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UNIVERSITY
OF MICHIGAN
ANNUAL REVIEW AND OUTLOOK ISSUE
1 n 2 Sections
-
Section 1
FEB 27 195
rasiKst ADKiNisrund
imm
Commercial and
Reg. U. S. Pat. Office
Volume 171
Number
487?
New
York, N. Y., Thursday, January 19, 1950
Price
$1.50
Copy
a
EDITORIAL
As We See It
By MELCHIOR PALYI
The Year Ahead
For several weeks—we had almost said months
—the
soothsayers, political and other, have been
busily peering into the coming months. It has be¬
come
almost
an
This year
for some
universal
there has been,
New
so
Year's
custom.
it has seemed to
us
time
agreement
past, an exceptional degree of
to what is ahead, at least during
as
Businessand Finance Speaks
Glancing at 1950
Alter Turn of the Year
Reviewing economic situation, Dr. Palyi asserts prevail¬
ing optimism about general business prospects of 1950
is well justified, provided it is not based on self-delu¬
Points out national economy is still
sions.
and corrections cannot be attained
relatively
painless
Leaders in government, industry, finance and banking
provide the "Chronicle" with their individual opinions as
unbalanced
the probable trend of business in the current year.
Contributors include the chief executives of numerous
to
by mere minor and
Notes over-inflated
adjustments.
companies in all lines of business.
farm prices and distorted industrial incomes, and con¬
cludes continuation of present boom will make necessary
further expansion* of debt and dilution of monetary
Continuing
ICLE
base.
more
less unanimous that the earlier part
or
of
this year
would be "good" so far as business in
is concerned. Among these gentlemen
general
there has likewise been
relatively uniform ten¬
dency to question, or at the very least to feel
uncertain about, the second half of the
year, al¬
though usually nothing drastic has been predicted,
far
so
as
we
are
a
1949
extraordinary
crises, both of global portent. One was the breakdown
of international money planning, culminating in radical
currency devaluations in virtually every country that
is a protege of the Bretton Woods
set-up and/or a beneficiary of the
year,
marked
was
*by
two
specific
to time periods, that omission
as
easily be forgiven individuals whose main
is to get themselves and their
party
cern
in office next
place.
are
had it
than
more
ago—has
a
little
appeared because "we planned it that way."
if
the President
and
his
advisers
really quite confident of all this, they
are
are
Continued
on
At
not
Melchior
future
the world
at large
Secretary of the Treasury
the steel and coal strikes, testifies to
in¬
an
underlying strength in our econ¬
which, I believe, will become
omy
"dollar crisis" is
are
other event
since
effects
World
ori
evident.as the year progresses.
more
monu¬
War
II.
in
sale
shifts
in
the
or
of the
personnel
new
Chinese
protecting
Formosa—of
or
re¬
abandoning the strategic island of
"containing"
or
appeasing
Russia.
Continued
show
the
table showing the price trend
on
on
Both
page
1%%
Continued
51
monthly high and
Due
January
Priced
1.05%
l,
of Treasury
bond
the
year.
-
1.50%
as
and
if
issued)
Members New York Stock
Exchange
Wall Street, New York 5
40
Boston
Chicago
Bonds
Monthly Commercial Letter
COMMON STOCK FUND
upon request
PREFERRED STOCK FUND
THE
BOND FUND
White,Weld&Co.
Municipal
Canada
across
inc.
A Mutual Fund
plus accrued interest
(When,
Funds,
Bond
THE NATIONAL CITY BANK
CANADIAN BANK
OF NEW YORK
UTILITIES FUND
OF COMMERCE
Prospectus on request
FRANKLIN DISTRIBUTORS, Inc.
Street, New York 5
Department
THE CHASE
INCOME (BALANCED) FUND
64 Wall
16
State and
550 Branches
Yield
to
page
low prices of
issues during
Franklin Custodian
1955-59
on
the New York Stock Exchange in
Compensation
Bonds
outlook
half-year, while per¬
obvious, are fully as re¬
Washington
War Veterans'
promising
second
less
Business prosperity depends pri¬
marily, of course, upon the ability
and willingness of consumers to buy
freely the products of industry. The
John W. Snyder
powerful influence of this factor was
again forcefully demonstrated dur¬
ing the year just past. Despite the business unsettlement
and increased unemployment caused by the inventory
gime will be the question that, in turn, involves the vital
issue of
the
assuring.
will be put
Department.
State
non-recognition of the
The factors making
continued
a
haps
and crucial test, foreshadowed lately by whole¬
Recognition
obvious
of
number
observers.
for
Its
to
a
have been pointed out by most busi¬
ness
country and
But this much is
incalculable.
49
a
of
are
factors making for prosperous busi¬
ness in the first half of 1950, which
Commu¬
this
1950 American diplomacy
stock and bond issue in which dealings occurred
L949, also
the
to
That in
a new
of
course
begin here¬
important recovery in business which has been
under way since last summer, despite the handicaps of
according
certain:
making
page
every
OF
reduced
China
of
occurrence
Paiyi
statements
The
significance, probably
the
significant
single
historical
In the SECOND SECTION of today's issue we
STATE
a
the
was
mental
most
been removed, and that it has dis¬
now
new
schedule,
nists
Dr.
indicated
the
to
The
HON. JOHN W. SNYDER
Hin prospect for the, second half
a
months
some
be
The fall
scheduled to take
worried
as
There
depression—which obviously
a
the Marshall Plan
If
to
The Administration is oozing confidence
that the threat of
least
economies.
stalments will
retained
OUT¬
&
government
of
with:
can
autumn, when Congressional and
number of other elections
views
business in all industries.
ca's inflationary policies and mone¬
tary warfares, which stymie the in¬
ternational capital flow and the fi¬
con¬
REVIEW
opinions
country's leading industrialists, bank¬
as to the probable trend
of business
the-minute official
nancial reconstruction of unbalanced
so
ANNUAL
individual
halt to Europe's and Latin Ameri¬
a
persuasion have
If they have not been quite
of former years, the CHRON¬
today's
the
in the current year.
These forecasts, written especially
for the CHRONICLE, provide the reader with up-to-
The devaluations failed to call
ECA.
aware.
the tune.
custom
in
and financiers
ers
The
Politicians of the Democratic
taken up
ISSUE
officials and of the
the first half of the current year.
For some six
weeks, perhaps longer, the economists have been
our
features
LOOK
NATIONAL BANK
Head OfFice: Toronto
Bond Dept.
Teletype: NY 1-708
„
OF
New York Agency: 20
Seattle
Portland, Ore.
THE
CITY OF NEW YORK
Exchange PI.
San Francisco Lob Angeles
V
CANADIAN
c(ffio&fon
Company
bonds & stocks
New
Underwriters and
Prospectus for this Open-End
Investment
STOCKS AND
may
be obtained
front authorized dealers, or
BONDS
and
COMPANY
Corporate Securities
OTIS & CO.
Established
BOSTON
2NEW
LOS
ANGELES
Goodbody
&
co.
ESTABLISHED 1891
1899
(Incorporated)
CHICAGO
YORK
England
Company
Distributors of Municipal
"VANCE, SAN I)E RS
A
Northern
CANADIAN
Cincinnati
Chicago
Columbus
Denver
Toleds
Geporatiotj
MEMBERS NEW YORK STOCK EXCH.
CLEVELAND
New York
Dominion Securities
40 Exchange
Dallas
Buffalo
115 BROADWAY
105 W. ADAMS ST.
Place, New York 5.N.Y.
IRA HAUPT & CO.
Members New York Stock Exchange
and
111
other Principal
WOrth 4-6000
NEW YORK
CHICAGO
Teletype NY 1-702-3
WHitehall 4-8101
Boston
Exchanges
Broadway, N. Y. 6
Teletype NY 1-2708
Telephone: Enterprise 1820
2
TRADING
The Security I
IN
MARKETS
&
COMMERCIAL
THE
(238)
FINANCIAL
Like Best
This Week's
Ohio Edison
Constituting
Ohio Public Seivice
*
Puget Sound Power & Light
of experts in the investment and advisory field from
sections of the country participate and give their reasons
all
Louisiana Securities
particular security. Selections may be suitable
individuals, for trustees and for institutions.
for favoring a
for
New York Hanseatic
Co,, Philadelphia,
Coffin, Bet? <&
Corporation
Pa.
York 5
One
weaknesses
human
the
of
responsible for much grief to in¬
vestors is the tendency to become
"wedded" to certain pet bonds or
stocks
for
better
or
for
worse.
Specialists in
ap¬
world.
,,
The
such
2-7815
Charles H. Baird
Conservation of principal.
(2)
Payment
'
come.
Growth
(3)
to
New
third
This
&
American Air Filter Co.
Common
Black Star Coal Corp.
V
Kentucky Stone Co.
Preferred
BANKERS BOND ^
Incorporated
1st
Bldg.
Floor, Kentucky Home Life
LOUISVILLE 2, KENTUCKY
Bell Tele. LS 186
Long Distance 233-9
prejuT
the
like
dices
back
25
Bliss
ago
with
Bonds, Series D, offered at 25%
discount from their 10-year ma¬
Oxford Paper Company
Engineering Co.
unstable
largely minimizes the
factor
in
government
Some years ago
American Telephone
bonds,
Security I Like Best,"
months
130 Broadway
Member
New York
:
Stock
Midwest
Exchange
favorite
"The
Not many
or
Constantly changing
convince
company
me
or
that
my
industry, at
this article,
probably not be my favorite
from now.
will
a
Tele^
been
Standard Oil of
the moment of writing
year
Today the Investor must either
Union Commerce Building
be
CLEVELAND
&
might have
it
ago
conditions
-
the stock
graph Co. might have been
New Jersey.
WM. J. MERiCKA & CO.
An
power.
General Motors
Inquiries Invited
a
yield to maturity.
he is being paid off at par in dol¬
lars valued at a 40% discount in
of
Associated Transport, Inc.
2.9%
Now, however,
expected
value,
turity
currency
Incorporated
expert himself or he must
an
an expert, if he expects
attain or even retain security
employ
to
his
from
LAMBORN & CO., Inc.
STREET
WALL
NEW YORK 5, N. Y.
invested
the
to
answer
99
The
for the
capital.
problem
overwhelming number of investors
is the mutual fund of moderate
size,
by qualified pro¬
whose fore8ight
investor can rely. The larger
managed
fessionals
the
upon
funds, in order to avoid over ^con¬
centration of
SUGAR
Raw
—
Refined
—
Liquid
Exportm—Imports—Futures
this, still cannot avoid holding
large block of individual securi¬
Biscuit
gan
Stirling, Eastman, Dillon &
difficult to liquidate
Besides, such a
often
desired.
Unwjeldly size breeds the hazards
inflexibility and too great re¬
liance upon mere diversification.
of
Eagle Oil
Bought—Sold—Quoted
Philadelphia Fund, inc., in. my
opinion,
solves
the
investment
conundrum
for
most
investors.
is
Here
Memorandum
on
request
size,
a
mutual
fund
entirely flexible,
versified,
objective is particu¬
MARKETS
be
than
greater
costs
now
pre¬
vailing.
$1.20
to
close
to
share
per
after
adjustment for a separate tax re¬
Missouri
of
acquisition
turn,
Light and certain of the
properties of West Ken¬
tucky Coal Company.
Dividend?
in
the
same
period
(including
those paid by Missouri Power &
Light) were above $1.00 per share.
Power &
former
able
to
like the Philadelphia
fund
present market.
CROSBY
JOSEPH P.
Mgr., Utility
Bear, Stearns
Research pepf.,
& Co., N. Y. City
Naturally, it is difficult to nar¬
row a choice down to ione specific
issue, but picking just one,
time
is
Co.
American
my
the se*
present
££
stock.
common
This
the
at
suggest
North
I
curity
the
opinion,
tbe
combines
common
the reclassification of
stock of Union Elec¬
of
existence
ued
appreciation
probabilities;
(2)
favorable
timing for such
appreciation;
(3) current
pany over a
a
and
.
it
ing,
of
Joseph P. Crosby
does
appear,
situation
now
North American under the
Hold¬
ing Company Act has divested it¬
self of all utility subsidiaries ex-
Electric Company
Missouri
Power
of
&
Light, and application for acqui¬
sition of the latter company by
as
it
is,
in
of
small
amply di¬
25
to
30
is
American
as
a
holding
tbe end of 1949 had about $15,000,000 of working capital, substan¬
all of which could be in¬
vested
as
additional
equity in
Union Electric if necessary or ad¬
tially
plicating factors
in
liquidation
(save possible minor ones relating
American
Union
Electric provides electric time, the value of Union Electric
St. Louis and adjacent
service in
common
territory. The company with Mis¬
souri Power
&
Light was the
twelfth
largest in
revenues
stock should be enhanced
by the likely improvement hi the
mm & company
Telp. RApjjlplph 6-4696
Chicago 4
Tel. CG 451
The
moreover,
investment portfolio,
country in earnings of that company and in
conservatively the general market for public util¬
the esteem
in
and
which its outstanding
securities
are regarded can be judged by the
ity
operating
stocks.
listed
company
North American
the New
common
is personally supervised
York
Stock
is
Exchange and, in my opinion, is a
markets for its bonds
preferred stocks of around a
2.55.%
and 3.80%
basis, respec¬
a
braces thorough knowledge of the
Members
New
York
Stock
New
York
Curb
Exchange
Cotton
York
New
Exchange
Commodity
Exchange
Inc.
Exchange,
Board
Chicago
Trade
of
Npw Orleans Cptton Exchange
other
And
Exchanges
N. Y. Cotton Exchange Bldg.
NEW YORK 4, N. Y.
PITTSBURGH
DETROIT
GENEVA, SWITZERLAND
on
semi-conservative investment suit¬
able for individuals and trustees.
reported
Incorporated by Royal Charter 1727
HEAD OFFICE-r-Edinburgh
Branches throughout
LONDON
-
3
OFFICES;
Bishppsgate, E. C. 2
8 West
49
Scotland
Smithfield, E. C. I
Charing Cross, S. W. 1
Burlington Gardens, W. 1
64 New Bond Street, W.
TOTAL
1
ASSETS
£155,175,898
■
■-
1
i
Associated Banks:
Williams
Deacon's
Bank, Ltd.
Glyp, Mills & Co,
N. Q. B.
OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX
,
earnings
of
Union.(year.,to 9-30-49). amounted
10-Year,: Performance of
35 Industrial Stocks
common
prevailing
small investment committee.' tively.
whose collective background em¬
Latest
by
1856
the
in 1948, is
capitalized,
iiwiiwiii—i
H. Hentz & Co.
visable, and has no apparent com¬
this
North
Established
existence
that the continued
North
on the
obtain¬
stocks.
Once
►o
com¬
yield of over
company only over Union, a com¬
5%; (4) little
pany with consolidated total as-r
general market risk, and (5) the sets
of approximately $333,000,000,
opportunity to benefit from the
would be in violation of Section
likely further improvement in the
11 (b)(2)."
market for public utility common
Inasmuch as North American at
Union
Open End Phone to New York Canal 6-1613
Royal Bank of Scotland
.
basis of the
a
and
2904
Hartford, Conn. Enterprise 6800
single operating com¬
the Act.
dends of $1.00,
Union
Enterprise
Me.
Ino.
Tele. BS 142
HUbbard 2-5SQ0
Portland,
Dealers
10, Mass.
violation
.
Missouri
Tel.
contin¬
holding
Securities
of
constitutes pf itself an undue
unnecessary
complexity in
of Section 11 (b)(2) of
pany
annual divi¬
oept
Assn.
Nat'l
75 Federal St., Boston
CHICAGO
"We have held that the
(1) excellent
affording
finding and opinion
a
tric, stated:
of
advantages
SEC in
the
in respect to
in
issue,
the divestment
common stock
has been announced as yet. In re¬
cent months North American has
been engaged in a number of pro¬
ceedings before the SEC relating
to its non-utility subsidiaries and
the acquisition of Missouri Power
& Light by Union. With regard to
the divestment of Union Electric,
J. B. Magnire & Co., Inc.
Members
No program for
of Union Electric
and
issues.
£08 Soiith La Salle St.,
TRADING
Co., New York City.
pending before the SEC.
its
non-Utility
subsidiaries,
acquisition is approved, to
will hold
114 which companies have a probable
spreading out of money has the shares of Union Electric for each
value equivalent to only around
effect of relegating the suppryi-. share of its own stock.
In addi¬
$1.00 per share), it appears that
sion of the investor's capital to
tion, cash and miscellaneous assets
the distribution of Union Electric
many assistants, and of the invest¬
have a probable value in excess
ments
suffering from too little of
$2.50
per
share
of
North should be made sometime in the
attention by the top management.
American.
next several months. In the mean¬
ties;
BIgby 4-2727
capital, have had to
spread their shareholders' money
over
an
unwieldy list of hun¬
dreds of .securities and, in spite pf
when
Mexican
branch offices
City.
.York
United
larly essential to investors aiming
at retirement or the education of
bought U. S. Government Savings
stability
Weiiman
our
of
The
years
have', looked
might
purchasing
;
Direct wires to
Lo¬
Jacquin,
4
m
NY 1-1557
La. - Birmingham, Ala,
Mobile, Ala.
Co.,
Company—S.
fix change
New Orleans,
Land Trust—Ernest
Pacific
Jellinek,
pace
trend of
Stock
St., New York 4, N. Y.
ton, Del.
with the long-term
rising living costs.
keep
York
New
25 Broad
HAnover 2-0700
Texas
both principal
the longer term,
Henry,
Henry & Co., Wilming¬
Allan J.
of reasonable in¬
income over
and
Steiner,Rouse&Co
Members
J.
Issues—Allan
Selected
quality of supervision avail¬
the investor in a mutual
Fund,
much favor upon a U. S. Gov^
in my opinion, cannot be equaled
ernment 4%
Treasury issue, of*except by the exclusive employ¬
Based on the prices at which
fered at par on Dec. 15, 1924, and
ment
of
an
expert investment
payable in gold.
This was cer¬ manager. Because such employ¬ comparable companies are selling
tainly a perfect investment, but ment is, obviously, prohibitive in at the present time, and allowing
in
April, 1933, the government cost for most investors, I believe for the probable value of North
suspended gold payments, thereby Philadelphia Fund, Inc., consti¬ American's other assets, the cur¬
changing the entire character of tutes the security I like best for rent liquidating value for North
American appears to be in the
government obligations. Ten years the future.
neighborhood of 25% above its
ago, for instance, the investor who
Looking
one
5%
P.
Co.,
City.
New York
of Phila¬
its basic
their children at future cost re*
professional quirements that cannot be prede¬
rightly avoids termined, but which probably will
plague.
*
&
Stearns
Bear,
Crosby,
(1)
Bought—Sold—Quoted
experienced
i
BROADWAY, NEW YORK S
Common
sion, the management
delphia Fund has as
objectives:
-
investrpent
problems in a
changing
York Stock Exchange
York Curb Exchange
Tel. REctor
\ atti¬
to
proach
mcdonnell
120
a
gerous
Since 1917
Members
and
to
tude, a «d a n
Co.—Joseph
American
North
Through careful selection of in*
inflexible
nt
m e
Rights & Scrip
New
lead
dices
Co.,
&
Betz
Philadelphia, Pa.
technique.
sound diversification,
constant professional supervi¬
Coffin,
Baird,
vestments,
Preju¬
a n
New
standing Of trust investment pro¬
cedure, and long experience with
successful market
1920
Teletype NY 1-583
BArclay 7-5660
investment field, complete under¬
CHARLES II. BAIRD
Inc.—Charles
Fund,
Philadelphia
JL
120 Broadway, New
Selections
Their
ent group
Eastern Utilities Associates (Conv)
Established
Alabama &
and
Participants
Forum
continuous fprum in which, each week, a differ¬
a
Thursday, January 19, 1950
CHRONICLE
BOOKLET ON
National Quotation Bureau
Incorporated
46 Front Street
Continued onpage
67
REQUEST
New York 4, N.
Y.
I
Volume
Number 4873'
171
'THE
COMMERCIAL
INDEX
FINANCIAL
Page
Retail Outlook for
___Cover
_
1950—Malcolm
lVIcNair;
P.
of
The Budget, Taxes and
Mutual
Fund
4
the Debt—Beardsley Ruml
Views 1950
Manager
Marketing,
Harvard Graduate
Business Administration
Effects
of
European
.9
Devaluation—.Craig S.
Bartlett
39
Gazing into
order to
the
come
The
Security
Like
I
doubly
2
when
Free
Economy
Vital
to
Proper Retailing, Declares
Fred
Chase
to
National
Low
Bank
Interest
Executives
Rate
Boy land Is President
Lay
Modest Bank
ity
47
Policy
47
Pro-Tern
of
to
Bank
to
Open
Bids
Jan.
NYSE
25
$100
Million
Bonds;
t h
for
eral
57
on
the
sure
El
Salvador Bond Exchange
Announce
Offer Extended to Jan. 1, 1951__ 71
Payment to Holders of
Chile
Bonds
Colombia Extends Time for Exchange of Bonds
77
Economic Outlook
on
TURN OF THE YEAR
was
At
wrong.
re¬
crease
price
in
1949,
performance.
than5
of
in¬
In the SECOND SECTION of
usual
our
tabular
record
today's issue will be
of
the
prices,
and
which
er,
by months, of every stock and bond issue'in"
dealings occurred on the New York Stock Ex¬
change during 1949, also a table indicating the course
of Treasury bond issues
during the past year. '
with
the
the
ally
Business
Insurance
Man's
Canadian
—t.......
...LCover
Stocks.
stood
Bookshelf
Gold
Ahead
out
_
Reserve"—
15
—
Prospective
Security
With
let's
94
Governments
Utility
Offerings
Railroad
45
1
Securities
Securities
had
Tomorrow's Markets
essarily followed
wise
2
_____1.__.___L
(Walter Whyte
.*
Says)
agricultural
Drapers'
The
COMMERCIAL
FINANCIAL
and
c/o
*An
14
96
Gardens,
Edwards
Copyright
Goods
WILLIAM
j
B.
CHRONICLE
25 Park
;
COMPANY,
WILLIAM
WILLIAM
to
N.
SEIBERT,
RIGGS,
President
Business
Manager
Thursday
records,
itate
issuei
corporation
and
Other
Chicago
(general
and
issue
city news,
Offices:
3,
Tll.
every
—
of
Countries,
Other
and
ad¬
$25.00
$25.00
market
news,
etc.).
135
S.
(Telephone;
and
per
Monthly
per
Note—On
the. rate
La
Salle
State
Act
St.,
0613);
March
of
the
by
National
Association
York
Prof.
per
U.
Retail
Dry
Convention,
City, Jan. 10, 1950., '
*
year;
per
interested
in
our economy
today is
than
it
after
was
There is
World
War
the
1948
Selling about
$9.25
•disregarding
and accelerated
arrears
—
Investment Securities
ID Post Office
Tel.
Square, Boston 9, Mass.
HUbbard 2-1990' "
BUY
U.
S.
distinct absence of that
a
disastrous
so
periods
There
of
during
business
is
absence
SAVINGS
I.
BONDS
pre¬
down¬
also
of
large-scale speculation.
At the
same time, added
strength factors
in the way of agricultural
price
supports, greater stabilization and
income, and
stable wage structure have
stiffened
our
resistance
to
the
more
cumulative
deflation
and
which
considered
the
.
self-reinforcing
had
come
almost
accompaniment of
a
to
be
inevitable
business turn¬
factors in 1949 there
ing stability ot
was
on
NATIONAL READERSHIP
where it
counts niost
income.
consumer
Continued
,
an amaz¬
page
29
Readers of The New York Times
truly national audience
a
for you.
offerings of
.
.
I
1,000
in
all the
because The Times is
communities in
4.8 states and the District
postage
financial
in
Monthly,
directly
Spencer Trask & Co.
Members
New
York
Stock
25 Broad
extra.)
fluctuations
Exchange
Street, New York
HAnover 2-4300
in
(
4
Members
--
Chicago
-Glens Falls
New
York Curb
Hubbard
1-5
-
'
2-8200
-
to
Times, your
message
talks
this important, nation¬
wide audience.
Sfljc
"All
-
Schenectady
advertising
Exchange
50 Congress Street, Boston 8
t
Teletype—NY
Albany
to Class A,
depreciation of $1.74
LERNER & CO.
vulnerability in the credit, bank¬
ing, and financial structure which
year.
(Foreign postage extra.)
Earnings Record"— Monthly,
of
Industry.
$5.22*
good
substantially broader and stronger
PREFERRED STOCKS
year.
(Foreign
Earned
many
High Grade Public Utility and Industrial
of
1
year.
Record
brief review of
a
read
are
S.
Publications
account
McNair
and
the Cement
of Columbia. InThe
per
$38.00
$42.00
of exchange,
as
-
remittances lor for¬
eign subscriptions and advertisements must
be made in New York
funds.
I
address
CLASS D (common) STOCK
repeatedly
New
Members
$35.00
Quotation
year.
pointed out,
Next,
have
Febru¬
at
States,
and
Canada,
Monday (com¬
quotation
bank clearings,
news
matter
United
Union,
Gther
adjustment,
ANALYSIS OF
RIVERSIDE CEMENT CO.
Dana
office
the
Dominion
Bank
statistical
in
just closed.
Eng¬
We
post
Territories
'
.Every
C.,
B.
Subscription Rates
Thursday, January 19, 1950
plete
the
under
Subscriptions
Possessions,
'I
vertising
William
Pan-American
flANA
E.
1879.
Y.
9576
SEIBERT, Editor & Publisher
D.
8,
at
price
degree of
AN
form
second-class
as
25, 1942,
York,
N.
Y„
ary
Publishers
Place, New York 8,
REctor 2-9570
,
HERBERT D.
'
Patent Office
DANA
by
1950
certain
we
fateful
Smith.
Company
Reentered
Reg. U. S.
London,
&
a
Aoic Available—
more
ing point. Growing out of all these
New
1
had
we
before
land,
year
commentators
a
ju-p
Teletype-BS 128
are
are some very
wider distribution of
Like¬
of
year
Why
in¬
the filling
on
the, pipelines of supply.
a
all,
nec¬
5
i..
Weekly
First of
long-anticipated
92
Washington and You
Twice
the
certain
were
ventory readjustment which
of
Security I Like Best
at
HUbbard 2-3790
capital goods industries generally
booming; and all three of them
certainly were booming in the
proved
hindsight
what hap¬
1923
STREET, BOSTON It w
are
-
of
there
95
Corner_^_
The State of Trade and Industry
Published
briefly
situation
55
Salesman's
Securities Now in Registration
The
benefit
basic factors at work.
93
:__—
the
30 FEDERAL
Prophets
construction industry
the automobile industry, and the
vious
1949?
pened in 1949. In the general busi¬
ness
' 14
Securities
Happened in
look
we
Public
be much stronger
inclined
have been
oi
the
turn.
What
5
Report
should
a-
when
the fiscal
forecast at this date last year.
to
13
Observations—A.(Wilfred May___
on
have,
in recent months
recovery
stores.
First of all, you just don't
serious business- setback
reasons.
half.
whole have turned
as a
appears to
than 1
91
-
Reporter's
timism? There
profits
general business situation to¬
day
8
12
Our Reporter
how
be
to
the
of the News—Carlisle Bargerou__.__
Funds
failed,
first
Connolly & Co.
INCORPORATED
business,
now
spinning down a
spiral of deflation as in 1921 after
the collapse of the World War 1
business boom, instead of which
we
have a s'trong stock market
and widely expressed business
op¬
general business conditions
1949
Of the
8
_
_
News About Bank and Bankers--
Our
lower
the
Walter J.
CALIFORNIA
not
i
that
approximately what I
anticipated, nevertheless because
5
.
British
year
95
Indications of Business Activity
Mutual
much
during
business the results for
89
Dealer-Broker—Investment Recommendations.__
From Washington
be
Bought—Sold—Quoted
ex¬
almost any other kind
on
then/was not 1949
point actu¬
therefore did not
and
also
department
j serious depression?
which began in July and
August.
Although in the department store
96
Briefs
be
break-even
how
turn in
15
Securities
Einzig—"The
I
Stock
goods.
long warned us oi
dire consequences when this
post¬
war boom came to an end.
Why.
fpr the second half of 1949 I
frankly did not foresee the up¬
Coming Events in the Investment Field
Dealer
down.
Common
of disaster had
Then
Regular Feature«
and
be
result
however,/to appreciate just
high
would
Bank
natural
profits would
foresee
As We See It (Editorial)
would
lower, markdowns higher,
percentage lower,
the expense percentage high¬
gross, margin
PRENTICE
CORP.
Clearly the great po'stwar boom
little
a
high and low
factors
same
culminated in late 1948.
sug¬
found
REED
business.
Specifically
that dollar sales
YORK
4-6551
a
be¬
why the business readjust¬
of 1949 bore more
heavily
particularly
far the department store
business
for the first half of 1949 I
gested
hard
on
certain types of retail
on
in
unemployment, a lower
level, and a less favorable
profit
toward
expenditures oh soft goods
ally, those
ment
last
an
back
relationship
expenditures
plain
last
lower rate
a
WALL STREET, NEW
Telephone: WHitehal!
can be explained in terms of
those four factors; and incident¬
look¬
time
shift
prewar
you—
Lichtenstein!
to
11949
wherein
this
consumer
happened during the
so-ealled business readjustment in
began
said
it
a
stock!
disposable
consumer
Most of what
meas¬
by
I
discovering
I predicted
business activity
many
and
precau¬
I
what
see
year
first page we present the opinions of
of the nation's leading industrialists and financiers
garding the outlook for business during 1950.
tween
there¬
assignment
and
year
on
be
preparing
this
ing back to
I
normal
out.
ure,
McNair*
79
BUSINESS AND FINANCE SPEAKS AFTER THE
is
fore,
M. P.
for
Starting
a
tionary
Prof.
More New York Bankers Comment
to
As
73
continued
or
-caught
99
relationship. Another factor hav¬
ing a particular bearing on the
department store business was the
succes¬
he
a
lost
you
"sure"
Lady Luck has failed
last year, this was essen¬
return to a normal prewar
you
tially
year s.
later
69
to
e
that
on
normal relation¬
more
spending; in
other words, the
so-called.^spendi-ng ratio decreased somewhat and
Savings increased. As I suggested
sev-
Sooner
Reports Gain in Net Income
a
income and
d i-
a u
ence
sive
World
in 1949 to
appear
same
If
Leave
ship between
so
before
Earnings
big bet
particularly significant for
retail business, there was a return
has the temer¬
41
Government Aid Promoting Housing, Says Raymond M. Foley
TOO?
Maybe it's because
Then,
practitioner
Lazarus, Jr.
ARE YOU
ANTI-GAIWBLiNG
which is probably not yet finished.
business
a
forecast
Best
AND COMPANY
slightly lower.
crystal ball in
with
up
be
is
a
highly
hazardous
undertaking at the best, and it is
-
of
Looks for lower business
sale will
10
Outlook—Roger W. Babson
School
profits in- 1950 because of
tough competition and higher break-even points. Says depart¬
ment store unit sales will
increase, but average amount of each
Economy
—Henry J. Simonson, Jr
The Employment
level.
6
—
licHitnsitifl
B. S.
Asserting postwar business boom is over and competition is
here, marketing analyst predicts little change in level of busi¬
ness
activity but with slight decline in wholesale and retail price
3
—
New Look in Federal Policies—Murray Shields
•«
(239)
By MALCOLM P. McNAIR*
Professor
Business and Finance Speaks After the Turn of the Year. .Cover
-
CHRONICLE
Retail Outlook for 1950
Article* and News
Glancing at 1950—Melchior Palyi
&
Worcester
flork Simrs
the
News That's
Fit to Print"
4
&
COMMERCIAL
THE
(240)
with
inconsistent
New Look in Federal Policies
The
the "new
look" in Administration's basic
One of the most significant de¬
velopments of. the postwar period
is the dramatic change in empha¬
ture
sis which was evident in the Mes¬
titled
avoid
cine,
en¬
political
is shifting from
radical-liberals
the
the
to
con¬
recently servative-liberals.
These
presented
t o
developments provide
Congress by good reason for believing that we
President are in the midst of a highly im¬
Truman.
portant change in Administration
The
impor¬ thought and attitude with respect
tance
of
this to the general direction our eco¬
"new look" in nomic policy should take. But it
the basic phi¬ is essential to recognize that the
losophy and change in objective has as yet had
objectives no more than a modest reflection
sages
the
of
Ad¬
hardly be
can
Shields
Murray
are
edge of
on
the
reversal in government
a
in the
specific legislative measures
by the President. The
look"
appears
to involve
over-esti¬ more of a
change in the expres¬
mated, for it sion with which official policies
gives
reason are clothed than in what is under¬
to
hope that neath. It is not surprising, but it
ministration
im¬
for
welfare
a
pro¬
including socialized medi¬
more
liberal unemployment
insurance, and comprehensive old
sickness and other benefits,
the
massive
expenditures com¬
age
the
if
wonder
to
outlays
gram,
Consequently one is
groups.
balance of power
so
the nation underwrite colossal fu¬
and spending and advocates bipartisan economic
policy which will analyze President's program so as to
gambling with the nation's future.
is
nation's future. He has asked that
objectives, New York banker interprets these as more sound
and less radical than in New Deal days. Sees changed attitude
toward taxing
it
proposals inimical to economic
expansion, that we are running
the risk of being in the position
of the individual who expands his
perative that the President's pro¬ scale of
expenditure not to the
gram be subjected to
the most limits
imposed by his present in¬
searching analysis is that it in¬
come, but to his rosy hopes as to
volves a great gamble with the
Vice-President, Bank of the Manhattan Company
on
positions taken
why
reason
Thursday, January 19, 1950
CHRONICLE
previously by him?
By MURRAY SHIELDS*
Commenting
FINANCIAL
advocated
"new
is nevertheless disappointing, that
the
President's
legislative
pro¬
policies capable of having a pro¬ gram contains the same old rec¬
foundly stimulative effect on the ommendations as to labor, regu¬
course
of economic development lation,
taxation,
subsidies,
and
for a long while ahead.
loans which were previously ad¬
Evidence of a marked change vocated in order to effectuate re¬
in the pattern of official thinking forms but are now advanced as
prehended in
the
the next 20
that
30 j^ears. We know
or
individual's
that
if
turns out to
if
And
for
guess
financial precipice.
obligates itself
the nation
more
welfare than it
can
pay
will
be
running
the
Warning
on
Welfare
Statism
for
it
same
risk.
the Brannan Plan,
by the govern¬
only of low-income but
housing, a
The record of other adventures
of middle-income
of assistance to edu¬ in welfare statism carry a warn¬
cation,
the
almost
unlimited ing for us. The most recent ex¬
amounts
necessary
to
translate ample is that of the Labor Gov¬
the vague promises of the Point ernment in Britain.
There, too
Four
program
into reality, the little attention to the economic
prerequisities of business growth
aggressive expansion of the loan
activities
of
the many Federal and too rapid an assumption of
agencies which are expected to welfare liabilities by the govern¬
grant low cost credit on liberal ment produced such weakness in
terms to agriculture, cooperatives, government credit that, faced with
and foreign as well as domestic the option of permitting British
enterprises, and the vast amounts Government bonds to decline pre¬
or
of using support
called for in the grandiose plans cipitately
for river development, road con¬ measures which would inevitably
explosive inflation, the
struction and other public works. involve
It is assumed by the President authorities chose the former, with
Consols
that the wherewithal for such ex¬ the result that British
vast program
penditures will automatically be
generated by an expanding econ¬
omy.
But there is a formidable
body of opinion among people of
the highest competence and intregity that the President's pro¬
gram
contains
so
many
specific
that
the
We
President's
be
new
afford
can
is
be
to
less
in
found
Truman's
that
earth—if
business is prosper¬
our
shall have neither wel¬
fare nor prosperity if we persist
in policies which constrain busi¬
ness enterprise.
ous;
we
Therefore, while the President
the highest commenda¬
deserves
his
for
tion
statesmanship in re¬
anti-business
and
anti-growth objectives which ap¬
peared to dominate government
policy for so long, it is imperative
that he seek, obtain, and accept
the
versing
bipartisan counsel in perfecting
realistic
more
his
this
President
of its
recent
most
Messages
that
than in any of those issued previ¬
ously by him or by his predeces¬
sor
in office.
Furthermore, Mr.
Truman's
obviously
more
con¬
structive attitude toward business
gamble with the na¬
are incredibly high,
great
tion's future
there
for
reason
no
is
and his
willingness to assume that
a higher state of pub¬
is through rapid ex¬
the road to
propitious that if the Pres¬
to lead the way to the
adoption of a really expansionary
economic program, the twin spec¬
tres of want and war, which have
ident
were
haunted this
banished
generation, would be
for
our
time.
one
will
counsel
time
in
prevail
will
provide the essential ingredi¬
ent
of incentive
far different from that of Brit¬
mit
one-third
almost
nation's
This
value.
their
of
position
ain that there is little danger
we
shall
follow
have
they
the
that
which
road
the
But,
traveled.
danger cannot be ignored, and it
which will
official quarters. And, the realis¬
tic optimism with which the Presi¬
attained.
to
orient his
problem
thinking
relationships is
a
welcome change
from the assumption of economic
Was
opportunity
•'
the
••
'■/
'
•
•
•
.
.
;•'
••
acquisition of the business of
E. H. Rollins & Sons
da
to
INCORPORATED
is
so
unique, for the rate of progress in
industrial and agricultural tech¬
been so great as to
means by which we
rapidly develop vast new in¬
nology has
to
used
furnish
stagnation which
justify the reforms,
and
controls
The
and
inaturity
•' ••'
about the
government-business
of
announces
Opportunity for Expansion,
Progress and Prosperity
to be prepared
seems
-
prosperity.
dent now appraises the future and
to which he
■»
doles
the
of
past.
can
the
This suggests strongly that those
with their ears to the ground have
dustries and reduce costs so that
become convinced that
sumption potentials increased, and
our
people
prefer full employment by
pros¬
business to continuous de¬
perous
pendence
on
government relief or
,| Additional evidence of the de¬
gree to which official thinking
has been transformed is found in
attitude toward government
taxation, and deficits.
There is now decidedly more re¬
spending,
spect
for
government
determination
more
the
tax
tive and
burden
the
anced than
efficiency,
make
to
restric¬
less
budget
is
unbal¬
have
seen for many
so
long ago,
fashionable to consider public ex¬
It
years.
we
was,
not
penditure inviolate, deficits stimu¬
lative,
means
and taxation chiefly
of effecting reforms.
a
|j! May it not be of the highest
significance that the Administra¬
tion now considers that fiscal radi¬
calism does not
bell
as
sages,
must
ring the political
it did before?
repeated
year's
widened,
be
ened
can¬
dead¬
Finally, the
declarations, in this
conducted
the
under
of
name
if
taxation,
restrictive
by
The combined business will be
con¬
is not permitted
capital
to
into existence or to flow
come
into enterprise,
or
Blair, Rollins £> Co.
if government
persecutes industry so that growth
But there is
is inhibited.
to doubt that the
son
means now
tional
ever
exist for
no
INCORPORATED
rea¬
technological
a
greater up¬
production and in na¬
well-being than we have
in
surge
seen
before.
44 WALL STREET, NEW YORK 5
In the face of such an opportu¬
nity to make the Nation prosper¬
ous and impregnably strong, it is
urgently
as
necessary
that
we
bipartisan economic policy
as it is that our foreign policy be
held
above
partisan considera¬
tions. The two are in fact inter¬
have
a
ALBANY
ATLANTA
m
DETROIT
PHILADELPHIA
BAN FRANCISCO
BOSTON
•
GRAND RAPIDS
*
PITTSBURGH
•
6CRANTON
•
WILKES-BAR RE
•
BUFFALO
LOS ANGELES
•
»
ROCHESTER
'»
SPRINGFIELD
•
WILLI AMSPORT
CHICAGO
MANCHESTER
•
•
•
ST.
LOUIS
WASHINGTON
WILMINGTON
dependent, for it is only if we are
economically strong that we shall
be able to raise our military po¬
tential high
enough to provide
some
insurance against another
holocaust.
Presidential Mes¬
that the Nation's policies
toward produc¬
for
I
submit
that
we
are
not
crop
be
of
directed
likely to find a sounder state¬
ment of basic economic objectives
such
ing maximum economic strength
program
business expansion and
growth is in pointed contrast to
the policies advocated by some of
the less-than-conservative voting
out
through
a
bipartisan
in
his
*An address by Mr.
Shields be¬
fore the Cigar Manufacturers' As¬
sociation of America, New York
City, Jan. 17, 1950.
Messages
*
to
Congress. And in constructing a
bipartisan economic program are
we
not
as
United States Government Securities • State and
Municipal Securities
Railroad, Public Utility and Industrial Securities
Bank and Insurance Stocks
•
our
views
as
specific measures likely to
produce the desired results as
the President is to accept them in
/ ; good faith—even if they
may
be
r
Investment Trust Shares
obligated to make avail¬
to the
to
Underwriters, Distributors and Dealers
economic
than that the President
forward
able to the President
j
This
expanded.
production
not be done if incentive is
official embarrass¬
more
that
ment
can
venture
subsidy.
a new
markets
per¬
private enterprise to lift our
people to higher levels of welfare
than
any
proponent of welfare
Socialism ever dreamed could be*
Blair & Co., Inc.
new
with all
so
that the nation's economic policy
am
construct the framework not for a
if I
And
be permitted the luxury of
prediction it is that sound
may
willing to take in good faith the
President's profession of desire to
phase of welfare Socialism,
its paraphernalia of ob¬
pansion of private enterprise is structions to individual and busi¬
in such sharp contrast to the point
ness
initiative, but for a new
of view formerly fashionable in
qpoch of expansion, progress and
lic welfare
doubt
so
are
enterprise. It is to be hoped
this inconsistency between
believe that it will be for I
to
that the basic economic conditions
objective and program will be re¬
solved in favor of the former, and
I
a
to attain
The stakes in
program
objectives.
new
necessary to promote the growth
of the Nation and the expansion
in
rhetoric
radical
fact
the
sound economics and
more
wel¬
fare than any other nation on the
,,
there is
adapted
objec¬
more
is
lost
so
essential
tives.
be wrong he is sure
to go over the
subsidization
ment not
also
how much his income will rise in
is
legislative program
more
closely to his
Federal Housing Administration Mortgages
Volume
171
Number 4873
THE
•
COMMERCIAL
&
FINANCIAL
CHRONICLE
(241)
5
/f
DEALER
Steel
The
BRIEFS
Production
Electric Output
Carloadings
State of Trade
By A. WILFRED MAY
Retail
Trade
Commodity Price Index
Food Price Index
During
the
Michigan
of
suance
history.
will
of
had
It
is
volume
largest
bonds in
expected
Limited
that
Practically
due
is
the
to
is¬
its
this
all
of
issuance
Tax School bonds.
De¬
spite the volume, these issues have
been
received
pated.
In
a
comprise
than
better
great many
This,
of
call
we
Sydnor
they
been
not
many
years.
has created what
course,
"a
antici¬
cases
that had
names
held by the public for
scarcity demand."—W.
Gilbreath,
First of Michigan
Jr.,
President,
Corp.
Asbury Park, N. J.
Business in
our
had
area
decided
a
increase in the past month
have received quite a few
pertaining
Funds.
of
We
few
next
we
inquiries
Mutual
anticipating in the
a
larger volume
are
months
business.
First
and
Investment
to
New
Martin
—
Jersey
The
months
the
municipal
continue.
this
few
past
has
P.
Rubin,
Securities Co.,
Inc.
of the
Business
would
and
if
Markets
be reasonable.
be lowered
creased
and
consolidate
omies
reduce
to
its
to
issues
gains
is
the
Fund
Thus
criticism.
fund's
its
In
con¬
expert management
ble
to
25
185,000,000
anti-social
effects,
both
the
by
coninnunity
well
as
over-concentration
textiles
more
erected,
used,
portfolio
shoes
more
electricity demanded,
The
bought,
buildings
worn,
more
more,
more,
of
everything.
A growing
country such as ours, gives invest
ors
opportunity of prospering as
more
our
business
We
are
of
corporations
and
open-end
amounts
of
trusts,
each,
in
made
held by all
sizable
Gulf
Oil
$29.2
_
Amerada
26.4
....
Oil-
J...
Oil,
N.
Sears
duPont
Inter,
Un.
&
Am.
Gas
panies.—Gurdon
Monsanto
&
Goodrich,
shows
trade
45
Phelps
9.7
37
purposes
62
La.
Explor.
9.2
16
nage
39
Inter.
Math—
9.1
Liggett
8.9
Land
&
Bus.
&
Myers
Sou.
58
Shamrock
62
Penney,
U.
.
S.
Oil
J.
of
36
Yngstwn
DOw
23
'
30
Am.
4?
Gen.
35
established
"A
Nat.
8.0
of
Pennsylvania
states
ignored jM$
Lewis' suggestion to
return' to the,
southern
and
mines.
doubt, howevei\ was1
top coal inddsti^
strategists that the strike coiistb;
tuted a "revolt" against Mr.
Lewis^
It may look that way, they said,;
Some
by
expressed
but
actually, the operators. 6narge"
deliberate union pol¬
designed to wear down vcoal
stockpiles of steel producers an$
other industrial consumers.'
it's part of a
icy
six
out
on
Tuesday
reached
Continued
shipment.
on
a
Grand
total
and
before
We
are
Mr.
pleased to
that
announce
Frank E.
'
1
■
Mulligan
has become associated with
in
22
32
our
us
Trading Department
22
Joseph
McManus & Co
MEMBERS
$639.3
New
York
Stock
Exchange —New
Midwest
stoc
the
American
39
Stock
Curb
York
Exchange
Exchange
Broadway
New
York 6,
N. Y.
needed
of
Continued
on
page
89
WE
We take
TAKE
pleasure in announcing
the election
PLEASURE
THE
IN
ANNOUNCING
FORMATION
OF
of
MR. i. G. SHELDON
gj
charge of
our
to
The
Financial
Municipal Department
Middaugh
of
the
Stock
was
Denver
Chronicle)
Republic
Co.
Exchange.
formerly
office
and
in
our
prior
thereto
<5arrettr
TO
TRANSACT
UNLISTED
Incorporated
manager
wasj manager of the syndicate and
of
NEW
YORK
5,
N.
Y.
Whitehall 4-2250
NY
1-3236
A
GENERAL
SECURITIES
BROKERAGE
TRADING
AND
BUSINESS
f. s. yantis & co.
Member Midwest Stock
Central
departments
for
Brbmfield & cdf'^ "
PLACE,
Telephone
Municipal Department
Mr.
of
sales
EXCHANGE
teletype
with Boettcher & Co., 828 Seven¬
teenth
Street, members of the
York
us
40
MR. CHARLES P. WINTERS
DENVER, COLO. —Harry W.
Middaugh has become associated
New
8c CO.
of this Company in
and the association roith
Harry W. Middaugh
(Special
THEODORE YOUNG
i
Vice President
135
South
LaSalle
Tel. ANdover 3-1551
^
Exchange
Street, Chicago
■
Teletype CG 227
-
-a-
*
k
*-x
v
nr-
7§,
W
: -1 <
billion
$2V2
owners
point
page
27
7.7
7.3
Co.
Developments in the coal walk¬
practical
quarter
35
7.7
.
Util.___
third
all
enterprises."
as a
more
as
miners in seven eastern
'
Slichter
is
some
northern,;
as
24
7.8
Util
Sou.
&
__
for
36
7.7
T—
Gas—__
Pub.
Deere
30
&
Harvester
Middle
19
bonds
way
become
such
Monday of this weekf the
strike spread
to- new
accepting ton¬
are
34
Economic Association Dec. 30,
by which tens of millions of persons of modest
corporations.
The investment trust is the obvious
answer, and I expect to see investment trusts
achieve great importance in the
next generation.
Most investment trusts, however, will buy shares in
only wellcan
in
However,
37
7.9
Sh.
For
they
14
8.0
lnd—
new
paper.
17
8.1
Oil,
book
30
the
Sumner
1949, said:
means
steel com¬
brunt of
the
bear
23
8.1
Chem.
Inter.
49
10.6
of cash
re¬
coal
areas
they are continuing
business, states this
29
8.2
& Gas
Paramount
Standard
10.6
_
to
expected
was
2q
8.2
8.2
C
22
11.0
_
8.4
SteeL___:
52
11.1
_
__
W—
Chem.
51
13.1
that
1 Dr.
Allied
Kodak
&
37
12.9
Chem
voted
It
32
Dodge
Central
13.8
F.
would
than 65,000
they
first
"sug-;
25
8.6
but
a
21
62
14.1
Elec
B,
Oil
holding
With Boettcher & Go.
to
27
34
9.9
Financial
15.4
1
_
Inter. Nickel
Harry W. Middaugh
24
9.8
ilil
Gas
T.
15.5
Tobacco
Day & Co. Inc.
accommodate in the
9.7
I.
15.8
Cal—_
:
Hudson.
Chrysler
Humble
months,
can
i;
United
16.5
Rys._____
Am.
A.
25
Johns-Manville
16.6
Copper
Carbide
Oil,
Niagara
30
10.4
C.
17.0
_
Electric
Lt.
51
10.5
51
17.0
_
Union
$10.6
and
work
strike.
areas,
On
enter¬
than
United
the
Virginia, United Minework¬
back ,to the/
soft
formally
are
tonnage
more
mines.
of
pits.
to
not yet
locals
cur¬
ers' locals voted to go
be
Several
quarter.
taining
17.3
Paper
Kennecott
Gen.
rent
70
issues $210.4
10
are
miners
of south¬
number
a
action.
West
more
67
Eastman
oi
the
on
sheetmakers
to
other
suffi¬
could
at
Pennsylvania
on
panies
operations
into
All the mills have
third quarter.
Ki 0
Co—
business
coal
that mines operated by
"Steel"
Actually,
by the
capacity
assure
17.8
__
Motors
Total
new
19.1
Pet.
Amer.
Gen.
Elec—
trade.
steel
19.9
_
Roebuck
Phillips
Trusts
Gypsum
return
accepting second quarter business,
holding substantially more orders
than they can get out in the cur¬
Holding
Skell.v.Oil
S.
the
soft
extended into the
was
week
main
consumers
19.7
Co.
Montgomery-Ward
opinion that an in¬
creasing
number
of
people
are
awakening to the desirability of
owning shares in our good com
Chas.
U.
55
21.1
May 2, 1949,
walkout in the
idling more than
magazine in its current report
of
gestion" by John L. Lewis, United
Mineworkers President, that they
This rate
states
extra
•
Mine Workers disregarded
a
arrearages,
increased
against major northern
Numerous
pressing the
mills for every pound of sheet and
strip available, producers are
meeting
difficulty
in
clearing
away
strike
western
the past week
At least two
(Millions)
.
Westmghouse
26
23.1
*
Texas
Nc.
67
firms
50,000 workers.
With
the
in effect.
now
week
rent
Co.,
$ Value
Stock—
The
to
mines
result of
a
last
*
and
according to issues
by Aig'eltinger &
Trusts
Holding
coal
con¬
of
tonnage on their books now
than they can deliver on schedule
No.
$ Value
(Millions)
'
soft
though
attempting
are
charges
the highest since
was
booked
by Total Dollar Value
(June 30, 1949)
Stock—
*
notwithstanding,
cient
stocks
listed
recently
as
in
effect
beginning Jan. 9, 1950.
"The Favorite 50" Ranked
Std.
prosper.
the
Mead,
A. Wilfred May
individual tend to be shirked
common
the
few sellers,
a
to revise
specifications to effect economies
expand, rising to
of capacity for the period
97.2%
issue concentration in the mutual funds'
is of course a controversial question.
A
management
closed-end
Std.
population
more
if
Extent of Blue Chip-ism
compilation of the favorite 50
had
minor
been
sumers
employment,
occurring
Steel production
fund-managers' responsibilities
to the
as
of
localities
continued
blue-chip liquidity.
on
field
lay-offs
>i:
actual extent of
Continental
come.
automobiles
Thus
have
week.
withholding sorelyequity capital from the country's economy, and affirm¬
obstructing the constructive use of the small capi¬
talists' savings from devotion to the less well-heeled
but worthy
value-laden situations.
order cutbacks which
expect in second quarter. To date,
order cancellations and cutbacks
claims for unemployment to show
a continued
slight increase for the
in
dollar
hence, vs. around 150,000,000 today, means more steel
more
negatively
the
some
income
gross
Some of this forward booking
may
be insurance against possible
causing both continued and initial
new
a
years
needed,
In
No.
The United States is growing.
estimated
from
industrial
slightly under the level for
corresponding period of 1949.
seasonal
a
harmed
are
total
production for the country a week
the same as
the
in
the interests of
of
ago remained much
in
past
weeks.
hold
kind of
a
picture
Fractionally
changes were registered
last week, but output continued to
operating under siza¬
deductions
expense
J
The
higher
receipts, devotes itself to the purchase of the Dow.Jozies Average
or its
equivalent, with its efforts largely devoted to" attempts afc
general market timing.
In the second place, Blue
Chip-itis in mutual funds operation
—
up
years
in
Business Failures
of
sup¬
problem
are
shareholders
and
here in Bos
ton, the Hub of the Universe, the
City of Culture, is optimistic for
many
we
the first place
individual
Boston, Mass.
and
on
Auto Production
Industry
Chip-itis—that is
Ponzi-like chain of blue-chip
"liquidity."
Insofar as such concentration may exist in
investment trust operation, they are open to
econ¬
a
thought to income, with
declining volume of business.
Gaylord W. Bahl, Jr.
1950
elsewhere1
and
Blue
managers
distributors'
tive of their value.
The
effect
prices to the
firm, located
in
Labor
with
Our
column
selling to their uninformed public portfolios
containing issues that are not known, irrespec¬
to
Securities should be bought
sumer.
this
Chief motivation for such flight to the
glamor issues—bonds as well as stocks—is the
subsequent alibi of having lost the client's
money respectably and blamelessly. Also mo¬
tivating the concentration on the well-known
could
in¬
in
posedly safe and well-known issues.
and
income
Treasury.
Management
be
raised
concentrate their investment selection
labor
Taxes
taxable
the
to
should
allow
could
been
of investment trusts, as well as
trustees generally and all who are charged with
the responsibility
of the custodianship of other people's
money, to
atively
and
government
has
tendency of the
needed
Mansfield, Ohio
issue
participation of the/mutual funds
the
has
better,
and
A Closer Look at the Funds— With Mr. Ruml
Detroit, Mich.
T, R.
YOUNG
S.
B.
YOUNG
6
(242)
By BEARDSLEY RUML*
Formerly Chairman of Board, N. Y. Federal Reserve Bank
•
.
■ V,
„■
.
(
" \
.
i
Asserting tools of fiscal policy comprising the ^budget, taxes
s
and national debt can be powerful instruments tor mainj
taming high level of productive employment, Mr. Ruml defends
principle that budget deficits prudently incurred in times of unemployment can, by reducing unit costs, tend to be deflationary 'V
rather than inflationary. Says it is no longer true governments
must tax to maintain solvency, since with central banking,
they can borrow under self-imposed conditions. Contends tax
rates should be set to balance budget at high employment level
If we
na
of
the
the
of
spectacular
speeding
enormous
nological
conse¬
great world war is
a
of tech¬
up
the
of
and
progress
application of
scientific
It
knowledge.
be
may
1 y
world
limited
means
no
to
physics,
chemistry,
tioned whether
these
the fields of finance and
cal
qu e s
-
techni¬
ics.
advances
at
rapid
so
are
the
whole
detail
in
either false
ma¬
ings
and
•to
tradition
and
provide
for the
We
time
tradition
new
firm
a
social
be
certain,
setting
progress
that
ac¬
companies it.
the
tional
to
it
way
debt
per
rioration
from
that
moral
inevitably
dete¬
results
an
The first world
speeded the
war
for
state
but
it is
money.
loans and
on
n a
t i
to tax in order to
its
arid
independence
still holds true
local
governments,
longer true for most
1
governments.
Two
no
o n a
of the greatest conse¬
have occurred in the last
years which have altered the
changes
the refund¬
quence
25
Let
ing of its loans to get the money
it requires fcr its operations is
necessarily,
dependent
on
the
debt
they must
citizens,
as
The United States is
state which has
a
a
national
central banking
system., the Federal Reserve Sys¬
tem, and whose currency, for do¬
mestic purposes, is not convertible
into gold. It follows that our Fed¬
eral
Government
dom
from
the
has
money
final
France.
the
the
had
its
financial
require-"
Accordingly,
the
prime
(Consideration in the imposition of
meeting
ments.
taxes
has
become
the
inevitable'
social and economic consequences
of
the
taxes
that are
imposed.
Since all taxes have consequences
of a social and economic charac¬
interest rates would purposes, of the convertibility of ter, all Federal taxes must meet'
the currency into gold or into any the
tests of public policy and prac¬
and
higher — and
other commodity.
No longer do tical effect.
greater inducements
lenders have the final
would have to be offered by the private
By all odds, the most important
word on the fiscal policies of a
government to the lenders.
As a
national government which does single purpose to be served by the
consequence, power over the gov¬
imposition of Federal taxes is to
ernment would gradually shift, in not tax.
some measure, to the money mar¬
This final freedom from the im¬ aid in the maintenance of a dollar
ket, which could dictate the terms position of unwanted control on which has stable purchasing pow¬
on
which
the
necessary
loans the national state by private lend¬ er over the
years.
Sometimes this
would be made.
Governments in ers holds true for every sovereign
Continued on page 83,
those days found that the only national state where there exists
higher
greater and
This
announcement
is
not
to
be construed
The
125,000 Shares
Webster-Chicago Corporation
time
six
fold
Common Stock
a
and
limitation to
a
of
nearly
And yet the
reached $45 billion.
at
is
billion
already
increased
to sell or as an offer to buy the securities herein mentioned.
made only by the Prospectus.
ojjer
as an
offering
na¬
declining rate
handicap
$1 Par Value
was
our
pro¬
practical development of the radio ductivity.
and
aeroplane.
the
of
aware
It also
extent
of
made
In
us
illiteracy
1941,
in the United States and hastened
guns
by
war
many years the reduction of
this handicap to human freedom.
From the second world war, by
odds the greatest contribution
,
all
technology
of
knowledge
science
and
was
the application of
atomic energy.
The basic scien¬
of
tific
insights
were
well
War II
it
in hand
began.
estimated
ing sharply.
general
$80 billion
high
as
World
we
as
m states
securities
in
and
in
which the Prospectus may
legally be distributed.
produced
worth of
arma¬
came out
before
may be obtained from the undersigned only
which the undersigned are qualified to act as dealers in
Copies of the Prospectus
in
The miracle of production
of productivity that had
growing unnoticed beneath
been
F. EBERSTADT & CO. INC.
SHILLINGLAW, BOLGER & CO.
the surface of actual output for a
in
1939, with
of fission¬ period of
able
known,
would
least
at
,methods of separation
materials
liv¬
And yet in 1944, the
standard of liv¬
1941, and in addition
some
would
of
over rail
was
share
for
arm
we
standard
our
Price $11.25 per
we
between
that to
hemispheres
cut
ment.
But I have heard
that
to
fission
atomic
on
in two
ing
choose
to
and butter,
have
told that
were
we
have
would
then
Let
it
take about 70,000 years
to
of
a
15
years.
January 18,1950
give one more example
insight in the field of
me
new
collect enough U235 to produce a
bomb.
Arid yet, under the pres¬
fiscal economics. During the 1930's
most
people
believed
that
a
of
prodigal
deficit in the Federal
necessity and the
expenditure
for sheer
sure
war
inflationary.
that
^survival
Today
budget
we
was
can
see
which war releases, a
actually exploded after a •unemployed who want to work
^period of six short years. Except and billions of dollars invested in
for war, mankind
might never idle plants and equipment is much
have found out how to use atomic like a
factory or company that has
energy, or at least, the knowledge a sizable amount of unusued ca¬
'might
have
been
delayed
for pacity. Under such circumstances,
All these shares
nation that has millions of
a
having been sold, this announcement appears as a matter
of record only.
bomb
decades.
many
There
of
are
increase
an
many
accelerated
other examples
technical
progress
coming out of the last world
war.
reduce
them.
plasma; all illustrate the
in
plications
which
discoveries
and
our
ap¬
to
abolish
nor
thinking must adjust.
eyes
or
them
turning
by
our
closing
backs.
our
ment
no
longer exists.
and
does not take
Manage¬
statesmanship
the
into account is
new
living in
a
dream
*An address by Mr. Ruml at the
Annual Stockholders Meeting of
the
Savings Banks Trust Co., New
York
City, Jan. 18, 1950.
New Issue
to
For the
deficits
same
Fed¬
incurred
to
32,500 Shares
prudently
Combustion
Engineering- Superheater, Inc.
be
deflationary rather
than inflationary as far
as
the
purchasing power of the dollar is
Capital Stock
concerned.
These
:
reasons,
times
(No Par Value)
discoveries,
insights,
or
whatever you want to call them
in the field of economics and fi¬
nance
that DDT,
technology
tends
a
unit
of unemployment, since
they also tend to reduce unit costs
The
world in which they did not exist
itself
eral
tend
<We cannot wish these things away,
demand
No!
costs, and therefore
under competition tends to reduce
prices
rather
than
to
increase
Radar, rocket and jet propulsion,
insecticides,
the
use
of
blood
new
of
are
are
and
just as real as
atomic energy.
not matters of
theory
or
radar,
They
wish
ful
thinking, they are matters of
experience and observation.
The
plain fact is that the war was ac
tually financed
of interest.
It
means
has
been
on a
that
a
new
created
Kuhn, Loeb & Co,
declining rate
What does this mean?
relationship
between
the
free¬
market in
penditures,
period of defense prep¬
that
no
I
but
control
lenders.
get
suspect was generally shared, that
it was unfortunate that we were
debt
war.
in
war,
from $45
on a
with
the
expenses
1940, a metropolitan newspa¬
of high reputation expressed
opinion editorially, which I
a
a
and
both
solvency
than their receipts
paid their -bills by: bor¬
government which must de¬
on
its
and
of interest.
arations
life
had
rose
$275 billion
entering
even
of
whose
be prepared
maintain
country;
this
as
eminent economist
during the
token offset to the
as
loss
expenses.
to
exercise
and not
Treasury that unless
We do not regard
this acceleration of technical prog¬
ress
are
different
believed.
once
an
the
And yet
In
however,
is worth the scientific
war
technical
true
a
few examples.
1937,
8%,
technology.
new
may
no
and
without
custom and
new
that
the
aggregate they
prematurely changes in cus¬
tom
in
the budget was soon balanced, the
interest rate would go to 6%, to
Ruml
Beardsley
of
in
But
'force
for
In
competent
were
true
or
was
a
advised
sat-
isfactions
life.
give
me
bless¬
terial
than
way
in¬
the
crease
*
they
to
many
thought
people
particular and
seem
is not yet understood, but
things that
some
In
econom¬
import of these ad¬
do know enough to know that
we
on
•beneficial.
The full
vances
a
rate
countries
rev¬
The necessity for a government
position of the national state with
respect to the financing of its re¬
quirements.
The first of these
Advances in Finance and
sources
from
which
the money changes is the gaining of vast new
Economics
can be
obtained.
In the past, if experience-in the management of
The
discoveries
and
insights a government persisted in bor¬ central banks. The second change
coming out of World War II are rowing heavily to cover its ex¬ is the elimination, for domestic
talking in the past
biology and surgery.
Advances have also been made in
e r
their
pay
of
rowing the necessary
tense.
by
prop-
is
short
greater
from taxes
A
and
ablq, to
though their tax
fell
Those
were
were
even
enues
mocratic
Taxes
look at the financial his¬
ions
bills
pend
One
This
state.
tory of the war, it is apparent "that
and then "he let alone."
quences
Thursday, January 19, 1950
market
money
national
Budget, Taxes and the Debt
.
CHRONICLE
and the way they could maintain both an institution which functions in
relationship their sovereign independence and the manner of a modern central
was created by law in 1913,
1933, their solvency was to tax heavily bank, and whose currency is not
and 1934, but it required the im¬ enough to meet a substantial part convertible-into gold or into some
pact of a World War to give us of their financial needs, and to be other
commodity.
The unsound
the experience necessary for un¬ prepared—if placed under undue practices of
a
reckless, taxless
derstanding, in part at lea-st, what pressure—to tax to meet them all. government can and should be
controlled by the citizens of a de¬
had happened.
private
The
FINANCIAL
&
COMMERCIAL
THE
January 18,1950
Volume
171
Number 4873
THE
COMMERCIAL
&
-■
of the
San Francisco Exch,
board elected for terms of
Mark C. Elwdfthy
members of the
Mark
of
1
C.
Ferdinand
El worthy
&
C. ' Smith ' of
Elected
Co.;
FRANCISCO,
Douglas
G.
Witter &
man
for
of
the
meeting
Stock
the
of
of
time
the
Exchange,
Dean
of
elected
was
Board
third
CALIF.—
Atkinsoil
Co.
at
Chair¬
Governors
the
Sart
annual
Francisco
New
members
Pierce, Fenner & Beahe;
Ralph E. Van der Naillen of
and
addition
In
to
the
9tone
Wm,
above,
&
Howard J. Greene of Sutro & Co.;
John P. Symes of
Henry F, Swift
&
Co.;
and* Ronald
President
the
of
E.
serve
&
for' the
cur¬
Richard P. Gross,
Youngberg,
H. Agnew,
Chairman;
Shuman, Agnew
Co.; H. H. Davidson, Bailey &
Keyston Co.,
Sherman Hoel-
and
scher, Sherman Hoelscher &
are
~~T\
Interest
to
r
i
Trrr
Robt.
1
Nominating
Davidson; George A. Heintz, F. Bj
Kaehler,
Exchange,.,
the
rent year were:
Douglass, Van der Naillen & Co..
Inc.
to
Committee
Mefrill
Lynch,
CHRONICLE
Governing Board.
tw0 years are:
Elects New Officers
SAN
FINANCIAL
7mrT
Co.
Robert
elected
a
(243)
Winthrop Director
Winthrop
has
been
Bay & Western RR. Co., and is
director Of United States
Savings.
&
Foreign Securities Corp. and
United States & International Se¬
Ellis, Holyoke Adds Two
curities
Corp. • Mr. Winthrop is
partner of the investment
Senior
(Special to The Financial
Chronicle)
banking firm Of Robert Winthrop
& Co. and is a director of National
City
Bank
Bank
New
York,
Trust
Co.,
of
Farmers
LINCOLN,
Johnson
and
NEB. —Harold
Clifford G.
City have become associated with Ellis,
Green Holyoke & Co., Stuart Bldg.
MM
*—i—i—.—
$70,000,000
Compensation
and 2% Bonds
13A%
'
Dated January 1, 1950
Due Januflfy 1, 195U1974,
Coupon bonds in the denomination
of
$1,000 each, reglsterable
as to
principal only,
as
shown below
both printipal and interest, and inconvertible.
Principal and semi-afthual
interest (January 1 and
July 1) payable at the office of the State Treasurer or, at the-option of the
holder, at the office of the
Fiscal Agency of the State of
Washington in the City of Ndw York, New York.
or as to
These
bonds, part of an authorized issue of $80,000,000, will constitute valid and direct
obligations of the State of
from the War Veterans'
Compensation Bond Retirement Fund
State is
Bonds
obligated to pay the proceeds of cigarette taxes in the
Washington, payable solely
established by Chapter 180, Laws of
Washington, 1949, into which fund the
amount and manlier
prescribed by said act.
maturing on and after January 1, 1961 are subject to
redemption prior to maturity, in the inverse order of their numbers, at the option
Washington, at par and accrued interest on any interest payment
of the State of
"
"r
•
•
*
dat^ oil or after January 1, 1960.
'
r
.
Yield
/mrm nt
Maturity
$2,032,000
1951
•6%
2,154,000 "
1952
6
2,283,000
1953
6
Pate
Y*eH
1954
6
1955
P/4
12,750,000
.80
2,420,000
Maturity
.70
2,565,000
Amount
•
or
Rate
'PHce
1959
1M%
1.50%
2,798,000
1960
l3/4
2.847,000
1961
l3/4
.90
2,897,000
1962
2,947,000
1963
Rate
$3,167,000
1967
2%
3,230,000
1968
2
99V4
1.70
l3/4
Maturity
1.60
l3/4
1.05
Amount
3,295.000
1969
2
98I/2
Price
100.
1.75
•
3.361,000
1970
2
98
1.80
3,428.000
1971
2
97ft
2,610,000
1956
l3/4
1,15
2,999,000
1964
1%
1.85
3,497,000
1972
2
97
2,656,000
1957
l3/4
1.25
3,051,000
1965
l3/4
1.90
3,567,000
1973
2
97
2,703,000
1958
1%
1.40
3,105,000
1966
2
100.
3,638,000
1974
2
97
(Accrued Interest
to be
added)
We
offer these bonds when, as and if issued and received by us, and subject to the approval
of legality by Messrs. Wood, King & Dawson, Attorneys,
of New York
City. Such offering is not made hereby, but only by means of the offering circular,
copies of which nitty l)t OhhiiUtd iii titty state in which this announcement
is
circulated, ft dm only such of the undersigned as are registered dealers and arc offering these securities in
compliance with the Securities Law
of such state.
Kuhn, Loeb & Co.
White. Weld & Co.
Union Securities Corporation
Eastman, Dillon & Co.
Bear, Stearns & Co.
Harris, Hall & Company
(Incorporated)
Coffin & Burr
Reynolds & Co.
A. 6. Becker & Co.
R. H. Moulton &
liieorpdrated
Company
Weeden & Co.
Incorporated
Kean, Taylor & Co.
Stern Brothers & Co.
■
Ira
F. W.
Tucker, Anthony & Co.
Haupt & Co.
:
Craigie&Co.
.G. H, Walker & Co.
Wm. E. Pollock & Co., Inc.
The Robinson-Humphrey Company
Bramhall, Barbour
Co., Inc.
,
&
King, Quirk & Co,
<
J. G. White & Company American Securities
Incorporated
Grande & Co. Inc.
W. F. Hutton&Co.
Roosevelt
Incorporated
Cross
Hirsch & Co.
Heller, Bruce & Co.
Laurence M. Marks & Co.
Incorporated
Corporation Whiting, Weeks &Stubbs The Ohio Company Blunt Ellis & Simmons
Sttfel, Nicolaus & Company
Incorporated
R. L. Day & Co.
Fordyce & Co.
Kaiser & Co.
Reinholdt & Gardner Folger, Nolan Incorporated First Southwest
Company John C. Legg & Company Clement A. Evans & Co.
,
•
incorporated
January 13, 195CJ
B.
Rowley
New Issue
6%,
a
trustee of the Seaman's Bank for
Exempt, in the opinion oj counsel, under present laws, front all Eedcrat Income VaXtE
War Veterans'
7
THE
(244)
8
COMMERCIAL
there
that the way to stop spending is to check
legislation or the legislation that involves spending,
at its source.
Washington
Ahead
This
where
BARGERON
mittee
fight in
the power
the House over returning to the Rules Com¬
that was taken from it at the last session is of
politicians,
years up
I
the
power
Cannon,
Carlisle
Bargeron
ents
but
would
a
was
amiable fellow who
other country in the
position he has, and who
Republic and there can't pos¬
anything wrong, the committee chairmen have been
running hog wild under him. Some of them are men with a sense
sibly
our
be
of
responsibility, some of them are not. Those with the sense of
responsibility have chafed about being put under the guns and
having to call up measures which they didn't believe in but which
demagogic public pressure forced them to call up.
There
ernment
435 members of the House.
are
is
that
they
represent
the
grass
The theory of our gov¬
roots.
Through them,
is
with
all their faults and weaknesses, rank and file America
supposed to have expression.
—
to
But the emotions and excitements of the day are not supposed
law. If the American people want anything they can
want
it.
period of agitation which
proves that they really
voice of today should not become the law
Therefore we have our checks and balances which
a
But
the
of tomorrow.
a
;
become
get it after
loud
Speaker Cannon
Rayburn
or
a
House Rules Committee
strong committee chairmen are
Rayburn hasn't been that, couldn't be that and
or
or
a
strong Sam
expected
as
was
to
be.
to be
ex¬
pected, the committee chairmen haven't been that.
The effort
now
is
to
get the control of the unwieldly House
who compose the Rules Committee.
back to the
determined
It has
definite purpose, aside from that of bottling up loose
The effort has for its purpose the checking of the
a
spending
Appraisal
view
a
of
and
letter
re¬
and
►
RHODES-HAVERTY BLDG.
I,
GEORGIA
AT 288
Long
Distance 421
Selected
-Bache
&
New York
Bank
Year-End Prices (1949)
Internal
&
.Also available is
attractive
jeliminary
36 Wall Street- Earnings.
.j?--
Co.,
'
5, N. Y.
Stocks—Year-end
on request
in
securities
a
industries—G. H.
Co.,
1
Wall
Street,
Walker
New
the
East
&
York
r
KELLOGG CO.
Declared
To
Foreign
*
tabulation of
a
York
*
Bank
*
Hair
Share
$3.75
Moreland & Co.
Detroit'Stock Exchange
Member
Bay City
Felt
&
Building
Penobscot
1051
DETROIT
American
Per
$2.35
Lansing
—
MICH.
26,
—
Muskegon
Co.-
Summary
&
analysis—J.
and
OUR COMMON STOCK
PROGRAM FOR INVESTORS
Barth
Co., 482 California Street,
—
&
in
Industries
Basic
11
Electric
General
Bro¬
Stocks
44
Lists
San
Co.
Gas
chure
discussing industrial oppor¬ Analysis?—H. M. Byllesby and Co.,
tunities
in
New
Jersey — write Inc., Stock Exchange Bldg,, Phila¬
Dept. 1, Public Service Electric & delphia 2, Pa.
Gas
Company,
66
Park
Place,
Illinois
Bell
Telephone Co.Newark, N. J.
Analysis— J. P. O'Rourke & Co.,
Detroit
Bank
Stocks—Annual
analysis—First of Michigan Corp.,
Buhl Bldg., Detroit 26, Mich.
Stocks—January issue
large, clear reproductions
affords
of
958
charts complete with divi¬
records for
stock
Stock
listed
12
the
on
Curb
and
New
of Trade
Board
Mexican
dum
—
Eagle
Oil—Memoran¬
Zippin & Company,
South La Salle
request
ESTABLISHED 1900
208
Street, Chicago 4,
ONE
York
New
Stock
ST. LOUIS
Exchange
NEW YORK 5
WALL STREET,
HARTFORD
PROVIDENCE
111.
Missouri
Pacific—Analysis
of
the general 4s of 1975 vs. the con¬
vertible
lin,
of
1949—McLaugh¬
Co., 1 Wall Street,
&
York 5,
New
Exchanges,
5VzS
Reuss
full
N. Y.
Pacific
Missouri
Our Stockholder
Relations Department
Will
Design
Railroad—Re¬
a
Program
to
Suit
your
—
.
F. W.
on
G. H. Walker & Co.
Members
years to Jan. 1,
view
Ira
Haupt
&
Co.,
Ill
1950—Single copy (spiral bound), Broadway, New York 6, N. Y.
810.00—yearly
(six
revised
is¬
New
England
Public
Service
sues), $50.00—A special offer is
Co.—Special survey—Ira Haupt
also being made of three editions
& Co., Ill Broadway, New York
of Graphic Stocks, 1924-1935 and
6, N. Y.
1936 through 1947 and up-to-date
current
Copy
Bldg., Chicago 4,
111.
the full year of
and
edition *, all
for
Parke, Davis & Co.—Memoran¬
$25.00—
Stephens, 15 William Street,
dum—A. M. Kidder & Co., 1
Wall
Corporation's Needs
We
Invite
Inquiries from
Corporation Executives
Stockholder
Relations' Department
Stanley Heller & Co.
Members New York Stock Exchange
Members-
Street, New York. 5, N. Y.
5, N. Y.
New
York
30 Pine Street,
Riverside Cement
Equipment Trusts—Study trac¬
ing their development from the
—Lerner
Curb
Exchange
New York S
Square, Boston 9, Mass.
&
the
19th
Co,
61
centuryBroadway,
Gas
Industry—Analy¬
sis—Newburger,
Broad
&
Co.,
Co.—Analysis
10
Post
WHilehall 4-0200
Office
South Shore Oil & Development
Dealers in
Co.—Analysis of interesting low-
Loeb & Co., 15
Street, New York 5, N. Y.
Oil Production in Canada—An¬
alysis—Dominion Securities Corp.,
40 Exchange Place, New York 5,
N.Y.
and
speculation
for
brokers
dealers only—J. W. Gould &
Co.,
120 Broadway, New York 5
priced
N.
Y.
REAL ESTATE
MORTGAGES
Southwestern
Electric
Utilities
—
BONDS
UNLISTED SECURITIES
—Analysis—H. Hentz & Co., 60
Street, New York 4, N.Y.
Beaver
OveV
LUCKHURST & COMPANY, Inc.
Member I\eiv
40
York
Security Dealers Association
Exchange Place, New York City 5, N. Y.
Telephone HAnover 2-0270
-
the
Stock Index
-
Counter
—
Industrial
trial
stocks—National
Quotation
Bureau, Inc., 46 Front Street, New
Income
-
Century
Fox-Film
Corn.—Analysis of current posi¬
tion and outlook—Hay den, Stone
&
Co.,
25
Broad
Street,
New
York 4, N. Y.
4, N. Y.
Railroad
Twentieth
Booklet recording
10-year performance of 35 indus¬
York
Teletype NY 1-1825
of
Corp.,
Federal Street.
Francisco 4, Calif.
of
B.
joined the staff
Yorjt Jdrcujafc—Swift,
5, N.Y.
Crossroads
MASS. —Robert
has
Bringing Total For 1949
Henke & Co., 135
City Bank Stocks available Jan., South La Salle Street,Chicago 3, 111.
Jo—Laird, Bissell & Meeds, 1204*
-Boeing Airplane Co.—Analysis
Broadway, New York 5; N. Y.
—Newburger & Co., 1342 Walnut
Common Stock Program for In-^ Street, Philadelphia 7, Pa.
vestors—Listing 44 stocks in 11
^Consolidated Grocers Corp.basic
to The Financial Chronicle)
Securities—
New
fc
compajjf
rison and analysis of 19 New
Natural
Analysis
Inc.,
Street, New York 5, N. Y.
External
List—Rey„.„T„
New York 6, N. Y.
Common Stock
Chronicle)
Stone & Webster Securities
Outlook—A. E. Ames & Co.,
2 Wall
list of issues considered
Freeman
Olympic Radio & Television Inc.
engaging
Thomson
of Canadian
early part of
Teletype
is
(Special
5, N. Y.
Bache
New York
ATLANTA
Opens
to The Financial
BOSTON,
department, H. Hentz & Tabulation—New
York Hanseatic
Co., 60 Beaver Street, New York
Corporation, 120 Broadway, New
4, N.Y.
York
covering
1894
5,
Joins Stone & Webster
What's Ahead for Canada in 1950
dividends—write to manager,
every
Robins on-Hurnphrey C ompariy
York
Co., 115 Broadway, New York 6,
research
York
LOCAL STOCKS
&
—Composite opinion
showing monthly highs,
lows, earnings, dividends, capi¬
talizations, volume on virtually
CORPORATE BONDS
Established
ton
N.Y.
covering
study of basic business conditions,
analysis of leading industries, and
a
forecast of corporate earnings
1949
m
1950—Annual
review of the past year, analysis
the
broad
economic
outlook,
dend
e
of
forecast
Graphic
STATE AND MUNICIPAL BONDS
New
DENVER, COLO.—Etsel C. Sut¬
49
spree.
It has become apparent to the
thinking members of the House,
the number of which I haven't the slightest idea and I am afraid
Street,
Etsel Sutton
(Special
firms mentioned ivill be pleased
interested parlies the following literature:
send
to
men
very
legislation.
to the
power
It is understood, that the
likes to say that in no
he have risen to the
as
therefore thinks all is well with
return the
using the spending argu¬
are
Recommendations and Literature
that is
world could such
But its leaders
Dealer-Broker Investment
of them.
But Sam Rayburn is far removed from Speaker Cannon. With
authority of a boss he would not know how to wield it. An
Broad
15
rado National Bank Building.
However, in the last session, the great wave of "democracy"
the
Railway—
business from offices in the Colo¬
irresponsible bills imagin¬
cultivating their constitu¬
the realization
that nothing
sweeping the country, and as I understand it, India and
Asia, prevailed in the House and before the Rules Committee
knew what was happening to it, its power to bottle up silly or
revolutionary measures had been removed. Under the new order
any committee chairman can, after a prescribed period, call up a
measure which the Rules Committee had been sitting on, and de¬
mand action.
The Speaker is supposed to be under compulsion
to recognize him when he demands the floor. On paper, this is a
return to the Speaker Cannon days. On paper it makes Speaker
Sam Rayburn the boss that Speaker Cannon was.
Maryland
N. Y.
They are using it persuasively and they may prevail, be¬
cause
most members taken singlehandedly are right responsible
fellows and realize we can't go on the way we are.
view to
come
Western
Analysis—Eastman, Dillon & Co.,
served as
has
with
know how far the fight to
do not
introduce the most
able with
Pershing—Munici¬
of .New York, care
Shields
& Co., 44 Wall Street,
New York, N. Y.
ment.
the Rules Committee, to
&
Forum
pal
expenditure.
committee will get.
given in the overthrow
brake on reckless
legislation and on reckless spending.
The
members
of
the
House, a hodge-podge of
Americans of all
creeds, racial strains and
levels of life, liked this, because they could
of
Mitchell
of
in which it can be stopped.
way
Speaker Joe Cannon, who held a Czaristic con¬
which
notwithstanding that they came up
for expenditure
cuts, they
went,
recommendations
But legislation authorizing future spending can be stopped.
Return of the House power to the Rules Committee is an effective
lation, out of the some 3,000 bills introduced
during a session, were to be acted upon by
the House as a whole.
Ever since the days of
the House,
by T.
Howard
Duckett;
Harry B. Shaw; Townsend WainWainwright, Ramsey &
Lancaster; and Robie L. Mitchell
wright of
clear that before the budget is materially
reduced, there has got to be some cleaning out of the cob-webs of
legislation. That is not likely to happen.
until the last session, the House Rules
could say and did say what legis¬
over
of
be¬
Municipal Forum of New
York
The fact is crystal
Committee
trol
that
and
influence and prestige, although that is, of
course, what politicians are always doing.
It should be remembered that for several
seeking
fore the
estopped by legislation, enacted years before, authorizing this
were
It is not just a matter of scrambling
importance to all citizens.
sorts
Sanitary
District—Addresses delivered
more
fellows
these
all
Suburban
Washington
t
never
was
Appropriations Committee, brought into Washington some of the
country's outstanding researchers and economists.
But every¬
with
The
Co., 63 Wall Street, New York 5,
N. Y.
apparent than in the infamous 80th
Congres which among its other acts of infamy made a serious ef¬
fort to reduce the budget.
Chairman John Taber of the House
of the News
By CARLISLE
Thursday, January 19, 1950
not enough,
are
the spending
From
CHRONICLE
FINANCIAL
&
Bond
Interest
Coverage—Discussion—Good body
United
States
C. H. TIPTON
SECURITIES CORP.
Members N. Y. Security Dealers Ass'n
111
Fidelity
and
Guaranty Co.^-Analysis—Geyer &
Broadway, New York 6, N. Y.
Telephone WOrtJi 2-0510
V
171
Volume
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
With White, Weld.
Mutual Fund
Managei Views
1950 Economy
(245)
Joins A. C.
Allyn Staff
*
(Special
to The
BOSTON,
Financial
Chronicle)
MASS. —Joseph
(Special
Di
to The Financial
FLINT,
MICH.
—
With Slayton & Co., Inc.
Chronicle)
Robert
(Special
K.
ST.
Smith has joined the staff of A. C.
Henske
of
.
to The
Financial
LOUIS,
Sessa has been added to the staff
By HENRY J. SIMONSON, JR.
Allyn & Co., Inc., Genesee Bank
Slayton
Bldg.
Chronicle)
MO.—Robert
Street.
White, Weld & Co., Ill Devon¬
shire Street.
has
&
joined
Co.,
the
Inc.,
staff
408
President, National Securities & Research Corporation
.
After revieiying-President Truman^ State of the Union Mes¬
This
along with his report on economic conditions and the
proposed Federal Budget, Mr. Simonson concludes business
activity will continue at relatively high rate during first half
of 1950 and stock prices will be generally higher. Says careful
selection is required for profitable stock purchases.
sage,
behalf of
Speaking in
our econ¬
omists and the executive members
of
Investment
our
Research
and
Department, it is pleasing
able
be
to
$55,000,000
Chicago, Rock Island and Pacific
there should be any reces¬
event
in 1950 is
good.
Brief
Railroad
the highlights of the
on
(1) Reducing unemployment to
million-21/2 million seems rather
2
also
-We
an offer to sell or a solicitation
of an offer to buy these securities.
offering is made only by the Offering Circular.
Message follow:
look for busi¬
ness
The
generally apparent that the
Government would take steps to
stimulate business activity in the
comments
out¬
the
is not
was
sion indicated during 1950.
to report
that
it
announcement
unlikely
with
civilian
the
believe,
force
based
First
Company
Mortgage 27A% Bonds, Series A
if.
labor
S»f
proximately 1 million
upon
estimates
our
of
and
it does appear that
earnings
dividend
will
nerally
H. J. Simonson, Jr.
justi¬
heart and
our
are
for
economy
views
the
first
on
six
realization of current
a
The
President's
labor,
indicates
the
hope
the past.
of the Union
the expectation of
of
the
coalition
a
of action
the
this year on
major items contained in the
of the Union Message de¬
State
livered to the Congress on Jan.
4,
1950, is as follows:
(1)
There will be no Civil
Eights legislation.
(2) Taft-Hartley repeal is not
expected.
(3) Neither corporate nor per¬
sonal
taxes
income
are
The comment "the par¬
ticipants in collective bargaining,
(5) The Brannan Farm Plan is
unlikely to become law, but farm
supports will be continued.
(6) No socialized medicine legis¬
lation is expected.
controls' will
be ex¬
tended.
The Social Security pro¬
will be limited to an exten¬
(8)
sion of the number of persons cov¬
ered by old age
DICK & MERLE-SMITH
EQUITABLE SECURITIES CORPORATION
INCORPORATED
HALLGARTEN
& CO.
HARRIS, HALL &. COMPANY
(INCORPORATED)
HEMPHILL, NOYES, GRAHAM, PARSONS & CO.
CARL M.
LOEB, RHOADES & CO.
..
LEE HIGGINSON CORPORATION
MERRILL LYNCH, PIERCE, FENNER &, BEANE
ately engaged, but also the whole
economy" as an indication of Ad¬
ministration
CO.
PAINE, WEBBER, JACKSON &. CURTIS
.
„
SALOMON
L. F. ROTHSCHILD &, CO.
SCHOELLKOPF, HUTTON & POMEROY, INC.
AMERICAN
SECURITIES CORPORATION
STROUD
COMPANY
*
Considering National Gross
Product at an estimated $259 bil¬
in
BROS. &.
\
COFFIN
1949
and
"Productivity
per
the
WEEDEN
INCORPORATED
&,
&
CO.
HUTZLER
SHIELDS
BURR
COMPANY
GREGORY
INCORPORATED
(4)
lion
R. W. PRESSPRICH
(INCORPORATED)
policy is recognized
constructive.
as
OTIS &
&,
CO.
&
SON
INCORPORATED
WILLIAM
BLAIR
&
COMPANY
INCORPORATED
statement
F. S. SMITHERS
worker should
be increased by at least 2 to 2^%
&. CO.
January 19, 1950
a
Gross Product will be limited.
(4) Some reductions in wartime
excise taxes are expected.
gram
A.G.BECKER & CO.
year" there is an indication that
any Administration activities that
expected may retard an increase in National
to be increased.
(7) Rent
*
Offering Circular may be obtained in any state in which this announcement is circulated from only such
of the undersigned and other dealers as may lawfully offer these securities in such state.
of
opinion of the staff as to the
likelihood
•
,
HALSEY, STUART & CO. INC.
that
particularly in dominant indus¬
the Southern Democrats and the tries, should recognize that wage
adjustments affect not only the
Republicans in the second session
of the 81st Congress, the compos¬ employers and workers immedi¬
ite
*
The
statement
that lodging of wage adjustments
in the hands of management and
management may get more recog¬
nition in the future than it has in
months of 1950.
Based upon
Price 9934% and accrued interest
likely with but few increases
price cuts in the various areas
(3)
,
President Truman's Messages and
.
subject to authorization by the
are
of business.
investor.
continuation
these Bonds
January 1, 1980
Interstate Commerce Commission.
seem
and
portant requisite for the successful
State
The issuance ancl sale of
conditions. Relatively stable prices
fied, although careful selection by
industry and issue is still an im¬
Following
Due
31/2
problem
facing
the
country is not that of combating
inflation
indicates
a
change of
rently
pre¬
vailing
are
the
current
economic
cur¬
fully
a year, but
unemployment
the
exceed
January 1, 1950
(2) The admission that the basic
higher stock
prices than
those
not
Dated
ap¬
million figure by very much any
time during the current year.
forecasts, that
g e
increasing at the rate of
benefits.
President
(10) Military expenditures will
be continued.
increase
to
Continued
of
program
year
to
Product
This
Gross
announcement
is not
on
billion
page
offer to sell or a solicitation of an offer
offering is made only by the Prospectus.
an
The
$300
G.
Leon,
of
formerly
Niagara Mohawk Power Corporation
Dean Witter & Co., is now associ¬
ated with Stanley Heller & Co.,
Street, New York
General
as
Mortgage Bonds, 2Y\% Series due 1980
City,
Dated
members of the New York Stock
Exchange,
buy these securities.
$40,000,000
Stanley Heller & Go.
William
to
65
William C. Leon Joins
(9) ECA program expenditures 30 Pine
will be reduced.
five
(5) The
the
National
January 1, 1950
Due January 1, 1980
~
senior analyst and
director of the stockholders rela¬
(11) Support of the United Na¬
tions is assured.
tions department.
Mr. Leon is a
member of the New York Society
Pt*ice 101.8.5% and accrued interest
(12) The challenge of Commu¬ of
Security Analysts and has had
nism will be successfully met—
many years' experience in Wall
,
short of war.
Street and a broad understanding
(13); Aid from the United States of the
importance of maintaining
the unproductive countries of
a
liaison
between
corporation
the world (Truman's Point 4) will
management
and
the
financial
meet with great opposition.
to
The
Prospectus may be obtained in any State in which this announcement is circulated from only such
of the undersigned and other dealers as may lawfully offer these securities in such State.
(14) Creation of the National community.
Foundation
for
the
Scientific
peaceful development of
will be approved.
atomic
energy
James Coulter With
(15) Aid to housing for those in
the middle income groups will be
Mason, Moran & Co.
forthcoming.
(Special to The Financial Chronicle)
(16) So-called "Monopoly Laws"
will not be enacted.
(17)
Aid
pected.
:
to
education
is ex¬
*
;
It
was
the
South
composite opinion
the Economic
that
of
was
goals sought may not be
reached,
La
the
He
lins
was
&
ILL. —James
has
with'Mason,
highly conciliatory
thereto
business and that while all the
Message
to
the
staff
CHICAGO,
Coulter
Economic Message
of
HALSEY, STUART & CO. INC.
become
-
Moran
Salle
Midwest
A. G. BECKER
HORNBLOWER
Street,
Stock
Co.,
he
was
Inc.,
135
an
&
CO.
&,
CO.
HALLGARTEN
WILLIAM
BLAIR
&
GREGORY &, SON
*
BURR
HIRSCH
officer of Se¬
January 19, 1950
1
&
CO., INC.
&
COMPANY, INC.
& CO.
WEEDEN & CO.
THE
ILLINOIS COMPANY
INCORPORATED
COMPANY
WM. E. POLLOCK
prior
& CO.
PAINE, WEBBER, JACKSON & CURTIS
INCORPORATED
Exchange.
-
1
INCORPORATED
OTIS
SECURITIES CORPORATION
ESTABROOK
-
BLAIR, ROLLINS &, CO.
-
members
and
lected Investments Co.,
CO.
(INCORPORATED)
AMERICAN
formerly with E. H. Rol¬
Sons,
"
& WEEKS
M.
associated
&
&.
INCORPORATED
,
STERN
9
BROTHERS & CO.
.
E.
of
Olive
10
'COMMERCIAL
THE
(246)
FINANCIAL
&
CHRONICLE
Thursday, January 19, 1950
'
-
Missouri Brevities
sales
$2,755,959, as against
Co.,1
St. -Louis, for the year ended Oct. current liabilities of $341,725.
21, 1949, amounted to $80,'377,978
which
is
of
5%
than
less
amounted tc
Shoe
Brown
all-
the
time high record of $84,404,361
in
Profit after
$2,543,052,
the 1948 fiscal year.
amounted
taxes
to
equal to $4.84 per common share
after deducting dividend require¬
ments on the preferred stock, and
compares
with $2(555,079, equal
to $4.87 per common share in 1948.
of
1949,
31,
Oct.
at
assets
Current
$26,680,950,
with
current
liabilities at $4,579,510, a ratio of
were
5.82 to 1.
5% cumulative convertible
sinking
fund preferred
stock
•Co.
three issues
Scherck, Richter Co. on Dec.
par
Inc., has
concluded arrangements through
Lehman Brothers, G. H. Walker
& Co., and Bacon, Whipple & Co.
for a loan of $1,750,000 from a life
insurance firm under a 3%% 17Edison Brothers Stores,
the public of¬
fering of 400,000 shares of com¬
mon stock
(par $1.25) at $5.25
oversub¬
share, which was
scribed.
*
:I:
year promissory note due Jan. 15,
Earnings of Curtis Manufactur¬
1967, according to Harry Edison,
ing Co. for the year ended Nov.
President.
