year were running as much
as 13% behind 1957.
With the upswing in business dur¬

ing the last few months the railroad expects to end the
with loadings down only 5Vz% compared with the
1957.

spiral, adding about $8.8 million to operating
impact of this and other operating costs has
a large extent
by close control of expenses.

The

for

capital

balance,
of

funds,

After careful study by a special
committee, the Board
Directors last August concurred in the committee's
recommendation that merger of the Texas & Pacific

dollar

compared with 61% for the nation

after mandatory
appropriations
approximately $4.5 million.

things,

contracts

outmoded

subject

Missouri Pacific expects to end the year with

Com¬

the

been offset to

II, the Southeast

national

equally

costs.

nature of railroad service in peace and

This should

the

basic.

transport service

upward

ex¬

14,000 new
be provided.

over

As to the railroad industry, its outlook for the future

slight recession

are

Gross revenues for 1958 will total about $290 million,
down 3% as compared with 1957. Wages continued their

these

growth,. according

was

pe¬

improved

Russell L, Dearmont
only
making
privileges that are given to their major competitors, the
picture would be much brighter.

accorded

year

Based

belief that continued rapid industrial expansion is
in store for the South in the
years ahead.

coun¬

year

year,
which
of more than

decrease in the number
takes years of

the

weighing the effect on the industry. United we
a
greater transportation industry.
Divided
surely fail.
*

The outlook for the

ing the postwar period jumped 220%

foresee

successful.

action

HARRY A.

pace

ownership which

record

importance

value of construction

construction job.
of the
country a

now

mean

keep

the economy. We will be in a
greater position than ever
before to supply necessary capital and exert a beneficial
influence on the country's expanding
economy.

this

being felt. This is
the 1957-58 overall
economy.

also

dollars available lor investment by life companies. The
investment activities of companies like MONY will thus

merce

n°t sufficiently elastic

increase

insurance

economic

ecuted for the year 1959
will be at
least equal to that of
1958. There is
limit which must be
placed on the
overall construction
volume.
This
R. C. Daly
limit is dependent
upon the supply
of skilled mechanics
for the installation of
work.

certain

will

recent

the

order

most of the accustomed

during
on

are

increase

outpaced

Because of these two
factors, it is
certain
that
the
total
volume of construction

,tra1de?
wholesale

insurance

Since World War

reasonably

nJzHS*

sickness

and

its recent spectacular advances in

job

Construction volume for
fully dependent upon two

things: contracts
awarded
late
1958;
projects
now
drafting boards.

move toward thrift in personal economic
matters,
bring about still another record high in 1959 by
raising the number of policies bought and the average
coverage of the insured family to a new high level. Acci¬

will

other.

1959

able

ceed

easier in the construction
field than
any

cessful

High income taxes make it more difficult for
family heads to accumulate an estate, or even protec¬
tion for their own emergency needs without
undertaking
speculative risks. These trends, coupled with an observ¬

projects, the total investment will

1959

1958

year

themselves

ago.

nounced

year ago.

for the past
year
1957.

Predicting the volume
be

Fuller Company

Con¬

new

ade

costs

and labor

}

on our railroads
consideration by the
leaders of labor and management during the coming
year.
It is wholly unrealistic to deny the industry the
tremendous potential benefits that may be derived from

that

R. C. DALY
The

avail

guaranteed security

par¬

during 1959 will be to see to it that
wage in¬
are kept in line
with the long-term rise in the

President, George A.

will

■

and for,
failure of the

of the opportunity to
through the use of life in¬
surance at an unprecedented level this year. The
larger
family is once more prominent on the American scene,
and now represents an appreciably larger percentage of
the nation's family structure than was the case a dec¬
obtain

dent

confidence maintained
proper selling effort on the part of the indus¬
consumer

•

minds

business

ume

convenient

have reached

of decision by,

Long outmoded regulations, fed¬
eral, state and local, keep railroads
fairly competing for the vol¬

must.

••

from

they want.

now

be the year

conditions in

reasons

selves and their families with the stability and security

com¬

earnings, but this will not solve
the
industry's problems since
did not originally stem from

national

certain

of return

;V';'

1957-'58 depression

over,

come-is at

a record level, and gross
product on a seasonally
adjusted annual rate basis is almost

the United States.

try that the
riod

economic readjustment we experienced

future

rate

Concurring in the thinking of the

from which is not yet complete as 1959 begins.
During a period of business readjustment, the eco¬

dustrial production and employment
have been moving up. Personal in¬

by the attitude of the

insur¬

security. The

well

may

gress of

determined

earn

own approach to their problems and the
solutions they find therefor, as well

coming months
to meet people's
changing needs and desires. We will offer new bene¬
fits, new types of policies, and expansion of coverages
meet

opportunity to

by the carriers'

ready during the
with new products

cited

with their

President, Missouri Pacific Railroad

sure

can

summer.

the railroad industry, and the success or
nation's railroads in the year ahead will be determined

insurance business is ob¬

last

responsibilities to the nation, the
railroads can make dramatic contributions to the nation's
to
its
economy,
transportation
service, and to its

1959

covery

Spending by government
by consumers is increasing. In¬

Given the
mensurate

also constantly chang¬
significance of this to us

in the life

adopted

modes of transportation.

are

The

303

a thorough study of major
questions of transportation policy. Out of this study, it
is to be hoped, will come the
ground rules that will
enable railroads to
compete on equal terms with other

RUSSELL L. DEARMONT

needs and desires of individuals and

families

Resolution

inequities and authorized

defensive strength.

change

that

appreciably from
year to year. This process of develop¬
ment and change in
our economic
and social picture means that the

the

been

are

the

DAWSON

^economic and social

The year 1959 will see

adjustment
decline in
plant
and

Increasing wage Tates and
rising costs of doing business also are responsible.
the continuing
inequities in public policy with
respect to transportation which continue to "hogtie" the
railroads. Here, the bright
hope for the future lies in
So

government

year

Thursday, January 15, 1959

other

for

1959, we will see a continuance of the evolution
development which have characterized the Amer¬

of Americans

arrested.
and

for

amount

low rate of return last
year.

was

1958

President, Mutual of New York

contracts

have

The

1958

Senate

■"tailor-made"

seasonal level.

The

for

contracted

all designed to keep up with the
ture and shifting social scene.

sharp increase, while the total dol¬

has

fine.

released

rear

ance

year

1959

LOUIS

that

Flint, Michigan

signs point
generally.

volume

The

already

Mutual of New York—and I

Chairman, Genesee Merchants Bank & Trust Co.,
All

alarm.

much

volume

vious; if we are to do our job prop¬
erly, we will have to keep pace with
these changes.
Speaking for my own company—

industry to cater to consumers' changing preferences.

Former

the

burir

omy

The

work
u

the field of flexible

and

half.

and

execution

In 1959

this company

too

cause

fine

Railway with Missouri Pacific should not be undertaken.
The committee pointed out that such an end-to-end
merger of two railroads, would not produce the econ¬
omies which

often

present in

merger

of parallel

However, through subsequent purchases Missouri

Pa¬

cific now owns more than 80% of Texas & Pacific stock.
This permits the filing of a consolidated Federal income
tax return, thus relieving Missouri Pacific of

paying

taxes

dividends received

from

the Texas

During 1958 Missouri Pacific placed 1,615
cars

in service.

dolas
Mo.

were

new

Pacific.

freight

Of this total, 815 box cars and 750 gon¬

built in the railroad's

Fifty Airslide hopper

The

only in part for the railroads'

are

lines.

cars were

growing usefulness of
ments, with its modifications

shops at De Soto.
purchased outside.

own

trailer-on-flat
for

specific

car
ship¬
shipper de-

led to the purchase of 100 new mechanically
refrigerated trailers and 50 tractor units to add to those
already in service in Missouri Pacific piggy-back op¬
erations handling perishable commodities, principally
from the Rio Grande Valley of Texas.
mands,

lines

Its

Pacific

dieselized

completely

had

since

total of 879 diesel

units

Missouri

1955,
its

roster

year's end. with all the road locomotives and most yard
switchers radio-equipped.
Construction
of

begun

was

the

23-mile branch line

new

first

the site of a new iron
Washington County, Missouri.

12-mile

from

run

to Pea Ridge,

section

Cadet,

Mo.,
development in

ore

To be equipped with the latest electronic devices
yard operations, the huge new yard will be

City.

MANUEL

hump

placed in partial service in February.

Gulf Coast territory served by Missouri
In the past ten years some 3,600 new

Pacific continues.

industries, with an estimated capital investment of more
than $1.5 billion have located there. New establishments
and expansions of existing plants during eleven months
of 1958 represented still more opportunities for Missouri
Pacific.
178 new industries with estimated capital in¬
vestment of more than $28.5 million were established,
while 226

expansions, totalling more than $49.3 million,
added to the freight traffic potential of the region.
The

seeking

policy

Missouri

for

increased

trains

Pacific

passenger
traffic
continue.
We will be

will

service and will be looking
for added innovations to popularize our passenger trains.
the

for

alert

improved

Among the various plans instituted to induce passen¬
ride Missouri Pacific trains was the idea of spe¬
cial trains to special events for group movements of

gers to

met

meals have

such

70,000

been

through

served

October

the

successful

Missouri

Pacific's

many

1949 to

from

revenue

while

I957's

the

68% in the
The

local rail
same

from the

revenue

revenues

The

the

Colorado

when

lower-cost

train

travel

had

not

reduced

Pullman

fares

cane

harvest,
lowest

gers.

aboard

tions

all

may

trains

supplemented

with

others

avail¬

the

the prospects

whole,

for

favorable for the Missouri Pacific.

appear

year

set

and

the

effects

swiftly and surely than
economy

other regions.

many

mines and forests

are

raw

big

Company—two dams

mal

levels from

of sugar from the

has been

higher

cane

the

deficient

the

rainfall

July, 1956, through April, 1958, the rainfall

period of the 1959 sugarcane crop

slightly above normal.

addition, during the fall of 1957 and the spring of

1958, substantial
that

means

plowed

the

and

new

plantings of

old,

made. This

cane were

lowryielding

stools

cane

were

higher-yielding plantings were

newer,

Its diver¬

products of agriculture,

in nearly equal balance with man¬

constructed within
Oregon.

The

tral Oregon is a symbol of our com¬

pany's faith in Oregon's future/And
the Pelton and North Fork hydro¬
electric

projects, completed in 1958,

standards

PGE's

recent con¬

struction progress.
We share the faith which all Ore¬
gon
Thoimas

Delzell

electric utilities have in the
growth and development of

future

This confidence is exem¬

state.

plified by the tremendous construction program which
these utilities have undertaken.
i

addition

hydro

projects already

completed

^contracted for large blocks of power from projects such
as Priest Rapids dam and Rocky Reach dam, being built
in Washington

by local public agencies.

tual commitments
believe

the

are

state's

These contrac¬

added proof that Oregon utilities

will

economy

continue

its forward

progress.

Another trend in the industry

which indicates higher

output is the development of new, improved cane vari¬
eties.

Since

and test

requires

number of years to develop

variety, only preliminary results are

new cane

coming from this program.

Excellent results

cated by some of the new canes now

are

indi¬

in the preliminary

Another

toward higher sugar production is

step
is

that

being

now

made

cut

progress

but

hand,

In the years since 1952,

has been made.

most

the

mechanical

toward

The

loaded

cane

is still

mechanically.

research

which

harvester

cane

can

both cut and

load the cane.

There is
years
of

the industry has suffered seriously in the matter

earnings.

1957.

creases

believe

This has

been the

continued in¬

consumption by all customers

spend some $13,000,-

expansion and addition to our transmission and

distribution system during
Line construction

the year.

planned by PGE: includes 48

of transmission conductors and 510 miles of
lines.

During 1958, the utility constructed

transmission cables and 415 miles of
At the

111 miles of

year's end, PGE registered 245^000 customers

Construction expenditures for 1958

took

BOSTON, Mass.

Something to remember...

Whitston

—

of North Fork

$10,700,000

electricity.

totaled $21,900,000.

and Pelton hydro projects

of the total, with the rest going for

transmission and distribution

construction.
'

continued

Continued

page

Bruce S.

affiliated

now

P. W. Brooks & Co.,

with

MUNICIPAL

Incorporated,

31 Milk Street.

TAX AND

Joins Keizer Staff

in Ohio, it's The Ohio

(Special to The Financial Chronicle)

Company for underwriting,

BOSTON, Mass.
Mittell

...

for

sound investment service

has

Keizer

joined

Co.,

—

the

Inc.,

David P.
staff

REVENUE BONDS

Congress

Street.

Inquiries Invited
With Keller Co.

(Special to The Financial Chronicle)

BOSTON, Mass.
in the heart of Ohio,

—

Sheldon A.

connected

with

Freeman

Keller

Co., 31 State Street.

now

serving all of Ohio
1

51 N. HIGH ST.

THE

OHIO

COMPANY
of tht Midwest Stock

Cxckangt

investments
COLUMBUS 15, OHIO

Lee

Walter, Woody & Heimerdinger

Higginson Adds

(Special to The financial Chronicle)

BOSTON, Mass.
Dowling
staff

has
Lee

been

—

403

Dixie Terminal,

Cincinnati

Richard L.

added

Higginson

tion, 50 Federal Street.

the

Corpora¬

miles

distribution

distribution lines.

who used 3.6 billion kilowatt-hours of

been due in large part to two

The first has

factors.

to predict

it is sound

With that in mind, we will

in 1959.