The proceeds-are to be
30,
1949,
after
providing for
used to pay for improvements to
Federal and State income taxes
leased premises rand for general
amounted to $323,317, equivalent
corporate purposes.
to
approximately $1.67 per1 share
the
on
This compares
$810,124, or $4.19 per share,
tlie preceding fiscal year. Wal¬
ter
C.
Heckler, President, said
"The company has ample working
for
with¬
funds to finance its business
borrowing." Cur¬
out resorting to
rent
assets
1949
30,
Nov.
at
ended
Nov.
net sales of
for the
fhc.
Rice-"Stlx,
with
30,
RR.
the
of
has
to
purchase
after
Nov.
finance
price <of
30,
fixed
income
charges
*
Southwestern
Ry.
is asking for tenders of its
eral
and
gen¬
refunding: mortgage
Series A,
due 1990
to be received by it by noon off
Jan. 31. It is prepared to expend
bonds,
5%
approximately $2,000,000, if the
bonds
are
offered
favorable
on
terms. Interest on the bonds
cepted
purchase
for
profit after income taxes -of $1,103,894.
This
compares
with
$2,261,679, re¬
the preceding
On Jan. 4, 1950, an
856,174,111
and
spectively,
will
ac¬
be
year.
Sunday, Sept. 18, 1949, Great
devalued the pound ster¬
ling in respedt to the dollar from
$4.03 to $2.80.
In terms of the
increase in
dollar
this
had
was
deval-
Britain
a
uation
3 0.5%.
the
most
v
hausted
overcome
this
of
i
the
In the
Asia
various
Craig
..
S.
Sold
to
investments,
Scandinavian
the
and
Berkshire Fine
,
Spinning
Rockwell
a
to
Mfg.
currency
The
10%.
'ask,
why
was
it
to effect these devalua¬
may
The
tions?
(Special
common
Watkins
with
Tennessee Gas & Transmission
troit
of
&
Penob¬
the De¬
Exchange.
Mr.
members
Co,
of
formerly an
was
officer
of Watkins & Fordon, Inc.
Hearst CtmsoL Fnblicat'ns A
Wagner Electric
Kerr-McGee
Western Natural Gas
LaPlant-Choate
Wurlitzer R.
J. Arthur Warner Adds
Arthur
J
120
SCHERCIi, RICHTER COMPANY
quite clear.
In the first
Warner
&
War I,
World
Inc.,
well
\
far
United
the
tion where
pronounced.
States situa¬
very
a
.downward readjust¬
ment was effected during the
six
months
of
first
1949, prices con¬
There was not the
tinued to rise.
which
The
no
one
Effects,
//
*An address before the forum of
Garfield 0225
the
SLY56
St. Louis 2, Mo.
l.D.123
ing,
American "institute of
Springfield,
Mass.,
Bank¬
Jan.
11,
possible for the na¬
their - products in
areas. as
well as sterling
but with the. elimination of
areas
sell
shortages,
in
especially,
developed.
a
the
countries
now
products
at
In
in
securities
**
5
609
OLIVE
STREET
general,
affected
necessary
NEW
Members,
Midwest Stock' Exchange
an
countries
,
-
'
—
■1
'
'
.
a>
&
Exchange
Exchange (Associate)
ST. LOUIS 2,
Teletype—SL 151 & SL152
'
*
'•'
'
s
-
.*
.
■
ST.
w
-
-
Continued
-
-
MO.'
—
'
Offer to sell,
Peltasonjenenbaum Co.
*
#
Clark, Dodge & Co, 61 Wall St, New York 5,.N, Y,
solicitation of offers
-
■>
STOCK
Copies of the Prospectus smay <,be obtained from the underonly
by persons {o whom
the_ mdersignda may
legally offer these securities urider applicable' securities laws.
*1
£
'
'
V
k
'
,
William L Burton & Co.
.
*Correspondent and Private WtreT System
nor a
-
L. D. St. Louis 340,3 41, & 342
\
page
signed
4
\
'
on
LOUIS
.
{
"
.
IAN.DR.ETH; BUILDING
25 BROAD STREET, NEW
YORK 4, N. Y.
Teletype NY 1-295
Telephone HAnover 2-2575
-
ST. LOUIS 2, M0.
Teletype—SL
486'
*
-: / ;
'
January'17, f950
t.D.240
,
.
thea
-
Price SI.25 per Share
_
Midwest Stock Exchange
FOURTH & OLIVE
Bfell
r
*
°
t
New York Curb
Co.
Members—
Neiv York Stock
»
-
take
prevent
Consolidated Caribou Stiver Mines, Inc.
'f
*
the long range
favorable, for if
800,000 Shares
t-
be
mar¬
sharp increase in prices and wages
COMMON
,
world's
measures to
"
ISSUE
their
can
buy, any bf these securities.. The offering is
made only by th'e Prospectus. ' - • •
St.Louis l.Mo,
,
the
sell
to
that
"'..3
to
"
have
prices
competitive
kets.
States
United
buyers' market has
Thus, the devaluating
Stix & Co,
This announcement is neither
'
was
to:
dollar
1950.
investment
Devaluing
So long as a sellers' market ex¬
isted, it
-
*
the
on
/;;*. ''Countries
tions
the
Landreth Building
escape!
can
effects should be
Bell Teletype
living be¬
It is a severe,
are
reaching and brutal tax from
which
and the productive
became
act of despera¬
an
yond their means.
as
capacities of the several countries
severely damaged.
Partly
because of the great devastation
and partly because of the heavy
cost of social experiments, infla¬
Unlike
Co,
New York City,
announce that Joseph
F. Conlon,
Jr., and Charles J. O'Neill, Jr.,
have joined the firm's New York
trading department.
as
were
tion
Broadway,
II,
War
World
ing
It is
clearly shows the effects
nations
on
B. fered
heavy physical damage dur¬
associated
become
Stock
Watkins
are
MICH.—Edward
has
Bldg.,
tion
to this ques¬
answers
Chronicle)
Financial
Titus-Miller
scot
Texas Eastern Transmission
Newhard, Cook
necessary
imports.
place; Great Britain and the Other
western
European
nations suf¬
to The
DETROIT,
Southwest Natural Gas
Delhi Oil Co.
Ely & Walker Dry Goods
her
currency.
One
Sotrfhwfest Gas Producing
Dumont Laboratories
for
pay
and to fluctuate.
Southern Union Gas
,
earn
sufficient amount, of dollars with,
which
Devaluation, in effect, is a way
paying for the war by lower¬
ing the purchasing power of the
necessary
Dearborn
Danciger Oil & Refining
Dafcey Co.
countries, has been unable to
lira, although not deval¬
ued, was permitted to depreciate
Edward B. Watkins
i
insurance, banking
shipping services. The great
reduced these earnings dras¬
tically and Great Britain, and in
most instances the other European
wars
tion and
Commonwealth Gas
Consolidated
Canada
Italian
Old Ben Coal
com.
while
extent
devalued its
Mississippi River Fuel
Black, Sivafls & Bryson
approximately the same
lesser
a
has been
a
and
In Europe, Holland,
percentage. Devaluations were ef¬
fected also in France, Belgium,
Western
Germany and Portugal
Quoted
—
distortion
for
existence
payments through the earn¬
ings accruing from tourists trade,
"Bar'fle'rt
countries also devalued their cur¬
rencies by
of Great Britain the
case
her
the
island
Greece
respect to the
livelihood and, in the past, it had
been possible fdr her to balance
Pakistan), Af¬
and
to
bal¬
adverse
long time. A
great many commodities must he
.imported into Great Britain for its
(with the exception of
rica
countries
wide
in
n
Sterling
in
these
the
fundamental
the
of
and
sources
hard currency areas.
effected
all
for
of trade with
ance
Britain,
devaluations
were
countries
nearly
ex¬
their
of
These factors made it im¬
gold.
'
—
all
lowing
Great
.Furthermore,
or
holdings of dollar exchange and
Im¬
action
States.
the devaluing
of
exhausted
possible
area
thhs-Mtfler & Go.
United
mediately fol¬
countries
Ed, B. Watkins With
productivity -of labor
equipment that was true in
and
of
possessions.
Bought
U. S. from devaluations,
devaluation of dollar is indicated.
no
On
in
for
fiscal
and holds
from rising. Fore¬
wages
serious broad repercussions in
no
and
*
Louis
sees
totaled
$699,936, as against $1,362,268 for
the corresponding period in 1948.
St.
ating countries can prevent sprites and
1949, net
taxes
to
beyond their means, 'New York banker <ca1fe action con¬
structive, since »it removes some of maladjustments in price
structures. Says success df wove
-depends 'on whether 'devalu¬
1,000
h.p.
diesel-electric
switching locomotives. For the 11
ended
war
4ed European countries
live
nine
months
of devaluation to :hdth damages inflicted %y
cause
and to social experiments tfhaft have
equipment
$911,616, the
year
$47,018,478, and net
Laying
for
31
obligations totaling
proceeds to be used
100'%
Co.
reported
1949,
By GRAIG S. BARTI/ETT*
Vice-President, Oerrtral Hanover Bank and Trust 'Company
paid.to Feb. 15.
193.365 shares of common
stock outstanding.
to
be received by
to
Jan.
on
Federal
20 participated in
bids
European
Devaluation
and
amounted
Terminal
for
income
made at
and accrued dividends.
was
$18,566/350,
liabilities
,
H'
per
current
Illinois
outstanding preferred stock.
offering
totaled
assets
noon
amounting to 62,500
in exchange for the
The
Effects of
on
St'eb. >1. At Nov. 30, 1949, «otfrrent
asked
shares, which were first offered
of
cents per share
*
off Southwestern Investment
(par $20),
per
declared, to be paid
50
' —
i--—
n--
$2,879,349.
Louis,
investment dealers, participated
in the underwriting of an is¬
G. II. Walker & Co., St.
sue
■
With the regular quarterly divi¬
dend
Net
1
Of 30 icefits
'dividend
extra
share was
'
1
J
_
♦
.#
•
•
•
22-
Volume
171
Number
4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(247)
11,
Continued from page 10
Connecticut Brevities
'Capital
.
increases
have
been
for
pany
voted by World Fire & Marine In¬
Sept.
Company
and
Indemnity Company,
Century
ings
wholly-
$3.11
surance
owned
subsidiaries
of
Aetna
In¬
&
million
stock
$1.5
to
$2.5
dividend.
million
The
will
from surplus.
million
by
of
stock at
to Aetna.
par
The
bal¬
cash position
a
working
capital of
value of $36.58
Inventories were ma¬
terially below the level the
vious year.
from
pre¬
„
'!=
.
❖
Stockholders
of
New
These
Britain
change the
value of the capital stock from
par
changes are a step in the group's
plan to initiate multiple line writ¬
ing under
charter
amendments
dividend to stockholders of record
which will permit each individual
•Dec.
write
to
company
casualty
both
fire
$100
s):
ijt
from
which
be
River navigable to
of
part
a
in
1936
and
in
tional
new
was pro¬
proposal calls for
estimated
hours
of
a
236
27,000
The
cost
Construction
Phoenix
new
office
The
new
"
and
with
will
The
G.
esti¬
\
April
1,
•*«.
•
j
'
>;t
become
Hartford
1952.
"-NEW
The
the
on
Bros;
the
on
HAVEN,
&
Co.,
»
157
'
-
>':
#
Financial
on
from
pendent
effect
the
during
devaluation
whose
by
in
through
respect
the
nations will
tion
have
as
more
foreign
on
this
imports,
pronounced.
will suffer
-
the
will
situation
be
Thus,
to
a
effected.
Great
greater
in
prices
of
price
been
effected
obviously
serve
to
Great
price
the
(2)
Governmental expenditures
purposes which are not pro¬
used
or
an
for
for
capital
social
devalua¬
lead
to
a
decrease
in
experiments.
production cf
t'fi
R.
worth
a
modities which
time when the supply
<4)
is
bound
world's
to
com¬
With
the
rise
in
the
cost
could
It
make
will
be
some of these
met
and,
and
of
be
permitted
borrowing
especially
wages adds
cost
of
living
thus
effect
a
(4)
A
in
rates
order
curtailment
lowering
Why
tc
oi
Was
•
due
the
Depreciation
So
It
had
been generally
expected'
Great Britain would devalue
and that this
that
devaluation, in turn,!
would
be followed
valuations
in
by similar de-'
the
other
sterling;
area
countries.
However,
had
felt
the
that
many
devaluation
would not go below
$3.59 and St"
was not anticipated in
any-event*
that
It
it would
would
portant
British
be
cut below $3.20.1
that several im-*
appear
reasons
prompted
authorities
to
drastic cut to $2.80.
(1) It
be
was
taxation-
for
make
a
rate shou d
which
an
could
indefinite
Continued
the!
the®
J
*
felt that
established
maintained
\
of
in
Drastic?
difficult
more
capital expenditures.
the increase in
increased
and
(3) An increase in interest
will be demands for higher wages.
seems/iikely that
be sold in the
can
markets
those which might be sold in dol¬
lar areas.
living, it? is expected that there
on
fee
pe-
page
&7
Chronicle!
!
F.
the staff of
This advertisement is not
Griggs Co., 35 Leaven¬
\
WEST
John
offering is
or
a
solicitation of
an
offer to buy these securities.
made only by the Prospectus.
Street.
I
J. F. Wattles
i
offer to sell
tin
The
F.
CONN.
Wattles is engaging
—
in
i
a
640,000 Shares
*
At
*
the
.Stanley
1950 annual
Works
will vote
the
of
a
ently
from
proposes
97
Board
to issue
are
564,198
a
Tim Brothers
pres¬
for
6
shares
is
to
be
free
Associate
of
or
part
any
the
par
thereof
at
not
York
Members
stock
-and
New
Exchange
Boston
Stock
York
Curb,
par
value
Price $19,125 per Share
Connecticut Securities
less
Hartford 7-3191
of $25 to employees
*
-
Copies of the Prospectus
New7 York:
the
•
BArclay 7-3542
;
The annual report of Bridgeport
Hardware
Manufacturing
Com¬
c
or
*
Hartford and
other than Directors.
If
Common Stock
without nominal
Primary Markets in
pre¬
emptive rights with authority
given to the Directors to offer all
than
New
•Exchanges"
of Directors
1
;
,
Members
shares
dividend. This would require
183,066 shares and the
remaining 37,736
Middle South Utilities, Inc.
North Quaker Lane.
shares
600,000 to
There
outstanding
the
stockholders
authorized
shares.
which
securities business from offices at
of
proposal to increase
of
stock
common
840,000
on
on
number
the
meeting
BelP System
may
undersigned,
he obtained from such of the several ituderiu iters, including
ins
may
legally offer these* securities in compliance
uith the securities laics oi the respective Stoles.
Teletype: HF 365
maintain:
Primary Markets
Union Securities
in
■
Corporation
Equitable Securities Corporation
't
4
Connecticut Securities
A. C.
Allyn and Company
Incorporated
Robert W. Baird & Co.
CHAS.W. SCRANTON
MEMBERS
NEW
YORK
STOC.K
&
EXCHANGE
CO.
New
York
Canal 6-3662
Bridgeport
.
Teletype JNR 194
Danbury
Now London
Hartford
Waterbury
Incorporated
The Milwaukee
,
New Haven 6-0171
7-2669
January 18, 1950
!
•
,.
Opens!
HARTFORD,
-
i
i
r
New. Issue
*
•
at
foreign products
and,
shall Plan successful,
expend¬
shifted to the
will
Such'
-
increase,
prove
to be successful,
this, in1
turn, would help to make the Mar- «
Funds thus released could be used
for
more
productive
purposes.
1
to
serve
trade
cur¬
imports and an increase in ex¬
ports. Thus, the demand" for goods
It
«
would
of time, might - aid. in ef¬
fecting free convertibility.
Ob- 1
viously, if the devaluation should!
The over-employment' in domestic
capital ventures such as building
and- public works,
and the raw
materials
employed
should 1 be
(3)
:
exchange restrictions.
course
amount is
excess
seem desirable to.
gradual removal of trade
a
multilateral
this
.
It would
action
a
of retir¬
purpose
Obyipusly,
aqti-inflationary. -
itures
Britain
be
to
public debt.
being
increases
the
counteract
tion itself..-
foi
tailed where
Al¬
•
lead
ductive in character could be
increases have
in
used
for
com¬
imported commodities.
some
••
home
at
(6)
effect
and
gov¬
could
would
holding'
the North American market
where
their
sale
could
produce much
needed dollars.
surplus .pi the-budget which could
be
ing
manufactured
This
would be,
The devaluation inevitably
accompanied by -moder¬
be
increases
ernment.,, expenditures
areas
These "unrequited exports" obvi¬
ously would be better directed to
production.
total
in
return flow
of
com-,
modifies needed in Great Britain.
gain in respect to the
in
sell
balances,
offsetting
Furthermore, these
reduction
or,
but obviously
this has permitted commodities to
;go
into those areas without an
cur¬
A
to
sterling
dollar only to the extent that they
able to hold down their costs
(1)
reduction
likely, cancellation.
this problem.
It has, of
been easy for British ex¬
porters
are
of
of
course,
extent
han¬
It'
possible that the United States
-may become involved in the solu-'
lost.
which
same
the
is
Great
to
funding,
what is not
pur¬
is
for
sterling balances.'
This might be accomplished
either
1959
that nothing has
countries
Great Britain.
j
,
gained
Britain
tp be inflationary
countries
of
course,
to
the
curtailed
a
or
suitable out¬
a
solution
some
dling of frozen
equal to the de¬
pace
devalued, to
decrease.
Church
af¬
heavy taxation
inability to find
find
to
rencies have remained stable will' What Can Nations Do to Make the
Devaluation Effective?
of
to>
All
WATERBURY,.. CONN/—Clyde
the
;
•
of
pose
increase in terms of the devalued
currencies. Where a nation is de¬
of
With R. F. Griggs Co.
schedule while the Commonwealth
df .Massachusetts'' appeal was
pending.
stable
wages
agreed
valuation, then the corrective
deflationary,
the,devaluing coun¬
tries must prove
in character.
CONN. —Nor¬
Inc.,
YSpecial tx> The
discontinue
on
have
unless the cost of living -rises too
fast.
been
the effects
demands
Old
line
keep
Britain
ceeds at, a
effec¬
in removing
quite
evident, however,
just as the effect on
the
crease
Street.;
Colony line.
has been operating
railroad
trains
Great
and commodities at home will in¬
Chronicle)
C.- Fowler has joined
service
in
alleviating the dollar Thus it is evident
and
'
-
peals, New York, in .its efforts to
to
is
inflationary spiral
continues. However, Trade Unions
the
by
United States will be
was
order
private initiative.
Great Britain are
in
earnings as they have
able to receive.
(5)'It would seem desirable to
and the vicious
<5), If the increase in wages,
prices and cost of production pro¬
is
ready
York
K. Silverman is with Hincks
man
The
%
permission
It
that
modities
Co.
■'
|
obtain
'
New
desirable
in
let for such
de¬
the
and
measures
least
at
from
manager" for
New York, New Haven & Hart¬
ford Railroad has been upheld
by
fhe United States Court of
Ap-
>
If
on
shortages.
ate
associated
Mr. Perkins
H. Walker &
J
.
basis.
trade
accompanied
tive, it could succeed
(2)
••'
Sjt- ;
is
necesary
prices
shGuld lead to
currency
course,
multilateral
will
Oheohjole)
-(Special to T«e Financial
outstanding had pre¬
viously been reduced to $1,792,400
through tenders.
'
r
soft
between
restoration of
valuation
Britain
With Hincks Bros, & Co.
amount
W
at
Waiston, Hoffman & Good¬
'
\
/
on
due
unbalance
and
general
or
be
possible
fected either by
the
;
sit
Dec. 31, 1949 at 100.50
and interest its entire issue of 5%
bonds,
Financial
has
formerly
Aspinook Corporation called for
payment
The
Stock Exchange.
$3,500,000.
sit
to
win,-members of the
four
audi¬
area,
cafeteria.
mated cost is
:
{.Special
Perkins
on
Hartford.
have
recreation
a
torium
in
penthouse and
a
Deposits
$173,027,591.
were
Afafsfon, Hoffman Finn
Company's
will
share.
a
HARTFORD, CONN.—Harry L.
started
building
office
Stories and
include
has
Insurance
$25.88
the
&
v
production,
degree than France.
$18 million.
#
of
(1) Prices of imported commod¬
Hair; L, Fortius With
.
company is
dollar
ities
a
per
to
the
and, in due
>]:
Trust
&
the year end
an average
kilowatts
indicated
the
net
were
million kilowatt
year—equal to
nearly
hour.
-
profits ' to
Company
earnings for the year
equal to $2.42 per share. Capital,
surplus
and
undivided
profits
higher dam capable -of producing
an
Bank
shows
1939, the
opposition,
company announced its
the
ac¬
par
The 1949 report of Hartford Na¬
a
Holyoke, Mass¬
achusetts. When the plan
posed
stock
^100,000
undivided
development at En¬
will
-20%
pay a
cost
capital.
that it favors the pro¬
power
5-for-l
a
shares for each share of $100 par
stock and by transferring
$32 million project of Army En¬
gineers to make the Connecticut
but
effect
)<:
posed
field
to
6, 1949. The change was
complished by issuing six $20
and
Connecticut Light & Power has
announced
$20
split and also to
lines.
»•:
to
the
reduce
fit
National Bank voted to
in
competition in the world's mar¬
kets can be met. It will tend to
a
is
been
and
a
$1 million to $2.5 million by issu¬
ing 30,000 additional shares of $50
per
of 45%.
classes
Devaluation
$3.26 against
despite a
it
stimulate
European
earn¬
book
and
share.
per
transferred
a
that
before
year
$5.24,
$20.39,
a
Capital of Century
Indemnity will be increased
the
ended
year
shows
were
sheet showed
ance
additional
be
1949
share
Effects of
to
appear
where
fiscal
drop in sales
The capital of World Fire
Marine will be increased from
surance.
$1
30,
per
the
would
'
Tucker, Anthony & Co.
{
I
First California Company
Company
Hirsch & Co.
Piper, Jaffray & Hopwood
THE
(248)
12
Thursday, January 19, 1950
FINANCIAL CHRONICLE
&
COMMERCIAL
*
named
John J.., Hayes.
began his banking
Madden
Mr.
1921 and has been with
in
career
National
Bank
*
with
Henry C. Brunie, President of
Empire Trust Co., of New York,
has announced the promotion of
Charles Leslie Rice, Jr., from As¬
sistant
Vice-President to Vice-
president
of Winfield A.
Manager of the Munici¬
appointment
the
Scott
as
in charge of the bank's
Assistant
d
e
t
n
Vice
as
Presi-
-
'
GeorgeL.
F
sistant
Barnard Townsend, President of
Title Guarantee and Trust Co. of
Jan. 16
t
n
of
sworth,
a r n
As¬
Vice-
n
graduate
a
of the Wharton
has
School
the
of
University of
Pennsylvania,
Farnsworth
L.
G.
Class of
extensive file of facts and
at your
to
disposal
with
cooperate
.
.
.
figures on
INSURANCE Stocks which is
Out-of-town BANK &
and shall be more then
pleased,
in the purchase or sale of any
experienced attention.
you
such item that demands
1933,
joined the Chemical Bank in
He was appointed Assistant
Branch Manager in
1942, Assistant
and Assistant
Vice-President in 1947. Appointed
1943
Secretary
in
Assistant
Vice-Presidents
V.
Geoffrey
were
Melville
Azoy,
P.
Chamberlain and Edward G. New-
formerly Assistant Secre¬
taries; John H. Higgins, formerly
Assistant Comptroller; Sumner A.
fang,
formerly Assistant
Rockefeller Center Of¬
Clifford D. Wooster,
formerly Manager, 57th Street at
Williams,
D. RAYMOND KENNEY & GO.
Member
National Association of Securities
SUITE 801
-
Dealers, Inc.
41 BROAD STREET, NEW YORK 4,
N. Y.
Box 343, Gettysburg, Pa,
BOwltfig Green 9-2822 NY 1-2918
Manager,
fice;
and
Gettysburg 554
Kenneth
J.
office.
8th" Avenue
Assistant
formerly
Townsend,.
Other
Director.
Personnel
BANK STOCKS
Department;Robert C. Kurz"Seventh
Avenue at 38th Street Office; Leon¬
Trust
woil Assistant Secretary,
S.
PUBLIC UTILITIES
of
GEYER & CO:
Chicago
Y.
(
Los Angeles
York.
N. Y. John P. Heney and Alfred
C. Middlebrook were elected ViceBank,
Saviugs
San Francisco
New
Bank & Insurance Stocks
Over-the-Counter
Department. Mr.
formerly Assis¬
was
and
Vice-President,
in
is
Driscoll
elected Assistant Vice-Presi¬
EXCHANGE
YORK 5, N. Y.
Bell Teletype NY 1-124849
Crowell, Weedon & Co.
650 S. Spring St.
New Haven,
Tiff I
9
Los Angeles, Cal.
Conn.
Brothers
Lewis Street
WILMINGTON,.DEL.
50 Congress Street
Boston, Mass.
LINCOLN LIBERTY BUILDING
PONT BUILDING
.
in
Assistant Secre¬
an
the
in
1937
been
Corporate
Casey,
trustee of the bank, is a
a
member of the law firm of Casey
listed in the Army
and Honikel and a past
the
to
rose
Colonel
tion.
the
in
He
Lieutenant
of
Intelligence
returned
1946 and
in
Air Forces and
rank
to
ciation.
Sec¬
the
Assistant-Vice-Presi¬
as
dent.
*
,
At
the
of
York held
New
on
Jan.
17, Joseph P. Shaw and Riley P.
Stevenson were appointed Assis¬
tant Vice-Presidents. Mr. Shaw,
has
who
been
manager
Bank's
Fifty-seventh
Branch
since
ferred
of
the
Street
1945, will be trans¬
head
to
B
office.
Mr.
Ste¬
S.
Walter
u
k 1 i
c
n
After 13 years
ide
of
tional
Bank
N. Y„
of Troy,
announced
PHILADELPHIA, PA.
surance
quishing his position as an Assis¬
Bankers
Trust
Company
in
New
York:
City,
his
Marshall will take up
Mr.
A further
duties Feb. 1.
new
change in the Manufacturers Na¬
tional we learn is the election of
J.
Welch
Don
the
ceeding
President, suc¬
as
late Chauncey W.
Marshall, newly
Cook.
Mr.
elected
President
of
Manu¬
the
Moberly,
Mo.; he began his banking expe¬
facturers,
in
born
was
during summer vacations
Council Bluffs (Iowa)
rience
the
as
a
National Bank
Later
he
became *
of
Bank
Canajoharie,
In¬
Com¬
Bankers
Trust
Assistant
Vice-President
he served
as
Shawmut as a
York
dent
Presi¬
in
He
1929.
Ray A. Ilg
Officers.
William H.
appointed Auditor.
was
*
*
Campbell
M.
and
Henry R.
Jr., President,
Savings Bank
of
was
on
served
of
for
Banks."
formerly
been
Efficiency Engineer of the Bucyrus Company, he was
also, from
1912 until 1914, Director of In¬
dustrial Relations of the Federal
Rubber Co. and later Director of
Sutphen,
New
16.
ville, Inc.
at
York
it was an¬
Mr. Camp¬
President
as
was
Relations
Industrial
35
for
having taken that office on
trustee
and
Jan.
15, 1915.
tee in 1906.
a
advertising
he is the
author of the definitive textbook,
of
American
the
their annual meeting,
Jan.
relations,
public
He became a trus¬
been
the
Mr. Ilg is Treasurer of
bank since
1937
appointed Vice-President
in 1948.
in
Dimes
Bank
well
as
Co¬
as
a
Trustee of the Grove Hall Savings
the
Boston Chamber of Commerce.
Bank.
He
is
member
a
•.>.
sjs
as
elected
a
J.
He
*
at several
is
an
first
of
has been
director of the Lafayette
chapters
instructor in the
school
summer
of
Relations
Public
the
Financial
Association
Northwestern University.
serves
of
as
a
at
He.
member of the Board
of
Trustees
the
New
York
State Bankers Retirement System
and
as
member of the Executive
a
Council of the American Bankers
Association.
:'i
Louis
elected
Bank
H.
#
Prange
President
&
Trust
of
has
the
been
Bremen
Company
of
St.
Louis, Mo., to succeed Robert H,
Ballman, who
was
elevated to the
office of Chairman of the
learned
from
the
board, it
St.
Louis
"Globe Democrat" of Jan. 7.
Mr.
Prange, it is stated, has been
asso¬
the
1903
National Bank of Brooklyn, N. Y.,
*
the
of
i>,
Huisking
an
Association.
Bankers
member
lecturer
a
ing.
is
Charles
a
was
as
in
of the American Institute of Bank¬
and
Director of the Workingmens
operative
State
Company
1944,
Secretary of the New
Suffolk
Vice-President
and
Mr. Sutphen has
of the
of
March
County
Evans-
at
that
graduating class of the Graduate
School of Banking and has served
in
Relations
Trustees
bell
and
Vice-
From 1939 until he joined
Mr. Ilg
joined the
-
was
Relin¬
11.
Jan.
on
tant Vice-President of the
National
pany,
Vice
di¬
Manufacturers Na¬
the
rector
and
Cashier of what is now the First
Sales
General
J. Mar¬
Vice-President
as
Examiner.
and
t
n
shall
pointment
Vice-Pres¬
as
*
*
The election of Harold
Savings Bank and after his gradu¬
ation from Notre Dame he again
served the
bank
until his ap¬
,
10.
Jan.
New
*
'
with
President,
on
the
Association.
regular meeting of the
of
the
National
City
Directors
Bank
*
*
Association,
Title Association
York State Title
American
and
position
member
bany Insurance Co. and a
of the American Bar
promoted to the
was
President
County Bar Asso¬
He is a director of Al¬
of the Albany
bank
the
having
*
years,
Schirmer, Atherton & Co.
Springfield, Mass.
Hartford, Conn.
DD
TO
Tifft Brothers
1387 Main Street
-
made
was
tary
1930, were elected Assis¬
They have
Assistant Treasurers.
Mr.
tant Vice-Presidents.
Trust Department. In 1942 he en¬
"Public
nounced
Williams, Inc.
He
Stoltz, who started as a mes¬
W.
Hayes came
with Bankers Trust Co. in 1931.
Richmond, f Mr.
Besides
Summers
Laird, Bissell & Meeds
95 Elm Street
companies
Southeast, and engaging in
the investment banking business
Appraiser.
Estate
E.
William
Day, Stoddard &
foods
wholesale
eral
Baily and Julian M.
were
appointed Assistant
Real
Driscoll,
A. GIBBS, Manager
CONNECTIONS
senger in
as
charge of Shawmut's
elected Chairman of the Board
WIRE
in
Whaleyville, Va. Af¬
an officer in sev¬
serving
were
Mortgage
DIRECT
in the
ter
Formerly
dents; Mr. Nelson had been Assis¬
tant Mortgage
Officer, and Mf.
the
At
9.
Jan.
on
time, it is learned from the
same
Albany
"Times - Union,"
John
Boyd Thacher II announced that
Donald B. Reagan, associated with
the bank since 1934, and Frederick
native
a
H. Nelson and Walter G.
Bond
Inquiries invited in all Unlisted Issues
Telephone DArclay 7-3500
of
annual meeting of
its
trustees
the
bank.
Walter
Securities
120 BROADWAY, NEW
the
was
at
Y.,
Mutual
of the Bond Investment
Department of the bank.
Walter
STOCK
with
been
had
Savings Bank of Albany,-
County
N.
of the Liberty
charge
YORK
suddenly
ly Assistant Vice-President and
Mortgage Officer and. will con¬
tinue in charge of the Mortgage
tant
NEW
for
Casey was elected a
Vice-President of the City
and
Joseph J.
47 years old.
nineteen years. He
Hayes,
bank
was
i|i
*
.
N. Y., and he is at present a
President
and
director
of
Middlebrook
MEMBERS
Mr.
*
York died
He
11.
Jan.
ciation of Group V.
*
Co., of New
of
past President of
Savings Banks Officers Asso¬
the
Hayes,
Assistant
of Bankers Trust
Vice-President
is
Fuhr
Mr.
joined
Inspector in 1935.
*
he has been in charge
Williamsburg office.
years
the
Officer. Mr. Rickard*
the bank as Real Estate
Mortgage
H.
with the Kings County
year
Manager
and Real Estate
Trading Department, LOUIS
Walter
promoted from
Mortgage
Officer
to^
Garland
January
Presidents; Mr. Heney was former¬
connecting branch offices in
Cleveland
made
following promotions and
the
River
Boston
a
its
Savings Bank in April, started his
as a junior clerk with the
bank in 1901.
For the past five
was
Assistant
by
been
has
appointments at the annual meet¬
ing of the Trustees, of the East
INCORPORATED
Private wires
-1:
*
*
Announcement
NEW YORK 5, N.
at
at
bank
career
Allen, Assistant Manager,
venson, Assistant Cashier at the
Municipal Bond Department; R. P*
Eighty-sixth Street Branch, will
Brown, Manager Investment Re¬
remain on this assignment with
view Department; -Sylvester F,
the new title.
Majestic, Assistant Manager, For¬
$
&
%
eign Department; Arthur F. McRay A. Ilg, Vice-President of
Ginness, Assistant Manager, Broad¬
the National
Shawmut Bank of
way
at 44th - Street Office :and
Boston, Mass., has been elected a
Eustace W. Torrtlinson, Trust Of¬
director of the bank, it was anficer, Personal Trust Department. n
o u n c e d
ard
INSURANCE STOCKS
63 WALL STREET,
Rickard
ap¬
Assistant Treasurers; Emil J. Horn,
Assistant Secretary, Corporate
that
of Trustees
Board
the
the
of
48th
York
meeting
of New
Bank
announced
of
Personnel Director was appointed
pointments were Harold F.Selesky,
Assistant
Secretary;
Robert W.
Peck and William H. Schofield,
Y
Savings
has
on
3934.
an
tral
County
Charles D. Behrens,
President, announced on Jan. 10.
Mr. Fuhr, who will complete his
1
1
Vice-
Kings
meeting,
Lee, President of Cen¬
James T.
the
elected to the Board of Trus¬
tees
*
Bank Items
of
Savings Bank, of Brooklyn, N. Y.,
were
*
*
sworth
Far
is
and
We maintain
Schefmeyer
t-
Assistant
Fuhr,
President
was
formerly
Principal Executive Assistants.
Mr.
President. Mr.
announced that Ed¬
mund W. Madden, Assistant VicePresident at the bank's Borough
Hail Office in Brooklyn, has been
;j
e
formerly
❖
Harvey B. Gibson, President of
Manufacturers Trust Co., of New
York,
*
promoted from Assis¬
Mr. Sheerin and
was
*
*
Treasurer.
J.
d
*
busch
tant
appoint-
financing for
*
Vice-Presi¬
served
New York, announced on
the
m
Manufacturers In¬
Co.
Lewis
Ohlen¬
Mr.
Assistants.
Jan. 12
on
A. Scott Co.
Secretaries.
*
tors
ann o u n c e
he was a partner in M. L.
prior to the war and
before that had his own firm, W.
dents. Both had previously
»
meeting of the direc¬
ganization
Moore & Co.
Trade Bank
& Trust Co., of New York, Sam¬
uel S. Sander and Ira F. Weiss
as
or¬
30 years,
annual meeting on Jan.
elected Assistant
annual
the
at
associated since 1945.
he had been
10 of the directors of
were
York,
municipal department of Equit¬
able Securities Corp., with which
Active in municipal
At the
New
pal Bond Department.
Mr. Scott
was previously co-manager of the
Oil and Gas Division.
'•
of
Neumann,
Executive
the' Chemical
1
W.
o n
Maltine Co. and the
rector of the
Schefmeyer, Deputy
Herbert
surance
Jackson, Chairman of
Bank & Trust Co.
N. Baxter
Treasurer;
Assistant
Sheerin,
Walter H. Tietjen,
William H. Auer, and Martin W.
Hiller
were
appointed Principal
*
i!«
C.
and
Merchants and
the Manufacturers Trust Co.
Products
t i
Corp., Chairman of the Board of
directors of Heli-Coil Corp., di¬
Auditor, Ralph L. Figgatt, Alwin
merged
was
C
President
appointed John M. Ohlenbusch,
Assistant Vice-President; William
since
Co.
former
the
when
of
10
Brooklyn
Trust
Manufacturers
1931
suc¬
late
the
ceeding
office,
that
head
to
ciated
according to Walter Jeffreys Car-
and had
with
bank
since
*
The trustees of the Bowery
ings Bank of New -York on
Sav¬
Jan. lin/ President.
1
|
;
Mr.: Huisking is
beeh Vice-President for-
the last 10 years.
-
t
Volume 171
Number 4873
THE
COMMERCIAL
CHRONICLE
FINANCIAL
&
Mutual Funds
Bullock Fund
13'
(249)
PHILADELPHIA FUND
Dividend Shares
Nation-Wide
Securities
INC.
By ROBERT RICH
A Mutual Investment Fund
Selling to the New Middle-Class
The
Great
American
Crash, by Royal Typewriter, Millins Manu¬
teaching facturing,
Shell
Oil
Company,
method
known, experience, in¬ Bendix Aviation, Acme Steel, In¬
stilled in the younger generation terstate Iron Corp., and Consoli¬
the
Prospectuses
available
from
of
Investment
Dealers
most
the
time
the
idea
that
ments weren't "safe."
or
Prospectus
effective
invest¬
The expe¬
dated
Edison of
New
York
Fidelity-Philadelphia Trust Bldg.
com¬
mon.
123 So. Broad Street
Philadelphia 9
riences of their
elders, the stories
heard, and the legends
still extant, together with the rise
Concord Fund Directors
they've
CALVIN BULLOCK
of
paternalistic
a
and
its
and
Established 1894
welfare
sales
policy of
for
all"
generation
younger
and 30s
government
"security
this
soured
of
the
1920s
the idea of personal in¬
vestment in American
enterprise,
and,
on
long-term,
the
gave
secur¬
ities business the toughest
job of the half-century.
INVESTORS STOCK
selling
of the
America,
FUND, INC.
tional
Board
Stock
of
Directors of Investors
declared a quarterly
fifteen
cents
per
share
Fund
dividend
payable
holders
has
of
February 21,
on
record
on
1950 to share¬
of
as
January
31,
1950.
h. k. BRADFORD, President
Manager
INVESTORS DIVERSIFIED SERVICES
Established 1894
as
in
of
the
investments.
Na¬
ing to Selected
no
Accord¬
American
mar¬
with
incomes between $3,000 and $7,500
a
receive
year,
51%
of
the
Na¬
Minneapolis, Minnesota
middle-class
new
has
an
aggravated
tendency to "hoard"
savings in "mattresses" and
savings
accounts,
so
the
most
pointed selling argument to be
Weltner
made
is
dollar
Diversified
holdings.
talk
of
the
can't
real
be
"dollar
insecurity of
this selling
couched
in
ing velocity and supply of money."
In simple
language, the "Dollar
Fund
Investor" must be made to realize
that his savings in the
past, at 2%,
in the face of
A Scries
New
of
York
at
Stocks, Inc.
Prospectus
ami
investment
descriptive
from
dealer,
local
your
8%
are
and
Company
Wall Street, New York
CHICAGO
LOS
5
ANGELES
mysterious
The
as
basis
a
The
the
that
(Dec. 31* 1949) announced its pol¬
icy will be designed primarily for
those
able
which
in
by
our
be
late that "not
sets
reach
this
Funds
is
for
these
sysem.
basic
market.
a
be
And
natural
"ve¬
savings.
Custodian
Funds
shares
600,000,
certificate
amounted to
more
and
holders
distributions
set
a
Keystone at 10,500,...
Portfolio
National
Trust
Funds,
in their
folios, Suburban Propane Gas 4J/4S
(issue
called),
Public
Service
Electric
&
Gas
Para¬
common,
mount
Pictures, Finch Telecom¬
munications, Inc., Fairchild Cam¬
he obtained from
era
Keystone Company
of Boston
r
'
i
.
,7
M
i
,
•
50 Congress Street}
•
v
*
*
•
& Instrument.
series RR 4s, 1960, Gulf Oil
'
ferred,
•
'
■
Additions
rities
Celanese
Denver
Corp.
Rio
Western RR. covertible
-
1
'
1420 WALNUT
STREET
PHILADELPHIA 2
Fund."
•
The
Concord
Fund
shares of $1
200,000
•
v?
registered
par
common
stock.
"f
Theodore
ij
I
iii
Young Co. Is
Formed in New York
AFFILIATED FUND, INC.
AMERICAN BUSINESS
Prospectuses
ican' Radiator
&
T.
Theodore
R.
R.
S.
1st
com¬
pre¬
Grande
&
5%, Amer¬
S.,
Young
SHARES, INC.
on
Request
Lord, Abbett & Co.
Young
announces
63 Wall Street, New York
the formation of Theodore Young
& Co. with offices at 40
^
I
Exchange
CHICAGO
ATLANTA
LOS ANGELES
Place, New York City, to transact
a
general brokerage and unlisted
securities trading business.
Mr.
Young is
member of the
a
Security Traders
New York,
"
of
Association
,
Kuhn, Loeb Go. Places
Combustion
Engineer'g
Stock at 255/s a Share
Kuhn, Loeb & Co. made
of
,
Combustion
a
on
Jan. 17.
BALANCED
SERIES
Armco
SERIES
INSTITUTIONAL
BOND
SERIES
BALANCED
SERIES'
-
•
•
INCOME SERIES
sec¬
PREFERRED
SPECIAL
STOCK
PREFERRED
SPECULATIVE SERIES
STOCKS
SERIES
Engineer¬
the New York Stock
Exchange
The issue was
oversubscribed and
SERIES
SECURITIES
BONDS
BOND
LOW-PRICED
ing-Superheater, Inc., capital stock
(no par value)
at $25.62% per
share which was the closing price
on
NATIONAL
heavily
the books
STOCKS
COMMON
STOCK
SERIES
INDUSTRIAL
AUTOMOBILE
SELECTED
STOCKS
CHEMICAL SHARES
<
SHARES
BUILDING
SHARES
SERIES
RETAIL TRADE SHARES
RAILROAD
METAL SHARES
OIL SHARES
GROUPS SERIES
LOW-PRICED STOCK
SERIES
SHARES
AVIATION
EQUIPMENT SHARES
RAILROAD SHARES
STEEL SHARES
are
closed.
FIRST
were
Boston & Maine RR. 1st mortgage
mon,
-Boston ^rAlassacltHsetts
f
'
.
and not over 10% of
of a company's secu¬
may
be purchased by the
shares
Changes
various series, omitted from port¬
(Scr;..si-S2-S5-S4)
Distributors
one
ondary offering after the close of
the market on Jan. 17 of 32,500
National Trust Announces
STOCKS
National
as¬
any
class
than 53,000 in¬
000.
(Series 3vl-lC2)
of the
had
in
the
BONDS
Tl ie
any
in¬
1949; assets
$200,000,000 mark,
outstanding reached 15,-
vestors,
PREFETCHED STOCKS
5%
company,
popu¬
and
people's
records
new
rtbw mark for
(Scries JJI-B2-B3-B4)
over
be invested in
may
stipu¬
that
most
enterprise
concerted
a
exceeded
may
W. L Morgan & Co.
restrictions
"stock," -"secu¬
should
the
Keystone
IN
in¬
current
fine—not
remembered
words
to
four
investing tlieir capital
than
lit¬
Keystone Sets 4 New Records
Prospectus
important
more
come.
confusing
are
Mutual
INVESTMENT FUNDS
1928
preservation and appreciation are
thoroughly instilled
be
the
hicle"
Participation in
INCORPORATED
investors to whom capital
parlance
selling job will Mutual Funds
.
$311,851.15
^re
are
sales
the
stocks
must
Only
Tii nds
its
whose total
Fund
value
at
shape
to own.
terested
COMMON
Concord
assets
to
policy.
Elysium,
eign to the segment of
Custodian
which
as
often than not, only
more
belief
lation
Certificates of
from
investment
FUND
of
Dr. Roos' Econometric Institute
rity," "bonds," "preferred," and a
host of others are
completely for¬
:ystorn
figures
analysis
WELLINGTON
as¬
use
revision of
a
technical
and
copy,
confirms
It
K.
the
will
middle-in¬
Mutual /Funds
the
even
V
Fund
a
securities
new
might well be
layout,
I N CO It P O HATED
48
of
business
Boston.
Company
of
capital
"prudence."
his
if
Trust
class, to whom investments
as
there
erature.
Hugh W. Long
effected
for
sold to this
current
from ! *
or
be
come
other
available
price level rising
10%,
of
Furthermore,
to
material
about
levy
a
in
Goodale
Concord
Sand-
Adolph E.
City;
and
is custodian
The
the
York;
Street
Boston
terms
depreciation," "nega¬
interest," and a "ris¬
un¬
Roos, Waddill
Kansas
G.
State
sets.
But
tive rates of
Investment
in
Francis
The
all its
Inquire about-
Co., Inc.,
Maurice H.
Management
This
&
fpr the Concord Fund,
Catchings and
berg in New
1949.
Investors Syndicate
Weltner
to be Dr. Charles F.
Shares
bulletin, this rich, untapped
ket for investment
selling,
tional
Income
after
taxes
con¬
trasted with 7% in 1937. And
only
8% of this group owned stocks in
Principal Underwriter and
Investment
share
Income, and practically
interest
Dividend Notice
The
sizable
a
E.
Telephone: Klingsley 5-3311
announced the directors this week
of
This younger generation
30s is now Middle Age
with
A.
derwriter
request
on
MUTUAL
TRUST
FUND
With Cruttenden & Co.
(Special
to
•
The
OMAHA,
Soener.
has
Financial
NEB.
—
become.
Prospectuses
Chronicle)
Robert
f
L.
associated
j Siee£;f Cutler 'HamMSr£ Gtodfiy^r with CEuRpntfep^qp., 204;So:uth
1
Tire & Rubber, Ingersoll Rand, 17th Street.
upon
request
NATIONAL SECURITIES & RESEARCH CORPORATION
••'.1
.j
r/'./.j'L!'
'120 Broadway, New
York 5, N Y.
Ill
COMMERCIAL
THE
(250.)
FINANCIAL
&
CHRONICLE
Thursday, January 19, 1950
instances
hoping for just such a thing to take place.
Income
holdings of government securities becomes much more im¬
portant to the commercial banks, when loans are declining or have
.
.
.
from
Owr
Reporter
Governments
on
Tomorrow's
an uncertain outlook.
If prices shoulids weaken there is quite
likely to be considerable swapping from shorts into the more dis¬
tant eligible issues.
So far this operation has not been very
.
.
.
Markets
...
By JOHN X. CHIPPENDALE, JR.
substantial
because
of those who have been
many
waiting1 for
a
r
better
;
The government market has run' into further opposition, not
only from the more aggressive selling by Federal, hut afso from
the Treasury's refunding of
'
!
the February certificates. . . . The 20month."!%% note, which is being offered for next month's 1 xk%
certificates, may signal a minor hardening of interest rates, which
could be more evident as we move farther into? the year.
The
.
.
.
; backing which the Federal Reserve Board received from the Con¬
gressional subcommittee headed by Senator PauL Douglas of
Illinois, might also mean the Treasury is going to give some
ground on its low-interest-cost policy of financing the deficit.
Likewise Federal could be taking this "pat on the back" to mean
'
.
t
independent in carrying out the credit pol¬
This might result in somewhat higher rates
refundings and deficit operations.
they should be
more
icies of the nation.
in future
.
.
.
buying opportunity in the long eligihles are now scared
are inclined to stand
pat and do nothing,
It seems to be the same old story; when prices
go down, they are
all sellers and when quotations go up, all are
buyers.
of the market and
.
Traders and dealers in
some oases were caught unawares by
developments and positions have been lightened,
which had a minor depressing effect upon
quotations.
According to reports, however, not too many securities were
involved, because it is believed by some a substantial part of
the adjustment in the market has
already been seen. v.
Many
the
recent
a
to cut down inventories.
believed, to a considerable extent
immediate trend of the inflationary forces, because
upon
over
Since
the
the
!
.
i
which cciuld accentuate somewhat the deflationary
i
i
I
the
which
indicators,
used
are
might exist in peopled minds.
.
to
.
the
express
fears
defensive.
note, holders af
new
valuable "rights" for
mare
moderate
firming in interest
of
were en
.
.
There
.
be done, but most
the 1
''\
WELCOME
The
sell-off in
the government market, particularly in
list, would not be exactly unwelcome to
holders of short Treasuries, because' they have been in some
the
of
there
LIGHTS FROM THE
1949
ANNUAL
REPORT
a
60
EAST 42ND
products, parts,
..
seems
6,264,600
as
.
to
.
1,368,10#
- -
~
this security
lawek
attractive
yield.
.
was
.
.
as
business
1,157,100
as
say that
damaging
How far it will go<t
is
something I can't answer.
But on such a rally I believe-
good buying in this
.
available in
was
to
buyers,
many
some
despite
now
.
.
inclined to
were
adjusting
was
itself to
move
the
to
new
nonetheless selective acquisition of the
the
2Vzs
due
1956/58,
and
the
of
2y4s
Some of these purchases were made with new funds,
bought
.
.
The 24/as; of Sept. 15,
.
mainly by the out-of-town banks.
though these
institutions
well
were
It
...
for
prepared
unfavorably for them.
.
.
the
.
tap bonds have been leaders in volume and
unsettled
conditions
have
group
whereas
the
.
profits
likely.
seem
been
.;.
well
bought
on
despite
the
way
The Vies have been favored
1964/1968s
and
1964/1969®
it
rest
of
$22,306,600
be¬
with
the
Inasmuch
them.
profit taking point was 31
I assume you're out of it. It
was
originally bought at 23.
I also recommended three
lambasting in Reynolds
a
bought
with
a
Stock
to 23 and then to 21.
Now that
you're long again
I
suggest profits as fallows:
Cooper Bessemer at 28 or bet¬
19
or
better.
Total Current Liabilities
Ratio Current Assets
to.
Chronicle.
Cur¬
-
7.97
.
Working Capital
views
to
$10,817,600r
1947
BILLS
1
1948
-
CERTIFICATES
-
NOTES
in
expressed
tM«j
article do not ' necessarily, at any
time coincide with those of the
1,552,800
...
„
I The
U. S. TREASURY
12,370,400
v
Mead'
at 14.
27,066,200
Total Current Assets
he
to
was
between 23 and 24
stop at 21. It got down
Stop Cooper at 22 and
Total Assets
new
buys: Cooper Bessemer at 24
or
better, came in on the
break; Mead Corp., 16 or bet¬
ter, also was available. We
ter and Mead at
30, T949
as
the
have
been the leading issues for the fire and casualty companies.
to- 31
rallied
skedaddled
fore
\vas
especially
get out
Before the reaction, Denver,
.
Metals.
by this
1,403,700
....
would
it would readily appear.
I think the market will rally.
from here.
The
.
MANEUVER^
down by savings institutions.
-
2,10 1,300
Dividends
SUMMARY
as
took
the
"
-
BONDS
They
are
presented
as
those of the author only.}
:
T949
.$3,687,004
$4,721,824
1,795,628
-1,569,972
2,184,529
2,926,196
2,560,769
242,500
252,420
438,679
2.45
3.82
Pacific Goast
$4 J'8:0,741
1,452,535
..........
Off-hand I
the reaction isn't
prices
the largest
tendency to level off.
a
you
man
of 193.95.
be
bought at about the low
were
before
sitting next <
to you what happened — it;
happened! The next day the
slide pieked up where it had
left off the day before and the<
Dow averages reached a low
going-
as
you,
sudden turn
a
and
could ask the
It is indicated that the 1952/54s, always
quotations showed
were
The
buildings, and
Liabilities
.
.
downward
have not worked out
Federal I ncome and Other T axes
YEAR
banks
reached
column
the market, took
sell-off in the longest bank issue and scale-down
pui chases so far
power,
10,011,800
Net Income
...
disposed; of in order to disprove income.
$22,306,000
1967/72
costs
THREE
these
among
con¬
institutions.
but according to reports most of it came out of
shorts, which were
fuel, transportation, and other
Net*
move.
bonds,
1956/59.
.
484,400
Wages anclsalaries
NOVfM&ER
without
32nds, they acquired sizable amounts
sidelines, while the market
bank
USED OCR INCOME FOR
our
deposit
Although the longer maturity buyers
$21,822,20#'
Interest, dividends, and licenses
Invested in
of the
many
because
pressure
not
was
m
week's
than
STREET
,
stockholders
under moderate
was
great deal of which
a
MARKET
TACQMA, WASHINGTON
and services
to
substantial worsening of the inflation
a
inclination
no
developments, there
on
in¬
not
are
step right in and prevent quotations from
the somewhat
RECEIVED INCOME FROM
Depreciation
equipment
market followers
However, nothing very startling is
.
water.
happened. I
got wet almost up to ray neck.
Last-Thursday, the day* last j
mium make
DURING 1949
Raw materials, electric
op¬
the
toward
You know what
we'll get a chance to
with
perhaps better
the
Sales of chemical
.
one
guessses around as to what could
money
.
to
certificates
foot
one
Rio Grande
FALLS, NEW YORK
•
offered
be
March
The
.
watching without participat¬
ing, I tentatively^ extended
of the callable 2s.. .! The absolute
maturity and the small pre¬
FALLS, NEW YORK
office
.
issue, despite the better return which
plants
york
what will
to
.
1%% notes acted quite well and there
HOOKER ELECTROCHEMICAL COMPANY
NIAGARA
15.
favorite with the commercial banks, came in for
buying
rent
informed
was
few
a
shaded,
AT
plenty of
2% list, which
point of the
WE
are
siderable support from
down
\Vl£
March
...
heroes and
new
question
due
refunding terjns. for February,
While
NIAGARA
2s
clined to make predictions.
psychology.
4 the longer end of the
HIGH
the
looked for unless there is
f. SETBACK WOULD BE
many
This raises the
.
first, but there is talk of combining these two into
eration.
...
A further
.
which
Also interest rates in tHe
.
past have not firmed when economic conditions
1
as
.
owners
came
,
;
a
the
influences
Once the psychology of inflation has been dissipated, there
will be less need to resort to monetary measures to control
j
indicated far the
rates.
...
*
premium is
a
these obligations, if there should be
year is quite likely to bring with its readjustments in business
I
»
INDICATED
.
.
last
came
week, and sick and tired of
"RIGHTS"
maturing issues may find there will be
longer term the forces of deflation appear to be the stronger
This opinion is based upon the belief the last half of the
I
to
spot
Then
in.
lounge
...
ideal
the
seemed
favorable time
more
a
in yelling,
on e
'%eave 'em alone." We took
some profits and ths sidelines
higher-yielding issues, and to take
the income from them and to wait for
By WALTER WHYTEse
Up tp last.week I've been
afl m b s t.... a 1
.
feel it is better to hold the
slight firming of interest rates
will depend, it is
I
•i
,
.
VALUABLE
.
=
...
be
there will
Whether
Says—
.
.
.
.
.
2.64
Federal Taxes
Securities
Net Income after Federal
Taxes
Preferred Dividends
...
-
Orders Executed
Earned Per Share of Com¬
mon
Stock
....
on
Pacific Goast Exchanges
Schwabacher & Co.
Manufacturers of
for
more
over
100' chemicals
than thirty industries
Aubrey G. Lantston 8c Co.
incorporated/
Members
New
York
New.. York
Curb
San
15 BROAD STREET, NEW
YORK 5, N. Y.
14 Wall Street
TELETYPE N.X 1-3690
COrtlandt 7-4150
Private
San
CAUSTIC SODA
•
CHLORINE
•
SODIUM SULFIDE
PARADICHtOROBENZENE *BENZOYt CHtORIDB-SODIUM BINZOATf
1
Wires,
Exchange
Exchange
Stock
Chicago, Board
TELEPHONE WHITEHALL 3-1200
L
Stock
Francisco
(Associate*)
Exchange
o) Trade
New York 5, N. Y.
Teletype- NY 1-928
to. Principal
OJJices
Francisco—Santa Barbara
Monterey—Oakland—Sacramento
Fresno—Santa
Rosa
Volume -111
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
1251)
■
By H. E.
promising, in others considerably
The British Gold Reserve
Bank and Insurance Stocks
less
to
on increase of Britain's gold reserve in last
quar¬
1949; Dr. Einzig contends it is temporary, because result
is due largely
inclusion of non-recurring items* anifc does not
necessarily, indicate success of sterling devaluation. Points out
This Week—Bank Stocks
operating results and" developments during. 1949 reflected
the general business conditions
prevailing throughout the economy.
much of
The readjustment in business which
began in, the early months;
of the year was
accompanied by a sharp contraction, hi the volume
influences caused
time
was
increase in. outstanding
an
active easy-money
continued.
an
For
the
most
policy
loans.
At the
LONDON, ENG.—The
imports they
increased
The
lion
to,
part
of
Britain's
in
make
earnings figures
nearly comparative
more'
made adjustments and for this
reason,
shown in the published reports.
cases
some
be the-same
prospects.
Operating
Prolits Prom
of
Bank
$2.12:
National
Manufacturers
,
the
devaluation
when
date
and*
Sept.
1,8—
continue
for
some
so
reserve- to
rate
to expect the
maintain its pres¬
increase
of
during
the
first quarter of 1950, the
figure to
bp published at the beginning of
April is likely to be relatively sat¬
at
figure was down
$1,340 million—has been
0.27
—0.20
2.63,'
2.37
2.87,
0,48
0,17.
3.19
3.04
about
3.32
3.61
aid, "the uncovered part of the
it, this dollar
gap, though it will.be larger
appears to justify the con¬
than it was during the last
quar¬
clusion that, after all,, the devalu¬
ter, is not likely to be alarmingly
ation of
sterling has been a suc¬
cessful operation. In spite of this large.
3.41
re¬
0.32
0.20
0
0
2.4-1
6.90
79.06
83.99
17.44
17.98
0.07
1.29
17.51
19.27
1,38
1.36
0.C5
Nil
1.43
4.84
4.76
0.16
0;46
5.00
5.22
3.47
3.37
0.18
0.10
3.65
3*47
6.54
6.50
0.10
—1.24
6.64' "
5.26
4.56
4.68
0.16
the announcement of the
good re¬
0.08
4.72"
4.76
sult
—
__________
Trust-
profits
and
recoveries
tlncludes
reserves,
not
'
A
covered.
reported separately but added to
of City Bank Farmers Trust Co.
earnings
On
Allowing
for
Marshall
face* of
not followed
was
in
ery
the
by
for
rates
markets.
a recov¬
sterling in
The discount
on
transferable sterling in New York,
for
instance, remained over 10%.
Nor
there
was,
British
;
a
recovery
loans.
Government
in
,
Concerning the year-end statements of condition, considering
the
the
isfactory.
result
1.36
im
of
to
2.57
Adjustments in the above figures have-been made where there
has been a change in capitalization. The
figures-on Public National,
however, do* not reflect- the 10% stock dividend to be paid Feb. 1,
events
that
on
loss
the
overseas
the
gold
entire
4.93
National"
"Security,
7.4&
in
devaluation
unduly optimistic
ent
that the
incurred' between
3.02'
7.82
Ein*i*
77.09
Trust
City
valuution
$2.22,
3.30
0,58
3.20
Guaranty Trust
Irving Trust
Public
$2.13
—0.0G
0.99
Paul
Dr.
30,
4-.9G
National
York
SG..10
C.22
6.86
the
of
covered1
by now. ' On
the other hand the
temporary in¬
of exports to replenish ab¬
normally depleted stocks, of Brit¬
ish and Sterling Area, goods is
be
76.65
Exchange
First
tNational
SO.03
3,08
probable that most
far-as these exports have taken
place they may not have been paid
for. Thus,, even though it would
rose
means
non¬
2.70,
Tru6t__
&
National
Corn
New
which
1948
the
2;36
Bank
Commercial
1049
3.08
Hanover
Chemical
1948
C.83
Trust
Central
C'haso
1949
S2.10
Munhaitan__
Bankers
1948
will
months. .What is more, even in
op-
J urre
on
is;
sterling debts incurred
been
likely
above its level
—Earnings—
1949
most
reserve
Total
—Securities—
i
even
ipations. The
operating earnings, profits from securities
earnings for the past two years is shown below.
—Earnings—
increase
timistic antic-
A tabulation of the
and total
m
doubt,
the
not
may
as
much
a
crease
Be-
the
exceeded
have
we
they
:
d
yond
seems
anticipation
have
gold
a n
question
It
the
of
about
position
their
ate?
BlpgP
amount of op-
timism
relatively minor significance, however,
security profits did not affect total earnings
materially in com¬
parison with those of 1948.
To
certain
a.
that
seems
The
past 12 months,
they compare favorably with
those of a year ago. The
following table shows the deposits, loans
and discounts and U. S. Government securities
holdings at the end;
tory
of the past two .years for
for
reason
Dollar Area.
this- unsatisfac¬
The prospects for the
-
more
dis¬
tant future
are,
couraging.
however, less en¬
By the second quarter
the non-recurrent fac¬
effects, and the gold
the
on
dollar
dollar
the
will
reserve
permanent factor,
drive
imports.
and
The
the
in
cuts
outlook
for
clearing
Britain is liable to
Sterling
are
more
Area
lose
system
dollars if
countries
should
buy large quantities of continental
goods.
One
thing is certain.
The de¬
sterling now appears
valuation of
to have
been justified in
a
nega¬
tive sense. But for it the drain
on
the gold reserve would have con¬
tinued,
and
ability
the
by
its
now
have declined
would
below
in
$1,000
absence
amount
all prob¬
million.
In
devaluation
of
the
complete exhaustion of the dollar
might
reserve
in the
has
place
The deval¬
stopped
has
temporarily
reversed it.
even
There is
that,
devalued to
the
taken
certainly
drain, .and
suppose
have
of 1950.
course
uation
no
for
son
the
reason
an
sterling
even
larger extent,
been
more
Nor is there any rea¬
believing
devaluation
that
would
second
a
improve
the
result.
William C. Juen Joins
Newhard, Cook & Co.
(Special
to The
Financial
BELLEVILLE,
Juen
C.
with
has
Chronicle)
ILL.
—
become
William
associated
Newhard, Cook & Co. of St.
Louis.
Mr.
Juen
in
partner
Wm.
formerly
was
C.
Juen
&
Co.
last
edly good
Learns & Discounts-
1948
&*
Bank
of
Bankers
1,180,7,72
462,758
455,974:
329,184
244,796
1,325,472
576,711
571,153
532,299
1,446,101
1,400,785
443,612
425,538
636,351
441,902
590,525
_______
National
4,384,572
4.237,000
1,350,507
1,449,656
1,435,190
436,846
560.799
176,466
183,678
43,790
48,039
________
766,807
772,123
83,709
80,285/
599,388
523,323
110,333
316,214
________
2,299,856
2.330,237
954,968 1,034,441
1,088,072
1,113,182
381,224,
429,049
4)52,41,4
2,281,748
2.223.383
557,375
605,912
1,078,980
970,586
4,731,275
1,382,264 1,423,085
1,986,755
1,737.912
627.3C0
642,399
237,059
256,427
267,035
217,199
505,319
Exchange
First
515,991
156,562
140,307
232,144
248,763.
Trust
___
National
Guaranty Trust
Irving Trust
Manufacturers
"National
Trust
City
York
Trust__
National
"Includes
Here
supplies
395,088
&
National
figures of
too,
1,482,834 1,819,414 1,482,078
126,947
598,546
there
individual
are
325,693f
ume
reserve
goods
ports to: the Dollar Area.
some
devaluation
banks
banks, possibly because
the
sition
was
Area
securities.
exports to
better
as
far
tent
A, Frame is engaging in
ties
business
from
previously
was
Co.
a
offices
American Trust Bldg.
Lewis &
Pyrte* Kendall Admit
CAL—Howard
Pyne,
in. the
Mr. Frame
ing;
on
the
John
R,
and
Witter
&
nership
has
Arthur
on
been
G.
Bowman
Feb.
active
1.
as
Mr.
an
floor broker.
to
in
NATIONAL BANK
Bankers
Our year-end- comparison and
t
analysis of 19 New York City
'
now
(
to
Kenya
the
Laird, Bissell & Meeds
York
Stock
A
Teletype—NY
Gibbs,
1-1248-49
Manager Trading DeptA
Nor
1
reserve
Members of
6
The
\
Bank conducts every
description of
banking and: exchange business
also
undertaken*
CENTRAL
of
ROW,
CO.
&
York Stock Exchange
the New
York. Curb Exchange
HARTFORD
4,
CONN.
Branch
Offices:
New
Britain
and
Middletown
BOSTON—Enterprise 1540
NEW
YORK—CAnal
Bell
6-1255—Enterprise
6350
Teletype: Hartford 564
or
which
due to
CONNECTICUT
|
.
SECURITIES
I
I
Primary Markets
f
|
Statistical Information
j
over
this
higher
im¬
ex¬
bare fraction of that figure.
cuts in dollar im¬
i
j
•
FIFTY-NINTH YEAR OF DEALING IN
could the
I
|
MEMBERS NEW YORK STOCK EXCHANGE
payments through larger
|
209 CHURCH STREET, NEW HAVEN 7, CONN.
and
smaller
imports
exports
was
offset
through the resumption of leakage
by the discount on sterling
£2,500,000
Trusteeships and Executorship*
a
the New
Members
Telephone 5-0151
by
month.
to
was
bank,
cuts were not fully
Moreover, part of the
improvement in the- balance of
£2,000,000,
Capital__
Fund
extent
industrial,
not the
was
million,
per
Coverage
have initiated and participated
ex¬
operative.
£4,000,000
Reserve
,i
ports account for very much, since
Zanzibar
Paid-up
Fusz-Schmelzle & Co.
follow¬
most of these
Branches In India, Burma, Ceylon, Kenya
Colony, Kericho. Kenya, aad Aden,
Subscribed Capital
Exchange:
BKOAOWAY, NEW YORK 5, N» Y.
Telephone: BArclay 7-3500
Bell
<L
New
been
Government in
connected
it must
so,
ports to. the Dollar Area, must have
Colony and Uganda
and
Members
The
Head Office: 26, Bishopsgate,
London, E., C.
available.
;
120
gold
$640
provement
oi INDIA, LIMITED
was
the Dollar Area
the
$200 million
we
financing of Connecticut
the
of the improvement, in a. little over
individual
three months was therefore some¬
thing like
BANK STOCKS
prior thereto
Sterling
improvement
of
years
Associate
million from the latter date to the
end of the year.
The full, extent
part¬
with
PUTNAM
ex¬
million between June 30 and Sept
18 and its increase
by some $340
Meserve
and
insurance, and public utility companies.
During
as
Even
the devaluation
increase
&
change, will admit; F.: Leighton
Meserve, member of the-Exchange,
Dean
Co.
banks is
in,
%
Hollister, 52
$263. million but; the difference be¬
Wall Street, New York. City, mem¬
securi¬
tween its decline by some $300
bers of the New York Stock Ex¬
with
and
Kendall
of
40
which
be borne in mind that the full
ALTO,
over
following the
increase
concerned.
was
PALO.
still very un¬
Connecticut
For
by the lower dollar yields due to
the devaluation.
Possibly the po¬
requirements, have larger holdings of government
Howard A. Frame Opens
the-
voLume of such exports was
barely
sufficient to offset the loss caused
increases in
gains in the vol¬
of loans, outstanding and most of the
British
cerning the increase of British
Bankers Trust and Central Hanover
showing
all three groups. Others have been able to show
of lower
of
the first two months
variations- with
as
allowed to become depleted'
anticipation of the devaluation,
expert opinion regards this esti¬
mate as over-optimistic. It is cer¬
tainly not justified on the basis of
suchi figures as are available con¬
City Bank Farmers Trust Company.
as
such
in
96,52.6,
461,605
is
In certain lines it is very
were
41,5,567
95,94.4
466,542
drive
claiipg that only about
covering of short positions
insterling and the replenishment of
959.61/1"
1,052,448
4*781,137
Bank
the dollar
half of the improvement is due to
non-recurrent factors
&
1,127,810
_________
Corn
such
'
$
•
.
1948
1,431,628
Chemical
Public
1949
Manhattan
Commercial
New
$
U.S. Govt, Securs,.
1948
Trust
Central-Hanover
Chase
1949
is that most peo¬
news
statement
(000's Omitted)
1949,
is undoubt¬
ple believe that it is too- good to certain.
Even
though
the
official
14: banks.
-—Deposits
response to what
caused
! in
|
r
overseas
market,,
| which, part of the
'
|
increased
dollar
as
a
result of
proceeds of the
exports
did
not
|
Chas. W. Scranton
;
j
■
&
Co.
j
^
j
Bell Teletype—NH 194
New.Haven 6-0171 New York: CAnal 6-3662 Hartford
7-2269
*
)
Bridgeport
Danbury
„
to
had
result would have been
satisfactory.
of this year
tors will have produced their full
depend
importing
Under the proposed
intra-European
recurrent factors continue to
oper¬
rise
gave
probable-
It
to, non,-recurrent factors.
the part of the government
on
.Treasury.
estimate of 50% must be
attributed
by
on
goods from Britain or other Eu¬
ropean ' countries
to
replace the
larger proportion than the official
same
countries.
goods formerly imported from the
the
therefore
ter of 1949 the British
gold reserve
operating, earnings of the- principal: New
City banks were well maintained; despite some of these
adverse factors at work. The
rising trend of bond prices, however,
was generally favorable-for
security transactions and in most cases
resulted; in higher profits or the elimination of the
previous years'
Because
reach
by Sir Stafford Crippa
that during the last quar¬
Jan. 4
on
York
losses.
announce¬
ment made
ability
demand and
domestic
soft-currency
likely to insist
increase arises from payment of
sterling debts
incurred in anticipation of devaluation.
reserve
of
outstanding industrial, and commercial loans. After the decline
had been underway several, months- the
governmental authorities
reversed their earlier
anti-inflationary policies and; began a pro¬
gram of easing restraints on, credit.
By, the latter part of the
summer tire decline in business was halted and
normal seasonal
and
The latter problem is
particularly
difficult.
If the countries of
the
Sterling Area are required to cut
down their dollar
ter of
Bank
the Gov¬
on
willingness
curtail
exports to
Commenting
'1
Much depends
so.
ernments
By PAUL EINZIG
JOHNSON
35
New London
Waterbury
.
j
Continued from
&
COMMERCIAL
THE
(252)
1G
Thursday, January 19, 1950
FINANCIAL CHRONICLE
first page
L. AMBER
HARRISON
year, people showed almost no tendency
curtail their buying.
The total volume of retail sales
adjustment last
to
held up throughout the year at
is every
There
SUBSEQUENT ISSUES
Quite
in
than they have ever been
today are better protected
Consumer confidence is
reassuring.
by
supported
forms
strongly
the record volume of individual savings,
a
large backlog of potential purchasing
power.
There is
no
less strong
be any
will
confidence
national
for
these
foreseeable reason for believing that
during the closing months of 1950 than they are today.
No evidence has appeared of any important speculative
maladjustment or excessive credit expansion, like those
which, in the past, have often initiated or prolonged a
business downturn through forced liquidation.
We must
guard against any development of this nature.
In
of some such maladjustment, no business
on
the
absence
last year's experience
setback is likely to get very far, as
Industrial output this year will
be supported, in part,
continued volume of unfilled demand in such fields
capital goods, automobiles, heavy construction, and
housing.
Some observers feel that business must decline
as these backlogs are used up.
One must keep in mind,
a
as
that it is always easier to visualize a decline
in goods that are currently being produced than to fore¬
cast the new factors that will arise to replace them.
however,
is well known that our industrial
Yet it
has
built
been
continuing progression of
a
upon
development
new
products which have given successive support to indus¬
trial activity.
Today we have the advantage of the un¬
precedented technical developments of the war and post¬
years, which are rapidly being applied in bringing
out new types of consumer goods and in reducing pro¬
duction costs.
We are at the beginning of an era in
which technical achievement based on new discoveries
war
in electronics, in chemistry, in synthetic materials, in
metallurgy, and in many other sciences, will play a very
substantial part in our industrial progress.
It is incon¬
ceivable that such
era
an
of scientific advancement in a
nation should not see business con¬
tinuing to push strongly ahead.
Industry is alert to the opportunities which have been
opened up. The record volume of business expenditures
for new plant and equipment, in the years since the
war,
has very largely reflected the determination of
growing
rapidly
businessmen
make
to
use
of
discoveries
new
and
im¬
proved techniques to improve their production efficiency,
to turn out new and better products, and to broaden their
markets.
These
developments
confidence in
our
provide
an
additional basis for
continued industrial progress through
ABRAHAM
For the
a
year 1949 was,
period of transition—from the ab¬
normal conditions of the immediate postwar years, when
of demand
throughout the
supply kept sales at high levels
over
the normal
seasonal pattern of prewar days, with
materials
in
adequate supply and
sales
year,
to
result> in
The
healthier
my
situation
distributors of
--
opinion,
one
in
is
a
which
manufacturers
can
whole,
have
the
industry
as
Herbert Abraham
special feature bulletin issued by the
U. S. Department of Commerce. For
the year 1950, according to this bulletin, total new con¬
struction in the United States is expected to reach a total
of
$19.25 billion,
or
about the same as the total estimated
1949, which was, as a whole, a
by the Department for
good
It
year.
will
be
construction
noted
only.
refer to new
In addition to this, there is the huge
that the figures quoted
accumulated
Production of the ma¬
backlog of repairs and modernization work
.
before, during and since the war.
ordinarily accounts
substantial proportion of the output of numerous
terials adapted to this kind of work
for
a
In this
great forward movement of
industry, Emerson has
that
evidence
established
in
position
a
manufacturers.
that, at the start of this new year,
there are in our industry's situation various significant
factors of an encouraging character.,.
,/
It will thus be seen
It could not have rendered the kind of
rendered had it not grown to such size.
has
will
1950
of individual companies and the large
the
of leadership
be
a
prosperous
national
How can the young GI, for that
with a family, protect his family except
performance and a steady pro¬
cession
of
mechanical
and
electronic
else
improvements.
Emerson developed the large ex¬
panded picture, widely copied by others. Emerson like¬
wise developed and was first to introduce the circuit
and mechanics for integrating FM/AM phonoradio with
TV on a single chassis. Still another first was the FULL
performance AC/DC television. These and other Emer¬
son features, such as super powered long distance circuit,
simplimatic tuning, "Miracle" picture lock and auto¬
matic gain control circuit, won universal acceptance by
the television public.
Emerson, in 1950, will continue
to pioneer simpler, more trouble-free, less expensive
television, with the constant aim 'of giving the public
even greater value and improved quality.
Emerson plans for 1950 also call for material increase
in the production of radio receiving sets. The past year
has proved conclusively that both television and radio
have a permanent place in the American home. Through¬
out 1949, public interest in radio has not diminished and
broadcasters have maintained the high level of program¬
S. C. ALLYN
President, The National Cash Register Co.
field, 1950 will be a test of manage¬
In almost every
radio broadcasting,
benefit
the
of
best
we
production and costs in balance. The seller's market,
together with huge backlogs are a thing of the past for
industry in general.
Nineteen-fifty may well prove to
be the first normal year in business
in the
be in
to
of ten million
which
influences
life
affected
and
so
,
seriously
in the
business
"forties."
Economists
in
almost
are
pointing to
a
conditions
ness
year
unanimous
of good busi¬
national
with
in¬
production and employment at
high levels. In fact, there is so much
unanimity on the business outlook
that one is inclined to ask the fol¬
come,
which would give both systems
possible programs. For these
the neighborhood
It will not have
past decade.
contend with some of the abnor¬
to
mal
lowing questions:
Will the automobile
do not foresee any
expected
being to keep sales,
ment, with the principal problems
ming which made radio such outstanding entertainment.
There is a definite trend toward simultaneous television
the
must prosper; it
whole economy suffers.
our
season,
and
Certainly he cannot* save suffi¬
through life insurance.
ciently to do it, therefore life insurance
must grow or
better
for life insurance, in
economy.
matter any man
Benjamin Abrams
year
because it has rendered and is rendering
kind of service which is necessary for individual and
opinion,
my
things—great increase in value,
Early in the
Amber
L.
H.
a
Now
of service of life insurance.
Television in 1949 was based on
son
three
neces¬
render
to
humanity.
companies have contributed greatly to the advancement
popularity of Emer¬
The immense
out
to
Size is made up
1950
television field.
the
big
be
to
succeeded, it is being subjected to accusation
big.
it
service
to
Such
1949.
service
of being
double the output
growth is convincing
Emerson has firmly
expected
are
of
for
plans
Emerson
out
started
it
Life insurance
years.
start
that it has
played—and will continue to play—
a
leading role. Emerson production
in 1949 will be three times that of
And
hundred
not
needed
S.
C.
booms
Allyn
ment?
and building
continue without
Will there
be
an
a
readjust¬
ebb in the
capital goods expansion? What effect will lower income
communities have? At the peak of
ahead for the farm
Thus, from every aspect, the ;coming year will be a
highly rewarding one for the Emerson dealer and dis¬
tributor organization.
In order to keep pace with the
increased demand for television receivers and the con¬
prosperity, what does it mean to have the
tinuing demand for radio receiving sets, we are planning
a
large scale expansion of out production facilities.
Emerson advertising and sales promotion will keep pace
operate
this greatly enlarged
sales potential.
year
innovations
can
be looked for.
definition
well
as
in
as
Greater sensitivity and
pictureswill
undoubtedly
be
improvements in cabinet design. But
be available
1950.
Indeed, it
may
not be a bactor for
the next
live years.
some
been
stop the size of life
companies or the size of
the industry as a whole so long as
it renders the kind of service which
has
been
rendered over the past
cannot
insurance
sarily;
the television
in
a
interesting statistics
published recently in a
icyholders themselves will not make
headlines but they are the biggest
headlines in the business.
did
premature changes, expansion in television
will come in an orderly manner through such develop¬
ments as the expected early lifting of the "freeze order"
by the Federal Communications Commission. This will
bring television within the reach of many more people
and consequently will open up new markets. Also, the
Instead of
building
be
one
the much discussed color television will not
respect to the present situa¬
in
promise of large-scale expansion. At
the moment, we stand on the thresh¬
old of the greatest 12-month period
in electronic history.
achieved,
plan
known in advance.
With
so-called "infant" industry took
The
made for it.
better
production and develop sales policies
on
the
basis of important factors
tion
prophecies that
1949, television amply fulfilled the
giant strides in the direction of maturity. Yet, amazing
as its growth has
been, the future holds even greater
or
can
purchase with greater confidence and
in
Corporation
1950 will also bring increased stability in
television production and sales.; While rapid improve¬
ment in television quality will occur, no radical changes
which
building material
Radio and Phonograph
You
In
were
The
favorable
I
BENJAMIN ABRAMS
with
of
again following the curve
building weather.
billions of
dollars
paid to beneficiaries
policies and to pol¬
The
will
units annually for some time to come.
building products industry the
in marked degree,
excess
of
industry.
President, Emerson
is
President, The Ruberoid Co.
it, about the tremendous amount
service rendered by the insurance
say
which
reasons
HERBERT
companies
said, unless the insurance
"Chronicle."
material decrease in the
sale of radio sets even though television production and
sales continue to rise. The normal demand for radio sets
1950 and in later years.
lot of talk in
a
of life insurance
1948.
demonstrated.
by
the
in
monetary stringency,
freedom from any credit or
is likewise
be
of
—EDITOR.
financial situation,
Our immensely strong
earlier years.
bases
issues
subsequent
an
future.
which
for mechanical reasons, could not
These will appear
or
be accommodated herein.
indication that people have confidence in the
There is a general appreciation that incomes
rently is
our
too
issue,
ing during the second half of 1950 will be equally well
maintained.
The continued high volume of sales cur¬
and
number of statements either were
late for publication in today's
a
Company
1950 about the bigness
of life insurance.
Too much is going to be expressed
about the size of individual companies, assets of life
insurance companies and their place in the economy of
our nation.
There will be very little
will be
There
received
buy¬
to expect that consumer
reason
President, Berkshire Life Insurance
MORE STATEMENTS IN
close to the high levels
of 1948.
Eventually it became evident that people were
buying more goods than industry was producing.
In
consequence, sales expectations had to be adjusted up¬
ward, new orders had to be increased, and factory out¬
put had to be expanded.
Year
Speaks After the Turn of the
Business and Finance
additional centers by coaxial cable
will make available to a far greater audience, the better
programs which now stem from New York and Chicago.
All of these factors should insure a production in 1950
linking
up
of
many
The
extent to which dealers may -capitalize on this great
opportunity will depend largely on their ability to equip
themselves amply to finance and service a much, greater
volume of business than they have handled heretofore.
Radio and television, already a. billion dollar business,
will develop in the next few-years to one of the top
six industries in the United States/ There are ample
opportunities for all to progress. By constructive plan¬
ning and devotion to the best interests of both the public
and the industry, we can all look forward with confi¬
dence tQ a rewarding future in television and radio.
of
between
3%
and 4 million television
receivers.
accounts in
As far
government
ink?
red
the
as
Office Equipment industry is concerned,
I think it is faced with several
special conditions which
insure a well-maintained demand. Perhaps
the most important of these is the necessity for reducing
costs in every type of business. Higher labor costs, with¬
out recent increases in volume, have narrowed profit
to
margins
so
duction
has
much in the average business that cost re¬
become one of the major problems - facing
such an
margins have been impaired. Mechani¬
zation reduces operating costs and therefore creates a
demand for labor saving machines, such as those manu¬
Costs of all kinds have risen to
management.
extent that profit
by this
factured
company.
Today, no management can afford to
sible saving," and a dollar saved in the
important as one saved out on
In the-realization
that
new
overlook a pos¬
office is just as
the production line,
i
products will be demanded
constantly by the fields it serves, the company enlarged
its Product Development department during the past
and is following an extensive program in this di¬
Research activities are projected well into the
future and include work with electronics as well as
established mechanical principles;
~
■ j
year
rection.
Within
our own
ment of some new
of various
business, 1950 will see the announce¬
machines and the release to the field
improvements affecting the present
line. The
research program being car¬
important element of all in our
extensive engineering and
ried
out
is
the
most
evaluation of future opportunities.
Sales
in the
Overseas field in
1949 were substantial.
that volume in this division of the busi¬
in 1950 will equal 1949. Devaluation and the dollar
It is expected
ness
shortage have had little effect on our overseas
'as the
business
antici-
possibility of both developments had been
Continued
on page
18
Volume 171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
,CV'"
^
:S M;i K:5i:V:t-r
V,
K%
■illlllll
:
VrM
THE GROWTH of the United Nations
as a
force
for peace and justice is typified in the present
physical growth of U. N. world headquarters
beside the East River in New York City. An on¬
looker, viewing the early stages of construction,
might be overwhelmed by the magnitude of the
task. But the skillful,
farsighted builders know
that each day's work is a step towards the shining
beauty that lies ahead.
An
important part in the construction of these
headquarters, where nations will seek
to solve the
"world's troubles, has been entrusted to skilled
1
•
t
"workers of United States Steel's American
Bridge
Company. Into the Secretariat building has
gone
13,000 tons of structural steel made in U. S. Steel
plants, and into it also have
the
gone
the labor and
hopes of thousands of United States Steel
•employees whose
own roots
stretch back into all
countries of the United Nations.
Helping to build
a
better world is part and
parcel of helping to build
a
better America—the
No. 1 job at United States Steel.
/
m <■
18
Continued from page
16
Speaks After the Turn of the Year
Business and Finance
-
|
devaluation.
dollar shortage or
Through new machines and further development of
existing machines, the Company has entered new fields
expanded old ones. Its accounting machine
now equal to its total business before
and
alone is
business
the war
week, overtime
premiums, social benefits—all have helped to create a
greater appreciation of the advantages of mechaniza¬
tion of record keeping.
Because of this and the con¬
stantly increasing need for business information, we look
forward to a well-maintained demand for our products.
High labor costs in
FRANK A. BACH
regulation, but our accounting, finan¬
cial, borrowing, and inter-railroad relations / are con¬
stantly under the surveillance of some
government
bureau or commission.
While our costs for materials
and supplies began rising in 1940 and have continued
upward at an accelerated pace until recently, it was not
until July of 1946 that freight rates were increased.
Notwithstanding all of these adverse factors, Wabash
Railroad Company came through the year with an earn¬
ings record of more than $5 per share upon its common
controlled by rate
patecl. Manufacturing facilities established through over¬
seas
plants supply a considerable part of the overseas
market.
The operation of these plants is not affected
either by
offices, the 40-hour
stock.
Fidelity bonds (sometimes referred to as "Dishonesty
Insurance") constitute the largest single line written by
basis for
determined to fit itself to
1950.
in
deflationary swing,
normally to be expected at this time, can be discarded
as
unlikely. There is almost a certainty that the Ad¬
ministration will use the full force of its not incon¬
siderable power to forestall it. A substantial increase in
taxes would be deflationary, but this is hardly likely
development
in
a
of
deep
a
traffic
be is
as
' There are several reasons for
prediction.
Since the period immediately pre-r
ceding World War II, rates on certain
fidelity classifications, more particu¬
larly blanket bonds, have been re¬
duced by as much as 75%,'with an
average reduction on all such classi¬
fications
of
approximately
60%i.
Paradoxical as it may seem, sub¬
year.
stantially
made
these
the
COLONEL F.
campaign year.
reaching the point of full
industry, there are
picture, such as the
good* liquid position of more or less everybody, defense
and Marshall plan spending, agricultural price supports,
building programs, Veterans' insurance payments, social
security, etc. and a strong and controlled credit struc¬
ture, all of which should keep the economy from slowi ing down seriously, at least during 1950. These factors
will
probably continue to be supported
by deficit
financing and will produce an inflationary psychology
,
from time
As to
magnitude
comparison:
Fidelity bonds written in 1949,
,
effect
upon
the unimpaired business
where dividends are well covered.
rates
press,
20,
ness
planned
1949, as the "Chronicle's" Review and
the then current year was going to
the area lying between the Sierra Nevada Moun¬
Mississippi Valley was in the throes of the
severest blizzard recorded in its his¬
tains and the
Repercussions
of
long
the
period of disrupted transportation in
vast territory were nationwide
and alone rendered invalid most of
that
forecasts; but
the
blizzard came in
a
period of
industrial unrest followed by critical
labor disturbances in two key indus¬
our
considered
best
strike in steel
the slowdown strike which still
tries:
sists
a
in
42-day
the
upon
coal fields;
the
tries being
both indus¬
major contributors to the
earnings power of the Wabash Rail¬
which itself was closed down
completely for eight, days and dis¬
road,
Arthur
JC.
Atkinson
organized
for
inexcusable
own
days
strike
of
longer
certain
by
of
an
become more
the most outstanding example.
of the large
supply
»
H. W. BALGOOYEN
look¬
of capacity operations in 1950.
Despite the tremendous postwar expansion in electric
power facilities, the demand for power in most areas
The electric power
Most of Latin
early
ment
pin-pointing of specific
potential market "is
copious, but that sales organizations must M retrained
and geared to the expanded and diversified, prospects.
to
achieve
a
are
We have learned that the
sights must be raised and sales
highly competitive tempo.
Sales
to
Production materials meeting
still
.
~
have
become
special"1 requirements are
better
Utilization
of
business systems
H.
applying the most recent developments created by
office equipment industry in methods simplification
mechanization.
-
-
—■
•
W.
Balgooyen
the
and
in
system, alone, has spent
$140,000,000 since the war
expanding and improving its util¬
pany
Inc.
more
than
in
ity properties;
machines
in
privately-
the
industry
prises are among the leaders in the
recent large-scale development. The
Ameriean & Foreign Power Com¬
and improved
provide, at low cost, basic information
needed for the guidance of management.
With the rapid
mushrooming of growth in government and business,
there still is a sizable gap to be filled by top management
of
Latin
North
investors, and their enter¬
electric
American
stabilized and more
procedures.
modern
for which an eco¬
electric power is
of
America has been financed by
prevail. Con¬
tinued
changes in organizational structures Of many
companies should provide for further efficiencies and
office
living,
supply
owned
advantageous procurement conditions now
further reduce wasteful
rising,
is without the conveniences of
indispensable.
A
large
part
*
readily available which in turn reduce processing
fabrication costs.
Likewise, material requirements of
manufacturers
develop¬
standards
much of the population
nomic
personnel alerted
available supply.
America is still in the
stages of industrial
and, although living
modern
more
or
industry in Latin America, is
continues to exceed
generally available.
streamlined
markets.
Company, Inc.
ing toward another year
Competition is active.
Our experience has been that
for the first time in over lOj years, are
being
& Foreign Power
Secretary, American
*
sales techniques,
employees.
Being the
industries to be regulated, we have
operated under Interstate Commerce Coinmissoin control
for more than half a century.
Not only are our revenues
first
of
controlling factor, we
its
Every business, whether large or small, must be con¬
stantly alert to government regulation and competition,
but I believe the critical situation which the railroads
face today is
law
should not expect
commodity prices to advance generally during 1950.
Inventories have been brought into better balance during
the past year as a result of improvements in sales man¬
agement and as a result of production materials having
and
per¬
abnormally high losses.
Jr. J. Atwood
patterns.
Relying
Railroad Company
'
Opera¬
provide for a
slight retrenchment in molding future developments to stabilized busi¬
thus
tions
for
tory.
government
lines.
conservative
along
prices, support the thought that
strength rather than weakness.
and demand as a
Issue
of
veterans'
•
ARTHUR K. ATKINSON
Jan.
and costs of pro¬
political and tax outlooks have a
tendency to guide future planning
1
At
•
The
yields at present
Outlook
be
bonus payments
and
the
present abundant
money
supply can be expected to prevent a
receding tendency in most business
activities for the next six months.
longer range factor of increasing investment con¬
sciousness of the general public, spurred by high divi¬
President, Wabash
not
interruptions
supply
influence
The
good base for expectation of no serious
in the prices of stocks of well established and
there should be
should
next 12 months.
duction for some months to come.
The
dend
business
doing
expected to have an adverse
be
can
conditions give a
breaks
metal
recent
spending,
equity security markets,
of
cost
for which insureds
paid'premiums estimated at $40,000,000, would have
cost approximately $100,000,000 at the prewar rates.
There was a very marked upward trend in fidelity
losses in 1949 and there is every reason to believe that
this trend will continue through the current year.
Based
on my 45 years of experience in the business,
I can say
without reservation that never has the cost of this pro¬
tection been so low, or its value so great.
Our industry is better equipped than ever before to
sell-this coverage.
Wartime and early postwar man¬
power shortages have been largely eliminated and prac¬
tically all
companies through Home Office training
schools and similar media have developed organizations
well grounded in this line and eminently qualified to
serve agents in promoting its sale. We have also observed
that more agents and brokers are becoming fidelity con¬
scious, that is, are recognizing the necessity of dishonesty
coverage in adequate amounts as a vital part of any
sound, well-planned insurance program, and credit men,
as well as bankers, in increasing numbers are requiring
prospective borrowers to submit data as to the amount
and character of fidelity coverage carried on their em¬
ployees.
Such factors naturally stimulate sales—hence
-from the viewpoint of increased production, we are quite
optimistic regarding the outlook for this line.
Recognized reporting authorities estimate thart public,
construction and engineering contracts awarded this year
will be slightly in exoess of the 1949 volume.
Accord¬
ingly, as a major portion of contract bond premiums
results
from public construction, it is reasonable .to'
assume that our this year's writings in that line will be
slightly in excess of last year's, and it is my opinion based
on the facts now available that 1949 contract bond writ¬
ings were the largest in the history of our industry.
Other surety lines should produce premiums about
equal to those written in 1949.
The outlook for our business naturally depends on
many factors,
including fair and reasonable premium
rates, our earnings on invested assets and general eco¬
nomic conditions, and while there are elements of uneertainty, the indications are that 1950 should be a satisfac¬
tory year for the fidelity and surety, business barring
.
gradually, the
resulting gains may be offset by increased labor, trans¬
portation
and other costs.
Also,
to time.
managed companies
over-all
The
indus¬
able to pass on to its insureds savings the
of which is apparent from the following
What its profits will
dependent wholly upon
expected to change materially during the
While
labor efficiency is
improving
Frank A. Bach
costs, com¬
unusually favorable loss ratio, our
try has been
J. ATWOOD
Despite the fact that we are
with
rates'.
closest supervision and
bined with an
Vice-President, Remington Rand Inc.
competitive pressure throughout
many elements of strength in the
were
curtailment of operating
question as to what part of its legitimate earnings
government tax-gatherers will permit it to retain.
the
broader coverages
concurrently
drastic .reductions
in
available
Through the
efficiently handle such increase
unhappy imponderable,
an
industry will sell
of
during the current
increased 1 amounts
this
be tendered it.
may
our
substantially
•
that
fidelity
the major portion
and as we are one of the largest
fidelity coverage
,
The
opinion
my
:•
,
company
our
writers, it seems appropriate to devote
of this brief article to that line.
In
forward hopefully to the year
That we look
Deposit Company of Maryland
President, Fidelity and
\.
which lies
ahead does not mean that the railway industry is not
beset with difficulties of the most serious character.
Foremost among these is subsidized competition by air,
by land and by water. Where its competitors are receiv¬
HARRY A. ARTHUR
ing subsidies to enable them to ;live and to compete,,
the railroad industry is being taxed to make the sub-j
President, Blue Ridge Corporation — American Cities
sidies for its competitors possible.
While we must spend
Power and Light Corporation. (Investment Companies).
huge sums for maintenance and real, estate taxes on oun
There seems to exist good reason for moderate op¬
roadbeds^ the airlines, truck lines and barge lines use :
timism for business and more so for equity security
facilities costing millions of dollars and paid for out ofV
markets in 1950. This favorable view should be tem¬
the public treasury.
President Truman recently pointed
out that the Federal Government is now spending approx¬
pered by a realization that we are launched upon un¬
charted economic seas and anything may happen in
imately $1
billion annually for regulating and promot¬
the more distant future.
ing certain branches of the transportation industry.
The
President named specifically Federal aid for roads, air¬
\ Forming an opinion as to what general business and
ports, river and harbor improvements and navigation;
equity security markets will do in 1950 is largely a
and I should like to emphasize that no part of this huge
imatter of appraising the prospective action of our gov¬
expenditure goes for promoting the railroad industry.
ernment. In the past, the tried economic processes were
But the railroads are not asking for Federal subsidies.
the principal basis for developing a concept of future
All we ask is a chance for fair competition with other
treads in the economy. This was a complicated matter
transportation agencies with a minimum of Federal
but not impossible of solution because one could rely
Government interference.
The increasing diversion of
upon experience and logic and the accuracy of one's
business from the railroads to other carriers could soon
foresight was in direct ratio to one's knowledge and
be reversed if the railroads had the same opportunities
clarity of thought.
Since politics make the motives un¬
to adjust rates and also had the freedom from control
orthodox, to say the least,
actions taken are often
now enjoyed by our competitors.
.
volatile and inconsistent with the underlying economic
It is my view that we will have no substantial im¬
structure. Consequently, there are no established pat¬
terns to be accepted for guidance.
However, this un¬ provement in business during the early part of 1950;
predictable political factor is now the major element in
however, in the absence of major labor difficulties or
forecasting economic events and the only practical basis
other equally disturbing factors, a reasonable growth in
for judging the outlook.
business may well be anticipated during the balance of
the year.
Wabash Railroad Company goes into 1950
There are certain reasonable expectations to be built
on
1950
Thursday, January 19,
FINANCIAL CHRONICLE
COMMERCIAL &
THE
(254)
and probably a larger amount
spent for the same purpose by a Canadian
Brazilian Light and Traction Company.
'
Recent
v
has been
company, the
published reports indicate that both Foreign
Brazilian Light have reached the point where
Power and
Continued
on
page
20
Volume
171
Number 4873.
-THE
COMMERCIAL
Women know and trust the name of Ivory Soap—famous
for its purit3r and'mildness.
-
.
•
Crisoo is a household word
which, to,
where, stands for the finest in shortenings. <
Duz, Oxydol, Tide, Draft—and
a
women,
-
every-
-y
Gamble products—help lighten the burden
pf housework in
millions of homes.
'
In
FINANCIAL
\
CHRONICLE
(255)
sible
prices. They, in their turn, demonstrate their faith in
quality of Procter & Gamble products by using them In
ever-increasing numbers,
the
It is because
.;
dozen otter Procter &
v.;
&
women
have this day-In,
Procter & Gamble products that
always had such year-In, year-out
able to plan ahead for the
steady
ployees. We have been able
fact, there probably isn't
today that doesn't have at least
product in
use or on
a
household in America
one
Procter
can
a
do
everything in
women
of America forever
a
century We
bring them the finest of
soaps,
cleansers, skorttffligs and drag products at; the lowest
employment of
our
em¬
plans whereby they
share in the company's success.
Above all, we have been able to continue
the pantry shelf.
our power to
stability. We have been
& Gamble
spirit of partnership has existed between Procter
& Gamble and the
day-out faith in
business operations have
to create
search for
For
our
pos¬
new7
even more
people everywhere. '
and
our
constant
improved products to make available
to
19
Continued from page
18
FINANCIAL
&
COMMERCIAL
THE
(256)
20
•
\
;
continue
Cuba, and
•
year,
expansion of the electric l ower
industry, so fundamental to the industrial growth and
general economic development of Latin America, in¬
volves more than obtaining additional dollar financing.
The privately-owned electric power industry must find
a way to promote a more active interest and a greater
financial participation in its business on the part of
local investors and administrators of public funds. Al¬
though capital accumulations are not large in Latin
America as compared to more developed areas, private
savings and the resources of social security institutions
constitute a substantial reservoir of potential investment
capital. Latin Americans, however, have favored in¬
vestments in land and other real estate or in high-profit
commercial ventures, rather than in industrial under¬
takings that may take a relatively long time to "pay off."
The public utility industry is particularly handicapped
in efforts to enlist local capital by the comparatively
low return it can offer; and the threat of government
competition, where it exists, is not only a contributory
cause, but frequently a result, of the inability of the
private utilities to raise the large amounts of capital
required for necessary expansion.
One of the most urgent tasks of public utility man¬
agement, therefore, is to educate the consuming public,
and convince the regulatory authorities, as to the indus¬
try's need for more remunerative rates—rates sufficient
to cover inflated costs of operation and maintenance
and provide a margin of profit that will attract new cap¬
ital.
The consuming public and the authorities in the
more progressive countries are
showing an increasing
awareness of the problem and, in many recent instances,
have provided badly needed rate increases to both local
North American investors in
Latin American utilities
only must be concerned about the adequacy of serv¬
ice rates; they have the additional problem of converting
local currency income into dollars to service their invest¬
ments.
This has been difficult in several countries al¬
not
though, in most instances, there is no real "dollar short¬
age." Dollar earnings from exports and tourist services
are much lar ger than before the war, even when allow¬
volume
and equipment
to speed their industrialization. However, the exchange
required to meet full service charges on dollar invest¬
ments represents, for most countries, only a small per¬
centage of foreign exchange receipts; and the realization
is growing that a record of satisfactory exchange treat¬
ment for existing foreign investments is the surest way
of attracting the new investment capital that these coun-
was
so
urgently need.
history of the
largest in the
the
to
supplement
•
motoring
its
public.
.
Approximately 17,000 persons now are employed by
the company and payroll rates are the highest in the
company's history. *. Hudson has further strengthened its
distributing organization with additional zone and large
quicker
parts warehouses which have been added for
and better service for customers and dealers.
points out that 40% of
being driven today are 10 years old
or older.
The survey further says that America's poten¬
tial market will increase 15% in the decade from 1950
through 1960.
This means that Americans will increase
their present expenditures for goods and services from
$178,000,000,000 a year to $206,000,000,000.
A
recent independent survey
the 35,000,000
cars
should like to warn dealers and
However I
salesmen
against over-confidence in the belief that large demand
automatically insures success to all units of industry.
adjustments which already
that we again are conscious
of such natural laws as "supply and demand" and "the
survival of the fittest."
Their influence is being felt
very strongly.
I regard this as a very healthy situation.
One
result of
the
postwar
have been accomplished, is
demand, there is a more
the part of the buyer. That is why
I believe Hudson faces a good year in 1950. Our products,
with their "step-down" design, appeal to the most dis¬
criminating buyer.
We believe, and our Hudson owners
confirm, that our products offer more value on a dollar
for dollar basis than any car in any price class.
Our
Although there is a heavy
careful approach on
sights are set on strengthening our position in the
field through continuing to offer more
motive
than any
auto¬
value
other producer.
J. D. BARNETTE
President, First Bank & Trust Co.
of South Bend
Measurement of the basic soundness
business structure
carried
of the economic
cannot be made in a vacuum
where
be isolated in order that the measurement be
under laboratory conditions.
It is possible,
forces may
on
however, to assess with some degree
of certainty the weight some of the
individual forces may be expected to
in the
A. E. BARIT
J
President, Hudson Motor Car Co.
Motor
Hudson
Car Co. has
just completed one of its
most successful years.
By invading; a lower-price field with the new Pace¬
maker, Hudson has broadened the company's market,
and
with
its
lower-priced entry,
Hudson
now
offers the exclusive
counted
year.
all
time
range.
people, conscious
Business prospects for the
year are
reasons.
for
coming
excellent for a number of
In the automotive business,
example,
the
previous year.
Bright hopes for 1950 based on
need for cars for
replacement alone is still very great
as is evident from the large number
of old worn-out vehicles still in use.
Another important factor
automobile-using
group
of soundness should not cause us
It is well to bear in
the
mind, too, that
population growth of our coun¬
A.
E. Barit
try, which has been progressing at
an
unusually rapid rate for some
years now, augurs well for our future
Another factor worth mentioning is
will have
market.
that the average
American people has been
Sharply increased in recent years.
This is certain to
have the effect of adding to the automobile-using group.
Not only do the American people have money in
greater abundance than ever before but credit is also
readily available to them.
While the income of certain segments of our economy
Individual
may
income. of
be somewhat less
the
than in the previous year,
extend
and
the
about
In
expand
1949,
connected
29,000
than
11%
over
the
to
be established.
which maintain
year
profits in
1950
'will
growth
means
because it is
the basis of population gain
ever, on
tire
city of nearly 100,000 resi-
new
dents
to
our
lines and
electric
F.
Barrett
.
mains.
gas
Natural^, such continued expansion requires a pro¬
gram of looking, planning and building ahead on the
part of a public utility. The first 40,000 kilowatt turbine
of the Long Island Lighting Company's new Port Jef¬
plant placed in operation in December 1948
major factor in enabling us to maintain a pro¬
ferson power
was
a
capacity of 13% above our late December 1949
duction
peak demands.
While this is considerably above the
margin of safety of the electric utility industry as a
whole, the continued growth of our territory will soon
require the output of the second unit of equal size due
for competition late this year.
Aided by the present open winter, construction is also
being expedited on a new 5,000,000 cubic feet gas
holder at Glenwood Landing, L. I., which is scheduled
for completion this year. A new catalytic gas plant is
being built at the same site for processing natural gas
when it reaches the New York area.
We
expect
receive natural gas from Texas and
Fall of this year and the Long Island
to
Louisiana by the
Lighting System has already started activities to be
ready to connect to this source of natural gas when it
becomes available.
The receipt of this gas will enable
same
the
expand substantially our gas business and at
to
us
time effect economies in our System operation.
anticipated during
1950 is completion of the reorganization and consolida¬
tion of our three System companies, the Long Island
Lighting Company, Queens Borough Gas and Electric
Company, and Nassau and Suffolk Lighting Company.
This has been pending for several years.
The Plan of
Consolidation has been approved by the Securities and
Another
development
favorable
Exchange Commission, and the New York State Public
Service Commission has found that consolidation is in
,
We are now awaiting a decision by
the Federal District Court on the application of the SEC
for the enforcement of the plan.
In retrospect, the year 1950 marks the 40th anniversary
of the founding of the Long Island Lighting Company.
At its beginning the company had 35 employees whereas
today more than 4,500 persons are employed to serve
over half a million customers we supply with gas and
the
public interest.
place
to
of
all
future,
the
combine
There
ness
J. D. Barnette
for
seems
various foreseeable
the
System in
our
unusually
an
By following our policy of endeavor¬
to be
the first
rather general' feeling that busi¬
a
half of 1950 will
continue at
a
high
level, at least as good as during the latter part of 1949
and
Hooker Electrochemical Co. is a
relatively small factor in the huge
perhaps better.
this and other factors
that ever¬
chemical industry but
in
to disccunt
the
branch
of
larger factor
a
this
chemical
in¬
dustry having to do with the basic
production of chlorine and caustic
plus the manufacture of a large and
adverse conditions
varied group of
in
agree
the
of
the ex¬
business
1950.
latter
the
to
R.
Bartlett
ment
statements
and
these basic
upon
no
reason
of
in
look
uncertainties
this
interference
business
in
and
stimulation
is
the
actions
a
ivr.-.i:
are
growing
based
too
sense of
the
fear
of
the
normal
believe
in
half
with
of
We
year.
extremely undesirable.
political expediency and
dis¬
to
the first
however,
Government
of
artificial
run
the
increasing
course
E.
see
trend
We,
part
national
need complete
We
with the general feeling about
concern
kind
the face of reduced volume.
chemicals dependent
major degree
a
materials.
the well considered
productivity/By securing this
Edward
it is the equivalent of adding an en¬
E. R. BARTLETT
cooperation, we
can
afford spreading among greater numbers of our
people, higher living standards with reduced costs..
dustrial
to visualize what
one
to Long Island
principally represented
by new homes and developments
scattered over a large area.
How¬
this
President, Hooker Electrochemical Company
cooperation of
management, labor, and investors all working toward
the good objective of wider enjoyment of increased in¬
The
a
a
during recent years.
This will call for
ercise of economy measures of
electric
gain of
year ago.
It
new
representing
is difficult for
Companies
System
our
over
customers,
more
facilities at
our
rate.
same
management of indi¬
that
may appear in any one particular field of activity.
As
markets become more generously supplied with products
of industry, keener competition is bound to be experi¬
enced.
In cases where, any considerable falling-off in
volume materializes, more favorable break-even points
broadening with the establishment
of new families at a very rapid rate.
Long
past year, and it is apparent that
coming year will require us to
the
growing obligation on the part of
vidual businesses to be alert to
is that the
is
ever
On
,
ing to visualize the future, we will be ready to meet the
continuance of the rapid growth which we have enjoyed
of their need for
are
one.
System Companies continued during
the
during
better provided
with such funds today than in any
funds,
reserve
real
very
a
it serves.
territory
the
with
pace
-rapid growth of the
area
served by the Long Island Lighting
The
favorable position.
These savings are at an
high, and the American
the
public utility company is to provide the
the task is
Island
""X
adequate gas and electric service required
and
keep
a
to serve as a sta¬
upon
bilizer of business conditions
"step-down" design in a wide price
to
factors
savings bonds, as only two examples
of reserves people may call upon,
constitute a back-log that may safely
be
reliable
Viewing
factors affecting
I
of
The task
electricity.
complicated interplay
business in 1950.
Savings is one such individual
force, and savings deposits of the
public in banks and in the form of
carry
President, Long Island Lighting Company
conditions,
The essential characteristics of
"step-down" design permit the car to be built lower to
the ground, still providing unsual head room within the
body, and ample road clearance. It also provides beau¬
tiful free flowing lines, easier, surer handling, smoother
riding and safer driving. With such a design exclusive in
Hudson cars, I am confident that we will be able to
capture more sales than ever before.
the
greater, particularly for machinery
ries
business
With the introduction of the new Pacemaker
ing for present higher prices. Moreover, prospects have
been materially improved in several countries by the
rise in coffee prices. It is true that import requirements
are
general
already popular Super and
Commodore series cars, Hudson is offering to the auto¬
mobile buying public a smaller car in a lower-price field
embodying all the principles of the famous "step-down"
models which have been so enthusiastically received by
model
'
utilities.
Sales
company.
financing the necessary
and foreign-owned
of
This, of course, contributes to con¬
largely eliminated.
Brazilian Light, earlier
Guatemala.
standpoint
is
fidence in the current business structure.
announced the completion of negotiations
with the International Bank for a $75,000,000 loan to
assist in financing further development of its electric
and'telephone services in Brazil.
It must be emphasizd, however, that the problem of
this
EDWARD F. BARRETT
apparently still be suffi¬
pertinent to mention that most of the unhealthy
business practices which came into being as a result of
the severe material and commodity famine have been
it
recently
Chile,
the
From
the territories they serve.
Foreign Power
obtain a credit of over $8,000,000 from the
Export-Import Bank to assist in financing the con¬
struction program of its Brazilian subsidiaries, and it
has filed applications
with the Bank for additional
credits on behalf of its subsidiaries in Brazil, Mexico,
in
power
segment will
ciently large to enable buyers to satisfy their needs for
automobiles and other necessities.
outside
to
of each
income
must be supplemented by
financial assistance, if they are to
keep pace with the growing demand for
and current earnings
substantial
„
,
After the Turn of the Year
Business and Finance Speaks
reserves
Thursday, January 1.9, 1950
CHRONICLE
the
that
long
Govern¬
much
on
paternalism.
Continued on
page
2%
Volume 171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(257)
21
IT'S 1950 SHOW TIME...
•
•
•,V«V,V<Y»V<V.
HE SOTO AND CHRYSLER DEALERS
-
.•
Come
see
cars
built
<t
be lived with...
to
■;»:fi.
I".
i
.
■
'
f
dramatically
. .lufiexcitingly new!
tuaeb
v'.';
•
'vpi-
''i
>
!■;■?$
■
i
-i;
.
:
■
It's 1950in Show Time Dodge, De Soto new
beauty
Plymouth, for dramatic and
which
You
Chrysler cars!
can
their
It's 1950 Show Time for
that do
cars
and
give
than
more
we've
value—and
ever
more
of
room
room
1950
functional
new
.
.
styling
lilt, and
lines from
lined
flow
these
are
Ave've carried
.
a
a
of
rear
jaunty step forward. There's
grilles
fenders.
exciting looking
enhanced those
to
the
new stream¬
Coming
cars
.
.
.
or
going,
and we've
Chrysler Corporation qualities
You
get
of them with
out
chair-height
for your
for
head and
your
out
and
can
seats,
your
your
family.
ease
thru
sit naturally
there's plenty
hat
.
.
.
plenty
legs and shoulders. You
and
can
enjoy driving with real
of mind.
»'''•*
•
(1■"
' '
handle in traffic
There
are
:
;
:
*
and
simple
so
see
these
Dodge
Chrysler sixes and eights
.
.
.
.
.
.
.
.
.
the
,
.
.
1
most f
luxurious
Chrysler Crown Imperials .
in an -!!
of beautiful colors, upholstery selections ' :r
appointments—each a unique worth, der
.
.
array
and
signed with
you
in mind.
There's smooth performance built intolift.
all
give
pride
By all behind come see them a t your dealer's.
means
Take
They're quick and fleet and dependable, And
the road.
four
so
cars
easy to
that will
drive! In
your
even
a
a
larger
measure
they have all those features which make
cars
on
notably responsive
the
steering Avheel
to
or
the
light
brake.
our
touch
Easy
to
Get
own
for
comparisons. See why
a
them
a
iioav more
Plymoulh, Dodge, De Soto
great
buy for
than
or
you.
mtu
of 1950 cars. Now on display in your Plymouth,
Salon, Chrysler Building, Lexington Ave. and 42nd St.
PLYMOUTH
out
on
ever,
;V
y
comfort, safety, smooth performance and j
style,
is
the wheel.
Get your own answers*—niake
your
Dodge, De Soto and Chrysler dealers' showrooms, and Chrysler
International
u
De. Soto
to
the good things first from Chrysler Corporation
newest
-iT' ii
Vt
to parkh
fifty-three models, from the lowest
priced Plymouth
XXe&oto
Come
•
-<
clean, crisp
our
quickened rhythm in the graceful
smart new
get
relax, stretch
peace
For
V"-''
to you
in comfortable
pleasure
built before.
;
•
spacious doorways. You
of
for you, mean more to
you,
you more
any
Chrysler Corporation
■
important
in and
are so
r4
DODGE
DESOTO
.CHRYSLER
Chrysler •*'"
22
COMMERCIAL
THE
(258)
Continued
jrom
page
20
t
likely to be harmful rather
Correction should be made in the dfe-
beneficial.
than
;
made in the income tax structure there
are
indications that these
are
are
criminating double taxation on corporate earnings paid
out in dividends but the chances do not appear optimistic.
solid foun¬
However, the chemical industry is based on
dations,
it
it
'managed,
,
is "adequately financed and conservatively
has had a tremendous growth in recent
along widely varied lines and we feel that this
growth will successfully continue.
We hope the growth
will resemble a steadily rising plateau with only shallow
small hills of unusual
activity.
Speaks After the Turn of the Year
plant equipment, and in many cases
struction work has been completed.
In
our
this
necessary con¬
of
$15
case, for example, we completed last year
of improvements costing in the neighbornood
million.
These have now begun to show a
own
healthy return on their investment and at present the
only construction under way is a $250,000 addition to our
plant at Calvert City, Ky.
This
d&es
not
foe
to
cease
that
mean
important
an
this
type
factor.
going into cans.
It also has meant more jobs in the
industry.
During the year at American Can
container
program
a
years
valleys of poor business and only
Thursday, January 19, 1950
CHRONICLE
v..
,
Business and; Finance
If changes
FINANCIAL
&
of
expansion will
Rather,
that the essential construction to catch up
it
indicates
with demand
is nearing completion and we are now probably entering
a
different phase—the expansion and development of
Co.,
employed more men and women that ever be¬
we
fore, totalling
BEATTY
T.
effect
largely in the automotive, truck and
original equipment field and we feel that 1950
is
plant
tractor
industry, perhaps
continuous activity in that
will show
only 5%-10% lower than '49.
We
had
some
difficulty during
1949 in
experiencing
electrical instruments and drills.
will* certainly
have
marked
a
The
able
and
take
more
to
iast
did
Our
President, Jefferson Bank & Trust Company, St. Louis
money,
of
more
is the money
necessities
third of
again for office.
If businessmen do
in politics, the regulations that
run
that
we
have just been lucky since 1948
enough
were
what
of
members
Truman
"his" Congress among the Republicans and
the
State's-righters to prevent the whole socialistic program
from becoming law.
Any businessman who has any
calls
love for his country
should get busy to protect it—save
mand
BEITZEL
rate
of
well
In spite of the serious threat to
,
steel
strikes
which
marked
business in
final
the
general business conditions were at
ended and there
year
ent
to be
seems
quarter
reason
now
and
1949,
of
high level
a
no
coal
as
the
appar¬
why they should not continue at
this
level
months
for
least
at
1950
of
and
the
first
quite
of
years
Consumer
de¬
some
bringing
George
B.
Beitzcl
cases
their
have
This has put
us
to
the
into
a
phase of true
prosperity.
Tfrk
and
more
situation, of
and
men
other
While
course, now
sales organization both by adding
increasing their effectiveness by training
strengthening
new
our
means.
over-all
noticed in
one
or
conditions
appear
two of the many
good,
we
industries who
have
are our
customers
temporary periods of weakness.
One example
was the general condition in the textile industry during
the summer of 1949.
This condition has since improved,
however.
We
note
ditions
one
of
and
the
metal
being
packaged
in
packaging
products'is
metal
both
potentialities
pointed
containers
food
opening
up
and
new
of
for
these
markets
new
of
among
the
industries.
has
frozen
recently
concen¬
First marketed in 1946, the pack
juice concentrate this
year
will require
single strength juke at about 18
as used in the previous
development
in
connection
with
urban beer drinkers, consumption
at home
fact which
year.
The period
this
very
extensive
may
from
affect general
1946 to
con¬
1949 was
expansion and replacement of
hardly help
of
a
with'government
..
but look to the New Year fairly confident
improvement trend such as has
continuation of the
been
since
experienced
August
which
and
was
only
slightly interrupted because of the coal and steel strikes.
Prices are now fairly stable and from all appearances
will remain so.
Demand created during and since the
war
for both furniture and
fied and
to
we
be
a
appliances is far from satis¬
feel will continue to assert itself in the year
at least the first six months—should
1950—or
come.
unit sale, if not in dollars.
banner year in
Trends
up—employment is at a high level—people have
money and are going to spend it.
1950 will be another
good year, because the opportunity to make it so will
are
E
A
one
of
non-food commodities.
tential
metal, which Canco also manufactures, has remained
because of still' growing public demand for this
type of package for milk, frozen foods, salt, drugs and
many other products.
meet
the
continuing demand
for metal
cans
and
manufacturing industry
through the year further expanded production facilities
through the construction of new plants or increasing pro¬
ductive capacities at existing plants.
As part of Ameri¬
can
Can Co.'s postwar program new plants were com¬
pleted at Indianapolis, Ind., and Hillside, N. J., and con¬
struction was started on plants at Milwaukee and Balti¬
containers,
the
container
Additional facilities also
were
installed at Canco
in other
areas.
The opening of new markets for canned products has
meant added revenue to the producers of the products
any
at
terconnection
Production of fiber containers and others of both fiber
BOWERS
general
the
greatest
of
natural
continuous
the
United
water¬
States
rivers,
intracoastal waterways, and tidal estuatries in the world.
Their value is vastly increased by improvement and in¬
glance
the quantities of containers permitted for certain
products gave further encouragement during the year to
the development of new markets for canned food and
and
S
President, Atlantic, Gulf & Pacific Co.
reveals
plants at Tampa, Fla.; Houston, Tex.; Portland, Ore.; and
another
.
the
The return of adequate container manufacturing sup¬
plies and the ending of restrictions on the use of tin and
more.
.
will
increased from 34% in 1940 to 43% today.
To
Stores, Inc.
be at hand.
significant
fiber
BOWDEN
major strikes improbable
packaging of beer in metal cans is the trend toward
home consumption of the beverage and away from outof-home consumption.
A recent national survey showed
that
C.
$2,800,000,000 veteran bonus, the major portion of which
be spent, and with personal incomes pretty well
assured
of reaching an all-time
high, then one can
Black
non-food
by the growth
juice business.
H.
for
markets
these
major
.
C.
of
produced rather wide gyrations in the
ingredients for some of our leading
year
the
pledged to further expansion of the public housing pro¬
gram
with credit and money easy . . . with the
containers.
use
past
of
With
resul¬
prod¬
The
so.
O.
high
normal
is resulting
in more healthy competition and a general increase in
selling activity.
In our own company, for example, we
are
products
in
but
demand
ucts
now
improvement and maintenance
President, Sterchi Bros.
on
llwered.
production
point where it meets demand, have at the same time
brought incomes up to the point where this demand is
continuing strong.
public
secondary concern with them.
basic job is the con¬
Their first and
pre¬
tant increase in the number of
A
still is continuing
strong.
There is a good indication that it will continue
to do so in that, despite the steel and coal strikes, sav¬
ings deposits have increased steadily and m&^ey rates
in
increasing
but
items
new
means
then,
continuing
season.
however,
Manufacturers,
the
that
products, such as mayonnaise and margarine.
We hope
these are leveling off and that America will dine better
than ever and less expensively in 1950.
million boxes, the same amount
has
have continued low and in
higher than
from
for the 1949-50 pack of
Looking at business in general, it
appears that large backlogs of
demand are being satisfied—we are
now able to obtain almost any goods
we want.
Expanded production by
possible.
cost
unless
year
popularity of the product has created a market
supplementary to the one already established for the still
popular "single strength," canned orange juice.
Indus¬
try estimates have placed the volume of fruit required
now
this
coming
and
The
continue
know
com¬
research
hundreds,
the
the same top standards not just
every single package produced.
industry's bill for quality control is high, but neces¬
That
formity.,
sarily
Public
dustry.
mand,
will
are
industry's
by
chemists
a
products
new
high quality in every branded food already on the
market.
Not only must the quality be high and the
nutritional values outstanding, but there must be uni¬
The
undiminished
and it is likely the
estimated 27 million boxes of fruit, nearly three times
the amount used for the pack a year ago.
being close to the basic industrial
economy because it supplies virtually
all manufacturing and processing in¬
recent
during
billion
an
of
made
the
of canned orange
as it appears
viewpoint of the chemical
industry, which has the advantage
in
ago,
production
canned
trated
the
manufacturers
year
resulted
been
possibly
28
adverse
conditions,
such
as
poor
growing weather or interruptions in
the flow of supplies, interfere.
A
Impetus
for
the
postwar
rate,
The
nine
for the entire year.
This is the picture
from
containers
into
for
President, The Pennsylvania Salt Manufacturing: Co.
of
becoming
of
now
for
v.
trend
B.
equivalent
entering 1950 with the de¬
are
war,
GEORGE
containers
many
as
1948's record
as
which is some 70%
better word.
a
approximately
year
cans.
from
me
there
out
past
We
It seems to
it, is
turned
the
businessman's standpoint that the
probably seriously affect business in
a
late '50 and '51.
because
With the supply of materials adequate for the first
No. z
significant from
policies set will
are
our
Fortunately, quality
the
from
ing
G. Blumenschine
to
kept pace.
Wondrous
stant
_
from the second Truman Congress will be so
come
nas
L.
time since the war, the container manufacturing industry
cracker
crock
available daily.
H. BLACK
President, American Can Co.
Beatty
themselves
interest
will
J'ohn T.
thing going to take place
the Senate will
not
most
that year will be the No¬
elections, and all of the House and a
vember
are
new
our
C.
1950, the
materials
pickle
laboratories
luxuries.
in
methods.
and
during 1950.
This
that is being spent for
and
important
during
packaging
it
business
Beside
relatively short time from
unsanitary
open
that
true
a
barrel and
present
New methods
the
banking, and business in general
have enjoyed a number of years of goQd earnings, and
so-called
prosperity, yet this is a result of artificial
stimuli
engendered by political considerations rather
than sound business principles.
How
long
business can survive under these false
premises is anybody's guess.
and it looks like there is going to be
lot
it is
While
offset the reduction in the
general automotive line.
Inflation
money
is easy
12
the
in
industry has advanced a long
in
way
the same autowhich we hope
companies,
will party
BERGFELD
N.
A.
be
we
further
still
months ahead.
we
from
year
mobile
.Will
business than
that
exist
longer
This trend should be
venient forms.
accelerated
be kept in hand.
anticipate in a
problem will no
that
weeks
few
in
should be one of unusual progress
1950
year
packaged food industry. Recent years have brought
many packaging and processing innovations which have
enabled American consumers to buy better quality foods
more economically and in more con¬
the
trouble presently
some
BLUMENSCHINE
G.
LEONARD
that score, but we
on
a
which
factor
economic conditions is the action of
government in regard to taxes and further
deficit spending.
However, as we enter the new year
it appears that more and more pedple, both within the
may
of such things as explosives,
by the "canning"
dicated
general
on
the Federal
government and out, are aware of the potential dangers
in these fields and there is good reason to hope that they
obtaining sheet steel and are
now
President, The Best Foods, Inc.
Another
President, United Specialties Company
Our
non-Iood,
and
food
products,
potentials of the can. Food products packaged in metal
containers range from live lobsters and whale steaks to
frozen lemonade.
Another potential field may be in¬
of.
care
of
going into cans, runs into thousands, and the container
manufacturing industry has not yet determined the
many of the products and processes which have had to
wait until the more immediate necessities were taken
JOHN
approximately 33,000.
number
The
as
map
systems
of
ways.
There
are
over
navigable
65,000 miles of
waterways in
po¬
the
country and we have improved only
28,000 miles of them.
With a coast¬
of over 30,0(10 miles, including
line
that
of
the
Great
Lakes,
we
have
only about 190 improved harbors.
The building of new
connecting
harbors, inter¬
channels,
a 1 o n g
with
modernization of old canalized water¬
planned
ways,
all
fuller
utilization
to
of
bring
about
regional
a
water
transportation facilities, will result
in great local and national benefits.
moving nation
Surely, a forward
cannot neglect the
steady develop¬
ment of these great natural and per¬
manent
way
assets.
One
sound
reason
for
Emerson
S.
Bowers
continued water¬
development is of coursel, that low cost water trans-
Continued
on
page
24
Volume 171
Number 4873
THE
COMMERCIAL &
FINANCIAL
■
f•nrtlifri'nV•'•
CHRONICLE
(259)
...—
■
^
®88ti8S8ytot«f^^^
h?.*
ress
Large
new
lubricants plant
now in operation at
The Pure Oil
Compaay's Smiths Bluff Refinery
Down
used
Oil's
near
to
Beaumont, Texas,
on
be unusable marshland
big Smiths Bluff Refinery,
the world's
newest
plants. This
70
acres
adjacent
now
of what
to
stands
Pure
one
of
the completion of
most
modern lubricants
plant greatly increases Pure Oil's
capacity to manufacture highest-quality oils and
greases for automotive and industrial use.
Completion of this important project, after five
of planning and four years of actual construc¬
tion, is another big step forward in Pure's
program
These
a
substantial
part of the company's
earnings for the past three years. They have been
paid for without the necessity for outside
financing.
which
It follows closely
sure
to
PURE
vt,
refineries in Toledo
improvements required plowing back into
the business
more than
34,000 companies are competing
supply the petroleum needs of America.
pU*£
Be
at
They have made it possible for The Pure Oil
Company to better its position in an
industry in
years
of modernization and
expansion.
units
Newark, Ohio, and the expansion of
producing,
transportation, terminal, and marketing facilities.
new
and
new
and
4NY
with Pure
-23
4 ,t
Continued
from page 22
Speaks After the Turn of the Year
Business and Finance
is a vital factor in solving one of the most
burdensome problems of the nation—high cost of distri¬
bution.
Every new and every expanding industry using
large quantities of raw material seeks a location where
water
transportation is available.
The railroads are
portation
material increase.
any
for waterway
reason
the lower is the
cargo
of operations are continuing to mount;
continuance of the spiral of inflation could,
of the nation as
of waterway
development, and realize that it must keep pace with
other national growth, we cannot be other than optim¬
istic with respect to the outlook for The River and
Harbor Construction Industry.
It is making a vital con¬
tribution to the growth and strength of America.
When
consider
we
LYMAN
B.
value
BRAINERD
President, The Hartford Steam Boiler
and Insurance Company
improve¬
ment which first became discernible
tion
trend
the
of
toward
losses
America's 531
before
had since
have
underwriters
war.
A
what the boiler and
forecast of
machinery companies may expect in
1950
of
based
be
must
tion
extent
the
have been changes
countable
for
the
on
to
a considera¬
which there
Lyman B.
Brainerd
in the factors ac¬
poor
underwriting experience of
the
All of these factors were related to the
production of war material and to the abnormal pent-up
demand for peacetime goods in the immediate postwar
past
10 years.
During those hectic times industries were oper¬
ating at full throttle with heavy overloading of power
plant equipment. In many cases this equipment was be¬
ing run without proper maintenance or overhaul, and by
operating personnel relatively inexperienced in their
duties.
To further add to the difficulties, new power
years.
plant
and
equipment
parts were
spare
short supply, so that worn
in extremely
out equipment had to be con¬
demands. The
insurance companies were also hard pressed to maintain
adequate engineering staffs, as men of mechanical back¬
ground were eagerly sought for service in the armed
forces. Moreover, the inflationary trend in our national
economy greatly increased operating expenses and, as is
frequently true in the insurance business, the level of
premium rates did not keep pace with rising costs and
adverse loss experience.
Each of these factors played
its part in the generally unsatisfactory results.
During the past few years there have been changes
which have served to eliminate or minimize the effect
of many of these adverse influences.
In many lines of
manufacturing, production has overtaken the pent-up
demand for consumer goods so that operating schedules
are
now
being geared to current consumption, thus
bringing to an end much of the overloading of power
plant equipment. At the same time, availability of new
power plant equipment and of repair parts has increased
to the point where much of the old equipment, which
bore the grunt of the war years, can now be discarded
tinued in
or
in order to meet production
employment conditions
materially bettered the efficiency of power plant
held
have
use
in
reserve.
More stable
operating personnel and, for the same reason, the in¬
spection forces of the insurance companies are operating
Improvements in inspec¬
tion techniques have also made a major contribution to
the reduction in accident frequency. In the last quarter
of 1948 the long overdue increase in premium rates went
into effect country-wide, and this was reflected some¬
with
what
increased
both
in
However,
written
as
for
a
effectiveness.
premiums for 1949.
most boiler and machinery policies are
three-year term, it will be almost two
written and
earned
benefit of the rate increase
years more before the full
will show in earned premiums.
indication that the favorable
couple of years will continue well into
There seems to be every
trends of the past
savings banks started the new
mutual
deposits of $19.2
During the past
$800 million of which dividend
deposits increased
year
accounted
credits
for
$350
bonds
Offer
investment
a
government
Except when na¬
deficit must be
of
savings funds is
of
to
is to the
great concern
as
institutions themselves.
thrift
million.
of business will
level
and
wise administration of the government as it
STYLES
HON.
depositors saved $450 million
of new money—a 2J/2% increment.
With indications that in the new year
high
doubt again be had to
no
incentive yields.
at
arises
need
Thus,
a
will
recourse
financed, the best outlet for savings funds is in the
building of cities, public utilities and providing homes
for individuals.
But so important is it to encourage
thrift that a solution of the problem of the adequate
U.
The
con¬
S.
BRIDGES
Senator from New Hampshire
in 1950," is of greater
the twentieth century
question, "What's Ahead
tinue, it may be expected that 1950
will
register a similar growth in
significance at the mid-point in
Even though the dollar
buys considerably less than it did,
and the government spends increas¬
States.
In
the
United
save.
and
Americans
continuing
liberties
to
bureaucracy
which
security
Copyrighted by
Underwood & Underwood
Bruer*
Henry
39%.*
expansion in accumulated
families.
for thousands of
The
telephone
industry
has
bank funds
substantially completed
financing its expansion program.
Railroads have sub¬
stantially completed financing new equipment.
Esti¬
mates of new financing by electric and gas companies
declining volume.
Savings banks' corporate
investments are principally in these categories. As the
point
of
supply of these securities decreases
decided
surely
in
the
decade will
I
continue to be ihe major
outlet for
mortgage loans
throughout the country.
savings banks are making and will con¬
tinue to make increasing use of this wider lending power.
New York State banks made over $20 million of loans
outside New York and its adjoining states during the
Metropolitan
of 1949, the first period when such loans
legally available. They have on hand $39 million
in commitments scheduled for 1950 and 1951 delivery.
last
quarter
were
In
addition,
loans
are
issued
loans
for
$52 million of nationwide mortgage
with commitments expected to be
process
near
future.
1948, FHA and VA mortgages
In
of
some
in
in the
1949
accounted for 39%
compared with 34% in 1947.
Figures
not yet available.
The trend towards in¬
made,
are
mortgages continued in 1949 and is likely to con¬
tinue in 1950, especially if FHA insurance of large, multisured
family
rental
projects
under
If the authorization to insure
law
very
is
extended
of March 30, 1950.
Section 608 is
beyond the present expiration date
the
such
developments under
extended,
the
p.
9.
the
Fair
Truman's
and
years
"affects
Congress,
Deal
for this
reasons
con¬
the Republican
ously
state
The
First,
Sen.
minority will vigor¬
the Administration's
oppose
slave
program.
threefold.
are
Styles Bridge*
proposals and, second, the statesmen in the
are elected as Democrats are more
de¬
Congress who
voted
to
to
are
the
principles of free
schemes
bination
to
their
insure
of forces
in
than
government
re-election.
the Congress
This
they
com¬
will be sufficient, I
forecast, to stop the Fair Deal drive.
The third
factor
the situation,
in
in
a
final
analysis,
This is a purely political
The Trumanites,
because of the 1948 upset,
I am confident is explained by the fact that
have the greatest effect.
may
factor.
(which
25,000,000 eligible electors did
vote)
expect to
the same
use
not take the trouble to
desperation formula for
re-election in 1950.
promise all things
delivered on their promises of
1948.
And, quite as obviously, they did not have the
mandate from the people in 1948, as they would have
to all
us
if they have
men
believe,
promises.
not want
they
or
would
have
delivered
on
their
Thus, since the Fair Dealers themselves do
action during this Session of the 81st Congress,
-it is unlikely
that much in the way of new legislation
will be approved.
The big
job of this Session is to cut back government
balance
5 billion dollar cut in
cuts should
come,
the budget.
I hope at least a
expenditures will be made. These
I believe, in the bureaucratic aspects
government which will certainly have no place
in the national picture during years of prosperity.
If we
our
can't balance
our
budget during good times, how can we
expect to weather any years of
adversity which may lie
ahead?
Truman has asked for
increased taxes. I feel sure the
Congress will not respond to his request.
There is a
drive in some quarters for repeal of war-time excess
taxes
as a sop
to the consumer in an
election year.
Pro¬
ponents of this plan state that revenue to replace that
furnished by the excise taxes would be raised by in¬
earnings. The idea of re¬
which at least has the merit of being
honest and easily seen, for further hidden taxes is not
a desirable method of operation, in my view.
If we are
successful in cutting the budget sufficiently we should
reduce taxes and not simply juggle the method by which
creasing taxes on corporate
placing
a
tax,
they are collected.
Personally, I shall continue to
socialism in our government
ously as I can the
States and
stand against creeping
and I shall oppose as vigor¬
spread of Communism in the United
I shall stand for econ¬
throughout the world.
in the operation of the
demobilization of the army of
omy
of the present
efforts
toward
enable
my
Savings in New York: a Record of Steady Growth,"
New York State Commerce Review, Vol. 3, No. 11 (November, 1949),
"•"'Personal
am
will be
be prophetic.
savings banks in the larger
attractive low-equity financing
not
ten
trolled by the Democratic Party, will
do little or nothing toward enacting
the yield advantage
savings bank funds.
Recent legislation in New York
and Massachusetts, where 74% of the Mutual Savings
Banks' assets are concentrated, now permits the banks
FHA
them
I
freedom?
of
next
that
expect
of
make
promises
legislation which
any
immediate future.
to
decade
next
that this question
spending and
will
United
ever-enlarging
an
instead
convinced
government bonds likewise decreases because of
rising prices.
Corporate securities therefore are not
likely to be too attractive for savings banks in the
over
Mortgages
these
Obviously, the Fair Dealers can't
opportunities for investing savings
available in the new year?
will be
of
past
this issue during the first year of the
associations, all have com¬
peted for the savers' dollars.
This competition for indi¬
vidual savings will continue during 1950 and will be
augmented by aggressive sales efforts to sell participa¬
tions in equities by the investment trusts.
Mutual savings banks still have 54% of their assets
invested in United States Government securities. Eleven
per cent of their funds are invested in other securities,
principally corporates. Only 29% are represented by
mortgage loans.
However, during the past three years
these banks have reduced government bond holdings
largely to increase investments in mortgages. A large
part of these mortgages are insured by the FHA and
represent new housing loans. Tne Bowery Savings Bank,
for example, has added over $200 million of such loans
to its portfolio in the past two years, providing homes
What
the
recent
a
capita savings in
States
have increased
Per
1939 to 1948. Adjusted
dollars, the increase was
1939
to
opinion,
mark
the
in
turning point in the
primary issue of this generationWill our people continue to sell their
from
140%
been
has
my
will
amount for public welfare
to
it
than
deposits.
panies and savings and loan
ing everything into account, the year
was
the most satisfactory one the
the
Bank,
City
Bonds, mutual savings banks operating in 17 states, thrift
departments of commercial banks, life insurance com¬
proximately 23%, a reduction from
'the 28% of the previous year. Tak¬
supply,
government bond market. The question will then
arise whether the Treasury will take heed of the need
for an outlet for funds which are saved by the people,
to stabilize their incomes and hence the general economy,
the
with resources of $21.5 billion and
billion owned by 19.3 million persons.
year
The vast
premiums was ap¬
earned
to
limited
liquid savings of individuals has sharpened competition
among the different types of savings institutions for
stewardship of savings funds.
United States Savings
writ¬
ten and earned premiums to be about
$35,000,000 and $34,000,000, respec¬
tively—both being records for the
industry—while the ratio of incurred
The 1949 figures show
in 1948.
The Bowery Savings
New York
assistance, since the war
have demonstrated their
underwriting results,
the boiler and machinery insurance companies appear to
foe heading toward better times.
The unofficial experi¬
ence figures for 1949 show definite evidence of continua¬
savings continue to increase, when the housing de¬
more nearly satisfied and mortgages remain in
If
mand is
HENRY BKUERE
ing
Inspection
of unsatisfactory
decade
a
A marked
and
will
After
ing under Section 207 of the Housing Act, but, as regu¬
lations now stand, the larger equity investment required
from the builder under this section would reduce volume.
tional
Chairman of the Board,
low
and
im¬
provements tie in directly with national defense.
Few
know that every Navy Yard in the nation is on a water¬
way improved by the Federal Government.
Waterway
improvements are vital not only to commerce but to the
well.
the intrinsic
backlog of commitments is exhausted.
Recourse to some
extent would be made to financing multi-family hous¬
premium rates.
the current level of
investments when their
centers will be hard-pressed for
of course,
result in the need for a further increase in premium
rates in order to enable the boiler and machinery insur¬
ance companies to produce a reasonable operating profit.
Tne year snouid provide a fair test of the adequacy of
transportation.
Even many well informed persons do not associate
cost transportation and civic development with river
harbor improvements.
They have no idea that such
defense
forms of insurance, ex¬
is the case for all
However, as
penses
improvements. The larger
transport cost per ton mile.
Few people realize that 85% of all the steel made in
America is made from iron ore transported from Upper
Lake Superior ports to the steel manufacturing areas
along the Lower Lakes at the almost unbelievably low
cost of approximately 8/10ths of a mill per ton mile.
Nowhere else in all the world is there such low cost
the
at anything like its
industrial production
With
1950.
present high level, written and earned premiums should
show further gains. Loss ratios are not easy to predict,
but there is no reason to expect that 1950 will bring
^
benefited, too, through the distribution of finished prod¬
into areas where water transportation is not avail¬
able.
The use of deeper and deeper draft vessels is
ucts
another
Thursday, January 19, 1950
FINANCIAL CHRONICLE
COMMERCIAL &
THE
(260)
24
economy,
Federal establishment, a
bureaucrats which resists
and every move which will
fellow Americans to
condition in this life through
further improve their
their own efforts.
Continued
on page
26
Volume 171
Number 4873
THE
-
COMMERCIAL
&
FINANCIAL
CHRONICLE ..."
(261)
Announcement
to
,uowho operate motors or
y
and would
■yrry:[r-
The
accepted
like
of
method
heavy oil, too heavy to be
.
making high
compromise—and
a
with compromises it
yv/V
our new
process
newest and largest and most efficient plant
of its kind in the world. This plant is
proc-
is usually the
the highest expectations of the scientists.
case
naturally suffers from
thus
superior to
by taking
scientists
any on
The
new
Service
have discovered
ate
"heart-cut" oil is available at Cities
stations—another
step forward
a
advantages
lubricating oil
a
of
the
older
Agmn
new
while
new
scientific
tQ
process
CITIES
lubricant better
and
progressive oi, industry,
by
better ways
a
way
of doing things_ has
and has been quick
proWde the fad|ifcs to make thk
product available to the public.
(2£) SERVICE
QUALITY PETROLEUM
^
-
one
through its incessant search for
discovered such
avoiding their disadvantages.
brand
jn this
company
retaining the
methods
a
oper-
costs.
of the lubricating oil
barrel of crude,
machinery of all kinds
in
in action and resulting in lower operating
the market. This is done
heart-cut
a
fraction in
produces
now
"on stream" and its products have exceeded
which does away with the compro-
and
un-
$42,000,000 lube
providing the motorist and those who
Cities Service
The
.
light to give satis-
Pa
mise
T
y
usual feature of
a
the adverse effect of both of.its
component
a
.
which this "heart-cut" is achieved is the
the resulting mixture is
as
.
oil plant (at Lake Charles, Louisiana)—the
factory performance. Although the best
up to now,
money
satisfactory lubri-
a
cant, with another oil too
known,
save
-'A "
quality lubricating oil has been to blend
ess
to
machines
PRODUCTS
new
25
2<i
Continued from page
24
Speaks After the Turn of the Year
Business and Finance
some
insidious
Pacific
the
Railroad Company
Expanding Economy
Our
freight
of next
reduced volume of rail
I believe the first six months
forward
look
I
to
a
"
year
prosperity is essential to oar country's wel¬
fare.
The American people need to realize that they
have a tremendous interest in keeping industry growing
of
and
traffic
1950.
in
will be about as good as the corresponding period
and that the traffic volume will show some
tendency to recede during the last
six mouths.
However, it is difficult
at
this time
to forecast what the
1949,
percentage of decrease
will amount
to-
Agricultural prospects in our ter¬
for 1950 are somewhat less
conditions are spotted.
that
wheat
and
potato acreage will
government is
also expected to restrict 1950 corn
acreage.
With less wheat, corn and
potatoes to market and an estimated
10% general decline in farm prices,
farmer
income
will
doubtless be
the
above
10-year
Buford
H.
C.
average.
opinion that the manufacture of heavy com¬
modities, including farm implements, will be somewhat
It is my
reduced.
of our
completion, late in the fall of 1949,
freight car program, we do not expect to construct or
acquire any new freight or passenger cars during the
that I believe that'oilf acceler¬
during the last few years have made our
year
1950, for the reason
ated
programs
ownership
of
freight and passenger
during the year.
cars
sufficient to
'
"
handle our traffic
industry and employment
territory.
-
,
Stability
is
Rather, there
to believe that the volume and quality,
consumed in the United States will reach a
reason
every
foods
of
consumption.
food
reduce
would
which
high in 1950.
new
LOUIS
1950 hold for the milling and
BURFEIND
supplies
of
agricultural
in
are
mercantile
Of course,,, you
trade.
must realize that
resort and our business is
summer
S. Senator from
U.
v •"
HARRY F. BYRD
Virginia
Creeping socialism in the United States is steadily in¬
state
agriculture and labor, and the prerogatives of local,
and Federal governments.
creeping socialism will
This
else
galloping
products at fairly high levels, gives
nation
ernment
Harry
in
ilizing
be
if
While farm income in 1949 was not so high as
there
by
supplies
ample
food industry
combination
fortunate
a
of
of
raw
can
look forward to
circumstances
as
reflected
materials, generally
stable
commodity markets, and prosperity among our principal
Consumption of food continues high.
dairy
When people
incomes Ihey want more meat, and
poultry products.
High demand for
good
and
In
at. least
from
and
unless
the' system
has- made
four
products permits the farmer to feed
more
these
his surplus grains
profitably, and so contributes to farm prosperity.
Our heavy
Cereals
industries, including construction, pay high
workers in those industries
The outlook for con¬
struction, steel, automobiles, and other durables, is very
wages,
are
the
and
therefore the
farmers'
best customers.
good as we enter the new year.
These high-wage in¬
dustries are the keys to prosperity, and as long as they
have full
will
be
employment and full operating schedules there
a
good market for food and other consumer
petition
About one-sixth of our
working population is engaged
agriculture. This means that five-sixths earn their
livelihood in industry, trade, services, and professions.
in
would
alone
cost $2
billion annually.
retreat after socialism becomes entrenched,
no
vital¬
ity.
think
who
Those
they
benefiting
are
Federal
from
70 Britons with net incomes of $16,000,
today only
The
taxes.
well-to-do
so-called
in
England have
been liquidated. But the worst of the British
situation is that' the liquidation of the middle income
of
such
and
that
as
another
is
in¬
an
Harry F. Byrd
continuing threat
government controls such as those requested at the
beginning of the 81st Congress on prices, wages, em¬
ployment
practices,
commodity allocation, consumer
credit and bank requirements.
Much of this legislation
by the President is still pending
to
the
tax
was
for $4
billion in
proposal
taxes and $2
Last year the
In
the
billion in new general revenue
payroll security taxes. This year the pro¬
fourth
direction there
is
a
crushing onslaught
spending and debt which result from
Federal
100 different programs already
^expenditures through
Federal de¬
partments and agencies (with 1,000 units). It is through
these give-away programs that Federal plans, adminis¬
tration, control and regimentation are extended over
individuals, agriculture and business with a deluge of
spreading out from among the 60 principal
borrowed
billions
in
financial
aids,
grants,
subsidies,
payments and virtually every
other form of government advance and contribution.
These elements of socialism have been overtaking lis
payrolls,
cannot balance the budget
we
pensions,
gradually for years, usually accepted
of
the
this
of
of $5
in the name of
for my conclusion is that
reason
in
10%
the
of
in tax
result
in
the loss in tax
loss
a
—
all
of
revenue
for every
revenue
income
income
the
country—would
as
national
present
aggregate
billion,
basis of $1
a
The
disaster.
the
in
tax
occurs
$4 reduction
anticipation
the
of
another .recession,
blueprints
already
are
though
even
for
prepared
the
government to embark upon still more great spending
programs in the effort to prime the pump to maintain
the present, or even higher, level of prosperity.
With
even
recession
little
a
Federal tax
revenue
Let
general
huge
reduced
prosperity,
priming spend¬
tremendously to the deficit.
remember, too, that continued deficit spending
us
socialism
and
in
and increased pump
ing together will add
are
inseparable
such
sums
as
for
twins.
government
The
socialism without spending
socialized medicine, socialized
And resistance on the
housing, socialized farming, etc.
part of the taxpayers will be so vocal that it is doubtful
that
new
posal is for $ll/£ billion in new payroll security taxes,
and
new
general revenue taxes of an unannounced
of deficit
If
cannot extend its program of
proposals to add more
burden which already, in some in¬
In the third direction there are
stances, is close to confiscatory.
spending.
means
minor,
the
is
gratuities
with
in this
In
so-called
there
stuffing, ourselves
in
national income.
in
those to Lus-
direction
socialistic
justified
recession
on
of
advocated
are
citizens
tron and Kaiser.
In
we
incomes
after taxes.
If we "like what
government of England, then
$5,600,
to
the
from,a paternal central government until we bankrupt
the greatest nation in all history.
But, I for one do not believe that America wants to
go the way of England. I am opposed to these socialistic
programs.
I believe that so long as we can keep this
country financially sound, the door will not be closed to
the recovery of the freedom of private enterprise in
democracy.
Let us never forget that the last hope of
freedom-loving people in the world hangs upon main¬
taining the integrity of our American money. The key
to this fiscal solvency is balanced budgets'in time of
peace.
Today we are enjoying the greatest prosperity
in history, and we are at peace. Yet the President pro¬
posed in his recent message that we indefinitely em¬
which results
as
in
see
revenue
tremendous
business loans such
$2,800
we
which
government
there
Evidence of
has extended to an alarming degree.
this is that there are only 320,000 Britons having
a
America the greatest
direction
projects
and
goods.
exerting their most
are
he required by private enterprise to recapture its
this
So
much
vasion
new
must fight
we
deficit
and
amount.
The Market for Flour and
i
milk
to
There is
financial
di¬
will
checked,
in all the world.
one
taxes
suppliers, the farmers.
have
that
in 1948,
agriculture is still highly prosperous.
Therefore, it would appear that for the coming year
the flour milling and
nation
destroy
prices
surpluses.
both of the great farm organiza¬
Bureau and
the National
Farm
era of piosperity, when can we?
considered judgment that, unless the Congress
balances the budget lor the year beginning July 1, 1950,
it will not be balanced until we go over the precipice of
from the development of huge valley
particplarly
^hing Mr. Brannan
It is my
upon
carrying out the provi¬
burdensome
accurate
most
American
brace deficit
creasing stream of government com¬
factor
should
more
plan is that he cannot estimate the
this
Despite this, politicians
Grange.
now,
that
is
converging
from violent
The policy of our gov¬
secure
sions of the Marshall Plan is a stab¬
A. Bullii
this
is
socialism
fact
The
academic.
is
rections
agricultural
soon
socialism if the
program
of President Truman. is
adopted.
Whether you call it wel¬
fare state, collectivism or something
become
However, the recent amendment to
the
Agricultural
Adjustment
Act,
which supports prices of many farm
fluctuations.
for
was
powerful effort to force this socialistic plan upon both
the farmers and consumers as a sop to labor leaders.
The American Farm Bureau estimates that its applica¬
sometimes known'to be inland.
Seriously, we look for another good year, provided
we
have a hot and sunny summer, which benefits our
hotels and concessioners, whose business is reflected in
shore, and
state
that
programs
Part of the vast public housing pro¬
is opposed by
It
from
products are often accompanied by
low
prices and unstable markets.
fairly
cost.
tions—the
group
ness,
carryover.
about
said
has
after
don't know what's. ahead for business
Frankly, I
cereal indus¬
of 1949 relieved any shortages which
may have existed previously.
Sup¬
plies of farm products are now am¬
ple to meet requirements for do¬
mestic
consumption,
export,
and
be
clincher
these
Plan.-'' The
Brannau
are
filtrating the privacy of individuals, the policies of busi¬
assurance
of
which, .within 10 years, will cost $20 billion annually. \
The third, and crowning program
is the so-called
1950, but we are making fast all lines in the event of a
premature hurricane, ^ which we sometimes get on the
HON.
The Farm Situation
will
first
The
already
Park is a
distinctly seasonal.
try? Prospects depend on two major factors, the supply of
raw materials and the market for flour and cereal products.
Ample
a
payments and expanding Federalized programs should
lake a look at England.
In all that great country there
President, Asbury Park aiul Ocean Grove Bank
of the Board, General Mills, Inc.
The bumper crops
plus
same,
which, if adopted,
primarily because the state usurps not only the machin¬
ery of agricultural, mineral and industrial production,
but also the sources of wealth and capital which would
,
What does
demand for three more measures
will irrevocably commit us to state
socialism, from where there is no retreat.
the
of
that public and business psychology will
continue to be optimistic, I do not look for any broadscale economic reverses or widespread unemployment
the
.
BULLIS
A.
HARRY
session
new
tion
Asbury
Chairman
to the
and last, were simply for more
Congress this week,
prices will help to make it possible to satisfy
that demand even more completely.:
food
of our motive
will contribute substantially to
our
income and education.
stantly rising level of
of
improve and I believe we are
in
better^foods is growing with the con¬
The demand for
"
power has continued to
in good shape to handle
any and all traffic offered in an efficient manner.
We
do, however, expect to supplement our fleet of Dieselelectric locomotives during the year.
Our new loco¬
motive program for the year 1950 will involve an expen¬
diture of about $5,500,000.
Our improvement budget for
existing equipment and for road property is estimated
to require an additional $9,000,000.
These expenditures
condition
The
President's recommendations
The
of
gram has already passed, and, exclusive of the new pro¬
posals, the part, already passed, within 10 years, is esti¬
mated to cost $20 billion.
The second clincher program is socialized medicine
rates of investment by
We should show1
people that it pays to encourage greater production be¬
cause production is the source of income to give us food,
shelter, and recreation; to pay the costs of government
and of aid to Europe;, and to-give us some measure of
national and personal security.
'
In the year ahead the market potential for basic goods,
and particularly for foods, should be at least equal to
that of any prior1 year.
There will be new mouths to
feed, and the record number of youngsters added to our
population during the past decade will be a year older.
plants and equipment.
new
Assuming
the
With
receiving direct,
payments from the Federal Government, the
Federal payments to business are equal to more than
half of corporate profits after taxes are paid.
\
socialized housing.
„
although considerably
the last few years,
below that of
To accomplish that, it is necessary for
industry to keep growing, building more plants, enlarg¬
ing its facilities, and supplying new products and services.
We in business should do bur utmost to teach the
business in
restricted, and the
be
fact that 17.million individuals are now
regular
Industry must be prepared to employ an ever-increas¬
ing labor force.
away
dependent upon continued high
In some
sizable areas in the northern Great
Plains, sub and surface soil moisture
is
quite deficient.
It is expected
ture
providing incentives for business to expand.
m
disappeared,
at the free
democracy, have remained.
which eat
is, jobs for themselves and their children—are directly
Soil mois¬
hopeful than a year ago.
Industrial
the emergencies
as
programs,
enterprise foundation of our
How far we have already gone toward government
control of our lives and business can be measured by the
people that high levels of productive employment—that
ritory
but
emergency,
these
cultural
Milwaukee, St. Paul and
President, Chicago,
that the prosperity of the agri¬
population is dependent to a large extent upon
prosperity of the other five-sixths.
evident therefore
is
It
BUFORD
H.
C.
Thursday, January 19, 1959
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
{262)
of
a
taxation
can
be
obtained.
those twins of evil—state socialism
spending—just
as
we
would
fight
an
in¬
hostile power.
Balancing the budget is first and foremost in the pres¬
our security.
Those who, wilfully or other¬
would destroy the American enterprise system
ervation of
wise,
would
alone
destroy the freedom of people everywhere.
We
bearing the standard of freedom today. With¬
are
out the
perish
light from
the
from
would
is
exaggeration to
on
earth
more
no
torch freedom and progress will
Without
deterrent to
there
no
be
our
earth.
American
communism
solvency,
abroad.
It
that there is literally nothing
important than the fiscal integrity of the
say
government of the United States and the financial sta¬
bility of our free enterprise system.
Continued
on
page
23
Volume
171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(263)
Blair, Rollins & Go.
Foritsad by Gonsolidat'n
t
V. D. Dardi
Warren
Formation
ment
H.
Snow
invest¬
new
banking
-Rollirs
firm
of
Blair,
Co., Incorporated, was:
(Jan.
16)
by V. D.
&
announced
Dardi,
Chairman
Warren
and
the
of
H.
of
the
Snow,
The corporation
is
board,
President.
result of the
a
consolidation of the
business, ef¬
fective
immediately, of the two
nationally-known
investment
-firms
of
Blair & Co., Inc., and
E. H. Rollins & Sons
Incorporated.
<-
Blair, Rollins & Co. Incorporated
will function in all phases of the
investment banking business and
will
mderwrite,
distribute
and
deal in United States
State
and
Government,
municipal,
railroad,
public utility and industrial se¬
curities, investment trust shares
and
Federal Housing Administra¬
tion mortgages.
In addition to
\
prior
to
the
Chairnran
and
of
Dardi,
who
of
Blair
H.
Rollins &
was
&
Co., Inc.,
Snow, heretofore Presi¬
Mr.
dent
Mr.
consolidation
E.
Sons In¬
corporated, officers
lins
of Blair, Rol¬
Co., Incorporated, include
&
Charles
F.
Hazelwood
and
James J. Sullivan as Senior VicePresidents. The board of directors
of'the
Snow,
Bateman
-
firm consists of Messrs.
new
Dardi,
Sullivan,
Burton
and
Frank
A.
B.
Howe.
Main
offices of the corporation
located at 44 Wall
Street, New
Branch offices will be
are
York City.
maintained in 20 leading cities:
Albany, Atlanta, Boston, Buffalo,
Chicago, Detroit, Grand Rapids,
Los Angeles, Manchester
(N. H.),
Philadelphia, Pittsburgh, Roches¬
ter, Scranton, St. Louis, San Fran¬
cisco, Springfield (Mass.), Wash¬
ington
(D.
C.),
Wilkes-Barre,
.
William sport
ton,
Del.
The
will
(Pa.)
and
Wilming¬
dollars
firm, it was stated,
particular attention to
Blair.
Rollins & Co. Incorporated
to make'available to the
investor "a type of service to fit
be
In
Hill
particular requirements,
whether a small, medium or
large
investor, whether
individual
an
or
institution, whether he wants
buy s°eurities in enterprises of
to
For
rapidly growing industrial Far
West Or in the old-line
companies
Middle East and the
East,"
it
stated.
was
With
the
Co.,
Im.,
and
of
business
reaching
the
former
of
Blair
back
to
Rollins
&
firms
to 1876, the consolidated firm "has
accumulated experience which
qualifies it for the job it has cut
for
itself,"
nine
is
according to
the
The
of
tor
the
offices
at
new
the
corporation with
firm's New York
address, 44 Wall Street.
and
direc¬
a
Both he
one
more
.
of
Blair
company,
the
its Fordham
open
for occupancy in March
*
.
.
yet in
a
price
budgets.
Hill development cost
is insurance
money, invested for Equitable policyholders.
example of the double
funds that
guard
your
value of the life insurance dollar
security have created
a
new
.
.
.
community of
homes in the heart of New York.
Like the other funds
cooperatively pooled in The Equitable Society, the
that built Fordham Hill helps all of
money
when you think of
your life insurance
millions
Mr. Snow will be substantial
stockholders
on
development of ultra¬
beautiful, luxurious, practical
most
statement.
Burton A. Howe will be
apartment
buildings that comprise the Fordham
$16,000,000. This
It
are
1890
an
out
The
medium-priced
1,118 families, apartments will be
agreeable to
range
a
design.
some
—apartments that
the
of the
July of 1948 The Equitable Society began construction
housing project,
modern
his
an
WORK
at
new
give
financing business expansion
through issuance- of equity se¬
curities.
A primary: objective of
will
insurance
-
enjoy better living— thanks
.
.
us.
.
to your
It's something to remember
that while you
enjoy security,
insurance dollars.
ownership
Holdings Corpo¬
ration.
With
Zuckerman, Smith
Zuckerman,
Smith
&
THE EQUITABIE LIFE
Co.,
members of the New York Stock
Exchange,
announce
that
THOMAS I. PARKINSON
Harry
Levirm is.row associated with the
firm in its mid town
office,
Broadway, New York City.
ASSURANCE SOCIETY OF THE UNITED SUITES
393
1441
IMMMIIIB III
SEVENTH
AVENUE
•
■
PRESIDENT
NEW YORK
1, NEW YORK
IIMWMMWBMBB—H——jWWMj—
27
28
Continued from page
& Paper Corp.
President, Union Bag
The FRB Index of Indus¬
closed the year at
equal to the great year, 1948.
Production
trial
approximately 175. In tune with all
general business activity, the
paper
and paperboard mills
produced in the neighborhood
of
4.2 million tons of product—a decline
of less than 4% from the 1948 record.
As we
look forward
into 1950,
this
kraft
is
there
good
no
reason
to expect
serious let-down in the indus¬
tempo.
It may be that things
transpire which will bode no
good to the long-run health of our
economy, but they are not likely to
do
any
immediate harm.
I am
unbusinesslike
national fiscal and
thinking especially of
handling of our
In the short run,
financial problems.
Calder
Alexander
it is likely
world-wide generosity with
kraft
The
that careless spending and
To
large extent the prosperity of agriculture depends
a
will probably produce in
that of 1949, 4.2 million
sizable share of total per capita
paper
This compares
pounds annually.
capita consumption of only
eight pounds in the rest of the world.
with
per
a
Corporation with about 350,000
Union Bag and Paper
1949, expects to do at least as
well in 1950.
Prices have declined during 1949 to reflect
the return of competition.
In 1950 there is no reason
of
tons
in
production
anticipate any substantial further price decline. As
matter of fact, the low profit per dollar of sales on
suggests the likelihood of some
firming of the price structure in those products.
certain paper products
The largest
is
1950
the
of
be free
cloud
the horizon at the beginning of
is made in Russia. We cannot
on
which
one
uncertainties
war
as
long as an
aggressive
dictatorship pours out its floods of mendacious propa¬
seems
to
me
that
we
and
manufacture
in America continue
As we
atmosphere.
pleasant
distribute
to
goods with such efficiency
spark economic recovery throughout the world,
cannot fail to aid the cause of freedom in the year
to
as
we
a
about
$7,600,000,000, and, accordingly, might appear to
high in relation to that figure were consideration not
given to the fact that the total national income today
is running at the rate of about two and one-half times
and
what it
good demand for the products of agriculture.
however, the further requirement that agri¬
cultural prices be properly related to quantity of produc¬
tion so that a profit will be realized by the producers.
The continuation of wartime price support policies has
There is,
a necessary readjustment of farm production
peacetime levels; and the incentive to improve effi¬
ciency has not been present to the same extent as in
manufacturing industry and trade.
The period of post¬
war adjustment in
agriculture will continue into 1950.
prevented
to
Farm income
be
will
and
good
a
balance
between
manufacturing, construction and- agriculture, with con¬
sumer income at high levels and with
savings to back
unsatisfied wants, conditions are favorable for a
continuation of good earnings for banks.
I believe that
up
the outlook for banking in 1950 is for a
continuation of
growth and satisfactory earnings.
time
was
excessive strain
an
vidual
tinue
ALLARD A.
CALKINS
of
San Francisco
personal customers would remain good and
throughout 1950.
The
of the health
the veins of business is a useful
The banker is in a
of business.
particularly favored position to take the pulse of busi¬
ness and to know the past and present state of its health.
He
is
usually
quickly
aware
of
a
slackening or quickening of the pulse
of business, but he is not peculiarly
endowed with the gift of prophecy;
it is with due humility that I com¬
ment
President, The First National Bank of Philadelphia
concerned.
But, it is dependent in its opera¬
tions and in its earnings on the
cli¬
live
must
which
with
and
it
must
because
conditions
that
surround
may
it in
that future.
appear,
conditions
climatic
those
accordingly, that
be
given
to
first
half
of
1949
accomplishment of
an
witnessed
the
adjustment in
Government
the
has dictated so far that it will pay to the
banking industry for the quite large services which that
industry renders to the government, a rate of return or a
compensation lower than objective appraisers consider
is proper and fair. Hopes have been held from time to
department
our
same as for 1949.
For the shareholders of banks,-this
manifestly nothing to get excited about, but, if this
conclusion is correct, it is merely a further indication of
the long range stability of bank earnings.
Harry C. Carr
population, and third, by the condition
total
whole, but so far those have been merely hopes, and it
requires a pretty starry-eyed optimist to believe that
those hopes will materialize, at any rate, in 1950. (No
reference is made to Federal Corporate Income Taxes be¬
cause
these are applicable to all corporations, but the
percentage of the banking industry's earnings taken for
this purpose constitutes a heavy charge.)
Under those
conditions, the climate afforded by government for the
industry to exist under does not hold much promise of
improvement from the rather dreary outlook of the last
is
created,
first, by the conditions of industry,
second, by the income and general
welfare of the individual members
of
rect
commercial
loans.
look forward with confidence to
filled.
w.
Allard
A.
Calkins
continuation of these
backed by the ability
potential buyers have
savings awaiting greater value—lower
increased
;
their
prices—in
some cases, cr
better quality.
The industrial
plant of the nation has been expanded and improved,
productivity has been increased and greater efficiency is
possible in operations.
These factors will make it pos¬
sible for industry to offer greater value to consumers and
yet earn profits that will sustain production, employment
and trade.
All
in the
evidence
points clearly to good levels of activity
construction
industries, especially in residential
construction and public improvements.
a
of all
that provides the cor¬
proper
criticized, at any rate, in so far as soundness
why that unsatisfied demand should not be ful¬
If the above assumptions are correct, then busi¬
generally should continue to be good, and
probably
main good.
'
relationship of the individual in the community
at large to banking, in so far as the effect on the general
welfare and earning power of the banking industry is
Adequate hous¬
concerned, has been in recent years entering into a new
phase. Of course, the banks have always acted as deposi¬
tories for the funds of individuals. But for many years
the banking industry as a
whole had not considered that
it should play a part in supplying the current relatively
small needs per individual of the individual wage earner.
It had left that function to be
exercised and developed
by companies organized for that specific purpose, known
under the general name of finance companies or small
loan companies. In very recent years, however, the bank¬
ing industry has more and more addressed itself to satis¬
fying the needs of such individual small borrowers by
loans direct to them, and probably today two out of every
three
banks in the
function, and in
manner.
an
United
States
are
performing that
increasingly adequate and important
This has
served to bring
the
of
about a relationship
ing will require years of activity in residential building,
between
Schools, water and sewage systems, roads, gas and elec¬
ternity which simply did not exist before except in iso¬
lated cases, and the question then is how will that new
relationship persist during 1950, and what will be its ef¬
fect during that year on the banking industry as a whole.
At the present time there would appear to be total
loans to such individual borrowers by finance companies,
tric services and commercial centers will be
supplement the housing construction.
Banks will par¬
real estate
commercial loans to contractors
ticipate in financing these activities through
loans to home owners,
required to
mass
individuals and the banking fra¬
carpenter; jr.
In
considering what we may expect in business for the
1950, it may be profitable to look back over recent
years for a moment. In doing so we find that during the
last four years we have experienced a very high rate of
industrial activity and commerce in
the exchange of goods and.services.
Also, we can hardly fail to recognize
that over that period there have been
year
a
number
of
factors
of
an
unusual
character which have served to stim¬
ulate
The
accumulated during the war
have been filled, but many wants
to buy remain unsatisfied.
Some
be
s.
Chairman, E. I. du Pont de Nemours & Company
the
general rate of opera¬
tion during 1948 and 1949. If this is correct, then the
climatic condition set by business for banking will re¬
trends well into 1950.
The most urgent of needs
total resources of
should continue during 1950 at the
We
a
combination
the
should
ness
and
the
answer.
ing the last six months of 1949.
Although major strikes obscured the
improvement in indices of business
debits
upon
premise to say that which is
probably well recognized, namely, that the banking in¬
dustry is in a stronger and better position to serve the
people generally than it has ever been in its history, so
that its own inherent situation would appear to offer
It
in inventories.
Business improved consistently dur¬
especially
activity, the evidence was present in
rising trends of bank deposits, bank
banking,
on
banking industry, and on the total operating earnings
of that industry.
Each has its influence, but it is, of
reason
business,
has
its
the
should
consideration
durable, and from both individual consumers and cor¬
porate consumers alike, continues to remain unsatisfied.
With the large amount of liquid funds available for use¬
ful expenditure, and with a great amount of unutilized
credit further available, there would appear to be no
in wholesale commodity
The last months of 1948 and
in
Adding together the three things enumerated above,
no common denominator, is a
mathematical
impossibility. Arriving at the combined result is purely
a
matter
of guesswork
or
judgment, whichever one
wishes to call it. It is the writer's feeling that for the
banking industry as a whole, the weight of evidence is
probably about equally balanced, and that 1950 may
show operating results for the industry approximately
Taking business as the first element, it is the writer's
belief that demand for goods, both durable and non¬
1948 recorded the post¬
writer
relationships with the Federal
industry is practically subject to the
dictates of the United States Treasury Department. That
signedly
which have
Any predictions as to the fu¬
ture, near or otherwise, of the bank¬
ing industry, consequently, must first
endeavor
to
appraise the climatic
cope.
is concerned.
peak
war
prices.
the
year
con¬
conditions imposed by gov¬
used the word imposed de¬
few years.
surrounding it and in which it
mate
little to be
the prospects for 1950.
on
The
climatic
Treasury Department and the Federal Ad¬
ministration may come to realize that this sort of impo¬
sition is not altogether healthy for the economy as a
carr
Banking is essentially a service industry. Serving as
it does the entire community at large, namely, business,
individual enterprises, and various governmental activi¬
ties, it is probably less susceptible to the ups and downs
of the economic cycle than other in¬
dustries in so far as its earnings are
course,
The flow oh money in
measure
con¬
time that the
fluences
President, The Anglo California National Bank
the economy, and
so
What about the
the action of governmental bodies, particularly the
Federal Government. All three have their important in¬
=
on
sequently, believes that the total amount of credit now
outstanding is not excessive. If that is a correct conclu¬
sion, then it would appear that the climatic condition as
regards the banking industry's relationships to its indi¬
and
11
The writer believes that looking at
is little indication that the total amount of credit at that
ernment?
active
business
in 1929.
was
the 1929 situation as above described in retrospect, there
probably be lower, but farming will
profitable.
With
of
ahead.
with
companies, banks and others giving credit,
approximately $18,000,000,000.
This compares
peak figure in 1929," before the depression, of
be
It would
must learn to live in this un¬
loan
the prosperity of manufacturing and construction
industries.
High levels of employment in industry and
trade in prospect for 1950 will provide broad markets
ganda and its incessant calls to hatred among men.
It
small
upon
harry c.
representing a
consumption of more than 350
tons,
a
public
tonnage at least equal to
1950
to
the
American resources will be
industry
paper
finance
to
totaling
stimulative to business.
;
issued
bonds
of
The third basic division of our economy is agriculture.
1949 was a good year for American business
in general and for the kraft paper industry in particular.
Personal income in 1949 amounted to about $212 billion,
The year
will
Thursday, January 19, 1950
Speaks After the Turn of the Year
and purchases
improvements.
calder
alexander
trial
-
26
Business and Finance
any
financial chronicle.
&
commercial
the
(264)
this
industrial
activity.
As the result of the employment of
our
industrial plant
of the
of
war
over the course
period in the manufacture
products for the
armed services,
large segments of industry were con¬
fronted at the end of the war with
the
necessity of making
heavy
ex¬
penditures for repairs and renewal
of plant, as well as for the enlarge¬
ment of capacities which might nor¬
W. S. Carpenter, Jr.
mally have been made over the pre¬
vious period.
Because of the scarcity of many peacetime products
during the war both of a semicapital and consumer goods
type, we found ourselves at the end of the war with a
vast accumulated deficiency of such goods. Industry was,
therefore, faced with the burden of overcoming these
shortages by producing goods during recent years at a
rate substantially larger than normal consumption.
Also, it has been possible and desirable to export the
products of American farms and industry in quantities
greatly in excess of the amount of imports.
In addition to this, the national policy seems to have
indicated the carrying on of a huge arms program.
These and other influences contributed a great and
unusual demand upon
production and provided
a corre¬
sponding consumption.
It is
probable that these excessive demands have been
this period of four years. If
so, we face a period of transition in our economy, from,
one of extraordinary demand and consumption, to that
of a more normal course. In fact, it is possible that we
have already passed through a part of that transition. In
considering what may happen in the future the question
naturally arises—what will replace these extraordinary
in large part satisfied over
elements in
If
these
our economy.
are reasonable, then American
industry in the future must depend to an increasing ex-
assumptions
7"
_
Continued
on page
30
Volume 171
Number 4873
THE
COMMERCIAL
v
Continued
jrom
3
page
"
and
Actually the figure for 1949 of ap¬
proximately $210 billion will be
only fractionally below the 1948
figure of $212 billion; and per¬
also
that
mately $178 billion.
do
light of the developments
stand
we
we
•
Retailers
did not have
we
spiral
in
1949
substantial
of
credit
businessmen,
think
this
for
particularly
true
of
retailers.
are
three
managed
there
assign
the behavior
entitled to praise
behavior in 1949 on at
their
least
to
and
is
Businessmen
downward
a
should
we
counts:
First,
inventories
they
effectively;
ably
thing
somewhat
have
we
less
accom¬
involved in
a downward
spiral of
Production, as meas¬
ured by the Federal Reserve In¬
deflation.
dex.
dropped
off
high point of
still
second
that
a
year
from
maintain
volume.
the
In
de¬
now
mately
7%.
dropped
approximately
remain
chandise moved in 1949
was prac¬
tically
Wholesale
their
at
Have
transition
really
v/e
into
decline
in
were
building construction, auto¬
mobiles and other
able goods
plished.
are
in
the
had
the
the
an
face
of
outlook,
to
place,
courage, in
adverse
ahead
go
programs for
On all these
third
political
with
their
capital expenditure.
business
scores
de¬
consumer
dur¬
production, and busi¬
plant and equipment produc¬
ness
tion.
Activity in all three of these
areas
historically
in
run
over
a
period of time and not all
In all three of these
once.
a
durable goods.
plant
on
1949
dropped
Estimates
high rate during at least the
first half of 1950.
In all three of
of
the
envisage
a
remarked
some
In
mar¬
on
Business spending
equipment during
off in the fourth
quarter in contrast to its behavior
the two preceding
about 14%
A
it
expanded
to be
offering
along these
encouragement
the
area
of
consumer
envisage
a
prospects
for
somewhat
lower
prices should releais some pur¬
chasing
other
of
for
spending
years up
correction before
that
assurance
we
we
can
Continued
in the first quarter of
on
page
a
88,243 Owners
and
f//orCd^wide
BANKING
with
say
embarked
are
normal? Do we, as some
new
observers
think, face, from here
stationary or gradually de¬
won't get it.
clining economy with mounting
unemployment because of the high
In assessing reasons
why we did
not have a serious
business de¬ wage scales that are tending to
serves
praise, though it probably
on,
a
.
pression in 1949
get the cold
under
the
which
1920's.
but
rather
continuing
an
interim
truce.
uneasy
is
the
visualize
we
existing in
as
difference
of
characterized
of armed and
scale of
on our
a
eco¬
activity.
In fact, for the
bringing about the
long-hoped-for collapse of Ameri¬
of
purpose
can
price labor out of the market and
the continuing social
antipathy to
business profits that tends to
capitalism, Stalin might have
The Chase National Bank
pre¬
vent
adequate accumulation
capital for replacement and
pansion?
But
The
important; it has
marked effect
nomic
We do not live
illusion
peace
ourselves
must not for¬
we
war.
these
long-range
selves
latter
Let's
more
tie
1949, and
ex¬
questions
ones.
down
department
There
are
store
In
business.
and allowed
$2.37
ourselves in with the comfortable
for retail business but for
business
in general the trend of
illusions of isolationism.
income
is
Paid
though
the
once
more
to wall
In
coming closer to an ap¬
praisal of the present business
situation
it
be inquired
may
cifically what
caused
the
spe¬
upturn
in the middle of 1949. At the time
there
was
some
surmise that
ad¬
ordering in anticipation of
vance
the steel strike marked the turn¬
ing point.
This
partly true, but
the
facts
that
have
been
more
basic
were
inventory adjust¬
substantially com¬
ment had been
pleted
may
that
and
the
fundamental
strength of backlog demand
serted
itself.
exceedingly
appraising
important
underlying
for
In
strength
be
forgotten
that
of
demand
goods
for business capital goods
not
this
factor
of
durable
consumer
reas¬
and
it must
there
are
tivity
has increased,
new
inven¬
tions and discoveries have multi¬
plied,
ened.
the
our
horizons
have
broad¬
and the accomplishments of
wartime
to shake
us
period
have
out of the
served
lethargy of
mature economy concept.
lowing the completion of
demand
same
reasserted
time,
sumer
the
income,
itself.
was
stability
current
latest
for
as
well
as
the sta¬
bility of the ratio of expenditure
to
that
income, helped to restore
total
little
trend
October,
annual
figure
is
Al¬
for
below
during the
that the public could
past year.
$19,464,000 net ($2.63
per
per
share, compared with
share in 1948);
which
1948,
slightly downward
offset
to
some
billion.
Paid
and official staff in New
This
by the ef¬
capital funds to $345,000,000;
Increased its
deposits to $4,384,572,390;
Had loans of
arising from the veterans' insur¬
individuals at the
wage
payments. On the other hand,
will probably take some
farmers
Handled
cut in income in
1950.
But on
the whole it appears that no
great
decline in total consumer income
is
to
be
anticipated, at least for
The
spending ratio
disposable
income
their
—
These
billion.
This
a
ratio
(after
established
ous
the
of
consumer
growth
credit may well be
problem
of
the
quarterly
during
year
-
incidence
income
the
tends
year
during which the Chase,
as
in the past
records for volume of transactions and number of
new
York, throughout the nation, and
4 A
I
overseas.
■»
President
con¬
a
/
Chairman Board of Directors
seri¬
next six months we must not for¬
that
eventful
by the end of 1950.
hand, looking at the
On the other
get
of 700,000 checks in New York.
augmented by
use
credit; and this development ap¬
pears probable, in fact to such an
that
average
an
served in New
customers
**"
liberal
more
year-end;
fairly
appears
It could be
daily
highlights of
are
three years,
Of
taxes) of approximately $191 bil¬
lion at an annual rate, consumers
are
now
spending roughly $178
stable.
a
$1,350,507,126 (net) to corporations, firms and
V.M'
the first half of 1950.
(2)
f
Increased its
settlements.
Like¬
wise there is, of course, the tem¬
porary boost of about $2.8 billion
ance
York;
be
fects of the minimum
wage and
also by the
monetary value of va¬
rious fringe benefits obtained in
recent
share),
$24,356,000 in salaries to 6,800 members of the clerical
the
trend may
extent
per
amounting to 60.8% of net earnings and profits;
the
at
was
$11,840,000 in cash dividends ($1.60
1949
downward, the
being that
rate of $208
extent
con¬
Earned
available figure
sumer
of
highly important.
very
inven¬
At the
the press so
consumer
So fol¬
tory adjustment this basic backlog
1
(1) Consumer income—Not only
powerful growth factors at work.
Population has increased, produc¬
to
brief, during 1949 the Chase
factors to
us
time released it
our¬
been smarter if he had called off
the dogs in the postwar
period
same
specifically to
the usual list of critical
be evaluated:
are
the
at
be informed of the Bank's activities
the outlook for
1950, first for busi¬
ness
in
general and second for
the
recently sent to shareholders its Annual Report for
of
first
to
tax
CHASE
THE
NATIONAL
of
BANK OF THE
CITY OF NEW
two
Member Federal Deposit Insurance Corporation
payments
quarter
restrain
of
the
spending,
.
T,
I
i.;
'■'.1
i
v
—■,
i
i
;
■
i
m,i
ni
ii
(•".J.iO.iVU'Hl
:.V
to
1949, inventory accumulation was
did
soon
on
goods.
During the postwar
years.
decline
power
consumer
Report to the Bank's
greatly
Or
non¬
durable goods it should be borne
in mind that textiles have staged
postwar
and
may
parenthetically, the
seems
ques¬
they still unhealthy elements
economy that will require
a
and
during
a
number
estimates
business
be
falling off of 8% to 10% from the a substantial recovery from their
record-breaking
production
of decline in the early part of 1949
1949.
Obviously competition is and hence may be due for an¬
going to be more in evidence, and other readjustment period some¬
this.applies also to other consumer time in 1950.
In the food sector,
the
on
the
Most
at
and
made
new
economy?
the readjustment end too
in
areas
riages.
automobile
activity bids fair to be sustained
These
strengthened
Then
(and just now,
lines).
major areas in
business activity was sus¬
tained at a high rate
during 1949
normal period, perhaps in some
respects resembling the 1920's but
as high as it was in 1948.
Without prompt price adjustments
this could not have been accom¬
businessmen
expansion
prices
10%
low.
important unanswered
an
factors, among them the abil¬
ity of business to obtain funds for
definitely forecast by the
demand
and
readjustment though still a
definite one.
But there remain
with
able
ment is
supply
mild
tions.
high rate for
in No¬
ago
some
partment store field it is probable
that the physical volume of mer¬
a
point in July,
moved up approxi¬
offering of special values helped
to
through at
carry
29
1950; but plant and equipment
spending hinges on many change¬
the
policies, es¬
pecially in the retail field, were
kept flexible; markdowns and the
price
there
tapering off
the first six
Basic
movements may be termed a rather
place,
however,
some
the low
to
has
and
17%
be
in the latter part of the
year. Con¬
struction
now
under
way
will
stock market
plished a major postwar inven- 1 at
tory readjustment without getting
losses
taken promptly. In the
One
competition has
With
say
vember
were
situations,
well
has tended to
cycles, fundamentally be¬
certainty, but still with consid¬ cause such goods have a
long life;
erable confidence, we can prob¬
i.e., they are consumed gradually
relatively little mer¬
speculation, judged by
previous
experience;
inventory
adjustments were made early, and
was
chandise
and
over
returned.
Then, also, in seeking to explain
why
I
Acted
today?
probably say with
certainty is that the big postwar
can
boom is
How
these
could
situations—Three
1949 at
approxi¬
minor deter¬
some
which
Over
during 1949, and particularly dur¬
ing the second half of 1949, where
annual rate of
that
months; at some point,
however, the building boom is go¬
ing to flatten out; such a develop¬
(3)
Postwar Boom Is
(265)
spending might arise dur¬
cise taxes.
of the boat.
sonal
consumption expenditures,
though running below the 1948
ratio to income, have remained
remaikably stable throughout
an
CHRONICLE
*
ing this period from delay, accom¬
panied by long-drawn-out discus¬
sion, in the repeal of wartime ex¬
balance and minimize the rocking
In the
FINANCIAL
t
rent to
Retail Outlook for 19S0
&
•
YORK
31
J
SO
Continued
from
tent upon
purchases for current consumption. If we may
the confidence of the public is not im¬
that
ticularly in the political Ifield both foreign and domestic,
which may induce a gradually increasing anxiety upon
the part of our people. However, in anticipating so short
a period ahead as one year, it is probable that such a dis¬
turbance of confidence on the part of the people as a
-whole should not be sufficiently sudden or important to
'upset the present stability in our current, economic life.
"In view of these circumstances,
it is reasonable to
sup-
Jpose that we should be able to carry through the year
1950 without too great a change from present conditions.
-
•
•.
'*i "
: •• •
;
G. CASTLE
LEWIS
The
mining of iron ore, together with timber and
shipping, constitute; three major industries in northern
Minnesota, and Duluth is the gateway to these enter¬
prises. For the coming year ahead it appears that activity
will continue close to the volume maintained
The
wholesale and
retail
1949.
in
business,
although reduced
percentage-wise, is continuing on a sound basis, and
our harbor will also be the gateway for
grains coming
from the Far West, as it has been in the past.
Con¬
siderable building and new construction is anticipated
for 1950, and on the whole we feel that a broad view of
conditions
in
this
permit
coming
area
fairly
a
confident
year.
,
pre¬
.
JAMES L. CARSON
In Canada the tide of
has
avoided
recession
a
of
type experienced in the United
States.
Exports
vital to Canada's
are
econ¬
Looking ahead, the sale of our
export surpluses is not too assuring,
largely because Britain is likely to
fewer
Canada.
appreciate
It
in
spend
in
realistic and
largest market
must
we
economic
life
is
closely
linked with that of the United States
and, with
ishing,
Canada
United
on
to
note
will
States
that
be
the
over
British purchases dimin¬
even
other
and
past
heavily
more
markets.
30
years
It
dependent
interesting
is
-
the
United
States
has sold
more goods to us than she has
purchased from
the extent of $7 billion.
Canada is the United
to
us,
States' best customer.
There should be a give-and-take
This all makes for the advancement of inter¬
policy.
national
understanding and goodwill between nations—
objective.
Can we not hope for a
most
a
desirable
reduction in tariffs and
cedure,
that
so
a simplification of Customs
pro¬
Canadian■>products can get into
and bring the trade between the
more
the American market
two countries into better balance.
The Canadian North has
possibly the greatest reservoir
of undeveloped wealth in the world.
20%
of the total
veyed
has been
area
To
explored, mapped,
sur¬
or
prospected.
future has in store.
Another
arm
in
strength is water
power
sheds and the
have
something like 100 million potential horespower,
which is enough to drive the
machinery of a top-rank¬
ing industrial nation and to supply its homes.
The range Of minerals is so great as to include
species of importance, and in
every
The mineralized
is
area
to be ample reserve of
asbestos,
maintain
current
As
next
we
nearly
quantities.
mean
lead zinc, titanium,
and natural gas, to
copper,
uranium, oil
production and possibly to double
quarter century.
are
no
vast that there would appear
so
gold,
iron, coal,
in the
in
now
in
test
the
this
is
adverse
'
,
world's history.
but its place is
In the
In
of
the
most
remarkable
aluminum and gold, and in the
power,
we
of external trade
in
gross
our
loans
the
newsprint, Canada stands first in the world.
are
second.
Canada
stands
in copper, zinc and silver, and fourth in lead.
and
in
eras
Canada is not at the top of the world,
export of wheat,
stand second per
we
volume.
«
In
While
contributions
to
the
in which
20th
we
arising
century
are
forge ahead.
tremendous.
forward
to
business
as
doing
in
•
the
out "of
not be
may
economic
at
are
economic
the
era.
Ours
nomic, political and spiritual.
ours
let
our
us
also
have
due
opportunities
industries
last
as
detri¬
were
which
level
of
is
a
great
The
of
State
a
regard for
and
priceless liberties.
at
the
sharing
same
an
Construction
Alabama
in
our
time
so
utility
in
the state,
sideration
a
is
privileges
safeguarding
be
opening of several new
These include the first
will
factor
unit of the multimillion dollar General Foods' plant: the
Corporation; the Longview Fibre Com¬
to mention
and the Andre Paper Box Company,
the first
of
months
10
announced.
1949, 58
facilities
existing
of
With
a
new
in
combined
plants and 77
County
Alameda
some
expected to create
are
investment of
1,100
Although industrial growth in 1949 fell below that in
high
the
previous year, encouraging signs of renewed interest
plant locations were evidenced in the closing months
the year.
All in all, the Oakland Area seemingly
enters 1950 with prospects more favorable
than most
in
of
experi¬
of.
has under
plans for
sections of the
United
States.
con¬
ROBERT
John
approximately $20 million for ad¬
generators, new extensions,
In
electrification and increase of other facilities. The
1951.
V'.v'
some
is not
The cotton crop esti¬
mate for 1949 is 865,000 bales compared to production
in 1948 of 1,197,000 bales.
This decrease was due to
rainfall
extensive
the
to
and
weevil.
boll
The
severe
placement
of
of
sections.
tenant
farmers
in
others
and
dis¬
number
a
While
a
majority of the farmers appear
quota restriction they did not antici¬
pate that the reduction would be so drastic in so many
to have favored
individual
numerous
a
cases.
as
The
cotton
peanut
planters
difficulties with quota
while
experiencing
growers
are
not as
similar
allotments.
The production of
ing and
planting
blooded cattle is constantly increas¬
greater diversification of crops and scientific
are
leading to
sounder economic condition in
a
the
1950
oil
will be faced with several
these are new, some continuing;
some are common to all industry, some peculiar to oil.
I will discuss briefly a few of the more important ones
problems.
industry
Some
of
their probable
what
indicate
to
fluence will be
on
our
in¬
affairs.
--
First, what is the public's demand
for petroleum likely to be? Probably
more than in 1949 by about 6%, that
is,
350,000 barrels per day. Of
demand for petroleum de¬
by
course,
pends
on
general business. The pres¬
for
general
business
outlook
ent
sections of the state the outlook for the farmer
good as in recent years.
as
COLLEY
President, The Atlantic Refining Company
Coleman
S.
capacity of the steam plant at Chickasaw near Mobile is
being increased 40,000 kilowatts and that of the Gorgas
plant near Birmingham is being increased by 100,000
kilowatts.
This increase will give a capacity of 290,000
kilowatts at Gorgas, making it one of the largest steam
generating centers in the South.
The 'Southern Natural
Gas Co. has just announced plans for a proposed $32.5
million expansion program to meet increased demand,
particularly in the Birmingham area. It is contemplated
that $18,360,000 will be spent in 1950 and $15,160,000 in
In
II.
expenditure
an
ditional
rural
in
conditions
looks
ing
individuals,
by
Federal,
current
through
industrial
5
a
local
and
govern¬
level higher than
and consequently
will increase, at
the first half of the
year.' For the
be
It
rate,
activity
business
least
businesses,
and
state
ments will be at
the
is favorable.
1950
if the total volume of spend¬
as
year as a
whole, total
Robert H. Colley
production is expected to
10%
to
higher than in 1949.
problem is well in hand. There is
now
no
question that the oil industry will be able to
supply all the demand forecast for 1950. But there are
still long-term oil supply problems.
First, oil must be
found this year to replace the oil taken out of the
short-term
The
a big job, calling for the
Moare
increase in demand of 350,000
barrels per day—128,000,000 for the year—will require
over a billion barrels of additional reserves, since only
last
ground
agriculture.
year.
This is
discovery and development of two billion barrels.
than
C.
CLARK
President, Centra! Bank, Oakland, Cal.
that,
about
Government policies are likely to
effect upon business trends in
bilities
have a pronounced
Some of the possi¬
1950.
disturbing, particularly the proposals for new
expenditures and increased taxation.
The return to deficit financing has
inflationary implications.
Stimulus
may be provided for too sharp and
are
temporary
an
in
upturn
business
which in the long run would be in¬
jurious
to
the
economy.
The
in¬
evitable downturn would be hastened
intensified
made
in
were
already
The
an
increase
burdensome
rates.
tax
and
of
increase
in
taxa¬
tion.
In
fact,
lower
taxes
are
urgently needed, particularly in the
field of excises to aid certain indus¬
tries, and in individual surtax rates
and the treatment of dividends to afford
to investment in
Because of the uncertainties
gress on
upon
more
incentive
equity securities.
regarding action by Con¬
expenditures and taxes and the possible effects
economic conditions, it is obvious that opinion
upon
meet
of
new
an
reserves
can
be taken out the first
its responsibility to
public to be prepared for any national emergency.