Power

and was 4% to 5% greater than in

in electric energy

Completion

denying that during the past six to eight

in Oregon did not have a

"recession"

remained high

use

000

testing stages, however.

advance

The so-called

noticeably serious effect on the utility business.

With P. W. Brooks

distribution

underway, PGE and other Oregon utility companies have

(Special to The financial Chronicle)

...

pro¬

made.

important

ufacturing and industrial output.

ever

confines

posed $71,000,000 Round Butte proj¬
ect on the Deschutes River in cen¬

ever

production is nor¬

sugar

compared

level for the growing

electricity "on line"—mark¬
construction investment of
$49,000,000—and for the future

largest dam

the

causes.

weather.

some

which had already been cut from

completed

new

ing

our

The first stimulus

were

,'1

planned.

one

1959, however, the sugar output of Puerto Rico is

variety of

Portland

The utility in the past year placed 198,000 kilowatts

979,000 tons in 1957 and 923,000 tons in 1958.

is perhaps responsible for most of this

healthy condition, for the

one

productivity. What is more, the industry is now starting

of the depression

from

caused

Hauling is done under conditions which greatly increase

its

and another

fol¬

was

to be accelerating

seems

General Electric

that

The West-Southwest

territory served by this carrier
recovery

•
'/ '
' 1 1 '
J
The year closing has been one of progress for

MIL

Then, in the middle of the 1958

of recovery

tremendous

1959

Portland General Electric Company
'•

announced its intentions to build the

equipment for harvesting cane,

the

was

been

Outlook for 1959

sified

serious, however,

heading sharply upward from the 1957 level, due to a

ahead.

rates

DELZELL

rains

heavy

1,360,000 tons.

Chairman of the Board and Chief Executive Officer,

period of drought, which affected the

1958 crop.

of about

are

These innova¬

cars.

level

1,360,000 tons in 1952 to 1,138,000 tons in 1956 to bring

served mornings and afternoons

carrying dining

1952

output in line with U. S. Sugar Act quotas, fell further

custom, the "coffee break", to all its passen¬
now

the opportunity the sugar indus¬
try of Puerto Rico has to restore its production to and

costly practice for

was a

largely devoid of rain and

was

population projections, U. S. sugar
indicated at about 10 million tons in

THOMAS W.

Production of sugar,

December, Missouri Pacific introduced that popular

Free coffee is

was

indicates

experienced in the industry.

effect; 23% would have traveled by air, 14% by pri¬
vate automobile and 3% by bus. Only 10% were former
standard Pullman car patrons who took advantage of
the saving offered.

American

This

dry weather continued through the growing sea¬

for the

son

basis

the

1965.

able to harvest and sell

was

million tons of carryover cane

adversely.

very

The

(St.

also

What

lowed by a long

Surveys among passengers in these coach-fare
sleepers indicated that 37% would have used just the
seat

consumption

Sugar Act.

With around

this hurricane

able.

coach

the quota level.
In addition, the island has the
opportunity of rebuilding a normal carryover inven¬
tory to replace that which was wiped out by the dis¬
astrous crops of 1957 and 1958.
Over and above this,
sugar consumption is constantly increasing.
near

August 1956 the industry suffered from hurricane

serious.

increased

made

was

in the fields, the effect of the hurricane winds proved

Louis to Denver) likewise showed an awakened traveler
interest

more sugar was

factor

second

depressing industry earnings has
been the reduced volume of production. By present in¬
dications, however, the 1959 production is indicated at

and processors, so that in the period from 1953

damage.

experi¬

Eagles

during the period

million tons

1957, the industry intentionally reduced its production.

In
on

In fact,

carrying of excess sugar

growers

period.

Thrift-T-Sleepers

market.

shortage of sugar in

The

above the

original higher fares,
those trains

1956, nearly

the U.

under

First instituted
Brownsville, Texas trains, the Pullman
May through October increased 24% in

from

over

protect against

produced than the industry

the Houston to

1958

mainland

the

ments to increase its passenger business.
on

sugar to

excess

most

future,

long-term

production prospects look bright for Puerto Rico.
expanded volume and improved production
facilities, earning outlooks also are favorable, particu¬
larly for the long pull. The recovery in production will
result largely from more normal weather and operating
conditions, but in some part from improved techniques
and practices which have been adopted by the industry.
In the early 1950s, Puerto Rico served as a reservoir

1958.

Honoring coach tickets in sleepers and substantially
reducing Pullman charges on some runs were probably

the

and

both

With

These invariably were well-patronized and paid
off in revenue as well as good-will.
The use of low-

meals for coach passengers in the Eagle trains
with astonishing success. Started in December 1957,

immediate

the

sugar

people.

cost tray

mounting of all elements, of .production costs—wage
rates, taxes, materials, and the like—while the price of
sugar has not gone up. '"
'

VALLE

DEL

both

For

Realization of the vast industrial potential of the great
Southwest and

Chairman, Fajardo Eastern Sugar Associates

Work is progressing on the new multi-million dollar
"push-button" freight car classification yard at Kansas

(MS) ' 48

Number 5812 ...The Commercial and Financial Chronicle

Volume 189

MAin 1-5071

<2461 J

The Commercial and
Financial Chronicle

Continued

from

page

pected improvement in all three major segments of the
of the country.
Our Ansco Division plans to

capture

DIETZ

President, C. I. T. Financial Corporation
U.S.

will

consumers

credit

ment

use

billion of instal-.

record $42.5

$16.2 billion for
will top 1957's record
extensions of credit by a small margin.
Rapid recovery from the recession
*1
and the surge of the economy toward
the peaks of the 1960's will make
including

1959,

1959

good

very

for consumers

year

ahd business.

this

increased

spending

Our

Ozalid

Division,,which

reproduction

machines

better equipped

1959

in government and

crease

leader

sensitized
handle

the

field

there

and

was

business spending.

With

was never any doubt as to the
judgment and integrity of the aver¬
age. time buyer and repayment for
eailier purchases continued, as al¬
ways, on a sound basis. Now some of
of the "backlog demand" from the [ §
slump will be added to other pur¬

GEORGE
Chairman

Artnur

Dietz

;

billion, will

instalment

Total

credit, at $42.5
billion higher than the 1958

$3.1

some

total.

Other durable goods—major appliances and the like—
will account for some $11.7 billion of credit extensions
and

repair and modernization loans probably will total
$1.6 billion. Personal loans probably will total
some $13 billion.

about

Repayments of instalment debt during 1959 for earlier
purchases will amount to about $40 billion. Total instal¬
ment credit
to

outstanding at the end of 1959 will amount,
billion, compared with an estimated $33.4

$36

some

billion at the end of 1958.
Consumer

instalment

increase because
mal"

way

durables

and

most

buy
also

credit

volume

families

now

automobiles

its

use

will

use

and

continue
as

other

extending into

the

"nor¬

many

to be

are

expected

instalment

increasing numbers of

for

cause

and

amounts

concern

long

years of

C.I.T.

that

U.S.

consumer

excellent

his

predecessors.

sur¬

the all-time high

sales record established in 1957.
Earnings were somewhat restricted in 1958 because of
increased operating and
non-recurring costs. We ar*
looking forward to 1959 with a great
deal
our

optimism.

general

the

business

good.

While

upward

1959

solid

year.

1959

three
omy

will

1959

and the beginning of a
highly competitive economy.
In the period ahead it will
probably

panies that will

♦

well

become

structure

times.

It retains

well suited to

operating

and

operating

large corporation.

and

units

are:

Harris

Dayton;-Iiitertype

Philip

Dinkins

spending
replenishing of

inven¬

plants and equip¬

present

buyer's market is expected
competitive because of the increased

the

are

pro-

for

our Dyestuff and
Chemical Division should
because of improved
economic conditions of the
it is aware that
competition will be keener
,n 1959- In anticipation of this the Division
has reor¬
ganized its
marketing and sales departments and its
technical service
organization. The Division will
have
•n

fall

and

early
all

then-same,
man¬

Division,

little

im-

.
.

■

expected
The

result

year

new

oxide

manufacturing fa¬
plant, which are

improved costs.

photographic industry

should

this

rates

the

upward

benefit by the

extensive
In

pressures

member

Thus,

emerge.

growth

The

new

construction

persons

The

not

continued

cement
areas.

has been promoted
now

reserves

rates

money

be summarized

can

are

can

likely

expected

the

plants

may

Much of this

stability in

DONNER

horizon

considerably brighter

now

at this time

a year ago or at
any time within
past year. The recovery from the low point of the
last April has now reached the
point where

can

confident

charts

that

the

eco¬

showing, not a
definite and healthy
are

cement

importation of foreign

incident

most

dealer
-

agreements

new

representing

fourth

adequate in

quarter

new

the

negotiation

employes.

our

the

stocks

the

with the unions

cars

During
of

1958

were

in-

light of the enthu¬

siastic customer response to our 1959
models. This, however,
is a small

price to
ments

pay

that

for arriving

are

reasonable

at agree¬
and fair

and that should represent a construc¬
tive contribution to economic stabil¬

accentuate
new

Over-

construction
or

Frederic

ity during 1959 and the succeeding two
remain in effect.
The

years

Donner

they will

•

remarkably rapid recovery from the

1957-58

re-

industry.

cement

appears' to

;

]

by in-,

recession

by interests outside of the U. S.
in the

was

ficulties

con¬

The automobile industry has been
experiencing the effects of labor dif¬

follows: favor-

times and reasonable

good

economic

than it

Cris' Dobbins

supply in certain

bank

Chairman, General Motors Corp.

•,

wiggle, but a
upward trend.

prestressed precast

industry,

promptly

recessionary periods.

nomic

;

the

struction

by
ex¬

use

rather

statistics

year.

responded

This characteristic

Table

„

Highway System; and;.
continuing trend towards more

concrete.

operating

recovery

store

the Interstate

ethylene

economic

Harris-Inter¬

1956, the industry's best year.
Some of the significant
develop¬
ments during 1958 were: the
gradual
improvement of housing starts; the1:

the

general

a significant part of/
earnings will be utilized in the form of per¬
manent
additions
to
capital
funds.
In
any
event,"
investors in bank stocks can continue to view their;
holdings as "growth" type investments.
Loan demands, which did not rebound quite as quickly
as some experts Anticipated late in
1958, will follow the
economic recovery upward thisjyearlt A marked ihflow
J
of savings to banks, which increased the costs of doing
business last year, will probably be drawn down some¬
what by "temporary" savers as consumer spending on
durable goods increases moderately this year.
Bank earnings performances are once again demon¬
strating a unique characteristic in an economic system '
placing heavy reliance on flexible monetary policies.

in and compiled, total
shipments
1958 will equal or exceed the

rate

Doherty

the

Although some increases can
banks, it is probable that

year.

total of

increased

winter.
of

enabled

DOBBINS

showed

We feel when

While

including

expansion

asset

dividual

provement, but in early summer ;
shipments began to improve and i.
continued at a good level through,

beneiit

operation for the entire

actions
promoted
of the earningbanking system last

■V Bank stock analysts have already begun to cite possi¬
bilities of increases in cash dividends on bank stocks this

Seybold. Division,
Brooklyn;

expected

practically the entire nation gave the cement in¬
dustry a slow start during the first three months. The
quarter

1958.

increase moderately in 1959.

over

second

liquidated

new

duction capacity which

cilities.

Reserve

level,

:This

Money

($58 million

time provides the over-all research, financial and

country,

...

reflect

over

Federal Reserve actions at mid-year in 1958. If recovery
moves faster than
is now expected, additional Federal

competitive
closeness and sensitivity, to
customer.

the

whole

1959

seasonal variations. Although recent evidence suggests that the momentum of the recovery may be slowing, no serious faltering or prolonged levelling seems

being built around the concept of centralized
policy and staff services, and decentralized operations..

requirements

the

for

Harris-Intertype's organization struc-"

appears

widely.

expecting bank financial
on

progress

This

individual

vary

continues
anticipated, money rates can be expected
increase gradually through the year after allowances

growing volume of business

year),

for

Second,

Early in 1958 the nation seemed to be undergoing a
minor recession which coupled with unfavorable
weather

handle

at least two fundamental

are

expense/,

search and development program should provide further
advances in 1959.
fiscal

precipitous declines in money market
rates
during the first half of the
year and
in the face of further increases

Harris-Intertype,

ture

FREDERIC

resulted from heavy
investment
; in new plants and
equipment in the past few years. We
£ plan to meet the competitive
challenge, however with
i*cw and
better products and
by greater efficiency in
operations.
:

for

banking system as
the other hand, because

banks to maintain 1958 earn¬
ings at or near 1957 levels, despite

economy.
Advertising
back as general business

this

the

many

„

ment.
Although we are optimistic about
1959, we recognize that the coming year will be one which
will test
organization, but the same will be true of our com¬

The

gain

continue

monetary

year.

over-all

CRIS

our

petitors.

than

Commerce, Houston, Texas

decade.

asset base of the

the

of the Board,

further "expansion

Dively

Printing, Publishing and Broadcasting
Looking at printing, publishing and broadcasting—the
industries served by Harris-Intertype—the 1959
picture
is promising. Advertising is the main source of
revenue
for these industries, and
during 1958 total advertising
outlays dipped only about 2%, compared to a drop of
for

DOHERTY

First, Federal Reserve anti-reces¬
S.

econ¬

construction of

use

uniformly in all industries
geographic regions, earn¬

will

sion
G.

President, Ideal Cement Company

business

the

all

improvement

will

"hard-sell" future.

10%

Bank

performances

reasons

be primarily those that have
geared
products and organization for

! Chairman

over

statements

their

economically

the

attributed

tories

forward

move

There

be harder to make
profits and easier
to make costly mistakes.
The com¬

Forecasters predict that
will see
increases in

increase in

years.

general business recovery does not

banks

appears

ment

pated

several

in continental United States

earnings performances for

ings

Cleveland; Lithoplate, Inc., Los Angeles; Gates Radio
Company, Quincy, 111.; and the International Division,
including Intertype Limited, Slough, England and Intertype Setzmaschinen, West Berlin, Germany.
"

country, i.e., govern¬
spending, consumer spending
and business spending. The antici¬

for

program, the general
industry could result in the

cement

whole in

and

shortages

type's

expected

major segments of the
of

general, it marked

Cleveland

dramatic

inaugurated

was

highway

to.

National

progress

The Cottrell Company, Westerly, R. I.;
Macey Company,

will experience

agement strengths of

agree

for

the

continue

who

not

nevertheless,

that
in

the

economists

outlook

surge

1955-1956;

the

forecasters

?,hat the country

based

well

consensus

business

that
is

estimates

own

and

This is

able

Film Corporation

Nineteen-fifty-eight sales of General Aniline will

pass

the

Continuance of moderate economic expansion for the
nation this year should result in one of the most favor-

bindery equipment, in improved presensitized photooffset plates and
in advanced designs of commercial
broadcasting equipment.
The company's enlarged re¬

credit

/ :'

;

five and six-color sheet-fed offset
presses, in automated

responsi¬
>

The

the end of the period of
war-induced

last
&

should

the outlook appears good.
New and improved products
recently introduced have
been well received by customers.
Increased interest is
being shown in high-speed magazine presses, in four,

DINKINS

President, General Aniline

moving since

level

10%

;

Ilarris-Intertype

experience in sales financing has proved

the

been

this

on
somewhat broader
significance,
in my
opinion, than its two postwar

acquiring assets and
outstandings are no
credit is soundly extended

manager and will continue to discharge
bilities promptly, as he has in the
past.

com-

however, takes

credit

persons turn

credit

has

1959^

expected--throughout
during the first half of the year

advertising and sales promotion expenditures
to meet increasing competitiveness.
There should be a
corresponding pick-up in volume and profits for wellprepared printers, publishers and broadcasters.

wisely used.

Fifty
at

Large

and

rates

used

than in 1958.' '

bolsters its

to time buying as a sound means of

services.

and

addition

of 5%-to

provide additional impetus.
The 1958 recession,

should

new

The highest annual total of instalment credit exten¬
sions up to this time was $42.4 billion in 1957. The total
was $40.1
billion in 1956 and $39 billion in 1955.
consumer

are

turn in the construction

ing largely from the consumer. Dur¬
ing the latter part of the year, the
capital equipment recovery should

around

valuable

fields.

Rising dollar amounts of

DIVELY

President, Ilarris-Intertype Corporation

with the stimulus

Our auto-financing subsidiary—Universal C.I.T. Credit
Corporation—is the nation's largest independent auto
finance company, and we look for at least 5.5 million
new car sales, with the
probability that the final figure
will be considerably higher.
Studies conducted by the C.I.T. department of eco¬
nomics indicate that consumers will use $16.2 billion of
instalment credit for automobile purchases in 1959, up
1958.

likewise generally

labor

items

;

1956

During 1958 the economy experienced the
deepest, but
the shortest, recession of the
postwar period."
Continued improvement is

for the coming year..

over

and

other

which
*

•

reductions

Costs

possibly

chases to swell total credit extensions

billion

been

sight.

gradually increas-

there

1958., \ 1

exchange.

greater than fcr the current year. The Interstate High-:'
way Program should roach a level of construction toward

year than

have

are

be willing to ignore

may

dollar

secure

either

plants to manufacture reproduction
machines, sensitized
and new and improved
products, Ozalid expects
not only to maintain
its position in the field but also
improve its operating costs.
-:r[c '
On the whole, 1959 for General
Aniline'rshould be

substantially better

ing plane and this pattern of inflation can only be offset
b3' higher prices or by further mechanization
which, of course, requires large capital outlay.
The prospects for 1959 are that cement use may be

new

papers

job dislocation,

some

order

industry

Although many persons deferred
pUrchases during the 19.57-58 slump

none

will
expected in¬
papers,

the

their governments

ducers and
costs

There

and

disturbing factor in some areas. It is unlikely
shipments of cement into the United States can
profitable to foreign producers except as the pro¬

proving its present product line.
of

Thursday, January 15, 1959

that

by
with

power

instituting more intensive selling efforts coupled
the marketing of new
photographic products, and im- '■

some

automobile purchases. This amount

minor but

economy

ARTHUR

Continued

page

Volume 189

Number 5812

...

higher "price" for gold find them¬
selves in a contradictory position.

TO THE EDITOR:

LETTER

the

Mi. Johannsen's Letter on Gold

field

Higher Price Contradictions

more sense

low.

contradictory position.

credit dilution than there > would be in redefining milk to; take ^4$
into account watered milk supply. ; He asks when would they
.

^
-

the

have been loans
or

redefining milk—when it Contains 99.0% water. Recom- ;
advocating
.of'and retiring Federal Reserve ' ,' ; weight of

Amends ceasing the issuance

V t ^ Notes and/or loan-created deposits that impair the; financial t >
aualitv of dollar rather than ihe opposite riiellicd of devaluation:

must

from the

loans.

revenues

point out

leaders in Latin

many

for

the need

'social develop¬

ment':; they contend that the lack of housing

stitutes

their

They hope

the reduction- in the
gold in a dollar, - they

repayable either from tax

earnings of the enterprises meriting the

Beyond this, however,

America

If-they recognize that by urging
higher "price," they are actually

Limit!

only natural that most of the dollar credits

which have been made available in Latin America

commodities.

cease

gold is the only sound
they
"price" of gold is too

On the other hand,

Well, if gold has a price, it
and if it's not money,
it's just another commodity. And
it certainly is 110 function of the
government to fix the prices of ;

"It is

is not money,

He writes there is no:
in redefining the dollar to take into account money- •

themselves in

claim

dollar devaluation place

Mr. Johannsen maintains advocates of

and claim

There Must Be

hand, they come into
monetary disputation,

one

money.

Hits

(247)

The Commercial and Financial Chronicle

available

•

support such advocacy with
cogent reasons why the monetary

method

ifor

struction.;"

serious

most

can

home,

con¬

single social problem.

be found to make credit

hospital,

and

con¬

unit's;weight should be reduced.

"I feel that

If the weight in a dollar
be.

i.lRecent discussions on
and
as

Financial

Chronicle,

well

other media,-are indicative of
the semantic

problems.
confusion

the

"dollar"

word
in

Johannsen

makes pretensions to
a

restricted

form

whatever is ..money.:} ^. y
f°u is money, then the so<£lled pnce'ofgoid occurs as
e IeSj
^ definition of the
Jord doUar.'^Any cl?,ange in the

inter-

national gold bullion standard, the

only acceptable definition is that
of the so-called

tablished

"gold-dollar"

es-

proclamation

1934.

re-definition of the word "dollar

But

the President
Jan. 31, 1934, a

(48 Stat. 1730)

"dollar"

was

defined

"grains of

pure

dollar

the

Prior

1934.

dollar

13.714

was

re-defined

was

that

grains

23.22

the

time

pure

changed

was

only

years

ago,

monetary
structure has been diluted through
faced

that

and

u.'s,

Federal

form

issuance

the

our

Reserve

the

deposits,

and loan-created demand

becomes

therefore

that

and

take

to define the dollar to
this dilution into account,

may

one

ducers

"profit"

nebulous concept of value, but ac•tually under the gold standard a

had
on

inventory
their gold holdings,

of; those

Many

"I suggest,

;

who

therefore, that the nations of Latin

America should not look to the United States
international
sistance

the

housing but should

in the

them

ask

control in order to

enlarge the national product and

savings, and thus widen the margin that

devoted

urge

case

question?

This

seems

wisdom. After
is

to be at least the

all,

loan is

beginning of

loan and repayment

say

bribes?) in recent

many

loans.

years

gifts (or should

have been labeled

some

re-defined

tinually

it be

should

And

account?

even

SPECIALIZED—PROMPT:

the re-definition
do they advo¬

stopping

CLEARINGS

"milk"—when

stopping the re-definition of

Would

wiser

and

remove

Hartford

Pittsburgh

Chicago

Cleveland

Loans and Securities

partment.
tic

York

Toledo.

Address

possible?

would it not also be wiser

De¬

Teletype: CV 240.

Bank Wire: NCLV.

s. PAI Off.

OHIO'S LARGEST BANK

sible?

NEW YORK

instead

We clear for dealers in New

to stop its
as
much

If that is so,
instead
of re-defining dollar to stop the
dilution by ceasing the issuance
of Federal Reserve notes and/or
loan-created demand deposits, and
retiring as many of them as pos¬
water

not

re-defining "milk"

dilution

'•]

DEALERS

SECURITY

con¬

quart of milk eventually contains
99.9% water? When do they ad¬

Chicago

naturally expected, all too

"dollar?"

CLEVELAND

housing."—

nation through

water

addition

the

cate

;

improvement

Milton S. Eisenhower.

suggestion be
of the dilution of the

milk supply of the

Company

vigorously

pursue

their

would

What

vocate

as¬

path of economic development and inflation

available
can

agencies for significant financial

large

necessary

people the word "dolprobably conjures "up some

Baxter

have been avail-'

past and should continue to be. The

difficult.

in the
notes

governmental agency? Would they
recommend
that "milk", be re¬
useful purpose, though it meant
defined to take this dilution into
that government and gold proThis re-definition served

gold.

To most

la r"

of §old actually means a

price

the result of the Gold

Reserve Act of Jan. 30,

then it has a price in terms

money>

which

being allied'
of

are

and services are exchanged for
money- Of course, if gold is not

But

economy

ours

years.
And yet, although'
weight of gold in the dollar

the

'"price" of

$35, you

"Price" is the ratio at which goods

well

gold

terms

silver
B.

t*has

defined

prepared to assist other

improving their health and sanitation

problem of housing finance is, however, .much

many

pleas are now being heard for
an ounce of gold
changing it again. And why have
saying the price of
they waited for 25 years?
Why
an
ounce of gold is an
ounce of
not every ten years, five years, or
«<>"• This is mere tautology ' every hour on the hour?
One is
The simple fact is thai; if gold, just as absurd as the other.
is hioney it has no price, for in a
If their argument is that the
money economy, the definition of realities of the situation must be

the

gov-

ernmen

shoes is an ounce of ; gold,
That being the case, when you say
Pa*r °*:

fact

the

that

pa*r °f shoes is $35, that is equivalent
sayin£ that the price of a.

due

probably
to

should be

the

facilities. Loans for these purposes
able

might quite logically say, therp- larly from the viewpoint of ease of
confusion sur- fore> that $35 is a synonym for an calculation,
but
the
16-ounce
rounding ounce of gold, if the price of .a pound has been with us for many,

Part

countries in

Troy, ounce,-if you ckvidc;-43(l from .16 ounces to 10 ounces?
grains by 13.714 grains per dollar,,, Some tenable arguments might be
.you < arrive. at 35 dollars. One adduced for ten ounces, particu¬

monetary

weight

......

gold, both in" the Commercial

'ol

should f
why not reduce the
hi" an avoirdupois pound

reduced,

cannot improve the nutri¬
quality of milk by re-defin¬
ing it, how can^ypu improve the
financial quality of the dollar by
re-defining it?
If you

tive

'■

•

■

•

Over

One Billion Dollars

JOHANNSEN

Roselle Park, N.
Dec.

Assets

26, 1958.

With Sterling Assoc.
(Special to The Financial Chronicle)

CHARLOTTE, N. C.—James A.
Goforth has' joined the staff of

Underwriters

Dealers

Distributors

Sterling Associates, Inc., Johnston

Field, Ricliards & Co.

Building.

ESTABLISHED 1908

Municipal and Corporation Securities

E. F. Hinkle Adds
•

Chronicle)

(Special to The Financial

•

PORTLAND, Ore.—Laurence H.
has been added to the staff

Lau

Underwriters and Distributors

Hinkle

Co.,

Inc.,

Equitable Building.

Municipal & Corporate
Joins May

Securities

& Co.

(Special to The financial

PORTLAND, Ore.
Barkdoll

1556 Union Commerce

CLEVELAND

Bldg.

14, OHIO

Telephone PRospect 1-2770

Teletype—CV

174

1707

Union

Central

CINCINNATI

Bldg.

has

joined

May & Co., 618
hill Street.

Chronicle)

George E.
the staff of

—

Southwest Yam¬

Telephone Main 1-3776

Member Midwest

C. Etheridge Opens

Arthur C.
Etheridge is engaging in a secu¬
rities business from offices at 3109
SHREVEPORT, La.

Alexander.