This means that besides developing reserves sufficient
to care for expected growth of demand, there must be
provided a margin of safety. This is an especially acute
problem because of the uncertainty of the extent of our
own
pretroleum resources, which were used freely for
many years to supply oil to foreign countries.
To provide
this margin, most of the industry considers it of utmost
importance to go to all parts of the world to seek oil,
besides thoroughly exploring the United States. This is
a problem of great concern to the American people, for
Second, the oil industry realizes
the
best
avoidance
10%
to
year.
the
*
hope for continuance of
prosperous conditions without either
boom or depression lies in a reduc¬
tion in " governmental expenditures
and
doing
the
plants early in 1950.
local
industrial
bama Power Co., the largest electric
been
increas¬
ficial
$12,000,000, these projects
new jobs when completed.
much
as
fine industrial growth. Ala¬
heritage—eco¬
We must take
particular localities and industries, there is basis for
were
lumber, cement and other build¬
ing materials should remain good.
war
new
'
conservative optimism as to business prospects in general.
In the Metropolitan Oakland Area, a particularly bene¬
In
for
alone, it is
a
;
activity and employment should prevail throughout 1950.
The adjustments responsible for a downward trend in
pany;
felt.
that the demand
means
gifts,
late
.
American Blower
year.
will also Too doubt remain on
second,
development has
threshold
ing share in shaping human destiny, and
and
being
about
1949.
-
Dunlap C. Clark
greater
lines of business.
same
The steel and iron companies look
third
our
;
,
prevail in Congress and in the exec¬
high levels of business
If wise counsels
expansions
forging ahead and should continue
Our
We
still
and
are
we
matter of
utive branch of the government,
proximated those of last
capita, and third
living standards
a
i ;.
.
affairs.
and international
business
However,
department store
sales
during the recent holiday reason ap¬
totalled $6 billion.
one
many
coal
and
sales
and
the
activity, and-some
are
In volume
prosperity is reflected in the fact that
and
steel
production
about
competition-, in
DUNLAP
increasingly important.
hydro electric
of
be
will
year
production of nickel, platinum, asbestos, radium,
uranium and
effects
'
1950, the
:
only a few of the major ones.
20th
one
1950
it
which marks the
century, we can appropriately view
the changes which are taking place, because
by every
turn
in
reduction this year in cotton quotas will cause the
national
our
In the St. Lawrence and Hudson
Bay water¬
numerous rivers of British Columbia we
resources.
district
mental to business
date less than
appraised and less than half of this part has
The spectacular development in oil
production in Alberta is just one instance of what the
been
expected that the level
encing
purchases from her.
Canada's
is
this
year with more
Strikes in the
prepared to increase considex-ably
our
James L. Carson
to
be
must
that if she is to remain
second
our
be
dollars
We
will be
1950
well will have a
bearing on business trends. If inflationary dangers again
become acute, there will be renewed agitation for new,
credit controls.
Experience under the emergency controis authorized by Congress in 1948 bore out the- fears
of banking groups that adverse effects would outweigh,
the; advantages.
Major reliance on voluntary credit re¬
straints promises the most satisfactory results.
The business situation may be affected also by other
government policies such as those relating to labor, bigr
in
President, Birmingham Trust National Bank
omy.
have
during
appraisal.
desirable.
the year just ended.
Canada
business
of
business during the first half of 1949 were on the whole,
While conditions may become unsatisfactory
1
JOHN S. COLEMAN
prosperity has continued during
Industrial production is at a peace¬
time high.
Capital expenditures continue to be heavy.
Purchasing power remains strong and retail, sales are
above those of. a year ago. American
capital is flowing into Canada and
employment is plentiful. Thus far
trend
continuous
Government policies in other fields as
President, The Bank of Toronto
the
Thursday, January 19, 1959
the
President, Northern Minnesota National Bank of Duluth
view of business for the
;
CHRONICLE
Finance Speaks After the Tarn of the Year
portantly disturbed by unusual events, it is not unrea¬
sonable to expect that such a condition will flow nor¬
mally. To be spre, there are a number of elements, par¬
*
FINANCIAL
&
28
page
Business and
-assume
COMMERCIAL
THE
(266)
following reason:
There
sources
of
oil
the
is
now
little
doubt
that
of the rest of the world
United
industry
to
States.
Unless
the
are
potential oil
re¬
greater than those
America
encourages
its
enter the
foreign field, this abundant
supply might become firmly controlled by foreign oper¬
ators, even by potential enemies.
Then one day this
nation might find itself seriously worried
about the
adequacy of its oil supply.
During 1950 competition will be intensified.
Produc¬
tive capacity will be higher in relation to current de¬
mands than at any time since the war; internal compe¬
tition will be keener.
Moreover, the industry faces
sharper outside competition, particularly from natural
Continued
on
page
32
Volume 171
Number 4873
THE
COMMERCIAL &
FINANCIAL
CHRONICLE
(267)
31
Continued from page 29
total
result
bearing
Retail Outlook for 1950
what
of
of
a
'these
all
factors
prices will be
on
standoff,
retardation
of
at least
or
downward
major stimulus to business ac¬
tivity. In 1949, inventory declines
had
the reverse
the
most
effect.
reasonable
greatly
On the monetary
be
inventory accumu¬
inventory depletion will
nor
affect
business
significantly; if anything,
little
a
more
net
sustain
exports
business
trade
themselves
To
It follows that
in
these
erned
national
our-
matters
should
on
our
net
probable
us
in¬
do
in the
to
seems
for
argue
of
inflationary
in
not
and
and
altogether,
in
equipment
1950'
the
con¬
be
about
59
following:
Activity
million and
for
The
—
of
most
60
the
million, at least
Unemploy¬
year.
ment,
proximately 175, is likely to
lion, will probably rise to 4 or'4.3
range
between 170 and 180 for the year.
probably slip off
140's.
to
The
at
168,
little,
a
retail
is also
(4)
to
little under 3.5 mil-r
Business
Profits
—
In
gen¬
erately lower in 1950 than in 1949,
price
because
likely
perhaps
a
eral, business profits will be mod¬
little, into the
consumer
now
drop
a
now
million.
(2) Prices—The general whole¬
sale price index, now at 151, will
industries; index,
should
the
the
of
tougher
Continued
the
competi-
on
page
of
a
a rise in prices.
sharp advance in
a
burst of business
The
situation
year.
All
far
and
during the
in
Ample
the
as
eAcct
demand
com¬
;.:'U
;
■
Goods
So
fairly
a
Mon¬
plant
of readjustment
for
Business
Employment—The number
jobs may well remain between
some, deflation¬
influence in the American do
ing
balance
of
be
factors
Supply
of
supply
price
on
is
high level of business activity dur¬
ing the first part of 1950 (partly
concerned,
this is true because of
icant merchandise sliortages. Prac¬
there
tem¬
some
it
are
is
longer
no
tically
by the steel strike) and for some
lessening in this degree of activity
supply, and there-
in the latter part of the
year.
clear
that
signif¬
any
mounting
(4)
The
.is
Labor
million,
at
at
approximately
slightly
under
»Even if the
men!
same
continues,
peeted
that
I figures
will
advent of
.? ers
3.5
it
is
59.5
be
ex-
600,000
scene
It
is
a
;
probably exceed 4 million
dime
before: the
end
of
reach 4.5 million.
<may
changes
iwage
to
-seem
be
edging
-Aside
from
(strike,
no
and
Important
the
improbable,
year
though
grad-
be
of fringe
up
some-
1950
during
there will presumably
iual
a
benefits.
the
existing
eoal
serious labor dis¬
very
putes seem likely to hamper pro¬
duction in 1950.
■,.■■■■
(5)
Spending
Taxation—The sober fact
1950.
(1
is
and
that
spending will rise in
about
was
to
add
the
words
"as usual," but let's not let
ourselves get hardened to these
high government expenditures; on
the
contrary, we ought to yell to
high heaven about them.) Presi¬
dent Truman has called for
eral
budget
state
a
Fed¬
of
$42 billion, and
municipal expenditures
and
once
will
more
rise.
The Federal
budget will not be balanced, §ince
spending will not be cut and no
net
increase
in
taxes
excise
Wartime
taxes
is
likeiy.
probably
will be removed, at least to some
extent; but the difference may be
made
in
up
slightly higher
cor¬
poration taxes and/or higher taxes
on
upper-bracket
personal -in¬
The net result of govern¬
comes.
ment
fiscal
called
policy (if it can be
policy)' in 1950 will be a
a
continuation
In the short
ment
long
of
run
deficit
spending.
that tends to aug¬
business
run
paid.>
activity;
in
the
the piper will have to be
'
-
(6)'Prices-—As always, prices are
the key factor in the situation.
One of the important reasons
why
we did not have a serious
business
depression
in
wholesale
price
only about
do
not
have
1949
10%.
government
.
was
level
We
that
the
dropped
ordinarily
serious business
j
p
de¬
FERTILE
■
■
ca^ds
wouia pe on ,uie cards,
Bananas
influenced not only
factors
was
a
temperamental.
are
luscious
The
(ires
and
supply
but also by
an<* demand factors
businessmen s expectations. Today
j business sentiment is notably betthan it
FARMLANDS.
Jsu
orient
be on the
would
.
ter
OF
sup-
a
ago.
years we
shadow
craves
lands of Middle America
the rieh silts and bottom
not
the
higher regions,
oper¬
ated
Michel, for instance,
Dur¬
ing the last three
under
year
the
anticipated
postwar
of
an
adjustment without
.
.
.
■cultivated and inhabited for centuries.
inventory
liquidation depression of the 1921
type.
Now we seem to have got
through an important inventory
To
seri7
any very
give the hanana the land it loves,
vast acres
of
ous
consequences, and hence busi¬
ness
has stopped
looking
under
the bed every night for the
(Parenthetically it
remarked
that
situation;
it
of
is
the
depressions that
in
unadvertrsed
from
tive
somewhat bet¬
a
he earved from dense jungle. Thick
must
he cleared, stagnant water drained
impenetrable
land
—
swamps.
Land—tillable, produc¬
actually be created.
must
As banana
feeling between business and
government today than- there
Businessmen
ago.
year
that Congress is
any
election
can
Perhaps
differentiate
nomic
the
If
programs.
off
toward
there
creased
into being,
so
be
in
:
r.
So it goes.
lit¬
■
.
■
'
'
•
Through scientific cultivation of
lands, the banana industry creates
eco¬
business
middle
talk
areas.
<■>
of
waste¬
of
new
fertile farms
for Middle America.
unemployment
will
do inhabitable
in¬
deficit
larly in
tion.
the
and
year
grows,
come
cam¬
literature and serious,
slacks
plantations
also
a
accurately between
more
paign
legislation
year.
now
was
know
bulwark against
a
radical
very
this
they
tle
underbrush
is
are
also that there is
a
.
must
this
likely to be
It is probably true
the bad ones.)
ter
be
there
danger
plantations
bogey¬
may
perhaps
element
some
In
dangers
spending, particu¬
anticipation of the elec-?
spite of the long-run
inherent
in
such
deficit
spending, the prospect of it would
be
bullish
tions.
we
of
on
Let's
the
business
not
cold
expecta¬
forget' also
be due for
may
some
in
war
that
U NITED
warniup
1950,
of
Tito.
Such
a
FRUIT
C 0 M PA NY
either
through trouble in- the East or
through the attempted liquidation
of
warmup
80 Federal
Street, Boston 10, Mass.
the
cold
war
could easily result in
larger military appropriations and
in
some
Such
wise
state
pressions accompanied by such a
price decline. It should be
on
rioted, however, that whereas the
production rate has gained about
price
commodity
developments
stockpiling.
would
contribute to bullish
tations.
small
price
.
f^ic|s
man.
Government
government
for
not
work- i
new
yearly.
fair guess that unemployment wilt
CREATORS
basic
because
t
ample
in fact seri¬
are
factors
unemployment I
Prices are
of the1 ky
monetary
the
in
are
supply and de¬
may be regarded as
pointing
toward
a
[somewhat
lower price level in 1950. Were it
million.
to
the
mand
standing
rate of employ-
rise
some
the
on
Hence
Emplownent—
unemployment
goods
problems with respect to our
agricultural surpluses.
ous
level of employment
present
steady
and
all
quite
porary supply deficiencies caused
,
not yet know what faces
we
(3)
of
I
year,
government
mestic
.forces in the several supply and
demand situations just - enumer¬
•
ventory readjustment, but
more
j continue to exert,
economy.
Business in 1950
!
here;
look
next
point in the same direc¬
widespread currency
devaluation of 1949, which may
not yet have been completed, wil
tion.
ary
t
is
postwar
yardarm
noted,
gov¬
Expects Fairly High Level of
ated
the
something
that you can hang me
so
the de¬
happen in 1950, but there is no ni¬
di elation that
it
will.,
Not all
monetary factors,
it should be
ing world trade generally rather
than by calculations of immediate
The
by
lower 160's, with most of
cline in food prices.
may
activity
in
placing orders that begin to mop
up available supplies; this eouW
by the objective of restor¬
direct effects
.
competition
got
If I
to translate these
cause
trigger off
and/or
policy
be
1950 would
inference.
do
prices it takes
of less importance
in the United States.
are
these facts that
conditions
potentialities
and
they
from
unwarranted
etary
of
foreign
ago,
and
have
1949.
as
into
Federal Reserve Index, now at
ap¬
struction, automobile, and business
conclude
an
the actual economic effects of
than
year
over,
we
way
priees will rise in
during
helped
activity.
In
imports are not a
l'arge moment in our
total picture.
Probably in no other
country except
possibly Russia
are
a
is
,
1950 the prospect is for a decline
in the net export balance.
But
matter
gov¬
noted
(1)
outlook: essentially the boom
ness
year
the
should
the general busi¬
bank loans are now rising, thus
augmenting the supply of money.
accum¬
likely than
export balance
three years has
past
to
can
inflationary;
that, con¬
are
be
may
trary to the situation
depletion.
The
it
side there
continued
deficits
ernment
To summarize
To
ulation is
the
that
doubt
no
Also
activity
Summary
still at their low point.
are
1950
assumption
is that neither
lation
For
7% from its bottom in July, prices
a
specific
from
s
;
good
be rash enough
generalities
a
price
tendencies.
a
as
some¬
mind
of
1950 seems more
the
minus
expec¬
Altogether, therefore, the
of
plus
side
businessmen
in
in
likely, to operate
side
its
movements.
than
;
BRITISH
HONDURAS, COLOMBIA, COSTA
RICA, CUBA,
DOMINICAN
REPUBLIC, EL SALVADOR
like¬
the
on
influence on
Perhaps the
.
GUATEMALA,
HONDURAS,
JAMAICA,
B.W.I.,
NICARAGUA,
PANAMA,
CANAL
ZONE
33
32
Continued
from
page
30
'
,
/
•
Speaks After the Turn of the Year
Business and Finance
gas.
The continued growth in
facilities and the construction of
markets
natural gas productive
pipelines to many new
challenging the oil industry.
are
Increasing competition will keep the industry on its
toes; will benefit the public.
It will mean further in¬
creases
in the quality of products, to permit more
efficient use of automobiles, heaters, and other equip¬
ment.
It will mean also that oil will find its lowest
with the free interplay
possible price level in accord
of supply and demand.
the
problems and influences described above will
as
they will the rest of the industry.
Atlantic
expect to do our full share in meeting demands
We
good
for banking.
will at least match
Unfortunately, there is one particularly
in
preparing for the longer future. Our capital
outlays for productive facilities will be about one-eighth
less than in 1949 and 1948, years when we still had on
our hands the job of replacing facilities worn out during
1950 and in
they will be at a level far in. excess of any
Many millions of dollars will go into
searching for oil .and drilling wells; the completion of
two new pipelines; new lubricating oil equipment and
other
refinery improvements; storage facilities; new
the war, but
earlier year.
continue at
Government
an
We
are
growth of America. We are confident that the standard
of living of this country can be expanded, if essential
freedoms are preserved and if incentive is provided for
the exercise of the initiative and individual energy which
have made America great.
a
given to the adjustment in general business con¬
The banks now are crossing the threshold of
ditions.
equipped with resources
equal to whatever service they
may find opportunity to perform in the New Year. In 1950
as in the past, the privately owned banks of the nation
will strive to increase their contribution to the economic
1950 in
The future magnitude of
advancement of our country.
will be the best measure
contribution
and progress.
success
,
v
,,
,
of banking
>
,
The general program
first
last
quarter
of
in
strikes in
steel
deficiencies,
made
up,
tions
coal
and
which
resulted
The first half of 1950 should be
still
are
created
be
to
other
way,
are
weeks.
Thereafter,
impact of world-wide currency
more
labor and other costs
the domestic market under the
items
Jr.
ahead
hinge largely
the
the
upon
progress
year
the Nation's
of
Banking is the servant of general business: of
agriculture, of mining, of manufacturing and of distritribution.
What happens in general
business finally is reflected in bank¬
economy.
ing.
■
In
» | r ■■■
considering
„.
business
..
the
outlook
for
in
general, and thus for
banking, there is ground for en¬
couragement in the trend of recent
banking data.
individuals
Checking accounts of
and
businesses
are
slightly higher than a year ago, and
they represent a considerable gain in
potential
buying power because of
the lower prices which now prevail.
It is also
ings
banks,
loan
Sidney B. Congdon
gratifying to note that
accumulated
savings
banks,
associations and
companies
last
with
year.
sav¬
commercial
savings
and
life insurance
likewise higher than
are
Thus
our
families
have
increased their security, and in so doing have given tang¬
evidence
ible
economic
dividual
system.
in the future
confidence
It is
so many
reach
the
of
of
our
heartening to observe that in¬
thrift, tor which there is
practiced by
A.s
their
of
our
turn
of
no
substitute, is still
people.
the
there are other
indications that there will be good business at least in
the early part of 1950.
Personal incomes after adjust¬
ment for lower prices are at or slightly above the level
of a year ago. Surveys of consumer buying plans sug¬
gest that automobiles and appliances are going to move
we
year,
in
good volume. Construction contracts have been run¬
ning at a high level, so that vital industry will be off
to
a
can
good start.
Capital expansion by business hardly
attain the peaks of recent years, but
be expected to
deficits
splendid and profitable year in
will enjoy a
1950, particularly in the underwriting
capital securities.
and distributing
of venture
War this country
World
first
the
Since
has been a
but has failed to act as a creditor. We
have continually sought unsound methods to sell more
creditor country,
debtor countries than we bought from them,
resulting in gifts and unsound loans. We should now re¬
that policy, plan to become larger consumers, plan
to consume the major part of our own production plus a
goods to
determine
fluctuations.
we
our
railroad
is
watching
J. Russel
Coulter
The T. P. & W. depends
If retailers and wholesalers
manufacturing—and traffic—slows down,
traffic for income.
necessity of continuing gifts and un¬
To effect such a program will require
Federal tax structure that will permit
corporate and individual initiative to function at their
best. If along with such a program the government should
practice economy in givemment, we would be off to a
long period of sound prosperity that nothing could punc^
ture other than war. In the absence of such a program
I feel we should all recognize that the good year ahead
that
major factor in our economy is
enough, the future
the farmer.
of the farmer lies
we
adopt
could prove
a
only temporary.
Inter¬
in the
reduction—then
poor crop weather, can mean financial loss for the farmer
in spite of government price support. A crop failure is
a crop failure whether corn is 50 cents or $5.00 a bushel.
The farmer is in good shape today (except for sky¬
rocketed fixed real estate taxes), but he knows better
than anyone else when to quit buying.
In the Midwest,
many farmers can live on their milk sales, but they pay
their taxes, buy their machinery, their trucks and cars,
their furniture and barns with crop and livestock profits.
Poor crop prospects can reduce their manufactured pur¬
chases to almost nothing in a period of weeks. They
will know by June or July, but not until then.
No pur¬
chases, frozen inventories, halted manufacturing, unem¬
ployment and repetition, by logarithmic cumulation. Not
weather—not
banking business in the
erty that has not been inflated. With government
cumulatively.
A
President, The National City Bank of Cleveland
on
sound loans by us.
con¬
Colvin,
yield
would obviate the
but
cut inventory,
H.
stocks is about 61/2%
high-grade bonds. Corporations can now
afford to distribute a more liberal portion of earnings
as dividends.
Stocks seem to be the only form of prop¬
age
also know it
good,
estingly
for
business
highly speculative guesses.
upon
SIDNEY B. CONGDON
prospects
difficult/to/
what
not be.
all
i-
The
The more
are
wholesaler, politics, and the weather,
W.
The average yield on 30 high-grade
compared to 2.61% aver¬
$260 billion.
as
common
by all statistics that 1950
be
What
ditions which will then exist.
high
Such a plan
They would
help build this country and help to provide our countless
needed capital assets of the future. Such a plan would
provide an expanding economy and prosperity in this
country that would spread to other parts of the world
enabling foreign countries to discharge their debts to
us and in turn buy more goods from us.
Most of all, it
all favorable indica¬
closely is the fluctuating optimisms
or
pessimism of the retailer and
capacity to produce steel for
of
part of the production of debtor countries.
would put those countries to work for us.
my
which,
unfortunately, are
less valueless as absolute
may
increased, will reveal this country's
excess
or
will
being
are
—
We know
the
de¬
highly satisfactory in 1950. In the
savings in the hands
individuals have reached a colossal sum estimated as
meantime liquid
verse
thoughts are too
personal opinion
our
It is
"short-term"
preciation and American tariff de¬
creases, both at a time when Amer¬
ican
of
& Western Rail¬
in the heart of the Midwest
belt,
earthy.
gauge
inventory accounts sub¬
stantially out of balance which are
being corrected.
This will take a
few
prediction
basing
measurements.
situa¬
In
business
mercial
the public se¬
addition, com¬
promises to
be
encourage
markets.
Richard W. Courts
industry
It would appear
good.
premises upon dividends
from veterans' insurance, the "backlog" of orders caused
by the steel and coal strikes, high consumer income,
large personal savings, etc.
that
more
in
with
and
RUSSEL COULTER
J.
tions
the forced reductions incident to the
to
curities
1951 it means still more money
will be pumped into the market, meaning more inflation.
It therefore seems to me that the investment banking
President, Toledo, Peoria & Western Railroad
that these are
with
together
1948
the
mined
apparent for 1950 and
road
of voluntary inventory reductions
evident
became
Senators
Congressmen have become dis¬
turbed over this situation. Likewise
Administration officials seem deter¬
strong position and
a
of money and manpower
that
Today it is apparent that
and
1949, particularly when considera¬
successful year in
tion is
capital.
whole, the banks of the country experienced
On the
a
farm
which
try has not been able to secure suf¬
ficient amounts of venture or risk
expenditures
the Toledo, Peoria
Company of America
stroyed the market for venture capi¬
tal securities.
The failure of these
markets means that American indus¬
But it cannot
often, for fundamentals do not change.
be reiterated too
The past four years,
tion, sales and earnings, the average
annual
volume
has
been
slightly
above 1901. Government policies and
tax
structure
have practically de¬
repeated.
theme which often has been
1901.
industry at an all-time high in produc¬
are
Perhaps, however, located as we
COLVIN, JR.
President, Crucible Steel
less than the volume of
running beyond income. The day of reckoning
is bound to come, and the sooner we as a nation face
that fact the better off we shall be in the end. That is
again
planning to make such expenditures at nearbecause we are betting on the continued
H.
was
with American
excessively high level, and
despite the heavy tax burden Government
levels
W.
of shares traded on the New York
discouraging
service stations, and other projects.
record
ended 1947 the average annual vol¬
Stock Exchange
10 years
For the
ume
The expenses of the Federal
aspect in the general outlook.
taxes.
All
Partner, Courts & Co., Atlanta
We are hoping that total loan figures
the 1949 level, with a possibility of
moderate growth in real estate and consumer loans.
The average level of investment portfolios should be up
in 1950.
Higher total figures for loans and investments
combined, however, may not bring an improvement in
net earnings unless some upward adjustment is per¬
year
COURTS
W.
R.
by greater construction of
be taken up
mitted in the level of interest rates.
point out that,
inflationary forces tending to raise
all prices, including oil prices, the public still gets a
lot for its money when it buys oil.
For example, since
1941 the price of a gallon of gasoline—including taxes—
in Philadelphia has increased only two-thirds as much
as the average retail price of all other kinds of goods,
and only one-half as much as the price of food. At that,
more
than one-fourth of the price its direct gasoline
in spite of the many
affect
may
schools, roads and hospitals.
A good year for general business should mean a
speaking of prices, I should like to
And
slack
the
s
r,
-
19, 1950
Thursday, January
FINANCIAL CHRONICLE
COMMERCIAL
THE
(268)
a
in
Washington.
pleasant prospect, but a possibility.
Rolling stock is modern and the roadbed can now
stand
greatly increased speeds.
Financially, the road is in sastifactory position. Like
railroads, it is in less favoraDle long-term position
competitive transportation mediums,
than the subsidized
trucks, airplanes, and barge lines of which
costs of taxes and maintenance are smaller
as
the
and
While no marked
change in these governmental policies are expected in
1950, it is hoped that fair competition will be instituted
more
flexible by government decree.
in the foreseeable future.
While 1950 looks good on paper, our
out
door.
all
railroad is going
business, not waiting for it to knoick on the
At our National Sales Conference in December,
after
our
traffic
men
(who
are
called salesmen in other
increase traffic
this year.
Every means of modern advertising and sales¬
manship is being explored, evaluated, and incorporated
as applicable.
If it is a bad year for the Route of the
Prairie Marksman, it will be in spite of our efforts, not
industries) expressed a belief that we can
because of
our
lack of effort.
'
,
,
investment
the
1949
CURREY
O.
ture
cal
was
was
a
and
generally
a
with margins in other industries, but
The tax struc¬
profit.
unfavorable, and the politi¬
environment
than ideal.
enjoyed
satisfactory
Unit profit margins were absurdly
conditions.
low in comparison
there
banking industry
business
of
volume
market
mm
something less
was
In view of the high level
nation's
1949
for investment
bankers as it should have been, but
nevertheless it was a good year. The
the
of
wasn't
as
1959
year
prosperity,
good a year
promises
equally
be
to
good, perhaps a little better.
demand
institutional
for
securities
from
fed
con¬
investors,
by
tinuing large purchases of insurance
and large time deposits, and further
by growing pension
undoubtedly be strong.
bolstered
funds,
Per¬
high, and a
somewhat better demand may be ex¬
will
all
fixed
In
good
The
Individually, the T. P. & W. Railroad has continued
its roadway and facilities and stands in an
excellent competitive position for the next few years.
to improve
such
BROWNLEE
President, Equitable Securities Corporation
Acreage
sonal income will remain
Brownlee O. Currey
pected from individual investors.
Furthermore, the supply of securities
,
will again be
Federal financing for new money in 1950
be in larger volume than in any year
since 1946.
There is a strong likelihood that the Treas¬
ury will offer marketable securities (other than bills) for
new money
for the first time since the Victory Loan.
Drive of 1945.
While it is too early to estimate the ag¬
generous.
will
probably
gregate amount of such
substantial.
financing, the total is apt to be
will
Generally speaking, American industry
spend considerably less on new construction in 1950 than
in 1949 for the reason that most companies have now
completed their postwar expansion programs.
that industrial emissions will be smaller in
It follows
the aggre¬
gate in 1950 than in 1949.
Of course, there are excep¬
tions, the most notable being the electric and gas utili¬
ties.
Last year the nation's privately owned electric
Volume
171
Number 4873
THE
COMMERCIAL &
FINANCIAL
CHRONICLE
.(269)
33
Business and Finance Speaks After the Turn of the Year
utilities spent $2.1 billion for
construction and
new
ex¬
pansion,-and capital expenditures for 1950 will probably
Joo at about the
the
same
level.
Largely in
booming demand for natural
spent
$943
million for
the gas industry
construction in 1949, and
new
may spend even more in 1950.
utilities
made
effort to meet
an
gas,
Both the electric and gas
record
1949, and there is
breaking capital expenditures in
good chance that both will establish
a
records in the current year.
In the field of municipal securities,
extent
of the expected
said that stocks will
to
price range in 1950 than was the case in 1949.
And if
the anticipated improvement in stock
prices materializes,
was
a
rise in equity prices, it may be
probably fluctuate within a higher
sharp increase in the volume
well be
onei
of
equity financing
of the outstanding features of the
1950
may
new
issues market.
As against this, for the 12 months, deliveries of
copper
fabricators totaled some 1,048,000
certain
that
previous
the
several
spend
this
huge
securities,
but
and
World
to
issued
$2,989,972,551.
is expected to be in
$500
in
financed
be
War
a
will
Not
the
issuance
sizable
in
of
of
amount
will
veterans
In 1949, the
securities
of
all
Chairman
of
the
Board, Revere
of
We must expect copper to be in
to come, despite high rates
for copper products.
A few
months ago
be
states and
And
was
was
addi¬
an
be
stocks
tomers,
or
money rates, and that the current year
somewhat improved stock market.
It seems
to expect
to
be
rate
If
the 2Vt% rate
maintained
on
the
one-year
S.
U.
in
will
see
Government
issues
pursue
a
relatively
anticipated, corporate obliga¬
as
pressure
ness
term
•
In
in
Tax exempt bonds,
strongly influenced by Governments, but the
of sheer volume could bring about some weak¬
tax
exempts,
obligations.
brief,
acterize
it
the
particularly in the
bond
movement
occurs
lower than
to push them
of
long
more
in
apt
stability will char¬
1950, and that whatever
to
carry
prices slightly
higher.
It now looks as though increasing confidence on the
part of the public will make for improved stock prices
in 1950, despite the outlook for somewhat lower cor¬
porate earnings.
revived
Without hazarding
a
guess
as
to
the
reduced,
were
a
cents per
in-; the
was
and
were
a
con¬
fabricators'
those of their
as
at
close.
consumption
C. Donald Dallas
low point
as
cus¬
1949
Industrial demand
third
quarter
and
close to the highest
levels of the postwar era. Producers
of copper met this stimulus by going
on
a
six-day-week basis without, for the
bringing the metal into easier supply.
Since
copper
business, it
position of
rate
of
is
our
is
tied
closely to the general level of
surprising to learn that the strong
industry is due to the continued high
of the
principal copper using indus¬
might name building and construc¬
tion, electric and public utility and the automotive as
the outstanding
consumers
which are also extremely
we
active and confident of the future.
Domestic producers in 1949 were unable to meet the
of industry and government for
copper in the
United States. We estimate domestic
production of cop¬
there
as
per
for the year
copper
at
plus
896,000 tons.
old
scrap
This includes newly
returned for processing.
is
not
are
is
and
stock¬
tons.
170,000
There
1,218,000 tons of cop¬
of
one
consider
few
on
basic
and
materials
the
in
market
for
world-wide
a
production
basis, it is
consumption in
and
We find that in most
foreign markets,
late spring and early summer
such
no
the
self-sufficient,
established
to
was
we
was
slump
Foreign production, however,
slightly by the fall in U. S. prices.
result was little
change in basic relationships.
experienced here.
affected
The net
1948
the
United
consumption,
estimate
and
States
for
accounted
43%
of
for
world
60%
world
of
production.
We
the
corresponding figures for 1949 at 55%
world consumption; 41% of world
production.
The
immediate
outlook
for
the
copper
pends upon one's appraisal of the
factors which enter into the state of
and
many
of
industry de¬
complicated
manufacture, trade
finance.
My
judgment is that for the first six months of
reasonably count on a continuation of ap¬
proximately the levels of the last quarter of 1949. Copper
was then going into
industry and stockpiles at the rate
of
own
we
can
more
ative
than
115,000 tons
month.
a
If
to
be
conserv¬
reduce this forecast to 110,000 tons a
month,
the indicated level is still
eminently satisfactory to pro¬
ducers and fabricators and makes
necessary the impor¬
tation of at least
30,000 tons a month to
we
supply the
consumer
The
demand.
question
arise
may
to whether
as
this is
not
an
"abnormally" high rate of absorption, unlikely to con¬
tinue for long.
It is useful to approa- h the answer from
the statistician's viewpoint of
pounds per capita of cop¬
consumed. This figure was 18 pounds in 1948; 17.3
pounds in 1949, and if my forecast is ciose to the facts,
per
there will be
a
six months of
return to the
18-pound level
in
the first
1950.
In each case these figures include
stickpiling which, while not consumption in the usual
sense, has precisely the same effect on the market as
industrial consumption.
In
needs
mined
about
copper.
copper
foreign countries.
time being,
not
operation
tries, of which
market
is
case
that relative
appears
the
metal
1950
meanwhile
well
as
drew to
certificates will rise above 11/4%.
tions will undoubtedly do likewise.
arc
siderably
reasonable
long term taxable Treasuries
1950, and it is not likely that the
steady market course,
too,
Inventories
a
on
for
brought
was
recovering to 18.5 cents.
influencing securi¬
drastic changes in bond prices
no
price
and
pound, slumping to 16 cents and then
that
bring
soundly
very
The
situation
down from its peak of 23.5
markets, it is perhaps foolhardy to make any sort
of prediction in January covering the full year.
Never¬
theless, on the basis of the present outlook, it appears
will
out
industry.
ties
1950
temporary
a
worked
million,
issued
thorities.
In view of the multitude of factors
industry
we
pertinent
In
the
disturbed by an almost complete
cessation in sales of copper.
This
the
$3 billion.
tight supply for some
of operation at the
mines, because the government's accelerated stockpiling
program is superimposed on a brisk industrial demand
or more, of tax exempt obligations
by various Federally-aided housing au¬
Thus, total tax free emissions for the year will
probably be well above the $3.5 billion level.
will
the
Copper and Brass Inc.
time
aggregate
The comparable total for 1950
excess
imports of
which
DALLAS
that
1950.
by
II
all
exceed
indicate
DONALD
at
which domestic production failed to meet
bty 322,000
tons, the deficit being made up, as in former years, by
net
C.
estimated
effective demand for
an
Because
almost
subdivisions
various
the other hand
on
subdivisions
tional
their
will
estimates
State bond issues.
by
amount of
volume
recent
construction
on
will
payments
financed
their
states
total
issue
new
Most
billion
$4.1
bonus
1950's
records.
appears
be
can
thus
per,
new
it
tons,
piling
a
some
quarters it has been held that
return to what
sumption
of
10
is
described
pounds
as
capita.
per
we
"normal"
This
Continued
50 million
pairs of shoes
31,000
to men, women,
expect
copper
con¬
figure
was
on
page
34
a year—more
than 10" of all the shoes
for sale
must
produced in the United Slalcsand children.
people in 59 shoe factories, I t sales
(branches, 9 tanneries,
than 30 other
rubber
a
plant, cotton mill, and
supply plants and warehouses needed
provide materials for shoe manufacture and
to
mor$
to
effect the
Company's world-wide distribution.
200 million dollars worth of shoes
to
28,000 retailers,
states, in U. S, territories, and in
try
more
Willi
foreign countries,
than 11,000 individuals and
no one
person or
for 37
d
r
as
5% ol
Company stock issued—and
maintaining for its stockholders
dividend payments
institutions—
organization holding as much
the 3,400,000 shares of
ST.
annually
large and small, located in all the 48
an
unbroken record of
years.
\
vWJ/mJ...
LOUIS—Roberts, Johnson & Rand, Peters, Friedman*
Shelby, Continental Shoemakers,
Accent Shoe Co.,
Pennant Shoe Co.,
Vitality Shoe Co., Queen Quality Shoe Co.»
Dorothy Doc Id Shoe Co., Winthrop Shoe Co.,
Cordonjnil Footwear Co.
MANCHESTER, N. II.—Sundial Shoe Co., Great Northern
Shoe Co., Metro-Craft Shoe Co.
33
Continued from page
Speaks After the Turn of the Year
Business and Finance
of the great depression or much restricted
activity and do not provide a sound basis for appraising
the main years
^lie
financing through increase of bor¬
of curtailing Governmental ex¬
penditures, emphasizes the unsoundness of our present
Government fiscal policy. Corporate and personal Fed¬
eral income Taxes are already so high that many indi¬
vidual investors no longer have either the funds with
which to purchase equity stocks or the net income in¬
sort
We might consider 1939 as more
period ahead.
is
a
It should also be
of
Part
consumption.
consideration that measures to.
by the fabri¬
cators of copper, my company among them, are having
a genuinely stimulating effect.
Copper tube for plumb¬
ing and for radiant panel heating, as well as copper
sheet for flashing and other building uses, is gaining
instead
the risk thereon.
following England's
stop
we
policies and
natural
advancing educa¬
tional standards and technological research have en¬
couraged even more progressive development, promoting
a healthy, stable, well-rounded and integrated economy.
The consideration of these factors, plus the knowledge
that plants of appreciable size will locate in the South¬
east in 1950, and that others will expand their opera- ;
tions, adding to the Southeast's growing share in pro¬
ducing the nation's manufactured wealth, leads inevit¬
ably to the conclusion that next year's business prospects
President,
Syracuse Trust
The
Company
,
We
with
resulted
growing
to
the
in
Davies
W.
H.
fall,
the
in
the
however,
spring moisture, this
heavy
industry,
estimate
operating
Demiey
months
mately
demand
both
in
Northern
the
for
revenue
of
that
1950"
of
will
1949.
the
be
urban
Pacific
in
scheduled
for
order
-•
■■
.
DUNCAN
E.
A.
Our
year
ment
we
just
has
Company
closed
the
biggest
ating
1949
tinue
results
to
make
ing 1950.
During
much
and
1948
better
should
six months of
1949, our Manufacturing operations
and net income thereon, like those
of many other manufacturing com¬
panies, were considerably less than
during 1948. The last six months of
1949
showed very substantial
im¬
year
will
than
less
1948
they
when
were
abnormally high.
All in
in
1950.
all,
we
Our
to what extent
A.
look for
concern,
is
our
a
E.
Duncan
good year
however,
is
current National prosperity based
unsound permanent foundation gnd temporary
expediencies. During 1949, our Country experienced its
upon
an
greatest volume of business, the largest earnings there¬
avoid
the
the
might
as
If sales
lower than 1949 they should
substantially lower.
which seems cer¬
we
should be
demand
higher than in 1949.
profit
margins
not
We estimate
will
about
stay
same.
I.
Leland
means
I feel that by now we
proven
ourselves to be the
generation.
really benevolent Uncle Sam
McD.
C.
President, Atlantic Coast
Doan
ECCLES
S.
GEORGE
President, First Security Bank of Utah
I
believe
ahead
somewhat
be
can
we
looking
in
optimistic
business outlook is
the year 1950, so far as the
to
concerned
in
conditions
ip this area depend largely on national con¬
ditions and it appears to me that in
.the
picture for 1950, there
in activ-.
national
the
Of course
Territory.
Intermountain
will be very little let down
is the
The major problem now
settlement of the coal strike.
ity.
the
After
first
the
of
year
the
billion Soldier's Insurance dis¬
be made, which will
increase the consumer market.
The
$2y2
contin¬
national budget provides for
ued
expenditure for foreign
subsidy, public housing
large
farm
Military Program.
looks
as
though the
aid,
and
our
It
national
will show a cash deficit of
$5 billion. This in itself is inflation-."
ary.
I doubt that there will be any
tax increase and there will probably
budget
George S. Eccles
be
some
relief
in
the ex¬
of
many
So far as our Utah and Idaho territory is con¬
cise taxes.
cerned, the agricultural outlook is good. There has been
considerable mechanization on the farms, which reduces
of
cost
production.
There will be good prices in prac¬
the
DAVIS
subsidy program of the government. Prices will not be
at their peak but should be sufficient to show satisfac¬
Line Railroad Company
tory income.
I believe we will see an increase in the
Our dairy industry is
Canning prices are holding fairly well and the
national inventory picture is good. There should be in¬
number of both sheep and cattle.
Southeastern 1950
A year ago,
the
for
tion
favorable.
less encouraging; uncer-,
a less confident expecta¬
business prospects are
the outlook was
there was
immediate
future.
Now,
the
ter
beet acreage throughout the territory.
sugar
income has been
Farm
is
There
be
to
Utah
in
both
good for
many
years
and the
substantial
and
increase in
electric
which will aid in
Idaho,
power
industrial
expansion.
income, expenditures for con¬
and the output of electiic
.
struction.
data
creased
position of the farmer in his relationship to the general
economy is very much in balance.
supporting this view are the
increases in
there
Although
is
some-curtailment
in
some
of the
mining industries, due to! the price of lead and zinc, it
of which in 1949, from
thus far available, recorded bet¬
showings
than in
1948—fre¬
all
energy,
sound.
consensus
apparently is that for several months,
at least, business in most lines should
be better than in 1949.
Substantial
there will be continued expansion in the copper
appears
industry with the completion of the copper refinery and;
acid
quently referred to as the peak yea«r
of
Southeastern
postwar
business
the
being produced in .this territory.
Additionally,
remarkable
strikingly
The
the
McD. Davis
our
to
make
large smelters,
use
of
the
well
as
steel
as
that is
Southern Idaho is very
will
continue
There
found
is
reason
increased
demand
for
our
Southern
Arco.
All
to
"
be
optimistic
as
to
the future oil
Tremendous expenditure is being made in
by the Atomic Energy Commission at
development.
Idaho
of
this
will
assure
stabilization
in
our
em¬
payrolls of this area, and will be
reflected in continued good business activity.
ployment and in the
There will be increased
school
buildings and
a
Remand for housing, need for
tremendous amount of road re¬
habilitation and construction^ work.
The condition of the banks is excellent with
credit available for.all sound purposes.
I do not think there has been undue
in
in the
be
to
coal and increased production will be possible when the
coal strike is settled.
in the past two
this movement is expressed
diversity of occupational pursuits not
Among other ways,
of
chemical development in
There
C.
1950 horizon.
growing
in
important and is expanding.
decades.
These changes, their impact upon the region, and- their
attendant atmosphere nurturing creative effort and di¬
versified enterprise, are so widely known as to require i
no elaboration.
From the adoption of more modern and
profitable agricultural practices, improved manufactur¬
ing and production techniques, higher cultural and living
standards and the increasing interest that venture capital
is displaying, there has been established in the Southeast
an economy whose prosperity is unlikely to be retarded
by more than temporary setbacks.- None of these appear
on
one
industries
plant at
increase
sales, less in volume in
supporting this view are
changes
that
have
so
the results for the
satisfactory, although
be
for
deficit
to
financing
deficit
affected the Southeast's economy
and
provement
up
tically all lines of livestock and agriculture due ot
turers
first
the
wish
I
be
have been a sensible people—fight¬
attacked—trying each in his individual
way to earn a living and make .his place in society, but
now there seems to be a strong tendency in some quar¬
ters to try to "Plan our economy" so that a few at least
will not have to give but only receive. 1 liken this plan¬
ning and the resultant attitude to a barrel of apples that
is left standing too long exposed to the elements.
One
bad spot soon develops and, if not attended to, soon
spoils the whole apple and then another and another
until finally the whole barrel is lost.
We have- worked long and hard for what we have in
these United States and our childrens' children are en¬
titled to the heritage of clear thinking and hard work.
Let's hope that sanity will prevail.
activity.
in
con¬
good showing dur¬
a
hold
manufac¬
1949
than
in
1948, may reasonably be
expected to improve in 1950.
Of
even
greater significance in
j
<
activities and oper¬
were
in
than
are
general,
or
By and large we
farm
and best
Our outstandings in instal¬
have not yet reached their peak, so
during 1950.
Our Insurance
last
likelihood of continuing
anticipate satisfactory results in our financing opera¬
tions
of
sales
bursement will
.•
in its entire history.
receivables
lines
older
but
should
time.
factor
Chairman of the Board, Commercial Credit Company
the
because
tanty prevailed, and
1949.
freight cars and motive power is
for delivery during the coming year.
'
'
sizable
A
a
Northern Pa¬
additions and betterments to roadway
and equipment carried out during the last 10 years is
nearing completion, and the amount expended for labor
and material and for equipment will be less in 1930
was
of
chemicals
products
new
In
to all the
world and subject to. severe criticism if we wreck our
own health by trying .to do the impossible.
I see a great danger in easy credit, and I fear the con¬
sequences of the "no down payment sales". Surely sales
without equity in the purchaser, while perhaps effective
in producing sales volume, will not stand the lest o£
of all.
first six
approxi¬
cific's program for
than it
the
bank deposits and resultant
larger bank earnings, it also means
a
mortgage on future earnings and*
a still greater burden on the coming
rural.
We
E.
some
larger
reducing
reserves
territory;
the
building
and
C.
destined
seem
although
anticipated increase in move-
due
ucts
the
of
spending
tain for the next fiscal year,
ment of lumber and lumber prod-
^
■
u
the
the Federal deficit
Offsetting this to some extent will
an
of
financing.
should make for an average crop.
d
all
in
industrial
of
high
We
Company
droughty
a
moisture
with substantial
be
by
indus¬
exceed!
probably
will
ing only when
has
grain
though
demand
several years.
programs.
this
even
concerning the
well.
much
Northern Pacific Railway freight traffic and revenues
1950 are expected to reflect an anticipated drop in
agricultural products, brought about as the result of
cutting the spring wheat and potato acreage in Wash¬
ington. Montana and North Dakota
under
government
price
support
sub-soil
and
optimistic
are
Supply
try.
plenty of money to spend, he is not
spending it with the same carefree
recklessness that has characterized
in
Likewise,
I. DOAN
1950 outlook for the chemical
statistics available the consumer has
friend
Railway
,
President, The Dow Chemical Company
sincerely share the
returned
DENNEY
Pacific
favorable.
are
opinion c|f most of my industrial
friends that 1950 will be a good year, but I must imme-,
diately qualify this statement by recalling to your mind
that competition in all lines, including banking, is back
to stay. The day of the salesman has
I
have
E.
methods,
farming
LELAND
development that can affect this
picture would be a return of the copper import excise
tax.
This tax, which is two cents per pound under the
reciprocal trade treaties, is scheduled to be reimposed
after June 30, 1950, unless Congress acts to continue
the suspension now in effect.
In view of the statistical',
position of the copper market, as well as the urgent
need to keep copper prices competitive with those of
other metals, it is to be earnestly hoped that Congress,
will vote for continued free..;imports of copper—one of.
the few materials vyith whicfy our neighbors and friends
overseas can acquire dollar balances.
Since the mining companies have gone on a six-dayweek basis, involving payment of overtime wages, it
must be assumed that price and demand are satisfactory
to them, and that they have no need of a tariff.
The independent fabricators feel strongly tha the way
for prosperity for both producers and users of copper
is to promote wider use of the metal, not to adopt
policies which are all too reminiscent of the cartelization and other restrictive practices which in the long
run have proved so disastrous for European industry.
C.
and the intelligent utilization of
newer
resources,
HARRY W. DAVIES
only foreseeable
President, Northern
has demanded a broader employ¬
expansion
ment of skills;
constantly in acceptance.
The
The great
agrarian.
the Southeast was primarily,
when
industrial
State So¬
which are leading directly to
cialism, which is next door to Communism?
experiments,
consumption of copper taken
increase the
will
When
arises from the
months
money,
centive to justify
the forthcoming six
optimism concerning
my
ncted that there
greater per capita
long-term trend to
again to deficit
rowed
nearly a normal year.
There were 12.2 pounds per
capita consumed in that year, without stockpiling and
without anything approaching the exceptional demands
now
caused by military production and the European
Recovery Program.
Current operat¬
unemployment.
with but little
and
ing expenses of our Government, without provision for
any debt reduction, is running several billion dollars in
excess of expected total income for the fiscal year. Re¬
These were in
1931-40, inclusive.
10 years
the
of
tion
on
convenient device of averaging consump¬
reached by the
Thursday, January 19, 1950
CHRONICLE
& FINANCIAL
COMMERCIAL
THE
(270)
34
our
area
and
we
still
see
increase in
adequate
debt
expansion
savings of the
Continued
on
page
36
Volume
171
Continued
Number 4873
jrom
31
page
THE
COMMERCIAL
lower in the spring of 1950 by rea¬
son of better control and the elim¬
the
high
tne
chief
break-even
Perhaps
question
Profits
—
If the
CHRONICLE
of
in
I
to
1950
tially
in
should
increase
substan¬
dollars,
probably by at
least 25% over the
distinctly poor
performance in the spring of 1949.
of the spring of 1949.
(4)
points*.
''
decline
slightly reduced below the experi¬
ence
end
slight
a
sales volume, expense percentages
should hold even or perhaps be
For 1950
tion
only
.¥
FINANCIAL
assumptions with respect to sales,
gross margin,
and expenses are
realized, net profit in the spring
ination of "fluff;"
With
&
Now,
all my
foregoing
having
spent
practically
allotted time in speculating
(271)
about the general business and de¬
In
partment
long-run
problems
tributive
picture
store
outlook
for
1950,
going to conclude by saying
that I don't think these
am
you
cyclical problems, that is, these
year-to-year fluctuations in sales,
expenses,
by
margins, and profits,
any means
for you to be
ones
there
are
some
seriously af¬
fecting the future of the depart¬
ment store's position
in the dis¬
more
are
the most important
opinion
my
which
worthy of the
top executives.
of
Before I sit down
Continued
thinking about.
far
are
attention
on
37
page
in
regard to the business outlook to¬
day is whether the second half of
1950
will
halt.
Many business
be
good
as
the first
as
commentators
to be rather
cagey and non¬
committal in regard to the second
seem
half of 1930,
perience
probably because
the last two
over
shows
years
ex¬
three
or
clearly that it is in
the second half year that
ity of business forecasts
major¬
a
go
awry.
Most of the logics of the
situation,
particularly the plausible expecta¬
tions of
a
tapering off in the im¬
construction, automobile,
capital equipment industries
portant
and
in
the
to
less
latter
part of 1950, point
favorable figures for the
second
is
half
the
but I
it.
For
ness
to
one
not
prognosis
Subscribe
'to,
wholly persuaded by
the
have noted
This
year.
easy
am
three
past
a
years
we
patter of lower busi¬
activity in the first
in the second
Privately owned steel companies'
half than
half, and 1 have
are
more
than meeting the nation's requirements
not
yet been convinced that this pat¬
tern
is
unrelated
of the U. S.
and
the
to
activities
At this time last
year,
of the country were
although the steel mills
operating at capacity; they
Treasury in receiving
disbursing funds.* (I referred
previously to the two income
tax
payments
the
which
fall
now
in
still
accorded
more
weight in
all
an
"emergency"
of short-lived
an
shortage
election year.
not
abnormalr demaftd—to
make
quarter.) Furthermore, as 1
haveplried to indicate, there are
some
non-logical r factors in the
situation; and perhaps these ought
to be
So personally I am
yet. quite ready to subscribe to
the view that general business will
be poorer in the second half of
1950.
( Now
outlook
for
the
department store
in
the
spring
business
of
should
I
Steel
transac¬
companies
favorably
compare
With the spring of 1949, probably
plus 2% or 3%.--; -
predict—
and produce
-
The average sale,
be slightly under
however, will
lapt
_
Some
further
consumer
1949
'
year.
surplus
readjustment- of
spending
between
soft goods and hard
goods'is' t6 be
anticipated. The prewar relation¬
action, however, will have
national
tons was
an
in
•
The composite result will prob¬
ably be department store dollar
!.
ning somewhere between 0% and
5% below the spring of 1949. For
whole
store
sales
whereas
1949
year
department
off
about
6%.
retail sales are off
only about V/2%.
In the spring of
should expect this gap be¬
total retail sales and de¬
1950 I
tween
partment
rowed
store
sales
somewhat
but
to
be
nar¬
the spring
of T 949
because
of
the
strong efforts made by many
stores during the past "year to raise
this figure.
;.
'
* '
•
Markdowns
.should
show
.
im¬
since
provement,
inventory ad¬
substantially com¬
pleted. On the other hand, prices
are
still tending slightly down¬
ward, and therefore markdowns
justment is
-
now
continue
normal.
!
'
"
•
The "result
somewhat
■'
•
"above
•'
should
k<
be
a
gross
margin percentage at least 1% of
sales above that realized in the
spring of 1949.
(37 Expenses
—
In spite of the
continuation of serious wage pres¬
sures,
press
dollar
expenses
should
for
government
participation
financed
by
(2) Gross Margin—- Initiate mark¬
up should be somewhat better than
will
continue to
-closed
not
entirely.
in
Die-hards
are
total
be
1949
1949
sales in the first half of 1950 run¬
the
to
the
you
capacity of more than 96,000,000
able to provide all the steel
required
with a large surplus to spare; And
was a
ernment
now
much.better than average year.
somehow
there
In
total,
Over
600,000
demands for steel.
stockholders
-
We
proud that National Steel Corporation
is an
outstanding example of a constantly
growing company and that it has expanded
more in
proportion to size (now fifth in the
industry) than any other steel company.
are
\
.
-
h
.
.
..
supply
.
maximum
demands
for steel-
efficiently
-
into
long-range record of the steel industry
for infrequent
always had more than
enough' capacity to supply 100% of steel
requirements at any time.
This
was
accomplished by the work of private
individuals,
not by government planning or
operation. It is the work of private
the
steel
the
strongest, most secure nation on earth and
provided history's highest standard of living.
Can thete be
any good reason to exchange the
proved success of the private way for the
proved failure of government planning and
operation?!
!
people to
cies"
ment
answer
Steel
„
companies'
record
a
tribute to
private
ownership
question for the American
whenever new "emergen¬
bring new attempts to put
in business.
the
govern¬
business.
are
If the government made
steel industry alone, there
such a move in the
would be a first cost"
of many millions of dollars followed
by a con¬
tinuing cost of many more millions each year.
of
The
proves conclusively that, except
and brief
periods* it; has
That will be the
proposals for government
financing of new steel plants in various parts
of the country. And
legislation is seriously
proposed that would permit the government
to build and
operate facilities in any industry.
This cost,
number.
individualsthat has built the United States into
Despite this record of the privately owned,
privately operated, and privately managed steel
industry, there are still moves to get the gov¬
Even
mum
government
war.
After the first three months of 1949, the back
of the
shortage was broken; there was a con¬
sistent decline in the demand for steel. The
Repeal of wartime excise taxes
will help if it
comes
promptly.
Long drawn-out discussion with¬
out
exactly what happened.- Ex¬
cess demand melted
away under the outpour¬
ing of steel products from furnaces and mills
history by an
expansion since the
to soft goods.
adverse effect.
Of Course, this is
highest capacity in
unprecedented program of
goods in relation
600,000 in
a
that had been built
as
ship has i?ot yet been reached, and
furthermore the long-run trend is
probably toward higher .expendi¬
tures for durable
executives answered this cam¬
prediction. They said that during
1949 the steel shortage would end, and there
would be a
large surplus of steel capacity.
company
paign with
than
more
companies have given the United States
a
constantly expanding steel industry geared
to
supply riot minimum nor average but maxi¬
the
steel desired by customers. .This so"emergency" was made the basis of a
campaign of criticism followed by proposals
that the
government go into the steel business,
either
indirectly through financing or directly
through actual construction and operation of
new steel mills
by the government.
at
these
called
Steel
following:.
(1) Sales—Number of
^
1950
1
provide immediately,
to turn specifically to the
should expect the
tions
unable—because of the war-created
were
Opportunists
first
i
competing companies that are owned
by private, individual stockholders estimated
separate,
course,
would be shouldered
by
the fellow who pays
for all government spend¬
ing, the American citizen—YOU.
j
National Steel Corporation is the fifth largest producer of steel
in the United States. Among the companies it owns and
oper¬
ates are tfie following
major divisions:
WEIRTON STEEL
COMPANY,. Weir ton, West Virginia. World's largest
independent manufacturer of tin-plate and producer of a
wide range of steel products.
GREAT LAKES STEll CORPORATION, Detroit,
Michigan. The only
integrated steel mill in the Detroit area—exclusive maker of
the famed Quonset buildings—produces
special steels and
t
a
u
ide range
of carbon steel products-.
HANNA IRON ORE
*
COMPANY, Cleveland, Ohio. Produces
ore from
extensive holdings in the Great Lakes
Region—operates a
fleet -of Lake ore boats to supply National Steel.
THE
HANNA fURNACE CORPORATION,
duces various types
Buffalo, Neiv York.
Pro¬
of pig iron.
•
No
master
steel
mind
or
"brain trust" directs the
industry. It is composed of hundreds of
NATIONAL STEEL PRODUCTS
COMPANY, Houston, Texas. Operates
warehouse and distribution facilities for steel
products in
the Southwest.
'
s
Continued from page
34
.
financial con¬
dition.
"
We
not
must
become overly
optimistic, because some
unsound. We all know
national budget during a
of the
national policies are still
that
$5 billion deficit in our
a
prosperity is not sound.
Also higher taxes
they would throttle incentive and
ambition. There is need for economy in our government
and we should go very slowly in any expansion of our
governmental services.
the
where
endure
than the income,
asking themselves sucn
of these bureaucrats are
larger
is
output
therefore, these same people are
questions as these: "How many
successful businessmen?"
"If their theories
are
sound,
why are most of them considered failures in their pro¬
fessional or business life?"
of
period
—
. .
time
The
would be bad because
has
the
when
come
people
of
the
United
should
lay aside party prejudices and combine
their strength in applying pressure to the brake that
will stop this prodigality—1950 would be the ideal time!
States
—the polls
ALFRED
Cleveland, Ohio
that
ernment
depends in no small
managment and by gov¬
is a capitalistic nation, and that to
make our system work every Amer¬
the recognition by
on
measure
ours
must become a
ican
Every
000,000 men
of the
the mines and mills
factories,
the
in
more
of America, and
and offices,
fields
oufeht to Jhave a stake in the Amer¬
ican system. If ever the $10,000,000,0C0
a
that the people of the
States now gaily risk on
and other kinds of betting
be
channeled
into venture
year
Ujnited
bingo
could
capital investments to increase the
productivity of our mammoth indus¬
trial
machine, there would be an
abundance of the good things of this
life for all Americans.
task for man¬
The most important
Cyrus S. Eaton
this goal, is to
gain the confidence and cooperation
of labor. When management stops resorting to legal and
governmental compulsions over labor, and takes up con¬
structive and direct dealings with labor and its leaders,
then the great unions and their individual members will
want to become investors in industry and business.
agement, in achieving
urgent job for
The
of
whose
almost
business and the individual
government is drastic reform
agencies and commissions, Federal and State,
rigid bureaucratic < controls now constitute an
the
barrier between
complete
investor.
their own land, build¬
implements and livestock,iand who work the harder
The 5,000,000
ings,
farmers who own
ownership, know the pride of
If the rest of our working people can be
that
for
ing industry during 1949—the steady increase in sales of
packaged bee.r and the progressive concentration of beer
production among fewer and especially the larger re-:
Substantially higher
costs - with
only moderately increased
selling
prices are squeezing smaller units.
Since 1935, the first full year > of
operation after repeal, raw mate¬
heedlessly and
a
will
to
will be lovely,
and
noisy,
Then
short
of
With $50 billion to
/
unwillingly
*
duration.
the cold, gray dawn of
it
conse¬
are
and
more
attract
cannot
facilities
the
ganizations
essential
merchandising.
Deficit
socialism continued for a few years
lead
us
tions
to
in
Most of these
were
out to fulfill the selfish interests
year or
two, and taking the last 16 years as a
it should remain thusly for some time because
If
another
criterion
it has been
politically expedient, our American way of life will be
no more and
we will have lost our dearest heritage—
our
Freedom!. '
the presence of
destroying us.
Recently I have interviewed many ^persons in many
states, including Alaska, about these socialistic tend¬
encies, and almost without exception, he or she voiced
definite apprehension.' Apparently they have dusted
Up to now too few people have realized
this socialistic octopus which is rapidly
off the old arithmetic book and found the
shocking.
it
is
for
answers are
They now see how uneconomical and stupid
them
to
their
send
hard-earned
money
to
Washington to be sent back to them less large deduc¬
tions for bureaucratic salaries, etc.
This
same
simple arithmetic specifically states that no
individual, business
or
government can long exist or
1950
Alfred
Epstein
some
1,400 breweries
been
however, have
States,
quite well sustained despite the U. S.
recession
and,
with
the
recent
strengthening in U. Si business con¬
gloomy
the
.
decline
universal
in
of
prospect
Canadian
a
ex¬
opened,
the
but
since
then
the
were
only about 425 breweries
is
in
number
been reduced by more than 40%.
were
operation
has
At the close of 1949,
in operation; this number
likely to be reduced further in 1950.
a
greater percentage
higher operating costs than * would otherwise have
At the same time, it has permitted the
been possible.
as a
a
fact not generally
Pfeiffer, the lowest paid hourly workeraveraged
$3,200 in take-home pay last year, while the highest
hourly worker averaged $7,200.
Regional breweries have been steadily taking business
from the smaller local institutions.
The
same
is true of
the three large national shippers, but on a
smaller scale.
Although total sales for 1949 will, probably approximate
the 1948 level, the individual units in the industry will
show widely different progress.
The smaller units, for
example, will mostly show declines, while the three
national shippers probably will show gains approxi¬
10%
made
regional breweries which
the best progress are likely to show gains
to
The
15%.
cosfs low. This
substantial
other costs.
As
regional breweries usually
or
at
service
within approximately 300
less, they are better able to keep their operating
a
minimum and yet provide a good quality
highly industrialized
and
expected both because the immediate postwar boom is
running down and because overseas export markets are
contracting.
At
of
the
same
momentum
the
ment of
provides
hydro-electric power, of oil and of natural gas
one of the essential bases for more indus¬
and a bigger economy.
trialization
of Canada's development, U. S. capital
playing an important part.
U. S.
companies and other: investors know from long and
-favorable experience that Canada is a good country in:
which to invest, for not only is the investment climate
favorable but the opportunities of expansion are great."
has
process
and is
played
However, Canada's development could be further stim-'
a most healthy way if the United States wete
ulated in
to
scale
recent
lines U.
ductions
still
its
down
costs cannot be
\
The trend toward fewer and larger regional producers
may be expected to continue in the future,
In the next
ten years, it is quite probable that as much as 80% of
total beer production in this country will be concentrated
among the top fifteen breweries.
There is a strong likelihood that the popularity of
beer as a home drink will increase in the future.
The
industry is concentrating more and more on packaging
for the family trade.
Currently, bottle and can beer
account for about 75% of the industry's sales whereas in
pre-prohibition days the amount was negigible.
Some
new innovations in merchandising arrived in 1949, in¬
cluding a handy carrier for six cans or non-returnable
bottles of beer for home, consumption.,t
.
consumption often
doubled each ten years.
With the resumption of demand
following repeal, it took some. 14 years, until 1947, for
per capita consumption again to approximate the preprohibition level. To expect a doubling of present annual
consumption (which is in the neighborhood of 87 million
increasing
perior, the proving of the large deposits of high-grade
iron ore in Quebec-Labrador, and the continued large-'
scale construction of hydro-electric capacity.
Develop¬
spread over large enough distribution. ,*
beer
the needs of an
and with
energetic population remains clearly in evidence.
As compared with 1929, which was the peak of pros¬
perity prior to the war, Canada's population has in-'
creased by more than a third and her production by
approximately three-quarters. Among the recent devel-opments which point to continued growth of the economyare
the major discoveries of oil in Alberta involving
the construction of an 1,150-mile pipeline to Lake Su¬
and
area
1920,
time, Canada is a growing country and
of growth associated with opening up
resources
new
marketing and advertising because these
in
H. L. Enman
increasingly competitive
further readjustments are to be
Canadians
prohibition
the
war
Business conditions are
filled.
product. Breweries with less than a 300,000 barrel annual
sales volume usually operate under a great handicap in
Until
ac¬
and
the
becoming
In this
operations, very extensive and ex¬
from
depression before it has in large part
whole to expand and has given workers in
It is
of demands
backlog
huge
cumulated
been
The trend toward larger regional breweries is a sound
condition for the country and tile consumer.
It has
costs
of the vote-getters.
the outlook
portion of Canada's trade in
is discouraging. Exports to the
ports has been removed at least for
the time being.
In Canada, as in the United States,
miles
present bureaucratic ideologies prevail for
the
buying power
relatively small and
family-owned, operating in a radius of less than 50
miles.
Following repeal, some 725 breweries were re¬
a
Elam
countries have been
in view of the depleted!
of the sterling
and western Europe
ditions,
prohibition, there
operation.
and
G.
depends heavily on external trade
outlook for 1950 is a mixed
Canadian exports to overseas
United
modern
capital investment for equipment to
offset the rise in raw materials, wages, delivery expenses
A.
ENMAN
for this
consolidated.
or
Prior to
means
into
:
result the business
a
as
area
pensive mechanization is essential to keep
National
as it has every country
which has tried it. No person, business, or government
can survive extravagances such as we daily are meting
surely
Bankruptcy
:
• ■ -
.
dollar
•
The result has been
In modern brewery
spending, except in emer¬
will
and
that many of the smaller units have discontinued opera¬
and
gencies, is not only extremely dan¬
gerous but foolhardy. TLis brand of
will again share,
sales gain this year. It is also probable
more of the smaller units discontinue
any
facing growing restrictions, and
ranging'from 15% to 35%.
endure!
likely that the regional brewers
It is
generously in
one.
especially competent
Also they do not have
and
distributing or¬
management.
have
depression. Defin¬
itely this is an artificial prosperity
built entirely upon sand and cannot
melancholy
and the industry can
consumption gain dur¬
ing 1950.
and
more
capital for plant modernization
mating
day
with
equipment
obsolete
little
relatively
is
except in the small breweries
readily supply the anticipated
H, L.
at
when we face stark
realities
accompanying head¬
aches
immediately
followed
by
next
the
*
whole, are encourag¬
Expansion has been consistent with the growing
President, The Bank of Nova Scotia
appreciated that employees in breweries are now among
the highest paid in the industrial field.
For example,
hilarious, stimulating
but
comes
raise
a year.
.years.
difficult to operate on a satisfactory
basis.
Many small breweries lack
industry
mandate to "borrow,' borrow,
elect!" the
participate should be
prolonged throughout the year. Like
most parties of this type every thing
compelled
well
consumption, which is about 18
present per capita
the
Canada's economy
brewers
finding
of
spend, spend—elect, elect,
Eve .Party in which we are
Years
New
-
might
methods
merchandising
•Intensive
,
smaller
quently
given a corre¬
Savings Bank, St. Louis
Superficially 1950 should be good.
borrow—spend,
children.
operations—both developments are typical of the trends
which have characterized the
industry during recent
/
less than 30%.
up
The
permitted the producers to absorb
A. G. EL AM
spend
reflects its wider acceptance as a
It is often found on the family
table, particularly in families where there are growing
100% while the selling price of beer
is
breweries much higher wages.
and
beverage
moderation.
of
rial and labor costs have risen about
proprietorship.
sponding incentive to success, American capitalism
have nothing to tear from any other ism on earth.
Southern Commercial
national
drink
that 1950 will see
gional breweries.
capitalist.
than 50,and women who work in
one
a
demand—there
Two distinct trends continued in evidence in the brew¬
Century,
Twentieth
the
of
rest
This growing popularity of beer as
population increase.
ing.
EPSTEIN
for 1950, and for the
American business outlook
growth parallel to, and perhaps somewhat exceeding, the
Prospects for the industry, as a
President, Pfeiffer Brewing Company
The
barrels) in the ten years beginning 1950, would seem to
optimistic. But it is reasonable to anticipate a steady
be too
gallons
would be the ideal place!
CYRUS EATON
Industrialist and Banker,
.
w
Speaks After the Turn of the Year
Business and Finance
people which indicates a sound underlying
Thursday, January 19, 1950
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(272)
36
well
are
formidable
of
aware
protective
barriers.
the significant tariff
re-1
that have been made by the United States in:;
also conscious that in many '"
highly protective andhas a strong bias against
letting goods into the U. S. market. They cannot help
but note that the strongest manufacturing country in
the world still effectively protects her domestic market
U.
years,
for
but they
are
S. tariffs remain in fact
administration
tariff
S.
many
manufactured
goods,
and
that
the
producer of foodstuffs uses not only tariffs but
of
largest
variety
a
and other devices for keeping out foreign
Canada's growth is closely associated with
S. conditions and the expansion of the last few years
quotas
produce.
U.
reflects in part the high level of
States.
is retarded
is by
-For
activity in the United
But Canadian growth in a number of directions
by the U. S. system of protection.
Canada
long odds the best customer of the United States.
three
billion
and
years
Canada
has
purchased
$2 billion of U. S; goods per
between
$1.8
annum.
Her
ability to buy freely from the United States, as well as
the rate of her
development, depends
and moire secure access to the U.
:-.
\
V
*
j
;
on
obtaining better
S. market..;
Continued
.
on page
38
Volume
171
Continued
Number 4873
from
THE
COMMERCIAL
35
page
activities
Paine, Webber Expand
Retail Outlook
Commodities
For 1950
of them.
(1)
Competition of Lower-Cost
If you will cast
Distribution
your
an
a
exchanges,
firm
program
is
of
service
its
the
embark¬
firm
inaugurating
brokers in spot
as
com¬
will
to
be
include actuals,
in
a
position to
a
more
commodities
central
private
1879, maintain
wire connections
with their 24 offices in 21
cities
By enlarging the scope
trading
firm
is
render increased and
expanded
cus¬
tis, established in
dealings
an¬
its
to
Paine, Webber, Jackson & Cur¬
from
coast
to
It
Fred Barton
is Manager
of the
,,/^j
Broad
//. ;f ' *
in
the
Street,
•
Shields & Co. Adds
is
today one of the largest broker¬
age and underwriting firms in the
country.
com¬
New York,
leading
coast.
department
office at 25
37
BOSTON, MASS.—Lincoln Da¬
vis,
Jr.,
has
associated
become
with Shields &
Co., 24 Federal St.
—
back
eye
studies for
ing
the
prehensive
direct
the
of
that
de¬
kets;
Dept.
and
nounce
commodity
tomers.
modities.
commodity
its
(273)
Jn addition tq accelerated oper¬
ations in the various futures mar¬
Paine, Webber. Jackson & Cur¬
just going to mention four
am
for
CHRONICLE
partment.
tis, members of all principal stock
I
FINANCIAL
&
the Harvard
over
period of
a
years, you
will find that the department store
margin
gross
1949 is the lowest in 17 years;
year
in
percentage for the
other
any
words,
it is lower than
margin percentage for
since 1932, which was at
gross
any year
the
bottom
sion.
of
the
think
I
Minniapoms-Moiin E
depres¬
great
this
trend
means
MM
something. I think it means some¬
thing that is going to be awfully
difficult for the
store to
average
MODERN
MACHINERY
by raising the initial markup.
words, it reflects the
competition of lower-cost forms of
cure
In
other
distribution, namely, the so-called
distributors.
mass
Multiple-unit
(2)
;
Operation—
Whether you like it or not, the day
of the individual store is drawing
to a close.
The future lies pri¬
marily with the various forms of
multiple-unit operation.
for
the
department
Whether
store
this
the further
development of
branches, or the further develop¬
ment of chain-type operations in
department store groups, or the
means
further
expansion
of
leased
de¬
THE
MAINTAIN
mm
QUALITY
OF
MODER
partments, or a combination of all
of these, you had better get on the
job of finding how to make these
various
multiple-operation
man¬
agement techniques work with the
department
types
store
of
mer¬
chandise and service.
'
Open Display, Self Selling,
Vending—Take a
(3)
Automatic
and
look at what the supermarkets are
rapidly beginning to do with de¬
partment store types of merchan¬
dise,
of
what
in
they
the
Then
figure out
giving the customer
satisfactions, con¬
are
of
way
venience
you
are
not
you
can
and price that
doing, and see how
take
leaf
a
venture
far
of
out
that
book.
I
to think that you
can get
productivity out of
employed
behind the
greater
people
in
scenes
for
preparing merchandise
effective
self-selling
people employed out in front
sup¬
posedly to exercise alleged sales¬
manship
irregular flow of
an
on
customers.
(4)
More Hard
that
is
definite
a
to spend a
consumers
higher
for
pro¬
portion of their income for dur¬
able
goods.
A great
of the
many
luxuries and conveniences of mod¬
ern
living fall in this category. As
national
income
expands,
be
prepared
handle
to
of
ment stores for the most
bussed out
getting
on
share
ciable
automotive
thing
same
higher
a
durable
consumer
You all know that depart¬
goods.
of
the
dollar.
part have
any
appre¬
consumer's
Don't
happen
to
let
the
the
con¬
sumer's hard goods dollar, because
there is every
kind
of
going
than
;
indication that that
spending in the future is
to
increase
spending
on
rapidly
more
soft goods.
So don't spend all yOur
ing
budget
the
on
problems of 1950.
some
This storehouse of
The Proud Record of
IVHVTs
you
are
be
hi
Employees and Dealer-Distributors:
Of
MM
1890, Charles Beckman
president and general
AN
MM
manager.
approximately 6,500 employees, 890 or about 14%
employees with length of service records rang¬
ing from 20 to 59 years. Over 30% of ou« employees served
with the armed forces in World
distributor
organization of
have been MM dealers for
War I
some
over
or
II/Of
our
dealer-
2,000, approximately 10%
20 years.
Minneapolis-Moline also takes deep pride in its fatherand-son employee teams, now numbering 204, who are con¬
tributing to MM's reputation Tor skilled craftsmanship and
high quality. The products of MM employees are now sold by
2000 dealers in this
country and in Canada and by distribu¬
tors in 30 different countries of the world.
Many of these MM
dealer and distributor set-ups are also father-and-son combina¬
tions. In some divisions over 20% of the dealerships are fatherand-son org-anizations.
This
record of
Greeley,
from C
DEALER
FOR
Nebraska
A
is
YEARS.
21
o
warded
1
McCarthy
Old-Timer
of
plaque
monaqer
notable in a nation where
free choice of work is a cherished privilege. To the OldTimers,: to the father-and-son teams, to all employees, dealers,
and distributors, Minneapolis-Moline extends the wish that
the years ahead will fulfill their fondest hopes.
loyal service
is
worry¬
Devote at least
1960
%,,,
or
going
1970
if
^Minneapolis
Moline
;
mm*sm
Minneapolis-Moline
MINNEAPOLIS
1,
MINNESOTA
AN
MM
DISTRIBUTOR
Maltomess,
Old-Timer
EaU
FOR
- 7
ycy
-O
53
South
London,
plaque from George
YEARS,
Africo
L
Douglas
receives
Gillette,
MM
his
vice-
manager
:
J,
he
J
an
Johnson, MM Midwestern division
president and general sales
?/.;
re¬
MacFarlane,
Old-Timer
to keep up with the pro¬
cession.
C.
the
are
i
to
AN MM EMPLOYEE SINCE
ceives Old-Timer watch award from W
part of it to thinking about
have
necessary
machinery.
And it is equally important that these skills be passed along to
men enthusiastic and
eager to aid the growth of a great modern
industry.
immediate
what kind of .store you are
to
knowledge and skill is vitally
i 'J-
in the manufacture and distribution of modern farm
there¬
fore, department stores had better
proportion
Help MIVI Build Better Farm Machinery
'::u
agree
tendency
Training, '■
Experienced MM craftsmen,j skilled in precision work and
trained to turn out only the finest product, are maintaining the
high standards of MM Modern Machines, Visionlined Trac¬
tors, and Power Units year after year. These MM employees
represent a storehouse of skill, training, and experience that
firmly supports MM's outstanding reputation for service and
leadership wherever man tills the soil in the modern manner.
Zelomek
total real income increases
as
there
Goods—I
friend
good
m,y
and Experience
auto¬
or
matic vending than you can from
with
Years of Skill,
for instance in the field
as
housewares.
hT-ul
r.l t..
j.J
j
21
j/;
•i:
,.ui
i
'
o ...i<
i i; ■'<■ ')
!««.■« ■'
.7 >
$
38
COMMERCIAL
THE
(274)
Continued
from page 36
Speaks After the Turn of the Year
Business and Finance
Company
President, Packard Motor Car
Motor
Packard
counts
Company
Car
of high achievement in sales, production
gineering—and looks forward to 1950 confident
in the past year,
expected to gain mo¬
in the months ahead.
be
established
Packard
1949
in
records
—
fine-car
new
the
company's
golden anniversary year.
Factory domestic shipments
new
all-time peak of 102,411
J.
because
of
with
production in January, 1950,
last May, demand for
drive
automatic
—
Packard -developed
to outstrip
produced—has continued
production volume.
buyers will be more
Home
discriminating and will be
style of architecture which they particu¬
larly fancy and the taste of the buying public will be
more
carefully studied by builders so that the buyer
will have a better chance of getting what he wants than
has been the case heretofore. For Savings and Loan Com¬
looking for
a
Cleveland, 1950 does not promise to be as
was 1949.
The centering of construction
price range with sales so largely to GI's will
confine the supply of mortgageToans more and more to
GI and FHA mortgages bearing 4% and 4V2% interest.
A considerable number of Savings and Loan Companies
panies in
profitable
will be
as
in the lower
only
Unveiled
completion.
upon
105,087 cars
competition and the trend toward mass pro¬
a
consequent lowering in cost, and the
to dispose of their houses promptly
builders
of
desire
Ultramatic Drive.
equipped with
the
this completely
and Packard- ,
gradually rising-
deposits from 2% to
increasing their interest rate on
are
Packard available ,
various other models as op¬
Initially offered as standard equipment on
Custom models, Ultramatic Drive was made
Additional Diesels on order, to be
placed in service in 1950, will substantially increase this
There is
The outlook for 1950, in my opinion,
good, and indicates continued activity and growth on
is
a
healthy level.
"
D.
President,
V.
in shape to do a constantly better
pjublic in 1950 and their financial
results should be much more satisfactory than in 1949.
With the crippling industrial strikes of this year almost
out of the way and the promise of a
Packard engineers.
Missouri-Kansas-Texas Railroad Company
manufacturing mate¬
adequate flow of materials all along the line is in¬
the case of steel. The influence of the
steel strike will be felt for some months ahead
—aside from the complication of higher steel costs—
dicated except in
lines
net
.earnings in the months ahead. On
the
Pennsylvania,
high of 109,518 units.
birthday.
On
that date in 1899, the first Packard was built. Over the
half-century span, some 1,250,000 Packards have been
produced.
Latest registration data available indicate
that fully 52% of all these cars are in daily use today!
As the company embarks on its 51st year as a finecar
builder, its dealer organization across the country
remains strong,
its financial position never stronger,
and its product acceptance is rising to a new and prom¬
Packard, last Nov. 6, observed its 50th
for
.
State
.
of
in
ism
offers
ahead
into
account.
that
the
will
months
six
show
1949.
somewhat
rise
over
the
next
few
months. The veterans' insurance divi¬
both their passenger
of the growing Southwestern
industrial districts in the nation,
Other
.District,
been
be
rebuilt
largely
and
spent
farmers'
in
headed
toward
some
voters back
the
to understand
home
curtailment
a
as
reduction
a
undetermined
and
D.
W. Frackelton
field.
struction
Will
industry be satisfied with
plant improvement and extension started in 1949 and now
or well under way?
If there should be, as is
completed
possible,
a
There should be
some
con¬
siderable
increase in public building but possibly not
quite enough to balance off the drop in industrial and
residential
a
East
high level
con¬
but the housing shortage here
industrial
are
now
the
Katy
is the
the railroads have en¬
of earnings, to make up
and tear of the war years.
However, in
equipment,
new
the
wear
areas,
is
Katy
they
are
to-continue
provide
depend not- only on the efforts of railway management,
but on fair and equitable treatment in the matter of
prepare
hand
in
conducting business, and the reasonableness of
demands.
ROY K. FERGUSON
;
quickly
as
and passenger
effected
large as the great
continuing its plan to
equipment
are
Southwest. New
being placed in service
earnings permit, to give improved
service for the Southwest.
freight
The economy
through Diesel operations has spurred
the Katy
I
St. Regis Paper Company
President and Chairman,
>
Business
.
■
in
;
underwent important
current year and earnings of
reflect the adverse effect of
indications are -that the com¬
net sales for 1949 will be ap¬
proximately 25% under the $162,-
many
t directions
readjustments during ithe
St. Regis Paper Co. will
these conditions.
Present
pany's
673,925 reported for 1948.
A
general
tendency
among
pur¬
chasers of .commodities to reduce
or
their inven¬
tories
required
an
important cut
back in operations during the first
control
closely
more
.
area.
for the continued growth of the
Diesel engines and
free
subsidized competition, the assurance of a reasonably
similar to the Dallas Airlawn
Railroad is actively
and all
to progress, meet their
the best possible service at the
lowest possible cost, sustain a credit rating adequate to
their needs, and do their part in national defense.
All
of this means substantial .earnings, and these, in turn,
if
This
Railroad).
being planned and progressed.
oil-producing
Texas
The
as
construction.
Residential construction in Greater Cleveland will
tinue at
with
Texas, will open a field possibly as
pronounced curtailment here this will be felt
in the last half of the year.
for
in the
competitive
tapering off
half of the year and resulted
large quantity of the 1949
"stored on farms and in country
is
balanced budget.
possibly the
most important factor in the uncer¬
tainty of the future lies in the con¬
spending and
The
use
"green
A
give Congress
they want
going into
competition,
season's wheat is still
elevators, which it is
expected will move prior to next season's harvest. The
"Texas cotton crop, estimated at 5,600,000 bales, is second
only to the record crop of 1926, and the total Oklahoma,
production will amount to some 540,000 bales. There
is considerable oil-producing activity in Katy territory
in the vicinity of Gainesville and Wichita Falls, Texas,
and in Western Oklahoma.
It is now predicted that
new
oil
discoveries in Scurry
County, northwestern
incomes
will decline. Government spending
still in the engineering stage,
proposed construction of a $50-million warehouse devel"opment including an office building in downtown Hous¬
ton bv the Katy Park Industrial Development Corpo¬
the
will
Continued advances will be made next
progressed to com¬
buildings and land in this area
industrial projects.
It is one of the most
connected
and freight services. Great numbers
passenger and freight cars are
Hundreds of new Diesel locomotives, making for
labor in its future
(not
regards future results.
as
modernized
and
new
erties
market.
first half-year, inventories will have
dend
confidence
and
proposed development will house from 100 to 150 in'dustries, and will be constructed-on the present site
•of the Katy Railroad yard facilities in Houston. .Leasing
I of space in this proposed structure's now under way. '
generally as compared with
Industrial production may even
business
Franklin.
S.
improvements and continued modernization of the prop¬
D. V. Fraser
;
ration
great difference in the volume of
Walter
providing commuter service,
basis for reasonable optim¬
of the roads must make further large expenditures for
.
Another project,
the
1950, and in the years ahead, the Pennsylvania
sub-assembly
plants make .up the wide variety' of industries that are
relocating or expanding in the Southwestern area.
While there was a reluctance on the part of industry
during the early part of the year to consider additional
major expenditures for plant expansions, this activity
'was stepped up by midyear because'of a desire of busi¬
.modern
regulatory
reduce
to
Then, too, the Pennsylvania and the other roads have
made notable progress
in modernizing and improving
for
.yards, grain elevators,
vfor 36 large
This is good advice any time and the year
no exception taking the whole
12 months
There appears to be a universal opinion
first
is
borrowed,
produce for the Katy Railroad some
28,000 carloads of new freight-busi¬
ness
annually.
Heavy
and
light
1 manufacturing, warehouses, material
r
act
deavored, out of the low level
r
outstanding industrial project
ithe
that
will
production,., by government regulation, and the effect of
subsidized competition.
In- addition to expenditures of Jaree sums, mostly
and
to take advantage
and badly needed
on fhe rails.
light" for the railroads, however, is not
determined by railroad management alone, but by the
course of business, by labor-manageir.ent teamwork and
industries represent a
nessmen
hope
soon
pletion during 1949 was the 200-acre ultra-modern Katy
Airlawn Industrial District in Dallas. More than $20 mil¬
said "Never prophesy unless
Josh Billings who
was
know."
you
in
the
and
lion were .invested in
It
now
nearly in line with the charges
other industrial 'products, with
The
$8,000,030
equipment, and" give
.employment
to
more
than
1,500
workers.
Estimates show they %|I1
FRACKELTON
President, The Equity Savings & Loan Company
pro¬
more
are
Total investment of nearly
An
W.
the
within
These
-buildings
ising peak.
D.
have substan¬
we
tially scaled down expenses in
portion to reduced revenues.
With the level of freight rates
greater efficiency and improved service, have gone and
located along the
were
Texas.
the then-current steel and
to the all-time 1937
next
by the railroads
definitely show up in better
should
year.
Katy Railroad, most of
the
of
.which
10, Packard was forced to slash produc¬
tion in half to maintain operations and spread employ¬
coal industry
walkouts. Output was successfully continued at the re¬
duced schedule through the rest of the year until sus¬
pension for plant-wide inventory on Dec. 14. Employees
will return, on a staggered basis, starting Jan. 3.
Total 1949 production of 104,593 cars was second only
traffic
of
the significant efficiencies and
already in use.
months of the year
248 industries were
gratify¬
Last October
ment in face of
volume
substantial
year,
economies achieved
of
were
crops
In the first ten
recent
ing rate.
Also during
again produced
which, with increased activity in t :e
discovery of new oil fields, is add¬
ing to the wealth of the Southwest.
cotton
,;
industry's "pipelines" are filling up at a
continuation of the
development of that section of the country.
the year bumper wheat and cotton
An
but that
are
the
railroads' losses in carrying the mails
healthy industrial growth and expansion throughout the
Southwest, which is adding materially to the economic
sales effort in the new
close watch will be kept on
serving
of
bodies
FRASER
During the year 1949 there was a
for Ultramatic Drive
1949, representing a Packard
$7,000,000 and culminating years of
no
railroads
The
job
with
factory expansion program
rial supplies.
S, FRANKLIN
WALTER
President, The Pennsylvania Railroad
increase in basic passenger fares, and
output was completed in
year,
of
of the Southwest.
there
Although the accent will be on
genuine spirit of optimism about the busi¬
the Southwest among the businessmen
a
future
ness
profit.
line.
research and test by
handled
were
percentage was 71.6.
the recent helpful
subsequently in 1949 on
equipment at extra cost.
\
January production will include Ultramatic Drive on
the Packard Eight, lowest priced car in the company's
expenditure of over
10 months of 1949, 60.2% of gross tonby Diesel power; in .October the
first
the
In
within
power
future.
2%%' which will still further curtail their margin of
tional
The
complete Diesqlization of its motive
near
ligure.
duction
(including Canada and Export) ex¬
ceeded the prior postwar 1948 record
of 98,646 units, and was second in
the company's 50-year history only
to the 109,652 cars shipped in 1937.
One hundred per cent of Packard
Ferry
toward
miles
cars
surpassing the previous 1937
high of 98,686 units.
Total 194.9 shipment of
demand
hit a
in 1949,
H.
no
$12rO.GO range.
Construction costs will likely show little
change in 1950.
However with the tremendous amount
of building completed in 1949 and the large volume of
work begun in the late months of 1949 to be completed
in the first half of 1950, coupled with some decline in
business in the last half of 1950 the amount of residen¬
tial construction in the last half of this year may well
be reduced but the decline for 1950 will not likely be
more than 5% or 10%.
Prices will be shaded somewhat
and en¬
and pre¬
effort
and this
took place
mentum
acute
are
ing in the desire of veterans for new homes made possi¬
ble by GI and FHA loans.
Residential construction is
becoming largely confined to homes to sell in a $9,000 to
pared for the new challenges it will bring.
Increasing emphasis on sales
can
the
The
1949 as a
year
trend
character of the past several years.
longer looking desperately for shelter.
for new houses is more and more center¬
of
People
not
FERRY
J.
HUGH
The
Thursday, January 19, 1959
& FINANCIAL CHRONICLE
development of
conditions. While
took
place
demand,
at
more
some
the
in
post-war
consumption,
high
beavy
nevertheless
consumer
levels
remained
through this period.
An
improvement
paper
R.
K.
Ferguson
chants
August
products
and
and
by
others
was
in
demand
jobbei
s
developed
followed
for
mer¬
in
by firm¬
ing of prices in certain segments.
As a result of these
conditions operations in the industry have since shown
improved profit trend.
However, for the full year
profit of St. Regis will be substantially under that
of 1948, reflecting the effect of price reductions, e1 arges
for inventory revaluations, idle plant expenses and cur-,
an
net
rency
devaluations.
production
Total
of
papers
and paperboard in
Continued
on
page
the
40
Volume
171
Number 4873
THE
first
The Employment
lions
of
Outlook
six
billion
months
as
in
of
'49
$16.6
was
compared with $8.8 bil¬
the
corresponding period
The problem is how to
1948.
these dollars forth.
coax
COMMERCIAL
1 predict
that
during 1950 companies will
greatly to advertising
and
sales budgets. They will build up
add
By ROGER W. BABSON
Mr.
Babson
reviews
employ¬
their market research
ment statistics and cites factors
develop stronger sales promo¬
tional techniques.
They will hire
suggesting
more
good
employment
(1) continued government
spending; (2) credit expan¬
as
(3) stockpiling of peo¬
savings, and (4) farm
sion;
ple's
price support
however,
are
we
ward
will
tor
will
be
peak
near
employment
(jobs for 58,000,000) at high level
except
wages,
~
Lo ri
seasonal
fluctuations.
E
ri omic
co
activity in the
next
few
months
will
be
80%
some
above
*
prewar
levels.
This
jobs.
coal
means
Depleted
and
steel
stockpiles will
be
built
up.
Good employment
effects
Ro*er W. Babson
feft aU
along the line
by industries using steel. Rehiring
will be especially active in ma¬
chinery and fabricated materials
industries, with the automobile in¬
dustry leading. Construction along
home
hold
and
1950.
industrial
Both
rubber
the
from
Other
their'
factors
--eminent
and
recover
respective
of
credit
savings
suggesting
and
gov-
the
($127
price support
ture, etc., and
expansion
business
stockpiling
billions
ment bonds and
lor food
good
continued
are
spending,
continued
.
will
slumps.
employment
*
petroleum
industries
somewhat
*
will
lines
through the early part of
up
loans, the
people's
of
in
govern¬
bank accounts), a
for agricul¬
continued demand
program
a
All this is not
products.
symptomatic
another
of
boom.
Rather, it is the rebound from the
'49
recession
caused by the too
liquidation of inventories
part of panicky business¬
drastic
the
on
men.
The Downward Trend
We must,
however, face the fact
that
we
cal
trend.
was
the top year in terms of
pro¬
are
in
downward cycli¬
a
Nineteen
forty-eight
duction, wages, profits,
ployment. Employment
~
and
em¬
phe¬
nomenally from 52,800,000 in 1945
to
55,250,000 in 1946; and from
58,000,000 in 1947 to 59,378,000 in
1948.
On
the
other
rose
hand,
"
unem-
ployment increased from 1,040,000
"
in
1945
for
to
the
an
average of 3,189,000
half of 1949.
Most
first
economists
believe
three
million is normal for
of better than
The
net
a
to
four
labor force
60,000,000.
effect
of
strike
recent
settlements is to add substantially
to companies' long-term overhead
„
thus
costs
reducing
the
financial
margin to lower prices appreciably
'
and
thereby
ment.
why
stimulate
This is
you
will
one
see
of
employ¬
the
reasons
competition stif-
*
fen
sharply
within
many
indus¬
tries in the next few months.
is
_
is
also
likely to taper off in the second
half of
-
This
why industrial production
1950 With
resulting unem-
ployment unless greater attention
is given to sales.
Best Employment Opportunities
Best job opportunities for
will
be
Even
the
in
with
annual
the
distribution
business
rate
off
in
1950
field.
1949,
of savings in
the
in
the
human
of production.
in
more
tion
The employment outlook for the
next six months is good.
There
..
be
areas
tion
cyclical trend.
area,
espe¬
cially for the college trained
program.
Warns,
in for down¬
excellent
bringing
favorable
is the
of
common
more
human
man,
relations
A potent fac¬
business
into
a
competitive posi¬
effective utiliza¬
resources
good of both
management.
A third
the
Federal
past
20
for
labor
the
and
area young
In
government.
to
To
nearly
2,000 today, with cor¬
responding increase in available
jobs.
good
times-in
labor
spiritually
must
cer
Harris, Hall & Co., Incorporated,
talking
but
constructive
put
ways
gether for thejr
country
Each
about
until
into
are
group
its
pre¬
the
national
only
way
to maintain
our
common
socialism.
we
Stuart
appointed
C. Law has
the
of
manager
practice
firm's
New
Street.
York
Mr.
ciated
with
Harris,
&
security.
shall
This
be
is
able
free economy and
thereby insure freedom for all.
general
Co.
in
and
1945,
to
New
York.
Mr. Frank will be the firm's
ner.
Exchange
member,
membership
of
Jan.
berger
&
26,
Co.
Garfield,
will
be
and the New York Stock
firm
of
formed
Garfield
with
acquiring the
Eugene
Green-
berger.
%
Cook & McCormick
Confirmed in Sec. Posts
WASHINGTON.
Garfield & Co. Forming
On
partners,
Garfield, limited part¬
asso¬
transferred
was
Frank,
Wall
became
Law
the Chicago office of
Hall
recently
office, 37
Julius
of working to¬
This is the only way we shall es¬
cape
that
W.
and
municipal bond department of the
continued
management
reborn.
stop
rogatives
this
and
Needed
have
never
can
will be
Harris, Hai! in N. Y.
announce
3S
Street, New York City. Partners
George Garfield and Spen¬
Hanage Bep'f of
been
Spiritual Rebirth
We
(275)
government
years
agencies have increased from 250
both
efficient salesmen.
Another
the
staffs; they
will
CHRONICLE
should consider is work with¬
men
in
FINANCIAL
&
&
offices
dissolved,
Exchange
Co.
at
Gfeen-
60
will
be
Beaver
C.
Cook
mick
and
have
D.
Edward
been
C.—Donald
T.
McCor¬
confirmed
as
members of the Securities and Esw
change
ate
Commission
Banking
committee.
and
by
the Sen¬
Currency
siib^-
40
COMMERCIAL
THE
(276)
Continued
from
38
page
States
in
approximate 20,000,000 tons,
will
1949
1948.