—

CLEVELAND

Telephone: PRospect 1-1571

Corporation

Stock Exchange

National City E.

2, OHIO

Teletype—CI 197 & CI 150

The First Cleveland

6th Building
14, OHIO

Teletype: CV 443

CV 444

The Commercial and Financial Chronicle

(248)

Although it is too early to estimate 1959 fiscal year
profits, we expect them to be a little higher than a

Continued jrom page

of great satisfaction to all
Americans. It is indicative of the fundamental strength
of

our

Confidence

most

geared

economy

inspire

It should

economy.

confidence

important

ingredient

is ours for volume

year ago
for both

than

standing.

buy.

usable transportation. />"v-Vv- •
the

other

hand,

VV.

■

known
are

Existing firm orders for the coming
our delivery sched¬

year

increasing emphasis on
a relatively short pro¬

bility
have

of
a

come

time

offers

orders

new

direct effect

during the

Because

the

possi¬

which

could

' the

The

than

new

were

by 20%.

cleaner.
W.

Douglas, Jr.

vigorously.
available

service life of

per-hour

performances

now

programmed

within

not

believe that there will be
any marked
defense purchases other than
those

down, always barring

disruption of

the

international

political climate.
There will be strict fiscal
control of not
only total
military expenditures but the rate of
expenditure. We
recognize that any threat of excess

suending

sitate cutbacks

may neces¬

stretch-outs.

Both

result

comparative

will reflect sales of

Corporation,

Mist,

the
a

Banking, like

Improvement:

building—consequent
ever

second

are

\ments
from
;■

means

distant

larger

new

family
for

1959

are

farm

equipment industry.
expectation that many

the

planting restrictions will be
in the coming
year, there

increase

employment

boost

ing farm machinery.
logical improvements

The

techno¬

in
t o d a y's
tractors and farm machines will en¬
able farmers to do vastly more work
on

the

planting.

expanded

acreage

they will

And the farmer should have more
cash in his hands for
improvements,
J.

Russell

including
the
machinery, as

Duncan

under

purchase
of
farm
the new year gets

companies, have

Bank & Trust

favorable

The

•

the

future

must

either

cally to their labor force

and

latter

automation,

appears

Through it banking
are

also

planning

to
can

the

achieve

achieve;

other

Loans

good

year

be in

DUNN

large

crops

state.

All. these

factors

corporations

enlarge their operations

are

strong

Nebraska

a lot of commodity loans.
gradual increase in live¬
stock which produces loans. All ac¬

There

tive

what

banks

Nebraska

enough loans to make
tions profitable.
There

&uermaa

Drawdy

cities,

business.

processing.
heading of
logical solution.

higher

industries

standard

one

thing

states

that

and

opera¬

I; think

Nation

are

getting in¬
I am talk¬
ing about industry and professional

paper

other

getting

are

their

very lax on—and that is
formation to our people.

general

most

living*

the

continue to

banks with
:

pre¬

alternative; under

Total farm income will

Product will

and reduce their costs.

quarters
or
to
employ. technical
improvements to speed up and simplify

This

our

that wish to

drasti¬

add

with us, such

this past summer, the out¬
We look forward to serv¬
icing out-of-state corporations. We have cheap electric
power, plenty of labor, good transportation by rail and
by air; in fact, we have more air
line stops planned for Nebraska than
anv

point in the not-too-:
to

much

Built-

Midwest is good.

our

will permit us to serve

These two develop-

banks

Thanks to

look for

interrelated,-especially 7.

that

should

BYRON

banker's viewpoint.. More

some

President, National Bank of Commerce, Lincoln, Neb.

next.,

population

are

climate

long time.

Nineteen-fifty-nine

Company,

.already well under
are

strength

business.

•

Business

National

Gross

climb.

1959.

of economic

expenditures will continue high.
increase.

trends

the

for

favorable than it has been for

reserves

social security, unemployment benefits and pension trust
funds.
Our unemployment benefits tend to offset the
bad effect of continuing unemployment.
Government

long,

way,

I see it, the general business outlook

summary, as

very

population, means more loan activity,
more
accounts, and more clearings.
It

accelerating public desire

are

the

pared at
Drackett

farms which in turn will
certainly
the need for new cost-reduc¬

perspective,: it

These

and automation.

Roger

business

removed

to the writer that two out¬

two decades

over-all

greater cleanliness and health.

*.••••■■-

standing characteristics

cleaning and window cleaning
products are more directly responsive to
consumer influ¬
ences, like increased consumer
spending, the rise in the

formations—and the

two.

the

appears

drain

home

From

development.

the

will

any

ahead, the analysis
will 1 crystallize in

that

decade

31.

industries, will benefit directly from
expanded sales of the many indus¬
tries that buy their
products.
Our

new

look

American economy will be
reflected
in our
rising sales. Especially will
this be true of our
plastics division,
Calmar and the Maclin
Company,which, like all chemical and allied

general

acreage

other basic business activity of the
American economy, views the future
from two perspec¬
tives. First, there is the immediate
future, the financial
prospects for the year ahead. Second, there is the

periods

1958.

DUNCAN

years

Augusta, Georgia

in¬

for

With

SHERMAN DRAWDY

new

October

prospects

for

are being stepped
up this
readying for market testing several new

are

President, Georgia Railroad

Judson-Dunway

acquired

Present

products with promising potentials. Present
plans call for
concentrating research on household products in Cin¬
cinnati and on plastic
specialties in Los Angeles.

company in the current fiscal
year ended
are expected to be
above those of
year.
Dollar volume
in the first
quarter ended December
31, 1958, will be about three
per cent above the unusual
first 1958
fiscal quarter when
sales were con¬

product.

our

Blue

RUSSELL

good, and farm equipment manufacturing will
prove no
exception to the general trend. As a matter of
fact, I
personally believe that 1959 will be one of the best

Research and developmeat

September 30, 1959,
the
preceding fiscal

chemical

many

been

year.

production.

President, Minneapolis-Moline Company

a
problem to Drackett, because we
gear our
production to immediate
sales, a practice that will be
furthered by additional decentralization
in 1959.

ROGER DRACKETT

troduction

by any ephemeral dislocation of the
economy,

means

Inventories, unlike

President, The Drackett Company

tra-seasonal

feel that it is the banker's
duty now to set his sights on
this ultimate expansion rather
than on any temporary
short-term boom or recession.
The forces making for
this ultimate growth will
prove too strong to be deterred

portant elements in the total economy, accounting for an
annual gross income of $35
billion, it offers our farm
equipment manufacturing industry a really bright future.
Our market is bursting with dynamic
progress, I am
happy to say.

not

summary, we feel that employment will
be steady
at about
750,000, with a slight upturn anticipated in
the
last half of the year.
After June 30 there will
probably
be an appreciable
acceleration in the nation's missiles
and

Sales of

because of the over¬
whelming production indicated by crop reports of 1958.
Higher volume should more than make up for somewhat
lower unit prices received by the farmer for his
crops.
Since the business of farming is one of the most im¬

space age

a year of
slow, steady growth,
steady upgrade rather than a series of peaks and
valleys. It will be another good year in a long succession
of good years, past and
future, the cumulative effect
of which will be a
tremendous long-term expansion. I

with

new

first

experience is typical

Industry grows
population and standards of living and
increase.
Banks in these areas must be

I believe that 1959 will be

competitive busi¬
ness
will be helped by the introduction
of new basic
patentable features in some Calmar
products.

in¬

already laid

either

our

country.

(Windex)
our
window
(Twinkle) has progressed
rank

producers of resins. We use less than ten per cent of the
plastic specialties produced by the Calmar
division,
which is benefiting from the
growing use of plastic dis¬
pensers for a wide variety of liquid and
semi-liquid
products. Our position in this
highly

the

ten

crease in

spreads

products

service to

industrial

production

year

years. It would appear that
government ex¬
penditures for missiles, space
vehicles, and supporting
components will increase
during the year. Known De¬
partment of Defense estimates
support this prediction.

We do

these

better financial service.

will push them to new production
peaks, therefore we
plan to add to their facilities and to install more new
high-speed equipment and machinery. We are not basic

than ten years.
We do not forsee any marked increase
in the 600 milenext

and

prepared not only to follow, but to spearhead this trend.
From the short-term
viewpoint, the look ahead into
the year 1959, one characteristic
seems to be outstanding.

Although Maclin Company, maker of thermoplastic
molding compounds, and the Calmar division, producer
of plastic sprayers and
dispensers, operated at record
high levels in fiscal 1958 we expect their sales this

expectation that transports produced this
year
a

All

are

respective field, and we plan to use every
of advertising,
merchandising and pro¬
motion to maintain and
improve their industry positions.
As a result of the
Judson-Dunway acquisition we added
several
product lines, most important of which are
(Vanish) a bowl cleaner, (Delete) a stain remover for
sinks and bathtubs, and
(Expello) a moth repellant.

output.

but

primarily agricul¬

pour-spout package
We have introduced a new

Our copper cleanser

itself

own

second in their

rate

efficiency.

our

and

con¬

of the staff for

have gone far indeed. I believe
of that of many sections of the

These will be

In the meantime, we have market tested

be prepared to
impersonal machine

end

However, during

events

(Drano) our drain cleaner.
and
improved formula for

makes them a desirable purchase. Fewer of
the big and
faster units will be required to generate the
seat-miles
which we feel traffic expectations will
require. In addi¬
tion, fast turn-arounds and increased utilization will
contribute to greater over-all
It is

transports will be considerably more costly
their predecessors but their income
potential

and next will have

plants

economy package and introduced

order about 900 commercial turbine-

powered transports.

such

an
an

the past few years the dawn
era
has become apparent, and
now
occurring almost daily which point to a high
degree of industrialization in the section.
By the time
our
150th Anniversary is observed this
trend should
of

Within the last year our sales force has been
doubled.
Our advertising expenditures meanwhile have
increased

During the year, there will cer¬
tainly be a gradual acceleration in
the
delivery rate of commercial
transports which will be almost en¬
D.
tirely turbine powered. The last half
of the year will see a vastly increased
now

for
not

organization, the Georgia Railroad Bank &
Company, observed in 1958 its 125th Anniversary.

tural.

may acquire through
purchases of other firms. We are negotiating and con¬
sidering acquisitions of companies whose products will
fit into our manufacturing and
selling patterns.

industry in¬

year.

uation.

are

be announced in the coming months.

em¬

must

These years were spent for the most
part in
of the Southeast which was

our

production,

banks

section

all its operations.

We shall be able to handle increased

additional

change in the international sit¬

There

•'

may

industry
produces
primarily military vehicles, any pre¬
diction made today assumes no rad¬
ical

Trust

expenditures for the latest equipment and
machinery will be made in 1959 as we plan further plant
decentralization to reduce our transportation
costs, and
thereby hold down our prices. We initiated our decen¬
tralization policy in 1953 with the
opening of the San
Leandro, California plant.
Last November we began
operating our newly constructed plant at East Stroudsburg, Pennsylvania. Shortly we will open a new manu¬
facturing plant in Canada. Other plants at new locations

and

ilow

Our

•five years..
Continued

missiles, with
duction

new, efficient, and relatively low-cost in operation. Our
plants are almost completely newly equipped in the last

DOUGLAS, JR.

laid down far in advance.

the

But

profits

that

say

continually require

boom year

sequent to larger sales, readily because like the chemical
industry generally—47% of its plants are less than eight
years old—our plants, equipment, and machinery are

factors inherent in the manufacture of the vehicles which

produce.

do not look for

From calendar 1935
sales and profits show gains of
16 times. Net sales in 1935 were $1,432,400 against fiscal
1958 sales of $19,498,127. Net profit was
$105,171 and
$1,534,375 respectively for the two periods.

try must be qualified in view of certain uncontrollable

are

others

some

through fiscal 1958

President, Douglas Aircraft Company, Inc.

ules

out¬

are

43 year

and

The outlook for 1959 in the aircraft and missile indus¬

public contact. The
prime commodity offered by banks will always be
service, and the expanding future, with its increase in
population and industrial and business activity, will

history. Excluding the effects of our soy bean
operations, which were sold July 1, 1957, Drackett for
23 successive years has had year to year gains in sales
our

is bright,

DONALD

though

even

to free

means

1959, rather we expect one of continued general recovery.
Our confidence perhaps stems from our 1958 perform¬
ance When we had the largest sales and net profits in

v% i

■

ago,

year

when the trend is up and the
confidence revives and sales of auto¬
mobiles, as well as of other durable goods, rise rapidly.
This would seem to be the situation that exists today.
Confidence is reviving and consumers are spending. With
a proper selling
effort 1959 should be a year of sub¬
stantially increased volume in our industry. And as
reviving confidence produces similar effects in other
durable goods industries, we can anticipate further im¬
provement in the level of employment and industrial
activity generally.
outlook

not

sacrifice personal
Contact
operation. Automation is

absorption of the Judson-Dunway acquisition costs. For
all of 1959 the earnings per share should not be lower

When their confidence falters,
they curtail buying. The automobile industry is always
severely affected by recession because people can post¬
pone new car purchases without seriously impairing
their ability to have, lor a time at least, reasonably
they

confidence,

This

periods. Net earnings for the first 1959 fiscal

meet the needs of a mass market. When consumers have

per

ployee-hour.

again including tne Judson-Dunway figures

quarter may be under those of a year ago, because of
non-recurring items, as for example the almost entire

the

production

Thursday, January 15, 1959

production and service through greater output

net

cession should be a source

professional
the

press

all

men

and

know

and

over

that

women

the

air,

labor

and

Byron Dunn

socialism

hires

to tell their story through
and it is my opinion that

aren't to be swallowed up by labor and socialism,
going to have to organize and tell our story on
the American way of life. The
general public needs to
we

are

Number 5812

Volume 189

...

unselfish actions taken by many business
professional men in their efforts to produce a better
life for themselves and their families and people around
them.
This is a glowing story, one that will interest
the public, but the stcry needs to be put into print
and on the air. Newspapers, radio, TV, and magazines
such as The Commercial and Financial Chronicle will
tell this story if it is made available to them.
This is one of the goals we look forward to helping
with this coming year of 1959. It's easy to sit back and
read
the outlook from
the different sections of the
country, and do nothing! I hope those reading the arti¬
cles that appear will take the advice of these men and
your editorial comments
and join in a united effort
towards a
better American Way of Life!
understand the
and

Economic Development
Administration, Continental Operations Branch,
Commonwealth of Puerto Rico

Rico's long-term economic stability was
found wanting during 1958.

; Puerto

a recession that put a dent in
manufacturers continued to expand
near
record numbers during the

Despite
in

the U. S. econ¬
to Puerto Rico

total of 127 new Stateside
companies decided to establish them¬
selves in the island, only two short
of the record 129 set

made

economy

reaching 38 during that month alone.
On several other counts Puerto Rico also

Talcott, Inc., world famous factoring firm. Elec¬
consumption increased by 20%, and decen¬
industry was successfully pursued, bringing
new plants to remote areas and small {owns on the island.
In the U. S. we expanded our industrial personnel fa¬
cilities at our branch offices in Chicago and Los Angeles
tric

of new facilities
wholesaling and retailing.
development

Rafael Durand

Planning Board, the

$1,100,000,000—an increase
of 7% over the previous year; while per capita income
rose
to $470 from the 1957 level of $440.
Particularly
striking was the increase in new investments which
reached $274 million, up S18 million. The largest share
of these investments (about $188 million) went to indus¬
trial plants and equipment promoted by the Economic
Development Administration.
island's net income soared to

illustrates the increased
efficiency on the part of our Puerto Rican workers is the
net income gain from manufacturing which jumped 10%
to $230 million during the year. This, of course, is a new
high. Two industries that played a key role in this de¬
velopment were metalworking and machinery production
that perhaps best

One statistic

The

metalworking and machinery

tributed

the biggest

127

new

Through

Last

industry.

not

boom year,

year

it provided a

the figure will

probably hit $50 million. Perhaps most important in this
field are the 20 new hotel projects in the works. Most
prominent of these will be an 18-story Slieration hotel,
the development of the entire east coast as a resort play¬
ground and the first branch of the world-famous Maxim's
Restaurant of Paris. The Sheraton project is estimated
to cost

approximately $10 million and will be located in

San Juan.

other hotel projects promoted by EDA: the
America is planning to operate two
350-room $8 million project,
the other a smaller $3 million 176-room hotel. Others in
the works include a 300-room resort to be built by the
Among

Hotel Corporation of
hotels

industries also con¬
the island,

three times the

"Bootstrap" plants promoted

the island, one a

Overseas

Hotel

structure

represent

near

Corporation and 150-room oceanfront
San Juan's International Airport to be

increase

The

major deterrent factor over¬

as related to the recent
recession, and has more or less been

recognized

The real problem, how¬
the budgetary prospect for
the fiscal year beginning next July.
There seems to be no logical excuse,
accepted.
ever,

even

with large expenditures for de¬

fense, to warrant appropriations be¬

ginning

coming

the

fiscal

This is

major problem for Congress.

output and trade, additional business

With increased

Firm or tight Federal Reserve mone¬
permit some increases in the money
supply compatible with output of goods and services.
But, interest rates will continue high so long as the Fed¬
eral Reserve authorities limit credit expansion as antici¬
pated as the major tool in the fight against inflation.
Except in home building, credit controls and tight money
policies will not adversely affect most business plans.
Among the basic economic factors significant in the

credit is required.

tary policies will

following:

1959 outlook are the

(1) Production of most nonferrous metals will increase
from the low 1958 levels.
Upwards of 9% increase in

production and shipments of copper and aluminum are
expected. Some improvements are also anticipated in
part to construction and improved

economic slow¬
down Puerto Rico's economic development continued to
move ahead.
What then is in store for the island Com¬
monwealth now that activity in the States has resumed?
thing, the island's economy moved into a cal¬
1959 at top speed. Industrialization appears
certain to register its biggest year since the inception of
For

endar

one

year

a decade ago.
In the last six
total of 75 U. S. firms have been promoted, and

"Operation Bootstrap"
months

the momentum built up

is not letting down. On the con¬

upward at a faster pace with the
backlog of plants in the process of being established still
mounting. By June 30, 1959 we expect to reach new highs

trary, it is sweeping

(2) Demand and orders for steel will increase up to
over those of 1958 with operating ratio averaging
approximately 80% of capacity compared with the 60%
of 1958. Increased demand for automobiles, machinery
and construction are significant in the steel outlook.
25%

(3) Building

material demand will continue through¬
at the high levels prevailing in the last
Cement and clay products output
by 3-5%. Lumber will increase up to 6%

out most of 1959
six

of 1958.

months

should increase

from the 1958 totals.

(4)

textiles and apparel are

Outlook for

Continued

generally

page

With Daniel F. Rice
(Special to The Financial Chronicle)

Over

Half Century of Efficient
Economical Service

CHICAGO, 111.—Frank L. Phil¬

and

lips is now associated with Daniel
F. Rice and Company, 141 West
Jackson

AS TRANSFER AGENT

Boulevard,

Chicago ^and

the

members

Midwest

C&S BOND DEPARTMENT

Stock

Exchanges.

EO STATES

economies and other advantages to

afford

underwriters,

distributors, corporations

and their

(Special to The financial Chronicle)

PEORIA,
is

now

Jens

for

our

forth the Current Federal
Issue and Transfer Tax Rates.

free booklet setting

and State Stock

Original

the

Building

Midwest

Exchange. He was formerly
manager

Write

111.—Edgar J. Reilly
with Negley.

affiliated

& Rowe, Jefferson

members

stockholders.

GOVERNMENT SECURITIES

With Negley, Jens

and Jersey City, N. J.

New York. N. Y.

Stock

local

for Taussig, Day & Co.,

cT>Tr

inn

uiiufAtMi

iimiAC

Inc.

Hathaway Forms Co.

Registrar and Transfer Company
50 CHURCH

STREET

NewYork7,ti.Y.
BEekman 3-2170

15 EXCHANGE PLACE
Established
1899

RICHMOND, Va.

—

Robert M.

Hathaway is engaging in a secu¬
rities business from offices at 8518
Julian Road under the firm name

Jersey City 2, N. J.
HEnderson

year

Sound fiscal policy and a
possible substantial budgetary surplus are called for in
periods of high economic levels which 1959 will bring.

beyond anticipated income.

automobile outlook.

possibility of jet service.

In 1958 while the U. S. underwent an

of Nebraska Consolidated
This new enterprise—not
yet completed—is sparking a cycle of new industries. For
instance, the plant will produce for Puerto Rico's growing
cattle and dairy industry; it will supply and buy from
breweries; sell to a new meat packing plant and to a
tuna cannery on the island's south shore. Nebraska Mills
is also credited with helping to promote a burlap bag
factory; it will give a boost to agriculture by buying up

living

while

relatively stable,

shadowing 1959 is the threat of fur¬
ther inflation. The $12 billion Fed¬
eral
deficit of this fiscal year is

the

spurred by the establishment
Mills, a flour and feed mill.

substantially,

lead and zinc due in

investors.

plant is helping
chain reaction

1958 should continue

costs should be

by a group of Puerto Rican and Stateside
During the coming year we expect to have
close to 250,000 visitors to the island, particularly with

constructed

for Puerto
number of
assisted in
Puerto Rico are Blue Chips. Among these
Nebraska Consolidated Mills, Allied Paper

interesting aspect of how one single
industrialization
program
is the

1955 following a year-long

throughout most of 1959. Production,
sales
and
consumer
incomes
will

George S. Eccles

most important
$31 million income for

as was

few months of

during 1957-

which cost $8,000,000.

ECCLES

recession, but should be one of substantial growth. In¬
creased production and trade which began in the last

our

the island and we estimate that next year

expanding to
are Star Kist,
and International Shoe.

our

season.

The business outlook for 1959 is generally excellent.
is

development another phase of

Today, tourism is Puerto Rico's third

7,650 new jobs plus increased diversification
growing industrial complex. A large
the U. S. affiliated plants which our office

Rico's

GEORGE

President, First Security Bank of Utah,
Salt Lake City, Utah

Rico's

Concha (The Seashell)

share of expansions on

mostly due to an after tax profit ratio
average of their U. S. counterparts.
The

Perhaps this is symbolic of Puerto Rico's
struck in

Tourism office here in New
York we arranged for additional cruise ship visits.
The
three new hotels opened were the 320-room San Juan
Intercontinental built at a cost of $7,500,000; Laurence
Rockefeller's Dorado Beach Hotel and Country Club lo¬
cated 20 miles west of San Juan and the 300-room La

output increase.

which showed an 18%

million.

In a real sense oil has already been
the Commonwealth's economic development.
progress.

Southern industrialists.

than 120 inquiries from

Income from tourism reached $39 million

the
in

According to the Government's

at $4

power

1958

important gains in private

investment, external trade and in

the tests to be conducted by a Texas oil firm is placed

opening of three new resort hotels during 1958, repre¬
senting a record investment of over $25 million. The
number of hotel rooms available increased by 50%.

agricultural and in¬
and a record year
and construction.
We

tourism

time in the coming year.
a

developments come into
the first
A tentative estimate of costs for

Oil exploration should get under way for

"Operation
Bootstrap" program
also
showed solid gains.
.
TOURISM— enjoyed one of its biggest years with the

output,

achieved

enjoyed

As Puerto Rico progresses new

year.

In addition to industrial

total income,

dustrial

for industrial development

program

our

U. S.

Puerto

Puerto Rico showed increases

year.

;

focus.

Although

Puerto

impressive

gains and our economists predict even
greater growth during the coming

for

recession, by May, 1958 there was a definite upturn.
October, 1958, was a record month with plants promoted

importing most of its meat products from the

United States.

office in Miami. Because of the island's
proximity to Gulf ports, an increased number of inquiries
from Southern manufacturers prompted us to open a new
branch office. Our Miami office currently has a backlog

in the boom year

Overall, almost all sectors of

slowed down in the first five months of 1958 due to the

$34 million Water Resources Authority's thermal electric
plant; Consolidated Cigar's second plant to be built at a
$3 million cost; a $3 million meat packing plant; a $1 mil¬
lion tuna cannery and a sugar-cane bagasse processing
plant estimated at $1.5 million.

has been

Rico's

earlier expec¬

$12 million expansion at the Caribbean Oil Refinery; the

for their development.

and set up a new

1957.
•

poultry and poultry by-products stand to gain momentum
Up to the present, Puerto Rico

surpasses our

Among the important industrial projects are a

tralization of

year.

The construction outlook

tations.

of James

put to

the test and not

omy,

plant, by the way, will in turn provide the oil for the
tuna cannery.
Nebraska Consolidated Mills will also
prove to be a more economical source of flour and corn
meal as well as animal feed.
And further, hog raising,

First, a three-year contract guaranteeing
against a waterfront strike was signed in September.
Small business got a boost from the establishment of the
island's first commercial finance company with the help

Director.

150 new plants and

9,000 new jobs. The fact that a substantial number of
prospects negotiating for branch-plants are Blue Chips is
evidence of Puerto Rico's long-range industrial stability.

The soybean

soybean pulp from a newly built factory.

good

RAFAEL DURAND
Executive

in plants promoted; our estimate is

and perhaps sugar cane bagasse and also use up

sugar

(249)

Chronicle

The Commercial and Financial

4-8525

Mr.
Hathaway was formerly with R. S.
Dickson
&
Co.,
Inc.,
Mason-

Hathaway Investment Co.

Hagan. Inc.

and

Thurston

& Co:

The CITIZENS &
Atlanta 2,

Georgia

•

SOUTHERN NATIONAL BANK
JAckson 5-3811

•

Teletype AT-399
member

foic

The Commercial and

(250)

Continued from page

HON.

ALLEN

Inventories have been reduced, jjroduction and
sales are expected to increase some 5%.
(6) Employment should increase by 1.5 million, unem¬
ployment decrease by at least one million. Increases in
automation and newer production facilities added during
the past few years mean increasing productivity consid¬
erably faster than total demand for labor. Labor prob¬
lems and wage rates may become significant by mid-year.
Specifically, the following items are of major signifi¬
good.

cance

There is

the

hampered

some-

ex¬

Some increase in loans

ex¬

pected in most major segments, commercial, mortgages
finance.

600,000.
In

ELLIOTT

President, John Hancock Mutual Life Insurance Co.

the

beginning of 1958, the national economy was
receding sharply; at the end of the year, it was recover¬
ing both vigorously and broadly.
In proper perspective, the recession of 1956-1958 is to

use

the

regarded

corrective

adjust¬

a growth period.
The causes
recession, which bottomed in
quarter (after a decline
some
14% in the output of the

section

since

the

War.