In
addition, imports of newsprint paper into this country
in 1949 will, it is estimated, total some 4,500,000 tons,
compared with 4,395,572 tons in 1948.
with
compared
Evidence
21,921,757 tons in
the record
the
of
of inventory liquidation
completion
to
actual consumption of paper may be found in the fact
that production
has risen substantially Irom the low
point reached in July.
With inventoried at the yearend back to normal levels, it is evident that total con¬
sumption of paner. including newsprint and paperboard
in the United States during 1949 closely approximated
resumption of demand more closely related
and the
business generally has com¬
pleted its major readjustment from a commodity-starved
postwar condition to the more normal position of a rea¬
sonable balance be.ween supply and demand.
The 1950 outlook for the paper industry as well as St.
Regis gives promise of more stable operating conditions
Signs at hand suggest that
and
competitors.
the utmost importance that
another good year for life in¬
surance
in general and the Northwestern Mutual in
particular.
Most indicators point to a continued high
level of economic activity and of saving, and these con¬
ditions produce a good market for
expect 1950 to be
We
to
is
important
legislation be
income is
be
railroads
the
in these
the
to
compete
work performed.
FRIEDLAND
GEORGE
President, Food Fair
confident
industry has had a phenomenal spurt
and is likely to experience a
with possibly some decline in
volume after the holiday season with supply having
temporarily caught up with a demand far in excess of
Mutual
than
Fitzgerald
Edmund
remainder will be
modeling ,of older
by death or maturity should re¬
they have been for sev¬
Serious troubles among our
almost non-existent today.
,
eral years.
investments are
\
,
_
the present national situa¬
tion is the danger of further cheapening of the dollar.
Federal Government deficits in times of high business
The
serious aspect of
one
the threats of increased taxes in the near
future or of further inflation over the longer term.
It
is our hope that 1950 will bring greater public aware¬
ness of these dangers, to the end that no steps may be
taken which could weaken the incentive to save.
activity
carry
E. S. FRENCH
The outlook for railroads in
their
to
close
has
levelled
least
at
and
off.
never
should
see a
areas.
year or
position today is the healthiest
Because deflationary factors which were
Food Fair's inventory
in its history.
present during part of 1948 and early 1949 have now
disappeared, we do not anticipate any appreciable fluc¬
tuations in food prices.
Government support of farm
product prices can be taken as an additional assurance
of stability in food prices.
these
all
effect
of this greater
on
In short,
have to be
tion
from
do.
other
benefited
e
in
forms
caused
an
to
varying
gen¬
of increased competi¬
transportation, all of which
through
public facilities for which they do not
charges.
There
is evidence of
of the unfairness of this
that the
gress,
a
pay
the
use
adequate
of
user
gradual public aware¬
competition, and it is hoped
investigations which have been made by Con¬
and
those which
promptly
lead to
we
are
an
dustrial
currently being undertaken
equalizing of opportunity in
look
to
the
the
Also
«tiyely promising.
strong
recovery
major
industrial
affiliated
during the
lines,
machine
activities
including
(including
paper
A coal strike, or further reduction
in
sup¬
In
in¬
picture, however.
spite of this optimistic industrial summary, it seems
several
months,
because
as
demand
mentioned above,
rising out of improvements and capital expenditures is
likely to be lower.
Rates, however, should be main¬
tained at approximately present levels.
view
In
of
the
employment at
high
of
probability
the outlook for retail trade seems favorable.
Sales for the past few months have been at levels which
may compensate for the low volume earlier in the year,
good wages,
and present indications are that they
in good volume at favorable prices.
will be maintained
•;
Installment credit is now becoming a very important
prospects. The volume
credit outstanding in this field has grown rap¬
factor in bank assets and earning
of bank
idly, and unless there are governmental regulations
restricting these activities, it seems likely that the total
volume will continue to increase at rates which should
than
from
compensate for any possible
commercial loan portfolios.
our
service
area
could
decline in in¬
experience
scarcely
tors, we have in prospect the veterans'
a
last half of the year.
of
dyeing,
aviation)
textiles and
finishing,
and
and machine
equipment, rubber,
products, and more .recently the rapidly
growing
The overall outlook for these industries seems
ing, at least for the next six months.
various
to
promis¬
Specifically, the
economic
throughout
groups
the
country
providing i high wages, welfare benefits, and
high employment in an election year regardless of their
cost or economic justification.
In fact, one almost wishes
that the outlook didn't appear quite so uniformly favor¬
able at a time when the Government is following such
aimed
at
basically unsound fiscal policies, because sooner or
the fiddler must be paid.
-
.
.
outlook
for the
area
later
.
Nevertheless, in summary, we believe
ing
industry.
insurance refund
with its
and sops
January, a continuance of deficit financing
inflationary implications, and all sorts of props
in
consist
tools, twines and thread, electrical
"television
Fuller
area
Our
chemicals,
Kenneth
pattern
and
their
C.
have, for the most part, fol¬
of 1949 with a sharp and
set back in the first six months and steady
national
severe
de¬
rela-
Trade and indus¬
trial activity in this
the
potential
outlook
renewed
been
period in the face of unstable nation-wide
conditions, it is important to give consideration to the
national picture. Such a survey seems to warrant equally
optimistic conclusions, especially for the first half of
the year.
The basic industries of steel, automobiles, and
construction are operating at high levels with every in-.
dication that these levels will be maintained.
It is true
that farm income may be somewhat reduced, imports
increased, export volume of trade curtailed, and com¬
petition keener with some soft spots developing, but,
nevertheless, the economy is in a relative state of bal¬
ance.
Furthermore, to compensate for unfavorable fac¬
homes, automobiles,
find
either have
likely that the volume of loans to industry may be in
somewhat reduced volume over the period of the next
Since
capital goods has
on
time deposits
months, which trend seems
and
contracts
for renewal until the latter part of this
prosperous
With ample supply of funds, there¬
fore,
fairly
degrees,
banks.
the
up
next.
more
likely to continue.
lowed
the face
con¬
drain
some
in recent
bound to have
share of the freight
of
Jersey for
The increase
commercial
of
of
come
branches of the woolen
some
,
and other domestic
who will require service. This
passengers
months.
exception of
plies of coal, could not help but affect the overall
'
for banking in northern New
the purchase of
E. S. French
most
come
posits
are
proper
> V
-
•
"
is obviously
mands
a
'
"
ently affected the growth of time de*
of the railroads is to participate in this
will
"•
institutions
paying
higher rates of interest have appar¬
barring un'orcseeable upheavals, 1950 for
shipments and
C. KENNETH FULLER
President, The Paterson Savings and Trust Company
competitive
be
growth
population
good business by handling
Our
the
don't
or
our
petition of savings banks and other
the total volume of business which will be done.
problem
Fair
Food
1950.
in general and in
With
likely to come in demand deposits,
rather than time, however, as com¬
business looks good.
The
reasons,
during
gains
is
population from about 150 million
152 million people.
The require¬
ments
for this curtailment.
cause
the past few
1949.
overlook the fact
should
construction may decline somewhat, but public construc¬
tion and road contracts appear likely to more than make
industry, the local labor situation should be quiet, be¬
continuing population
by
tinuing the trend in evidence during
country is growing in popu¬
lation each year. It is estimated that
we
slight evidence of rental vacancies or unsold
Furthermore, the national policy of providing
subsidized housing and inducements in the form of high
mortgages at relatively low rates will probably main¬
tain the volume at high levels. The volume of industrial
only
houses.
growth, a
prospective high level of home construction and the
spread of new residential communities in
suburban
enhanced
further
moderately during this period,
our
during 1950
national
determined by the outlook for trade
and industry in our service area.
As for the supply of
money, it appears that deposits will probably increase
about the same as they weie in
We must
the
is
up
The outlook
The price
temporarily
prices
And
lack of
A protracted coal strike or
least.
ably by the forthcoming payment of National Service
Life Insurance dividends.
Then, too, the outlook is
1950
exception of
greater feeling
stability exists today.
structure
levels.
income will be augmented consider¬
•
possible
a
<
supermarket operation in par¬
income and personal savings
high
record
hoard of spendable
branches of
that prospects are encouraging.
Most predictions are for a level of
business at least as good as
1949,
industry,
which
at
industry has absorbed large amounts
capital during the past few years, and although resi¬
dential construction has probably passed its peak, there
conservative rate
elements
year
of
is hopeful of its
confidence in the
position in the super¬
market industry in particular has never been greater.
say
coal
a
supply the auto¬
area
The construction
Not
is the availability
Other
in the
adequate supplies of coal (which, unfortunately, cannot
be ruled out) would; alter this outlook very drastically.
1950 is dependent on the
the executive and legislative
the Federal government.
As far as it is possible to hazard a
statement of views on the general
business outlook for 1950, I would
the
for
national
include
economy
by
with
the
in the prospect
domestic business in general and
food
ticular
capital at
interest.
companies
indications that it will be continued for the first half of
con¬
engender optimism
George Friedland
general level of business all over the country. However,
it is also Closely related to the policies which will be
followed
new
of
rubber
not
may
industry and a fairly broad line of industrial
products, including heavy industrial braking.
Activity
and employment have increased in recent months with
Our confidence in the current out¬
of
for the year is anticipated, overall profits
greatly increased:
The
♦
the least of these
in the offing,
seem
motive
applied to the re¬
markets.
Addi¬
are
Price reductions
anticipated.
ume
record
look stems from several factors.
greatest
and
Central Railroad
Maine
also.v
templated
For
Boston and Maine Railroad
President,
propored
facilities
warehouse
tional
upon
main low, as
the
of
months
consolidation
of
however, and even though a substantial increase in vol¬
property
investment is de¬
signed for the construction of mod¬
ern food supermarkets.
Most of the
ments. The death rate among
parently has established an all-time
low in 1949, and we see no reason
to expect a radical change in 1950.
Terminations? of
insurance
other
that
high
invest¬
North¬
policyholders ap¬
available
the
be
bulk
The
business are
our
on
three years.
favorableAvith the exception of the
rate of return
embarking
few
last
period
greatest expansion program in its history. This program
will involve an expenditure of more than five million
dollars during the next year and al¬
most 12 million dollars over the next
individual.
factors- in
western
television
The
Stores, Inc.
of the future prosperity of our
we
are
programs—and
industry offers a major
our
Other
will
opportunity
an
likely to continue to operate in good volume with stable
prices and good employment. The manufacture of paper
products has enjoyed a particularly successful six months
with prospects for its continuation and high employment.
Indication for the twine and thread industry seems to
be for good volume and high employment.
Prices and
profit margins in the hard fibers are somewhat difficult
to predict because of the uncertainty caused by deval¬
uations and the interracial bickerings in India.
fairly for the volume of traffic available and to be al¬
lowed rates which represent adequate compensation, for
leading individuals to de¬
to their personal se¬
service to the
ness
is
ask
a
ertheless, it is relatively favorable.
The electrical in¬
dustry, as evidenced by companies in our area, seems
for handling
railroads in their reimbursement
granted without delay.
the
by
mail
curity and retirement
are
clarify the
to
somewhat
a
By and large
they en¬
highly satisfactory year in 1949, and although the
prospect is for a somewhat lower volume, reflecting re¬
duced capital expenditures on plant and equipment, nev¬
joyed
the utmost urgency that the increases sought
It is also of
attention
vote
eral
passed
of uniformity.
greater degree
basing point situation which is currently disrupting the
of distribution throughout the country.
The increased public
life insurance.
to
machine and machine tool industries shows
normal methods
attention to the matter of retirement
in
We
pas¬
fares, and 3% on freight shipments, be removed
eliminate a restraining influence on the economy. It
country, that Food Fair Stores, Inc., is
Northwestern Mutual Life Insurance Co.
President, The
that
pas¬
these
EDMUND FITZGERALD
Of
the
see
high levels of activity and others experiencing low back¬
logs and reduced employment.
The outlook for the
senger
So
the
1950
of legislation which will encourage business.
l'eel it vital that the transportation taxes of 15% on
that
industry appears somewhat mixed
anticipating a continuance of present
lines
some
,
favorable earnings record.
a
and
with
■)
;
,
sage
All
that of 1948.
outlook for the textile
field between the railroads and their
the transportation
It is of
Turn of the Year
After
Business and Finance Speaks
United
Thursday, January 19, 1950
FINANCIAL CHRONICLE
&
that the bank¬
of northern New
definitely favorable for the year as a
Jersey is
whole.
Continued
on
page
42
Volume
171
Number 4873
THE
Economy Vital
To Proper Retailing,
crisis
report on "National Security and' doing
Individual Freedom." based
18
free
plaining:
any
drive
and
security presents
dangers t<t the very liberties
it is intended to
Mr.
study,
on an
dom
of
retailing edifice."
Ex¬
"The
central,
and
I
choice—of
one's
job,
of
ideas and viewpoints without dic¬
tation from above.
safeguard.
in
houette.''
promoting
Lazarus,
President,
Jr.,
Federated Department Stores, Inc.
one of the nations largest retailing
organizations,
presented with
was
T
the
Award
b
o
"Retailer
the
e
the
as
of
Yea
r,"
Thursday,
Jan. 12, at a
dinner
St.
the
on
a
awareness
OKLAHOMA
Philip Patton With
First Boston Corp.
Philip C.
Honnold,
The
First
Boston
Corp.,
100
Broadway,
nounced
New York City, an¬
that Philip S. Patton has
joined the firm
of the need
for the
in
as
the
Assistant ViceU.
S.
Govern¬
With Waddell & Reed
planning for personal lib¬
erty within the pattern of inter¬
security.
say
this
in
put
the
same
all
Stores—and
I
seriousness—can
kind
The
of
(Special
to
Tire
Financial
KANSAS CITY,
Chronicle)
MO.—Frank T.
Oklahoma
of
1950
CITY,
its
at
annual
of
for
OKLA.—
the
the
meeting,
Bond
with
Waddell
&
Reed, Inc.,
Avenue.
1012
Anniversary Dinner
suc¬
PHILADELPHIA,
Canfield, Oklahoma City.
officers
elected
were
Green of R. J. Edwards,
Oklahoma City, Vice-Presi¬
dent, succeeding Meredith Kilgore of Evan L. Davis, Tulsa, and
Charles P. Stuart of the Fidelity
Lloyd
Inc.,
National
re-elected
Page
for
was
the
unanimously approved
use
of
his
farm
for the
16 at 6:15.
Guest speaker was
John
on
Business
P.
O'Neil
staff of
vard
University, macje the
tation
of
behalf
on
the
Tobe
had
cumulative
McDonald, Evans &
1009 Baltimore Avenue.
f
Do-
of
Har¬
presen¬
the
trustees
stating that
been chosen for
accomplishments
statesmanship,
"industrial
of
of
Av/ard,
Mr. Lazarus
the
of
broad-scale
conception of retail¬
ing, over-all contribution to Amer¬
ican
business, liaison
tween
civic
efforts be¬
government and retailing,
activities and philanthropic
interests."
The
Award
Tobe
founded
was
"Oscar of
Retailing" to "stimulate progres¬
seven
sive
ago
years
thinking
an
as
among
merchants
and to
signify to the entire nation
outstanding
efforts in the
field by men and women."
In accepting the
Award, Mr.
the
called
Lazarus
nation's
the
on
retailers to "take a po¬
sition of leadership" in their com¬
1,750,000
munities. states and the nation to
America
alert
sound
the
to
planning
that
certain
individual
freedom
are
ent-day
curity.
search
"The
for
need
will make
liberty
and
in the pres¬
not lost
for
military
se¬
•
is
fact
that
retailing, as
we know it and as we want to keep
it, can function only under a sys¬
tem of private economy and per¬
sonal liberty," Mr. Lazarus said,
adding that a period of what
might
be
called
"permanent
crises"
here and that the drive
was
to achieve
security presented dan¬
gers to the "very liberties it in¬
tended to safeguard."
He noted:
"We
must
sense,
plan in the broadest
but without destroying the
play of personal initiative and
ingenuity, and be vigilant to pre¬
growing role of govern¬
ment from becoming a runaway
bureaucracy.
"For years certain retailers have
vent the
feared
risks
the
anything
of
getting into
controversial.
attitude could be
*
remotely
Perhaps that
justified in the past,. It no longer
applies today. Today the risks of
avoiding controversy have become
too great.
We have too much at
stake to remain passive observers.
"In the rugged years
pinch
may
hurts
us
Volume
ahead, the
well be felt where it
most—in
serving
two
industries. Today, using both biologic and synthetic production methods,
CSC makes over 200 products which serve every major
products
are
industry. Some of these
bacitracin, penicillin, riboflavin, ethyl alcohol and derivatives, acetone,
purchase and
of
goods and purchasing
Retailing will have to
major decisions and use its
dry ice, butanol and derivatives, formaldehyde, methanol, amines,
nitroparaffins, feed
power.
make
to
resources
make
them
count."
Pointing
"does
out
that
retailing
business not with govern¬
ment but
only with the American
people," Mr. Lazarus said that re¬
tailers, large and small, "must go
out
to.
and
an
elert
their
awareness
pening and
communities
of what is
arouse
them to
rect interest in what
can
hap¬
a
di¬
happen."
Drawing on his experience as
a special committee of
the
head of
supplements, benzene hexachloride, ammonia
..,
CITY, MO.—Timothy
been added to the
has
of
School
Administration
who spoke
McDonald, Evans Adds
KANSAS
of the Gradu¬
ate
the
Davis, Mayor
"Free Enterprise."
and
Dean
F.
of tbe City of Reading,
nald K. David
Lazarus, Jr.
on
Honorable
Bank, Oklahoma City,
Secretary-Treasurer.
resolution of thanks to C. B.
A
KugMonday, Jan.
Dinner Meeting at
ler's Restaurant
industry.
Fred
of
versary
&
Other
American
-
The
vert
York
business
—
Club
ceeding Herbert Canfield, of Cal¬
City, attended
by
over
250
leaders
PA.
Women's
Investment
Philadelphia held its 20th Anni¬
Regis Roof,
New
day outing.
committee
ap¬
field
permanent
Inv. Women of Phila.
year
Burgess has become affiliated
thought, Baltimore
family
41
pointments will be made later,
Honnold, of C. Edgar
Oklahoma City,
was
President
elected
Club
wisest
national
annual
Okia. Bond Club
Elects New Officers
"Retailers must act as the spark
ment bond department.
Mr. Pat¬
plug in their own communities in
ton was formerly
an
officer of
alerting the public to the need
Blair & Co., Inc.
for an informed opinion and to
an
(277)
sil¬
new
,
President
Fred
CHRONICLE
Lazarus
might say, symbolic freedom in a
democracy is, after all, the free¬
achieve
to
months'
said that this group found "free¬
dom of choice the cornerstone of
asserts perma¬
here
is
FINANCIAL
ment.
Declares Lazarus
nent
&
Committee for Economic Develop¬ initiative and money behind such
which last month issued a' promotion as it is accustomed to
Free
Industry leader
COMMERCIAL
PEAK® and NOR'WAY® Anti-Freeze.
Co.,
1
42
Continued
from
page
40
Speaks After the Turn of the Year
Business and Finance
President, The Curtis Publishing
will move during the
economy
our
There also
need
will
it
ward,
going
is
business
the
visualize
to
power
for the
u-
is selling and
climb and that power
'
...
will
downward—there
We all know what
advertising.
happen if it turns
will
turn up¬
to
unemployment, inventories
and that will mean less
be
unemployment, clos¬
factories and stores and all the
sales, still more
ing
dismal downward spiral.
of the
In
a
recent address, Dr.
■»
Harold G.
gling
attention to the
highly sensitive character of our tax
system by demonstrating that even
a moderate recession, such as a 20%
has
It
structure.
economic
effort.
relationship to our national sales
The trend of events
indicates that if we are smart and
instead of depressing it we
sales volume
stimulate
probably have continuing prosperity in America.
matter of fact, it is possible that we are facing
almost
every
the
that
financial
and
of
months
six
magazine, we
1950 are
going to be
ing in
our
conditions
troubles
the
are
on
begin
to
groundwork
appear
being
is
and
Barring
or
costs
of
articles
well
few other
a
the beginning of a
through the
year
would mark
1948
and
1949.
of
E.
by
severe
other
price levels will undoubtedly get worse instead of
Our economy
is
a
The Texas Gulf Coast,
combination of both inflationary and
business activity can change' the
trend.
We see a machine running smoothly with all of
the wheels functioning perfectly, but let one of those
downward change in
whole
in
our
_
the
goods could throw our economic machine out
could start a downward spiral. Govern¬
controls, subsidies, price fixing and other
can affect the over-all picture for a
stimulants
sooner
or
later
the
laws
of
supply and
Texas
artificial
In
summary,
I look for a
We
years
the
point
E. F. Gossctt
and
a
begin.
long recession
I believe bankers
vestments.
'
.
,
.
.
~'7
.
GRAUER
E.
1950
^business
well
utilities in the United
is
into
the
promising. The improvement in gen¬
conditions
which
part of 1949 should
1950, and this will
revenues
of
gross
availability
The
utilities.
appliances of all types
easier situation respecting
the
supply over i most of
the
permitting
promotional
sales* campaigns, will1 also work to
this end.
Costs, on the other hand,
should be more stable than for any
continent,
year
since the end of the war. There*
therefore be less of a squeeze
should
from the cost side.
With
should
F. Gimbel
Bernard
National Bank,
has"
been
area
World
War II,
chemical
the
pace
of chemical
construction in the
immediately
of
ahead to utilize
materials in
raw
forecast
1950
business
high
the. coastal
abundance
ad¬
power
investment
expect
hope for
electrical
and
be
activity
another
as
a
syear
of
generally, it
year
of
heavy
A.
E.
Grauer
expenditures by electrical
utilities.
During the immediate postwar years, almost
all electrical utilities were pressed by a condition of
capital
abnormally low surplus capacity as the result of the war,
electrical
therefore quite gen¬
erally "emergency" programs, involving the necessity of
catching up with the past as well as meeting the present
and anticipating the future. With some important areas
excepted, like the Pacific North-West in the United
and
unexpected and sustained increase in
an
Capital
and
States
programs
Ontario in
were
Canada,
1950
should
see
the end
"emergency" period. As against some of its im¬
mediate predecessors, it will be a year of more orderly
of this
development and better
capital
The
the
cern
control of costs.
financing of the huge postwar capital program of
electrical industry,
at the
which caused wide-spread con¬
beginning, has so far been accomplished re¬
1950 should, if anything, be an
year than 1948 and 1949.
Nevertheless, it is most desirable that action be taken
to make financing b,y junior securities easier. Important
sources
of capital funds like life insurance companies
state that governmental regulations prevent them from
becoming more significant purchasers of common stocks
and preferred shares.
If North America is going to be
kept an "enterprise" 5rea, this is a field which warrants
the most careful thought, followed
by action, of all
well,
easier financing
markably
and
concern.
area.
in Houston has
made satisfying progress since the war's end.
Latest
announcement is that A. O. Smith Corp. will build a
should screen their loans most care¬
eral
of
investments in the HoustonCity area alone exceed $227
Heavy
sound risks, short-term loans and in¬
fully, adhering to
the
net
a
bine to make
electrical
substantial plant
months of 1950. Some¬
that time could be the turning
where along about
of
may
friendlier
good.
• ■
earnings point of view, several factors com¬
marked the latter
development to slow down, but nev¬
ertheless we believe there will be
continuation of high busi¬
activity for the first few
.
Canada
and
From
.
million.
time, but
demand will
prevail.
ness
end
plant
of balance and
ment
.
from
Charles,
Louisiana, since 1939, about half of
this total coming in the period 19391945, the remainder since 1945. Since
mesh, and it can quickly throw the
machine out of order.
This can be equally true
economic machine.
Price cutting and the influx
and
management.
outlook for electrical
1950
States
Brownsville, Texas, to Lake
get out of
of foreign
The
retail
point
demand.
into
poured
industrial
and
/
plant
We
produce.
intelligent
of
probably the most talked-about
ical
good
justments between the various parts
the economy,
particularly labor
L. Gregory
William
in
...
farm
more
America today by reason of its industrial
growth in the past 10 years, presents encouraging pros¬
pects for continuing development in the future.
Approximately $1 billion in chem-
region
deflationary forces and when either force predominates,
we call it either inflation or recession. A small upward
wheels
in
Houston
better for some time to come.
very
levels should
hold
of course, with a
disposition for downward adjustment
increase
of the Board, South Texas
governments.
Already we are seeing
price cuts coming in certain lines, which unset-
tions
another
Price
period.
GOSSETT
F.
be
fairly well —but,
1949.
Chairman
other inflationary
to
tendency will not be
destructive during the
excessively
extend
believe retail sales
volume during 1950 will exceed that
production costs in the United States
the
1949.
should
inflationary
1950
entire
_
can¬
business¬
yejir for American business and the
veterans' in¬
^
in
had
1950
first half of
the
We
factors beyond
individual
the
which should give us a
higher level of business in 1950 than
wages, appear
levels likely to
through
com¬
tendencies
In summary, I
foreign goods is further increased by currency devalua¬
or
at
probably
great influx of foreign goods dumped onto the markets
of this country in the coming months.
This influx of
tied
and
stabilized
of
doubtedly add
premiums payable early in
the year, economists estimate national
income for the first half of 1950 at
an annual rate of about $217 billion;
close to the records established in
oiir tendecy to lower tariffs, we could see a
with
"
on
and defense programs will un¬
man,
surance
not supported by gov¬
are
control
goods and living
Including refunds of
Gasser
subsidies, prices are already beginning to de¬
cline. With the high
and
prices
.
wilt, of necessity,
production,
be free from
not
A.
.
reversal of
months ahead. '
economy
efficient
on
and normal business period.
year.
W. W.
reliance
more
petent management, and much more aggressive sales
development as we more nearly approach a competitive
time in recent years,
and
general long downward trend.
most lines where
ernment
During 1950, the American
place
.^national character- I
cause
hold
scarce
overtaking demand, it could
that the latter part of this
be
In
automobiles,
steel,
to
generally,
be
to
period of deflation sets in.
The latter part of 1950 could well
be such a turning point. With the
production
this
^
1949 comes to a close, trends in
dollar volume and unit sales
prices for consumer
hand; prices begin to fall, and'
television sets and
nothing
GREGORY
President, British Columbia Electric Railway Co., Ltd.
Brothers Inc.
prolonged strikes of a
For the first
long
a
in
these trends in the
after a war inflationary
prevail, and during this time
readjustments are being made, after
which deflationary forces gain the
years
forces
upper
trends
studies,
definitely upward.
see
four
about
For
year
both
trade
economic pattern, has been
similar.
quite
the
As
for
Following every war that we have
five
WILLIAM L.
GIMBEL
BERNARD F.
recessions.
had, the
of 1950 should be good
share
President, Easton-Taylor Trust Company, St. Louis, Mo.
business during the year.
President, Gimbel
that
laid
among
by the tax picture.
effort to obtain new
it is often when
the up-trend that
warning, for
a
are
we
good and after the middle of the year conditions are not
so certain.
This unanimity of optimism should in itself
be
Coast
Unquestionably, competition will be keen during 1950.
There will be many extensive campaigns in the fields
of advertising, sales promotion and direct sales.
We
believe we are geared to go out and make a good show¬
GASSER
paper
first
and
care
long-range prospects for
jug¬
machinery line, consisting
mainly of capital goods and heavy equipment, will show
a
decline during next year. It now appears that this
reduction may be as much as 10% to 15%.
While generally we recognize many encouraging fac¬
tors as we look into the new year, we find this some¬
President, Gary National Bank
In
also
we
expect that our general
We
what counteracted
read
credits with
our
Houston business and industrial
their view that the
Houston and the Texas Gulf
the brightest in the nation.
and
year.
will
As a
poten¬
tially one of the most prosperous eras in the history of
our
country.
High selling and intelligent advertising
can be one of the principal forces in bringing this about.
W. W.
business-wise,
peacetime business
cannot be expected to hold at this high peak.
There is a good indication, however, that the farm
machinery business of Allis-Chalmers will maintain a
favorable pace.
In this field, of course, our prediction
must be dependent upon the American farmer and his
income.
At the present time the trend of farm income
is downward.
If this trend continues, then those of us
working with farm products must work harder during
1950 if we are to approach the dollar volume of the past
demonstrated
been
watching
are
we
leaders that the first six months
large- volume of
health bears a very direct
times that our economic
area,
We share the view of
production
business
research
market
and
Walter Geist
likely to face, cut
it in
could still easily
throw us into a dangerous effort to recover by increas¬
ing taxes.
This, in turn, could result in a sharp reduc¬
tion in our selling expenditures and a weakening of our
whole
this
guide-posts as
such
to
general
in
appear
decline, would involve a drop in tax
as a
many
and
peak of
a
caution.
had to work with.
we
According
larger variation than we are
half and the resulting tax loss
20%
what
from
receipts of something like $16 to $18
billion.
If you regard this figure of
Walter D. Fuller
materials
of
at
just ever $1 billion. Demand for commercial loans con- "
tinues unabated, but, in common with other bankers in
strikes,
a
units have been built in the Houston metro¬
politan area since mid-1945.
Bank deposits in Houston are holding
facilities in order to realize the most
Moulton, President of the Brookings
a—
about 50,000
wind¬
are
highs.
meet
up a year
crippling
steel
and
coal
which brought lay-offs and
called
Institution,
we
Tonnage
cargoes through Port Houston are at allHousing construction continues brisk to
demands of an expanding population, even though
time
in which we will record
the largest peacetime sales in
the
102-year history of our firm.
This
record
was
accomplished
despite
ing
will mount,
rest
we
experiences.
At Allis-Chalmers
the
in
value of
and
look ahead
business picture in general for the
coming year.
At the same time, of
course,
it must be
realized
that
predicting future trends in business
is hazardous, must be based on past
year.
If
bright aspects as
many
are
general
with most indices comparing quite favor¬
ably with those in other areas of the nation.
be encouraging.
coming
in
Business
Houston area,
1950 generally appear to
Prospects of my company for
general economy of this country at the close of
1949 is on a seesaw.
Now level, it is difficult to predict
since the war's end.
is holding up very well
than $400 million
more
Company
Manufacturing Company
Allis-Chalmers
President,
The
way
Industrial and commercial construction in Houston totals
GEIST
WALTER
FULLER
D.
WALTER
which
Thursday, January 19, 1950
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(278)
industry
$5 million large-diameter pipe-making mill
in Houston.
An
interesting development in this connection is legis¬
lation passed
by the last Canadian Parliament. Canadian
and ordinary shares are now al¬
holders
of
lowed
10% tax credit on dividends from these shares ix*
a
preferred
,
Volume 171
Number 4873'
THE
usiness and
computing
their
in
both
taxing the
*and
income
personal
lecognition
some
exists
of
the
the
United
income
same
States
in
the
Finance
This
tax.
double
onerous
and
hands
'Canada
of
is
credit
dividends.
as
main
The
purpose
through
a
will
be
active
an
promotion
of
a
As
-situation
enter
we
1050, the prospects
be reasonably
are
many
lying
factors,
in 1950
that
factors
about
policies.
1950 will
the
demands
for
projects,
•power
more
of
over
new
::
into
'
fM
of
Federal
speculative
prices.
a
commodity
in
liberty must perish."
or
.
first half of
sharpened-
that the
appear
with its
1950,
accent
on
merchandising and more thoughtful
lontg-range business policies, should
be
period fully as good, businessas during 1949. The latter half
improve or retrograde in
proportion to the policies established by business, man¬
Hugh C.
Gruwefll
a
wise,
t
And 'he concluded'
-
with
of 1950 will
-
agement and
labor.
It
will
also
be
affected
by
the
business becomes realistic
in its approach to consumer
problems, and the world continues increasingly free from
threats of armed -disturbances, then the second half of
that your Huns and Vandals
and
Most
Americans
dismal forecasts.
ask
ourselves
will
will have engen-"
iYet
instinctively
they give
whether
we
repudiate
us pause,
are
really
The
?
a
,
these.;
and we should:
asserting out-
State
favored
productive and profitable.
continues
Arizona
of
.
to
be
an
especially
It is still very short of its ultimate growth
area.
in
population and development.
That development is
contingent, in a large measure, -on freer access to water
for irrigation projects—a .subject which has achieved
national attention and which is
now
of the United States for action.
in
before the Congress
The future of this State,
the
realms of agriculture and cattle raising, is tied
closely, to-a sufficiency of water. It is earnestly hoped
by all thoughtful citizens of the commonwealth, that
Continued
on
page
44
V 'IlPi
■
5
This
illustration
jolder
sent
Wisconsin
and
the
to
letter
55,449
Electric
Power
are
taken
from
stockholders
L
...
a
of
Company,
-October 29, 1949
To Our Stockholders:
Today
-we
consecutive
quarterly - dividend- check
holders of
to
ferred
-
our
issue
or
am
Six Per Cent Pre¬
hold sfeares of that
of other issues -of
sure
-our
stock,
will be interested in
you
pany
September, 1949, the Com¬
had 1,134 holders of the Non-
callable Six Per Cent Preferred Stock,
11,473 holders of-the 3/60% Serial
this occasion because it
serves
to em¬
Stockholders, located principally^ in
Wisconsin
state in
ing
but
also
the Union. In
some
in
a
every
other
circular offer¬
of the shares of the Six Per
phasize the "stability of-our Company
Cent Stock for sale in 1901,
-and
Nelson'Cromwell, then President of
our
In
dends
business.
addition
to
having ;paid divi¬
quarterly without interruption
the
William
Company, reported the popula¬
tion of Milwaukee and
tory to be 350,000, and gross earn¬
preferred stock, the Company paid
dividends regularly on other issues of
preferred stock formerly -outstanding
and has paid
regular quarterly divi¬
dends on the
currently outstanding
ings of the Company for 1900 as
$2,204,536 which consisted princi¬
Serial Preferred
Stock, 3.60% Series,
since date of issue. Common Stock of
this
Company
was
such
year
stock
pally of transportation department
revenues.
In
concluding his state¬
ment, Mr. Cromwell predicted con¬
tinued .growth of the
Company's
business.
How
first issued to the
public in May, 1940, and dividends
on
have
since that date.
and
heating operations
including revenues of the
not
transportation subsidiary .amounting
to
$17,080,383.
been
paid each
the
is
area
right he was! Population of
by the Company now
served
985,000, and
for 1948
were
sons.
When the
it had two
bined
operating revenues
$45,393,061, derived
are
plants with
a com¬
generating capacity of about
4,150 kilowatts;
now
watt unit
we
an
80,000 kilo¬
was~24,;095,96l kilo¬
hours, and for the 12 months
August 31,
1949,
3,089,015,401 kilowatt hours,
times
as
it
was
great. -Records do not show
-
of the century,
were
293,622
as
but .at the end of 1910
12,151 as
compared with
of last August 31.
pany's transportation business,
cluded in
annual
are
in¬
reports, as you
doubt have noted.
no
In the last 20
has increased its
from 285,400
kilowatts .and
years our
Company
generating capacity
kilowatts to 731,500
has
nearly trebled its
output of electricity, to cite only two
instances of its
I'm
sure
you
growth and
feel
progress.
I do, that it's
as
most
gratifying to be part of an in¬
dustry ;and member -of a company
whose
been
so
so
record
of
fine and
achievement
has
whose outlook is
'-encouraging.
subsidiaries, Wiscon¬
Respectfully
G. W.
sin Gas &
consin
our
Electric'Company and Wis¬
Michigan Power Company,
In 1941 the
operations and
Railway & Transport Company, or¬
ganized in 1938 to take over the Com¬
or 128
the number of customers,at the turn
there
ities. Results of their
have five
under construction. Electric
output for 1900
•ended
ing the scope of the Company's activ¬
combined capacity of
,a
731,500 kilowatts and
watt
other compari¬
Company was formed,
power
plants with
acquired, substantially extend¬
were
-of those of The Milwaukee Electric
Startling, too,
tributary terri¬
the non-callable 6%
-for 50 years on
from electric and
Preferred Stock and 42,842 Common
Capital Stock.
Whether you
I
As of
mailing the 200th
are
yours,
Van Derzee
President
sp-6a,50
WISCONSIN ELECTRIC POWER COMPANY -i,
*
labor
would
matter of public record.
variation
However, conditions abroad may
b^gin
to
resolve
themselves and
and
management
attain ~ a
degree of understanding.
Thus, it
expenditures'
the
now
continued;
1950 should also -be
.
enterprise system, together with
spending and lending.
We are turning
Federal
excess
American
be
disturbances in the field of labor and ;
that
continual
affect
will
business in 1950 could
may
dered within your country by your own-institutions."
private
our
,,a
which
factors
con¬
one
energy and realism with which our manufactured prod¬
ucts are distributed
abroad.
Therefore, granted that
out,
the Economic
in
government
If that is so,
strong hand, or your Republic will
be as fearfully plundered .and laid waste by-barbarians
in the. twentieth .century ,as the-Reman Empire was rin
the fifth; with this difference, that the Huns and Van-,
dais who ravaged the Roman Empire came from with¬
George Gund
Congress last July,
Expansion Act
1949, which provides for new government interven¬
tion
conclude
of government
through government loans and
It is evident In the bill in¬
called
the
that-"either so.me Caesar, or.Napoleon will seize the reins
capital.
troduced
what
1-950 faced
civilization
farm 'crops, more direction of indus¬
try
implied recently that budget-
to
to
century. He feared that in adversity we would
do things which would prevent -prosperity; that spoli¬
ation would increase distress; and that distress would'
produce fresh spoliation.
He -said further that '"when'
society has entered on this downward progress either1
.
control
Business
twentieth
government
more
Co.'s
In-1857 Lord Macauley made some gloomy but re-J
mark-ably apt predictions about the United States in Ihe
may
It is evident ;in
economy.
Trust
if the
secondary
all-of which is
racy,
One of these is the continual
pres¬
for more
government 'control
the
Cleveland
getting rid of the inefficiency, waste, incompetence,, ^nd.
extravagance in the operations of the Federal bureauc¬
sure
■over
preceding it. since the close of the war,
with a perplexity of world con¬
ditions which make obligatory and utmost exercise ofsober judgment and prudent thought.
The gravest of*
these
many
imponderables
is,
of
course, the possibility of aggressive '
policies
by
other
nations. Other •
come
dollar.
These
.
.
Like the years
future purchasing power of his hard-earned
And fee ought also to be vociferously concerned
with the large savings which could be -marie merely by-
the
arise from the trend of gov¬
ernment
'
we
■Every American worker ought to be truly concerned
business for
influence
years.
the
December,
GRUWELL
C.
President, First National Bank of Arizona
receipts will eventually lead to more inflation.'
over
Probably
should to help prevent these
we
HUGH
self-reliance.
it is perfectly reasonable for an
steadily -more than his income, be¬
cause all the things for which he is
spending seems ;so
important that he cannot dispense with any of them.
but which have most serious
implications for later
in
out
for
Clearly,
good.
as
is
individual to spend
persons
however, which
have much noticeable
well
as
•expected at the beginning of 1949.
There are some disturbing under¬
not
pointed
balancing is
1949, which turned
better than
be
which
vigorously
*
total volume of .goods and
services produced in
not differ very much from that of
-out to
individual
and
ceives to be the general welfare.
GUND
will
year
freedom
Government officials have
President, The Cleveland Trust Company
new
the
budget, is not balanced
when business is good, then when is it to be balanced?
one set of -rules for an electrical
utility in
hands, and a much easier set of rules for an
electrical utility in public hands. If this occurs for the
electrical industry, there is no reason why it should not
happen to any other .industry.
As
ideals of individual
Bulletin
private
the
over
grounds if business were badly depressed,
but ic is hard to find any possible excuse for it in
periods
of above-normal business such as we have been
having.
which allows
GEORGE
control
as
forecasts coming true.
toward
emergency
attractive.
should certainly be well above the average
The major disturbing factor is the fear by some
there
slate
selves
the highest
us
drifting
are
.
1950
that
43''
(2791
.Another serious development is the return to Federal
deficit spending.
This might .somewhat be defended on
of the Ca¬
Fundamentally, the electrical industry is in good shape
and
year.
system which has brought
a
system of
can
legislation is, however, to stimulate more "risk
capital'' investment by ma-king the purchase of junior
more
CHRONICLE
completely foreign to the true and fundamental Ameri¬
nadian
securities
FINANCIAL
living-standard in all hisioi;y, -and
corporation
a
&
Speaks After the Turn of the Year
from
away
that
taxation
again in the hands of the individual after it has been
distributed
COMMERCIAL
i
***
'
'»
:
yi.'f
/
*
.
''
4>
«■
v'"
•
f
r
44
Continued
from
43
page
,r
"
^
substantial change
not
feed for cattle.
Arizona contains much of interest to light
■
established in 1881 and is the
in the State, has seen Arizona
was
bank
national
oldest
through
to
from primitive beginnings to be the hub of a
thriving, throbbing Southwest. The vision of the pioneer
yemains with us, who have fallen heir to their courage
and imagination.
We expect the State to continue its
grow
growth and to play our own part in that
'
population is becoming alarmed at the dangers
at
a
indebtedness and
Treasury notes.
and
one-
*
current
the
rate
money
the
in
that
deposit
in
12
pattern
levels visible
Lewis G. Harriman
assets.
from
great, change in the trend
no
of
and that increases, if any, must come
decision to lengthen the average maturity of the
earnings,
a
investment portfolio and
from more efficiency and econ¬
omy of operation.
In most banks there is some latitude
here but it is limited. The trend of bank operating costs
has been upward since the war largely as a consequence
of wage and salary adjustments, but has reached a point
of some stabilization in the past 12 months. Banks gen¬
now actively and successfully engaged in pro¬
to cut costs, increase efficiency and expand profit¬
erally are
grams
able services.
in net
This should be reflected in
some
increase
no major change can be expected
rates and deposit levels remain steady.
condition, strength and integrity of the
banking system is eminently satisfactory. Banks have
never been in better position to meet depositor demands
and borrower requirements.
Investment portfolios are
largely confined to U. S. Government bonds and diversi¬
long
so
The
earnings but
as money
basic
fied maturities,
loans
and current and mort¬
sound
are
gages, if any, are subject to regular and systematic
amortization. Reserves are ample. It is difficult to con¬
ceive any condition or circumstance that will impair the
soundness of the structure.
to
are
HAGEMANN, JR.
have
efforts
economics through their customers
them
its entire history. Ex¬
of
difficulties
other
serious
the
these
ol
Some
nature.
the rising costs of operation,
have
been
thwarted
by
elapsed since the close of
steel,
are now
due
-
considerable
a
to
Early in
sure
and
contraction
a
1949, as inflationary pres¬
subsided, the Federal Reserve
steps to ease
the Treasury took
money
rates.
One
of
our
present
economic
centers around surpluses
than shortages, and as I view
problems
rather
the outlook for 1950 I do not expect
anv
a
appreciable increase in loans
or
lightening of money rates. Due to
the
fact
that
the
Government
will
operate at a deficit
a^ain next year, it seems reasonable
to believe that the deposit level will be somewhat higher
H. F. Hagemann, Jr.
undoubtedly
However, I doubt if the income derived
from any such increase in deposits will be sufficient to
completely offset the loss of income which banks will
incur through their higher coupon bonds being called
by year-end.
The favorable volume of busi¬
years.
ness
attributed
be
can
factors:
three
to
(1) the high level of business
throughout
the
United
Canada; (2) an increas¬
ing recognition of the advantages of
the constructive use of credit; and
(3) management which has sought
aggressively to serve the consumer
effectively. There is every reason to
believe that 1950 will also prove to
generally
.
States
be
a
and
good year for consumer
very
finance
companies
generally, pos¬
sibly exceeding in volume the year
1949.
Contrary to general opinion, it is
i
axiom that the
an
business
is
general is good.
Byrd E. Henderson
lending
consumer
when
good
business
in
When business is active and people are
employed at good rates of pay, they are willing and able
to obligate themselves to repay on an instalment basis
the money which they need to meet emergencies.
This
is conducive to a high volume of applications for loans,
the
granting of loans to
a
high proportion of appli¬
cants, and to a steady volume of repayments from cus¬
tomers.
When people have misgivings with respect to
their future employment or are unemployed they are
neither desirous of assuming obligations to be repaid
over a period of time nor are they in a favorable posi¬
tion to assume such obligations.
In view of the high
level of general business activity in 1949, it is not sur¬
by the Russell Sage Foundation over 30 years
with adequate
charge. Suitable laws have
been adopted in over 30 states.
Those laws generally
provide for the licensing of lenders after a strict exami¬
thp success
in
ago,
order to
provide
wage-earners
credit at reasonable rates of
government as effectuated through
National Petroleum Council.
nation
peace-time co-operative effort
between the petroleum industry and
the
Oil is the "Number One" essential
of both
it is
and peace, and, as such,
war
inseparably linked with the col¬
W.
S.
Hallanan
problems' are national in
scope and involve the security of the country and the
continuation of our high level of productivity. They de¬
Its
the
mand
attention
serious
and
fitness, character, and financial responsibility
supervision of such licensees. They
charge. Such laws originally
covered loans up to a maximum of $300. Economic con¬
ditions have changed greatly, of course, since 1916. The
higher price levels and wage levels and the more gen¬
eral acceptance of the use of all forms of consumer
credit have resulted in a demand for larger loans than
also set a maximum rate of
lective destiny of the American peo¬
ple.
consideration
of
all
formerly.
citizens.
"
To
In recent years, a
old political axiom, it is certainly
true that "as oil goes, so goes America."
The recent
simultaneous strikes in the steel and coal industries
paraphrase
caused
of
for continuous
and
an
thoughtful
to
persons
ponder
production of
two
such
prime
steel and
in
essentials
as
weeks, the economy of the coun¬
try managed tc limp along, but we all know that if the
standstill, chaos would
no
one
brought to
We must be on guard
obtains the power to
man
or
ensue.
group
ever
were
Loan Laws
number of states have amended the
in
order to enable
consumer
finance
companies to serve the public better. In 1949. New York
and Connecticut increased the size of loans subject to
In
coal halted for several
facilities of the country
Small
the effects of a
Even with the
complete shutdown of the oil industry.
the regulation of
the small loan law from $300 to $500.
addition, small loan laws now provide for larger loans
Canada ($500) and in eight other states: California
Illinois
($5,000);
($500);
Michigan
($500); ,Nebraska
($1,000); New Jersey ($500); New Mexico ($500); Ohio
($1,000); and Washington ($500). In a number of other
states. Household makes loans up to $1,000 under other
legislation.
It
a
is
to
be hoped
that additional states will provide
consumptive capacity.
legislation which will give their citizens the benefit of •
the services of consumer finance companies regulated
producer have contracted to
in the
flood of
went
of the significant
in operating' costs in recent
the provisions of the Small Loan Laws, originally recom¬
The markets of the American oil
a much greater degree than
is represented by the difference between world produc¬
tion and consumption. This is because foreign produc¬
tion has not only taken over most of the American ex¬
port market but has also displaced American oil in the
American market.
As production abroad has increased
by leaps and bounds, our own domestic production has
been sharply curtailed
in order to accommodate the
well filled. Last spring business under¬
rate
growth
mended
ventories up to more normal levels.
of
in spite
profit,
of net
factory
that it was a good year for consumer finance
companies. So far as can be foreseen, 1950 will also be
a year of high activity in business.
Consumer finance companies serve the public under
calamity to America.
World oil production is expanding more rapidly than
scarcities are things of the past,
of industry, except perhaps in the case
Corporation
year
of the
bring such
All wartime
and the pipelines
,
prising
general desire to curtail
inventories, but in recent months we
have had very good business as com¬
panies have moved to restore in¬
the War.
♦
1949 has provided consumer finance com¬
panies with the greatest volume of business in their
history. This business has been conducted at a satis¬
The
to
1950, it is faced
the
necessity
of
drilling
to
greater
depths in order to discover and de¬
velop new reserves, and the politi¬
cal pressures lor governmental con¬
trols over the industry, which so far
are
that
President, Kockland-Atlas National Bank of Boston
years
normal
oil industry enters
American
many
most
a
Over four full
their
re-instill in
to
oil productive
H. FREDERICK
essential to
panding world production at the same time that Ameri¬
can markets are contracting, constitutes the most seri¬
ous threat to the industry, but there
plentiful, that deficit financing will continue to under¬
full employment, farm income and the ever in¬
creasing outlay for the so-called welfare benefits.
De¬
posits locally and nationally may rise a bit during the
year, but we should experience no decrease in earnings
would indicate
seems
of the dollar.
bank operations during
with the most critical problems of
write
This
try
As the
money
bank
the part of the Ad¬
WALTER S. HALLANAN
in
political scheme of things
will remain cheap and
on
1950
President, Plymouth Oil Company
It seems to be
months.
in
their responsibilities as
citizens.
It would appear that only through an educa¬
tional program at the grass roots can a demand
for
economy be developed.
and
for 1950. This being
the
case,
the
commercial banker
cannot hope to find greater latitude
for
earnings
from
loans,
invest¬
ments and mortgages than existed
in
1949.
Nor
is
any
appreciable
change
action
this
impairment of Government credit and to main¬
to teach the ABC's of
and set the pace
the next
correct
1950, bankers should renew and intensify their
It must be
accepted that .this operation put the
Administration's stamp of approval
on
to
addition
In
orthodox.
and
an
tain the long-range purchasing power
isting market, and except for the un¬
usual size of the financing, it was
foutine
Some affirmative
avoid
expectations and with the ex¬
with
time when business is at or near a record peacetime
level.
ministration
squared
issues
these
of
four
•
B. E. HENDERSON
of
Government's operating on an unbalanced budget
with one-year
people,
now.
President, Household Finance
that
the
of
and it cannot afford to do so
of living. All major wars
by depressions, and the
our
1%%
year
terms
.
its obligations to the American
shirked any of
of the world
followed
been
have
balance to the confused
restore confidence and
can
picture of today. The industry has a public responsibilr
ity to develop and assert such leadership. It has never
ourselves almost
we
of
I%%" certificates
quarter
and
years,
of
States obligations were refunded
United
six
Some ten billions of called and maturing
ing operation.
The
•
nations
many
the Treasury engaged in a major financ¬
In December,
by
and
expansion.
■
that
proof, it seems to me, rests with those who
we are going to be
able to avoid a serious
major re-adjustment as a result of the past war.
All bankers, while they owe a duty to their communities
for the financing of local business and to their stock¬
holders for reasonable earnings, must be mindful of
the fact that their primary responsibility is to maintain
the safety of the funds entrusted to them by their de¬
positors.
It seems to me that a small but increasing segment
claim
President, Manufacturers and Traders Trust Company,
Buffalo, N. Y.
i-
change in
result, I do
the level of
v
fact
rduced -standard
a
date
burden
HARRIMAN
G.
LEWIS
a
four
years, in the vigorous prosecution of a war that de¬
stroyed hundreds of billions of dollars worth of eco¬
nomic values, it is hard for me to believe that we shall
not at some time in the future have to pay for this
private agencies,
result in 1949 gives confidence to such groups for
progress in 1950.
This bank, which
appreciable
any
the
of
spent almost
dustries is being expended by State and
and the
view
In
highly
Much effort to attract such in¬
labor pool.
qualified
anticipate
As
in bank expenses.
bank earnings.
industry in
of climate, favorable power rates and a
the way
*
surmounted these crises of days gone
lute courage that
I do not think there will be any
maturing in 1950.
or
all
productivity of cotton, foodstuffs and
time the essential
'
» ■ v
Speaks After the Turn of the Tear
Business and Finance
national action favorable to the State will insure for
'; t -
v
Thursday, January 19, 1950
CHRONICLE ?
FINANCIAL
&
COMMERCIAL
THE
(280)
within the industry can go a long
way toward restoring equilibrium and confidence to the
domestic producer and refiner, it cannot be overlooked
that many of the industry's troubles grow out of cir¬
cumstances beyond its control. To a considerable degree,
the industry is at the mercy of those who negotiate in¬
ternational trade, monetary and other economic agree¬
ments. However, the industry can do much towards a
solution of these momentous questions if it develops a
high order of statesmanship, especially among those re¬
sponsible for the record-breaking and ever-increasing
importations of crude oil and products.
Although it is true that the American oil picture at
the beginning of 1950 is less bright and more
uncertain
time since the close of the war, we find en¬
couragement in the recollection that the outlook has
than at any
been very
that the
dark at
same
many
We know
leadership and reso¬
times in the past.
kind of broad-gauged
In six states, (Kansas, Missouri,
bama,
Arkansas,
Georgia,
Mississippi, North.Carolina,
Tennessee, Texas, and Wyoming) and in the District of
Columbia, the small loan laws which exist must be con¬
sidered seriously defective so that.they are ineffective
in
imports.
While statesmanship
public interest.
Montana, North Dakota, South Carolina, and South
Dakota) there is no effective regulation of loans made
to consumers.
In a number of additional states (Ala¬
providing
at reasonable
adequate service
rates to
consumers.
It is also
hoped that the trend of recent years toward
the maximum amount of loans subject to
"state regulation will continue.
This will permit con¬
sumer
finance companies to serve wage-earners more
increasing
effectively and will provide regulation in the public in¬
terest on loans of the larger amounts.
Consumer
cessible
our
finance
companies
have
sought
to
serve
services conveniently ac¬
During the past year
Company has opened additional offices in order to
consumers
better by providing
through
branch offices.
provide more convenient service to a greater number of
customers.
At the end of the year, we were serving
over one million customers in 490 offices in the United
States and Canada.
These offices were located in 2&
states and eight provinces
of Canada.
The average
Continued
on
page
46
Volume
171
Number 4873
-
THE
COMMERCIAL
FINANCIAL CHRONICLE
&
,
(281)
45,
■
San Fran.
Membership
Analysts
bert
Public
Utility Securities
Com.
Laclede
Gas
Appointments
FRANCISCO,
CALIF.—
Richard
W.
Lambourne,
Presi¬
of
dent
Light
the
Public
Analysts of
Security
natural gas last May allowed
Laclede to lift restrictions imposed earlier upon new house-heating
business, and since then 25,000
of
San Francisco,
straight
new house-heating customers have
been accepted, practically doubling the total number. With satura¬
tion now only about 16 to 20%, the company expects to add another
Also, 5,000 to 6,000
new homes are being built annually in the St. Louis metropolitan
area, and the company expects to get the house-heating business
50,000 such customers during the current year.
from most of these
oil.
and
coal
the
In
Gas at present has the advantage over
homes.
Louis
St.
there is
area
at
present only one
Strauss
Program Committee: Earl Rich¬
Dean
man;
John
Co.:
R.
Adelbert
Brush
Wolff,
B.
Slo-
Co ;
&
Entertainment Committee: Mor-^
ten
Hocker, Bank of Califor¬
Chairman; Laurence G.
Duerig, Bergues & Co.; John G.
F.idell, Shuman, Agnew & Co.
Auditing:
Committee:
Committee:
Reynolds,
Dean
Walker's
Philip
Witter
&
J.
Carl
With F. L. Putnam & Co. [
(Special
Lewis
to
The
Financial
Chronicle)
BOSTON,
MASS.—George W,
Hemenway is affiliated with F. L,
Manual,
Robert
Committee:
Blank, A. G. Becker & Co., Chair-t
man; Dan Berg, Stone & Youngs
berg
i;
Fitzgerald,
Co.;
A.
nia N. A.,
& Co.
Chairman;
Stanley Dickover,
Eiworthy
&
Co;
Charles
C.
Clarke, Davis. Skaggs
Co,
cumb
Relations
Publications
Co., Chair¬
Beckett, Blyth &
Witter &
ards,
Her¬
San
Schick, San Francisco Stock
Exchange, Chairman; Thomas J.
Tasso, Walston, Hoffman & Good¬
win;
William P.
Held,
J.
S.
year:
introduction
of
J. C.
has announced the
following appointments to Stand¬
ing Committees for the current
The
<•
Bank
Francisco,
Chairman; James Shoemaker,
Schwabacher
&
Co.;
J.
Louis
Agnew, First California Co.
SAN
By OWEN ELY
Committee:
Drake, Anglo-California Na¬
tional
Putnam
F.
Street,
&
Co., Inc.,
members
of
77
Franklin
the
Boston
Stock Exchange.
Mulvaney, Irving Lundborg & Co.
■>>
grade of coal selling cheaper than natural gas; and, to compete with
Laclede's
have to
natural
sell
No. 3 fuel house-heating oil would
gallon, compared with the present
rates,
gas
8V2
at
cents
price of 11 cents and
per
more.
Laclede's water-gas plants will now
be converted to the manu¬
high BTU oil-gas, for stand-by purposes in case of
pipeline deliveries, and for use with peak loads. The
•coke oven plant will be retained as long as coke production is
iprofitable, which depends largely on the production rate of the
(steel industry; if it becomes unprofitable, Laclede may sell the
plant. It is carried on the books at $3.5 million, and the deprecia¬
tion charge against it is not stated; while sale proceeds might
i
,
facture
of
•failure
not
of
book
cover
the
value,
might permit the
company
Missouri Public
NATIONWIDE
Commission
Service
to write off the balance by charges to
SERVICE
learnings.
V
The
*
depreciation
of St. Louis County Gas Co., when
reserve
that company was taken
by Laclede several years ago, was
adequate, but Laclede's own reserve is probably too small, and
the annual charges for retirement might also be considered some¬
what
the low side.
on
hopes to arrive at
directly
gas
decision
of
subject the
or
to
over
The company is
some
future solution.
consumers,
the
Supreme
it
Shippers
Since Laclede sells all its
in the
t
that the recent
Gas case will
unlikely
appears
Court
for Santa Fe
studying this problem, and
1.
<
Ohio
East
FPC review of accounting policies.
company to
Conversion of the system to straight natural gas cost $2,400,000
about $8 per meter, which is the lowest conversion cost known
Office Centers
Santa Fe Traffic
thus far in the industry.
in
to
(It compares with $12 to $14 per meter
the case of Baltimore.)
Laclede was fortunate in being able
profit from the conversion experiences of Washington and other
cities.
Conversion
to accelerate
be
amortized
the
at
of
rate
the
Atlanta, Ga.
Laclede's capital structure consists of $25.5 million 1st 3%s
1965, a little over $6 million convertible sinking fund debentures
due
1963, $4 million notes and about 2.4 million shares of
stock.
The bonds
—
improving
credit
position.
f-1
ii.< *
.must
finance
million
its
expansion
is covered
by
a
Cleveland,
20
cents
compared
year.
parts of the nation
Wherever you are
States, Canada
locality and
your
While
Laclede
other
1949
I
Santa
reluctant
seem
Fe
you
commu¬
Kansas
are
yield
126V2-1073/4).
the
Kan.
Long Beach, Cal.
fully
Los
Angeles, Cal.
Lubbock, T§x.
promptly the
Mexico
City, Mex.
Milwaukee,
freight
men
They know
know their
Wis.
your
Monterrey, Mex.
New
territory
lems,
in
to
local freight prob¬
Because these
too.
men
City, N. Y.
Oakland, Cal.
Oklahoma City, Okla.
believe
Peoria, III.
giving service,
while
to
you
will find it worth
call them about your
1
Philadelphia, Pa.
Phoenix, Ariz.
freight
Pittsburgh, Pa.'"
shipments.
Look
over
and call the
Portland,
this
listing of traffic offices
one nearest
you
Ore.
Pueblo, Colo.
St.
for friend¬
Joseph, Mo.
St.
Louis, Mo.
Sacramento, Cal.
ly, helpful Santa Fe service.
Salt Lake
City, Utah
San
Angelo, Tex.
San
SHIP via
Antonio, Tex.
San
Bernardino,
San
San
Santa Fe all the way
Conversion parity is about 110. The
is about 3.9To against 2.9% on
debentures
the stock.
'
Orleans, La.
New York
is
on
City, Mo.
Leavenworth,
teletype with,
or
offices, and
and ours—and your
currently selling at 67/8 (1949-50 range 8-4%).
debentures, which are convertible into 160 shares, are
(range
Fe
business.
Lank loan.
stock
Tex.
Minneapolis, Minn.
Santa
up as operating earnings improve. There are also some rate un¬
certainties, and house-heating earnings will be subject to fluctuation
With weather conditions. In
any event, it appears likely that the
conservative 20-cent dividend policy will continue until the com¬
pany has completed its 1950 financing program and reduced its
116
Houston,
Hutchinson, Kan.
information and service you want.
1
future earnings, these estimates were
perhaps slightly
over-optimistic. The present $200,000 annual amortization charge
(covering the charge of conversion) is equivalent to only about
8 cents per share before
taxes, but the amount might be stepped
current
by telephone
equipped to give
issued from time to time,
share earnings when the
officials
Cal.
Fresno,
Galveston, Tex.
service.
at your
Each traffic office has direct
nication
forecast
at
a
.
debentures."
the
Mexico, there is
la.
Worth, Tex.
Indianapolis, Ind.
$1.25 to $1.40 per share on the present number of shares
outstanding and 90 cents to $1.05 assuming complete conversion
and
or
Madison,
Fort
freight representative assigned
to
exceed
The
Fort
located in the United
Santa Fe
company should
be fully converted to natural gas and could
obtain the full benefits of the potential
house-heating load. White,
Weld & Co., for example, in a circular issued March
15, 1949,
stated: "It is probable that earnings in 1951 and 1952 will not
the
El Paso, Tex.
company
earnings of 84 cents in the
J"
Mich.
Flagstaff, Ariz.
•
Wall Street studies of Laclede Gas,
have forecast a substantial increase in
of
Dallas, Tex.
Des Moines, la.
Detroit,
bank loan).
with share
Springs, Colo.
Denver, Colo.
freight shippers in all
serve
program
is anxious to obtain proxies for this
meeting in order to insure a favorable vote on the preferred stock
issue, since further debt financing seems inadvisable and common
stock financing should also be deferred until a more
generous
dividend policy can be adopted. At present the dividend rate is
fiscal
Colorado
conveniently located to
are
Tentatively, the company plans to offer preferred stock, and
annual meeting Jan. 26 it will seek authorization
by 75%
oi stockholders lor a new issue of $12 million
preferred. A portion
of this amount might then be sold, probably with a dividend rate
around 5%, to pay for current construction and
perhaps reduce
The
O.
-
the
the bank loan.
Cincinnati, O.
the
In
Y.
Kan.
Chanute,
Santa Fe Traffic Offices
'
iat
principal Santa Fe Rail li
,
meantime, the company
which will require some
$15-20 million over the next two or three years. In the current
fiscal year ending Sept. 30, about $8 million will be
needed, of
which only about $2 million will have to be financed
(another $2
.
N.
Buffalo,
,
Chicago, III.
.
The company would like to refund its debt, but it would seem
desirable first to obtain revision of the bond ratings as reflecting
the
Indicates
common
rated Baa by Moody and the debentures Ba.
are
Boston, Mass.
4r Indicates Santa Fe
Traffic Office
of
Tex.
Beaumont,
for rate cuts.
pressure
'/■.
Cal.
Bakersfield,
future
any
I
Atchison, Kan.
about
being permitted by the Missouri
corresponding amount to customers. They
write-off, and thereby reduce
'-V
1
Amarillo, Tex.
company
Commission to charge a
hope
will
costs
$200,000 annually, the
'
M.
N.
Albuquerque,
F. H.
Cal.
Diego, Cal.
Francisco, Cal.
San Jose, Cal.
Santa Barbara, Cal.
Santa
Rockwell, Gen. Freight Traffic Manager
Rosa, Cal.
Seattle, Wash.
Carleton A. Curtis With
Pflueger & Baerwald
(Special
.SAN
Carleton
to
The
Financial
FRANCISCO,
A.
Curtis
(Special
Chronicle)
CALIF.—
has
become
associated with Pflueger & Baer¬
wald, Mills Bldg.
In the past he
was
a
partner in Coons,.Milton &
v.
:v.»
H bv",L*;.0
Stockton, Cal.
With Edw. M. Bradley
to
The
Financial
Mm
Chronicle)
NEW HAVEN, CONN.—Vincent
K. Garland is
Edward
215
the
was
M.
Church
Boston
now
associated with
Bradley &
Street,
Stock
Co.,
members
Exchange.
to.
Inc..
Temple, Tex.
Topeka,
Santa Fe
Washington, D. C.
Wichita, Kans.
%
of
He
Kans.
Tulsa, Okla.
Wichita
Falls, Tex.
..•j
..
.
'.5.
4
previously
with
Clemence & Co., Inc.
Gaynor,
.
.
T ,\."t
:-r
rt—*-
■i
.1.
—T-
t
I
}
.1
lit
'(
'j.
i
I.
>
I
1
j|
1
4
-M-
x
_).
—
Continued from page
44
Speaks After the Turn of the Year
Business and Finance
such
of
amount
approximately $250. The
totaled over $350 million, the largest
loans
(foliar amount lent
volume in
"annual
our
the
used
Borrowers
was
history.
proceeds of these
loans in con¬
retire an equivalent amount of debt
\vhich already existed. Before these people came to us,
siderable
to
part
about to become
they had become or were
professional men. merchants,
itors
who preferred not to
indebted to
landlords, and other cred¬
postpone receipt of the
amount due.
In consolidating their obligations; into a
single loan with us for the purpose of paying off such
'creditors, our customers refunded their obligations into
a form which gave them time to budget themselves* out
•of debt.
Our
.
will grow during the
the extent that it serves
company
marily
to
offices conveniently
(the various states and provinces of
|through
more
ERNEST
coming year, pri¬
the public better
located throughout
Canada.
HENDERSON
Corporation o# America
President, Sheraton
for profits
outlook
The
^employees as the result of
of labor
introduction
and
payroll studies, job analyses;
in
reflected
as-
Dow-Jones Averages-, finally
the
high ground.
outlook
for
underwriters
The
security prices. xAithough the recent
stock market has not yet made itself feft
vitality of the
either in room
To
becomes
construction will be¬
come general, however, may still be far in the future, as
it is possible today to purchase existing hotels in most
areas of the country for considerably less than the cost
The time when new
competition.
of
building
ones.
new
for
reminders
that our dollars are not what they used to be, and real¬
ization that a $5V2 billion current deficit makes dollars
good stocks.
less attractive than
Predictions-
_
S.
HILL
r
seven-eighths complete, then the outlook for 1950 is
excellent for people who bold shares in good American
engaged in banking, in supplying utility
in producing goods and machines for the
world. The wide gap between the high yields of stocks
and the low yields- of bonds will tend to close.
companies
postwar readjustment?
our
This is-
an engag¬
readjustments that first hit luxury trades, the
the amusement business, then com¬
textiles,
modity prices, and resulted in inven¬
HOGAN
W.
D
President, City
National Bank and Trust Company,
Oklahoma
part of the
Oklahoma City
is
a
is noted
section
Great Southwest and this
begins;"
For
"Out where the West
as
for
animals
meat
all
and
agricul¬
products, farmers and ranch¬
encouraged to improve
tural
men
were
the seed
'
prove
they
planting and im¬
were
the grades
their livestock
in
production.
meantime,
new
oil and gas
developments have taken place and
several
fields
new
have
been
dis¬
covered.
Caddo
County, Oklahoma, on low
priced, sandy soil, produced peanuts
Dan
Sr.
Hofiran,
W.
is
deficits
and
heavy
dollar,
the
cessful
American
common
stocks
revolutionized
of
the
well-to-do
our-
now
yield from 5% to 10%, while prime
only 2%% to 3J/4%.
In the investment banking field,
bonds yielded
a review of 1949
stupidity: the continuous nar1rowing of spreads in new issues through competitive
bidding—narrowing nearly to the vanishing point.
Like lemmings, we rushed to the sea, overbidding,
would disclose our major
overpricing,
and
underpaying ourselves for the hard
sound and strong basis;
Competition
units in
the industry can be relied upon to accomplish such ad¬
justments to the benefit of the consumers and the entire
economy.
Some have already occurred during 1.949,
particularly in lower prices to consumers for many
petroleum products as increased supplies had their
be
expected.
the
industry
as
did
men
a
bale to the acre.
It
farmers
the
in
$15,000 to equip a farmer
one
man
old
way.
can
do as much
saving of soil
now
The
who easily handle a section
acres).
The moulclboard plow has been
discarded, and. the rolling coulter or disc plow has taken
ingenuity and energy of our free enterprise system,
and is now occupied
with
from
have
only looks
ranchers-
but is prosperous.
Farmers
well stocked.
Their indebtedness is
prosperous
are
a
President of Harding College,
native son of Oklahoma, has already
Benson,
a
nation-wide
educational
program
to
put
sections of
this Land of the Free and Home of the Brave will do
their full part, the worry we have in the Southwest will
down
Communism in the U.
S., and if other
be banished.
at the bank is getting loans.
Interest
Deposits in banks are high.
Building
and loan associations are well supplied with funds.
Our
Our
rates
problem
are
low.
He is- constantly
Oklahoma paid him $418,000,-
only poor neighbor is- our Uncle Sam.
asking for
that the rate of growth
of the
duction
automotive industry will be a factor in
petroleum demand in 1950 and the continuing sh:ft from
steam to diesel operation on the railroads adds further
The wide activity in the building of
requirements.
new
residential
The
heat¬
result in great remands
units and the installation of new
systems in older units all
the convenience of oil heat.
petroleum
industry has greatly strengthened
"handouts."
its
demands from
consumers
The problems
to be solved in the immediate period ahead appear to be
concerned more with the internal operations of the
various branches of the industry itself rather than with
ability
these constantly greater
for all pretroleum products.
fill
to
position in the economy as a whole.
The
both present and future, will be
determining factor in their solution.
JOHN
needs of
a major
HOLMES
President, Swift & Company
reports
indicate that total U. S. meat pro¬
1950 will be greater than that of 1949.
The
U. S. Department of Agriculture looks for an overall
increase of from 3 to 4%.
Some private reporting
duction in
agencies anticipate even
In general,
creases.
greater in¬
the outlook for
what
production next year is some¬
more favorable than
it was a
year
ago.
meat
Supplies of feed grains are at a
record high.
Feed conditions on the
well as on midwestern
generally good and this
should make it possible to convert
more feed into meat next year than
in 1949.
This- condition also favors
further expansion of both cattle and
range
as
farms
are
sheep breeding
herds, continuing the
upturn noted last year
after several
years of liquidation,
The increase in meat
.
,
production
John
Holmes
almost
entirely from pork.
Beef and veal
production probably will be about the same as 1949 and
we look now for slightly less lamb and mutton.
During
the first nine months of 1950, supplies of pork should *
be about 10% greater than in the similar period of 1949.If a further increase is noted in next spring's hog crop,
as- now appears likely, there also should be correspond¬
ingly larger pork production during the last quarter
next
S.
occur
past, the needs of our company for more petroleum produc.s are still increasing. The effects of the 1949 peak pro¬
Current
airplane!
to
operations to the
somewhat less than that of the recent
in demand will be
to
(640
I
likely
are
level of demand.
take their place, has
and fiber.
One
planted a 600-acre tract to
machinery
and other' crops by farmers
pumped
Others
the industry resets its
While it is reasonable to expect
production of food
production to-feed work stock is enormous. With highly
developed farm machinery, the dust bowl of the South¬
west has been transformed to produce wheat, kaffir corn,
of land
to
effect.
economic
normal
is
its
production, but*
mass
ten
developed
Hill
their .invest¬
overall capital structure has
consumers,
takes from $10,000 to
George
S.
a
the
paying out a
the thousands of independent business
county has made a record
of three-quarters of
crop
Search, Arkansas,
Carey
sources- after
stockholders on
its
within
the farmers $117 an acre.
same
at low ebb.
of suc¬
companies sold to
of
that paid
velopment of farm
and
government
on
interesting to note in this connection that the passing
mules as farm work stock, with the de¬
motors.
spending
and
a
continuation of
shrinking purchasing power of the
result,
a
of horses' and
water
inflation,
The industry has been
the post-war
The
cotton
have
expanded and improved to new
shortages now overcome, a period
consolidation and adjustment of various operations
With
for
In the
not
of
to
return
As
been maintained
unbelievable
people preferred
cash to good common stocks.
In
spite of a resumption of Federal
spite
'
been
capital from internal
ments.
ing
by the "Okies" living in well built homes equipped
back
an
the refinery
transportation
earnings which provided most of the required
of
reasonable
machinery, has brought about almost
deep wells by wind mills- or gas
recently returned from a trip through
this section and know whereof I speak.
The Southwest.,
of
but
the
our
accomplish these results in large part due to a
to
new
to
with the jaundiced
investment banker, we
have been through a year where, in
Looking
eye
and
and
peaks of efficiency and capacity.
and-poultry. Conservation of the soil,
and contour farming with improved
the
can
position
oil
crude
strengthen
to
network of petroleum pipelines
'
level
of
reserves
increased
future
Holliday
new
the dust bowl has been .eliminated
we
freely
part in providing constants
facilities
T.
W.
ous
begin to breathe
look
ahead to
smoother sailing that we've had, •'
nations,
more
a
domestic
been
during 1950
its place.
This method leaves the" stubble and other
growth on the ground which prevents blowing of top soil
and at the same time leaves a proper seed bed.
So, by
tory curtailment and in the devaluof
the
currencies
of
many
tion
our
the past
three years we have been blessed with bounte¬
crops of all kinds,, which, naturally, developed our
holdings in live stock and poultry.
With the prevailing favorable prices
to
f
among
as-
ing question, because if we are nearly through with the
played
service,, and
for
Are we in the last half, the last quarter, or- the last'
eighth of
readjustment is nearly complete,
post-war
suspect
we
say
products
ly higher quality products to fill the
needs of consumers.
Not only have
able
this time of year, but- if as
cheap at
are
of
Ail branches of the industry have
scheduled
important,
investors- to
of
flow
adequate
an
inflation, the almost day to day
evidence of
It
CAREY
awakening
gradual
isvthe
however,
years;
consumers.
allayed—the most talked-of depression
1949 was literally talked to death.
More
native grass with an
Chairman of the Board, Hill Richards & C(H
be less than that of
which reflected the
upsurge
of postwar demands, the
the preference for petroleum as an
energy source will require continued
efforts by the industry to maintain
have been some¬
Probably his fears
investor?'
growth will
recent
long way from New
a
where
today's
reach a point where new hotel construction
advantageous, the industry need fear little
of
a
agements to offset recent wage increases with corre¬
sponding advances in operating; efficiency.
Perhaps the most encouraging aspect of the hotel busi¬
ness today is the
fact that up to this time hotel room
rates have advanced less than 50% from the levels in
effect
before the
war.
Considering this advance in
the industry
in the
nominal volume of business from
companies, a firm almost wholly dependent
upon sales to private investors, the pickup in demand
that began in September and swelled to nearly record
proportions in December seems a worthwhile barometer.
What brought about this improvement in the attitude
only
with
security markets.
Whether the Hotel In¬
dustry as a whole will enjoy a successful year in" 1950^,
however, depends largely on the ability of hotel man¬
depreciated dollar and accompanyinglarger national
incomes, hotel rooms are relatively
cheaper today than prewar. This-low level of room rates
coupled with expanding population trends suggest con¬
tinued increasing demand for the services which hotels
have to offer.
Until such time as the profit levels of
abnormally warm weather
early months- of 1949; seems- likely to be resumed
in the year ahead.
While the- rate
ucts; temporarily slowed by
*
insurance
in
of
is
business
whose
firm
a
(Ohio)
trend in the demand "for petroleum prod^
Fall of 1945.
overall hotel sales, there is every indica¬
tion that demand for hotel rooms and services will rise
in
the
immediate future, in response? to the r recent
terms
The upward
1948, when the elections knocked out hopes of a more
conservative government.
From Mid-Summer lows, the
stock market by year's end made its best gains since the
York,
HOLLIDAY
T.
W.
Chairman, The Standard Oil Company
of
occupancy or
'strength
broke
•
distributors of
time since the Fall
and
at any
securities.is- better today than
the past the
tof
*
new
No, no^ we don't like that!
only $120,000;000.1
spreads more adequate.
During, the, first half of 1949, stocks alone seemed
immune from inflation. Since mid-year, however, prices,
saving equipment.
Hotel Industry, a sensitive barometer
of general business, has reflected—with a lag of not over
three or four weeks—any sustained change in the level
In
presently see no solution but to await our inevi¬
table drenching in huge losses, with' the meager hope
that somehow bids will then be more temperate and
can
into
ending July 1, 1949, and got back
000 for the fiscal year
With fatalistic calm,
underwriting.
work and hazards of
we
of' the
in the Hotel Industry during
!1950 would not seem to be as clear from recent indica¬
tions as was the case in the preceding fbu-r or five years,
'Hotel earnings reached their peak in 194# and' have reg¬
istered a mild decline in subsequent years.
< .
1
Although room occupancy and room, sales have re¬
gained
at a high level,
beverage sales- have been
dropping appreciably from year to ye-ar, indicating a
'reduction in surplus funds for spending.
There is no
indication that this trend, which has been consistent for'
the last three or four years, will not continue in 1950.
The real difficulty facing hotel managements is not so
'much a lack of sales, however, as increased wage scales,
The rate of wages paid hotel employees- has- gone up
considerably more than 100% since 1939,1 However, total
payrolls have not increased in this proportion, as man¬
agements have in many instances been able to offset
The increased rate through reductions in the number of
1
19, 1950
Thursday, January
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE.
(282)
m
year
is expected to be
of 1950.
Per
year
in this country next
approximately 150 pounds.
Continued on page 48
capita consumption of meat
is expected to average
Volume
Number 4873
171
Chase Bank Executives Lay
Bank
$3,511,300, with a down payment
of $351,580 and the balance cov¬
Modest
ered
4%
Earnings to low Interest Policy
by
shareholders
Chairman of Chase National Bank, in report to
G42
a
fhat of industrial cor¬
of government's policy of extremely low
capital stock, compared with
on
porations is impact
In
statement
a
to
the
of
operations
acres
Winthrop
W.
Aldrich,
Chairman
of the Board, and Percy J. Ebbott,
earned
interest
of
rate
age
on
2.34%,
was
year
year
in
total
of undeveloped
Greenhills
About
175
interest rate of 1.35%.
yield on loans and in¬
as
a
whole was but
average
vestments
has been
never
time,'
a
land
in
their
-
h
plan
the
on
cities
in
are
start
f- v
giving
for
announced
cities
contemplated
on
Under
to
the
plan
reservation
« *
v
£
recently
CT
by
a
for
project by July
(Special
the
and
to
1951.
1,
Corp.
to The Financial Chronicle)
HARTFORD, CONN.—Nelson
Rl
Jesup has joined the staff of Lee
Higginson
projects.
request
program
With Lee Higginson
a
advance
slum
a
its
in
participate
clearance
a
the
reservations of capital grant funds
states
intention
.
<* i
f
Street.
a
Corporation,
He
was
Hornblower
city constitutes
&
36
Pearl
previously
with
Weeks.
'■ s """
v-
v
.
I
price range of bank credit was
in relation to other eco¬
this
SOUNDNESS
low
government's
the
of
result
a
1IHFA
4,047
remains
40
nomic factors. Fundamentally,
is
About
reports.
these
plans: to
slum
"when
the bank executives stated,
the
Agency
of
city
Housing and Home Fi¬
last year.
"There
so
third
PHA.
cities
than the
of
tract
to be disposed of by
The average
1.77%
A
station.
«>■«>«>.
an
the
1949 gross earnings, with
of
36%
1949.
nance
commercial building, small city class of 25,000 to 40,000
building and
a population.
a
average have indicated
1948. Income from investments
securities was $24,924,000, or
for
at
47
simply a statement of intent—not
a
binding commitment—that the
redevelopment program
authorized by the Housing Act of
management
original
1949, sent out loans for the
the bank's 88,243 shareholders, slightly higher
covering
mortgage
participate in the slum clearance
land, 185 resi¬
containing 676
structures
service
interest rates.
of
(283)
and urban
Included in the sale
acres
dwellings,
of
explaining operations of institution in 1949 says small rate
25-year
a
interest.
was
dential
return
FINANCIAL CHRONICLE
THE COMMERCIAL &
;
policies of cheap money and def¬
icit financing."
Commenting that the Chase Na¬
is
the
leading American
tional
W. W. Aldrich
Administration's
Ebbott
J.
Percy
Economic
the
under
is Essential
in financing
Cooperation
institution
banking
of
letters
com¬
mitment, the report to sharehold¬
of
President
National
Chase
the
states:
ers
New
York, ascribed the
low rate of the institution's earn¬
of
Bank
"Although high expenses are in¬
curred in handling this business,"
to capital funds it explains, "our participation in
government's low interest the ECA program is important and
rate
policy.
According to the significant for several reasons. It
bank's statement the net earnings is
significant as an index of Chase
in
1949 represented a return of
standing in the foreign field, be^
5.8% on average capital funds.
cause
the
banking business in¬
"This exceedingly modest rate volved
originated in foreign "banks
of return, as compared with that and
foreign governmental agen¬
of industrial corporations, reflects cies.
It is important as part of
the impact on the banking busi¬ the American
program to assist in
ness
of
government
policy
in the rahabilitation of European and
maintaining interest rates at ex¬ other economies. It is i important
tremely low levels," the stock¬ also in its beneficial ieffects in
ings
relation
in
the
to
holders
Bank
told.
are
creating
earned
Interest
the
by
Chase
markets
for
American
It is further; important
products.
loans last year
amounted in that it is helping to keep inter¬
to $32,441,000 and represented 47%
national trade within the frame¬
of the gross earnings from bank¬
on
ing operations for the year, ac¬
cording to the report. The aver¬
work
in
Government Aid
that,
Foley,
cities,
/
more
would
it
Chicago,
in
the
Home Finance
year's
home building was financed under
commitments
Federal
insure
to
the
Administration,
Housing
including
of
1
a r
the
e-scale
g
rental
proj¬
ects, Administ
r a
t
o r
mond
ley
Ray¬
M.
Fo¬
the
of
Housing
for
the
in
areas
and
St.
housing is
rural
with
now
and
about
44%
areas
compared
1925.
in
construction
fringes ► of cities,
the city limits: is attrib¬
beyond
principally
(1)
to
scarcity
in-town sites for
(2) the fact
acceptable
large
in
Agency
re-
developments,
outlying sites are cheaper and
easier developed, and (3) the fact
that motor vehicles have increased
the
to
distance that
and
from
can
be traveled
work.
The
recorded
nati,
first
kji
c
Raymond M. Foley
a
posed
tenants
associa¬
tions, aided through financial
serves
^ncl
through
Bank
investment
the
Federal
System
Home
the
and
re¬
insurance
Loan
Federal
the
Greenhills,
Ohio,
were made by
savings
and
i
of
is
"greenbelt"
near
being
sold
Cincin¬
by the
Public Housing Administration to
loan
a
D
speeds; more production
changes; more efficient
cutting
tool; fewer tool
use of machines;
per
non-pg>fit
corporation,
primarily of
of
the
veterans
three
ment
and
built
by
the
Administration
one
of
Resettle¬
during
in
Half Billion
Loans,
in
Grants
demonstrate
were
resistant
material
provide longer life
of production.
on
or
machine
as
a
wear-
elements
intended to (1)
For Federal financial assistance
town plan¬
ning, <2) to provide needed hous¬
to aid local communities in clear¬
ing at reasonable rents for mod¬
ing
1949
erate
slums,
the
provides
loans/ and
a
a
Housing
Act
of
billion dollars in
half
billion
dollars
to
insure greater accuracy
Ask your works manager
metal and its cost-saving
if he knows Kenna¬
possibilities.
families, and (3) to
jobs
for
unemployed
workers.
The
price
of
Greenhills
was
to
of Government is tremendous.
an
alarming
KENNAMETAL
cosi
are
ex¬
The federal government is taking the entire income,
of
42,000,000 people
keeping them alive.
If everyone
over
and above the cost of
who holds life insurance cashed hm
run the federal
If every urban home owner sold his home, the toted
would finance the politicians on the Potomac for
If every
farmer sold his farm, equipment, and live
run the government for oniy<
stock, the total would
seven
months.
If every
into
than
industry converted its net working capital
cash, it would last the federal politicians lens
a year and a half.
Can you
CEMENTED
CARBIDES
do anything about this? YES.
Congressmen and Senators their position
that your
money will be redeemable in Gold at $35 an ounce.
(2) Tell others of this need. Tell them how Gold is an
automatic check on government spending. (3) Multiply
your efforts by joining the
Gold Standard League,
Latrobe, Pa. Membership involves no obligation. This
organization is bringing to public knowledge the un¬
(1) Ask
your
the Reed Bill HR 3262, which guarantees
soundness
SUPERIOR
Here
amples of its unprecedented magnitude.
on
money
of
all
irredeemable
KENNAMETAL^.,
UATROBE, PA.
currencies;
how
fiat
is socialism's secret weapon when our people
have lost power over
income
provide
grown
eight months.
development in this field is
Kentanium, a new heat-resistant material. It
withstands thermal shock, resists oxidation,
and retains unusually high strength on a wide
range of applications where elevated tem¬
peratures are encountered.
the
modern
financing" has
policies, the amount would not
government one year.
widely used
are: Greendale,
Milwaukee, Wis., and Green¬
belt, Md., near. Washington D. C.
These towns
press papei
Kennametal is also
near
Billion
gold in '1933,
of fiat money, printing
dollars, and bonds—not redeemable in any?
thing of intrinsic value—has been unrestricted..
"Deficit
"greenbelt" towns
poration.
Since the Government seized all
its issue
degree, with disastrous possibilities. The
depression of the 1930's. The other
Savings and Loan Insurance Cor¬
United States monetary
with money not made good to the"
individual, is inherently weak, our dollar is
not doing its work.
,/
system,
Outstanding performance results are achieved
in many different industries. Turning, boring,
and planing tools, and milling cutters for
Metal-Working Plants. Machine bits and ro¬
tary drills for Coal Mining. Saws and router
bits for Woodworking Factories. Percussion
rock bits for Construction Projects.
project. This Fed¬
erally-owned community is
the
com¬
Because the present
lower over-all tool cost.
Our latest
Greenbelt Towns
towns,
un-
faster
Federal Government Sells First of
the mortgages
$2 0,0 0 0
of Kennametal insures
that
ports,
and
about 30% of
e r
Use
the
the
on
uted
20%
increased
as
of
Home Finance
d
UNSOUNDNESS—A DEFICIT
From
Kennametal, because its structure is inher¬
ently strong, free from flaw and defect,
continues to give full value for its intended
purpose—the effective element of tools that
reduce costs and increase productivity.
as
and
Agency reports. In
nonfarm housing
less than
This
of
for
residential starts
new
by
most
few
mid-20's, the Housing
1948-49,
the
provide
much
as
accounted
of
was
a
being built outside city limits
limits.
one-third
on
Philadelphia
Twice
home building. Notes
houses built outside city
About
program
Louis.
par¬
ticipated in about one-tbird of
year's
the
entirely
clearance of all the slum
Federal
Government
Federal
if
concentrated
Housing Administrator, points
out
From SOUNDNESS—A PROFIT
capital grants. The size of this
is indicated by the esti¬
mate
M.
banking
program
Promoting Honsing
Raymond
commercial
of
channels."
the public purse; how entirely,
practical it is to restore freedom and
prosperity in this regard. Study for yourself the provi¬
feasible
and
sions of HR 3262.
48
Continued
from
46
page
.
three
about
is
1949 and 16
higher than
pounds
pounds greater than the prewar (1935-1939) average.
Production of other food commodities lor next year is
I
Fortunately, this country has a great meat production
It is a team which has developed a system of
team.
anywhere
and distribution unequaled
efficiency and economy.
Down through the years,
teamwork in the livestock and meat industry has helped
for
achieve a higher standard of
living than anywhere else in the world.
I feel certain
that this same teamwork
and progressive spirit will
American
people to
prevail throughout 1950.
rubber production will be expanded
in this
United States in
country
President, Electric Boat Company
the
During
its
of
Anniversary
50th
corporate
ex¬
completed
Company's Groton, Connecticut, plant
construction work on contracts from
The
Navy
S.
U.
number
addition
the
ing
erate
the
present controls are unnecessary.
tant
During 1949 the Company's Ca¬
nadian subsidiary, Canadair Limited,
John
Jay
for
Canadian
the
from
Canadair
order
Limited
100
jet planes
Government
undertaking
is
these
of
an
during 1949,
expansion of its
plant at Cartierville, near Montreal, which will enhance
its preeminence as the principal aircraft manufacturer
Canada.
The
Dynamic
Electro
Division, which in
Anniversary of the existence
1950 will celebrate the 70th
Division
facturers
and
of electric
predecessor company
motors
and
as
manu¬
generators for marine
industrial applications, experienced a
demand for its
enormous
several
returning
be
is
is
outlook
recognize
directly
that
enjoy
good
same as
business
in
The
American
people
will
or
related
depletion
as
the
to
an
improvement
of
program
replacement, to make
time
up
for
war¬
obsolescence.
and
This condition is reflected in the fact
that
in
1947,
Class
1948,
lines
1949,
a
retired
C.
C. Jarchow
and the'first 11
period of abovefor
railroads
I
and
industry
have
to
due
It
general,
railroad-owned
226,702 old freight
America's
refrigerator-car
while taking de¬
cars,
new ones—a gain of only 20,659.
clear from evidence like this that relief for
seems
a
definite need of the immediate future,
maintain their strength as a buttress of our
economy.
designed
give
with other and
senger
At
national
The situation calls for sound legislative action
to
the railroads
more
equality of opportunity
favored forms of freight and pas¬
transportation.
many
ployment at high wages.
This
by
more
boost
early
in
the
an
from
year
veterans'
on
and
competition
Tire
the
sales
1949
original
fall
for
80.000,000
off
the
insurance
sale
This
of
both
section
and
estimated
are
about
is
equal
possible
business
on
the
road
that
average
age
the
industry will
benefit from
the
in¬
Postal
paid
banks
spite
the
of
continuing to
—
there
Already,
are
organized
learned and are
how to get along
leadership of
inflammatory
learn more and more
consideration.
with each other with mutual respect and
the American people are going to do
sounder thinking during 1950 in their relationships with
other countries, in their evaluation and demands upon
in
All
all,
politicians,
on
and in the realization that our prosperity
the real effort that every one of us puts
forth.
The
as
trend
closely
system.
in
deposits is always the factor which is
on
in the
country
reached a new high, standing at the
end of the year at $19,300,000,000 or
a
gain over 1948 of nearly $1,000,000,000,000.
Of
this,
New
York
August
Ihlefeld
banks
000,
of
$760,000,-
of the na¬
again is noteworthy because
made in the face of a
been
has
increasing
supply
of
goods, which might have
consumer
share
expected to drain off a larger
of family incomes,
and has
been
George C. Johnson
accomplished
duction
whole, they in¬
1949, Government bonds and cash held
over
continually
been
Administration.
for
than 75%
increase.
This
it
savings
mortgages held by approxi¬
mately $800 million. A considerable
more
or
tional
and
proportion of these mortgages is insured by the Federal
Housing Administration or guaranteed by the Veterans'
At the end
accounted
State
deposits in mutual
the very high
creased
1949, 'deposits
in
Again
mutual savings banks of the
and
For the country as a
the
industry.
System
banks
turned
chiefly to the home mortgage field
for
new
investments
during 1949.
savings banking
thus is of
greatest importance in measuring developments in
compared
Savings
mutual
the
in
watched
This factor controls all others, and
in
incomes
in spite of
re¬
a
throughout
the
country.
The record for the year
is
a
splendid testimony to the
strength of the mutual savings banking system, and to
the confidence and faith which the people of the state
and
nation repose in it.
•
and the growing tend-
Relations
labor, workers and management have
liquidity they
explain their strong appeal to
Mutual
prewar year.
creased population of the country
American
of
friendly feelings between labor and management;
more
savers.
is
Improvement is expected in the
waterproof and canvas footwear in 1950.
of
offer
are more
than ever
motorist
the
degree of safety
might
driving about 10,000 miles annually,
considerably more than in the aver¬
too high. There
some
expanding economy.
an
gain of $641 million in 1948.
in
savings
well. There
the
a
dividend
to
but replacement sales
some,
should hold up
H. E. Humphreys Jr.
It
equipment
automobiles
before
1950
units,
total.
ingenuity
and
Labor-Management
in
and
goods priced to fit every
registered a smaller rise in 1949 than
in
1948, it is evident that mutual
savings banks are gaining in favor.
The many services rendered deposi¬
tors
the attractive rate of interest
policies.
at
than $800 million in 1949,
Since time deposits in other
Federal Government's distribution of
dividends
of deposits in mutual savings banks
with
additional
will get
power
Jarman
M.
President, The Dime Savings Bank of Brooklyn
has increased during the past year.
Preliminary figures
indicate that deposits of the mutual savings banks in¬
pur¬
chasing
W,
GEORGE C. JOHNSON
em¬
to
prices of all
see
business.
Most prices are
a normal basis.
A few
consumer
depends
railroads are considering the pur¬
chase of new freight cars, and the prospect is encourag¬
ing for a substantial volume in this field during 1950.
present
great
full
power
the desire to buy.
on
be
sign of
in
livery of 247,361
creased
continue
purchasing
buying
are
out of line—some too low
will
most
in 1949—close
there
goods complete the adjust¬
to a normal basis which makes
good
are
our
ability of the railroads to finance
The rate of gain
1950, with sales totaling about the
$3 billion.
Our country
normal
merchandise, and the people have
already
President, Savings Banks Trust Company, New York City
to
a
Prices—1950 will
President, United States Rubber Company
should
and
the money and
AUGUST IHLEFELD
industry
to
pocketbook
producers
shows what can be done in this great country.
The
average of all prices will likely show slight increases
throughout the year.
This is normal for our country
which during the last 150 years has had a gradually
rising price trend, interrupted only during peace periods
to correct excesses. Gradually rising prices are a healthy
must
to
rubber
back
ment—we
the railroads is
The
have.
we
for
PT boats and other
HUMPHREYS, JR.
-
American
national re¬
tremen¬
unfilled demands in every field
dous
industry.
personnel and essential facilities for the manufacture of
E.
;
at our own business—
which is Jargely the production of
component parts for railway equip¬
continued
IIARRY
we are
our
during 1950.
good
almost
ment
of
prosperity
.
some of
gradually
still
are
but
normal basis
foundation for the
ingenuity of
and from the
that
country.