Various
some

de¬

reattainment

levels

peak

progress to

date, it

may be approximately
Four years ago, it was

ery

ices.

A year

hence,

Life

insurance
has

Byron K. Elliott

recov¬

may be at the threshold

experienced

billion, surpassing the record high of 1957
by $2 billion;
reflecting growth in coverage, accumulated assets rose
5.8% to $107 billion; and the earned rate of
investment
return

(before

income

tax)

increased

from

3.75%

3.85%.

President,

Atlantic

and

new

volume of both

new

exceed that of last
year.

Pay¬

policy

owners

and

beneficiaries

$10 billion for the first time (in
ward

trend

investment

rupted.

during the last
return

But

(before

taxes)

lowering of the

would otherwise result
ized if life companies

cost

to be

earned

should
of

not

exceed

The up¬

rates of

inter¬

insurance—which

therefrom—will

are

will

any one year).

decade

not be

fully real¬

subjected to still heavier

income taxation.
The development of American
life

larly in recent

years, may

truly be said

adaptation to diverse and

insurance, particu¬
to reflect

ever-changing

dynamic

needs

our

people.

1959 will again mark the introduction
of new
policies and plans, further simplification of
contracts,
BXid broadening of underwriting procedure
and

$3,700,000 to state and local governments.

ROBERT

practice"

FNBr i?MAPT

President, Parker Rust Proof Company
It

seems

pointing

that

continuing

the

indicators

upturn

definitely

are

1959.

Good

news

coming in from the automobile, ap-'
pliance and steel industries and to
of

thinking they tell the
be, as some economists
claim, that this does not necessarily
herald
a
boom
year
in 1959.
In
fact, I shall not be surprised if many
of
the very
optimistic reports for
my

way

story.

1959

may

prove

bright

side.

much

too

But

have

the

trouble,

predicting that while
turn

out

will

not

than

1959 may not
best, it certainly
the worst, and

1958.

Robert w. Engiehart

the

approach

will

field

our

have

considerably

metal

better

treatment,-

doubt

nnk

better.

Montana

good

business

held

that
in

its

Company,

kwhrs
In

increase

an
over

many

curred

duction

the

nation's

over

Ray

England

Southern

our

system

during

period,

New

five

years.

the

rate.

same

are

recovery

are

not moving at

For instance, pro¬

Eppert

for durable
It

goods has not kept pace.
apparent
that
rising

also

pro¬

electric

trends have not yet stabilized into a predictable pattern;

However, although fourth-quarter reports are not in,
there is ample evidence that consumer spending has now
begun to rise significantly, due in part to the strength¬
automobile market and heavier holiday buying.

ening
add

The

132,000

capability to

Jersey

electric

During! the

conclusion

lowing

the

toward

oc¬

our

indefinite factors. Although
the significant elements in

to rise, even during the
deepest period of the recession, but
employment and consumer demand

billion

has

acceleration

continued

being paralleled in the
Southern New Jersey area served by
B.

Na¬

ductivity and personal income have

company.
For example, we will
kilowatts of generating

Gross

movement

rising, all trends

what

business

rate

yet

most

1957.

respects,

will depend on the direction of some

reported

trend

Product, employment,
sales
corporate profits to continue up¬

The

the stability

by all components
industry totaled 641 billion

kwhrs,

the

expect

and

generation

the

wards.

during 1958.

own.

seem

year

tional

Board, declined
electric production

points,

Corporation

The factors that influence economic forecasts

measured by the Fed¬

Burroughs

can

Power

EPPERT

RAY R.
President,

Company

Reserve

than

Or¬

The protection which life
companies also provide against
the costs of hospital and
medical care, and loss of
income
because of disability, should
continue to grow apace.
ments

production,

employment, and therefore

Group sales to

and

In his year-end
report, Mr. Corette
out
that
while
industrial

In the year ahead, the nation's
life insurance in force
will pass the half-trillion mark
by a substantial margin.
The promise of
increasing general business activity means

dinary and

ernment

pointed

force
naturally accelerates; and in periods of
buoyancy, or even depression, it continues to
grow,
although at a slower rate.

confidently expect the

Electric

summed up the
encouraging influences and
and progress of the electric
utility industry

may

important-factor in the operation of Atlantic City Elec¬
Company. During 1958 the company's tax bill was
$6,600,000 of which $2,900,000 went to the Federal Gov¬
tric

ENGLAND

City

President

lesser

report, pointed out that

the investor-owned electric
companies will pay approxi¬
for 1958.
Taxes are also an

mately $2 billion in taxes

Recently John E. Corette, President of Edison Electric
Institute

insur¬

and

Jersey shore

in 1959.
In the office
equipment industry, with which I am associated, the
prospects appear bright for better revenue than in 1958.
For business generally I believe we

solution.

eral

rising disposable income

New

indicate

In fact, the upward
progress of life insurance in our
country has had only one interruption since the end of
the 19th
Century, and that was both minor and brief. In
periods of economic expansion, the increase of life
ance

the

year-end

study of the farm problem is mandatory. We must ex¬
plore all new proposals fully for in them we may find

another

$35 billion to $493 billion at year-end,
approximately 8%; sales of Ordinary exceeded $47

three

existing law.
My personal feeling with respect to the law enacted
preclude full and complete considera¬
tion of all legislation introduced
during this session of
Congress. In fact I feel that continuous and intensive

several

somewhat lower levels of
in force increased

embraces

will be better than in 1958 and should be close to

outstanding
new
records, despite
general business activity: total

made

Corette, in his

last year will not

realized by the end of 1959.

area

of the

one

vast, rich agricultural section.

Mr,

that

in the production

The

;

seems

industrialized Delaware Valley, the 40

Agricul¬

programs, while others will deal

BAYARD L.

has

again

the

miles of world famous resorts
and between the
two, a

marketing of

bills affecting

kilothe nation average of

$500 billion economy.
year—it

zones:

annual

average

high of 3415

1959

new

with minor amendments

in fact attained in the third
quarter

was

it many additional

area

important factors of stability.
distinct

feed grains

that the Committee

sure

time

1957

completely

propose

That level

of 1955.

all

service

our

dairy products. Some will

apparent that we were at the
$400 billion economy in terms of gross
national product or total
expenditure on goods and serv¬

threshold of

over the
all time high of $35,-"

compared with
kilowatthours.

concerning

have before

to 221,500.'

our company

1958

provisions

all phases of agriculture;
particularly
and marketing of milk and

seems

reasonable to expect that full

the

addition, I

ture will

Operation previously reached, for ca¬
pacity levels have risen meanwhile.

But, given

its ' specific

and

corn

present laws affecting the production and
cotton, rice, and wool.

Recovery should continue without
major interruption during the year
ahead. Its ultimate goal is not only
the

not

reached

use

affecting the other com¬
reasonably acceptable. Although
these
commodities
will
likely
again be introduced, I personally feel that the Agricul¬
tural Act of 1958 should be
given a chance to operate
before any major changes are made.
Further, I doubt
that Congress will take any action to
modify materially
legislation

factories and mines) were
implicit in growth and economic de¬

required at least
gree of correction.

will

presents

the

company increased 5.2%

reaching

past 12 months increased 4.4%. Our

modities appeared to be

nation's

excesses

while

with

Pennsylvania-

Diversity of

Ellender

A;.;.v'

recommendations

tion to the bill had to do

second

velopment

1957

Congress.
'
V
Last year a law was enacted
dealing with corn and
feed grains, cotton, rice, and wool. The
principal opposi¬

the

his

Administration

the

respects, the eight county area of Southern
Jersey is out-pacing the state and nation in the
of electricity.
Our residential use of electricity in

3385
Allen

the

programs to the

ment in
of

nature

until

watthours

bill

exact

new

some

residential

known

The

New

mend

BYRON

of the

revenues

period

same

President, in his message, indicated that he will recom¬
legislation aimed at "greater freedom for markets
to reflect the wishes of producers and
consumers," and
indicated that past actions by the Congress "were appro¬
priate in direction but did not go far enough." However,

inflation.

capacity

60,000 kilowatts
intertie with Philadelphia

number of customers served

action is taken.

any

1959 will be a good year, but will present
problems, The main one being a fight to control

interchange

Company and other affiliates
Jersey Interconnection.

Gross

Additional problems will most assuredly be encoun¬
tered in dealing with the Administration proposals. Tne

All in all,

system

approximately

During 1958, 65 new industries and expansion of
pres-.
ent industries were added to the
company's lines. 5300
customers were added
during the year bringing the total

no doubt be considered
early in the session.:
Legislation affecting the production and marketing of
wheat will probably be the most troublesome. Widely
differing program concerning this commodity have been
proposed by national farm organization as well as by in ¬
dividuals. These will have to be studied carefully before

secondary mortgage markets, but outlook
million dwelling units.
(6) Increase in savings is expected, especially at com¬
mercial banks and other institutions, but at a rate some¬
one

transmission

new

source of power will be
completed in 1960 and will be
in addition to its present intertie
with Philadelphia Elec-'

trie

will

what by tighter

many

quite expeditiously. An

electric

increased
a

Thursday, January 15. 1959

Electric Company, Public Service Electric and
Gas Com¬
pany
and Atlantic City Electric

New

dealing with Industrial
Agricultural Products. This
legislation was well received
and
Uses

consumer

be made

support and should present no real
problem. Another piece of major
legislation in this same category,
which last year passed the Senate
unanimously but died in the House,

lion.

and

the
con¬

company's

through

Company.

doubt that some changes should

and
be

if the law is to be extended.
usually has strong bipartisan

upon

This

of the 1947-49 average.

what below that of 1958.

will

Dec. 31 of this year, and
therefore,
will
have to be acted

(4) Capital expenditures by industry will increase;
slightly from the 1958 levels. But, expenditures by gov¬
ernments, including the Federal Highway program, and
by local governments will raise the total above $52 bil¬

still calls for

nature

that

expires

(2) Personal Income should reach an annual rate of
approximately $390 billion, an increase of 3.5% over 1958.
(3) Industrial production will probably increase by al¬
most 10% and approach the peak reached in December,

will

predict the

ample of the latter is Public Law
480, The Agricultural Trade Devel¬
opment and Assistance Act, which

(1) Gross National Product for the entire year should-

construction

early to

agricultural

in existing laws. Some will be quite
troublesome whereas others may be
handled

Residential

too

will

Louisiana

legislation
sidered during this Congress.

tbial $470 billion, or 7.5% above 1958.

(5)

still

outcome

in the financial outlook for 1959:

1956 of 147%

It
,

The

ELLENDER

U. S. Senator From

Financial Chronicle

the

other

istic for

same

company will spend $95 million for new
to provide electric service for
expansion
and growth in the
eight county service area.

same

recent

seems

general

the

economy

recovery

is fol¬

common

recessions.

Historically, it is character¬
cyclical upswings to begin rapidly and somewhat

erratically, then settle into

months.

construction

that

pattern

the

This

seems

even

situation

pace

after

the

few

moment.

Although corporate profits in the third quarter came
9.2% of the record 1957 rate, industry leaders
in no mood to gamble, largely because of the thin
margin between profits and production costs. Most busi¬

Twenty-seven million dollars of the company's ex¬
pansion budget will be devoted to the construction of a

are

new
generating station at Beesleys Point in Upper Town¬
ship. Cape May County. The first unit to be installed
at the proposed
plant will be a high-pressure steam

from

to within

consider paring costs as their best protection
dangerously narrow profit margin. Third-quarter
reports of. smaller sales coupled with larger profits, in
nessmen

generator and associated facilities capable
132.000 kilowatts.
Our company has

of producing
already purchased

the face of rising wages, has borne this out.
We expect the pre-occupation with problems

land along the Great Egg Harbor and Tuckahoe Rivers
for this new station. Bechtel
Incorporation of San Fran¬
cisco has been named
Engineer of this project.
pect construction to start in 1960 and the

a noticeable effect in the office equip¬
industry. The cost-saving characteristics of good
data processing equipment are in the foreground of effi¬
ciency programs, and intensive research and develop¬
ment
at
Burroughs is aimed at creating systems to

plant will be

new

86,000

Deepwater
present
new

which

during 1963.
City Electric Company added
generating unit at the company's

The

capability

unit,

build.

plant.

cost

new

unit

generation
S121

raises
to

million,

the

took
.

implement them.