Volume of Business—Business will
of
Looking
normal
military equipment were transferred
to the Groton, Connecticut, plant, which currently is
engaged in completing a new type PT boat for the U. S.
Navy.
1
On the whole, with a substantial backlog of orders for
aircraft and submarines extending over the next two oi
three years, there is ground for a reasonable amount
of optimism- with respect to the Company's future pro¬
duction prospects.
There
of.
economy,
of progress that our country
right to expect from the char-
back
products in 1949 in line with that suffered
Operations at the Company's Elco Division were dis¬
during 1949. Certain of the Division's skilled
our
more
a
and establishing a
a
for our
progress
kinds of
of
industry generally. Prospects for
seen, particularly in the maritime field.
to
of
year
get rid
to
years
tax burdens will not be piled on the
months
of
a
dislocations caused by the war have taken
these dislocations in
relationship
pressure-
economy;
slackening in
by this segment
improvement are
1
its
and
if it is only.a
be
should
1950
The
people
good in most lines.
JARMAN
MAXEY
Chairman, General Shoe Corporation
broad general assumption
strikes will not
that national
and employment will con¬
a high level;
and that new
adequate
Company's
of the
tinue at
a
major
our
income
Overseas Air¬
ways Corporation and Canadian Pacific Air Lines, and
began tooling up for the production of F-86 "Sabre" jet
fighter planes for the Royal Canadian Air Force.
In
avail¬
savings banks in the coming year.
acter and
have to consider some critically impor¬
assumptions—that the world will remain
that
disrupt
adiar Four transport aircraft for British
the
able to mutual
we
related
peace;
Hopkins
Favorable prospects for new home
provide basis for the belief that an
adequate supply of acceptable mortgages will be
has
'
JARCHOW
1950 will be
in
at peace, even
completed delivery, well in advance
of schedule, of 26 four-engine Can-
received
business
Obviously,
S. Navy,
with
C.
safe to start with
seems
that
field.
home mortgage
sources
It
laying in February,, 1949 of the keel
of the first of four submarines for
of
We believe
President, American Steel Foundries
construction
connection
attained new records in size and conserved
the great strength built up over a period of many years.
They look forward to 1950 with confidence that they will
enjoy another healthy gain in deposits and that suitable
investment outlets will be found, particularly in the
type
C.
and resumed
with
the
the surface),
on
submarine
the U.
get out of the rubber business be¬
periscope depth with diesel
at
paid
return
look back at a year in
The mutual savings banks can
188,000 above the government requirement.
States Rubber Co. takes the position that the
synthetic industry will progress faster and operate
more efficiently when freed of government regulation
and turned over to private management.
subn arine to op¬
of
which they
since the war has used more synthetic than
by law. Consumption in 1949 of 410,000 tons
engine power and thus recharge its
electric batteries without
exposing
itself
The industry is required by the
current rates
that
consume
the
"Snorkel,"
of the
enables the
grade
depositors are being covered by the banks by a reason¬
able margin. Surplus at the end of the year was. roundly
11% of deposits.
This figure does not include reserves
that are maintained against mortgages owned.
year
required
cause
type submarines the latest advances
submarine construction
(includ¬
which
of all the
consumption
only major manufacturing industry still
government should
in
high
as
shows
increase
This
United
fleet
II
World War
big
of
investments of these
attractive basis.
Surplus of the mutual savings banks of the country
increased by approximately $130 million during the year.
bonds,
corporate
synthetic rubber at the mini¬
annual rate of 222,000 tons. However, the industry
mum
was
incorporate in a
to
of sound real estate mortgages and
their holdings
ther
construction in 1950
government to
every
istence.
the
Per capita
15 pounds, ten times the average for
was
under wartime controls.
Electric Boat Company
just closed,
year
the
1949 consumed 52%
the world.
the world.
HOPKINS
Rubber is the
celebrated
further to
growing demand for foam bedding and cushion¬
ing for furniture and automobiles.
The textile business appears to be recovering from its
1949 slump and this is expected to result in increased
use of Lastex yarn in wearing apparel.
Rubber consumption in the United States in 1950 is
estimated at approximately the. same tonnage as used in
1949.
This amount was 985,000 tons, of which 575,000
tons was natural rubber and 410,000 tons synthetic. Total
consumption in 1948 was 1,069,000 tons. It is estimated
that the
by mutual savings banks aggregated around $12 billion,
or approximately 60% of deposits.
The mutual savings
banks are thus in position to expand considerably fur¬
types become available on an
rubber consumed in
JAY
JOHN
business.
meet the
Eggs—somewhat larger.
Poultry—about the same.
the
vibration-dampening devices, will be in
in 1950 in line with the general high
and
Foam
Milk—not much change.
production
Industrial
level of
Vegetable Oils—about the same.
food
wearing of
the
strong demand
Lard—substantially larger.
Butter and
to more leisure and outdoor living which calls for
more sport and casual footwear.
rubber products, including hose,
belting,
ency
packing
expected to run somewhat as follows:
'
.
Speaks After the Turn of the Year
Business and nuance
This
' '
*
,
1950
Thursday, January 19,
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(284)
>
5
The President of the National
Continued
on
page
50
Volume-171
Continued
.
from first
COMMERCIAL
THE
Number 4873
page
to
strenuous, and
a
that
We See At
on
the whole
a
(285)
FINANCIAL CHRONICLE
considerable doubt, but
of this
we are
certain: So far
party in power is concerned reason for optimism is
limited to this one factor. The outlook for public policies
as
As
&
which
successful, effort to give
can
has not
be counted
as
really constructive over the years
improved at all, if
and that
impression.
we
and
part of the Democratic party he represents
quite certain that whatever im¬
provement has taken place either in the state of business
or in the outlook within the
past few months is in no part
the result of anyone, including the Administration, "plan¬
ning it that way," but is to be attributed to the working
out of natural forces which again and again have laughed
to
part,
the puny
scorn
of respects
As to the fact that business is in a
better than it
was some
months ago,
and
politicians have good ground for their faith that the
there need be
the
no
argument; that both the economists
had at
next few months will be much better than
been feared there
one
time
scarcely be much doubt, although,
can
of course, not
all segments of the economy or all sections
country will in like degree benefit, nor, for that
matter, may all share at all.
of the
We have
what is
-
so-called
leave
to
the
never
largely dependent
opposition—less for what it
it
can
have from time
the
Execu¬
Midwest
elected to
Exchange today
membership the following:
Irving J. Rice, President, Irving
St. Paul, Minne¬
J. Rice & Co.. Inc.,
can
upon
seU
the
make much of
accomplish
a
It
guess.
can
be said that
&
C.
St. Louis, Mo.
Co.,
Head Steiner,
the development of
Rouse Branch
super¬
Steiner, Rouse & Co., members!
a move¬
of the New York Stock Exchange,
announce
degree
some
toward greater sanity in public affairs.
comes
Edwin
President,
Sanders,
Republican party and in the conservative
wing of the Democratic party directed in
at least
Olcl-
Asbeck & Co.; Edward F.¬
Sanders
outcome, it certainly is rather soon
ficial appearances suggest
ment in the
J. Olderman, President,
erman,
get from the rank and file next No¬
As to this
vember.
what
of
Ohio; Clyde L. Hagerman, Wm. C*
Roney & Co., Detroit, Mich.; Rue-
appraisal of the 1950
present session of Congress than for what sort
of response
to
JLL. —The
Committee
Stock
that Tobias Gerson, Jo¬
seph P. Sanfilippo and
Upon
Alfred &
Zuckerman are now Co-Managers
of this insurgencc, if such it is, will de¬
of
the firms branch office at
1ST
East 86th Street.
pend what history will say of the year 1950.
professed to be able to predict
forthcoming in this uncertain world of ours,
considerable
skepticism as to whether anyone else can with regu¬
lar success do any such thing. However, in the present
circumstances, we are ready to accept at least as a
working hypothesis the now very general feeling that
the outlook is good, at least for what might be termed
an intermediate
term.
Beyond that we gladly leave
forecasts to the soothsayers. We leave it to the sooth¬
and
seems
outlook in these respects
efforts of politicians to guide the course
of economic affairs.
number
This
we are
in the
CHICAGO,
tive
sota; Robert B. Johnston, Canton,
controls.
our
,
must count upon Mr. Truman
"Planned That Way"?
For
Midwest Exch. Members
the
time expressed
to
h1
4
partly because there is little else we can do—
no feeling of assurance that we can see that
far into the future—but partly for another reason
which seems to us to be fully as compelling.
sayers,
having
By What Standard Judged?
That
of
our
reason
is the belief
on
our
part that this year
Lord, 1950, will be significant less for the rate of
business
basis is
business
turies.
_____
TREES
activity attained than for the degree in which a
laid, or at least the foundation begun, for sound
progress
All of us
S-WW
-
1
OUT OF
during the coming decades, even cen¬
are, of course, in a sense quite well
SKY
pleased with high employment, large production, and sat¬
isfactory earnings by all elements in the economy. These
are
all things to be grateful for, but the realization of
them may, and often does, conceal the growth of under¬
lying conditions which cause our good times to corne to
sad and untimely end. Those of us who lived through
it remember vividly, that the 'Twenties, particularly the
second half of that decade, brought blessings hitherto un¬
a
In fact,
known.
opinion
these
years
were
so
Sii
bountiful that the
widespread even among a very substantial
economists, and certainly among the politicians
was
number of
Anywhere in the world where
of the
to
party in control, that poverty had been or was about
be abolished, and that a "New Era" of economic bless¬
normal
necessities
ings had arrived in-which prosperity was to endure for¬
ever, etc., etc.
If all this bears a strong resemblance to
what is
sources
can
of
be
supply
.
.
brought
.
to
persons
is the
cargo
being said in the public offices of Washington,
certainly not merely accidental or co¬
incidental, as they say in popular fiction.
cut
ofT from
them by air transport
though landing facilities do not exist. The
now
are
food, fuel, medicine, and other
answer,
of
—
even
course,
parachute.
the resemblance is
These
in part,
The
thoughtful man will, therefore, we believe,
appraising the 1950 outlook at least in
substantial part on the basis of the apparent prospect
of making a good start on the foundations of future
economic well-being.
Viewed in this way the year
ahead takes on a much less rosy hue. We are not the
insist
kind of
upon
and truck tires. And what is the
yarn
In
are
through with their appeasement by
phrases the
branch
of
indicates
his
demands upon
still policies which must
a
so
far
of all viscose
produced in this country
are
rayon
and
made from highly
processes
from wood.
Rayonier supplies a large part of the highly purified wood
by domestic textile manufacturers for making
viscose rayon
and acetate yarns and staple fiber for wearing
apparel, lire cord, draperies, rugs, and many other textile
products. We also supply large quantities of purified wood
as
the
the "right policies" are
cellulose for the manufacture of
.inevitably do most to insure
parent
lack of the sort of solid progress that this country
made
per cent
made from? Trees!
cellulose used
the legislative
clearly enough that,
Administration is concerned,
yarns
than eighty
purified cellulose derived by chemical
same
the nature
more
vague
old "Fair Deal" is trotted out. No
one supposes, of course, that the President will get a
great deal of this program through Congress this year,
hut
fact,
acetate
first to observe that when the President and his ad¬
visers
life-preserving 'chutes usually are made, wholly or
from high-strength viscose rayon yarn, much the same
yarn that improves the wearing qualities of automobile
cellophane and other trans¬
packaging materials.
during most of the first half of the century.
The
Smiling Countenance
In the face of
forthcoming elections, and confronted
with a movement within the Republican party to end
"me-too-ism," the President, who must be put down as a
Rfl VOniGR
NCOR
shrewd
"practical politician," has apparently thought it
wise to turri a smiling countenance toward business in gen¬
eral. There may or may not be good ground for attaching
significance to this gesture per se. For our part we confess
PO
RATED
EXECUTIVE OFFICES: 122 East 42nd Street, New York 17, New York • MILLS: Hoquiam, Port Angeles,
PRODUCER
OF
HIGHLY
PURIFIED
WOOD CELLULOSE
for TEXTILES
•
Shelfon, Washington; Fernandina, Florida
TIRE CORD
•
CELLOPHANE
•
PLASTICS
50
THE
(286)
COMMERCIAL
FINANCIAL
&
Thursday, January 19, 1950
CHRONICLE
Continued from page 48
Business and Finance Speaks After Ike Turn of the Year
labor
Association of Mutual Savings Banks recently predicted
a further gain in
deposits for 1950, even in the face of
an
and the diversion of
expected continued decline in national income.
Just
gratifying
as
traffic to subsidized forms of
some
transporation.
the substantial gain in deposits
as
costs (including the effects of the 40-hour week
non-operating employees which began in September),
for
In
has been the sustained activity in the home construction
the
been
return
to
mands
and
made
by mutual savings banks in their mortgage
Housing starts in the country have increased from
low of 169,000 in 1944 to a new record high of over
000,000 in 1949.
an
of
average
minutes
of
a
house
apartment unit every
or
nation.
It has been estimated that 1949
Dime
$92,000,000
over
to
struction
of
money
on
over
alone
borrowers
17,000
Long
used to finance the con¬
housing in the Brooklyn
Long Island area. In addition to this, the bank con¬
the largest single transaction of its kind in
mortgage history, when it acquired the New York State
portfolio of the Home Owners' Loan Corporation totaling
representing
and
$100,000,000,
40,000 mortgages.
in Brooklyn and Long Islandr
Most of these loans were
bank
the
and
this
welcomed
opportunity
to
serve
so
additional families in its vicinity.
Another outstanding development in the home mort¬
many
the new Home
Buyers Exhibit at the Dime Savings Bank of Brooklyn,
sponsored jointly by the bank and the Long Island
during
field
gage
Builders
Home
the
past
Institute.
was
year
As
feature
a
"National
of
Home
Week," the exhibit was moved to the main bank¬
floor and was viewed by over 230,000 visitors.
ing
Throughout the year, over 300,000 potential home buyers
area visited the cxihibit.
from this
Currently,
entirely
an
new
been
has
exhibit
con¬
opening early in 1950, as the bank's con¬
tribution to the home construction industry and thus to
for
structed
the
a
prosperity of the Brooklyn and Long Island areas as
whole.
Developments
construction
home
in
and
mortgage
This latter
only important cost in home building which
mortgage rates will continue to remain low.
item—the
has had
increase since before the war—will
no
at the most
As
attractive level
pointed
out
more
than
a
of
the
President
the
by
in
Bankers Association of America,
again be
generation.
Mortgage
sound home financing
will be available for all regardless of race or creed. Next
1949's $19,000,000,000
some
ever
the
effect
that record in
come
the
to
half-way
point
in
the
present
where in the world,
tering
effects
within
the
of
short
despite the shat¬
two World Wars
thirty
to
the basic
carried us so
period
of
adhering
principles that have
far along this path to better living,
we can hopefully look forward to an
By
years.
of
era
continued
growth in the
Railroads
years
dustrial
prosperity
ahead.
constitute
basic industries in
economy.
our
one
and
of
the
American in¬
The
volume
of
business they handle depends large¬
ly
the prosperity and produc¬
activity of the nation. During
upon
tive
there
20%
in
enue
Johnston
was
a
depend
in
the
advent
return
for
1949 but still less
than in
the railroads
than
ability of the railroads to earn a fair and adequate profit
Foremost among these is the absenee of a sound
in 1950.
Railroads
all forms of transportation.
that 'are
taxes toward
self-supporting and at the same time pay
the functions of Federal, state and local governments,
receive
agencies
competing
Substantial
subsidies at the taxpayers' expense.
to
determining
In
cost.
should
one
nation
the
however, all ^true factors
that no undue advantage ac¬
costs,
considered
be
to
crues
so
In order for
against another.
agency
as
have
to
strong and healthy transportation"
a
system that will meet its needs in peacetime as well as
defense, a policy must be determined upon
for national
recognize the dangers of continuing the present
that will
however, suffered
a money
about
freight rates
15%,
granted
standpoint,
which
re¬
to the
rail¬
The net income of the railroads,
S. KENNEDY
basic
versified
agriculture,
between
di¬
is exceptionally well
area
and
manufacturing
oil,
Oklahoma
the
center
has
which
the
rich
many
natural
gas
-agencies,
which
interfere
handling of banking
business in the United States through
with the proper
is
between
rates
has
our
almost
crops
been
new
discoveries
tended
have
rates, which, therefore, do not
to
Donald
S.
Kennedy
during
the
to
increase taxation
in no uncertain
terms that taxes should be lowered also offer problems
to the bankers that are very difficult of solution.
added
by
manufacture
Forecasts within
We
have
own
our
added
the close of the
since
Company indicate a continu¬
trend through and beyond
65,000
customers
which is
war,
bankers
the
of
says
the
United
States
to
common
meetings
13
held
productivity and be in the public
studies and those in
of these
other fields- of
that
profitable to themselves to furnish the
which
banks
the
must
have
through
the
a
to
our
and
an
bankers
a
whole
doing
deplore
a
production
in¬
banking business. While
governmental
such
budget, greatly
conditions,
as
they
against the interests of the country,
yet they would strive to
carry
on
their business with
of safety possible and in such manner
to increase employment and productivity in the coun¬
the highest degree
as
try in ways which are sound and in
the interest of the
people.
The bankers of the United States look forward to the
Saturation
to
availability of equipment, we can
as
believe that they are
gain of approxi¬
load from existing customers as well as
unbalanced
the difficulty of
crease
lines
A total of 15,000 was added during 1949.
of electrical appliances is still low, there¬
each individual bank.
Bureaucratic interferences with industrial
1950 in the hope that government may find a way
year
curtail its expenditures and bring its financial house
in order.
They realize, however, that to accomplish this
it must eliminate those government bureaus,
which since
ones.
the
The
tions
back-log for
and
the
our
the increased
territory
home
homes caused by war restric¬
new
pected to continue the
in
fit
better
production
of
nature of the business of
mately 35%.
new
business
the
protection
great
in Oklahoma was 147%
greater in 1947 than in 1939, which compares with a
gain of 116% for the nation as a whole.
There is strong
evidence that this growth trend will continue as the
State offers great opportunities for industrial expansion.
value
Kent
maintenance of sound capital structures based upon the
reflects the trend toward decentraliza¬
Southwest.
Nearly all branches of
industry have made tremendous gains during the past
decade.
Even after adjustment for price increases, the
tion
I.
Government deficits and the urge to
time sufficiently
significantly
Fred
have been carried on by the American
bankers, the whole banking fraternity in this country
is imbued with the desire to so carry on their business
that it will be of benefit to the nation and at the same
recent years and
to this lowered income
decreased volume, increased
relationship be¬
the demand
for credit, also complicates the mak¬
ing of loans on a sound interest basis.
going
the
the supply of and
tween
Because
production.
increased
low
interest rates
government bonds and in a man¬
that kills the flexibility of in¬
banking
Manufacturing output in our area
has
pro¬
interest.
mineral
leading
a
risk
proper
which would increase
livestock,
and
producer for many years.
Its oil in¬
has been exceptionally stable,
as
them
good, the American Bankers Asso¬
covering the country as a
whole where discussions were aimed to clarify in the
minds of bankers the differences between loans which
could be made that might further inflation and those
come
offset
banking loans from carry¬
on
within
ing
tection.
which insures unusual stability. The
State
which
character
To
and
Oklahoma's
equally di¬
producing area.
income
vided
of competition of a
prevents interest
the development
ciation
livestock, grain
single
con¬
at the moment has to d6
of government
further the
nation,
the
of
reserves
of the oil reserves, and is
are
lending
re¬
This great region has 90%
sources.
the
favorably located in
great Southwest,
is
of
United States
activities
the
when
trade.
modern
were
Electric Co. is very favorable.
the
income of
I. KENT
the banks of the
as
one
with
express
in the territory served
outlook for business
Oklahoma Gas and
The
far
so
Again, holding
DONALD
by
activities.
various
our
They face many problems, however, that are not of their
own making but that increase the difficulties of carrying
on their complex business. The most
ner
President, Oklahoma Gas and Electric Company
sharp decline.
The rate of return
in 1949 on net property investment will be less than 3%,
whereas in 1948 it was 414%. The factors contributing
a
In
on
1950
or
cerned, their position at the turn of the year is excellent.
inequities.
The
beginning
of
our
priced at the lower
market, we anticipate
the
at
Director, Bankers Trust Company
trying
system, the public fs entitled
the best transportation service at the most economical
Under our free enterprise
1950.
From
down
from
FRED
in competition
are
The railroads are the only group
new
latter part of the year.
increased
returns
good
traffic, not only among themselves but with all other
transportation — highway,
airway
and
these
a
manufacture foods,' chemicals,
cost
of
commercial
waterway.
is
fiscal year were
administered in such way as to give equal treatment to
for
:
,
1950.
diversified
transportation policy that will be
and workable national
number of tons of
freight handled by the railroads
D. Joyce
factors which will interfere with the
many
con¬
one
which,
are
for
business
we
as
demand
strong
a
paints and varnishes, and process
soybeans and various edible oils.
Because of our modest inventories,
Adrian
There
and
products during
Our
in 1948.
the
roads during the year.
dicate
railroading
general decline of about
rev¬
equipment
machinery maintenance.
tinued rapid growth in
in recent years (principally the
of the Diesel locomotive) should produce a better
made
anticipate
were
building and
The con¬
population
and the housing plans that are hejng
put through in every community in¬
farm
a
fore with the greater
^revenues
brought prosperity to the rural areas
and farmers-are spending freely lor
with the Post
reasonably good level,of business,
coupled with the technological advances that have been
for
Prospects
...
prolonged strike in both coal and steel industries toward
the
course,
under consideration
now
are
last year.
A large part of this decrease was caused by
the intermittent shutdowns in the coal mines and the
flected
of
ation of the favorable growth
railroads in the East compared with
gross
will,
sumer
farm
century, we can approach the next half century with the
knowledge that our economic system continues to pro¬
vide our people with the highest standard of living any¬
W.
rail¬
production.
cotton
President, Erie Railroad Company
P.
the
not
ating costs and selling prices.
In this narrow field in
to operate, greater concentration and emphasis
will have to be placed on economies, efficiency and
greatest
P. W. JOHNSTON
we
or
which
75%
As
Whether
factories and
our
Accordingly,
railroad
managements
will
have
to
work largely within the framework of the present oper¬
of
t
.
branches located^ in
almost every important section of the country indicate
that general business is very good and prospects for 1950
most encouraging.
The good crops and the high prices
that have prevailed for farm prod¬
ucts over the past several years have
Reports from
terest
before, and they can even exceed
JOYCE
ADRIAN D.
Chairman of the Board, The Glidden Company
Office Department.
government
1950.
a
upward adjustments in railroad mail
necessary
which
pay
total.
of
participation in the
construction industry will be is hard to tell.
The fear
recently expressed by the President of the National As¬
sociation of Home Builders, that the cost and prices of
new houses would probably turn upward as a result of
the government's competition for materials and labor,
is shared by many informed observers in the field.
If
this proves to be so, it will be most unfortunate, since
builders in 1949 produced more lower cost houses than
What
Therefore,
for
years. "
favorable growth in our business
1950, and the same general pattern for 1951.
anticipate
as
conmpensating increases in railroad
coming year
during the
generally, with total volume running close to
struction
such
continue for many
to
railroad
certain to be another excellent year for con¬
year seems
commercial
in
expected
de¬
wage
assiime higher operating costs; however, there should
whereas
financing in 1950 cannot be predicted with any certainty.
There is no question that the private mortgage industry
can
meet all demands for mortgage money, and that
as
the extent to which the railroads will be obligated
upon
be
summated
some
♦
loaned
the
have not been settled.
-rates
1948.
during
pay
which
to
was
residential
new
one-third
Brooklyn
of
Bank
over
Most of this
year.
and
Savings
activity
insofar
operating employees, "away from
and readjustment of mileage rates of pay,
roads will need any
the
Island represented an increase Of
The
home"
two
working day last year.
In doing this,
they helped set the new all-time building high for the
also
the 40-hour week for
1,-
On Long Island, home builders started
one
condition
settled
more
a
higher prices are concerned.
The
brotherhoods have several proposals pending,
portfolios.
service
we
viewing the prospects for the railroad industry in
coming year, there is reason to hope that we will
industry, and the resultant large increases which have
New economical uses for electric
and industrial establishments is
expected to continue.
number
through
with
of
new
families is
ex¬
demand for residential building
1950.
electric
Each
service.
new
home
is
Modernization
a
times
and
rural homes is proceeding rapidly;
omy
of
expansion
of
our
therefore,
service into this market area is
have become not only non-essential but some¬
actually destructive, and
taxation in
a
farm
war
the
make room for reduced
interest of production and for an
econ¬
that will meet the requirements of the people with
high standard of living.
,
Continued
on
page
52
Volume
Continued
from first
COMMERCIAL
THE
Number 4373
171
FINANCIAL
&
that
downturn
page
'
wq
CHRONICLE
witnessing cipitous fall in
are
tries,
currently?
iv
*
Glancing at
mount
are
fraught with great the prosperity-deficit
Whichever is chosen, the '1950?
hazards.
Marshall
Plan
and
the
Atlantic,
fact
are likely to be
supplement¬
by parallel moves in Asia", possiPly offsetting the expected net
reduction (by about $600 million
only) of aid to Europe and of sim¬
ed
ilar disbursements.
The
course, on how far we will go in
implementing the Garrison State
and
in
developing the Welfare
State.
The Truman Administra¬
tion is evidently inclined to save
on
defense expenditures, if tem¬
r American
exports,:, under1 such
circumstances, are under-the con¬
stant
more
riskl to-
porarily only, and at some
national security, but to
threat
of
being decimated.
even food,
petroleum
Tbbacco and
products,
machine
tools,
heavy
c.-l/sfctrioai equipment and
moving
ptctuies should be, nay, they al¬
ready have been, among the first
tq feel the recent impact of the
outer
world's
precarious
dollar
and
Britain, in particu¬
unwilling to expose her
lar,
is
hothouse socialism to the fresh air
of international competition. Even
modest progress
a
toward reducing
trade regimentation in Europe is
bought at the price of conceding
discriminatory
practices
to
the
detriment of U. S. exporters.
The
latter will do well in reorientating
their
business, as much as possi¬
ble, toward domestic channels or
---the Middle
Fart.
Indies,
rection
of
East, Africa and the
especially in the di¬
the
President's
Point Four program of
famous
ting pressure groups*
of policy are akin to
developing
governmental spending and more
deficits than officially expected.
for, the $35 billions thus far
on and allocated to world¬
wide
"recovery."
Another
for
ersatz
export out¬
lets will be
provided by the forth¬
coming voluminous orders of the
Army,
the
Navy,
and
the
Air
Ih
the
II
meaning
by and large, the foreign
situation is only a secondary factor
in
the
As
domestic
lias scarcely
as
picture.
matter of fact, our economy
a
ed"
business
from
ever
been
"isolat¬
so
international
influences
i t is now—for the time being.
For
one thing, due
to inferior quality
production and rising costs abroad,
devaluations
did
not
strengthening
competition
on
the
greatly
tariff
spite
in
market,
of
reductions
in
succeed
foreign
American
appreciable
this
on
side.
What is far more important, the
technique of "perpetual" prosper¬
ity by monetary and fiscal devices,
by market supports and welfare
policies has rendered this
relatively
economy
independent
of
world
market trends.
Having discovered
higher living at "no
the secret of
cost"—by
credit
way
of
and
currency
manipulations
we
—
are
to continue on that road.
prone
The road
is
paved
by
ever-ex¬
panding
Federal 1 subsidies
and
credit guarantees, and by new an¬
nua] deficits in the national budg¬
official forecaest is $5 V2
The
ets
billion for the current and $4 bil¬
lion
the
for
Harassed
the
next
fiscal
necessity of fresh
borrowing,
the Treasury is impelled to main¬
low
tain
lower
the
of
face
interest
them
(mild)
fered
by
Board
against the
ary
rates
further,
the
and
this
in
to
the
resistance of¬
Federal
new
Reserve
inflation¬
trend—which it promotes, in
effect,
tion."
by
its
monetary "relaxa¬
Not only high-grade mu¬
nicipal
and
bonds
corporate
are
This
assured.
81 Ht
determination of the
Congress not to raise taxes—
possibly even to clip some of the
excises
on
luxury goods, enter¬
tainment,
rail,
services—and
duce
wire
its
and
phone
inability to
expenditures
below
re¬
the
peacetime record of about $43 bil¬
lion, the question is: how far will
bullish
outlook
for
two theories: that
fundamentally
balanced, with
our
ing
to
no
10%
26%
a
fabri¬
financial "wa¬
The
appears
to
have beaten, in dollar volume, the
all-time high of 1925; backlog'of
orders- piling
durables
as
for1
up
well
majority
what went on-in
for
as
of
194'7,
other
basic pattern that has become
equipment, and. corporate profits of
visibly recovering from their pre¬
the
postwar
a
feature validity is restricted to a year or
two.
That, of course, does not ex-
that
except
era,
next time the "seasons'-
Continued
would be
on
the
would
still
but
dip,
income of farmers
close to $30 billion, including the
estimated $2.6 billion the taxpayer
is to contribute 011
top of sub¬
sidies for land conservation, rural
electrification,
housing, etc,
rural
To keep the cost of
farm support
within "tolerable" limits, and the
well
million tons of
one
over
stockpiles
ton
ment at
considerably cut, penalizing
Obvi¬
other staple products will
have
be
to
too, corn
But then
the least
regimented,
rice
and
being next.
Naturally, only
what?
productive land will be "laid off."
will be left un-
And little acreage
planted: the Southerners plant less
cotton but more corn and oats-; in
Iowa, soybeans will be substituted
for
corn;
for
wheat.
in
grains-
feed
Kansas,
Also, the use of fer¬
tilizers will be intensified.
A re¬
in
duction
if
any, may be more than offset by
a boost in the output of fats, meats
and eggs.
The problem of sur¬
pluses will stay with us, and the
farm
price structure, sorely in
of
need
primary production,
,
between
readjustment
processed products,
livestock, etc.,. will be
further confounded.
The coming
primary
and
rounds
Dairy.
out
period of significant develop¬
a
The fundamentals of
—
with the
.
their
employees, and with
stockholders.
our
Translated into business terms,
ucts
of fine
this
Implicit in
our
health and welfare.
products
new
to
as
the
is
program
In
wider
1950,
use
a
as
Dairy Products Corporation.
contribution to the nation's
in the past, National Dairy is
and better understanding
human food... as
products and materials
progress on
supplying prod¬
quality at fair prices, and insuring te fair return to
those who have invested in National
dedicated
means
...
a
of dairy
base for the development of
as a source
of health and enduring
the farms and in the cities and towns of America.
see
the
attempt
to
problem by dumpings
great loss, much of the gov¬
ernment's
accumulated
surpluses
may
year
"solve"
the
a
the
on
business are
and
crops
at
our
producer, with the consuming public, with our divisions- and
as
rule the efficient producer.
ously,
1949
National
securely established in four important relationships
been
already
have
acreages
of
end
The
car
rising
from
world
markets
—
PRESIDENT
thereby
National Dairy Products Corporation
disorganizing the latter, too.
In
less
than
18
months,
so
farm
one-fifth
products tumbled by
or
from the top prices of the post¬
inflation.
war
That
alone should
have brought about a
crisis of first
enhanced
magnitude,
by
a
sharp
in base metal, scrap, and
many other raw material prices.
It was a major factor, indeed, per¬
drop
haps the most directly responsible
one, in the mild business reversal
of
"Glut"
1949.
of
agricultural
commodities used to be by all past
their
crucial
a
major
start.
ian field itself.
the
an
from
took
This
developed, not
was
point
depressions
time,
even
crisis
agrar¬
All that happened
interruption,
as
it
were,
general prosperity stream.
receded
of
It
slightly from the fantastic
peak it had. reached
fall of 1948.
is
no
in the
merely
an
in the early
Or could it be that i{
interruption of the
is
well-
the first months in sufficient quantity to halt the
and again of 1948;
In decline, cost what that may* The
words, we should see the second of these assumptions is
repetition of the sort of seasonal well-founded, indeed, provided its
consumers'
that
construction
as
some
an¬
mean
may
stabil¬
economy
sound t and
the gross
standards
the
The
ized prosperity is based on one of
prices for major agrarian products
is
in
prices and inventories, and might
bring a real "downturn."
nearly
legally established floor under
ac¬
readjustment
to be ready to push the "in¬
genious" Brannan Plan that prom¬
ises high prices on the farm and
cheap food to the housewives, not¬
withstanding the outspoken objec¬
tions of the leading farm organi¬
zation.
In a crucial election year;
with or without such plans, the
which
Given
half.
the
half
possibly
pears
the
■
second
celerate,
resume,
the other
latter
Administration ap¬
exhausted. The
strengthened
thereby, but even
long-languishing stock market
profits from this fresh outburst of
Cheap Money policy.
the
to
wni!
.
on
the
finance
ity Credit Corporation to
these
subsidies is pretty
year;
by huge maturities and
much
as-1
raise of steel costs
to be controlled. Tobacco and cot¬
But
erence
that
51
ter" to be squeezed out of it, and*
of prognosticators, pro¬ therefore in no danger of a critical
fessional or otherwise, foresee a
cators; national income holding up
show-down; and that the political
along the colossal $220-odd billion new leveling off of the so-called forces to be are strong enough and
line;
dwelling
awards
running High Plateau, but without serious determined to nullify any adverse
to development by pouring out credit
ahead1 of the current year's hous¬ repercussions — comparable
age,
further, the volume of output has
•
•
minority,
warns
1950
of
*
of
annals
hand,
the Commod¬
$4.75 billion fund of
ried-over
Force.
■
reversed'. A
leaks
the
other
spent
-1"
year's
price props constitute one
in the budget. The
Farm
of
leave
tute
■
**
indus¬
previous
level.
III
That pro¬
countries."
may
those pre¬
vailing in socialistic Europe. The
net result is likely to be enhanced-
become, from 1950 on,
the supplement of, or the substi¬
"backward
gram
vote-get¬
Both trends-
which benefit the
grams
port restrictions. Official attempts
Ids liberalize trade abroad
promise
success;
spend
"social" pro¬
on
more
supplies and of its mounting im¬
little
of
depend,1,
will
answer
in
*
;
7
numerous
the
from
record
The consensus in and out of the
business, it
Exchange
is
practically
would be a unique case of a de¬ Stock
unanimous: that the first "five to
pression or recession "interrupted"
six" months of 1950 will bring in¬
by such typical boom phenomena
creased sales and profits to almost
as- wage
(pension) bills substan¬
tially
increased;
steel
prices every sort of enterprising that is
A difference in
boosted1 successfully—without re¬ "on the beam."
ducing sales—by 4% on the aver¬ thought exists, however, with ref¬
1
alternatives
(287)
NATIONAL
PRODUCTS
DAIRY
CORPORATION
page
53
52
Continued from page
50
Chairman, The
having difficulty at one of our
southern mills to meet a water shortage by trying to
strike water by deep wells, unsuccessfully, I brought a
when we were
present continuing.
During the last six months of 1949,
had a complete
tie-up due to
that
of
for
have not forgotten
distributors
year
was
extremely good business and
second half a very bad
generally
business
expect
not
to oil and gas
great or greater than what happened in 1949.
I
expect a severe decline.
I think there will be
unemployment and some lowering of costs.
books
approxi¬
country will need
the
that
mately 475 million tons of coal for 1950. Mines that are
available for production at present can produce ap¬
to
do not
greater
unquestionably great uncertainty on the part
generally, I think, and
proximately 650 million tons. Well-managed properties
equipped with modern facilities for producing and pre¬
paring coal will continue to prosper and w7hile indications
are
that 1950 has serious problems for the industry as
a
whole, I believe there are still possibilities of fairly
good earnings for those companies having the proper
facilities and management to solve these problems.
of industrialists and businessmen
good deal of apprehension about the
a
even
the
acts
of
and
also
of
apprehension
the foreign front.
on
to
the Hoover •
by that route,
could come
larger volume and
is
Business
uncertainty.
the
M. LANDON
ALF
certainly
more
bound
shot in
the
arm.
According
profitable than in the
to
depression years.
financing
KIRBY
P.
Corporation
President, Alleghany
'«
.
-'
tute
with
fallacies at its
the unsound economic
This is
command.
to
of
our
a
constant threat
a local
Repub¬
in behind the New
Deal when it began
to hand out
money and guaranteed
him a big
price for wheat.
He has told me the
lican
world
thrive
on
an
practice, return in a few
The outlook, however,
is not pleasant when we see ourselves slowly but surely
drifting into the slough of some kind of "ism." No matter
whether it is called American Socialism or one of the
sound Government
of
help
short years to a
analysis, all just
trend in the other direction
"isms,"
European
about
sound economy.
it is, in the final
same.
Until
the
a
expected that busi¬
otherwise but view the future with alarm.
develops, if it ever does, it cannot be
can
ness
do
With such men as Herbert Hoover,
Eisenhower and ex-Secretary
Senator Taft, General
of State Byrnes endeavor¬
ing to arouse us to the inherent dangers
at hand it seems
to our
though there is- some hope that we may come
as
.senses
An
and
aroused
the situation
that
is
not
entirely hopeless.
American people can change
Congressional
thinking almost over night.
When, and if, the Hoover
Reorganization Plan can be
acted,
or even
venture
large quantities may become
then and
return to any kind
forward
as
avail¬
become
then only can the country hope to
of state of reasonable
normalcy and
it did in the first 25 years of the pres¬
ent century.
♦.
%'
•
in
projecting
that
the
r.#«n .»»•» **»•<•• r •»
*
* *
* n
next
of business.
R.
indications
during
the
on
the
30
use
of
*
more
steps to combat
R. L.
Lcadbetter
is showing an increased desire;
the growing noise menace.
to
others are becoming conscious
disregarded.
In the interest of
be
S.
E.
Lauer
type of
separately or
simultaneously.
sizable air
construction of
an important service to attract tenants and
Air conditioning is now taken for granted
forms
the year just
that noise cannot
the economic and
physical benefit of all concerned it must be reduced
are
expected to produce
All passenger
liners now under construction, including the largest superliner to be constructed in the United States for which
*
most
be among the lead¬
increased demand for
the
Management executives and development engineers at
Burgess-Manning have found the above industries and
wherever
of public transportation.
•
*
*
*
*
»
possible.
Management has discovered through their own experi¬
ence
and that of psychiatrists and psychologists that
long-continued noises in plants and business places pro¬
fatigue which impairs efficiency, encourages in¬
attention and lack of concentration.
The nervous sys¬
duce
tem, it has been
found, is not constituted to
take such
constant battering.
conditioning volume in new commercial
in
in
Industry in general
available for use
for several rooms
The next 10 years are
types as
Installation
period last year.
take
conjunction with existing warm" air heating systems
provide year-round air conditioning for the entire
all
of unnecessary noise on
realize its
requirements to meet this demand
for quiet for next year are the larg¬
est in the history of the company.
The oil industry, utilities and rail¬
air con¬
conditioners
unit air conditioner now
customers.
business
many
air
hermetically sealed
or
of people who
acutely aware this year
noise is a
waste, and a growing threat to ef¬
ficiency, health and safety.
applicable to residential use, but for
the first time the vast residential
market will be opened by the com¬
house
and
noise-abating equipment
past year. I base my forecast
more
1950 than in any
increased intolerance
part
industry
that
are
install
that constant, unnecessary
of
years
will
Co.
Management seemingly is becom¬
demand for much air condition¬
pletely
«
LEADBETTER
L.
Vice-President, Burgess-Manning
ing
ditioning commercially "in restaur¬
office buildings will create
ing in homes."
Single room
.
,
closing.
ants and
the
returns.
convinced that the pub¬
not more government control
good calls for less and
quieting devices during
economy
expanded
diminished
the future with
certain: Texas business men are
ers
in the No¬
vember "Atlantic Monthly," predicts
American
the
.A
"1: I JLi-S-Vt'.I
the
mean
confidence but quite mind¬
uncertainties which lie ahead. One thing is
the
of
easily
might
levies
Texas faces
ful
industrialists, and in
the opinion that
point and that addi¬
include labor, are all of
already near the danger
are
tional
farmers,
merchants,
Bankers,
Texas we may
roads appear to
progress
Slichter, Harvard economist,
H.
ner
and when some
signs of UN functioning in an orderly manner,
move
in
to
in
advanced by war-born
large
suggesting to the home owner that
he can share its benefits. Prof. Sum¬
threatened, and possibly reduced, so that
capital
many
technique.
But gradual increase
use
of air conditioning is finally
in
deficit
of
program
dangerous
the
discontinue
spending.
same
buildings, deferred
because of wartime limitations and the lack of compe¬
tition in renting space, is accelerating.
The use of air
conditioning in manufacturing to get improved products,
;was
visible sign of
anxiety. Businessmen in Texas
generally very earnestly believe that substantial econo¬
mies in Federal expenditures are entirely practical and
possible and that there is a good chance that the Con¬
gress will have the courage to put them into effect. This
done there will be no need for additional taxes and we
During the past ten months Bur¬
gess-Manning sales of noise-abating
equipment, snubbcrs, acousli-bootns
and other devices were 110% of the
LAUER
E.
of
in the making and no
plans
acute uncertainty or
any
harmful effects.
of itself."
President, York Corporation
in
able, socialistic legislation is abandoned,
evident,
and let tomorrow take care
conditioning
that deposits
all-time high. At the
same
decline in loans, al¬
though not to such an extent as is indicated in New
York and other reserve cities! The industrial develop¬
ment in Texas continues apace.
In this field we find
banks have reached ari
time there has been some
Present
increases are en¬
realized, the budget balanced, no tax
largely due to the big cotton crop
is
It
generally
Air
little money and
in Texas
and
unsound cur¬
base.
F. M. Law
their credit at the banks is good.
just
one
more year
and then he would be on easy street.
But he said, I do not know what will happen then.
But
that is the attitude of many—give me the cash today
past four or five years, that it was a poor program
meant trouble in the end, but that he would vote it
S.
Texas is
but swung
in
Without these everpresent
worrisome problems
and
stifling checks, we could, with the
Allan P. Kirby
Alf M. Landon
of
example
be
still pri¬
must
agricultural and livestock
in sound position. They owe
an
state—are
lic
an
welfare and to the well-being
live and
rency
chattering ty¬
the national
have
The
year.
it
who had always been a
man
general.
Despite all of this, we continue to
the
the
you
is
"Here
offing, possibilities of socialistic leg¬
with the atomic bomb, at least
and
picture:
labor costs, , strikes,
en¬
Social Security and, in the
islation, such as Federal Aid to Edu-\
cation, Socialized Medicine, threats
of higher
taxation, and the like.
With all of this, we are also harassed
with
the
ever-present
danger
of
what will Soviet Russia do, if not
of
some
coons
marily
taxes
cent letter. For
business men
creasing
larged
despite glowing predic¬
quote a small weekly editor's re¬
"a local man," substi¬
I
....
to look
forward with confidence or even with real hope, when
an unsound economy constantly faces the country through
an unbalanced
budget, deficit financing, constantly in¬
hard-headed
for
—
so-called businessmen.
that
remembered
we
hoped for at
even
us
beginning of that
farmers of Texas—and
the
can
periods of prosperity are
based on a foundation of deficit
tions of
difficult
cus¬
hamstring its activities.
not
is
New Deal
Sound
ALLAN
It
the
to
tom, business will be called a crook
and the Administration will attempt
be in.
to
will be more spending
Business will get an extra artificial
than in "off" years.
of
most
than
and
1949
on
it turned out better
know that
ambitious
Deal years.
1950 will be like other New
Being an election year, there
the Administration to press hard for
plan and the economies that
add
The fear
failure of either Con¬
higher taxes, coupled with the
gress or
attitude and
Administration, the labor situation
present
closed
are
equal its
if not quite,
nearly,
now
estimated
is
It
up
Frank F. Kolbe
competition must
be expected.
present levels and am of the opinion that some tim*e
after the first quarter, or possibly the second quarter,
another readjustment downward will occur, perhaps as
There is
predecessor as to earnings, employ¬
ment
and
business
activity.
The
ness
P. Kendall
hold
to
will
petition to be a more serious threat
to the coal industry and loss of busi¬
losses.
do
majority
the
perhaps
Texas
opinion among bankers is that 1950
supply has caused oil and gas com¬
stood heavy inventory
With the memory of that
still fresh, I think there is a tend¬
ency on the
part of a good many
Henry
companies to act as results specifi¬
cally justify and their customers do, too.
companies
I
and secondly, the ever
torment of world politics.
gress,
In
Con¬
present
around
centered
be
to
sqem
on the part of both consumers
producers of coal.
Naturally, this uncertainty as to
slump. Many
"ifs" in the situation
The two big
and
the
days.
of them to the first 90
many
ship
when the first half
1937,
the
reactions.
prophets prefer to confine their com¬
ments to the first six months and
coal on
produce
to
everybody is willing to get out on
to predict good times for at least
of 1950 might prove to be unfortunate in
It seems a bit ominous that most of the
far enough
the first half
its
First National Bank in Houston
practically
That
Monday, Tuesday and Wednesday of
each week. This limitation on pro¬
duction remains in effect at the pres¬
ent time and is causing serious hard¬
ticularly in the textile field, is due
to the fact that both manufacturers
and
permitted
only
spurt in busi¬
experiencing, par¬
are
we
the limb
Mine Workers
America mines for 60 days and
two months prior to that were
LAW
M.
F.
the United
strikes in
think some of the
I
Chairman of the Board,
we
forecast for 1950.
ness
conditioning is a growing industry.
Air
in the coal industry for the calendar year
1950. This is almost entirely due to the uncertain labor
situation that has existed since June, 1949, and is at
the expectancy
Boston to
sanitary engineer down from
tell us where to drive the next well.
He reminded me that one man could
see just as far
underground as an¬
other, and no farther.
I feel much
the same way when you ask for a
skillful
very
Companies
difficult to make any prediction as to
is extremely
It
eight giant York turbo Systems will be used, are to be
completely air conditioned according to a recent an¬
nouncement of the U. S. Maritime Commission.
KOLBE
FRANK F.
President, The United Electric Coal
Kendall Company
Year
Speaks After the Turn of the
KENDALL
HENRY P.
1950
Thursday, January 19,
,
;
^
Business and Finance
Once
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(283)
The
gas
found
lL
use
of quieting and
spark suppressing snubbers on
and diesel engines and on
not only to
L
other equipment has been
but alsp
alleviate the noise problem
r,
'
'A *
;
'
-A
Continued on*page 54
■■
i
4
1
1J
\
/■!
Volume 171
Continued
Number 4873
from
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
51
page
Charlotte, N. C.; Robert P. Mar¬
tin, Davenport & Co., Richmond,
Va.; W. Carroll Mead, Mead, Mil¬
ler & Co., Baltimore, Md.; John
T. Warmath, Equitable Securities
Corp., Greensboro, N. C.
NASD District No. 11
Glancing at 1950
elude
Elects Officers
"minor
readjustments" in price level and a high level of
1950.
But given the hard facts of'
output chase one another, and the
political life: the pending Con¬
problem grows more aggravating
gressional elections and an ap¬
preciable budgetary deficit in the at every turn.
place of
by-gone surplus—a po¬
inflationary factor replacing
tent
the
a
deflationary one—the
hood that
extraneous
likeli¬
(political)
serious re¬
It may
1950,
be another boom
and
perhaps
presumably with
also
year
in
in
1951,
some recurrence
of unpleasant inventory liquida¬
influences may cause a
versal, or even permit it, is negli¬ tions, strikes and similar
proc¬
gible indeed.
Actually, the fifth esses.
Even so, the continuation
wage
round
may
be taken for
of
the
boom
will
have
to
be
granted, to be backed up by new
credit expansion. In
short, we soon
again may see higher wholesale
prices for manufactured commodi¬
bought at the price of further
and
the
of
upward
of
nor
the
pressure
recent
curities
Dealers,
elected:
Edward
Stein
Bros.
Md.;
W.
Buford
&
Inc.
J.
At
meeting ol this Committee
the following officers were elec¬
recently
Armstrong,
Baltimore,
Boyee,
No.
S.
Brown
Durham,
Willis, Alex.
Caro.;
&
Vice-Chairman:
Ben
Sons,
D.
Committee, representing the
securities industry in this area for
term
of
three
years
to fill
vacancies
panding the credit (debt) system
tion
of
created
the
by
terms
man
Hagan takes office
succeeding
Atkins whose
the
the
expira¬
the
J.
Murrey
Donald
of:
The
Atkins, R. S. Dickson & Co., Inc.
N.
Fenton
H.
as
J.
has
Burns,
1625 K Street,
Washington,
D.
(Special
ST.
C.,
was
the
and
the
Virginia, West
of
on
this
this
the
District
Board
of
Association by
Pinkerton, Baker,
Co., Baltimore, Md.
to The
Financial
LOUIS,
on
Mr.
comprises
Joins Fusz-Schmelzle Co.
Murrey
expired.
of
Charles H.
Watts &
Chair¬
three-year term
Committee
W..
Mr.
members
represented
Governors
C.
Mr.
trict
11
Columbia,
States of Maryland,
Mr.
G.
Cramer, Ferris & Co., Washington,
Winston-Salem, N. C., to the Dis¬
a
Hagan, Jr.,
Mason-Hagan, Inc., Richmond, Va.
Securities'
Corp.,
C.
No.
of
"Virginia and North Carolina.
are
Chairman: John
Buford, W. E.
Co., Charlottesville, Va.;
William D. Croom, First
District
District
ted:
Erskine
&
a
Secretary of the Commit¬
tee.
Morse has become
Fusz-Schmelzle
Bank
Chronicle)
MO.—Edward
&
affiliated
S.
with
Co., Boatmen's
Building.
expressions of the basic economic
lows.
realities
which
reassert
themselves
later.
undoubtedly will
—
sooner
or
Jloo&
to THE CROSSROADS OF THE EAST
What that may entail some
day in terms of social upheavals
V
Of
course,
all advance symp¬
toms of bigger and better business
ahead
might be annulled almost
overnight, if buyers go into hid¬
ing — which is what they have
are
of the National Association of Se¬
elected
53
on
"correc¬
tions'.' which have lifted basic raw
materials
from
their
mid-year
been
11
ex¬
and further diluting its monetary
ties, tempered by cost-paring tech¬
nological improvements and by base. The longer this continues,
lower farm product prices.
Al¬ the more prices and incomes will
ready, most building costs have be removed from
being adequate
stiffened, to say nothing of steel
coal,-
The members of District No.
(289)
doing "seasonally"— orders
prices plunge and
is any one's guess.
Fenton and Marr Join
Ames, Emerich & Co.
cancelled,
the trouble spreads, be it
only for
a
short while.
But it stands to
reason
that the year-end
boom
will be carried well into the New
Year
by its
tum.
That is
evident
own
nosticators'
about
all
foresight
momen¬
the
prog-
amounts
to
at present.
And it stands to reason,
before next November's
too, that
elections
nothing will be permitted to in¬
terfere
the
in
kind
serious way with
mass-happiness that
any
of
dividends
pays
at
the
polls.
Its
drying up on the consumer end
is out of the question when
enough
l'resh spendable
income can be
dispensed
to
enough
people on
public payrolls.
open or concealed
As to
the construction end: if in¬
creasing population, "full employ¬
ment" and rising
wages
do not
provide sufficient incentive for
more
housing, plant and laborsaving equipment, additional Fed¬
eral
and municipal construction
do the trick.
can
Marr
Arthur W. Fenton.
CHICAGO, ILL.—Lawrence M.
Marr and Arthur W. Fenton have
become
associated
with
the
trad¬
ing department of Ames, Emerich
& Co., Inc.. 105 South La Salle
Street.
Both
Mr.
Marr
and
Mr.
Fenton have been with E. H. Rol¬
lins
&
Sons, Inc.. in its Chicago
office for the past 15 years.
Mr. Marr is Past President and
director of the Bond Traders Club
VI
of Chicago and has been active in
In
ism
Lawrence
short, the prevailing optim¬
about
the
general business
prospects of 1950 is well justified
—provided it is not based
delusions.
Let
us
on
our¬
affairs of
the
Mr. Fenton is
selves with the notion that this is
fundamentally sound, balanced
economy
the
shortcomings
of
National
Secu¬
former director
a
self-
not delude
the
rity Traders Association.
of the Bond Traders Club of Chi¬
cago.
a
which could be eliminated (in the
long
pull)
by
magic,
some
such
"co-operation" between busi¬
labor, farm and government.
as
ness,
Nor is the scramble of the vested
interests for more and more hand¬
outs
accidental
an
aspect of the
picture that might be cleaned up
by,
a proper
election.
of
fabulous
wealth,
dented
productive
In the face
of
unprece¬
capacity
and
living standards, this
ours
is
unbalanced
economy of
in a fashion
that cannot be corrected by minor
and
relatively
painless
adjust¬
*
price
structure
out of balance with the
supply
Mulligan With
Joseph McManus Co.
Frank
with
McM
-
demand
f'lated
forces.
Overin-
farm
double
is totally
underlying-
industrial
incomes
distorted.
High
similarly
living standards
by tax reve¬
nues
or
by way of a price and
profit inflation that keeps stimu¬
lating
output beyond the con¬
sumers'capacity to absorb it. The
are
financed
result
or
is
either
recurrent
recurrent
are
shutdowns—
strikes—to -control
production and raise costs further.
In
a
futile
-
circle, a high
wage-
a
Mulligan has become
Look
ted
way,
of
to
New
Joseph
anus
&
"Crossroads".
members
the
Jersey...
In
New
York
and
and
managed utility issues
New
Exchanges
the
as
He
&
Rollins
Sons,
in
their
Inc.
trad¬
1942
Frank
E.
was
Saxton
&
with
associated with G. A.
plant locations. Thanks
industries
to
He
more
than 300 major industries have moved
with
formerly
was
Financial Chronicle)
CHICAGO, ILL.—Jack
been
Reynolds
added
&
Co.,
to
the
208
Write
Frankel
staff
South
of
La
"THE
Depl.h'orbroch^
«MS*0»K « T"
to
.
a
gas
great
Joins Reynolds Staff
The
consider
such major factors
customers
with
and transportation, Public Service continues to
grow
State.
Chesley & Co.
to
to
Jersey in the past five years to improve their competitive
electricity,
Co., Inc.
Street.
(Special
has
to
Serving industrial, commercial and residential
Mulligan
and prior
Salle
new
cordial invitation
positions.
since
thereto
conditions,
New
ing department
Jersey for
a
markets, labor, transportation, research facilities and favorable
tax
has been with
H.
''The Crossroads of the EastJ*
New
Curb
Exchange.
E.
gear at
Company has a vital interest in the industrial leadership at the
fact, through national advertising in newspapers and magazines, this business-
Midwest Stock
and
you'll find that business is in high
Public Service Electric and Gas
Co., 39 Broad¬
what
prices — probably
they should be to
bring the market anywhere near
equilibrium—constitute the most
conspicuous case to the point. But
E.
i
a s s o c
York
ments.
The
Frank
1
PVBLIC®) SERVICE
'
'
( ©
A Citizen of a Great State
*
,
54
Continued
from
page
Thursday. January 19, 1'950
FINANCIAL 'CHRONICLE
&
COMMERCIAL
THE
(290)
52
ef the Year
Business and Finance Speaks After the Turn
higher degree of protection from explosion
a
fire.
and
Use
Acousti-Phone
of
noises
extraneous
which trap
Booths
offices and noisy fac¬
reducing costly telephone errors.
has
tories in
aided
President,
Cooper-Bessemer
The
best
corporations are the ones whose securities seem to me
to offer the greatest promise in 1950.
possible prices.
est
single objective of the electric companies for 1950
No
business
many
is
important than their determination to repel all
more
political efforts to extend the area of socialization by
taxation, whether in the electric industry or in any
CORDON LEFEBVRE
for the oil
sors
4k
and chemical indus¬
and
would expect the market
about
absorb
to
amount
of
the
.
Business
suming
should be good in
average
intensification
no
of the cold
income and savings are high.
sumer
or
tending
one
power
-sales
to
categories—industrial,
customer
commercial
This is simply another way of say¬
ing that living standards will keep
on advancing and that business and
industry will increase the efficiency
oLtheir operations through new ways
of utilizing the advantages of elec¬
tricity.
Increased use of electricity
both reflects and contributes to
of
care
and to build
present
is
in
of
midst
the
expansion
postwar
pace
business
industry in 1050, as it did in 1049, when 570,600
joined electric lines.
On New Year's Day electricity was in use on 85% of
all U. S. farms and was available to 91%.
This month
the five millionth American farm will be electrified,
of this year 02% of all the nation's
electric service, with another 5 % easily
their facilities, the investor-owned elec¬
million in 1949.
This year
construction will require an additional $2,105 mil¬
In expanding
tric companies spent $2,100
By the end of 1051 the grand total
expended by
their .six-year., postwar con¬
will exceed $9 billion.
these electric companies on
struction program
In
1939
consumed
American residential customer
897 kilowatthours of electricity.
Last year,
the
average
just 10 years later, he consumed 1,885 kilowatthours—
and paid 10% less for each kilowatthour, despite the 69%
cost-of-living increase which occurred nationally in the
same
The
period.
obstacle
to the progress
and the ever-
increasing service of business-managed power companies
campaign by demagogues and bureau¬
crats within the Federal government to socialize the
is the persistent
business.
Investor-owned
companies
are
pre¬
pared to continue their fight against this movement.
This drive by the Government
in
view
point to
of
a
the
fact
that
the
is plainly unnecessary,
electric
companies
can
superlative record of constantly expanding
Lovell
R.
of
cop¬
\
of public
been curtailed
and
struction
during' the
war.
to
consume
sizable
amounts
of
and
copper
base alloys in the form of pipe, tubing, electric
copper
wire, cable and forgings.
The automotive industry will continue to be
*
a
heavy
of copper as long as the demand for motor cars and
trucks holds up.
Televsion, refrigeration and air-conditioning require¬
steady growth.
ments should continue their
Government
stockpiling of copper is expected to foe
same rate that prevailed
maintained in 1950 at about the
in 1949.
During 1949 a sharp drop in price and demand for
caused most American copper mines to curtail
production or shut down.
At present the domestic
demand for copper exceeds U. S. production and some
copper
imports
to make up the difference. How¬
are necesssary
large mining companies are. .increasing
output and by mid-year it is conceivable that domestic
production may materially exceed demand.
If this
-should happen, it would be foolhardy to suspend again
the copper import tax which otherwise will autmaticaUy
become effective July 1, 1950.
The labor situation at American copper mines appear?
several
ever,
be
to
Recent
good.
increases at large Western
wage
properties indiciate that we may expect
during 1950.
with
gain
back
1942
1938, both
for
year
the
industrial peace
business.
basic
The
reason
for
this
have
not
*-
dividends.
»
trend.
There
are
no
secrets
in
the
reasons
behind
the
ad¬
Practically every¬
cheap on a balance
body
must
basis,
agree
that .stocks
are
earnings basis, and -on ;an income
yield basis.
The difficulty has been that the majority
has not trusted the continuance of good operating profts.
an
on
they have overlooked the change in consumption
patterns that has accompanied the redistribution of
wealth which began in 1933.
I think, also/that many
•dollar figures in earnings statements look big compared
I think
with
the
basis
of
the
normal and
This
prosper
allowance
make
to
power
past, whereas, actually,
does
dollar,
less
not
the
for
would
a
make
reduction to a unit
reduced ;purchasing
them ^appear
more
boom-like.
mean
and all stocks
that all
are
companies are<.going to
going to go up.
The moving
behind the 1942-1946 market was basically the
need for production.
Anyone who could produce, ef¬
ficiently or inefficiently, found their product sold at a
profit.
In fact,-the weaker companies tended to do
better than the strong.
The motive power behind the
rise which began last summer is of an entirely different
kind.
Today, it is the companies that,possess the best
management,: the most efficient production methods, the
best product design and the best merchandise who are
winning out.
In other: words, the largest, wealthiest.
as
a
good
year.
1949.
A
a
1949,
as
which may alter the picture
—the
return
which
had
inflation.
of
Prices,
going down, began
been
rising again last September.
Infla¬
tion 'of a mild type is back with us
again, bringing with it the
price dis¬
had been
tortion which it was hoped
corrected by the
ment
just beginning in stock prices.
vance
be
•
horizon
They have
actually mistrusted dividends dur¬
G. M. Loeb
ing a period when they have been
well covered by earnings and actu¬
ally rising.
Since June, however, there-seems to be a
change and I think the improvement in prices in the
last -six months is just the beginning
an Important
or
year
good
as
trusted
earnings
should
1950
many
whole will be almost
if not better, in
sales, production, and profits.
There is, however one cloud on the
the
set
Psychologically, investors
either corporation
existing.
are
fair
of facts but rather
the realization of a condition already
new
any
Bank and Trust Co., Philadelphia
indications,
considerably ahead of the first six months of
number are of the opinion that
antici¬
pated change is not the development
of
C. MADEIRA, JR.
well informed business men who be¬
lieve that the first half of the year will find business
There
brokerage
stock
all
•From
for investors and a depres¬
year
sion
1949, it will rank
as a bar¬
on
and
PERCY
President, Land Title
power
biggest
electric
looking
sheet
accessible to it.
lion.
it has in quite
than
also show a sub¬
In fact, I feel that
stantial increase.
the
farms will have
me
think that common stocks, as
Exchange should
farms
new
looks better to
users
as
transactions-on the New York Stock
which
maintained in 1949.
the end
during the year just
a while.
investments,;promise to
come
back into their own, and of course, along with
rising stock prices, the volume of
I
America's business-man¬
Elmer L. Lindselfn
aged power companies installed 5,580,000 kilowatts of new generating
capacity.
This year they will install an additional
5,060,000 kilowatts.
By the end of 1951 these electric comuanies will have
added 21,000,000 kilowatts to their collective postwar
generating capacity.
This figure will represent an in¬
crease of 52% over V-J Day capacity.
During the past year about two million customers
were added to electric utility lines, with the result that
95% of all occupied dwellings in the U. S. now are elec¬
trified.
One-half of the remaining 5% have electric
service readily available to them.
.Farm electrification will-receive much attention from
by
reduction.
LOEB
M.
The outlook for the stock market
ahead
Last year
and
study the gratifying results Canada
to have achieved through postwar tax
eco¬
will extend through 1950 at the same
vigorous
entirely different
lot of damage. In¬
stead, judicious reduction of certain taxes, for example
some
of the excise taxes, could be so stimulating to
business as to maintain total tax receipts at a high level.
G.
demand
program
matter of fact, put an
a
Partner, E. F. Button & Company
tremendous
a
as
aspect upon the outlook and cause a
appears
capacity for the future,
the electric light and power
could,
We would do well to
nomic improvement.
take
The budget should be balanced from
side,* not by increasing taxes. Tax increases
such
building industry has a lot of catching up to do,
we
may expect
residential and commercial con±
user
financing is
healthy
The
permitted.
the expense
of the three
each
•not be
Endicott
holding
of the day.
the Government to deficit
of
resort
order
the
a
utility sysr
t$ms and rural electrication pro¬
grams will move ahead.
The tele¬
phone and telegraph companies plan
to
continue
their, expansion
and
improvement programs which had
be
disappointing, and for the longer run disquieting. With
a national debt of $256
billion further increases should
and residential.
To
Linton
a.
m.
correction
,
Expansion
of
remarkably well with excellent
prospects in 1950.
As we analyze
one
industry after another, and add
the results, the composite picture is
good.
Tempered
optimism should
in
tities.
to
up
be
1950, the electric light and power business expects
in
is
automobiles
for
demand
now
firm at
Copper-
the hands
.electrical, automotive,
and construction industries, bid fair
to continue taking substantial quan¬
busy for some time making up for
resulting from the strikes. The
engines and gas en¬
President, The Edison Electric Institute
principal
prospect
addition
demands, will
underwent
are
During 1950 the main
per,
Con¬
in
arid
condition.
somewhat
little
Steel,
normal
meeting
busiest year.
rise
rise
1949
seems
pound.
per
inventories in
fabricators
in
losses
President, The Cleveland Electric Illuminating Co., and
continued
to
with
strong
ing
The
In
spend¬
struction, public and private, is go¬
weakening.
ELMER L. LINDSETH
and
of
Con¬
are
business -activity.
.stimulates
total
.
a
war.
People
withal to continue doing so.
Last
year's tendency for prices to fall has
been checked.
A stable price level,
w
present the demand is
cents
ing more freely and have, the where-
There seems to be little
demand for marine engines.
We believe there will be a heavy
their
At
stocks
1950—as¬
unsound tax legislation, a reasonably stable
no
level,
wage
the
on
horsepower as last year,
demand for gas
have
business.
strong and the price
18.50
gine driven compressors, particularly for the class of
engine used for pumping gas through pipe lines.
We
anticipate that the companies engaged in this business
will
for
demand
of Philadelphia
generation.
Lefebvre
the first half of 1950, but few have
about the second half.
The rate erf
copper
should approximate the level of
guesses
President, Provident Mutual Life Insurance Company
principally in the locomotive field
and perhaps some increase in busi¬
ness with respect to municipal power
Gordon
Copper Co.
predict that business
prophets
business
the
of
ventured
ALBERT LINTON
M.
for diesels
same
LOVELL
R.
will be good during
general power production
poses where gas is available.
The production facilities for diesel
engines were multiplied during the
war
years
by about 25 fold.
The
market, of course, has not kept pace
with this increase in facilities.
We
tries
Most
Corporation
as
company
ENDICOTT
President, Calumet and Hecla Consolidated
other economic field.
principally active in two general
fields.
First, diesel engines for locomotive, marine work,
stationary plants for power generation, dragline and
shovels, and general industrial and power usage.
Second, gas engines and compres¬
Our
entrenched, most successful and generally dominant
service to the nation for the past 70 years, of improving
efficiencies and economies, and of establishing the low¬
insure
to
Another year of
certain deficit financing will
add to the inflationary
The
trend.
price correction last year was
However, if the pres¬
situation is permitted to become
rather
ent
adjust¬
or
1948-49.
of
almost
recession
P.
C.
Madeira,
Jr.
gentle.
serious, there is a possibility that the next "correction?
will not foe mild but instead may be marked by the
sharp drops which followed the first World War.
De¬
clines "of this nature are serious.
They have always
losses, failures, and unem¬
This must be guarded against now.
World War, •business and
brought in their wake heavy
ployment.
Since the end of the second
industry to a large extent have tried to keep prices from
getting too far out of line.
It is expected that they will
do their part in checking the present inflationary threat
The reasons for confidence in the outlook for 1950 are
apparent.
Employment is
still around the 60,000,000
mark, .savings are at ;an all-time high, and the national
income is near the record level.
The demand for homes,
.for
automobiles, for household appliances, for television
receivers, etc.,
billion
power
dollars
is still far from satisfied, and nearly three
will be addhd to consumer purchasing
by the payment to veterans
early in -1950 of ad¬
justments, in their .government insurance premiums.
i
The demand is present, and the money is available.
If the demand can be turned into purchases, there is
Volume
171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(291)
53
Business and Finance
Speaks After the Turn of the Year
every likelihood that this year will be a
prosperous one—
provided that the present price distortion and inflation¬
ary threat are checked before
they become serious.
out the
year, however, is likely to be below
1949.
The
expansion of the public
housing program may result in
increased real estate
loans, and the greater availability
of consumers' durable
goods probably foreshadows a
further increase in the volume
of consumer credit. Dur¬
ing the current year, the Federal
SIDNEY MAESTRE
President, Mississippi Valley Trust Co.
In
1949 business
1948.
Prices
activity
was
lower
and
were
also declined.
It
is probable
government
edly will be compelled to borrow in the
somewhat lower than in
department
that
1950
store
will
be
finance
sales
marked
by the continuance of this moderate decline.
expenditures
for
new
plant
and
equipment are expected to
Business
newed expansion
and
private
arc.
construction
likely
to
Anticipated
declines
sectors
significant
are
expecting
dustrial
in
further
a
activity,
these
the
fact
in
net
tural
farm
income
unfavorably
will
the
the
The
the
.agricul¬
deficits
as
If
method
expenditures in
other
sectors
Sidney
the
of
•Banking
Maestre
Federal
Just
in
not
be influenced by the trend
Commercial and industrial loans
who
try
present "easy money"
tendencies should appear later
Board
would
undoubtedly
in
the
In
likely to exert
a
the
that
of
hoped
policy,
I
believe,
toward
veloped,
the
insuring
effective
more
commu¬
should
be
establishment
to
finance, and
year, however, these factors are
Subject
continuing
and
competition
with
of
a
single
communications, I proposed, in
a
letter
Senator McFarland
(1)
regulation
public, with
advocating the establishment
system of record
the past
January,
national
a
will
single system of domestic and
a
voice and air
mail services.
raise
it
the indus¬
in
reconvenes
Western Union as a nucleus around
which such a system would
be de¬
Walter P. Marshall
to
on
Oct.
14, 1949, that:
appropriate
enabling
other essential
considerations and
Barring
unforeseen
developments,
therefore,
business activity in 1950 is likely to be
only moderately
below 1949, and banking will
undoubtedly reflect that
half; the level through¬
it
government
for the protection of the
In addition to
greater influence than in
announced
appropriate
past
the present
Communications
Foreign Commerce
international record
communications,
under private management and with
permit a small increase in
short-term government securities and
Reserve
is
This
policy.
in
it
directed
of
indicate
the
on
nications policy will then be formu¬
lated and implemented.
probable
a
to
and
the problems
when
and
overemphasizing the importance
as an inflationary factor.
Treasury, together with
of loans, would seem
of
has
consider
foresee
year.
will probably decline
seasonally in the first half of the
in the second
the
those
year, foreign political commit¬
ments and demands will continue to influence the
longterm trend of industrial
activity, banking,
will, of course,
year and recover
of
Interstate
Committee, of which Senator Ernest
W.
McFarland, of Arizona, is Chair¬
requirements.
as
trade.
activity.
are
that
inflationary
the Treasury might
reserve
has been
economy
overstressed.
of industrial
Senate
anticipate continued
in the volume
continuance
the
budgetary
counter-balancing reductions
of
needs
year,
employing
a
may
probable
budgetary deficit
interest rates for
but the effec¬
economy,
of
the
decline
in¬
sector
of
tors
people
It is
continued inflation
of
of the
economy.
The
prospective deficit of the Federal
Government may offset in part the
decline in expenditures in other
sec¬
tiveness
S.
of deposits.
many
movements.
ary
that
consumer expenditures also may be
should not be ignored. Cer¬
tainly, the prospect of a further de¬
cline
U.
intensify inflation¬
in¬
lower
fluence
the
The widespread acceptance of the
inflationary
psychology might result in investment and expenditure
decisions by individuals which would
for
in
Subcommittee
of
man,
inflation.
two
reasons
decline
and
ing fiscal years,
reduced.
MARSHALL
The
Federal deficit may have still other
implications.
Since deficits are expected in the
current and succeed¬
expendi¬
be
P.
year 1950 may well be a
major turning point in
the history of the record
communications industry in the
United States.
The
The
decline,
tures
undoubt¬
market to
open
anticipated deficit of more than- $5 billion.
Since the banking
system will purchase a large part of
the securities issued,
Treasury borrowing means a re¬
an
WALTER
President, The Western Union
Telegraph Company
legislation
and
negotiations, Western
Union
would offer to
purchase the international tele¬
graph facilities of the American Cable and
Radio Corp.,
trend.
Continued
on
56
page
532
The
action
impressive.
of all
For
sections
time
a
of the
market
last week
was
Thursday and again in the middle
Friday it appeared as if the long awaited reaction
the day on
INDUSTRY
very
on
of
of
normal technical proportions was at
hand.
However, with the sharp
during the late trading Friday, and.
Saturday, hopes of the bears and the
rapidly dissipated.
.recovery on heavy volume
'the firm tone displayed on
sold out bulls
were
finds the Answer
Virtually all railroad securities have participated in the recent
strength. There have, however, been two
outstanding performers.
One has been Nickel Plate
(New York, Chicago & St. Louis) and
the
other
has
been
Missouri
Pacific
rNickel
Plate was caused by
reports
the preferred dividend arrears had
"trading in Missouri Pacific
lowed
announcement
approved by the ICC.
There
ation.
is
The
preferred
that
interest
Today, more than ever,
its $64.00 question—Where
in
for
bonds
conditions?
receive
a
new
in
new
the
to
were
the
effect
Nickel
Plate
that
holders
stock,
preferred
sinking fund,
with
in agreement.
Therefore, it appears probable
'be ready for stockholder action at the
annual
probably
in
bo
the
The
good
the
a
the
court
last
week
was
of
status
the
various
the
1949.
Missouri
same
The
Pacific
as
the
action
plan
did
securities
It
:
not
consummation
railroad
many
•
expect
would
be
for
a
and
year
a
alter
any
half.
analysts who feel that two years,
or
the
even
a
of
Section
more,
the
Supreme Court.
Holders of the Secured
5Vis,
secured by pledge of the common
stock of the
Orleans, Texas & Mexico, have
consistently ex¬
is
profitable New
jii
pressed dissatisfaction with their
a
based
advanced to
cumstances,
basis.
Last
for the
week
the
new
1st
point which represented only
the junior bonds indicated
profit, and
spread from
pace
current quotations
on
when-issued
a
a
only
the
any
Why
on
case
an
are
increased number of
establishing their plant
to
homes.
our
lines.
The
vast
Many would welcome
majority of these
a
job
near
where
now
about what
your
Long Island has
future operations.
to offer you as
Our Business Develop¬
securities, trading
LONG
& Refundings have
9% to 10% arbitrage
a
new
us?
Perhaps
we
have the
ISLAND
to
YOUR
LIGHTING COMPANY
moderately wider
securities.
answer
Address: Business Development
Dep't.
MINEOLA, N.Y.
recently and will have to be basbd
higher quotations for the
connected
new
not write
indicated when-issued values. Under the cir¬
further advance is apt to be at a much
slower
than has been the
..almost entirely
their
possible site for
Considering the probable time element, the old Missouri Pa¬
bonds appear to be
selling unusually close to the workout
value
on
month
nature
$64.00 question.
treatment. They, also, will almost
certainly argue for better treatment in the highest court.
Grant¬
ing that the case has been in the courts so
long that speedy action
should be possible, consummation
before Jan. 1, 1952
appears a
rather optimistic expectation.
cific
every
precision
Department will be glad to answer your questions
concerning
possible locations, available labor
supply, transportation, power,
etc., entirely without
obligation to you.
77
that holders of the old
common, which the Commission has
again
to be without
value, will take their case for participation
to
or
ment
the. mechanics
claim
own
Get the facts
are
found
whose
of
they live.
proceedings,- even if
everything moves smoothly make for serious delays. In this in¬
stance things are not
apt to move smoothly. It seems quite
likely
through
light
customers were
folks
respect.
There
closer guess.
a
Merely
present
area
They like the friendly, neighborly people who live there. In
during the past year alone over 25,000 new residential
fact
merely represents one more step forward in the
protracted pro¬
ceedings. To that extent the day of final consummation of a re¬
organization plan is obviously much closer. Even the most
opti¬
mistic followers of railroad
reorganization proceedings, however,
do
a
presented
not
in
answer to
plant under
plan will
Except for two minor points the Missouri Pacific
plan certi¬
to
our
operations in Nassau and Suffolk Counties.
meeting, which will
Also, it has apparently been decided to
split-up (four or five for one) of the common.
by the Commission earlier in
locate
being found in the Nassau-Suffolk
simple fact is that
industries of
May.
'follow this with
fied
that
we
situ¬
of
a
light industry is finding the
can
Long Island.
for their dividend arrears which now amount to
$83.50 a share.
This is along the line of discussions that
have
been taking place for a
year or more. The only thing new is that
the various conflicting interests are
now
apparently pretty much
,
and it's
—
the
final reorganization plan had been
Later it was certified to the
District Court.
reports
would
Revived
plan
a
eliminating
finally been formulated. Heavy
at rapidly advancing
prices fol¬
nothing particularly
press
bonds.
that
£532
SagBBSgBBSB
I
o«.
COMMERCIAL
THE
(292)
Continued
from
RCA
Communications, Inc. and any other international
telegraph carrier operating in the United States.
The government is operating extensive telegraph
systems competing with Western Union for government
communications, to the detriment of the private system
"which must provide a nation-wide telegraph service
operated under stringent government regulation and
under the burden of heavy taxation.
Subject to the
of
the
national
defense
establishment
and
government policy
considerations,
Western Union would provide a comprehensive system
.approval
for
cooperation
and
government's record communi¬
be an integral part of a coordi¬
handling all of the
This
cations.
would
system of domestic communications which would
utilize all new technological methods and be geared to
requirements
miltary
Such
a
the
of
present
atomic era.
maximum
coordinated system would provide for
security in time of national crisis and be available in
normal times for use by the general public and civilian
agencies of the government as well as the
to financial negotiations
Subject
(3)
military.
and regulatory
considerations, Western Union would purchase the tele¬
graph business of the Telephone Co.,
business known
the
ice
Thursday, January 19, 1950
Speaks After the Turn of the Year
motive parts industry than it had a decade ago and the
Auto-Lite
These
replacement
—
In
general industry
in
cross-wind
care
There
will
with
be
in
drop
volume
export
in
war
,.
for expansion, improvement and replacement
in both economies of operation
years
of facilities has resulted
production and these factors will become
increased
and
and
increasingly important in the competitive period ahead.
Two
not
Congress has been urged to remove
25%
the
tax
war
the still existing
which was imposed on telegraph users during
to discourage them from availing themselves of
service and thus free telegraph facilities for
of vital war traffic. Although the war has
long been over, this tax continues with its volume de¬
pressing effect becoming ever more pronounced. The
taxing away of telegraph volume is particularly serious
,&t a time when Western Union has spent $80,000,000
since the war's end for mechanization and plant im¬
telegraph
the handling
increasing the capacity of its system and
providing faster and more efficient operation to attract
wadded use of its services.
Relief from this tax is hoped
provements,
early in 1950.
for
of
its
program,
fascimile systems.
Senator McFarland
on
stated the objectives of the Sub¬
Communications
as
States
Only in the United
States do we have a free, privately owned system.
We
want to keep it that way.
In broadcasting, we have
freedom of expression and opinion under a public in¬
terest licensing system; in the common carrier operation
in the hands of the state.
are
telegraph, telephone and
of
cable, whether by wire or
toy radio, we have privately owned operating companies.
In neither case do we want the government's finger in
the pie."
In the
light of Senator McFarland's reply to the com¬
pany's proposals, 1 am more than ever confident that
wide acceptance will be gained in 1950 for the broad and
far-reaching program we have presented which would
establish Tor this nation a sound, solvent and aggressive
record communications
system both in the domestic and
international fields, better serving the ends
of national
security and public interest.
ROYCE G.
years,
from
highly diversified
list of products, with the
existing records in 194.9 with the
production of approximately 6,000,motor
Auto-Lite
ment
16
on
cars
and
products
these
ores
history.
has
the
more
increased
number
of
motor
two
years
since
1936
from
the
While
Canadian Pacific has
20,000,000
The
yard,
terminals of the Canadian Pacific.
equipment, the Canadian Pacific Railway
line
on
to
32,000,000
tions
with
is
improvements
only continue
sufficient
can
the
Royal Commission
Trans¬
on
on
all
at home and abroad, the Canadian
integral part, following down through
an
of
steady and healthy development.
Canadian
will
Pacific
We
proud of that part, and of
are
hope that condi¬
have always
providing the efficient, low-cost transporta¬
permit
carried on,
to
us
carry
on
as
we
nation of such great distances may
no
achieve full stature.
WILLIAM
L. MAUDE
President, The Howard Savings Institution, Newark, N. J,
From
indications
present
we
appear
to
face
a
con¬
tinuation of the current high level of economic activity
in this country during the first six months of 1950.
that
The
business leaders anticipate for the
should be of
moderate proportions.
I do not believe that employment, national in¬
many
second half of the year
.
spending
housing
drastically
that out¬
look—particularly that for the im¬
portant factors of employment and
national income—deposit trends in
our mutual savings banks should re¬
come, consumer
construction
during the
operated by the Canadian
major new
of fuel, and the
will
year.
Economic
ordinarily
faction.
ever,
on
period.
prospects such
as
merit considerable
these
satis¬
It is always
possible, how¬
price for any¬
afraid I share the
to pay too high
thing, and I
progressive program. In July, Canadian Pacific Air
inaugurated service from Vancouver, by way of
or
recede
Based
main favorable during the
Canadian Pacific is pursuing
am
a
doubts of those who wonder whether
Fiji Islands, to Aus¬
tralia, operating four-engined, pressurized Canadianbuilt aircraft, and in September, using the same kind of
aircraft, added a weekly service linking Vancouver with
Tokyo and Hong Kong. These constituted the first air
the degree of our present prosperity
ment
the
William
L.
Maude
that is being purchased by an over-
mortgaging
of
country's future will
our
not
one
day
to have been a poor bargain.
refer, of course, to the role being played by govern¬
prove
I
by a Canadian operator to either Australia or
Japan and China.
overspending and deficit financing in the artificial
stimulation
-
of
These stimuli cannot, in
healthy for the nation, regardless
of the theories that certain economists advance in their
the
Pacific
north¬
well
revenues
presently
tion without which
the Schreiber
190 the
Additional air services opened up by Canadian
Air Lines in 1949 were from Montreal to the
the
on
as
Canada's remarkable growth. It is our
division. Fulfilment of these orders will bring to
a
order,
cars are on
Pacific is permitted
filed
plays
decline
provided
main line service
of these
more
which
decades
seven
of the
*
expanding dieselization program is indicated in orders
recently placed with newly established Canadian manu¬
facturers for 58 diesel locomotive units to be assigned
ten-roomette, five double-
In Canada's trade
Pacific
big step to be taken in the Canadian Pacific's
and
under
hearing evidence
phases of transportation within Canada.
of the same capacity and, some 1,000-horsediesel switchers of a type now widely dispersed
Island
when
will be the only one of
and
destined for main line operation.
are
portation
River, Vermont, through the acquisition of three 2,250horsepower streamlined diesel locomotives of the latest
type. This order followed delivery, earlier in the year,
of 20 other diesel units for this section of the Company's
Canton
progressing
yard, the
64 first-class, air conditioned day coaches. These cars,
submission
Esquimalt & Nanaimo Railway, on Vancouver
Island, is now totally served by diesel locomotives and
late in 1949, the Canadian Pacifiq. completed dieselization
of the 171-mile section between Montreal and Wells
locomotives
freight
play its full part in the development of the nation.
Our position in this regard is made clear in the extensive
The
to 517 miles of the company's main
is
work
modern
to
transportation, costs, although the amount necessary to
purchase this new equipment represents a heavy outlay
which could not be justified except in terms of those
savings.
other directions,"the
Montreal.
if the Canadian
for them,.
equipment situation is not all that we would
number of diesel
in
It is plain that such
high cost of replacements, we are embarked on an ex¬
tensive program of diselization of our motive power
which it is expected will produce substantial savings in
The next
1950,
completed,
too,
desire, because of inadequate financial returns and the
power
for
most
now
as
the strictest economy in its
pay
our
set
Canada's
on
system. Fourteen
situation,
ferry destined for service
car
summer
services
Royce G. Martin
old
upward trend has never sustained any material
setback.
This means a much broader base for the auto¬
and this
ability to
this
all-enclosed space, five of the
bedroom cars have gone into
\
continue to practice
Honolulu,
figures
than
this
6.000-ton
a
In passenger
Lines
that this market has been broadened
that
with
ship,
this year put into service the first roomette type sleeping
cars seen on Canadian rails. Featuring moderately-priced
operations in order to meet its immediate financial ob¬
ligations. The company, however, has been able to under¬
take some notable improvements consistent with the
In
approximately 25% of Auto-Lite
our industry is convinced
show
to
'
Canal
popular
being "humped" in the classification section of the yard.
Mather
be
to
•
Faced
had
a
sales and
vehicles
A.
company's:Weston Shops at Win¬
nipeg have been working on orders to convert more than
100 steam locomotives used on the prairies from coal
to oil-burning.
production.
Registration
William
disappointing, however, that with
such buoyant traffic, the ratio of net earnings to gross
earnings remains aUthe lowest level in the company's
continues
the
in
switches necessary to move a car into a certain track
merely by pushing buttons in a control tower. Electric¬
ally operated retarders will control the speed of cars
and concentrates.
It
engaged
now
use of a new system of "push-button"
switching, by which it will be possible to set all the
industrial
and petroleum
for construction,
cement
Service
Panama
continent to make
Aside from the acquisition of diesels, the oil discoveries
replacement market amounts
permanently.
Canada's
petroleum
are
products,
source
engines, Auto-Lite initial equipment
sales will keep pace to the extent
that these manufacturers maintain
to
of
Coast
the
via
its type in the country. It will be one of the first on the
a
in Alberta and Saskatchewan have
equip¬
trucks, 11 tractors and 25 marine
The
which
result
are
will have 76 miles of track
Pacific in Canada.
20 makes of passenger cars.
their current high
in
and
year
Columbia
arrived
construction
Sea¬
Eastern
to
the St.
Company's $9,500,000 "hump" retarder yard,
war
expansion. More noticeable amongst
With
trucks.
original
the
continuation of
production and car
contributed to and
was
increase
a
the
on
there
board,
are
characterized
Pacific
on
The Princess Marguerite and the
both
completion
steadily
haul
long
British
last year.
the C.P.R.
With
marked
a
when supplies and equipment
all parts of the country were
concentrated
the
extremely
in
which
traffic
over
.steady introduction of new products, and with the out¬
look for car manufacturers, in their own words, good, the
year 1950 promies to be as good, if not better, than the
one just past for Auto-Lite.
The automobile industry smashed
000
off
was
this
where
switchers
Electric
Auto-Lite Company
a
and there
the Canadian
enable
Nanaimo, on Vancouver Island,
opened a new $1,700,000
ship terminal, has been ordered for the B.C.C.S.
United
lines, including 1,500-horsepower freight locomotives and
MARTIN
President & Chairman of the Board, The
With
the
beset
will
Patricia
Another
sustained. Consequently,
were
down
falling
follows:
the future of our kind of life is
involved in the kind of communications policies we
have.
All over the world, the avenues of communica¬
"While few realize it,
tions
which
the
on
between Vancouver and
while in some categories car loadings
were
;
committee
and our nation's economy, no
dislocations to industry such
those
Steamships
"Triangle Run" service between Vancouver, Victoria and
Seattle. Both are capable of carrying 2,000 passengers
per trip.
severe
loadings
Western
Union intends not only to continue the existing good
services and facilities now provided in the record com¬
munications field by the several carriers but to improve
and
expand them through' the introduction of new
methods
and
better
equipment,
including Western
Union's modern high speed automatic telegraph
and
accomplishment
Assuming
early
This
company's
the
Princess
During 1949 the Canadian Pacific again experienced a
of comparatively heavy traffic; tonnage handled
decreased only slightly from the records established in
the earlier postwar years.
Fortunately for the Canadian rail¬
as
the
fleet in
year
ways
a
6,000-ton Clyde-built passenger vessels have
new
joined
(4)
objectives, long-term government financing be provided
•at an interest rate designed to compensate the govern¬
ment for the cost of the money borrowed.
Lines
Air
weekly service by Empress liners
route to the United Kingdom.
a
Lawrence
WILLIAM A. MATHER
President, Canadian Pacific Railway Company
To the extent that required private capital may
be available to insure
accomplishment of these
Pacific
Canadian
of
Quebec.
provide
including primarily
(TWX).
Pacific
commercial aircraft
satisfactory, with its fleet of nine
ships, two Empresses, four fast Beaver cargo ships, two
Beaver cargo-passenger ships and the immigrant ship
Beaverbrae, carrying more freight and passengers in
and out of Montreal than in any summer season since the
war. Next May, the Empress of Scotland, which
before
the war operated as the Empress of Japan and was the
largest and fastest passenger ship on the Pacific, will
join the trans-Atlantic fleet and run between Liverpool
the
•
any
landing gear, which enables a plane to land
a single runway regardless of the wind
Operations
expenditure of more than $43,000,000 in the post¬
The
on
North Atlantic proved
although 1949 sales compared favorably
despite import restrictions and currency de¬
1948
Canadian
1949,
and Val d'Or.
year,
valuations.
of
This equipment was obtained for use on the
single strip landing fields recently constructed at Rouyn
of expected greater volume in these
some
the
to
direction.
die
products duiing 1950.
coming
d'Or and
Hudson's
of Val
take off from
or
castings, gray iron
castings, plastics, instruments and wire.
The company's
die casting and wire production facilities have been ex¬
panded to take
autumn
the
installed for the first" time
Another substantial portion of Auto-Lite's business is
with
mining communities
from Winnipeg
and
Bay port of Churchill.
000 dealers in the United States and Canada.
done
Quebec
Rouyn-Noranda
products
batteries,
spark plugs, fuel pumps, wire and cable. Bulls-Eye sealed
beam lights, instruments, starting, lighting and ignition
parts—are sold through whoelsalers and more than 100,-
Teletypewriter Exchange Serv¬
as
western
trend holds promise of further increases.
nated
the
CHRONICLE
55
page
Business and Finance
(2)
FINANCIAL
&
long
run,
our
economy.
prove
Volume
171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
Business and Finance
behalf,
will they finally prove
any more truly effec¬
trying to lift oneself by the bootstraps.
nor
tive than
glance to contain its
own
resentment
be
taken
during
that
for granted in the
any more
recent
Millions
years.
of
future
near
voters
who
the
on
expectation that ever-mounting
of ever-mounting taxes.
Despite the dangers inherent in
forming drugs—it looks
ple and painless.
is
passing
to
on
burden
a
of
one
so
solve
so
however, will have
two
either
ways;
children
our
staggering
and
to
be
shall
we
opin¬
ity
bestow
on
or
other
any
Of ?SY Stock
P.
as
Exchange has
Chairman, Robert
its
Boylan,
President
to
tern,
pro
assume
functions
duties
the
and
of
the
Presiden t,
during the
convalescence
of
E
Schram.
Boylan
serve
i
1
M
m
r.
will
without
compensation.
Mr.
cannot
Boylan
Davis. Jr..
&
Co.,
Governors
has
P.
Boylan
accepted,
with reg ret,
the resigna-
tion
Bradshaw
as
a
mem¬
ber
of
the
Board.
Mr.
Brad¬
shaw had served as a Governor
of
the Exchange since 1947.
He
was
elected
to
bership
1946
Stock
in
he
Exchange
November,
Clark,
1943
Dodge
at
at
He
his
Co.,
he
from
of
will
and
the interests
year.
Any legisla¬
must
be
carefully
With
the
proper
balance
a
land of private initiative:
between
government
and
money
private financing, an increased incentive for
private
investment will be provided.
Obviously, an' adjustment in the
encourage
to
be
Burnet
R.
Maybank
the
alternative, business, particularly small business,
to government lending agencies
in order to secure
working capital and be assured of
an
be forced to turn
EZIO PINZA, famous
tax
structure would
private
investment and provide an impetus
increasing equity capital.
Such adjustment should1,
particularly adaptable to small business, which is
now
and always has been the
very foundation of free,
competitive enterprise.
It is my belief that business will
accept the challenge
which it faces in 1950.
With the assistance of construc¬
tive
and
helpful legislation, which
for
economic
investment
growth
will
gain
and
should provide the
individual progress,
momentum
will take its
pioper
step forward in 1950
the achievement of
our
national
business
the road to
objective of maximum,
employment, production and purchasing
singing
and
on
power.
Continued
on
page
star of "South Pacific", says:
President
1
W.
of
serve
Associa¬
13.
Bodine, of
SCHENLEY
1949 President.
elected
finer-tasting
the
were:
Jr., E. W. Clark
Brothers
&
Co.; Treasurer
E.
Groff,
Harriman
&
Secretary —Edmund L.
Horn blower &
For
of
C.
an
enchanted
and
Swan,
Weeks.
membership
Governors
for
Brown
Co.;
to
the Board
on
for
serve
three
the following were elected:
years
Raymond E. Groff, Brown Broth¬
Harriman
ers
Ergood,
Jr.,
&
Co.;
Stroud
Newlin F. Davis,
Jr.,
body
&
Co.;
and
Russell
&
Co.,
M.
Inc.;
Kidder, Pea-
Edmund
L.
C.
Swan, Iiornblower & Weeks.
William
May,
Clark
&
of
the
A.
Lacock,
Co.,
of
E.
W.
elected
was
to
the
serve
for
Governors
to
unexpired term of Clinton D.
Lowclen
('51).
Mont¬
retired
He
early part of this
needed
always remain emphatically
private
dinner of
Paul
—R aymond
Brewer & Co. Opens
ISpecial
to The
Financial
Chaonicle)
FRANCISCO,
CALIF.
from
SAN
partnership.
perhaps
economy that public
funds should not be extended for
any projects for which
private capital is available.
To do otherwise would,
tend to
destroy private initiative and our country should
Already, our economy has been affected and
inhibited through the scarcity of equity money.
As
is
be brought to realization in
the
passed
drafted since it is axiomatic in our
enterprise-
will
will
which
stimulus
Kidder, Peabody
annual
succeeds
Scott & Co., from Janu¬
time
fulfill
and
Vice-President—Franklin L.Ford,
1940, to the end of last year,
which
that
&
the
Board
the
partner of
a
through 1947, and
gomery,
ary,
was
tion
labor and enhance the free
competitive spirit of business
Securities
Drexel & Co., the
Other
officers
In
of
Nominating Committee.
Mr. Bradshaw
not
problem
1950.
mem¬
1934.
Chairman
was
will
financing
in
Further, the incentive of private investment in not
only the under-developed areas of this
country but also
in the undeveloped areas
abroad should be encouraged
and abetted through the enactment
of legislation
by the
Congress during this year.
It is my earnest conviction
responsibility of providing sufficient capital to meet the
requirements, especially in the field of providing tech¬
nical advisory assistance and
adopting new and improved
industrial techniques which increase
productivity of
Association, held Friday, Jan.
nation of Syd¬
B.
ney
of
elected
was
Philadelphia
that the Board
Robert
and
legislation
of business in
Without ade¬
private
such
PHILADELPHIA, PA,-Newlin
F.
has announced
of
security,
enact
that such
is
business enter¬
new
national economy.
our
quate
retain
individual membership in the
Exchange.
Brewer
with
to
Co.
has
been
—
formed
offices at the Russ
Building
engage
ness.
Ralph Anderson Joins
&
in
the
Partners
are
securities
busi¬
Porter R. Dan-
ford and R. Glen Brewer
Brand, Grumet & Tenser
Brand,
Grumet
&
Tenser,
Broadway, New York City,
bers
of
change,
the
New
have
York
Ralph Anderson is
with
them
Department.
in
now
their
"
Stock
announced
Ex¬
that
associated
Institutional
-
With Miller
150
mem¬
(Special
to The
Spink Co.
Financial
Chronicle)
CHICAGO, ILL.—Carl
previously
Peck &
with
231
with
Link,
F.
Brown,
Gorman,
ENJOY RICHER, FINER TASTE
A
Schenley Mark
of Merit Whisky
FROM SCHENLEY THE HOUSE OF AGED
WHISKIES
Co., has become associated;
Miller,
Spink
&
Co.,
South La Salle Street.
Inc.,
to
accom¬
Association Elects
The Board of Governors of the
New
York
Stock
designated
has
prises.
Thus, venture capital is a
prerequisite for the improvement of
Phila. Securities
Exchange
liquid
period
largest single problem
establishment of
citizens of the just rewards of their
thrift in order to
finance grandiose plans for an
impossible future takes
a
dreadful risk—the risk that those
citizens will lose
their faith in thrift.
When that happens here—if it
happens—this country will have lost the most
important
ingredient in its past and present greatness.
Because of our deep concern over
this danger, we in
Boylan Pres. Pro-Tem
vast government contracts
of
they cannot be primarily utilized for
political expedi¬
deprives its core of thrifty
reason,
transition
It is a certainty that
earnings will prove to be
inadequate for future needs and also
scendants; the second penalizes the
thrifty and rewards
the improvident.
Any form of government which, for
ency
accumulation
retained
de¬
our
its attendant
through the medium of bor¬
or
means
be
must
Many editorials are being written tolending credence to the belief that if government is*
provide venture capital, Congress should
so
provide
investigate this
rowed money.
our
tragic heritage to
Carolina
time profits and peace time
prosper¬
economic and political
bankruptcy; or else we shall con¬
on
our present
road toward a sizable
repudia¬
tion of that debt
by robbing the dollar of its
only real
value—its purchasing power.
The first of these two
a
South
challenge to industry and
government and business,
providing postwar financing either
through earnings resulting from war
tinue
alternatives is
an
The
the
as
lending policies of
present government loan
agencies or through the crea¬
tion of a separate
agency empowered to carry out these
broad objectives.
a
it has faced in several years—that of
by
up
with
faced with the
reckoned
end
Senator from
been completed and business
now
children's children
to threaten our country with
as
war
provided
embar¬
many
technical advisory assistance as well
improve industrial techniques.
These
plished through the liberalization of
in clear and
unmistakable terms. There is much to be
said in support of this view and I
believe that Congress
will
thoroughly
particularly small business.
at least
postpones the need for
mounting debt that deficit financ¬
The
producing,
in
to
appears
problems—or
their solutions.
with
It
S.
The year 1950 will present
to the relationship between
The
57
cay
than
many habitIt appears so sim¬
harmless.
so
per¬
less.
U.
over¬
my
a
HON. BURNET R. MAYBANK
appear
government
ing
do
assets.
spending, nevertheless, deficit financing is, in
ion, even more hazardous because—like so
to have become
to
care
rassing
not
can
levels will
wage
seems
part of government policy.
In the conscientious
of our duty as trustees for the $20 billion
placed in our care by 18 million American savers we
inflationary merry-go-round
in the
take
savings banking should oppose and
in the year ahead the overspending
manent
quite willing to listen to the political
promises of eco¬
nomic miracles will
also, I am afraid, be equally content
to continue the ride
oppose
financing that
discharge
cure,
will
ultimately lead them to do some¬
I for one,
however, cannot feel any firm
the correctness of that
assumption can
thing about it.
conviction
to
and deficit
predicated on the seem¬
ingly reasonable assumption that if you take too much
money out of too many people's
pockets their cumula¬
tive
of mutual
continue
evils—government overspend¬
ing—if accompanied by a level of taxation
high enough
to pay for that
overspending would appear at first
(293)
Sfis? the. Turn of the Year
the field
The first of these twin
CHRONICLE
RARE BLENDED WHISKY
whisky. 65%
86 proof, the straight whiskies in
this product are 5 years or more old.
35% straight
grain neutral spirits. copyright
1949, schenley
distributors, inc., n.,,y. c.
-
58
ii
Continued
from
57
page
-■
Speaks After the Turn of the Year
Business and Finance
Chairman of the Board, International Harvester Company
President, West Side Trust Go., Newark, N. J.
t'
writing about the financial and business situation,
it is always necessary to at least briefly review condi¬
tions in the past in order to understand the present, and
to attempt to foresee the outlook for the future. The fact
1949 turned out to be
that
be
is, of
prosperous business year, and
notwithstanding certain dis¬
turbing signs, some here, but mostly
in
other parts of
the world, this
country has apparently settled down
period
of
phase
never
business
of
going
results
good,
are
-
We shall
practically
public discussions,
continuous
always been able to handle
believe
ing 1949. and always
For instance, there
frequently occurred dur¬
to be threatening as we look
seem
into
it
the' future,
farm
run
and
taxes
are
the
giving
situation,
are
nations
that
other
it
so
forced
maintain, and
to
as
seems
We
the aid
we
the result of the foreign
shall be fortunate if we
keep the total of taxes and expenditures just about
where they are now for another year, and, under the
can
circumstances, we should not enter upon additional pro¬
grams which will increase our national commitments.
In
Communism, and the dismemberment and probable dis¬
British and Holland Dutch colonial
empires. Communism undoubtedly seeks world domina¬
tion and is an ever increasing threat to other nations, as
integration
of
the
it is daily becoming more evident
economic
side
warfare.
The
colonial
social
and
without
that it and any other
cannot long exist side by
system
into
coming
conflict
dismemberment of
systems
are
also
of
and
eventual
the British
and
importance
great
open
the
world situation, as there is
countries
which
have
the possibility that the new
been
established
may
become
aligned with Communism, and there is no doubt that it
is
of the major causes of the present economic
slump
in great Britain, whose industrial prosperity in the past
has been largely due to its business with its dominions
and dependencies.
There is one great lesson which we
one
should learn from
in
other
should never
will
the
disturbing conditions which exist
and that is that we
allow any conditions to develop here which
parts of the world today,
engender Communism or any of the other upheavals
have taken place elsewhere.
which
Taking into consideration all of the conditions which
I
have
mentioned,
and
barring
actual warfare,
willing to predict that 1950 will be another
am
prosperous
for American business, at least as good as 1949, and
year
there
are
reason
many
signs that it may be better.
for this is that American
with caution
has
I
been
I think the
business has proceeded
during the past few years, and that there
more
constructive
business
and
less
specula¬
I
know
that
banking, which is
this
a
is
so
from
my
observations in
type of business where all types of
businesses converge, and
where
we
can see
increasing evidences of economic stability.
greater and
all at
A secohd factor was the financial strength and
1949,
down into next
for
good
1950,
spring.
at
or
million
Advisors * seem
One
once
asked
ever
lost
but
the
forest.
maintenance
the
cost
of the
policies.
has borne
No private com¬
.could have operated on such a basis.
give some idea'of the cost, out of the $3,787 million
death claims paid through 1948, the government ap¬
pany
replied,
To
one
predictions for 1949 and the previous
years to see what degree of accuracy"
was obtained.
The year 1949 showed gome, evidence of
fear of deflationary forces beginning to work, but it was
rather startling to look two years back and find the fol¬
lowing prediction that appealed in a prominent news¬
paper during the first week Of 1948 on the outlook of
business for that year.
It stated: .*
Such dividend is made
hazard of service. In addition, the government
was
of
propriations that did not come from premiums paid
veterans amounted
C. McCord
W.
third of the annual interest charge
could
~
He
over a
federal
because the goverhment paid all death claims
be traced directly or indirectly to the extra
possible
question
Daniel Boorieiif he
well
total
Bureau by- all servicemen.
erans
un- *
time I was confused
for three days."
In projecting a trend for 1950,- the
writer looked back over some of the
"No,
-
in
the
of
out to 16 million veterans in the
amounting to something over $2,800
debt.■; It amounts to an over-all
refund of about 70% of the premiums paid to the Vet¬
that
J
'
reminded
is
months,
or
the
on
remaining members of'the Coun¬
of
few
next
on
cil
"the high level
government is to-pass
the
However,
them must certainly be included
One can point out extrava¬
gances in almost any field, but to use the life insurance
field for illustration let us Took for a moment at the
National Service Ljfe
Insurance dividend which the
least
the
able to agree.
as We look forward to the new year, we see
high level of income supported by several factors;
government spending."
of
long-range outlook, there seems
to be no unanimity of opinion. Even
Economic
that
once.
among
confident
seem
be
and individuals.
Another factor
peace-time adjustments did not come
business
be
to
Today
the
the
-
,
by
tp $3,291 million.
The mechanics of paying this dividend, the largest
operation in life insurance history, involves the training
of 3,000 additional new employees and issuing 16 million
checks.
.
'
Thus the effect of government spending can be readily
To this should be added the expense of foreign
seem.
spending, the cost of price support, unemployment com¬
pensation, and now the projected expense of a pension
.
"Economists
believe
another' prosperous
year
can
plan,
be
.
squeezed out of the postwar .boom.
To do a little figuring on the cost of the pension plan,
let us take a few facts.
-
"Ihflationary pressures now outweigh those making
long expected postwar slump.
Political consid¬
erations in an election year dictate-the maintenance of
million
*.
It
for the
been
has
estimated
that
there
are
now
over
11
jgeople in the United States that are 65 years of
age or'over.
At $100.00 per month this would call for an
present trerid, and the economy,- though more vulner¬ "Annual expense of-over $12, billion, or more than twice
able" by a year of pipeline' filling than it|Wgs 12 months' ,the interest charge-'dn 'the Federal debt.
'
Due to the low birth rate in the
1930s, it is quite
ago, still has. shown surprising.resi'stanee to deflationary
the
factors.
~
"There
are
a
probable that the average age during the 1950-If00 de¬
vast
cade
will'increase, making the cost of such a program
of fantastic proportions.
I
inflationary factors for 1950 that could be
pointed out are: housing loans on easier terms by gov¬
ernment agencies, wage increases
with corresponding
"number4 of-mixed trends, and few-
to the. government
top economist^: 'arC'Wifting... to go a'jiy
farther than the first half in their predictions.
But they
the
of
nation's
Other
the inflationary pressures dominant for at least that
period. And it is entirely possible, they say, that a year
on a production level higher than 1947 will be achieved.
see
minds and the President
agree on one vague policy—to keep this precarious pros¬
perity balancing on a mild inflationary course.
This
will be the appropriate economic backdrop for the polit¬
ical speech-making of an election year.
Political con¬
siderations are dominant.
It will be for political pur¬
increases
that the men in Washington will use—or refrain
from using—the many tools they now have available fo&.
carving out the economic level."
«
poses
How
in
industrial
costs
and
the
high liquid
business and individuals.
of both
"Both the Republican master
can
assets
:
„
this be interpreted in the life insurance field?
First, it is evident that as inflation robs the policy¬
of the purchasing power 6i the dollar, his need
for
increased insurance becomes\ self evident. - The
holder
.
of life insurance required to purchase $100.00
now require about
$170,000 Worth
insurance.
The life agent who sold his client a policy
am<?unt
worth of 1939 food will
of
jn;
1939
to
provide
his beneficiary
with
$100.00
per
month income now heeds to go back and write him adquotation is worth repeating be¬
J$j|ionaI insurance to provide $70.00 per month more to
cause
it could be lifted with remarkable fidelity anddo the same job he intended to do when to took out the
placed in a current prediction of the new year 1950; in
It
fact,
seems
some
that such
propose
a
policy—disregarding the fact that his requirements have
probably increased.
prediction quite similar to the one"these factsTas a background and with the belief
similar prediction may appear in this isstte.
Actually, it is
for" the
a
outlook of the life
insuraijeeMteinesiJ^^at in 1950
4.-
•
Business optimism
during the
i
•
is now
summer of
out.
Prices
and
prevalent
as was
like to get to the business of making
pessimisj&^a,,^.
b
6
Between that time and to-
1949.
day, business has undergone
4.
a
we will have a high level of personal sav-
in the country and. a high level of income, I would
.<•'
for the coming year.
o
tion.
will
six months of
Dutch
in
economists
business
first
the world
picture, and unquestionably of tremen¬
importance to us, are the onmarching spread of
to
avoided
seems
Christmas,
deflationary at the time, it was found
merchants
was
replenish their goods.
This cautious attitude
speculative borrowing and inventory accumu¬
lation which were some of the weaknesses of the 1920-21
needed
VI
that
and
we
this
While
that the constriction had been too severe, and
to
yet available.
Most
-■
ability of deficit financing, greater economy in govern¬
ment, and at the same time the propositions which have
been advanced for greater participation by the govern¬
ment in promoting the welfare of our citizens, all of
which will come before Congress.
Reduction of taxes
ment which
us
budget message has been pre¬
not
are
-
prob¬
greater governmental economy are going to be hard
accomplish in face of the large military establish¬
these being, first, the cautious
The advantage of year-end figures
to Congress.
sented
direct rela¬
a
and
such a precipitous decline, among
policy of business toward
inventory.
It will be remembered that a sizable con¬
striction took place to the extent of nearly $12 billion.
which prevented
tors
is being written before
industry
ance
.
of business
fiscal
McCORD
and before the President's
This proved
true, and a decline similar to the 1920-21 period
However, there were many fac¬
be
could have developed.
the outlook for 1950 in the life insur¬
on
industry, or the stoppage of transportation,
great losses to both employer and
employed, as well as losses and inconvenience to other
lines of business and the general public.
important questions which have
to
President, Southland Life Insurance Company
This article
feeling of optimism,: I
geographical
this
of
liquidity of
consequent
the future
Fowler McCormick
period.
of mines and
the
spite
might show evidence of deflationary forces.
our
C.
by far than any other state
give some figures to support my views. ;
At -the end of 1947 optimism was expressed for the
first half of 1948, but the inference was left that 1949
count.
W.
life insurance companies
woiild like to
*
looks to
1950
necessary
seems
now
Id
considerably ahead of last year's.
all,
reserve
States, nearly 20% have their home
in the United States.
other cities
be a year in which
quality of product, cost reduction and economy pro¬
grams, and intelligent and aggressive salesmanship will
in
legal
offices
in the Union,
and to bring it even closer to our home, Dallas has more
legal reserve life insurance companies than any other
city in Texas, and exceeded in number by only three
mentioned, we have a
completely new line of motor trucks to sell and a new
line of household refrigeration.
Volume on these lines
All
justification.
584
in Texas, more
good.
Offsetting the disadvantages
should
from
not without
Out of the
factors, we look
six' months of
will be surprised to hear an expression
a life insurance company in Texas,
one
no
optimism
in the United
things which could
that there
should be further attempts to find a proper solution of
this question along lines which will prevent the closing
dous
Surely
of
to be
year
off about 4%, but with prices down about
6%, the volume of business should be about the same or
maybe even a little better.
our
buying power.
1949
sales probably
of course, vary con¬
two other
read this article, it seems that Christmas
will be as good as 1948.
With dollar
you
for
business
the
on
During December, 1949, employment reached a high
over 59 million, and while you will have the figures
by the time
to
Aside from these
we
continue to do so.
can
we
our
have
domestic problems, and
but
is the matter of strikes, which
are
based conservatively
*
always have different schools of thought in
regard to political and economic questions, resulting in
to
of
machines.
of
for the first
conditions
conditions, all of which become increasingly interre¬
lated, that anything which seems like a comparative
calm in any of those fields now seems like a lag in
normal activity, but the fact is that we should welcome
such periods, as they contribute to greater economic and
business stability.
to
;
siderably in respect to our different
sened
Ray E. Mayham
Some people have become so used to sudden and spec¬
tacular changes in economic, political and international
tion
.'
sales during the
corning months would be labor dis¬
turbances caused by the activities of
rival - unions, and a somewhat les¬
entirely satisfactory to everyone, but when the
Other
.
be.
The
and a large proportion of
population have enjoyed a high degree of prosper¬
and
\A ■
,
and
adversely affect
when
come
ity, naturally business is good.
I
7
.
in 1948 or 1949, but it
impossible at this time
exact estimate of what
any
are
lines
The time
since.
ever
probably
collective
our
' •
planning is
shortages will,
'
groundless and business has been
be
..."
•
generally good
will
_.
be bothered by
shortages of steel for the next two
or three months. The impact of these
Early in the past year there was
a Widespread feeling that the
necessary readjustments which we
wpuld have to go through would be
disastrous to many lines of business
and inevitably wind up in a depres¬
sion, but those fears soon proved to
every
give
We
quite
will
-■ ■
as
course,
it will
progress.
be
1
talk with any reasonable degree
anything longer than the first six
about
Our
large
as
to
business
sound
_
assumption that our volume will not
erally
a
•
it impossible to
assurance
that
to
./'•
.
months.
gen¬
a
find
I
of
'
'
■
writing about the outlook for our business in 1950,
In
In
there seems to be more
ance, and with demand better,
confidence in the future.
FOWLER McCORMICK
RAY E. MAYHAM
is
Thursday, January 19, 1950
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(294)
'■
58
J
:
$12 billion inventory ring-
supply now seem to be in better bal-
a
few predictions:
H
jg'
United States companies during 1950, the
in
life insurance history and
highest figure
nearly two and a half
Volume
Number 4373
171
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(295)
59
Business and Finance Speaks After the Turn of the Year
the
tmes
billion figure of 1940, bringing the total
ordinary, group and industrial life insurance
a figure that
may be close to $240 billion or
$11
amount of
in force to
about ten times the amount of life insurance in force
philip
in
The
England.
figures
large, but
goal not above attain¬
1948 figures and find that
are
ing
when you look at the
about 80 million people owned $207 billion of life insur¬
and that such amount represented
only $4,800.0.0
family,
of uninsured
insurance
less
only about ten months' income.
or
is still
positions have
than it
now
in
was
The field
million, and the amount of
dollar of national income is
per
lose
insurance
1940
significance
basis
figures
are
caused
During
1920
life
insurance
in other words, tRe
or,
ance
may
a
this
insurance
had
hence
insurance
12
the figures
months'
$3,300.00, while national income
figure
From
increased
income
this
How¬
far
at
but
in
the
behind
whereas
that
so
life
by
climbed to $4,900.00.
The
amounted to about
about
the
for
same
1947.
The
1948
year
in
During
1950 this is
going to be
wide-awake agent
than
for
ever
risen
life
where
to
national
Therefore, if I
of
makes
1.947,
of
siderations
if
trend,
level
in the life
be
life
all
political
pressures,
a
higher
pro¬
bankruptcy
unfortunate
was
pro¬
nega¬
because
the
work to realize the potential
The cost of such work must be included
columbium
of
the
carbide, not for tool
turbines and other
gas
inXroduction
composition
of
chiefly
where
uses
for
the
in
1944
of
now
The
is
economic
and
conducive
not
to
able
production
paper
for
serves
sound
money.
cemented
in
of
which
in
the
U.«S.
the
to
A.
un¬
financing and irredeem¬
Despite entirely
resumption
currency
climate
developments due
certainties introduced by deficit
allowed
specie
adequate
payments
borrowers
faced
with
the
ever
more
ap¬
Federal excise tax
the
of
and
gold
re¬
providing
lenders
a
$3.,00
per
tax that was added
which our Government
war
remove
ceased.
The
when hostilitiej
industry's position
off when
come
the other
war luxury taxes come
off,
though there is a strong movement
afoot to leave the liquor
industry
holding the tax bag and this we will
fight to the last ditch.
Increasing costs
liquor wholesaler
affecting the
are
as
in
most
Thomas F.
cases
his
has
been
McCarthy
mark-up has been fixed and he
unable
to
offset
these
increasing costs except
with improved methods in operation and the
to
improve at his level is
very
opportunity
limited.
Four-year-old domestic whiskey will again be plenti¬
by the latter part of 1950 and the competition of
ful
straight
whiskies
against
blends
is
becoming
already
apparent.
more
Scotch
whisky
become
with
more
eight-year-old
an
probably
become
age
no
plentiful in
statement
1950
but
statement
age
increasingly
scarce
the
on
Scotch
and
until
label
whisky
will
older
when
1953
the whiskies made in 1945 will be eight
years old.
In
in
the
1950
the
domestic wine business it appears
will
second
be
as
largest
good
peal,
better
or
than
f
the volume
1949,
which is
the industry has had since Re¬
year
1:5
financial
such
are
is that this tax should
the
being
and
promised to
had
with
Blades for gas turbines are
Kentanium.
It is probable that the
reduction
proof gallon
but
use,
metals, beginning commercially in 1949. The year 1950
should see the first
important commercial uses of Ken¬
tanium in airplane turbines.
con¬
achieved for 1950.
smaller
into
price.
and
We
liquor is altogether too high.
are, shrinking and bootlegging
increasing.
In my opinion all segments of our
industry will coordinate in the fight
will
buy life insurance outweigh the
are
but
went
engineering
elements
made
insurance field
companies
M. McKenna
available to the extent necessary. Each
of .these metals has to be accom¬
'
insurance
Philip
these
many grams
by
also.
Sales
return to the industry
more
C.o. Inc.
our
is
long established
the
for
&
on
carbide industry will have a new field as
large or larger
than the tool and die fields of use of
these hard strong
both
dictate the maintenance of the present
may
industries
period.
disrupted orderly production
hard carbide
outlook
Nichols
parent fact that the $9.00 per gallon
such power units.
income has
insurance
of
McCarthy
industry for 1950 is quite mixed
and uncertain which, I suppose,
applies to many other
strength and high mechanical strength makes
practical the use of more efficient high temperatures in
need
inability to buy, that while political
from
will
life
use
f.
President, Austin
The
tensile
challenge to
greater
paraphrase the economists of the
may
private
freedom
a
average
additional
will say that
I
the pressures of need to
pressures
The
is
1950.
*-
astonishing ability of these1 products of powder metal¬
lurgy to resist destruction by oxidation at temperatures
as high as 2000 degrees Fahrenheit while
retaining high
and attainable.
necessary
fall
insurance.
it
good
a
because there
the
average
was
was not
so
titanium
was
practical .consideration for industrial
very
thomas
postwar
A
bright feature in 1949 was
"Kentanium,"
a
cemented
hard
ging behind at $4,800.00.
the
the
of
The
That
the
a
have
carbide
cemented
value in them.
for
saw
Freedom is
closing months of 1948 and has discontinued
panied
life
income forge ahead to $5,600.00 with life insurance
lag¬
-
the
sale of
next
only half of such difference, and
in
One
of
dustry"
the insurance lag from the national income figure
year
live by.
"Heads I win, tails you lose,"
keep the American people from enjoying
the widespread use of such new discoveries.
"Renego¬
men
development in
energy necessary to apply and develop these cost saving
hard metals which have been called "vitamins of in¬
insurance
the
promises
taxation laws
tiation" hamstrings those who need and can use .capital
provide employment and strengthen our country.
coal
metals
duction.
income
1945
real
to
beginning in
trade, stop¬
cutting
shops then for
of
important field of
tive.
figure,
national
to
automobile
machine
in
1949.
in
family had dropped
per
on
1928
three
ducers
increased
same
reductions
The recent steel strike also
By 1940 life
the
in
gram
a
com¬
strikes
for
hard
family amounted to $4,000.00 and national
family had
per
year
rapidly,
very
family lagged
insurance per
income.
average
remained
metal
months; and a series of
mining, stopping the
orderly production of carbide min¬
ing tools which constituted a minor
$3,500.00.
had
of
shipment
strikes
better year
a
hard
year
and at present. These
price
the
in
over
1930
being $3,300.00
-life insurance
year
family
per
$2,300.00.
to
these
a
at
tools
$2,900.00 for the national income fig¬
in either,,
than
more
increased
By
Prices of
$25 million
a
gone
war
ping
family owned life insur¬
dropped to $2,500.00.
and
to
$2,900.00,
was
bad year, and 1929 might be
was a
insurance and
ure;
'family
per
for comparison,
use
per
family
per
average
national income had
this
ever,
for
amounted
now
gram
series
1946
family
per
industry producing tools,
a
done
the
amounting to about six months' income.
while
to
they
family with national income
$1,500.00, while national income
to
that
carbide
confidence, the authorities continue to cling to their
sterilizing the gold in Fort Knox which
permit free men in industry to create
prosperity by providing a means of validating the
usurped powers,
otherwise would
large part of the output to
a
loss, especially during
the
postwar
years.
Steadiness
of
output was not attained, because of
be
family in the United States.
per
to
large
so
like to compare them on
I would
so
life insurance per
of
a
large
very
1930.
or
cents
during the
'
Total
hard
down from $1
in 1933, to 45 cents
a
gram in 1936, 12 cents a gram in
1940
and
about 4Va
cents
a
gram
90
60
over
family
per
have
McKENNA
wear-resisting parts is
industry in America.
a
ance
per
cemented
dies and
These
M.
President, Kennametal Inc.
but over-production
of
wines
is
the
most
serious
problem of the growers.
In
spite of all this, the prosperity attendant
high national income forecast should give
in my
opinion,
as
good
a
year
in 1950
as
our
the
industry,
it had in 1949.
Continued
may
upon
on
page
60
Henry B. Warner Co. Is George McDowell Pres.
Being Formed in Pbila. Of Detroit Exchange
PHILADELPHIA,
B.
Warner
formed
&
with
PA.
Co.,
Henry
is
being
123
offices at
Broad Street to act
—
South
Inc.
as
DETROIT, MICH. —George A.
McDowell,
&
George A. McDowell
Co., has been elected President
of
the
Detroit
Stock
brokers and
dealers
general
ket
gel, A. H. Vogel & Co.
Samuel
securities
Co.
o n
Hague, Smith
Hague & Co.,
is¬
electeo
was
Officers
sues.
eding
Arm in H. Vo-
mar¬
specializing in
Philadelphia
Transportat i
Exchange.
succ e
in
Vice-P resi¬
are
Henry B.
Warner, Pr.esiaent, and
dent,
s o
Paul W. Hicks,
Secretary and
be
of
Henry B. Warner
t
in
1' a
cl
Mr.
charge of sales.
Mr.
the
past
the
Philadelphia
19
has
been
office
of
years
Rollins & Sons
as
in
for
with
E.
H.
Manager of the
trading department. Mr. Hicks
was
O.
If you are interested in a new plant location,
you are
A.
McDowell
yourself of the services of
was
dent and Fred J.
Named
year
as
terms
in
i-
for
Also
firm
associated
will
who
was
lins
&
be
with
the
Elizabeth
for
which time she
tified with their
18
was
years,
R. P. JOBB,
Webber, Jackson & Curtis; Sidney
J. Forsyth, Baker, Simonds &
Co.,
and
Wayne M. Spade, Watling,
Manager Development Service
Atlantic Coast Line r. r. Co.,
Wilmington, N. C.
ATLANTIC
during
closely iden¬
COfcSTUHt
Jacquin, Bliss Admit
Farrell,
Jacquin, Bliss & Stanley 44 Wall
Street, New York City, members
of the New York Stock
will
admit
Gayle L.
Jan. 26.
on
can save you
requirements.
Lerchen & Co.
trading activities. partnership
your
new
formerly with E. IF. Rol¬
Sons
finding the spot best suited to
three
Dan Byrne, Paine.
with Baker, Weeks & Harden.
-
Development Department. Its staff of Agricultural,
Oppat Secretary.
Governors
were
r e s
our
Geological, Forestry and Industrial Representatives
Executive
Vice-P
cordially invited to avail
Mac-
re-elected
George
ing and
Flicks
C.
Co.,
Farlane
charge
Warner
&
Treasurer.
John
will
corporate
Wm.
n,
Roney
Treasurer. Mr.
Warner
i
and
Warren T. 01-
ra,LROAD
Exchange,
Young to:
I
time and money
c
«S0
Continued
from
59
page
■
Speaks Alter the Turn of the Year
Business and Finance
dustries
B. McMANUS
C.
are
President, Georgia Tower Company
enters into practically all
business operations, and thus
of electric power
use
industrial and commercial
consumption may be taken as a
community. Since the
of electrical
level
'he
of the economic life of a
measure
economic prospects "lor
whole
of
are
Georgia
as a
general interest
more
Similar skill must be shown
if their share of the consumer's
what may be expected on the
basis of necessity alone.
Continued alertness in mer¬
chandising and increased emphasis on selling are essen¬
tial if that is to be
business.
In a single sentence, the year 194,9
saw a return to what may be called
normal
conditions,
following
the
abnormal period immediately after
after
the
of the
"normal"
-.his
level
In
war.
and
nor
is expected to continue
slight upward trend.
be
said, however, that
present-day normal operations in
'Georgia are at a substantially higher
'level than the prewar standard.
Textile manufacturing is Georgia's
about
60%
postwar
abnormally
by
caused
years,
high
I do believe that business in our section
good but I am basing that purely on local condi¬
of
the
shortage
of
the
look for
new
ization of
for
persistent strikes and layoffs
The
increase
in
1950
in
While
a
change.
material
as
the
employment
unemployment
problems
It
thus
with
predict
can
of the nation's
industries.
in
the
the
was
modern
new
latter
picture
that
To
appears
much
created
are
MEYER
of
work
at
Some
small
themselves
adjusting
United
growth prospects of the
particular communities.
to
States,
the normal
and of their
will
dire predictions have been made for
state in which more severe conditions
than for the country at large.
Actually our
exist
1950
enlarge
a
a
a little sooner than they did else¬
comparative statistics for the entire country
show that variations as to both time and extent have
the company should be approximately
about 8300,000 more than 1949 sales, ac¬
cording to present indications.
The Georgia Power Co.'s own construction program
'has had an important effect on the economic life of the
State.
Since the end of the war four steam-electric
Slitting
Meyers
W.
Carl
products—agriculture,
mining,
petroleum, railroads,
construction,
manufacturing
and
steel
fabrication.
Larger markets are also developing from industries that
have
established new manufacturing plants, particular¬
ly in the Western and Southwestern regions, and other
large public and private construction programs are also
under
way
being planned.
or
While there is general agreement that
1950 will show
business activity, particularly in the
early months, all signs also point to increasing compehigh volume of
Studies to improve operating practices and
methods will continue
to
be
selling
active projects during the
year.
A
business
of
rate
the national
of C. F. & I.s
activity higher than
prevailed throughout 1949 in
average
many
important market regions, and there are numerous evi¬
the
that
dences
higher level
of
activity
will
continue
during the present year.
prosperity in 1950 in the steel industry, as
in other basic industries, will depend
as
extent
on
to a con¬
the cooperation that exists between
labor
management,
and
government.
The
productive strength of our nation must be maintained
and this can only be accomplished through a program
of mutual understanding and coordinated effort. Work¬
together objectively—and for the common good—•
enterprise economy can be preserved.
With
ing
America's
only
the world's people, the United
half of the world goods, and steel
of the vital needs in peacetime or in the defense
small
a
part
of
is
one
of
nation.
our
Great
progress
made in the steel industry
During my own 43 years of expe¬
has been
rience in the
been
For instance, from April, 1940 to
civilian employment in Dos Angeles
insignificant.
1949
County increased approximately 600,000 persons or 60%.
Since the war employment in manufacturing establish¬
ments has declined due to reduced aircraft and ship¬
building
units have been constructed and placed in
operation, providing a total of 145,000 kilowatts of new
Rail
In making large capital expenditures to improve its
plants and diversify its product lines, C. F. & I. has faith
in the continued growth of the basic industries thgt use
in the past 50 years.
but
September,
generating
be
facili¬
power
new
adjustments started
by
also
Rerolling Mill.
to
install
where
or
new
States produces about
very
as
A
will
of
Pueblo
at
1949.
program
and
business
During the past three years manufacturing, trade and
institutions all over the country have been
hard
during
at the Pueblo plant dur¬
America's
R.
exten¬
an
completion
mill
rod
part
construction
strike
in other ways
possibly
the
of
financial
problem
electricity by residential and commercial
customers of the company is expected to increase at the
uniform rate of the last several years.
Sales of electrical
$4,000.(100,
a
the
President, Union Bank & Trust Co. of Los Angeles
of
appliances
installations
a
diminution
key
and
well,
BEN
California,
use
in
on
program
past
siderable
results
and local in extent.
The
modernization
well
Georgia and there will not be one
casts
are
correct.
A few
marginal industries have
closed clown because of uneconomic operating conditions,
but
C. F. & I. has carried
brighter.
Gustav Metzman
in
in 1950 if our fore¬
serious
no
one
substantial
extent,
small-town and rural sections.
is
make
for
in 1950, the prospect is for
turmoil
growth and expansion of our large and small
the surburban areas surrounding those cities.
also results from the extension of electric service in
There
no
economy
cities and
It
strike, and increased costs
materials, labor, transporta¬
tion, and other services.
tion.
the
from
to
year
gen¬
a
This rate is expected to
year.
without
slackening
disappointing
certainty the course
growth is expected to be less rapid than in the postwar
continue
a
and the
with
railroads in the east.
period.
During the past three years, the Georgia Power Co,
has been adding new electric customers at the rate of
a
business
1949
expected to continue.
industrial development
approximately 30,000
strike
eral
steady rate
a
combined
steel
the boom conditions in 1947 and 1948
There will be I an
in 1950, but the
years,
not
are
in the bituminous coal fields
While the industrial¬
Georgia hs been proceeding at
many
and
steel
raw
its
goods, the textile industry has settled down to
supplying current, rather than deferred demands. These
current demands are requiring the mills to run at about
35%
of total
capacity or nearly 100% of economic
capacity.
The postwar period saw the establishment of a num¬
ber of large new industries in Georgia, including Ford,
General Motors, Armstrong Cork, Clark Thread, M. T.
Mills and others.
eastern railroads in par¬
railroad industry, and the
ticular, than was 1949.
consumer
Stevens Woolen
the
for
and
to be a much better one for
year
ca¬
present
which ends next June, will,
however, be somewhat reduced as a
result of curtailed operations due to
ties
industry.
demand
accumulated
an
J.
economist
President, New York Central Railroad
largest
on
products.
Operating profits for the first half of the current fiscal
ing
the
the
an
GUSTAV METZMAN
plants
such
high rate of
a
our
year
in progress
the Georgia Power Co.'s industrial busi¬
of
to
power
neither
am
McManus
B.
I
Following
ness.
C.
constitutes
electric
of
sale
concerned, I
am
tions.
may
The
I
as
operations at
backlogs and continuing demand for
several years at its five
plants, at its two plants in
California, and at its steel plant at
Pueblo, Colorado.
One of the larger
prophet.
a
will be
a
It
far
to
Eastern
President, Hudson Trust Company, Union City, N.
So
look forward
We
pacity for at least the first half of 1950 based
sive
G. MEEKS
CLARENCE
1950,
business
of
President, The Colorado Fuel and Iron Corporation
the
industry
with
accomplished.
own
our
end
goods, during the past two years, are a reflection not
only of the huge deferred demand for such goods, but
of the merchandising skill of these industries in compet¬
dollar is to be larger than
rather than with the more restricted
CARL W. MEYERS
production—is
unrestricted
of
as
by the apparel industries
this
prospects for
basis
a
strong
as
ing for the consumer's favor.
single indus¬
appraisal, based upon the
Georgia Power Co.'s forecasts, will
leal with the outlook for the State,
than the prospects for a
try,
on
in the immediate prewar years,
when it was being recognized as an even greater factor,
in some ways, than the traditional competition within
industries.
The large amounts which have been spent
for automobiles, electric appliances, and other durable
becoming
•The
Thursday, January 19-1950
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(296)
other
industry, I have seen many improvements
in the art of steel making, through research and the in¬
genuity of American workmen.
The next half century,
starting with 1950, will again bring new and wonderful
technical advancements.
I hope we are equally suc¬
cessful in the field of human relationships.
activity. It has, however, been absorbed in
Unemployment as a percentage of civilian
which has always been higher in Los
CLIFFORD W.
lines.
capacity,
labor
under
MICHEL
Angeles County, is still in a normal relationship to the
Two additional units of 100,000 kilowatts are
construction with completion scheduled for next
It
Georgia Power Co.'s investment in new facilities
lias been running at the rate of 825 to $30 million a year
and will continue at that rate in 1950 and for as far into
The
-he future
as
we
can
President,
many years
to complete the construction
required facilities for residence, transportation, civil
administration, education and health to meet the needs
our present population.
I believe there is justification
for optimism for any community and
especially for
of
MELVILLE
Melville
take
of
foresee.
WARD
will
Shoe
our national and local
dynamic and expanding
banking in that area as long
problems remain those of a
Corporation
as
economy.
During the past two years,, the portion of consumers',
levels
much
With personal income after
higher than
'Several
general expectation
even
war
tries'
if
lower
we
answer.
seems
In
The
to be that,
well
do not return to the pre¬
"pie"
sumer
tained,
If
will
so
purchasing
that would
to
if over-all con¬
power
is main¬
mean
It
be 'assumed, however,
particular industry is going
to
maintain its position without ef¬
fort.
The competition between in*-
.
cannot
the
consumer's
1
year
for loans
than
a
do
is
not
now
anticipated,
by
normal deposit growth.
defined.
an
industry
World War II now seems to be very
One
industry
adjustment
as
another
after
has
gone
its production met demand.
adjustments have progressed from industry
a
huge money supply,,stable consumer ex¬
the
and
resourcefulness
of
the
American
people have substained the over-all economy at a satis-
In 1949, we made considerable progress
factory level.
toward economic stabilization.
that any
dustries for
next
closing, I should like to observe that the adjust¬
penditures
improved
performance for the shoe industry.
;
the
demand
While these
increase somewhat
and
in
operating costs and by
through
the apparel indus¬
piece of the national expendi¬
1950.
the banking industry on a
ment pattern after
percentage,
tures
:n
higher
actually be the same.
years of experience will be
will
required, to supply the
as
concerned,
during the prewar years, it remains
to
be
seen
whether
the
postwar
pattern
ward
•
continue
Melville
dollar—now
along
stabilization
*
that
those
in¬
at
difficult conditions of the last eight
Production for 1949, estimated
$148 million shows an increase
of
20%
the
depressed and
years.
38%
by
this
same
offsetting
needed through greater
In 1950 I believe we will
broad
price
pattern
.
of
achieving
adjustments
where
efficiency and sales effort.
1948
over
production
and
'over that of 1947. The advance,
while not spectacular, is steady and
based
national plane is
look for much
change from the 1949 earnings and dividend experience.
Some revenue will probably be lost through government
bond refunding.
This may very well be offset by a
Insofar
percentage in prewar years.
at
only to South Africa among the gold producers of the
British Commonwealth, is making a good comeback from
on
'
expenditures which has gone into apparel and shoe pur¬
chases has been below what was considered the "normal"
taxes
gold mining industry in Canada, which is second
The
national figures.
Fall.
,
President, Dome Mines Limited
forces,
solid improvement in oper¬
ating conditions.
To
this
three
factors
have
con¬
tributed.
Labor
the
in
immediate
postwar
in short supply and the
industry suffered from a heavy turn¬
over of transient employees. During
1948 and 1949 some 4,000 men were
was
years
brought out to Canada from the Dis¬
placed
camps of Germany
industry, and a good
Persons
for the mining
proportion of them were allocated to
employment in the gold mines of
Clifford W. Michel
Ontario, Quebec and Manitoba. These men have settled
well, done excellent work, and gained valuable experi¬
ence.
Many are staying permanently with the industry.
With larger
have
and
their programs
Additional
been
more
stable working forces many mines
and plan
been enabled to expand their operations
with greater confidence and continuity.
labor,
sufficient
to
however,; would
keej)
in
operation
.
in itself have
some mines,: es¬
not
pecially those with marginal ore bodies. With sharply
rising costs of operation and a fixed price for their prodHi
Volume 171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
1297)
61
^
'
A*
|
Business and Finance Speaks After the Ites of the
Year
uct,
a price which was actually reduced by
1946 with the establishment of
10% in July
parity between the Cana¬
and United States
dollars, the squeeze became al¬
most insupportable for
many marginal mines. In order
to keep such mines in
operation and to maintain the
DON
and by
grams
in
costs of
a
on
to operate for three years
was
ning the 1st of January, 1948. Under this plan
that
strain
begin¬
$10
million was paid to the gold mines in 1948 and
something
like $13 million will be
paid in 1949.
For 1950 the
plan will be continued, but in
some
With the
few
staple
the
labor
factors,
price
and the
of
gold
the
•
-t
...
a-.;
,
cost-aid
assistance, which
all
its
year's production, have
first
mine
new
a
got
receives
under
Don
G.
:
of
increase in
an
be 90%
in
the
gold
of further
ere
The
growth
That question will
tion
of
confidence.
The
of
the
of
course
Canadian
dollar
Other
con¬
the
the price of gold, there appears every reason for
the
as
Red
Lake
area
next
Territories, show great promise. It would
give these and other
areas
a
favorable conditions
member
a
of
the
board
of
a
half.
Sizable
orders
are
as
MICH.—On
New
York
Stock
has
mere e,,
been
a
t h
of
Stock
Stock
e
are
committee
Exchange.
Hague.
in
charge of "My
Old Kentucky
Homecoming
—1950." by J.
Stephen Wat-
ber.
J
Vi
c e
-
Ch
a
i
Lamborn
has
been
individual
an
floor
SAN
land
Graham
are
San
Francisco
Mellon
on
Jan. 31.
limited
to
withdraw from limited
On Jan.
City, members of the New
will retire
the firm
on
Exchange. Edna Wolff
as
a
limited partner in
Jan. 31.
-
-
.
made
in recent years, the extent of which as yet
partially known.
The immense reserves of the
Persian Gulf basin of the Middle
East, coupled with
expanding reserves in the Western Hemisphere and other
areas, should be adequate for many generations.
being said about the threat and the danger of
.the Middle East
to the
reserves
American oil industry.
Continued
on
page
a
of Industries
which Eaton
Manufacturing Company is privi-
includes the best-known and
respected
most
names
in
airplanes, Diesel engines, domestic appliances, machine
are
Eaton
system
in
serve
them is in itself
makes,
and
a
this
to
Eaton products.
some way uses
companies which demand the finest
testimonial
the
to
equipment, and
parts,
,
quality of products
company's dependability
as
a
source
,
PRODUCTS—Sodium Cooled Valves
Minna Gombell will
partnership
Hydraulic Valve Lifters
Axles
Snap
•
Permanent
Rings
•
Stampings
•
Mold
•
Gray Iron Castings
Springtites and Sems
•
Poppet Valves
•
Valve Seat Inserts
•
Leaf and Coil Springs
j
Cold
Free Valves
•
Turbo-jet Compressor Parfs
•
Rotor Pumps
Drawn
Wire
•
•
•
•
Tappets
•
Motor Truck
Spring Lock Washers
Heater-Defroster
Units
•
•
Dynamatic Drives, Brakes, and Dynamometers
S. Vernon Mann Dead
1, Ernst Wolff will be
admitted to limited partnership in
Hecht. & Co., 14. Wall Street, New
York
31
in the firm.
Hecht & Co. to Admit
been
is only
supply.
partnership
reresentatives
in
Congress
Honorary Vice-Chairmen.
York Stock
tractors,
materials. To
Mr. Mellon will make
his headquarters at the firm's New
York office, 35 Wall Street.
are
and conservation to prolong the use of
Great new discoveries have
rapidly depleting asset.
Exchanges, will admit MaitAlexander, Jr., and Norman
S.
r-
of consumption
a
basic industry—leading manufacturers of automobiles,
every
These
which
York and
Until recently the basic economic
concept of the oil
industry has been one of scarcity, calling for limitation
tools, farm machinery, construction equipment. Every major railroad, public
of
Stock
Thomas
and Honorary Chairmen
Feb.
trucks,
the New
Vice-President Alben W. Barkley
and Governor Earle C. Clements;
Kentucky's two Senators and nine
On
practically
FRANCISCO, CALIF.—
Walston, Hoffman & Goodwin, 265
Montgomery Street, members of
d g e
Charles
I.
man,
Mr.
as
604
is bound
customers
to serve
-
S.
Vernon
Mann
home at the age
retirement
in
headed
own
a
his
died
of 77.
1931,
firm
at
Mr.
Mann
which
was
member of the New York Stock
Exchange.
MANUFACTURING
his
Until his
General Offices: CLEVELAND
Flints: CIEVELAN0
•
MASSIL10N
•
DETROIT
SAGINAW
t
con¬
economic
industry, have reached
towards
utility, and communications
u
is
partners
LIST of
leged
Walston, Hoffman Admit
a m-
Dawson
Other
Smith, Jr. and Samuel
broker in New York.
the
of
State C h
Hal IT.
active
Presi¬
dent
/~r1HE
Exchange, and the firm will
real
believe
important
international
Penobscot
become members of the New York
statewide
kins,
Co.,
Building, members of the Detroit
p-
pointed Chair m an
&
some
Wide Range
Exchange,
Smith,
Hague
an
I
inter¬
a
maturity in the age of oil.
Much is
will be admitted to partnership in
1
make
Feb.
ber
Com-
have
of
Eaton Products Serve
directors of the Kentucky Cham¬
of
business
oil consumption.
American mass production techniques,
first developed in the automobile
market, such
year,
underdeveloped
direct connection between American
productivity and
a
war.
experienced in the last half of this
was
Gap, and the Point IV
projected for the eco¬
gallons of oil per year per capita
an average of about 21 gallons
per
capita for the rest of the world.
I believe that there is
expected to engage in relighting activi¬
photographic
Plan
bridges
compared with
as
give substance to this prediction.
in the
Marshall
the
consumes
are
1,
L. Lamborn, member of
Richard
the
sales
the
emergency
well-being.
Very little of this kind of promotion has been done
Thomas Graham Heads Smith, Hague to Be
Kentucky Homecoming N. Y. Exch. Members
and
and
Any improvement
Canada's gold output is now again in the ascendant.
DETROIT,
year
since before the
considerable impetus.
LOUISVILLE,
KY. — Thomas
Graham, of the Bankers Bond Co.
tube
and
the outcome, and
to
and
The British
Americans in the
can
tribution
Some
public
at work in search of
are
oil
in
we
the.. United
discovery of petroleum, only 90 years ago.
crude oil
has become perhaps the most
economic package of energy yet found to serve and
amplify the power of man.
The United Statse now
any marked increase over 1949 but
be a comfortable, if not large increase in
lighting fixture sales.
A number of local
ties.
to
Moore
F.
barrel
a
expected to show
fluorescent
communities
more
W.
there should
of
Ontario, parts of Northern Quebec and Yellowknife in
much by way of
that
million tubes and
200
We
national
Since
to exceed
of 1945
stake
year
expected
are
is
and from
billion.
in
to these issues.
1948-1952
areas.;
replacements, slowly at
the year.
It has been
throughout
of last year
the Northwest
not take very
for tube
minds
nomic transfusion of
a
in
Demand for incandescent and fluorescent lamps is not
.
sanguine view of the future of Canadian gold
such
year
be
of
"$100
over
best
Program
should
users
wars
between 1914 and 1948
surplus
was
of the Dollar
dependent in large
requirements of the armed forces.
Judg¬
ing from the size of the Federal budget for defense, the
industry should run at a comfortable, if not full capacity
close
areas,
of
picture tubes, the market should
requirements of set manufacturers,
electronic
for
a
loan
in the
sold
Judging from
upon
the
production. New
to
record
are
from the disputed
taking
be
to
export
the
answers
heavy demand by television set manufactur¬
revived radio set market, receiving tube sales
a
measure
given rise to earnest
by two world
private life
industry estimates
sets
of
3% million sets.
around
growing
1950
question of whether the American Government will in¬
crease
number
with
may very easily set a new record.
Tube sales in 1949 are
estimated to have been something over 190 million tubes.
sideration of the role of gold in monetary economics and
international trade. Apart altogether
but
and
ers
should prove an inducement to American investors. The
revaluation of currencies has
the
1950
for radio receiving tubes was
1948 when nearly 205 million tubes were sold.
As the
for
devaluation
orderly.
proportion of television set
Previous
good grounds for looking to the future with
are
of
result of the
during the
the destruction and dislocation
States
will
have reached nearly 3 ¥2 million tubes.
1950.
the coming year.
There
market
tubes.
doubt have the careful considera¬
no
the Canadian Government
year's
estimated that 1950 sales will be about 5 million picture
Sales by the industry in 1949 are estimated to
be
expiry of The Emer¬
of
this
more
better in 12V2-inch and larger sets.
or
market this
first
and expansion for
Gold Mining Assistance Act at the end
gency
should
mining industry in Canada. It remains to
what will be the effects of the
seen
1950
year
or
addition
In
the
capacity.
that
in
the current demand for
creased
therefore he
Mitchell
order of 50%
certain
milling
from
caused
Present conditions seem to in¬
be much
spectacular growth
1949. Quite a number of established producers have in¬
their
be
Television should continue to show
its
on
way
to
Company
balance-of-paymeiits difficul¬
ties and the resulting inconvertibility of currencies stem
'
continue
Oil
American oil companies engaged in international
oper¬
ations today are deeply involved in the old
problem of
trade and payments.
The
the
dicate
tion granted for their first three
years of operation and
by
con¬
1949.
improved
.
W. F. MOORE
ing the second and third quarters of
more
producers, benefiting by the tax-exemp¬
new
prices will
European manufacturers
that it would not be sur¬
so
the fact that
brighter prospects of the Canadian gold
•
may
strongly competitive.
from
President, Arabian American
relatively
under pressure, there should be less
of the weakness that prevailed dur¬
assistance, and
for
account
mining industry.
Several
larger and
a
force, government cost-aid
increased
record
three
be
While
an ounce.
effect of .these
a
lines, where demand
will
of the Canadian dollar, which took effect in
September
last and restores the Canadian price of
gold to its preThe
exception of
Conditions
the
tinue to crowd production, the
buyer
will be in the saddle and the market
form to allow for the increased
price of gold which
Canadian operators receive as a result of the devaluation
parity figure of $38.50
At
recession anxieties.
modified
a
manufacturers.
on
Competition
increasing all the time
time, this situation wiped out
same
photoflash bulbs.
prising if 1950 exports failed to equal those for 1949.
All in all, however, the outlook for 1950
is favorable
and employment should show a
great improvement in
stability.
were
a
gency measure. It
is
both finished goods and components
reduced too far with the result
fourth quarter demand put a
cleverly designed plan for giving cost-aid
sliding scale in proportion to the mines'
operation. As its title implies, it was an emer¬
was
valuations.
1949
by inventory reduction pro¬
recession fear complex.
Inventories of
a
in sales of
the year-end favor such a situation.
Uncertainty continues to exist with respect to exports
due to dollar
shortage abroad and recent currency de¬
swings
accentuated
were
Mining Assistance Act."
This
to be reflected
at
Business in 1950 should be on a more constructive
basis with less emphatic seasonal
swings.
These
communities which depend on them, the Canadian Gov¬
ernment devised and implemented "The
Emergency Gold
assistance
G. MITCHELL
President of Sylvania Electric
Products Inc.
dian
BATTLE CREEK
•
MARSHALL
.
VASSAR
.
C 0 MP A N 1
10, OHIO
KENOSHA
.
WINDSOR
(CANADA)
62
<52
COMMERCIAL
THE
(298)
Continued
from
FINANCIAL
&
Thursday, January 19, 1950
CHRONICLE
61
wage
I
••
,
'
'
.
'
•
•
•
.
After the Turn of the Year
Business and Finance Speaks
portant factors appear to be artificial shortages in the
wartime
heavy goods industry due to work stoppages in the final
unsettling forces set free by the war have continued on
into peacetime and continue to create turmoil and con¬
consumption remains in the United States. The East¬
ern Hemisphere is
tl)i'£ natural market for Middle East
oil and it is probable that Middle East oil will continue
government with the resultant increase in money supply
fusion in
distributions to veterans in the form of divi¬
dends on life insurance policies and bonus payments by
several states which will result in increased indebtedness
and
has shifted'
reserves
of
to
serve
source for
marginal
a
as
the Western Hemi¬
sphere is well. The question is not whether this oil will
be produced and marketed, but rather who will produce
and market it and Upon what terms.
It is not comfortable for the
markets and the prospects of
from large world areas as a
believe to be narrow and unwise eco¬
face withering
today to
excluded
totally
being
American oil man abroad
result of
what I
What is happening to oil in the world
nomic concepts.
today is not important only because oil is
the
because
seems
area
cial
involved, but.
British Commonwealth and sterling
firmly embarked upon economic and finan¬
great
practices which
can
free democratic nations
only divide and weaken the
The prob¬
in dangerous times.
only the sacrifice of American foreign oil
investments on the altar of the Dollar Gap.
The basic
lem
is
whether
we
heading toward an expanding
are
higher standards of living, Or
whether we are going backward to suffer once again
the effects of rampant economic nationalism, bilateralism
and discrimination.
The United States taxpayer pro¬
world
and
economy
Plan aid has the right to insist that
grants to other countries shall mot be used to
the foreign industrial activities Of his fellow
viding Marshall
wreck
Americans.
American economic policy is founded Upon free com¬
petitive enterprise, mass production, wide markets and
prices which foster increasing consumption.
1 believe
it is fortunate
that large foreign oil reserves are
being-
produced by American companies. That fact should in¬
sure
that oil will not atrophy as did tin and rubber
Anglo-Dutch cartel control in the pre-war period.
Much is being said about ways to stimulate and en¬
under
'
courage
the outflow
American capital to assist the
of
under the Point IV Program.
American foreign oil investments today, which amount
to about 26% of total American investments abroad, have
underdeveloped
been
of the states.
by the
"
"
-
-
'
.
The
inflationary potentiality is great and! whether it
Will remain as merely a potentiality or become active
1956.
inflation is the real question for
Prior to this year,
Much
and
is .in
J -4;1 "
remembered that rates of interest
investments increase somewhat.
However, it must be
are
determined by the laws of supply and
Deficit financing is again the governmental
longer
no
demand.
policy and together with a .very large portion
of debt
for refunding this yeaiyit does not appear likely that
much increase in rates of interest will be permitted -to
up
r
occur.
History records that severe adjustments
in the econ¬
usually occur when confidence is high and predic¬
tions
are
uniformly optimistic.
IP is believed that
omy
not be substantially changed in
1950 and, as a result, bank" loans will increase only
moderately during the year.
If this occurs, rates of
interest will remain near
present levels.
As higher
inventory policies will
bonds
coupon
and refunded, the problems
called
are
Costs of operations will
of reinvestment will increase.
probably continue upward in the banking field with the
result that it will be difficult to maintain net earnings
but total income of banks may
increased possibilities for bond
current operations,
from
due
1949
exceed
to
profits.
Partner, Brown Brothers
cannot
I
situation
industrial
the
see
for
1950
very
generalization iS that it seems to be
very easy for the American economy
such
One
made.
»to
get into a temporary condition of
Overproduction, and I rather think
j nost
violent economic swings
past have come from just this,
sometimes
the
overproduction
is
of
represented
too rapid construc¬
by
as in the years be¬
1873; sometimes it has taken
;he simpler form of excess machin¬
The American oil companies serving foreign markets
fore
facing the hard realities of inconvertible currencies.
They are moving as rapidly as possible toward mini¬
mizing their dollar c^ts. In general, this means paying
for equipment, supplies and services as far as possible
in the
currencies of the consuming
countries.
This
are
necessary,
ever
It
excess
so
capacity to produce
separate items.
me, looking back to
many
to
seems
:he comments that were made a year
I ago,
but is also good business
in two principal
and
ery.
t.n
be accom¬
that
■fooled by
plished without unduly compromising efficiency of oper¬
ations and costs.
The aid and assistance of the American
Government is needed
to
try
to
predict
following
The
is
a
many
observers
were
the fact that the great val¬
ley of demand had not been filled
up,
although there
were
a
few
exceptions to this, such as the tex¬
Ray Morris
fields: first, in
very
incomplete
brief and
of the economic facts and forces which
mary
the people
The
sumr
confront
of the United States:
bust
which
brought into
followed
the
of
boom
World
War
i
New Deal in 1933 and during the
power a
.ensuing eight years much of Socialism replaced Amer¬
ican
individualism
in
the
policies, aims, and pur¬
of government and to a large
poses
nomic
extent in~our eco¬
The free market was badly impaired
power
of initiative in economic life passed
free citizen operating in a free market to gov¬
in such broad and controlling economic area?
system.
the
and
from the
ernment
banking, credit and the value of the medium of ex¬
change, agriculture, wages and employer-employee rela¬
The theories of Lord Keynes, which encouraged
as
tions.
in
.recklessness
and
expenditures
government
public
adopted and implemented.
The Federal
Government conspired with union labor leaders,, legal¬
debt,
were
ized
undertook to redistribute the
people, and initiated a vast
feather-bedding,
wealth
and
of
program
1937 and
the
of
income
"Social
so-called
Security."
By
1939
all
failed to soive the problems
short-lived boom which busted
We had
a
1938, and in 1939 we still had 9.900,000 un-i
-
the
came
great
.
conflagration
world
known as
waste and destruction
draft upon our economy before,
during, and after our direct involvement, induced the
inflation boom of the past decade during which the real
World
War
II, and the terrible
with the resulting forced
savings of the American people have been halved, a false
and insecure scale of living has been encouraged, and an
insupportable public and private debt contracted.
our
n the
tion of railroads,
and sound economics to the extent that it can
Since it makes
the world is in.
mess
in the
first,
come
for all prophets today is an
employed.
Rarriman & Co.
At the present time it seems to me, however,
that there are a few safe generalizations that can be
for the old problem of trade and pay¬
are built on the foundation of
policy is not only
of the
was
First
II.
War
crying first need
sense
in
clearly.
high productivity.
f
Hence it
war.
activity than it
things must
present economic
World
the
Then
of Europe and the underdeveloped areas
more
oil.
Greater production is the
cure
war-born
was
no more
undertaken.
MORRIS
RAY
Hard currencies
ments.
today
of it stems from the cold
these efforts admittedly had
.
.
and
only sound
.
activity
the outlook for the utilitylong expected postwar adjustments in ^prices dictated
industry, except as one can predict the outcome of the
such a policy.
The lack of caution in nearby, all present-- -cold war and the prospect, for the survival of America^
day predictions may bring about a reversal in' inventory
freedom, let me use this space merely to emphasize a
few facts which may help to awaken someone to the
policy. Should that occur, bank loans could substantially
increase and rates of interest for short-termMoans, arid
realities of our present situation.
Department of Commerce report that during the years
1946-1948 almost three-quarters of new American in¬
vestments abroad were made by the oil companies.
more
of
no
and
V-E
possible accurately to determine how
sound and healthy production and trade there
our
midst
economic
more
of
awareness
rapidly expanded in the face of growing payments
The people
still
and
,
our
is that it is
much
problems.
need
of
destructive,
in this fifth year since
all human affairs
commitments. Periodic price adjustment's and feat of thg
areas
The Arabian American Oil Company and the
Trans-Arabian Pipe Line Company have an investment
of approximately half a billion dollars in the Middle
East.
The part the American oil industry is playing in
an expanding world economy is indicated by the U. S.
and
V-J days.
management of business and industry followed a cau¬
tious attitude with respect to inventories and forward
not
issue is
these
quarter of last year, return to deficit financing
and large
inflation
other powerful,
who deplore the
center of known petroleum
to the Middle East while the center
Cries of alarm' are arising from those
inescapable fact that the
Now, here at the beginning of
the second half of the
century, with a V/orld population in turmoil and divided
between the more militant and less militant Socialism,
150 million Americans
with
and
saddled with response
bility of partially supporting one half of
carrying
on
"no
is
there
a
the world while
-cold war against the other half, we hear
the horizon."
So
serious threat visible on
confusion indeed that business as well as
political leaders are proclaiming an unprecedented era
of prosperity.
At a time when our country is nearing
the greatest crisis in its history and when our free insti¬
tutions, which were and must continue to be the source
of our strength,
are
impaired as never before, our'
great is our
people generally are so blissfully unaware of their situa¬
tion that they listen hopefully and confidently to the
overcoming policies by foreign governments which are
tile trade.
promises of deluded and ignorant leaders who tell them
that we are still on the right road and moving swiftly
industrial operations
abroad; and second, relief from the dilemma of receiving
income op dollar investments in currencies which cannot
be used to pay American income taxes.
In the longterm the American people must come to realize that we
must import more than gold if America is to continue
to prosper and sell its goods in the markets of the world.
work ahead, and I suppose
and
discriminatory
against
American
in
But, in general, heavy industry had plenty of
that one of the quaint factors
the situation was that of the many industrial strikes,
overproduction from
of is that in¬
creasing costs will price first one industry and then
another out of some essential part of this market, and
I think we may well see that in 1950 before the year is
which
out.
have
may
coming
the
prevented
What I
sooner.
am
most afraid
;
-•
GLENN K. MORRIS
WM.
President, National Bank of Germantown and Trust Co.,
Philadelphia
A year
ago a spirit of caution and uncertainty ruled
thinking of business executives.
Short-term plan¬
ning was the rule.
Today, optimism predominates and
one hears predictions on all sides of good business condi¬
the
tions, at
least for the
first half of
Where caution is evident, it is
1950.
confined to
lack of definite predic¬
a
tion concerning the latter half
of the.
year.
For the past
adjustments
lines
most
„first
quarter
experience
experienced
in
business during the
of
of
was
each
year,
country was involved in
which no one could fore¬
make much sense to pre¬
dict a continuing "prosperity" for the country or for any
particular industry within the
country, basing the prediction on the
current high rate of business activity
and
unprecedented
demand
for
goods
and
services.
Every
in¬
When
That
adjustments which
in
discarded insofar as the
tions which
years?
Glenn
K. Morris
hoped for but not present in preceding
Unfortunately, that is not the
case.
The im¬
a
of
once
an
end
each
country
We
worth.
ternational
our
C. NAFTZGER
;
is done:
are
Bank, Wichita, Kans.
For the last 50 years our
,
foreign
the British, French, and Dutch
nojw mortgaged
for more than \ye
Each day our money con buy
crowd hetfe in the United
less. The in¬
States has 1 made
economic slaves of all little people.
•
:
be
Wm. C. Mullendore
a
as
greater will be
M.
are
cold war on
and by an ideological war within
well
much
ago.
The
scale
as
how
we
war came to some
in 1945, but it was
succeeded by
world-wide
of
Empires.
cost, and the ultimate result of
kind
at
condi¬
of the economic system which gave
leadership lying all about us, we are
policy has been to save
and
.
standard of living
boasting
achievements under
that system in the next half century.
I do not undertake to say what the future holds for us.
I know, however, that, ignoring all danger signals, we
are driving at breakneck speed along a dangerous road
which leads only to disaster.
Until and unless we regain
our
sanity and return to the American way, there is
simply no point to indulging in the wild guess as to how
fast we will travel in 1950 and where we will be next
December.
One can only say with certainty that if we,
do not radically mend our ways, we will be in much
worse condition next December than we are now, even
as we are now much worse off than
we were one year
world
The damage
for a forecast of the future
engaged."
Well, the hot
With the wreckage
us
President, Southwest National
and
when
person,
elimination of poverty and the
of security, and a higher
that
are
Are they the result of
were
bad
this world-wide conflict in which
tors baek of the prevalent optimistic
economic
on
1942
the
1950 is concerned.
sound fundamental
was
1943, would, of course,
say: "It all depends upon the length,
It appears wise to analyze the fac¬
predictions.
our
aware
was
demand
Every intelligent
omy.
These
just about
to be considered as normal seasonal
are
1943,
healthy
development of the country's econ¬
called
patterns
and
not good for the sound and
curred prior to World War II.
year
1942
war-created
not unlike what acwere
in
world war, the outcome of
cast with certainty, it did not
a
formed adult citizen
three years downward
were
MULLENDORE
C.
President, Southern California Edison Company
surely toward the
guaranty
for all.
internationally.
Further, the
a
only way out is to get out
100 year
"Keep Out of
"Trade
Norte."
With
job.
of debt.
That will
Follow the advice of Washington—.
Foreign Entanglements," and Jefferson—
All. Nations.
Political. Connections
With
Volume
171
Number
4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(299)
63
Business and Finance Speaks After the Turn of the Year
A. G. NEAL
of this
P. J. NEFF
President, Potomac Electric Power Company
During
1949 Potomac Electric Power Company sold
electricity to more customers than at any time in
itst fifty-three year history. Kilowatt-hour sales amounteel to 2.-,074,595,000—an increase of 67,100,000 over 1948.
During 1949, in accordance with
more
our
long-range policy,"
the Missouri Pacific Lines have continued their
program
-of roadway improvements and
acquisition of
stobk in order to
-
the
serve
public
new rolling
efficiently and
more
"
.Although the
kilowatt-hour
average
economically.
Total
capital expenresidential customer reached ; ditures during the past year have
high during 1949 the increase •; amounted to $43,465,000 of which
in kilowatt-hour sales was princi¬
$28,978,000 is for equipment which
pally due to the record level of
.includes Diesel locomotives and
use
a
31,300
ments
and
started during
the
started
were
homes
new
were
surpassing
19 000
apart
freight and
June
the
1949,
1948
The
1949, far
which
units
1948.
in
increase of 4.8%
an
peak.
portant
sion
program
riod
from
total
to
the
meet
The
item
largest
in
this
cost of
labor
19,49
is
placed in service in
erating capacity to 585,000 kilowatts.
kilowatt
of
as
owned
a
Power
Company
with
its
business in this
transition from
a
seller's to
about the
area was
1950
continues to be favorable.
refund
maintaining
new
checks
the
to
present
volume
of
will
be
sales
because
of
FRANCISCO,
Arnold
Seidei
dated
(Special
—
asso-
The
to
RALEIGH,
Griffin
The expansion
be
ciates,
Spring Street.
Mr. Griffin
com¬
the
was
Co.
Also
associated
&
Arnold
University
E.
Love and John T.
a
high level during 1950.
as
lumber, steel, glass, cement,
an
and
plumbing fixtures,
imporant influence in many
these
are
furniture,
re¬
the
area
many
chemical
by
new
plants
Arnold Seidei
&
n-
the New York
Associates
a
and
Midwest
will
BOSTON, MASS. —Melville P.
Merritt will become a partner in
the New York Stock Exchange
Harris, Upham & Co.
1,
State
ley
&
Street.
a
C.
Mr.
Merritt
was
partner in F. S. Mose-
Co,
NORRIS
A.
President, Alaska Juneau
The
Gold Mining
prime
six
interest
not
and
war
of
postwar
Company
Juneau
Alaska
Mining
Gold
the preservation
in
years,
of
former producing properties, but of several
large low-grade lode properties which, were in an ad¬
vanced state of development with "important blocked
out reserves warranting equipment.
only
As
you
down
itation
been
all gold mines
doubt know,
no
early in the
order
known
rescinded
but
were
closed
b.y War Production Board lim¬
war
"L-208."
as
only
a
This
has
order
now
few of the higher grade do¬
properties have been able to resume production
statutory, fixed price of $35 per fine ounce;
gold properties, including our Alaska Juneau prop¬
under the
most
erties, cannot produce profitably
this Treasury price
on
Continued
are
shortage of electric
no
and
Power
on
page
64
Bedford
completed
Ruffing,
Stock
on
been
Feb. 1.
and
development
only the
three
with
the
firm for
some
These
SAN
FRANCISCO,
NEW
60,000
(shown
above) doubles the capacity
Chesterfield Station on the
of
the
James River just
ing
CALIF.—
1, Dean Witter & Co. 45
Street,
the New York and
Stock
dell
members
of
Wifter
approval
and
awaits
license
additional
power-generating
units
completion by 1952—
Vepco System
Kw.
addition
below Richmond, Va.
Vepco
service
day
year
Vepco is bring¬
electric power to
people in Virginia for
comfortable living and
efficient production.
more
...
ing day
per
now
every
adds
new
120 customers
or more
year.
a
4 minutes of
customer
every
per
than 30,000
were
will be
its
8-hour work¬
new
In 1948 nearly 30,000
tomers
to
working
customers
new
cus¬
higher.
added and for 1949 the
figure
San Francisco
Exchanges, will admit Wen¬
W.
actively
are
capacity.
more
Montgomery
a
proposed hydro-
will add 370,000 Kw. to the
more
On Feb.
a
the Roanoke River
necessary
—all scheduled for
Year by
Dean Witter to Admit
on
others
Also,
System,
recently been
from the Federal Power Commission.
Exchanges,
Mr. Gochenour
in
power
the Virginia
Company
second major power unit has
more
on
making his headquarters
gt the firm's new Boston office at
30
the
tion program now in progress on
time.
Harris, Upham Partner
formerly
has
Electric
Kirchofer
George
F. DeMarke
and Lynn W. Gochenour to part¬
has
Melville Merrill lo Be
of
system of transportation.
American
opportunity to formulate a national
transportation policy which will provide equality of
opportunity for all forms of transportation.
business
Virginia. Under the $150,000,000 construc¬
admit
nership
Feb.
most significant stage in the development
a
American
THERE IS
Asso¬
Building.
CHICAGO, ILL.—Lamson Bros.
Co., 141 West Jackson Boule¬
Insti-
t.ure of Finance.
firm
at
are
the
I.
vard, members of the New York
He has recently finished
with
We
of
reflects the increasing importance
To Admit Two Partners
&
Merchants
course
taxation.
mestic
of industry in the territory served
Pacific Lines through the location of
Lamson Bros. & Go.
Seidei
A
over
under construction.
associated
Los
railroads in competing with trucks
highways paid for by the public and with
barges and other vessels operating on waterways made
navigable and maintained by funds provided through
ex¬
Besides
Calif ornia,
of
impartial studies point out the difficulties
confront the
operating
or
Southern
geles.
These two
Company has been in gold mining—and for the past five
thereto
Griffin
&
with
of
National Bank
Unified and Coordinated Federal Program
Transportation."
which
grain in 1950
prior
of
a
California and
with
for
a
that
formerly head of
and
principal
Vaden, Inc.
was
of
Farmers
Owen, and the recent report of Secretary
Sawyer to the President entitled "Issues
Commerce
Involved in
associated
Arnold
Insurance
Inc.,
&
&
the
was
by the Brookings Institution entitled
Policy," by Charles L. Dearing
Chronicle)
C. —George
become
Kirchofer
Griffin
his
Mr.
of
Wilfred
less than
weather conditions
plants and the establishment of
Financial
N.
has
with
& Co., 458 So.
studies
expense,
.1
become
Morton Seidei
pleting
public
Kirchofer-Arnold
CALIF.
with
has
at
opportunity with other forms
George I. Griffin With
Morton Seidei & Co.
University
adverse
roofing materials
in the Gulf Coast
at
of
commerce—among
the Missouri
electrical
of
may
furnaces and other heating devices.
in
factor
a
Although the production
products
frigerators, ranges, floor coverings, electric appliances,
ap¬
The distribution of in¬
Veterans
Arnold Seidei Joins
After
other
construction exerts
articles
It is believed that the
appliances.
SAN
1949
sand, gravel,
same
buyer's market in the
a
of
in
Construction, both industrial and residential, is
pliance industry has been completed and the outlook for
surance
certain
building materials, such
in 1948—a record year.
as
and
cotton
pected to continue at
large volume of television sales, the elec¬
a
trical appliance
in 1949
production in 1949.
wholly-
Incorporated.
by
volume
territory
production of agricultural products in
serve, in the absence of adverse growing
existed in the latter year.
Production of
should equal or exceed that of 1949.
subsidiary, Braddock Light & Power Company,
Aided
the
our
and
in
hai^esting conditions in 1950, is expected to approxi¬
that in
result of the merger at the close of 1949
Electric
Potomac
we
equal
transportation.
1949, dependent upon the program of crop control
adopted by the government and the effectiveness of it,
production of fruits and vegetables in 1950 should exceed
about
financing of this large expansion program will be
facilitated
territory
maintained
and
an
in
June 1950.
The
total
of
The second 80.000
turbo-generator unit will be completed
similar
high level.
mate The
and it increased the Company's total gen¬
1949
The
enue.
or
October
in
no
occurred
as
territory served by our system
predominantly agricultural and agricultural products
provide approximately one-fifth of our total freight rev¬
The first unit of this
was
that
transportation
a
are
1950
A large portion of the
the
plant
for
there
in
evidence
abundant
available
If
is
generating station
new
1950.
1950 should continue at
which will include two 80,000 kilowatt turbo-generators.
new
there
in
disturbances
are
"National Transportation
study recently made of conditions in the territory
the Missouri Pacific Lines indicates favorable
conditions
built
report sponsored
P. J. Neff
of 1,320 freight
$9,260,000.
widespread
the
is
program
a
they
but
Comprehensive presentations of unfair practices with
which the railroads must compete are set forth in the
acquisition
at
business
Approximately $27,000,000 will be in¬
vested in the first section of this
the
traffic
expansion
of
$11,299,000 which will bring
total ownership to 274 Diesels,
A
Company's Potomac River Generating Station in Alex¬
andria, Virginia.
new
channels
must be accorded
served by
This total
of the company's existence.
years
and
im¬
most
highways
are not only ruin¬
ruining the system of
which this great nation
was
built.
Railroads, in order to compete with "box
cars" on the highways and barges operated on waterways
being the purchase
Diesel locomotives at a
cars
ever
the
the public
on
the highways,
distribution and marketing upon
items
and
adequate
an
1950,
far greater stake in efficient railroad
a
many
"Box cars"
ing
of
our
1952
increasing- de¬
expenditure is almost
equal to the $109,000,000 that was invested in property
and plant by the end of 1945, the close of the first
fifty
mands of its customers.
63
cost
during the. pewill require
expenditures of $96,000,000 and
to
which will enable it to continue to provide
electricity
of
which
1946
roadway
in
than
of them have yet come to realize.
prosperity of the nation is dependent upon ade¬
quate railroad transportation—not only in times of a
national emergency, but in times of peace as well.
This improvement program will be
continued
over
Company has reached 'the
point in its postwar expan¬
middle
of
marketing systems
built upon the
rate structure and services provided by the.railroads.
were
The
passenger cars,
for
Production and
industry of the United States
Industries have
and $14,improvements
which include new rail, yard tracks,
siding and industry tracks, changes
in grade and
alignment, signals and
freight and passenger stations.
487,000
¬
An all-time system peak load of
476,000 kilowatts was established in
supply
portation agencies.
of the
service
'■
A. G. Neal
Equal participation by the railroads in the prosperity
nation is certainly not possible unless the railroads
are
accorded equality of opportunity with other trans¬
per
area.
and engenders
economy
of the
new
building activity in the Washington
territory in the nation's
confidence in the future of the Southwest.
Chief Executive Officer, Missouri Pacific Lines
and
William
M.
VIRGinm ELECTRIC MID POWER (OmPMlV
Witter to partnership.
«
t:l
i''. .J
-
#
til
Continued
from
63
page
Speaks Alter the Turn of the Year
Business and Finance
and, under the Gold Reserve Act of 1934, are not per¬
mitted to market their product anywhere else at any
price.
for the
not look encouraging
The future, therefore, does
domestic gold miner."'
purchasing value of the U. S. dollar at about
40% of 1935-1939 average, the present value of an ounce
•of gold is indicated at about $14, compared with the
prewar average.
Several remedial measures have been
introduced in Congress during the past few years, but so
sight.
There are two measures now
hearings have been had before a sub¬
relief is in
no
in the Senate and
providing for
..a open, free market for gold, with nothing of a definite
character indicated as to what the Senate action on the
hill may be. The Administration has recently expressed
a
more
or less positive
attitude against increasing the
price of gold, which may or may not be justified insofar
as
it may affect the government buying price, but it
does appear to be entirely unfair, if not immoral, to
deny the domestic gold producer the right to dispose
of his product elsewhere at a higher price if he is able
committee
Senator Pat McCarran's bill
on
to obtain it.
NEUMARK
J.
ARTHUR
Partner, H. Heintz & Co., New
York City
major elements of recent years will continue to
exert the greatest influence on the economy of 1950.
They are a high level of government spending, strong
support of major crop prices, higher wages, increasing
population and large capital expendi¬
The
tures, although
undoubtedly this last
The return to a
duction
in
capacity,
productive
and
exports
our
a
re¬
an
in¬
imports are factors that
will tend to stabilize prices and cre¬
ate
in
mildly deflationary condition,
I believe will be more than
a
purchasing power.
should find
industrial activity around
and
Arthur
Neumark
J.
is all they
of last year and further stimulated
favorably with the best peacetime years.
The overall
volume of business for the year probably will be mod¬
erately lower than last year.
Corporate profits will be
somewhat less, although the prospects appear good for
the railroad,
profits in
stores, airline and canning
Securities
as
utility, television, retail
industries.
measured by normal yardsticks still seem
priced
conservatively
in
and,
many
instances,
greatly
It is my opinion that the trend toward a
undervalued.
Iiigher percentage of dividend distributions will continue
this year and this should act as an added stimulant to
stock prices. The gap between low bond yields and high
stock yields should narrow in favor of the latter.
With
Such
as
NORRIS
E.
Railway System
difficult to predict what might hapoen in this
country of ours in 195G as it is to
decide whether to join
insist 1950 will be the last year
first half of the 20th century or to line up with
claim
who
those
it
to
the first
be
approximately $125,000,000 in the years 1946
for additions and betterments to road property
1949
equipment, about $97,100,000 for equipment alone.
of course, a small part of our total expend¬
itures in wages, taxes and purchases oC supplies and fuel.
The
betterments
and
equipment
purchases were
and
And this is,
abreast—slightly ahead of, we hope—
the growing needs of the territory the Southern serves.
It is in that territory we make our living.
Assuming
that 1950 will be a year of peace and, with fingers
crossed, a year free from lengthy strikes or other things
upsetting to our economy, the territory served by the
Southern will continue the pattern of healthy growth
that is everywhere apparent in today's South. We have
helped and nurtured that growth and are proud of our
share as a railroad in it. Right now, 1 will nominate the
South as "Region of the Year for 1950" and I will
allow the nomination to stand for many years to come.
to
needed
President, Air-way Electric Appliance
tried
have
that
and
would
force
can
Australia,
political
and
upon
learn,
New
battle of those
fight¬
American
izens,
I
leave
this may mean
can
it to
a
Ernest
E.
Norris
political forecasters to say
Certainly,
individual cit¬
There was
a
time
OTTINGER
film
at
indication that business in our industry
good through 1950 with high production
continue
prices,
however, deeply concerned with
am,
r
*
'-
<#&* #7
••,,
&
The high rate of economy is being
artificially stimulated by the support
>•••*
farm
prices, by the shipment of large
quantities of merchandise for which
'$iMMi
mm
we
will
for
the
consumer
will
be largely spent
small
percentage
and
will
be
fluctuations
which
up
sound, by the
armaments and by
making of huge loans to foreign
the
countries
people
are
the
at
our
time
we
import duties.
I
Lawrence
do
know
not
what
tive steps we could
Ottinger
effec¬
more
take if
we
were
deliberately courting bankruptcy. We
doing
are
cause
believe
we
them
enemies better than
cannot
see
how
an
necessary
al¬
economic breakdown.
I
continue to violate every known
can
we
of these things be¬
politically
play into the hands of our dia¬
nothing could
though
many
be
to
economic procedure and remain a strong
rule of sound
nation.
Despite official denial, I feel that it will be not
long before the printing presses are rolling and our
too
devalued.
What that will mean toand insurance policies is all too'
We will prosper as long as this artificially-
sharply
currency
bank balances
saving
obvious.
needled economy can
hold together and then the reluge,
IRVING S. OLDS
Board
Chairman,
As
of Directors, IT.
S. Steel Corporation*
approach another year, I believe that industry
we
general will benefit from the lull resumption of steel
in
operations after the recent steel strike, and from theprospect of a high rate of steel production for some time
to come.
Considerable backlogs of
.steel orders have resulted from the
Then too, there is a substan¬
continuing
demand for steel
strike.
tial
products of many kinds. The ca¬
pacity of the steel industry should
be capable of meeting all of these
'
steel
strike
ended
with
the
establishment within the
industry of expensive pension
general
under which the employer
the eniire cost of the pensions.
programs
pays
This is
a
new
development for most
companies.
steel
The new insurance
in United States Steel is to
paid for equally by employee and
program
Irving
seem
S.
Old*
to
The
a
ucts.
That is the sole continuing source
funds
for
this
purpose
It is
can
only from
his prod¬
of money out of
come
manufacturer receives from the sale of
which any manufacturer can
natural and
meet his costs of operation..
as such costs advance-
inevitable that
prices will advance to pay the higher bill.
That is what
in the steel industry.
Statements have been made that the steel industryshould be able to absorb the pension costs out of exist¬
has recently happened
Joseph
cur¬
have held
same
equipment and
know-how and are reducing our
our
what
H.
Nuffer
•
buying,
people
and
exporting
are
due.
retail
much change from
Some
which
of
a
and others down but on an
levels.
houses
not
are
manufacture
I
tucked
in
of
being built, by RFC loans to a
large number of enterprises, many
pension plan must be financially sound to insure that
the money will be available to pay pensions as they fall1
scramble
dollars which
paid, by FHA loans
values
realize the
great cost of these new insurance and pension programs,
or to recognize that employers must meet their obliga¬
tions under these programs in years both of good and
bad business. It may be elementary to point out that a
sustained
a
be
not
full
are
employer.
Few people
capitalize
to
be
|
States Plywood Corporation
the economy of our country.
be
waiting for lower prices and these s&ine
realizing that price adjustments that
have already been made is all that can be expected.
off
in terms of legislation.
lot of all three.
these
rent
taxpayers, business firms and
stand
will
feel
I
average, not
they are
hearing strong demands from the "grass roots" for tax
reductions, governmental economy and a balanced Fed¬
budget.
divisions
selling
what
some
reports that members of the 81st Congress say
eral
their
There
ing against what seems like planned
national
bankruptcy in the United
States is not over. But it is encouraging to see in news
what
alone
not
prices by industries and commodities,
"problems."
are
who
There is every indication for
continued high demand for housing.
cannot substi¬
who
companies
by
recognize that competition is keen
provide adequate support to
but will
away.
getting things done for free
who
work together to
solve
The
able
relatively
social
opportunists
if we will, from
Zealand and Great
economic and/or social
factors in our economy, I
opportunity in 1950 to break all
many
an
previous annual sales records. Practically all factors con¬
sidered are on the plus side with only a relatively few
on the minus side. Progress will be particularly notice¬
believe
found
in
men
have
we
will certainly cause a wild
the United States.
Britain that the state
studying the
that
for
wanting many of the schemes
planners
Corporation
pro¬
There is every
will
The
billion in veterans insurance refunds
We can observe and be en¬
couraged by the swing away from
the welfare-state idea in other na¬
tions
President, United
demands.
H. NUFFER
JOSEPH
high level of buying power.
The impact of the payment of $2.8
year.
tute
keep
con¬
of research.
develop¬
has spent
on
in the second half.
It is not prediction, though, to say
that there are hopeful signs for the
year
offices; increased advertising and increased
the field organization and an expanded
with
tact
gram
bolical
feel
the ranks of those who
in the
branch
Instead, it is the
of transportation.
an
aggressive program involving the opening of additional
steel
President, Southern
It is
high reached in 1949. To that end we have planned
that permits all
After
ERNEST
larger number of Air-Way vacuum
topping our previous all time
a
thereby
of
preclude the sound and continued
not
—does
opinion.
utility and retail groups.
-ST¬
1950
attitude—against breaking down the railroads
an
be combined with good appreciation this year,
my
We
subsidies.
no
the overwhelming
purchases, excellent
in
cleaners in
encouraging' sign.
returns
in
Particularly favor the rail, steel, motor,
discrimination
proper
determined to sell
LAWRENCE
It is the railroads that must
bulk of our land commerce in
peacetime; they must also be prepared to carry the "win¬
ning" part if war conies again.
Our railroad system is
the only transportation medium that can increase its
carrying capacity "overnight" to meet the greatly ex¬
panded transportation requirements of any national
emergency. That there appears to be a growing aware¬
ness of this important fact among people who truly have
the best interests of their country at heart is, indeed, an
asking)
are
areas. It must also be recognized
companies will be faced with increased costs
due to pensions, some of which may have to come out
of profits rather than passed on to the customer, to avoid
pricing the company out of the market.
Considering all of these factors, we in Air-Ways are
indirect, to forms of trans¬
portation that cannot exist competitively without sub- sidies, waste tax funds, are bad for the country's general
economy and weaken the railroads that receive
(and
carry
possibilties in mining
that many
ask.
Subsidies, either direct or
to
by dis¬
tribution of the veterans' bonus.
I anticipate a falling
off in the second half with the year's results comparing
may
made to President Truman by
Secretary of Commerce Sawyer can be an excellent
starting point. It fails to state clearly that the best thing
for the country will be free competition for business,
without subsidies, among the various agencies of trans¬
portation but it certainly says so by inference. That
has been the traditional position of the railroads and it
tainly, the recent report
railroads, ,too, are direct contributors to the
countless other American busi¬
nesses.
In fact, their combined buying power is what
makes it profitable for many other free enterprises to
exist. For example, the Southern Railway System alone
the best levels of 1949 with soft goods
•larger
at¬
tempt made to deal with the transportation needs of our
country on a basis of the country's best interests. Cer¬
successful operations of
The first half of the year
-sales ahead
hopeful signs for the railroad industry
believe that there will be a .serious
in 1950 if we can
Strong
and/or larger pensions.
The year 1950 shapes up as an¬
other good one, with a high level of
wages
employment
medicine" will act
socialistic tax-wasters.
purge on
a
as
were
war.
deficit financing, higher
balanced by
general
hope this "grass root
us
transportation groups to make
their maximum contribution to the country's economy
as
each performs the service it can accomplish most
efficiently and most economically, without tax-wasting
subsidies or other aid from the public purse.
Such a
policy is the best assurance that American shippers and
travelers will have better service in peacetime and a
stronger joint transportation "line of offense" in time of
buyer's market, in¬
creased
which
medicines
let
attitude
last year.
crease
strong
roots;
ment of other means
10% to 20% lower than
will be from
brewed from herbs and
When
There are even
With the
far
Thursday, January 19, 1950
FINANCIAL CHRONICLE
&
THE. COMMERCIAL
(300)
now
Despite the government deficit, there is every indica¬
that the government will feed the stream of pur¬
profits, without price increases. Even if present
profits were adequate to bring this about, which is ques¬
tionable, no one can guarantee that past or present
ing
profits will continue at such rate indefinitely into thefuture.
Pension costs, however, are a continuing, con¬
tion
stant item to be
chasing power during an election year. Government
spending for armament and farm price supports will con¬
tinue to stimulate the economy. The probability of no
extent of current
tax
least
increase
some
and
the
possibility of
lating.
One
the removal of at
be stimu¬
of the war born excise taxes, will
.
of
the
negative
factors in our economy is the
will continue to reduce sales
miners strike which has and
paid year in and out, regardless of the
profits.
that any fair-minded person would
admit that pensions should not be paid at the undue
expense
of stockholders.
In many large companies,
stockholders are as numerous as employees. Stockhold¬
I
ers
should
suppose
provided the money which made American industry
Continued
on
page
66■
Volume 171
THE
Number 4873
COMMERCIAL
Continued from
page 9
ber
ing $30 billion
to
$45 billion
per year in the hands of
more
consum¬
ers
(an average of nearly $1,000
for every American
family) is op¬
timistic and indicates that
the Ad¬
ministration hopes to supplant the
cyclical rise and fall of business
by a steady growth. This, while
possible, appears, from our eco¬
nomic
viewpoint, rather difficult
to attain.
in
the
President
recognizes
downward trend
recent
business
pansion
investment
and
for
a
cause
It appears that
concern.
to
ex¬
modernization
plant facilities is
desire
create
warrant
a
of
it is his
favorable
a
resumption
programs.
at¬
of
such
Undoubtedly such
an
expansion would be warranted if
a
$300
billion
Gross
National
next
be attained
can
the
over
Business
years.
cautious
facilities
(7) The
owing to the high
level of prosperity. There are also
items
when
comment
the
Govern¬
on
Federal
date
consistent
with
the welfare of the
country, indi¬
immediate tax changes
no
that would be detrimental to busi¬
ness. In
fact, the President
mended
which
however,
changes in
would
tax
our
reduce
recom¬
laws
in¬
present
equities, stimulate business acitviity and yield a moderate amount
of additional
reduction
The stimu¬
revenue.
lation of business
in
excise
porate or personal taxes.
eral
should
Board
powers
to
have
increase bank
requirements as applied
banks insured by the Fed¬
all
eral
Deposit
tion
and
Insurance
to
Corpora¬
instalment
control
buying will likely meet with
op¬
position
and
in
the House.
both
the
Senate
From the
viewpoint
of
the
longer term
both
economy,
probably would be desirable but
such
legislation
is
unlikely
this
year.
representation
in the House and
Senate committed to the reduction
of
expenditures and the
ficient
ment,
will not be reduced
$1
The
recommendation
that
farm income support should
come
from production payments
implies
the Brannan Farm Plan which we
believe will not become
law
this
although farm supports
expected to be continued.
3'ear
(10)
The
billion
ures.
foe increased.
other
The
of
advocacy
rent
year,
stimulate
and
of
the
low-cost
an
The
an¬
Conclusion
proposed
the
1950,
year
program
forecasts
sledding"
a
deficit
during the first six months
is
expected
to
be
slightly down, the index
the
receipts
Based
the aforementioned
upon
conclusions
of
President's
State
Message,
unanimous
there
was
of
the
on
the
Union
conclusion
nothing
in
that
the
three
that would adversely af¬
messages
fect
staff
the
Economic
Report
Budget Message, it was
the
the
the
ing about 167.
high spending and
coalition
a
con¬
trol of the proposed
dicates
a
legislation in¬
favorable climate for the
expected in many
A substan¬
are
reduction
as
in strikes this year
1949
to
appears
likely.
Commodity
Index
of
Prices
—
Wholesale
900
The
BLS
Commodity
Series
for
the
Months of
First
Six
pect
this
index
to
about
average
150.
Farm Income—Farm income for
1949 amounted to about $28 bil¬
lion.
The annual rate of farm in¬
come
for
the
first
six
months
is
expected to
be about $25
Retail
1949
Trade—Retail
amounted
annual
to
rate
trade
$127
retail
of
to
trade
Plant and Equipment Outlays—
For
the
year
1949, Plant and
on
ings,
dividends
and
securities
prices for the next six months:
Industrial Production—The Fed¬
eral
Reserve
Production
Index
Industrial
of
(1935-39=100)
aver¬
aged 175 in 1949. We believe this
index will average about 177 dur¬
ing the first six months of 1950.
Gross Product—National Income
—
Personal
Gross
Income
National
For
—
Product
was
1949
ap¬
proximately $259 billion and Na¬
Income
billion
$222
Personal Income $212
and
billion. We
expect the annual rate during the
first six months of 1950 will be:
corporate
such
increases
taxes
increases).
in
(we
rate
months of
$16.1
for
first
is expected
1950
billion
the
to be
first half of 1949.
of
$5.5
about
billion.
deficit
a
The
Gov¬
$256
doubt
billion—and
increase
Federal
will
first
the
no
six
We
—
personal income taxes
by June 30, 1950. Excise taxes are
expected to be reduced on many
items.
Money
in
U.
construction
S.
During
about
to
first
the
in
$19.3
1949
billion.
months
six
of
1950 total U. S. construction is ex¬
pected to be at
Sales
—
$19.5 billion rate.
a
Manufacturers'
and
Inventories
are
at
about $55
were
1949
the
billion.
expected to remain
prac¬
sales
in
$215.8
1949
amounted
billion.
The
.
manufacturers'
of
first
months
six
about
to
annual
for
the
is
sales
ex¬
1950
of
rate
pected to be about $228.7 billion.
Money Rates and Bond Yields—
During the first six months of 1950
short-term
rates
are
ex¬
nractically
(he
Circulation
The
—
($27.7 billion) of money
in circulation at the 1949
year-end
not
expected
to
change
very
the first six months
during
of 1950.
Stock
($24.4
year-end
—
The
U.
billion)
is
expected
S.
gold
the
at
1949
to
months
remain
changed.
Net
higher.
should
grade
billion,
Na¬
not
tional
Income
$223
billion,
and
very
Municipal
remain
firm,
corporate
any.
expected to
v.
.
bond
and
the
first
six
months
first six months of 1950
we
Net
income
of
the
first
4%
six
is
months
expected
Railroad
remain
equipped to
tion and port
and
the
Federal
expected
of
public
utility
for about
1949
Loans
and
assets
banks
of
investments)
year-end
were
them
Margin
at the
$67.4 billion.
U)
Board
are
by
to rise
to about
billion.
50%
Federal
to be
Reserve
during the first six months
earnings for the first six months,
Savings
by Individuals—Indi¬
savings are expected to
vidual
advance
during the first half of
estimated at $8.4 billion. Dur¬
are
ing
the first six
total
the
1949
year-end
and
increase
of
we
totaled
to
expect
about
$5
$200
see
billion
an
by-
June 30, 1950.
S.
exceed
corporations
amount
by
paid
1949
amounted
billion.
to
Exports
about
during
$6.6
1949
amounted to about $12 billion.
is expected
that
a
trend
It
of lower
in
exports and somewhat higher im¬
Everywhere
expect
tax
no
re-1
New
15
York
Park
7
Row
7V2%
Houston
Citizens
State
2,
Texas
Bank
Bldg.
the
first
six:
the
Conclusion
Business
at
activity ivill continue•
relatively high rate during
first six months of 1950. High
a
the
corporate
dend
earnings,
dence
in
the
result
future,
in
stock
erally higher than
prevailing.
dustry
and
over
the
fore
and
confi¬
believe?
ive
prices
gen¬
tho^e currently
Variations
issues
careful
divi¬
liberal
disbursements
will
as
be
to
in¬
wide:
period ahead and there¬
selection
is
importance.