Burroughs

company's

446,600 'KW.
two

This

years

of effi¬

ciency to have

ment

ex¬

scheduled for completion some time
Last November, Atlantic
a

sales year in
With
and

Corporation

has

just

completed

its

best

history, in spite of the economic downturn.
now
in a more efficiency minded mood

business

stronger position to invest

new

equipment

Number 5812

Volume 189

.The Commercial and Financial Chronicle

of the

anticipate an even greater sales volume in the year

ahead.

packaging industry in particular where it pertains
packaging of items that are consumed at the beach,
picnic site, ball park, etc. When the weather is

to the

camp,

H.
President,

ESTABROOK

Sealright-Oswego

as it was
in "many sections of the country
during 1958, its impact on the consumption of these items
is very noticeable and of 'course this impact is extended

With several basic trends continuing strongly in favor

of the

packaging inclustpr, 1959 should be another year
of good growth for the industry, especially paper pack¬
aging, the field in which Sealright-Oswego Falls Cor¬
poration serves.
j
The population growth
and the
resulting increase in
the sale of

the

was

■

conditions, normal-grbwth in

popu¬

lation plus an expansion of new. items being packaged in
paper containers for the first time, we in the packaging

industry

looking for

are

diversified

good.year in 1959.

products

packaged food including milk ancl
dairy products; self-service super¬
market retailing; the pre-packaging
of foods of all kinds including com¬

President, Guaranty Bank & Trust Company,
i
Worcester, Mass#••

plete meals in paper packages with
no dishes to wash, and other packag¬

twined with the over-all trend of the national economy

ROLAND A.

and

short-lived

ERICKSON i

but

pulp products,
paperboard and paperboard cartons,]
matches, woodenware (such as tooth-j
picks and tongue depressors),
and
lumber products.
Except
some building and related
sold in our retail outlets on both,

lumber]
for]
materials]

raisds questiohs for the"
current year.
1
T
^'
ecovery now

I11

spaed in stores and homes — these
factors, and more, have brought vast

some

respects, the rebound that

new

May and June of the past

opportunities to the packaging
Henry C. Estabrook
and have caused the re¬
markable and fast-moving develop¬
ments that we see in packages competing for attention

had

work-saving and sanitary advantages

the

single service package as well as the advantages

apply in particular to paper, paper packaging has
important gains from these trends and has
one of the fastest
growing divisions of the paper

that

registered
been

Paper milk cartons for packaging milk repre¬
sent one of the larger segments of the industry and have
shared in its growth. Over £0% of packaged milk is now

packaging is due to the new coatings developed for ap¬
plication to the paper. Plastic coating for instance pro¬
vides paper containers free of paper taste, non-absorbent
to liquid and moist foods and more resistant to leakage.
This has made paper packaging available to many types
of food and non-food products that could not use paper
before. New developments in the way of improved coat-

rate

ten

exceeded

billion

mately 45%

was

/*"vc

dollars.

^ vt

glass,

vv*

sale

the previous

Now that

n v* k\ fa v

Another

factor

the

rate

deficit

government

may

operation. Nonhave been charged off this
year, and we have reasonable expectations for a better
profit picture for the operation. Already planned is an
additional 20-30% increase in egg carton production ca¬

be that 1959 will

recovery

the

fiscal

the

was

$12

startup

expenses

pacity in the coming year. The new $25 million plant
has molded pulp manufacturing facilities and lumber
manufacturing facilities.
%

ending
concern
in

year

The

lumber facilities

new

provement in the market for the lumber division's prod¬
Elimination

ucts.

Federal Reserve Board action

impact of

the money market.

judge from recent public statements, that Board is right¬
fully standing firm in its obligation of trying to prevent
deterioration

undue

the

value

•

psychological nature,

recession and

the

dollar, and to

Unless there develops

domestic inflation

startup

■;

confident -that

scares

•

in the coming year.
i

justify
based

■

This

statement

should

still

competi¬
however,
by careful attention to costs while producing better prod¬
ucts. An example is Gardner's "Redi-Tote" shoe box. ;It
tive.

higher

expected that such
A

prime

rates

perspective.
a

and

industry

there is

may

industry

are

the

strong banking

than

lineup

banking, services

past

year

Gardner Board &

takes complete

now

With

this

consciousness

and

certain phases

attention

will

their

and

done

appearing in the public

statements of banking leaders, it may
be

industry.

to the

prices.

•

costs

our

management

merger in

Carton Co.).

responsibility for its sales and pro¬

tough job well.

new resources

now

with

have

We think we've

new

products,

DOVER,

Summing
a

up, we

somewhat better

formed

profit performance in 1959.

Continued

page

Filling, Land Reclamation,
Canals and Port Works

are

With

Contractors

the

Waggoner, First
Building. He was
formerly with J: W. Tindall & Co.

Joins A. G. Edwards

TEXAS

Citizens State Bank

CApitol 4-6091
'Dredging/' New York

Bldg.

Local Securities
INVESTMENT DEPARTMENT

THOMAS

CSpecisll
r

POWHATAN
HECTOR

M. CONWAY

W. BOHNERT

GRAHAM

CHARLES C. KING
JAMES M. FETTEB

to The financial Chronicle)
W1L&ARD

*. CHICAGO, 111.—John E. Munger
h^s

JUniper 4-0226

Sons, 13 Public Square.

•

A. Kleine Adds to Staff

KENTUCKY

Teletype LS 1M

Kentucky Municipal Bonds

BELLEVILLE, 111. —Harold W.
is now with A. G. Ed¬

Atlantic, Gulf and Pacific Co.

Cable Address:

LOUISVILLE
Bell

Burdiek
i'

/ BArclay 7-8370

Floor, Kentucky Home Life Bldg.

(Special to The financial Chronicle)

Everywhere

HOUSTON

1st

Bank

Federal Government

wards

15 Park Row

Neal

Wyatt,

National

Longest Experience

NEW YORK 38, N. Y.

Member Midwest Stock Exchange

daman has become connected with

Correspondence invited from Corporate and Private
Interests

Wyatt, Neal'

ATLANTA, Ga.—Owen C. Var-

Ship Channels

work anywhere in the United States

port

THE

(Special to Thz Financial Chronicle)

equipped to execute all kinds of dredging, reclama¬

tion and

with
offices
at
Perry
Officers are Edward H.

Clerk.

Improvements, Deep Waterways

and

Arnold,-President; H, A. Holder,

been

Alexander

added

to the

Kleine

South La Salle Street.

staff of
120

Co.,

or¬

think Diamond Gardner should have

Investment Services, Inc. has been
Lane.

River and Harbor

Mass.—Accounting

new

better management

Accounting & Inv. Services

1957

Each division

ganization to direct them.

Relatively

plants and

be expected that

paid

selling

Gardner has continued to

duction and operates as a profit center.

speaking, this augurs well for the future of-the banking

it.

Diamond

(partially brought about by

with The

the

j/ mately one-half of all non-durable items sold are food

convenient for the customer

expand its facilities while reorganizing

tb be adequately

vigorous

time, it's

to carry.

earnings problem in the

is more

handling costs for the manufacturer and the retailer.

At the same

relationship will prevail.

if staff and stockholders

compensated.

rates

that the average banker is sensing

appears

keenly that

rediscount

Eventually, it

strong national economy requires

system.

cuts

historical

we can improve their performance.
The
division, especially, will improve through better
products with more consumer appeal.

match

The paperboard and carton industry is highly
We look for new business in that field,

rather steady money market

income
of approximately 3% in 1959, the sales of food products
! should continue strong. This augurs well for the packag;
ing industry especially in view of the fact that approxiindication points to an increase in personal

Weather to be sure is a factor affecting

Bluff

Our match and woodenware divisions operate in a
fairly stable business atmosphere. However, the recent
reorganization of their management teams makes us

qualified by the belief that present monetary forces do

Red

at about the levels of the past three months
may be ex¬

pected

approxi¬

speculative atmosphere.

startling international crises

months of 1958,

products.

nonrecurring

and lower production costs will improve per¬
formance.
Increased housing starts in the coming year
may'offset sortie depressing factors in the lumber industry.

quality of its staff and the happiness of those who invest

every

Red Bluff have allowed

to close two old mills and incorporate their personnel
into the Red Bluff staff. We do not foresee
much im¬

street which will sustain the business volume
coming year.

the

Package-FOODTAINER Division has its

Red Bluff, Calif., plant in complete

recurring

A. Ericksoo

for

General

The
new

boom.

super

expenses

metals, plastics and

the mend from the

Of basic importance to bank earnings is the

which was in itself a fine year.

year,

are

not

one-way
.

continued to run slightly ahead

items

but

with just the right speed to light the briquets inside.

can

July,
1959.
Apparently there is enough
Washington to encourage the belief that the 1959-60
budget will be in substantially better balance. However,
the announced $77 billion balanced
budget is probably
loo optimistic.
Spending by all political units is on a

our "Neet-Heet" char¬
briquet package—made of molded pulp which burns

coal

basic

of "troubled boom."

year

billion

economic climate was

Although the

etc.

of food

other

high level of busi¬

represented by paper packaging and the

somewhat unfavorable in the first seven
the

r\ 1

Of this amount,

remaining 55% was divided between

films,

prevent

,1 n11

*11 !

laving in mind problems coming
with long-term labor
contracts, it

Today, with everything from boats to

1959

VWe anticipate increased sales for

continuing phe¬

ing with more and more versatility. This plastic coating has been extremely instrumental in developing Sealright <

ness

-sales in the past ten years.

review

look forward to

Sealright-Oswego Falls Corporation is the first.?to
plastic coated paper packaging and has con¬
tinued to improve its processes so as to provide packag¬

•

therefore,; should

recovery,

year,

•Chic-tainer"

a very sub¬
The
present

rate.

forces seems to suggest that

introduce

individual can¬
dies being packaged in one form or another, population
growth is bound to bring about packaging growth,
especially food packaging growth, and our United States
population is growing at the rate of 3,000,090 per year
Last year in the United States packaging industry sales

declining at

not be viewed

which will

ings are in the making at the present time
add even more products to this list in 1959.

it has developed new products such as the
tray for pre-packaging poultry. In addi¬
tion, the normal growth of the population, plus a strong
trend toward outdoor eating and in-plant feeding, will
tend to increase our sales volume in molded pulp plates.

past

time when inventories

annual

nomenon.

industry.

packaged in paper and consists of some 13 billion units
per year.
Each year shows some increase over the one
before in favor of paper containers.
A considerable part of the gains registered in paper

been

stantial
..

;

occurred at

Because

come from the forests. General Package-FOODTAINER
Division should have an improved profit picture. In the

today.
of the

have

year which
re.-.examination of the status
of inventories the country over. This

led to

Robert G. Fairburn

coasts, all Diamond Gardner products!
one
thing in common: they*

has occurred is partly due to the im¬
pact of war and inflation scares in

Industry

forest
operating

sion—turn out molded

sharpness mf its

the

Five

General Package-FOOD-

—

TAINER, Lumber, Woodenware, Dia-j
mond Match, and The Gardner divi-l
4

The 1958 recession proved to

expected,

company

industry.

divisions

banking in 1959 is< inexorably inter¬

government budgets.

the TV snack; and the
'foods industry and freezer

drudgery;
frozen

outlook for"

The

ing developments in the competitive
race
to save
the housewife from

Diamond Gardner's management feels that 1959 will
show improvement in the company's profit picture. There
are two basic reasons for our cautious optimism:
(i) the
economy, we feel, is on the rise which will continue until
restrained by tighter credit controls;* \
and (2) we will not face such heavy1
startup costs in the coming year.
Diamond
Gardner
is
a
widely

consumption of packages.
Weather-wise, 1958
poor year. Given better weather in 1959, together

with better economic,

G. FAIRBURN

ROBERT

President, Diamond Gardner Corporation

unfavorable

Corporation

Falls

(251)

P. McNAIR

OSCAR C. WRIGHT

Mrs. E, C. LEWIS

CtAREXCE G. TAYLOR

Mrs. ELINORE, SEDLEY

.EUGENE L. COLCORD, Jr.

The Commercial and Financial Chronicle

(252)

the past 10 years. Rubber consumption in the United
States has gained 42% in the same period.
It is reasonable to expect that 1959 will be the best

ERNEST

FIELDS

ployment

widespread and we are experiencing continuation of
industrial development. As a result of such
develop¬
ment, Florida's numerical increase in manufacturing em¬

in the history of the rubber industry.

year

during the period 1947-57 was exceeded by
only live states/ In 1957 we moved from sixth
place up to third place in this category. From Septem¬
ber, 1957 to September, 1958, our increase put us up one
that

JOSEPH

The last several months of J 958

strongly indicated that
Company's service area has experi¬
enced a pronounced upswing and that the decline in
industrial sales of electricity and gas, which occurred
during the latter part of 1957 and the
first part of 1958, has been reversed.
Throughout
the
recession
period
of

residential

our

and

continued

commercial

their

sales

and

growth

sales.

FISHER

President, Reading Railroad

rise

The

us.

Reading to

revenues

the

recession

which

cut

1958

earnings

■
r

step, namely, second out of the 48 states. FP&L's
electricity to industry for the 12 months ending
October, 1958 were up 30% - over the preceding 12
months.
■'/•//,'- '.■<
• • '/•. ...v
.......
/■*
In spite of crop damage from the cold weather of
1957-58, our agricultural economy as a whole is doing
well, particularly citrus.
The Federal Reserve Bank
sales of

the

level far below those
previous year is apparently

the

trend in carloadings and

upward

quarter of 1958 is indicative of a further modest
in business during at least the first half of 1959

for

An
last

ended, and the hard-hit economy is
taking an upturn in which we should
participate.
Areas of particular encouragement
despite the low level of earnings
were adoption of the Transportation
Act of 1958 by a Congress increas¬
ingly aware of railroad problems,

than offset the declines in industrial

Atlanta

reports

marketing this

that

advantages

widely

the

diversified industrial business within,
the

area

latter

evident

were

part

sendouts

when the in¬
kilowatt hour

of 1958
weekly

creases

the

over

the

during

of the

week

same

prior year were greater for our
Company than for the country as a
whole and for our own particular

Ernest S,. Fields

expect the growth in
industrial gas and electric loads to continue throughout
1959 and. when combined with, the continuous growth in

region.

residential

the

commercial loads,

and

to result in in¬
creases in total gas and electric sales equal to or greater
than those experienced during the years prior to 1957.
There

several

are

which

factors

anticipated

long

of the area

continues to grow at

term

growth

contribute

that edds from

pace

population

The

pattern.

the

7,500 to 10.000 residential electric customers and 4,000 to
5,000 residential gas customers each year.
Sales of load building electric and gas

appliances

con¬

tinue

strong and it is estimated that conversions and
additions will add about 11,000 gas heating customers to
lines

during 1959. New suburban shopping centers,
which are large users of electric and gas services, are
being constructed each year. New industries continue
to be attracted to our Company's service area. These not
only increase the industrial gas and electric loads but
they also result in increased population with resultant
larger residential and commercial consumption. A large
steel company is in the process of increasing its rolling
capacity by 35%. This conversion will be completed in
the second quarter of 1959 and the energy used by this
customer will increase substantially.
our

firmly believe that our territory will continue to
grow at a fast pace. It is ideally situated in respect to
both the large population centers of the nation and all
forms of transportation such as
water, rail, air, etc. It
has also a stable and dependable labor supply and offers
an abundance of
educational, cultural, and recreational
opportunities which will continue to attract people. Sub¬
stantial progress is being made on improvements which
will

make

the

Greater

Cincinnati

Area

even

•attractive to
of

industry and as a location for headquarters
companies doing a national business. These improve¬

ments

include

construction
vehicular

bridge
a

expressways
into and

the

Ohio

River,

expedite movement

through the area, a new
a freeway
which will

the Ohio River and

easy

access

Federal

new

recanalization

traffic

over

provide

the

Greater

Cincinnati Airport,

Building and plans for

large

under¬

ground garage in the center of Cincinnati.
An

indication of our
Company's confidence in this
growth is the. fact that, during the past ten
years, it has
spent $263 million for construction and plans to
spend
an
additional $72 million
during the years 1959 and
1960.
It
is estimated
that the electric
industry will
double in size during the next ten
years and there is
every

reason

.growth

will

believe
at

least

that

our

equal

Continued substantial growth in

Company's

that

the

rate

result
the

enters

crease

mand
.

;
;

for

the

dollar

new

the

The

year

de¬

ahead*

approximately

units, from 4,250,000
in
5,500,000 in 1959, and that

truck production will rise some
220,900 units. The market for

H. S.

Firestone,

Jr.

replace-

!^n'"re sales through local tire
000,000 cais that are
now

another

from the

two years old

some

43,-

older presents

1959.

As for foreign
operations, the rate of growth is ex¬
ceeding that at home. Figures for rubber
consumption
outside the United States
indicate an increase of 94%

reached

1959

the

Bethlehem

Morgantown, Pa., began shipping iron
Nov.

Steel Co.

that

and

reach

and

economic

still

have

expectations, the

the

fares

attract riders to

lower

solved

added

service

ful

will

Sam

Fleming

alarm.

problem of inflation will undoubtedly become in¬
creasingly pronounced as the communist world builds up
the tempo of the economic cold war.
Their advantages
the totalitarian state cannot be taken

must

no longer indulge ourselves with
all-powerful. A balanced Federal
budget, sound fiscal policy and the gearing of wage in¬

the

illusion of being
to

creases

productivity

are absolutely essential if we
ourselves to contain inflation and meet
economic threat which the communist world
pres¬
ents. To do so will require the enlightened
thinking of.
both business and labor leaders and the
cooperation of

will

are

prepare

the

mass

offer

the public and government officials.

a possible
solution to the increasingly
to the railroads of handling short-haul
passenger service.
While the past year was

expense

disappointing, from

a business
brighter outlook for
the economy as well as renewed
hope in the promise
of more equitable competitive conditions
through the
Transportation Act of 1958, steps leading to a solution

viewpoint, the

chronic

The

transportation and reduce traffic
congestion. The test, known as "Operation Northwest,"
is sponsored by the City of Philadelphia. We are
hope¬
heavy

the

the malignant danger of inflation and is
willing to dis¬
cipline itself to the counter-measures necessary to con¬
tain this great problem, we must consider the future with

near

Chestnut Hill rail lines to
and

rec¬

problems of unemployment and the seemingly inexorable
erosion of the dollar. Until the general
public recognizes

participating with the Pennsylvania
Philadelphia Transportation Co., in a

whether

If auto¬

understanding,

not

lightly, and

and

py; ••;:

being

are

could easily break all past

of slave labor and

determine

There

year.

into

expenditures should

of railroad tunnels.

Railroad

well

likelihood, for the

Inventories

techniques in
through a new "dry lubricant," and made the first rail¬
road application of rock bolting in
stabilizing the roofs

pioneering six-month test

was

quarter of the
this forward

continue

all

considerable

Nashville, Tenn.

Bank,

However, with record prosperity
prevailing and excellent progress
being made in business techniques

research engineers applied
combating wear on curved rail

Reading

1959

FLEMING

close, it

second

will

mobile sales
year

Technologically, Reading

The

feel that

ords.

concentrate

ore

the

year.

income

12.

new

substantially ahead of 1958.

annually.
Further spurring economic growth and
enlarging em¬
ployment opportunities in the area, as well as providing
new
traffic for the railroad, 30 new industries were
located along tracks of the Reading System
during 1958.
of

forward to the future

rebuilt, government expenditures
a very high
level, hous¬
ing starts should be well in excess
of one
million, and both personal

marks of the year for the Delaware River
The new ore unloading facilities are expected to
increase capacity by up to 200,000 tons

Mine

1958,

continue at

ore

Grace

and,

entire

high

new

year and look

j--

the

indication

movement

port.

The

1958 drew to

every

carrier "Rio San Juan," and the largest
handled there—20,760 tons of anthracite
shipped to France in the freighter "Andros Mariner"—
were

good

very

our

new

passenger

offers

year

Business and operating conditions for 1959, as we fore¬
them, offer considerable promise for the electric
utility industry in general.

see

In our
opinion, all three major classes
utility sales in 1959 will show sub¬

deficit, and the prospects for further

legislative relief in the

session

new

Congress.

stantial

ROBERT
President

and

F1TE

Company.
were

42,000

the

end

October,

such

dollars.

our

to
i"

total

in economic

con-

the manner
generates opti¬
purchases, should lead

improvement

mism for

Octo¬

over

electric

ditions, particularly in

come

measure of this was the
customers connected to the lines of Florida Power

Light

revenue

eral improvement

Light Company
continued

gains in kilowatt-hour sales

For the residential class, the gen-

General Manager,

Florida Power

FITZWATER

President, Indianapolis Power & Light Company

new

sustained

and

electric
in

creases

the

growing volume

appliance sales. In¬
rate

home

new

ber, 1957.
While this gain is less
than the 56,000 increase for Decem¬

construction
creased

kilowatt-hour sales

ber, 1957, it is still very

electric space heating
conditioning will make sub¬

Another

measure

tinuing influx of

the

new

substantial/^
large

stantial

fact that for the year ending July 1,

1958, U.

S. Census
of

new

estimates

residents

the

1957-58 which

set

lead

in¬

1959.

in¬
O.

Fitzwater

Commercial sales will

increase
rate

at a very satisfactory rate in 1959.
The high
completion of new suburban retail facilities and

office

buildings in metropolitan areas in 1958 will re¬
flect substantial increases in kilowatt-hour sales in 1959.
As the high rate of construction of commercial
and in¬

the

record, weather-wise, we have
had since 1900. We are happy to say
that, at this writing, the sun is shin¬
ing now and that the U. S. Weather
Robert H. Fite
Bureau
predicts the usual warm
weather for this season. This, cour
pled with the magnificent hotel and motel facilities,
including new establishments constructed in 1958, gives
promise of an outstanding record of winter visitors.
The benefits of our climate and the widespread desire
of people to live and work in Florida, which spurred our
industrial development, are. becoming known to more

contributions

of customers.

will

in sales volume for this class

crease

each

also

addition,

and air

con¬

people is the

stitutional facilities continues in 1959, further gains in
kilowatt-hour sales will be realized. While the number
alone of these new commercial and institutional build¬
ings will lead to sales gains, the higher levels of illumi¬
nation, air conditioning, electric food service equipment,
\

and electric
ties to

space heating being utilized in these facili¬
ever-increasing extent will offer great poten¬

tial for sales gains in

Kilowatt-hour
are

sales

1959.
to industrial

customers in 1959
certain to show significant increases over
1958, due

in part to the moderate rate of improvement

and

dealers

outstanding opportunity for

Fisher

worse

continuing in¬

volume.
in

coal cargo ever

the winter of

with

year

Reading's
Port Richmond Marine Terminal in
Philadelphia, where
more than $800,000 was spent in
1958 for enlarged ore
and coal handling facilities.
The largest single cargo
transshipped in the 114-year history of the terminal—
35,848 tons of iron ore—lifted into 640 railroad hopper
cars

of Florida's farm income.

quite obvious that all
segments of the economy were continuing to move for¬
ward from the low point of the
recession, which was

established

were

receipts from farm
year's by 18% to
their district. Citrus sales bring
last

confidence.

the

state put Florida in second place.
Florida had some cold weather

1958, the rubber

the

favoring
tires

rising

will be greater because of
increased
of automotive vehicles
and a greater number of
cars in use.
It is estimated that
passenger car
production will be up

1,250,000

records

new

number

production

1958

Two

customers

industry during the

last six months of

industry

but

expenses,

cash

exceed

Florida's growth

SAM

time, carried out long-range studies for future capHal improvements to provide greater
economy, and effi¬
ciency, as well as better customer service, when earn¬
ings permit resumption of such expenditures.

operations.

all factors

earnings

states

President, Third National

same

new

FIRESTONE, JR.

My- belief that 1959 should be the best sales
year
;in the history of the rubber
industry is on the con¬
tinuing growth of unit tire
sales, increased sales of all
other divisions in the
rubber industry and the
encourag¬
ing rate
of
expansion of foreign

reduced

its

1.958 new residents
Florida in large numbers. One

view

Company

with

1958, the railroad exercised careful

industry.

Chairman and Chief Executive
Officer,
The Firestone Tire &
Rubber

volume

six

about 38%

will be

vancements.

control

the

Based

and, on our own railroad, the con¬
tinuing growth of port facilities and
industrial development, along with
the application of technological ad¬

During

HARVEY S.

gas business also

our

.anticipated.

lead

our

will

year

The

Thursday, January 15, 1959

our

President, The Cincinnati Gas & Electric Company

the economy

sales

Continued from page

more industrialists.
Such benefits are among those
that brought important national manufacturers such as
Pratt and Whitney, Minneapolis-Honeywell, Glenn L.

Martin, Sperry-Rand, Westinghouse Electric Corporation
and many others to Florida. While the national recession
of 1958 may have postponed the plans of some compa¬
nies, interest in the state on the part of manufacturers

trend

anticipated

for industrial

output. Efforts by the management of in¬
dustry to develop new materials, alter product design,
and improve production methods in order to reverse the
of

decreasing net earnings, also will bring about
applications and use of electrical energy.

additional

Since such effort
action

will be foremost in the

of industrial

management

planning and
1959, kilowatt-hour

Number 5812

Volume 185*"

stand

sales

more than the
with increased industrial output.

benefit from this factor

arithmetic gain to come

industry in general will continue

electric utility

The

construction programs in 1959 and will
have a corresponding need for new investment capital.
Total expenditures for new plant, however, will not
equal the levels of 1958. The construction programs
completed in 1957 and 1958, and the effect of the indus¬
trial decline, have left many utilities with a substantial
reserve in generation and transmission capacity.
The increase in sales naturally will require some in¬
crease in utility plant to serve the new loads involved.
Such new plant requirements will be predominantly in
the nature of distribution facilities. 7Much of the in¬
crease in sales to industrial customers',' however, will be
through facilities in place before 1 the recent industrial

with substantial

decline.

•

'•

7::.?

7 *77 *7

7' ■'
of increased

in.-1959

combination

"This

' 77 ' '■■■/
sales

•

and a
sub¬

reduced level of capital expenditure should lead to

gain in iiet income and earn¬

stantial improvement, and

ings for the industry in general. The improvement, and
gain in earnings-will be affected to,,?* large extent, how¬
ever, by the rateV-at which inflationary pressures; cause
material prices Jahdwages to "rise 7in relation to the
rate of increase in revenues.
74>i^ V
•
'v..

-ANDREW

.»•

FLETCHER

President, St. Joseph Lead Company

For years it has been quite common to consider the
United States as the premier lead and zinc mining coun¬
/

try of the world. But a new chapter
in
mineral
history.
In
1957, the

imports, the quotas to be

is often the case, no common

Further

world's

the

number

the

of zinc.

government's budget ex¬
The bond mar¬
appears to be discounting • sub¬
stantially the same developments, to
be
expecting higher interest rates >
and-a climate generally unfavorable
to the ownership of fixed-income se¬
curities.
The question as we enter /
1959 is whether these implied fore¬
ket

likely to prove correct. .77judgment they will be cor¬
only in part. The pendulum in;
1958 swung too far in the direction ;
of accepting inflation as a permanent.
way of life in this country; we may"
see the beginning of a swing in the'
opposite direction in 1959. The fuel
for inflation is abundant and Federal

casts

and