THE
FORMICA COMPANY
CINCINNATI, OHIO
Materials
Atlantic, Gult and Pacific Co.
1950
expected
are
about
of
,
from aH
months of 1949.
will
Foreign Trade—Imports during
months
dividend payments
to
rency,
billion
cor¬
porate dividends for the year 1949
this year.
Personal savings (cur¬
$22 billion; savings ac¬
counts, $68 billion; checking ac¬
counts, $41 billion, and U. S. Gov¬
ernment securities. $69 billion) at
to 5%.
Corporate Dividends—Total
U.
of 1950.
of aLl
months of 1950 should exceed tb€.
of 1949 by about 4%
(Regulations
not expected
the
Total net earnings
U. S. corporations for the first six
Securities—Securi¬
on
ties margins of
T and
industrial
corporatiions, we expect for all
corporations, 1949 combined,
net earnings will total about
$16.3
Investments—
and
earning
(loans
sidering these and the
U. S.
Bank
Total
account
Laminated Plastic
Longest Experience
the
pe¬
during the first half
of 1950.
Correspondence invited from Corporate and Private
Interests
same
7% of all corporate earnings. Con¬
is
only
reclama¬
Government
net
about
earnings
Manufacturers of
all kinds of dredging,
be
practically unchanged during the
work anywhere in the United States
to
to
For
1950
first six months of 1950. No
change
in the U. S. official price of
gold
Improvements, Deep Waterways
execute
of
greater than in the
in 1949.
riod
Canals and Port Works
Ship Channels
1949 is
year
approximately $14.9 billion.
Filling, Land Reclamation,
are
net
INDUSTRIAL
corporations for the
are
expect
1950
period in 1949).
,
DREDGING
We
of
Common Stock Yields—For the
average num¬
the;
income is expected to be $424 mil¬
lion (up about 10% over the same?
high-
change much, if
over
(elec¬
corporations for 1949
yields
yields
net.
about.
approximately $765 million. For
slightly
bond
in¬
income of UTILITY
power)
Long-term money rates
expected to be
are
.1950
be
to
un¬
money
pected to
$2-30
and
of
expected
(up 10%
period in 1949).
income
Gold
stock
six
is
million
tric
amount
is
first
$190
is
Net
—
approximately $400 million. For
income
believe
change in Federal
no
or
is
Earnings
of the RAILROADS for 1949
come
same
Taxes
,
there will be
corporate
in
it
during the first six months,
Corporate
ending
year
1950 will show
reduced
Construction—Dollar volume of
Product
1,
personal or
six
10% from the
off
or
Budget
July
Excise
Budget for the fiscal
June 30,
We expect
Gross
Employment—The
of 1950.
$70 billion by June 30, 1950.
annual
billion (an all-time high). Work¬
ing capital is expected to continue
to grow
Equipment
outlays
by business
estimated at $17.9 billion. The
tal of all U. S. corporations at the?
1949 year-end is estimated at
$70
Government Budget and Debt—
are
following represents the tically unchanged at the $54-55 bil¬
judgment of the staff lion level
during the first six
the outlook for business, earn¬
months of 1950.
Manufacturers'
in the
taxes on individuals and corpora¬
tions does not take into considera¬
anv
for
billion.
Budget, the proposed income from
tion
of
billion.
They
The
equity financing.
Financial
Strength—All U. S.,
Corporations—The working capi¬
It has been reported that the U. S.
much
vear-end
1950
is expected in
(1926 = 100),
averaged 155 in 1949.
During the
first six months of 1950 we ex¬
Inventories
Economy
corporate bond financing to change
little from 1949 but an increase
year.
compared
future.
The
Domestic Financing—During the
first six months of 1950 we expect
ernment debt at the 1949 year-end
this
tial
all
of
was
(The average
6.6%.)
months of 1950.
pensions
industries
amounted
continuation
yield for 1949
and
the
a
ports will prevail during the first
six months of 1950.
was
major trend
of
stock
prices over the period ahead.
To
contrary,
the yield on Moody's 200 stocks to
Wages and Strikes—Increased
labor costs due to social insurance
the
of $5,133
side
only
averag¬
million.
On
The
6S
average about 5.9%.
(1935-39=
averaged 169.2 in 1949.
1950
of
Index
expected to be about $125 billion.
Contractors
beginning
59
for the first six months of 1950 is
President's
on
River and Harbor
Federal
100)
trend
The
Messages
Budget
The
the
mately $4 billion.
Congress.
for
that
feel
suggested
"hard
Price
sumers
1950
therefore
private funds
long-term
program of aid to friendly coun¬
tries, while vague, will neverthe¬
have
over
(301)
ex¬
for
controls
and so acted upon.
less
fig¬
Budget deficit at the year-end on
June 30, 1951, will be approxi¬
and
average
.
We
into middle-income housing, we
believe, will be favorably accepted
(12)
Budget
Personal Income $212.5 billion.
specific
the number of persons covered for
old
age
benefits is expected to
(11)
by more than
the
from
are
emphasis on
Social Security programs will get
little support this year,
although
tension
ef¬
more
operation of the Govern¬
we
believe expenditures
tional
(9)
not
substantial
a
1949
composite
The statement that the Fed¬
Reserve
should
Prices,
Although there is
reserve
to
ques¬
would
activity implies
taxes, which
expect, but it is doubted that
there will be an increase in cor¬
broader
seriously
these
tive.
we
(8)
legislation
all, total estimated receipts in the
Budget are considered conserva¬
government
designed to contribute to
earliest
cates
Budget that would
proposed
affect the estimated receipts. Over
will
only ex¬
fully war¬
the growth of the
economy," ac¬
companied by the statement that
the budget should be balanced at
the
the
from
whose passage we
fiscal operations wherein it
is mentioned that "The fiscal
pol¬
must be
in
result
ment
of
by higher income (at
rates) from corporations
and individuals
and
ranted.
icy
expect.
offset
current
in
million and
Cost of Living—The BLS Con¬
con¬
tion in excise taxes will probably
be
employed
CHRONICLE
million and unemployment about
3.8 million.
reduction in such
The reduc¬
any
we
as
people
1950
of
,
five
likely be
pand
taxes,
real
of
mosphere for business that would
Product
sideration
tion;
(6) The
that
ceipts also do not take into
58.7
FINANCIAL
unemployed
averaged 3.4 million.
Employ¬
ment during the first six months
Mutual Funds Manager Views
1950 Economy
providing 64 million jobs andplac-
of
was
&
of
vital
66
(302)
THE
Continued
from
COMMERCIAL
Thursday, January 19, 1950
CHRONICLE
FINANCIAL
&
64
page
■
'
,
•
....
(
•
1
■
•
•
9
Business and Finance Speaks After the Turn of the Year
possible.
When business conditions permit, an industrial
be allowed to earn a fair profit and
enterprise should
the stockholders of that enterprise should be
a
reasonable return on their investments.
private business will
dry
soon
This and other rriatters
entitled to
Otherwise,
up.
importance today face the
of
petroleum customers, for
1949
In
tion of
and
new
is fair to
crease
over
the
meters
were
added.
from
enue
President, Alabama State Chamber of Commerce
1950 in the South
parallel those of the nation, and since the vast mapority
of informed opinion expects business in this country to
sustained
on
a
relatively high level at least for the
early months of the current year,
the volume of business in the South¬
region
ern
tained
in
should
the
be
well
immediate
The textile
industry,
All
main¬
future.
had
ELLIOT
months
Net income for the first 11
net
The paint industry
Bureau of Census
important
factor in Southern economy, after
having
curtailed
substantially
its
figures
to
sales
total
stand
The
months
crease
of
due
expanding production.
troduction of the automatic gas
to
veterans
will
in
the
should
trade.
The
decline
facilities
in
in
building
this
Bradstreet published
of
Gordon
D.
than
young in spirit and outlook, there is
inspiration and satisfaction in the completion
successful operation, There is challenge,
South and the
has
caused
capita
income
Petroleum
today fuels well
over
o£ the nation's
50%
with
look for oil is encouraging.
There
made
in
hundreds
are
from
this
basic
products
material;
on
garded
with
complete
satisfaction.
were
increase over 1940.
Incidentally, while the price of gaso¬
line has increased along with other
aspects of
the economic stimuli are inflationary and while infla¬
tion may increase business temporarily, its
long range
results
not conducive to a healthy economy. Current
Federal, state and local governments are in¬
are
deficits of
flationary and high rates of taxation
vidual
investment
the
of
Federal
funds
gion
in industry.
government is
which
might
The
are
retarding indi¬
enormous
tax
take
siphoning out of the
well
be
used
to
re¬
its
expand
since
commodities
it not only
its price
today is at approximately the same
level
in
as
the
S.
adding
Petersen
E, PAIGE
The completion of
improved and
holds
is
the
in
year
a
services to
promise for
during which earnings have
public
utility.
company's strength to make
opportunities
its
of
The promise
the
the
ability to acquire
most
new
new
of the
year;
in
resources,
to develop and expand the com¬
pany's services in the direction in
which they will do the most good for
and
the employees, the
stockholders, and
the customers.
At
the
beginning
of
1950,
The
Brooklyn Union Gas Co. greets this;
promise more confidently than ever
before.
And the outlook for the gas
industry in general in 1950 is equally
optimistic.
Throughout the
industry
1949, the gas
made; business headlines
year
with the installation of
Clifford
Paige
made in
ers
and im¬
processes,
with
were
facilities
virtually every sphere of activity; new custom¬
added to gas utility lines and services to old
customers
**
gas-making
new
expansion of production and distriand, spectacularly, with the growth
country's natural gas system.
New records were
tribution
of the
proved
were
expanded.
Gas sales and
revenues
from
-
s&les
increased; and capital expenditures for construc¬
expansion were greater than ever before.
During 1949 the gas utilities of the country were directly
serving 23,763,400 customers, including 334,000 liquefied
tion and plant
gallons
before
billion
6
families
What
can
(1) We
the
cut
a
also
task
The
not
an
doors
shows much
are
used in
lower
a
increase, they nevertheless
quantity totaling about 485,000,000 barrels
of
in
1949, which is 43% higher than prewar. The vicissi¬
tudes of weather greatly affect the seasonal consumption
of both distillates and heavy fuel oil, a fabtor which
caused
eastern
After
very
low
consumption in these products in the
part of the United States early in 1949.
the
war,
the oil industry was hard pressed to
find, produce, transport and refine sufficient crude oil
to meet the unexpected high demands.
However, a char¬
acteristic of free enterprise has always been its ability to
develop needed raw materials and finished manufactured
commodities, usually with astounding rapidity and in
quantities tending to exceed demands.
For consumers,
such situations mean ample supplies, and under the laws
of economics they mean reasonable prices.
For manage¬
ment they pose major problems in preventing supplies
from becoming excessive to the_point of wasting a nat¬
is
The
the
rates
painting is
one
of
segment
every
requiring the com¬
the industry.
It is
it.
to
And
a
vast
by
so
new
doing
and
we
will
public service
be unlocking
neglected market for
our
products.
continuing nature.
nationwide Dieselization of
sales of oil burners,
largely for use in homes, has caused extensive and grow¬
ing use of Diesel and heating oils produced by the oil in¬
dustry.
While the use of the heavy residual fuel oils
of
story to tell, but it is worth telling because
easy
the
gasoline,
through
educating the public into the health and
true, and we will be performing a
gasoline
from
of
efforts
bined
telling
Aside
can,
(4) we can
and
benefits of
welfare
by
the railroads and very large annual
we
nationwide crusade—at the
it
a
(3)
promote and encourage
community level—to show
the consumer that paint with the myriad of colors can
greatly influence the happiness and contentment of the
home, the family and the worker in office and factory.
requirements;
in the United States is
passenger
of
about
product development and research, create new products
that will more
adequately take care of the public's
cpntinues to show phenom¬
only the carrying of passengers, but the
are
do
(2) we can devise ways and means
manufacturing and distributing our
of
cost
products to the consuming public;
miles per year as compared
in pullman service.
consumption of aviation
(excluding the military) was 13%; these in¬
likewise
manufacturers
individual
as
get solidly behind our industry advertis¬
promotion efforts;
to
with 9 billion for the railroads,
The 1949 increase in the total
creases
we
can
ing campaign and key it in with our own advertising and
handling of freight, express, and mail. For example, the
air lines have continuously cut into the handling of pas¬
sengers in the "first class" category.
They now total
about
the standpoint of health the very well-being
is influenced by
the use of paint
from
it?
in 1940 it was only 680 gallons.
per year;
enal growth—not
customers have increased al-
a
740
Commercial aviation
President, The Brooklyn Union Gas Company
ways
20's,
State
mechanized.
more
now
-
middle
and Federal gasoline
taxes, and it is far superior in quality.
In
1949, the demand for motor
gasoline in this country increased by 5% from the previ¬
ous year.
It is showing appreciable increases each year,
as the automobile
industry continues to supply the grow¬
ing population with large numbers of new motor cars,
as the trucking
industry expands, and our farms become
T.
tion of motor gasoline per vehicle
^
1S45,
It is also of interest to note that the average consump¬
production.
CLIFFORD
alert enough,
we
public paint conscious, but, in my opinion, they are just
scratching the surface of the vast market that exists
for our industry's products.
All you have to do Is to
travel through practically any town, city or community
in the country-and look at the pitiful condition of many
homes,, office buildings, factories and warehouses to real¬
ize that my statement is true.
.
has increased much less, but
re¬
Certain
in
quantities which
represent a 56%
farms.
many
It would be less than realistic if the situation
Are
The industry through its cooperative advertising cam¬
paign is attempting to do its part in carrying this hiessage to the public.
Many individual manufacturers are
spending large sums of money advising the public of
the many uses for paint products,
Others are stressing
the value of color in the homes, offices and factories.
All these are a great help in our effort to make the
-
product is now consumed
the United States in
expanding to meet.
f
Agricultural income will more than likely decline to
some degree during the
year. The imposition of stringent
controls in reducing eoiton acreage will cause serious
adjustments
Phillips
products?
which the petroleum
GASOLINE.
This
has been quick to observe and is
<
S.
a
their
of
fact, everyone uses daily literally
of is
the country.
The larger income
demand which Southern industry
increased
Elliot
enough, aggressive enough to make the consum¬
of the United States conscious that paint products
and
of
raw
product which most consumers think
of
rest
the
to
existence, as well as the beauty of color and its effect
on their daily lives in their offices, factories and homes?
Can we convince them of the fact that psychologically
the unexpected population growth
which this nation has recently enjoyed, the future out¬
activities, and
the
of
direct, challenge
a
necessity in their daily lives, and that the pro¬
of their homes, furniture, automobiles, house¬
hold appliances and property is a "must" item in their
industry has helped to make, yet the
per
my
tection
Historically the Southern states have ranked low in
per capita income.
They still remain at the bottom of
the list, but there has been a considerable
lessening of
the
is a thing
opinion, this
years,
In
past.
period and the
war
postwar
share of the consumer's dollar?
our
are
dozens of things
between
definitely
very
successfully with other industries for
President, Standard Oil Company of California
trained technical persons are available to in¬
difference
sales
paint industry. Can we continue to
grow
as
an
industry and compete
ers
dustry.
the
during the
the
presents
PETERSEN
S.
T.
Recently Dun and
The utilities of the region are engaged in extensive
additions to their production plaxits and their distribu¬
tion facilities.
Research in the South is on the increase
more
' '
it
but
selling
in
in
of
smart
in the Southern states."
and
V
of
Palmer
lowing: "The cotton belt is gradually becoming a powerdriven industrial belt, for
regionally, the recent per¬
centage growth in manufacturing population was great¬
est
.:
divisions
de¬
a
of course,
that the seller's market, prev¬
few
last
too, to continue to grow with the community's develop¬
ment during the next century.
report which contained the fol¬
a
'■
alent
v
show
1949
This is,
decreases
to
all
industry,
means
company
a
more
laundry dryer gave us a
convenience for the
new
a
the
of 100 years of
should
area
be as great as in other
sections,
Southern industry is expanding.
not
for
To
in
this section
employed for some
well
The
plant
retail
sell, and
■
~
to
housewife.
few months
next
product
new
industry
be
time.
of
insurance
government
stimulate
building
refunds
of
cilities to meet the
of
12.2%.
in
on
record-break¬
a
industry figures for the first
seven
prices
distribution
at
ing figure of $1,169,582,867.
partly
The
j
represent
When the
additional fa¬
premiums
.
estimated
are
growing demand for gas. .The partial
easing of the house heating restrictions in 1949 gave us
more freedom to move in an important field.
;,The in¬
(
1948, according to the
year
90% of the actual volume.
operations in 1949, appears more op¬
timistic about future business and is
,
in the
report covering 680 manufacturing es¬
missing 10% is added, the estimated
a
$25 million building program, brings
our
PHILLIPS
tablishments, had a business of $1,052,624,451, the largest
for any year in the history of our industry. The reported
the previous year to
new merchandising record.
With an 8.49% in¬
crease over the same period in 1948, appliance sales had
reached $5,212,000 at the end of November.
Brooklyn
Union's centennial year, 1949, was indeed remarkable.
This record promises well for 1950.
With the expectation of the arrival of natural gas in
great possibility for increased gas service comes
closer to the community.
This, with the completion of
an
S.
President, Devoe & Raynolds Company, Inc.
a
1950,
/
in
5.56% in¬
6,669 active
already passed the total for
write
to
reason
no
a
increase
an
However, oil men have
handling such problems, and
expect that they will fail in the
in
all, petroleum is basic to our American way of
life, and as our economy and standard of living continue
to progress, we can anticipate further growth and pros¬
perity in our petroleum industry.
:
Within the territory served by Brooklyn Union, ac¬
ceptance of automatic gas appliances grew in degree and
in satisfaction.
At the end of 11 months, dollar sales
President, The First National Bank of Tuskaloosa
be
period
same
of $2,486,000 over the
income for the corresponding months of 1948.
$2,854,000,
was
In general the business prospects for
$1,878,000,
in 1948 and
increased
sales
is
petroleum.
as
experience
present instance.
months of 1949, Brooklyn Union rev¬
11
gas
long
there
construction and expansion.
For the first
such
resource
had
During the next five
years, manufactured and mixed gas companies will ex¬
pend $500 million and natural gas facilities $3 billion
on
GORDON D. PALMER
ural
1948.
over
expansion of present facilities.
steel industry and other segments of American business.
I am hopeful that the New Year will bring a sane and
sound solution of all such problems, and a solution which
all parties concerned.
increase of 2.5%
an
total of $943 million was spent for construc¬
facilities and expansion of present facilities
a
i
annual
Clean-Up-Paint-Up Week affords
ex-
an
eellent opportunity to convey this message through pub¬
licity in the local newspapers and radio stations.' Despite
the efforts of the National Paint, Varnish, & Lacquer
Association
Wallpaper
and, more recently," the'younger-Retail and
Distributors *of. America- organization, this
campaign has not been successful in too mafiy cities and
towns.
It has failed through lack of necessary organi¬
sational
work
successful
through
organize
in
at
the local level.
It has been highly
cities where dealers have worked
other
local 'civic groups and city ; departments
public sentiment.
The success has been
the amount of effort expended.
to
in
direct proportion to
I
say
to you, that in the new era to come, from
forward, there is
a
1950
direct challenge to the paint indus¬
try if it is to continue to get its share of the consumer's
dollar,
as
well as take care of the paint requirements of
What are we going to do about it? Devoe
the country.
&
Raynolds Company and all of its operating divisions
are
I
laying their plans now.
am
The balance of the industry,
confident, will do likewise.
....
.
Continued
on page
68
Volume
171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(303)
Continued from
paye 2
ed, in my opinion, by Chase Na¬
The
Security I Like Best
ALLAN J. HENRY
President, Allan
a.way
ERNEST
JELLINEK
tional, Wilmington Trust, Bankers
Partner, Jacquin, Bliss
Trust,
Insurance
Company4 of
&
.
North
in the face of taxes, unfore¬
America,
a
prosperous
and
and
seen
Security"
have
little
very
Securities
or
without
being too specific.
if
Of
tax-exempt
obligations
I
would prefer obligations of cities
with a population of 100,000 and
Allan J. Henry
with
equities,
up; bonds of the City of Wilming¬
such as taxa¬
ton and Philadelphia School Dis¬
tion, certainly would, or should,
trict, for example.
affect one's judgment in
naming
the ideal security—that is from
In the industrial equities I
pre¬
this dealer's standpoint.
fer Christiana Securities Common
Over a
and Diamond Alkali Common.
long period of activity in trading,
anything di¬
rectly
to
do
I
have
values
seen
classes
of
bonds
in
and
certain
stocks
melt
Among
the.
in
ment is not too
matter
metal.
under
discussion,
happen to
be
in
am
I
and
So,
stitute
for
gold.
abstrac¬
shares
boring those
are
ing costs
readers of this
article.
if
any,
group are the oil
reserves
out
com-
share
to
gold.
the
Of
can
be figured
barrel.
Oil
the
course,
is
earn¬
ings depend on the result of drill¬
ing operation, the selling price of
least,
on the importation with the
world's currency unstability. The
companies
owning
vast
lands,
prairies, and deserts of the West
and
Southwest containing
unlim¬
ited resources of minerals and oils
sub¬
the
producing
the oil, the competitive situation of
the
business
and
last, but not
to
mining
While
per
almost
black
my
tion
mind offer both
hedge
come
too high and profits,
small.
producing
panics ; they all own
large
stretches of land and their oil
suitable, but the min¬
are
too
Gold
are
present
a good and profitable
business in the production of
cop¬
lead,
zinc,
etc.
Another
Ernest Jellinek
a
the
metal
they have
I
looking around to find
at
Possibly
per,
the
precious
specific about the
must, therefore, deal
tions at the risk of
who
hoard
have begun this
article, with
statement that
my best judg¬
may
and
fairly
an
from royalties without
Continued
in-
infla¬
stable
on
in¬
run-
page
69
attractive
many
.stocks
common
I
as
the
run
gains
companies could be chosen as an
inflation hedge because
they all
have gold as a by-product
while
Wilmington, Del.
which
long
satisfactory, yields
capital
doubtful
time.
over a period of
competition, government in¬ company
years currencies
with
headquarters in
have been inflated in
terference, et al. I refer particu¬ Wilmington, Del.
every coun¬
try of the world. There is
larly to the Street Railway busi¬
The most successful
: In
only
accounts I one
writing this monograph on ness which, at one
cur¬
time, was in know of are
"The
those which are ac¬
Security I Like Best," I wish high favor with astute investors.
rency which
tive, in that they take profits as
to state at the
outset that it is Who will
would be redogmatically assert that the
impossible for me (even after 30 the
opportunity offers when a t a i n i n
great Electric Power industry
g
its
logical trade is in prospect. Frozen
years' experi¬
will not meet the same fate? An¬
p u r c h a sing
accounts, either rendered so
ence in investby power, the
other shining example of the same
design or carelessness or
ments of all
preju¬ one based on
character was the complete wreck¬
dice, are undesirable. Conserva¬
types)
to
do
the
free
exing of the real estate market by tive
investment trusts follow this
anything but
unsound financial
devices which
policy, the Harvard Endowment change of
generalize
on
were
countenanced
gold.
Such a
by some of Fund, for
such
a
broad
example — incidentally, curr
our
best-regarded trustees with one of the
ency
is
greatest of its type.
subject as
is
not existent at
disastrous results.
The railroads,
This, of course, is operated
embraced by
solely this
once
rated highly, also have had
moment.
for the benefit of
the title quoted
the University.
As a matter of
"rough sledding."
above. Mat¬
Most of the
foregoing is nothing fact, it is unWith this preamble in
mind, I new
ters of prime
to
the
majority
of
the lawful to
will attempt to describe the "Ideal
"Chronicle's" readers so I will end
imp o rtance
J. Henry &
Co.,
the
be
possible
very
There cannot be
any doubt that
seasoned
in
turn out to
New York City
and
ContinentalAmerican Life, the last-mentioned
being
vestment
Stanley,
67
the
Electric
Light and Power category, I look
with
New York Stock
Exchange
Weekly Firm Changes
The
New
John
will
H.
Libaire
Jan.
on
act
as
will
27.
be
Mr.
appeal
Wilson
of
to
the
late
Charles
will be considered
Hoffman will act
floor
con¬
and
NATIONAL BANK OF DETROIT
M.
on
as
mem¬
Also
I
R.
the
have
by rental
such as City
Homes,
rails,
Santa
Hoffman
Fe
which
Complete Banking and Trust Service
has
Atchison, Topeka
Common
The stocks of Banks
Trust
individual
Companies)
Companies
broker.
Ml <111 GAIN
secured
has
both
STATEMENT OF CONDITION, DECEMBER
31, 1949
speculative and investment appeal,
as has also Union
Pacific.
Jan. 26. Mr.
an
investors.
stocks
Suburban
Of
&
Herbert
to
in
DETROIT,
splendid record.
a
floor
understood.
Transfer of the Exchange
bership
dealt
values in real estate,
Libaire
individual
an
broker it is
Light,
Exchange
A
well-designed and ably-man¬
the following firm
aged Investment Trust always has
,
to
and
Central Arizona Light and Power,
and Delaware Power and
Light.
changes:
Transfer of the Exchange mem¬
bership of the late David W. Smith
sidered
Oklahoma Gas and
on
Electric, Florida Power
York Stock
has announced
favor
servative
.are
and
and
(including
regarded
well
are
'
vjt
V
Insurance
as
con¬
RESOURCES
represent¬
Cash
Hand and Due from Other
Banks
United Slates Government
Securities
on
.
S
.
......
CHICAGO TITLE AND TUI ST
111 IF
est
IF
ashington Street
•
96,615,367.83
Loans:
Loans and Discounts
Real Estate
$
.
Mortgages
COMPANY
202,916,074.88
50,330,754,60
253,246,829.48
Accrued Income and Other Resources
4,638,119.18
Branch Buildings and Leasehold
Improvements
Chicago
327,8 15,09!!.56
679,450,637.85
Other Securities
Customers' Liability
on
.
Acceptances and Letters
2,082,632.48
.
of Credit
1,721,121.36
$1,365,599,806.74
CONDENSED
As of
BALANCE
SHEET
1
December 31,1949
United
Other
Casli
.
Marketable Securities*
.
Accounts and Notes Receivable*
Mortgages, Real Estate and
Stocks of Associated Title
32,296,766.22
691,351.69
1,500,000.00
Common
3,674,172.06
$
15,000,000.00
35,000,000.00
10,448,143.89
Profits
60,448,143.89
f
$46,166,099.11
.1
,
.
.
States
Government Securities carried at $
109,149,530.13 in the foregoing state¬
pledged to secure public deposits,
including deposits of $15,606,199.12 of the
Treasurer-State of Michigan, and for other
purposes required by law.
are
$15,142,315.62
Indemnity against
Specific Title Guarantee
Payable
.
.
Risks
.
•
.
....
.
.1,881,124.39
360,000.00
.
Accounts Payable, Taxes and Accruals
1,191,409.12
.
Reserves
3,229,316.54
.
12,000,000.00
Surplus
8,000,000.00
Undivided Profits
Total Liabilities
amounts
DIKFjCTO ItS
HENRY
E.
ROBERT J.
PRENTISS
BODMAN
B. E. HUTCHINSON
BOWMAN
M.
ALVAN
BROWN-
BEN R. MARSH
WALTER SI
CHARLES T. FISIIER, JR.
W.
JOHN B. FORD, JR.
NATE S. SHAPERO
TltUST.
provided by
qualify the Company
cash balances.
to
statutes
of Illinois have been
do business and
to secure
MACAULEY
CHARLES T. FISHER
4,361,933.44
..
to
600,030.00
Stock
Undivided
United
Trust and Escrow Cash Balances
escrow
5,315,585.47
1,721,121.36
Surplus
LIABILITIES
pledged
*
.
.
ment
and
.
$1,365,599,806.74
.
Assets in the
.
Capital Funds:
*After Reserve Provisions
Capital Stock
47.329,381.98 $ 1,293,810,783.96
.
February 1, 1950
Acceptances and Letters of Credit
6,400,000.00
Total Assets
as
71,066,301.89
Deposits
Accrued Expenses and Other Liabilities
Dividend payable
713,578.48
.
Chicago Title and Trust Building Corporation
Deposits
$1,175,445,100.09
States Government
Public
Reserves
other Investments*
Companies
$ 3,710,352.55
854,050.17
....
Title Records and Indexes
Dividend
V 1111/1 T I E S
Deposits:
Commercial, Bank and Savings
ASSETS
Cash
I
This bu»k
acts
as
McLUCAS
DEAN ROBINSON-
R. PERRY
SHORTS
GEORGE A. STAPLES
DONALD F. VALLEY
JAMES B. WEBBER, JR.
R. R. WILLIAMS
C.
E.
BEN
DEPARTMENT
Trustee, Executor and Corporate Agent
trust
1
Member Federal
Deposit
Insurance Corporation
WILSON
E.
YOUNG
I
{ino\
€8
Continued
from
66
page
President, Equitable Life Assurance Society
for the American
thrifty in 1950" trend
now noticeable in Congress.
That the country can con¬
fidently look forward to a year of high business activity
Another year of postwar prosperity
,.
emphasized by the events of 1949.
minor recession in the
of last year has come and
is
proving that the nation's econ¬
omy
could take such setbacks in
stride without loss of confidence.
However, unwise taxation
could
as
brake
a
the country's
on
30—an
because
and
income
the
paying
with
region
go
new
economic valleys.
partly at least, any developing
Parkinson
I.
T.
during 1947
and
1948, a subcommittee of the
House Ways and Means Committee is planning to im¬
pose retroactiveitaxes for those years on the life insur¬
ance companies.
This is an exceedingly dangerous pro¬
without
forward with them as new
developed. These should provide the
job opportunities and tend to fill,
power sources are
ha3 enabled
to
an
the year ending Nov.
previous year.
The
go
may
reason,
same
taxes
'/»;■
■
v
ABNER
The
President,
!,'■
"K V
...
S.
National Bank
rations for
officially and-unofficially for the last 35
years and I know of no instance in which Congress has
ever imposed a retroactive tax.
It ought to be unconsti¬
tutional; it certainly is unreasonable and undesirable.
taxes
distribution to
have
their
closed
not
be
plain capital tax
a
ac-
.
the 80 mil¬
on
life insurance companies.
The present tax law, first adopted immediately after
World War I, was carefully fitted to the fundamental
requirements of life insurance soundness and solvency.
That meant no life insurance company had any taxable
income until there had been taken out of its gross in¬
lion policyholders of the
required amounts for accumulation against
eventual maturity of the face value of the policy.
The
reason
the life insurance companies have not paid in¬
the
come
and '48 is not the law but the
simply haven't had taxable in¬
come!
The reason they had no taxable income in 1947
and 1948 is because of the low yield on their invest¬
come
during
taxes
facts.
The
'47
companies
ments.
yield resulted from interest rates
deliberately reduced through the vast powers to control
credit exercised by the fiscal and monetary officials of
the Federal Government.
The Treasury has derived
benefit from those low interest rates.
They were de¬
The low investment
by
manipulated
liberately
the
Treasury
its
for
there
while
relatively low earnings sums for taxes which
due under the law is almost unbelievable.
Such action would
will continue throughout the year;
improvements
To go back now and take
policyholders.
than normal
more
1948 and have made their dividend
1947 and
from their
were
companies
insurance
life
The
counts for
it, a reduction in expenditures by corpo¬
capital improvements is to be expected, but
expenditures for housing and public
I view
As
with the details of our Federal
been familiar
I have
own
and
that
indications
are
should
People
Policyholders have for years borne
indirectly what they are reluctant to do directly.
Close to $50 million are involved in the proposed re¬
troactive tax on life insurance.
But far more significant
dr.: to
do
can
will be created. If a life insurance
be taxed now on the business results of
1947,
decades
government
The
chases.
gen¬
Abncr S. Pope
strides
will .con¬
Here
at the annual rate of $43
increased and the budget
If it
be assumed
can
barometer
£950
the
other
degree
a
may
of
*
All
industrial
and
the
in
PGE
activity
year-end
and
most
in
connected
set
FREDERIC A.
to
during
10%
in which
in
POTTS
other systems
the
Northwest
ber
customers
of
But
high
the rate
in
a
year
with
and
fairly clear that the
process
which
com¬
A.
PGE
system,
which-serves
the
populous portion and the industrial heart of Ore¬
gon, totaled
This
1.87 billion in the 12 months ended Nov. 30,
was
an
«
increase of
I '
1 [\{
approximately 19% over
.
v; '
-i.iil.t:
cen¬
Gwilym
A.
Price
For the immediate future
there are
encouraging signs, too. One of these is the smooth¬
ness with which
our economy switched from a postwar
boom to more normal business conditions—still at a level
some
During all of 1949, Westing-
greatly exceeding prewar.
companies—operated in a buy¬
since the end of the war.
Although this led to some declines in production from
the 1948 peaks, the downward trend was arrested at
mid-year and, in some cases, notably consumer lines,
production turned upward; in the closing months of the
year it was hardly equal to the demand.
Government reports indicate that the end of 1949
found most manufacturers with adequate stocks of goods
to meet the needs of their customers,
but generally
without the high inventories that proved to be a burden
at the beginning of the year. Granted a few assumptions,
I feel that we have a firmer foundation for our busi¬
ness structure now than we have had at any time since
the beginning of the war in 1941.
These assumptions
are that there will be no prolonged major strikes, and
manufacturing costs and prices generally do not rise
larger
number of
results for the new year
for the first time
much above
While
our
present levels.
population has increased about 15%
to
10%
double the 1935-39 average.
Is nearly
Our
own
experience at Westinghouse supports these
Even though there has been a
statistics.
is
cars,
1950 output is estimated at from
year.
On the basis of a
5,100,000
cars
during 1949 a cut of 10%
would
permit production in excess of that during the peak
years of 1929 and 1948.
Television is still rapidly ex¬
still
panding, but the quantity of other consumers'
goods may decline.
Although the trend in the
machinery, machine _tools.
durable
sales of
railroad equipment, etc.^ has.
three
was
in
to
the
best
prewar .years.
products have been
almost any other type of goods.
of
the firmer
areas
some
of business in 1949 was
the
that there will
$18,000,000,000 of new construction in 1950, apEstimates
construction industry.
be
such equipment still
dollar volume as it
Incidentally, prices for(
increased less than for
our production of
four times as large in
electrical
One
decline during
distribu¬
for electric generation and
1949 in new orders
tion apparatus,
below that of last
in the
this country still is doing well on a per
capita basis. For exajmple, the production of fuels, con¬
struction materials arid.consumers' durable goods, such
as ranges, refrigerators and automobiles,
is at least 50%
ahead of the 1935-39 average.
Semi-durable goods pro¬
duction is ahead abobt 35%.and capital goods production
past 10 years,
respect to last year, the overall de¬
mand for nondurable goods should
Potts
For passenger
volume of
the
the twentieth
tury, will have good reason to write:
"The last half was richer than the
be sustained.
Frederic
into
a
probable
good industries.
If their volume can
be held at a reasonable level, with
so
Kilowatthours distributed through
be
depend to a great extent on
happens in the capital goods,
construction and consumers' durable
6
Polhemus
a
The final
menced
H.
may
year.
what
num¬
early in 1949 has developed
definite and continuing trend.
last
will
seem
tapering-off
business
business failures.
inter¬
ago
a
gradually increasing in tempo
should
continue
during this year
served.
was
these
future,
long-term
2000, reviewing
been
Power
is not
in
output
therefore, should increase and with
likely
higher
labor
costs
the
maginal producer will find it in¬
creasingly difficult to operate profit¬
ably.
The corrections which have
in peak and
and
of increase
it
as
now
indications
year
carried
loads
industrial
It will be a period
the supply of most goods will have caught up
with
the
demand.
Competition,
by
posted
total
below that of
be found
to
operate
should
1950
which
commercial
figures
during the past
average
'!>
continue
President, The Philadelphia National Bank
Pool. In fact, new records have been
1949.
conditions at Norfolk
things considered,
satisfactory.
current signs of any
in general
break
sharp
the
ers' market
be one of transition from the Pacific North¬
boom to a more normal rate of
no
For
gains will serve as the springboard
to still greater progress.
I feel con¬
fident that
historians of the year
house—like many other
are
that electric utility statistics are
business conditions, the year
are
transportation,
important fields.
trade
progress.
most
already at a
hand, construction in this area continues in
comparable to that during and immediately
period. Those engaged in the retail
operating in a prosperous manner.
general
There
atomic
in
made
being
electronics,
and dozens of other
after the World War
west's abnormal postwar
James
shipping business,
the
Norfolk
at
has been further retarded by the coal strikes,
this affects adversely the ship repair yards.
On
and
scientists are con¬
first.''
Bankers
a
have
we
highest standard of liv¬
are
power,
low ebb,
5
President, Portland General Electric Company
PRICE
verting into actuality the technical
only a few years ago; great
inflation.
environment
POLHEMUS
today,
country
fore the war; our
ahead.
II.
A.
ing; industry is operating at a level
exceeding anything achieved be¬
billion. Taxes
should not be
probably will
not be balanced by reducing appropriations.
Promises
of pensions for the aged add a further incentive to
spending, so I conclude 1949 will not be the end of the
kind of prosperity we have
experienced for several
years.
As long as government deficits persist and sub¬
sidies are generous, the problem, in final analysis, is
tinue to spend
the automobile companies.
So can other
American business simply can't progress and
JAMES
this
In
the world's
ing themselves of the opportunities
offered in making instalment pur¬
retroactive
such
,
dreams of
if it must carry on under a constant threat of
taxation not only in 1950 but in the
prosper
1950
tive enterprise system.
can
so
industries.
of
far
is the precedent that
company
problems
from those of the past
into the second half of the twen¬
American business and industry are piling
impressive evidence of the superiority of our competi¬
erally have fair incomes, which they
are spending, and some are spending
their savings while others are avail¬
heavy burden of'
a
The
assets.
vastly different
be
As the world moves
reasons.
personal taxation. The present proposal to levy on their
savings in the hands of the insurance companies is an¬
other illustration of the willingness of certain politicians
earnings
its
not
tieth century,
abroad, have not
momentum.
With increasing competi¬
be lower.
going to be necessary to review more carefully
Deficit financing will enlarge the
President, Westinghouse Electric Corporation
up
their
upward influence and
weight of those exerting an
augment
generated by the war and
sustained
during a
reconstruction
lost
increasing wage
expected to exceed
supply of government securities, but it is doubtful if on
balance the banking system will be able appreciably to
1950.
and
as
borrowers' requests.
Forces
here
well
as
GWILYM
past year, it does not follow that
personal incomes and personal spend¬
ing will be greatly reduced, so there
may be a moderate decline but no
drastic change in business conditions
period,
financing,
The downward pressures are
year.
profits of many corporations will not
reach the unprecedented level of the
in
deficit
Federal
tion it is
posal for which there is no precedent.
income
competition is, consequently, expected.
Upward pressures will be felt as the result of the Na¬
tional Service Insurance dividend payments, continued
and discounts will
Norfolk
of
increased foreign
prices should be stable or declining.
Under these circumstances average outstanding loans
POPE
Seaboard Citizens
keener, which should likewise create pressure on prices.
The full effect of devaluation has not appeared and
the
■'
Competition will foe
creasing marketings of livestock.
costs.
■'
...
out of total con¬
of approximately $18.5 billion.
Commodity prices have continued to decline from
the 1948 peaks with basic raw materials some 12 to 16%
below those at the beginning of 1949.
The outlook for
this year is not clear.
Downward pressures on prices
will be exerted by large supplies of crops and by in¬
struction expenditures
ability to obtain firm power supply, as well as existing
industries which put a brake on expansion plans for
the
The latter, which includes
public work.
tems, may increase some $750,000,000
times the national average.
operations into
the Pacific Northwest but delayed doing so through in¬
it
companies
consumed
PGE
shifting from the industrial and commercial
highways, public schools, sewers and water supply sys¬
Industries which had planned to extend
the
law
tax
insurance
life
the
of 5,001 kilowatthours in
increase of 12% over the
of housing,
as public
well
In addition, there
expected to be higher.
are
some
classification to
public;
total is more than three
planning so necessary to keep busi¬
ness activity at a high level.
On the false basis that a loophole
in
by
served
customers
Residential
average
ex¬
hampers
dangerous
confusion
creates
will be
backlog of potential industrial
during the last two years due
supply.
stringency of power
to
pected prosperity.
The threat of re¬
troactive
taxation
on
business
is
especially
quantities
(3) the creation of a
expansion held in check
and
gone,
act
in
still remains in possession of the general
power
summer
as
work, is likely to continue at somewhere near its present
levels.
Costs will probably decline, but the physical
rapid mid-year recovery from a
kilowatthour sales early in 1.949;
(2) the continuing increase in electrical consumption by
residential customers, revealing a healthy purchasing
The expected
that the bottom may
classifica¬
appears
now
Total construction volume, consisting
industrial and commercial construction
(1)
dip
sharp
rather
downward, it
tions.
general'busi¬
rapidly falling trend line for
been
have
ness
people is threatened by a "tax the
'
be reached with respect to the first two
soon
which point to a sustained
Among favorable factors
rather than a
been
with a
1948.
increase recorded in
15%
'
" ;
"
Speaks After the Turn of the Year
corresponding period a year ago, compared
the
PARKINSON
I.
'
"
"""
•—
Business and Finance
THOMAS
Thursday, January 19, 1950
CHRONICLE
FINANCIAL
COMMERCIAL * &
THE
(304)
_
■
i
-
.
"';
now are
Co7itinued on page 70
Volume
171
Continued
Number 4873
THE
COMMERCIAL
from page 67
in
this
the
The
ning market risk of the oil busi¬
outlook
Texas Pacific Land Trust is the
seasoned
more
of
type.
of
ers
and
popular stock
Formed by hold¬
grant bonds of the Texas
that
Pacific
Railway
Company,
the
first
objective is to liquidate the
holdings end to retire the certifi¬
of
cates
proprietary
interest.
In
1948 the company
ing
1950
of
trend
and
plants
new
increase
cated
in
full
sales
this
lor
equipment.
and
is
indi¬
as
con¬
of
bondholders in
1888
3,450,642
was
These holdings were gradu¬
ally reduced
Dee.
31,
TXL
the
consisted
located
in
since and
ever
1948
1,845,787
different
29
lieving that
dend
by
retire the
to
used
arc
buying
the
in
stock
market;
the number of shares outstanding
as cf Dec. 31, 1948 was 2,559
orig¬
inal certificates of proprietary in¬
terest
(representing the equiva¬
lent of 255,000 sub shares) and 1,210,189 sub shares, therefore alto¬
gether 1,472,089 sub shares, as
quoted
the New York Stock Ex¬
on
change.
open
resents
Each share of stock rep¬
1^4 acres of rich grazing
pasture
or
market
which
to
oil land with
proven
value
of
$70
per
a
acre
compared very reasonably
prices
recently paid for oil
prospect acreage in the Leduc field
<of Canada, where prices up to $1,€00,000 were paid for lots of 100
to
150
Income
acres.
dends
depend
allowable
on
head
and
divi¬
and
royalties based
on
production;
over¬
non-existing,
expenses
except taxes.
Although dividends
are not comparable with other oil
companies, price appreciation is
tfye main objective for buying this
stock.
11
understandable
is
long-term
company
cumulate
a
point of view why a
U. S. Smelting &
like
shares
of
ploration
gle of
of
a
the
rarily
100,000 shares of Texas
Land
Trust
Louisiana
although
and
stockholder
directors
50,000
Land
from
&
Ex¬
the
an¬
such
may
be
action
tempo¬
unsatisfactory.
S. LOGAN
York
become a rather loose and vague
term when used in the investment
I
nevertheless
feel
the
that
basis
be
may
for
in
and has
since
formation.
be¬
soda
the
are
crackers
about
Biscuit's
12V2%
output,
further
marked
but
improve¬
gins
and
earnings in line with its
projected plant improvement pro¬
gram.
stock
of
United
Biscuit
Company is selling for only about
5.2 times estimated 1949
earnings
and
times
are
At
rolls
large,
transferred to the special
of the issue will be
amounted
pared with
Total
for
at
National
Biscuit
generally good and pay¬
such as at present,
are inclined to
purchase
higher priced goods, and
the
time
same
and
United
is
about
the
the
its
fancier,
viously mentioned,
two
$2,171,506.
were
the
of
to
yield
and,
being
rently
quoted
paying
a
extras
as
they are upon the level
ingredient costs. Of the many
ingredients used, the most impor¬
of
I
clusive,
the
six months' period amounted
$40,721,716, increasing the total
as of Dec.
31, 1949, to $567,012,730.
During the six months ended
Dec. 31, 1949, the Bank made loan
commitments of $94,045,000, in¬
creasing the total since the Bank
operations
to
$743,906,933,
after making allowance for the
cancellation by the Grand Duchy
Luxembourg
that
$238,017
Bank
was
a
New
33
it
of
be
received
office
25,
until
bonds,
will
payment
of
at
11
be
in
temporary
delivered
against
Feb. 17 at the Federal
on
Cowen Co.
Cowen
&
Admit
to
New
York
Co., 54 Pine Street,
City, members of the
New
York
Stock
1
Exchange,
last
cents
loan,
the
nership on Feb. 1.
On Jan. 27
George N. Cowen'will acquire the
to
Exchange membership of the late
to
this
agree
amount,
Isaac Siegel.
°h
e
J*
\
the
o'^e
<we
and
is
year)
possibilities for investment consid¬
to
and
lard,
wide
ranges
eration
Biscuit follows the
policy of
chasing most of its
on
a
raw
day-to-day basis
exception of flour.
it carries
up
stock,
Stock
as
dustry
times,
which
average
was
for
is
the
than
higher than
as
for
institutions.
$6,672,667 in last six
Everybody's saying it! "Meet
of
—where there's music
Loans
now
'The Dime'"
me at
by Muzak,
cool, delight¬
a
To
$100 million serial bonds
fully comfortable air conditioning system,
redemption
fully decorated lounge for the ladies, and
in
the
Credit losses
1949.
exceed half billion dollars.
issue
11
industry, which
about 8V2 times.
investment
Earned
importance.
better
■
be considered
can
well
t IWSt '*>
.Hi
months
.1948, United Biscuit turned its
over
as
York
Worid Bank Reports
Gain in Nei Income
the
At crop time,
lesser
Exchange,
The
New
pur¬
with
to 120-day flour in¬
of
the
materials
Labor costs in this in¬
are
present time.
on
conservative
individuals
ventory, and at other times a 60day inventory. Thus any decline
in
commodity prices could
be
In
a
the
at
listed
operation.
The International Bank for Re¬
construction
reports
a
net
and
Development
income for the six
quietly luxurious atmosphere for
Cent!
C
☆-
a taste¬
a
everyone.
ally located in the heart of Brooklyn's
downtown
© Free
SPECIALISTS
IN
shopping
area,
out
Open Monday through Friday from 9:00 A.M.
to
United States Government
as
©
are
\
open)
until 7:00 P.M.
at¬
Securities.:
Open
biscuit
its
"
3:00 P.M.
Open Thursday (the night the stores
of
most
parking for patrons.
—
©
☆
stabil¬
—the
State and
grown
substantially since the war, which
rising per capita consump¬
reflects
Municipal Bonds
these products,
relatively
income and gains
The industry now
/
your account—
INt*REST
^
from $5.00 to $7,500
;
next
time
YOU "meet
at
'The Dime"'.
Of0fPOs/r
☆
is in the unusual position of pos¬
sessing good
istics as well
growth
as
character¬
being somewhat
C.J. DEVINE&CO.
depression-proof during periods of
a
declining
tivity.
general
business
SAVINGS
ac¬
As the third largest factor
in this
48 Wall
FULTON
favorably situated industry,
United
Biscuit has
shown
Chicago
better
•
Boston
Cleveland
than
average
years
and earnings and dividend
growth
in
the
company's
history.
•
•
Philadelphia
Cincinnati
•
•
Washington
St. Louis
•
•
The
.
OF
AND
BROOKLYN
DEKALB AVENUE
BRANCHES:
BENSONHURST—86th
STREET
and
19th
AVENUE
FLATBUSH —AVENUE J and CONEY ISLAND
AVENUE
Direct Wires to all Offices
☆-
BANK
STREET
Pittsburgh
San Francisco
recent
payments in 1949 were the highest
in
HAnover 2-2727
Street, New York 5
MEMBER
FEDERAL
will
admit William F. Neubert to part¬
$1 regular dividend plus
60
at
a.m.,
Reserve Bank of New York.
(cur¬
31
around
the
at
Bank
be opened at
It is expected that the
serial
form,
the
of
Street
and will
that time.
new
$10,000,000
1952, in¬
to
not
the
of
will
York
1953
would
requested
cancellation
from
Liberty
Jan.
Luxembourg of $238,017 from
its original loan contract.
The
Bank granted a loan of $12,000,000
to Luxembourg on Aug. 28, 1947.
As a result of a determination
by
ore
Reserve
somewhat
currently moving in favor
of the industry. The biggest
price
decline has occurred in lard, which
is now
selling at about 50% be¬
low its price of a year ago. United
stock
one
ity, has
in population.
annually
pre¬
believe
price, but the price trend of these
wheat
are
subject
business, pre¬
viously noted
consumer
during
on
which
in
tant
The cracker
of'
and which will mature
loans
on
to
of
redemption
Federal
Bids for the new serial bonds,
which will be dated Feb. 15,
1950,
amounted
$2,062,840.
Disbursements
began
the
Bank of New York.
ad¬
year
for
at
behind the market for
issues in its class and
consequently
appears to possess above average
tractive.
tion
fiscal
expenses
30
17
for
as
as
the stock of United Biscuit
sales
in¬
stands
high
Feb.
31
regular dividend may soon be in¬
creased. It would thus appear that
is
currently being
reflected in rising earnings for
this industry. Profit margins are
not so dependent on the
trend of
Company
for
Dec.
In the first half
preceding
ministrative
Dec.
on
expenses
about
same
competitors
this
for
common
Logan Stirling
$10,291,345.
administrative
used to retire
a
like amount of 2%%
10-year
bonds, due 1957, which were called
com¬
eight times for Sunshine Biscuits.
vestment,
and
as
for the six months ended
United Biscuit
the
reserve,
$12,268,685
recom¬
mend
time
to
compared with around 12 times
customers
are
effec¬
Oil June 16, the Bank
publicly
advertised for bids for a $100,000,000 issue of serial bonds. Proceeds
issues which I
would
became
69
preceding fiscal year. Gross
income,
exclusive
of
$2,709,416
need
The
of
selected
band
year
equipment is installed.
This
provides a basis for antici¬
pating
as
situation
of
ment in the company's profit mar¬
packaged cookies, but there is a
wide variety of items and they
cover a
broad price range. When
this
pounds
trend
in¬
saltines
this
accounted for
United
new
used
or
100
this ratio will steadily increase as
the
1948,
universally
Earlier
ovens
mately 75% and the tonnage sales
approximately 12.5%.
dustry
reduce
can
which cancellation
tive Dec. 19, 1949.
in the
of
is estimated
It
(30,7)
months ended Dec. 31, 1949, of
$6,672,667,
as
compared
with
$4,804,057 for the first six months
indus¬
installation
ovens
per
should
pounds, using the older reel-type
profit
major products of this
costs
oven.
five years ended Dec. 31,
company's dollar sales of its bis¬
cuit divisions increased
approxi¬
The
band
maintain
the
as
with
been
crackers to around $1.80 compared
with a cost of around $3 per 100
every year
During
and
gross profit
costs
further
ovens.
of
use
of
paid dividends
to
Operating
proceeds
labor
year.
its
1947
This has
helping
reduced
the
established
a
are
high
same
in
as
months.
huge band
liberal divi¬
United has operated at
inventory
City
Although the word "future" has
field,
be
more
a
policy
beneficial.
STIRLING
Manager, Investment Research
Dep't, Eastman, Dillon & Co.,
New
further
In view
items is
from
Refining decided rather to forego
declaration of dividends and ac¬
racific
to
seem
early this
All monies received from sales of
land
a
year.
look, together with the company's
financial position,
there
would
counties.
in
be
see
strong
of
acres
factor
a
encouraging earnings out¬
of
as
properties
of
the
result
cookies
the
relatively satisfactory
try
original
acres.
12-18
terial
prices, I would expect to
and
about
prices
margins.
gain in earnings this
brought in by the
last
goods prices generally lag
behind any reduction in raw ma¬
situation
a
1948, while wheat, lard and cocoa
declined sharply during the
sumer
this
as
have
An
and
for
wholesale
of
volume
year,
crackers
selling
ingredient
operation
bought and can¬
celled 39,000 shares and as of Nov.
10, 1949 an additional 42,000. The
acreage
Soda
quite
appears
primary
the
negligible
practically on
are
is
Selling prices of the company's
change rather slowly.
Profit margins are ex¬
pected to benefit from the declin¬
costs
business
business
CHRONICLE
products
favorable.
for
FINANCIAL
cash basis.
Security I Like Best
ness.
&
DEPOS
NSURANCE
1
CORPORA!
70
COMMERCIAL
THE
(306)
Continued
from
FINANCIAL
&
same
This, incidentally,
1949.
for
as
indicates the need for approximately $750,000,000 worth
of electrical builcing supplies and equipment, about onethird
which
of
be
will
depend
future.
near
example,
below rormal for this time of year,
are
to
1950
help coriect this situation.
'
_
„
television has turned in
The output of all
tele¬
vision receivers, as compared with 950,000 in 1948; and
185,000 in 1947. With improved programs, and increased
broadcasting facilities, television receiver production in
1950 may well exceed 3,500,000 sets.
All of these things are encouraging signs' that point
toward a high level of business and industrial activity.
I should like to emphasize, however, that business still
is faced with a number of perplexing problems.
One
of the most serious is the possibility of further steep
increases in the cost of manufacturing the things we
the
the
all
most
goods,
consumer
performance.
spectacular
manufacturers in 1949 has been well over 2,000,000
high standard of living. This higher
cost, of course, would mean higher prices and more in¬
flation.
It might be well to point out that prices have
been held down to their present levels, in many cases,
of new manufacturing techniques, in¬
of electrical production aids, and scientific
because
only
creased
use
offset higher costs for material
that served to
advances
take as much
82% of
as
individual's income are
an
taxation of dividends—they are
corporate income, then as individual in¬
So, also, is the double
first
taxed
come
of
a
as
stockholder.
"
-
1950
for
is reasonably good
in this
the
at
and
ago,
time,
present
business
is
one
thing that is
which themselves
has
com¬
,
things
this
in
alone the problem of the busi¬
not
are
They deserve the close attention of eevryone
Initiative and free enterprise have
nessman.
country.
Our future progress
preserving the incentive system that made
way of life a shining example for all the
paced our prosperity as a nation.
depends
upon
the American
world.
T.
R.
Preston
have
dom
into
put
•
the schools
supporting about 3,000 people, have aided
of their neighborhood, in addition to provid¬
are
facilities for their workers, and helping
many of these to own their homes.
This could not pos¬
sibly be done now under the present Federal Govern¬
ment tax burden.
r
One thing that is going to be,a continuous burden to
our people is what is known as the Marshall Plan, unless
this is greatly reduced or done away with entirely. Many
people think this plan may eventually impoverish this
country in order to give to foreign countries. *
It is imperative that the extravagance of our govern¬
ment cease, otherwise it is headed for bankruptcy and
hospital
ing
i
'{
,»
PRENTIS, JR.
new
of
variety
to
return
naturally
the
of
products
balanced
more
calls
for
Armstrong Cork Co. The
conditions, however,
market
more intensive effort
maintain the sales and
in order to
profit leyels
of 1949. With "It's time to sell" as its
principal theme, our organization is
placing even greater emphasis on
merchandising, production efficiency,
,1*
research
end
terials
now
place the fact that American
remain
Some
ing
or
shift
near
in
the
specific
1949
a
coverings
as
customers
Consumer
cates
sustained
to
of inventory balancing to service
has not yet been completed.
high
products and designs
demand for hard-surfaced
new
indi¬
floor
covering products for the year ahead.
The
company's numerous industrial products are linked
closely to level of Over-ail industrial activity, which is
expected to be well maintained, at least through the
important factor, in this
situation is the resutgence of business since settlement
of the steel dispute.
New and improved product de¬
velopment can be expected to play an increasingly im¬
portant role in this industrial field where customer
needs continually are changing. Users of glass containers
and bottle closures have expanded their orders in recent
early
months
of
1950.
One
months, following a period of inventory liquidation and
balancing.
This industry generally has achieved and
to be maintaining a volume of business substan¬
tially above the prewar level.
appears
political environment in which all
business enterprises must operate in 1950, individual
success seems likely to
depend to an increasing extent
With the uncertain
'*•
upon
ability to reduce costs while maintaining—and
possible improving—quality. Consumer pur¬
whenever
chasing
power
months
ahead.
may
Yet
be expected to remain high in the
the amount and extent of actual
to
a
economists
ditions, but there
of
and
return
a
to
are
indications
no
postwar
boom
levels.
During the past two
years
a
of
tern
industry-by-industry
pat¬
read¬
justment has been set which should
continue during 1950. Certain heavy
industries hit new peaks in 1949 and
will
probably decline to lower levels.
problem inherent in the chemical
industry — accurate evaluation of
divergent trends among the indus¬
A
tries
which
consume
its
products—
will become intensified in 1950.
1
In
sharp contrast to the many
shortages of the immediate postwar
periods, there is an adequate supply
of virtually every product in every
The
competitive'
at
the
start
William M. Rand
conditions
of
1949
materialized
probably
continue.
Competition,
healthy; it does not inspire pessimism.
engenders
will
and
however,
It
is
invariably
ideas and forces thinking into new chan¬
new
If unhampered by excessive taxes and
by crip¬
pling strikes, competition can spur business, not retard
it.
The chemical industry,
again, harder than before.
But
That
C
A.
Putnam
.
*son
that
most
our
American
business
and.
industry could take these set-backs
in stride, and make rapid readjustments, is perhaps the principal rea-
economy, naturally felt the impact of the business!
decline in 1949.
The operating results of the past year
have demonstrated the practical value- of diversification
,
and
businessmen
feel
confident that
our
product development.
Competitive conditions
years should speed up the introduction
new
during
coming
of new,
improved and cheaper chemical products.
Although declines
33%,
or
nearly twice
as
1949, over-all business
ing the Summer months, followed by a recovery-in1 the
The American economy, however, demonstrated
its vitality and resiliency during the adjustment period
Fail.
The
1949.
of
for
ahead should be a satisfactory
industry.
Efficiency has been
year
the, chemical
one
in¬
creased, and there still appears to be a strong consumer
demana for quality products at reasonable prices.
!
ROBERT RAE
President, Dominion Bank
For
Canada, the
year
1049 has been one of steady and
indeed, outstanding national progress and
sidered
a
..
clines of 1920-21 and 1937-38, the index was
in prospect for industries which
activity should remain at favorable levels through the
first half of 1950.- There may be a seasonal slump dur¬
eco¬
.
are
enjoyed sellers' markets during
nomic
activity will continue, in 1950, at a high level—
although probably not as high as the record years of
1947 and 1948, when the postwar expansion and replace¬
ment boom was at its height.
"
•
,
Considerably encouraging was the fact that the pro¬
duction index turned up 8% in the two months of August
<and September/ However, the decline in the first six
months, plus the effects of strikes in the fall, will put
the average monthly output for 1949 8% or 9% below the
corresponding figure for 1948.
It may be interesting to note that at the lowest part
.of the 1949 decline—prior to August—the Federal Re¬
serve
Index of production was down 17%.
In the de¬
serving almost all segments of
the
point where many,
although production did, of course,
suffer, the economy rebounded with
surprising vitality.
the first
satisfactorily
response
year
industries threatened to push us
down
strong stimulant to the demand
While some needed retail inventory
accomplished in floor coverings during
the past year, the task
the
coal
while
well.
was
strength.
inherent
and
fledged recession.
Then,; when we
were
ascending from that decline,
nation-wide strikes in the steel and
only for building materials but hard-surfaced flooj1
rebuilding
indus¬
remarkable
volume.
product use
uled for completion during
half of 1950 should be
not
of
record volume of new homes sched¬
H. W. Prentis, Jr.
Co.
wave of optimism. Sel¬
businessmen been so unani¬
in their appraisal of the business
outlook. Such
confidence appears justified if it is based on an
expected
return to normal competitive condi-
observers felt we were in for a full-
moderate
slackening
from present exceedingly high levels
occurs in private residential and in¬
dustrial construction. However, the
*
1949
to
and
pand,
shown, in
Production declined in the first half
be anticipated as public housinstitutional building ex¬
may
„
at
has
try
resilience
expected
Chemical
nels.
to be good, with
generally
II.
view of the economic outlook for 1950 is an
optimistic one, tempered somewhat by the realization
that such factors as large-scale strikes and government
actions discouraging to business cannot be foreseen.
On
the favorable
side, I would
own
programs.
appears
'
„
very
President, Markem Machine Company, Keene, N.
My
The outlook for most building ma¬
construction
PUTNAM
A.
President, National Association of Manufacturers,
holds considerable promise for the wide
year
have
anticipated
C.
President, Armstrong Cork Co.
prosperity the
a
year 1950 begins with a
field.
'
The
similar level of understanding with gov-
mous
it was
over
rectly they
The
.
$6W million, all earned except the $60,000.
is in additionlo cash dividends that have been paid
a
period of about 50 years. Their total earnings
been a little under $9 million.
Directly and indi¬
slightly
socialism.
H. W.
a
ernment—our nation will go forward to
like of which has never
yet been known.
President, Monsanto
surplus now in this company
$60,000.' The capital and
'
WILLIAM M. RAND
rapidly in textile industries up to a
few years ago. As an example---about
60 years ago a family in a small town
in this section decided to go into the
textile business.
All the capital they
^
These
and develop
;
abso¬
growing very
been
not immune from human factors.
mind, it is my conviction
that if we can achieve
understanding of our interlocking
interests, between our production employees and their
leaders on the one hand, and managers on the other—
living.
area
are
With these considerations in
essential to "make a people
prosperous and elevate the standards
This
in the
billion
equipment, also have a great impact
on the
economy. The decisions of the public and of busi¬
ness to buy, or to postpone buying, are the result
largely
of their psychological attitudes. These attitudes, in turn,
may
be greatly influenced by government actions—
v
lutely
of
Indus¬
yearly in capital
done a few
building up of
the
billion
•
pared to what could be
years
tremendous effect
a
Consumers, spending at a rate of about $178
annually, as they have, exert a mighty influence.
trial managers, with a spending power of billions
purchase of raw materials, and from $15 to $20
area.
taxation, what is it? Under such con¬
ditions it is difficult to build up a
business
dollars, inevitably will have
business activity.
upon
corporation is taxed on its earnings,
and the dividends it pays to the own¬
ers is also taxed.
If that is not double
operation of our Government.
The Federal income tax
structure should be completely revised—high taxes that
throttling the incentive to invest in American business.
Bank,
National
country In the world where double
taxation
exists.
As an example—a
over
may
of their
Hamilton
Board,
greatest handicap business has at the present time
is the enormously high, taxes prevailing in our Federal
Government. In addition to the high rate this is the one
urgent need for economies in the
an
up
challenge
The
This
Then too there is
a
Chattanooga, Tenn.
outlook
The
is
and labor.
'
.
need to support our
-V-
of cut-and-dried theoretical propositions and statis¬
tics; it is the sum of the activities of all of our people
going about the business of earning a living. Therefore,
the way people feel about their prospects of jobs, wages
and profits, and about the course of prices and tne vaiue
price-quality
I!,' PRESTON
T.
the
of
Chairman
a
to
Of
upon
.1.940. Here is
business management in the year ahead.
for
largely
sharp pickup in demand in recent months and
shortages of steel that resulted from the eight-week
steel
strike.
At
Westinghouse, our appliance output
will be increased about 15% during the first quarter of
due
directly
more
inducements than it has since
building units.
lines, prospects are encouraging for the
Inventories of electrical appliances, for
consumer
1950
After the Yarn- ©f tfee Year
residential, commercial
in
used
will
buying
and other small types of
In
Thursday, January 19,
68
-page
Business and Finance Speaks
proximately the
CHRONICLE
The
fitting
economy
end
is at
to
detail,
!
but
what
one
perhaps
can
inferences
certain
for
The Federal election
the
business, the company of which I am
President, is building a new plant near our present site
in Keene, N. H.
If I did not think we are going to con¬
tinue to "go to town," that new plant would not be under
anced
for
draw
from
year.
last year re-,
in power by a
which appears to
continuance
a
policies
fiscal
As for my own
con¬
party
majority,
large
assure
much.
1950
happened during the past
turned
down about
be
can
the first half of this century.
stage where it would
be folly to
attempt to forecast the future in any
a
term .'of
of
moderate
The
policy has been that of a bal-.
budget or surplus—which is.
sound—but
a
Canada
years.
probably
must.
'
spend considerably more tor defense
and
no
appreciable change in tax
construction.
'
My belief about the economy
Barring the unforeseeable—the
whole is similar.
possibility of serious
strikes, of higher taxation, of increased government con¬
trols or further assaults upon incentives to succeed and
expand—I think American business will go ahead in the
coming year.
As I
see
it, the true nature of
as
rates for
a
our economy
is not made
!
Robert;
Rae
1950 is expected.
increased debt.
Canadian
Provin-
healthy, but mu¬
a
heavy program
of improvements which will prob¬
ably result' iri higher fax rates and
cial finances are
nicipalities face
banking
...
is in
a
stronger position
than
at
r'ilr
Volume
171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(307)
71
Business and Finance Speaks After the Turn of
the Year
any time in its history.
At 31st October, last, deposits,
loans and total assets reached an all-time
high. Deposits
of
business
million
and
while
individuals in
commercial
sound position and
finance
Canada
loans
that leaves
one
exceeded
$7,000
million—a
$2,212
were
RICHARD S.
Aluminum
plenty of latitude to
was
used more
ued
Europe, while
is
first
the
corresponding
stances
10
months
made
of
trade.
down
were
in
1948,
possible
this
abroad, 1950 will be
seas
1949
period
and
a
but
only 2%
for
in
high"
activity there
have thereby been
1949, trade in Canada
was
a
banner
failures mostly
num
concerns
sales.
out,
and
increased
Undoubtedly,
but
consumer
business
momentum
should
in
inexperienced
credit helped many
has
present levels for several months at least.
side,
have the
we
momentous
at
in
oil
fields of the west
and in the iron ore
deposits of Ontario,
Quebec and Labrador and encouragement for
gold and
base metal mining through devaluation of the
Canadian
dollar;
in
addition,
expenditures
will
level and much
of which
is
governmental
probably
and
continue
private
at
capital
a
being stimulated by government
In
constant
fairly high
housing is still needed, construction
new
its
reasonably
satisfactory
a
sharp
was
due in a large
effect on the capital
to
the
industry
occasioned
of
by
the
the
During
been
recent
the
use
that
billings
will
benefits, and
costs
and
average of the past two years.
The
financing.
and
El Salvador Bond Exch.
due
make
to
forecast
The
1-1-'51
to
so
Republic of El Salvador is
notifying holders of certain of
its
bonds, certificates of deferred in¬
terest
and
convertible
certificates
that the time for exchange of the
bonds
and convertible certificates
and for the payment of the certifi¬
cates of deferred int. has been
tended
from
1, 1951.
of
Jan.
1,
certificates
(scrip
of
deferred
certificates)
In
1949, Worthington has continued
collaborate
with
several
sponsored laboratory
university
with its
own
to
A
with respect to bonds
and
convertible
3%
external
of series
certificates
sinking fund
bonds, due Jan. 1, 1976.
tional
City
Bank
programs
research and
on
it is announced, are
holders of Customs first lien 8%
corporate
agency
1853
^
"
.
•
t
C;
for
of fa
dollar
York,
department,
Statement
is
■
*«..■
*
•.
■
ffnrk
of Condition, December 31,
1949
the New York
agent of the fiscal
ASSETS
agent, Banco Central
de
de
Reserva
Cash and Due from Banks
El Salvador.
.
,
.
M
#
M
$ 37,754,114.62
V.
Loans and Discounts
51,924,606.16
United States Government
STATEMENT
OF
Sta,te and Municipal Obligations
THE
Other Bonds
HAMILTON NATIONAL BANK
Real Estate
AS OF
and
3,147,767.51
Discounts
Buildings
(seven
offices)
Estate
(Includes
.
.
.
.
,
.
*
.
Surplus Fund
Undivided
property
Total
1.00
acquired
1,400.000.00
$ 4,000,000.00
.
.
,
t
.
,
»
;•
Profits.
24,000,000.00
.
.
.•
*.
1,983,441.85
.
Capital Funds
.
.
'55i
Reserved for
$132,443,934.35
Unearned
•
.
Surplus, Undivided Profits and Reserves
Discount
.
.
.
Total
to
.
MEMBER
'.
.
,
INSURANCE
$132,443,934.35
deposits
and
11,307.30
350,000.00
•
.
.
.
*
•
•
■
1,910.94
$163,135,672.55
for
$3,945,867.03 have been pledged to secure
public
other purposes as required or permitted
by law.
at
CORPORATION
FEDERAL RESERVE SYSTEM
.
•
.
Securities carried
DEPOSIT
1,214,418.45
«
124,835,719.07
—
.'.
.
Total
$4,742,340.69)__
FEDERAL
1,883,223.56
22,407.52
Liabilities..
MEMBER
129,691,370.45
•
.
Payable January 3, 1950
Other Liabilities
5,585,807.76
Letters of Credit
Deposits (Including Reciprocal Bank
Deposits
Amounting
Dividend
$2,000,000.00
'
Taxes, Interest and Expenses
LIABILITIES:
Stock
*
m
General Reserve
22,407.52
225,814.39
account
$ 29,983,441.85
*
Deposits
10,913.50
Resources
Contingent Liabilities
$163,135,672.55
for
:
Customers Guarantee Account
Letters of Credit
Assets
Capital
564,402.82
■»:
.
LIABILITIES
180,000.00
Other
Total
2,534,050.00
v.
840,000.00
331,515.07
Other Bonds and Securities.--,
Real
«
4,594,314.62
Capital Stock
2,096,743.19
offices)
future bank expansion)
6,076,724.71
0
m
29,045,272.05
Stock in Federal Reserve Bank
Other
.
$100,529,578.64
1,688.99
Bank
.
57,447,459.62
w.
Overdrafts
Furniture and Fixtures (seven
r.
53,476,995.88
State, Municipal and listed Securities.Loans
,
Total
__$43,904,815.25
Bonds
.
.
*
Mortgages
Banking House
RESOURCES:
States Government
.
Accrued Interest Receivable
DECEMBER 31, 1949
Cash in Vault and due from Banks
.
.
Stock of the Federal Reserve Bank
CHATTANOOGA, TENNESSEE
United
Obligations
Member
NEW
YORK
CLEARING
HOUSE
ASSOCIATION"
FEDERAL
RESERVE
SYSTEM
and,
test work
facilities in all plants of the
corporation. A
Continued
The Na¬
New
of
'
and
government-
llmtrii S>tatp0 ®ruat (fnnmamt
in¬
be¬
all fronts
on
cooperate
and
engineering research
addition, has carried forward
CHARTERED
issued
net
unlimited opportunities for
are
1,
ex¬
1950 to Jan.
Affected by the extension
this offer,
1957;
terest
it
with
the
accuracy
progressively carried forward
I believe that there
This is the result of the
steady
July 1, 1948; 7% sinking fund
gold bonds, series C, due July
on
engineering research, the development of products, and
improvement of sales techniques.
time
any
effect
sinking fund gold bonds, series A,
Offer Extended
at
related
their
the
acceptance of aluminum
stronger than
factors,
and
prices
selling
reasonable
any
Ramsey
fore been
in
war.
plans
the
How¬
income for the
coming year.
Scientific research has never
foil by millions of families is
industry enters 1950
since the end of the
economic
pension
as
extremely difficult
Hobart C.
products of every type.
action and
Impending
such
cooler
rural
consumer
has
approximate
social
rapidly increasing the
steel
an
ever,
of aluminum
and
there
weeks
appreciable improvement in
bookings and our forecast of
operations
for
1950
contemplates
low
a
uncertainties
coal
new
also
means
was
strikes.
electrification field, aluminum
principal material used to extend
the benefits of electricity to the farmer and his
family.
One of the major
selling campaigns of 1949 was the
introduction of Reynolds
Wrap, the household aluminum
foil, into millions of American homes. It is being used
daily for better and easier cooking, and to do countless
handy packaging jobs around the house. The wide and
near
the
goods
alumi¬
and
a
which
measure
cable has become the
On the credit
developments
fabricated
at
quarter when there
attracted many industries to
using it.
On the farm, aluminum is
adding
to the cash income. Aluminum roof¬
Reynolds, Jr.
months.
flattened
forward
us
be
can
with which
ease
were
decline
dairy barn and
poultry house because it reflects 95% of the sun's heat.
Farmers find cooler buildings mean a
greater produc¬
tion of milk,
eggs and
chickens during the summer
and
Canada
carry
1949
fourth
ing
R. S.
good in all lines—in fact,
but we saw increased business
year,
The
maintenance requirements have
The recent
was
in under-capitalized
in
the
savings
transportation ex¬
handling" and
pense.
'
it
finding
aluminum helps them
of
use
level until
are
during recent
devaluation of the Canadian dollar in
terms of the U. S.
dollar should help to ameliorate our
unfavorable U. S.
dollar trade balance.
In
manufacturers
net income for the
year
approximate the totals for 1948.
Bookings of
orders
years, the lightness of aluminum has
enabled industry to realize
over¬
An encouraging feature has been the
mainte¬
and our U. S. dollar and
gold reserves
helped to remain at approximately $1 billion.
that
RAMSEY
billings to customers and
will
new
As
of exports to the United States at
unusually
in spite of the reduced
business
nance
levels
Our
1949
to cut the net cost of their
products.
a
result of the rapid increase in
labor and freight costs
from
ch'cum-
our
firmly
more
major reason for the contin¬
high volume of aluminum sales
that the
developments
year
HOBART C.
The
most
special
with
difficult
very
the
by the
President, Worthirogton Pump & Machinery Corporation
established.
part
Exports from Canada for
obtained in the United States.
the
for
are
creasing recognition of the metal's advantages
manufacturer and the consumer alike.
widely by American indus¬
metals will become even
Foreign trade is unusually important to
Canada, com¬
plicated by the fact that our agricultural exports tradi¬
tionally move largely to the British Commonwealth and
import needs
development of aluminum postwar markets, and the in¬
try and the consumer during 1949 than ever before. The
prospect for 1950 is that many new applications of alum¬
inum will develop and that its
position among the major
the
commercial business of the
country.
The
capital market has been buoyant and .should continue so
with little change in interest
rates considered
likely^
our
REYNOLDS, JR.
President, Reynolds Metals Company
FEDERAL
DEPOSIT
INSURANCE
CORPORATION
page
72
72
Continued jrom page
71
Speaks After the Turn of the Year
Business and Finance
emanating from such activities,
the marketing stage in 1949, are the
part of financing the United States Government, through
our
investment in government securities, bankers are
few of the developments
reached
which
Air
En¬
gine Gas Compressor for gas pipeline service; a com¬
pletely modern and comprehensive line of Vertical
Turbine Pumps for agricultural and industrial use; and
a cold
process slurry type precipitating water softener
and Automatic Thermal
Dual-Fuel Engines; a new Uniflo Gas
Plunger Pump
Dual-Fuel
Control for
at a mod¬
decline the latter
a
in export
Spain, and believe that, while
continuing demand for
should be a
markets during 1950, the
there
Worthington products
competitive situation
particularly until material and
labor costs in Europe have been adjusted upwards to
compensate for recent currency devaluations.
On the
other hand, the factors which may reduce the demand
for the export of domestic products should tend to in¬
crease the volume for the foreign affilates of American
will
much stronger,
be
companies.
whole.
ing the past year many
President, Huyler's
The business of
foreign countries have used this
their unfavorable trade position.
From all indications the countries which devalued
their currencies for this reason have not accomplished
already experiencing a recurrence
problem leading up to their devalua¬
operations of the
the
After
war,
rant business, and
both the restau¬
the candy business
the return to more normal
competitive
conditions
somewhat
sooner than many other businesses.
As a result, candy of the type widely
sold under war conditions became a
common inventory
problem in the
began
dollar is the strongest man-made
power in the world.
It is sought after in every market
place and as a nation and as individuals we are duty
bound to defend its strength and world leadership.
With such problems as these some may be discouraged
Today the American
of maintaining our free enterprise
personally, I am confident, because of
faith in the future of America, that we will
these problems through adherence to the phil¬
our Federal Constitution.
their
great
overcome
osophy of
One reason for this was
public evidenced a strong
demand for a return to goods of pre¬
industry.
purpose
system although,
my
combination restaurant-confectionery
type.
tion.
Board, Citizens National Trust
Huyler's falls into two principal cate¬
gories—the manufacture and sale of candy and related
confections and the operation of a chain of 24 retail
their purpose and are
of the troublesome
T. RINEAR
ROBERT
method to eliminate
Savings Bank of Los Angeles
this respect,
particularly in eastern Montana and the western Dakotas.
If we should have poor crops throughout the
district in 1950, earnings of many businesses and banks
an
the Ninth Federal Reserve District would suffer.
Barring this contingency, we expect to enjoy moderately
good results for business and banking in this territory
an line with that which we expect for the country as a
level one can conceive
a Federal debt sometime in the future out of proportion
to our national wealth and our national income.
Another important aspect of present day banking is
the regrettable rumor of further dollar devaluation. Dur¬
SAMUEL K. RINDGE
&
tolerate
weather conditions for
Last year was more spotted in
dollar at its present
With the
from
Chairman of the
sizable deficit, adding materially to
a
have had especially favorable
the farmer.
figures?
red
from a tour of the
the end of the
1950, our Government
How many more years can we
the Federal debt.
supply.
corporation's
European operations, I can confirm recent statements
concerning greatly improved economies in most of the
iECA countries and
with
will operate
from European sources of
Having just returned
period of readjustment.
Preliminary estimates indicate that at
Government's fiscal year, June 30,
part of the year due to dollar shortages and the devalua¬
tion of foreign currency as well as the increased avail¬
ability of products
concerned over the effect of debt
economic structure particularly in
management on our
and industrial water treating.
Worthington's export business contihued
in 1949 with some
we
becoming increasingly
for municipal
erately high level
Thursday, January 19,: 1950
FINANCIAL CHRONICLE
COMMERCIAL &
THE
(308)
the
that
war
quality and sizes.
industry reached an
The candy
all
in 1948 of a billion dol¬
lars at wholesale prices. While this
level was not maintained in 1949, the
time peak
banking business today is faced
The
competition
Government
is not
with continuing
the Federal
competition
the laws and regulations under which
from the many agencies of
which make loans, and this
based on
banks
much
operate but
basis.
is
based on a
loaning
These
looser
agencies of the Federal Government
make loans on terms which cannot
be considered by the
are
banks, for they.;
not bound by any need to earn a
stockholders, nor
with
the possi¬
bility of adverse comment by a bank
examiner; and finally Congress is
willing to give them practically all
they ask for in the way of additional
profit
are
for
they
their
faced
funds.
deficit,
which
the
or
government
jshape financially today than they have been
time.
Consequently it does not seem as if the
for some
demands
for business loans will be large, except from the socalled war babies—those concerns which were started
during or immediately after the war, and which are
Minneapolis
business, not
than anticipated last spring.
Many fields, baking included, have enjoyed as good or
better profits than in 1948.
To appraise the outlook for indus¬
try and banking for the year 1950, it
is necessary to consider both infla¬
tionary
and
deflationary
factors
which may be anticipated.
Of the
inflationary, notable are the $2.8 bil¬
good as 1948 but better
lion of cash insurance
refunds to be
to veterans, the prospect
continuing high level of con¬
struction activity, the Treasury and
paid
soon
a
Federal Reserve easy money
policies
expected to continue
considerable inflation takes
which may be
unless
hold, and the trend of the Federal
Government to spend in excess of
its income. Among the more impor¬
tant of the deflationary influences
to be
J. F. Ringland
undercapitalized.
It
appears
that
pletion of war plans for plant and
equipment, the likelihood of a further drop in our ex¬
port balance of trade, and the prospect of continuing
decline in prices of agricultural products.
However,
these conflicting influences appear sufficiently in bal¬
ance that business in 1950 generally should be as good as
around the same
in
in general deposits will continue
levels as at present, provided that the
condition of the nation remains unchanged!
However, if
*
t
Congress should increase taxes, .or if the
should do anything which would impair
©f the business community or the people
Administration
the confidence
in general, it is
doubtful if conditions will remain as they are.
Therefore it appears that the outlook for the
banking
that of the nation in general;
for the banks do not make or create the condition of the
nation, but on the contrary they perforce reflect -thecondition of the nation.
The outlook for any given bank
will depend on the ability of its management to secure
the greatest possible amount of sound loans, on its ability
to keep its costs under control, and oh its ability to hold
and increase its deposits.
/ ,
,
,
..
,
business
is the same as
f
first part of the
second part.
With this general outlook,'it would seem that banking
could expect a year in 1950 that will average about as
well as in 1949. Bank deposits for the year 1950 should
continue in line with 1949 levels, with a tendency to
rise. Part of the deficit of the Federal Government will
probably be financed by the banks, resulting in some
expansion of bank deposits. Similarly, the banks may
add to deposits through purchase of substantial blocks
of state and municipal bonds. Little if any increase in
deposits may be expected from an increase in loans,
1949—possibly it will be better in the
year
and not as satisfactory in the
Unless there should
President, Chicago City Bank
and Trust Company
beginning of 1950 we enter upon the second
half of the Twentieth Century which will undoubtedly
the first half of this century.,
prove as unpredictable as
With employment at its
present level, ample bank
government spend¬
ing at record high, the expectation
is warranted that the general busi¬
ness activity in the nation will con¬
tinue at reasonably high levels for
credit, and with
time to come.
With the .year
next six months the
of our Government
will play an important part in main¬
taining this present posi+^n.
T^e
pendulum could swing swiftly to one
side or the other because of the fis¬
cal policies of the government and
During
fiscal
its
the
agencies.
Because
the
new
in
.
E.
year
outlook for business and
District, when discussing
banking, we must always
farm crops.
Agricul¬
products are such an important part of our
business that unusually good or bad crops upset calcu¬
lations for business in this area. For a number of years
ture and its
in regard to fiscal
In the
1949 and
from the
i
ROBERTS
A.
Mutual Life Insurance Company
President, The Fidelity
light of the forebodings with which we entered
the way we seem to have straightened away
the year, it
uniformly optimistic pre¬
uncertainties of the early part of
to accept the almost
is easy
half of 1950.
policies being
followed are not pleasing to all in
our business the fact is that they are
dictions for the first
While the monetary
pretty
and
to
we
live
well known and understood
give evidence of being able
under them.
The rules of the
market place are
We will see
rather than less, of controls if
tends markedly toward
changed under controls.
more,
economy
inflation
managers
of
or
our
deflation.
The
government
are
than
inflation.
Unquestioned evidence is
the present unbalanced budget.
It is not enough to say that if the
concerned about deflation
more
E. A.
Roberts
purchasing power of the dollar fur¬
ther declines people will need more
reserve
have in mind what may happen to
integral
cisions.
year
In the Ninth Federal Reserve
banking has become such an
namely; Federal policy
labor and agricultural matters, are controlled by
politics. In this circumstance, normal business consider¬
ations are necessarily of secondary value in taking de¬
tax,
either
these rates appear likely to hold
and if business continues good for the next few months,
current rates may readily obtain throughout the year.
An improvement in business might strengthen the rate
structure slightly. A decline might weaken it, but such
a decline if substantial could be accompanied by further
the
business of commer¬
cial and savings
the situation,
constant,
eral Government.
Frank C. Rathje
exceedingly difficult to reach any satisfactory conclusion
as to what may be expected in regard to general busi¬
ness
because the most important domestic factors in
level if rates of
ning of-the
1950 may be ex¬
activity in our field in
pected to correspond quite closely with developments in
business generally. We regard the prospects for the first
six months of this year quite favorably but we find it
earnings around the 1949
interest continue steady. At the begin¬
for bank earnings not greatly different
from that of 1949 provided, of course, there are no in¬
creases in corporate income taxes and no new important
inroads on the business of private banking by the Fed¬
decisions
substantial decrease in total
our
expect a
the past year.
marked price adjustments nor any
dollar volume in either the
candy business or the restaurant business, but we^ do
expect some further decrease in profit margins due to
rising labor costs and selling expense.
In the case of Huyler's our candy division and our
restaurant division will be actively engaged this year in
stimulating sales effort, still further improving quality
and service and controling costs.
anticipate any further
should stabilize net operating
requirements for Member Banks,
and the resulting larger earning assets could offset a
decline in earnings from softening rates.
So we may
a very
general economy of the country will be intensified
It is also to be anticipated that competition
within the industry will become sharper.
We do not
operalion of banks should not rise as rapidly
in recent years so that a modest increase in
bonds, with loans holding fairly
case
were
this year.
consumer
investment in
reduction
delicate
balance between inflation and defla¬
tion which has been in effect for
also
of 1950 there is
as
standard
the
'
Costs of
in 1950
and a very satisfactory
definitely lower during the year. We expect that the
drive of the industry to hold and improve its position in
business.
by
in
anticipated
Rinear
quality was achieved and maintained in the
of the front-rank manufacturers.
Profit margins
of substantial inventory
wave
loans.
With the
some
a
T.
of
Increase in loans may be
credit, real estate mortgages,
loans, offset possibly by a decline in business
accumulation
and CCC
FRANK C. RATHJE
be
were
dated during the year
The level of
expected are the nearing com¬
Robert
of the mandy
substantially liqui¬
problems
inventory
industry
1949 has been a good year for
The year
as
of
infaltionary, basis
is oper¬
ating is also a matter of serious con¬
cern
to the banking business, be¬
cause it imposes a presently remote,
Samuel K. Rindge
yet ever approaching threat to the
financial stability of the nation.
The industries of the nation, in general, are in better
The
on
J. F. RINGLAND
Northwestern National Bank of
President,
life
insurance
dollars.
Some
may
not be able to get
more.
But
fairness
and
simple honesty should cause us
to
have paid for their insurance
in
remember that people
various sized dollars.
Insurance with this Company ma¬
turing this year as death
claims average in excess of
20
takes us back through the
great depression. Although the national income is now
almost three times as great as then, our people are dedi¬
years' duration. Twenty years
cating about the same
percentage to insurance. To
bo
Volume 171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(309)
73.
Business cmd Finance Speaks Alter the Turn of the Year
they
sure,
are
absolute
more
dollars, for
far greater
a
V.
aggregate of coverage.
Then
II.
again, under the settlement options available, a
in the currently prevail¬
may elect to leave proceeds on the
To
need for
er
more
enter
we
the
of sales
area
of
man
wool
nylon
if he
fields
such
transport.
of
or
upon
cotton
coal
A country of
railroads,
or
in
one
rayon
flected
or
trucks
150 million will need
more
In
the
of
area
for
we
in
in
money
low interest rates
only
can
we
mean
have
evidence
will
finally
emerge
panded
Continued
power,
and
see
only
a
the time
adverse
a
alone
within
collapse of
limits
the
our
national
creation
of
all
of
kinds
market for
I
have
which
immediate
an
will
the
at
estate, and because tax rates
high indefinitely, I think the
remain
never
seen
not
all
the
dollars
Payment to Holders of
Bonds of Chile
The
Caja de Amortizacion of
Republic of Chile announced
provided
for it.
some
past
a
the
year,
loans, which
the
to
to which
have
we
'
the
contribution to
our
Arthur
serious situation in
particularly
as
At
the
manufacturing level
considerably lower inventories like¬
Accordingly manufacbeen
buying
sizable
quantities of raw materials during
wise prevail.
turers
have
as to operate their plants more
With these industry factors accompanied by the
tone of our overall economy, it is reasonable
anticipate that 1950 will show improvement over its
predecessor.
to
Over-optimism should not prevail, however.
The in¬
dustry is faced with rising costs and intense competition.
The latter will tend to keep prices relatively stable.
manufacturer will not
the result
bonds
which
assented
to
have
the
1948
Readjustment Plan, of $11,259
$1,000
bonds
payable
for
the
beginning
Bondholders
who
Feb.
have
1,
per
1949
year
period
same
bonds.
of
The
$20
creases
undeterminable increased labor costs resulting from new
legislation.
Thus what should be a good year will*
State
our
ously enacted law for
even
seen
a
fit to
more
repeal the previ¬
reasonable
in
freight costs,
following
amounts of bonds
and
$1,000
principal
amortized
were
retired
of
sum
Law
during 1949 with the
$2,531,000 assigned under
No.
8962
£296,900
Swiss
Limited, has become associated
with the firm's sales department.
for
amortizations
outstanding
1949,
amortization.
$6,138,000) and
8,955,000.
After
the
of
as
external
Dec.
31,
S.
$119,547,000)
£22,426,482
(U.
and
Swiss
francs
97,722,100.
The
was
$11,259
who
per
did
payment
one.
"
»
at
the
office
Company,
Broadway,
Springfield Ave. and High St.
South
"
*
assent
to
the
1948
of
Trust
New
Schroder
Trust
Department, 57
York
15, New
a
of
S.
of
in
Yantis
bond
La
Salle
department and
Charles
*
; -
To
VAULTS
as¬
LOANS FOR BUSINESS PURPOSES
PERSONAL LOANS
MORTGAGE AND F.H.A. LOANS
Chicago office, 135 South La Salle
AUTOMOBILES AND APPLIANCES FINANCED
Street. Mr. Doherty was
formerly
with
Continental
Cas¬
Mr.
was
L y n c
h,
Pierce,
his
own
ipal
White
&
Member of
previously with Mer¬
headed
DEPOSIT
BOND DEPARTMENT
George L. White have become
New York City, dealers in munic¬
John
SERVICE
sociated with Bache & Co. in their
Price
that
BANKING
*
Chicago Staff
&
announce
'
CHECKING AND SAVINGS ACCOUNTS
Bache Adds Three
Hicks
bonds,
EVERY
SAFE
Fenner
Beane, and Mr. White
Co., 50 Broadway,
,
P.
Winters
has
become
associated
with the firm in that division.
Grosby
Mayer to Staff
Schwamm &
.
Vice-President
Co., Inc., 135
Street, members
the Midwest Stock
Exchange,
charge of the firm's municipal
South
rill
John
Hawthorne Ave. and Clinton Place
NEWARK, N.J.'
ualty Co. and Shields & Co.
Schwamm Co, Adds
on
Lyons Ave. and Bergen St.
Orange Ave. and Bergen St.
&
F.
associated
York.
costs,
r
CHICAGO, ILL.—J. G. Sheldon
CHICAGO, ILL.—Augustine J.
$1,000 bond to holders, Doherty, Herbert L. Grosby and
not
material
Continued
•*
of
readjustment plan will be payable
raw
WEST SIDE TRUST CO.
S.
francs
these
debt
(U.
in
formerly sub-manager of
has been elected
Co.
The
his in¬
of
1950.
per
pass on
the New York
agency of the Bank
of
London
&
South
America,
assented
to the 1948 debt readjustment
plan
lhave
received
interest
for
the
readily be able to
not the voters of
Of F. S. Yantis & Co.;
Winters Joins Dept.
dollar
After a year
buying, the conhave to take a more
of reduced
may now
healthier
for
the
liberality of our provisions for the needy, and
which situation would have been much more serious had
If
ternal
been
pre¬
the past few months so
local
our
condition
robe.
Reb, Jr.
actively.
justi¬
mecca
healthier
acdve Part in replenishing his ward-
Aft
BBBA-IjBlBBB
in the past,
economy
-X Hfel
mention
cannot
one
become
more
or
are
numerous
far
a
sumer
predicated
mortgaging of future earning
too
JR.
ditions at retail level.
VI
substantial
Sheldon Named V.-
snot
good as another.
the industry than at this*
time a year ago.
The limited num¬
ber
of sales
at bargain
prices of
men's furnishings that are currently
in progress reflect the healthier con-
retail sales. There is every
economy,
Jan. 16 the payment of interest
under Law No. 5580, on the ex¬
on
as
throughout the country.
Manufacturing
plants generally operated well below
capacity
output.
Profits
suffered1
accordingly.
With this behind us, we enter 1950<
with
aged, by invitation it is true, appreciating that we
an obligation to those
resident^ who have made
least
is
one guess
ex¬
but which presents a
very
well as our State
is the only answer.
Mayer,
stores
con¬
evidences
as
family that lost its breadwinner
a
use
the dollar is smaller—more of them
the
substitute for
no
product is unlimited.
our
could
of
change
vailing in
do have
know
not
The past year was a year of readjustment in the Men5^
Furnishings Industry.
Inventories were reduced
andi
liquidated all along the line.
Sales were conducted_ in
of
substantially
unfavorable reflection
expanding market for life insurance for individuals and
Because I
element,
ARTHUR REIS,
should indulge
we
has been
the
for
than
other
do
so
President, Robert Keis & Co.
very
for
business.
a
Fundamentals
believe
to
the reported increase in
$1 •billion in the item of
by
of
excess
more
econ¬
by reason of the magni¬
present economy and our distorted discern¬
result, which make for our violations.
As to
reflec¬
retail
on
power
fiably subscribe is that
constantly
a
ments as
definite evidence of production overtaking
demand.
There is evidence here of a stagnation in the
real estate market and an availability of a substantial
supply of residential and other properties for sale and
for rent, and with apparent and reasonable office build¬
ing and store vacancies.
higher costs of insur¬
An
coverages, I
mass
reflected
in
credit
nothing
and
on
Today's inter¬
pre-war.
Regardless of
buying
amount of so-called personal
living cos-s and incomes
plateau considerably above
some
as
of
sumer
Both
on
that
amount
the return of lesser dividends.
After all the
American people have been conditioned for higher costs
in almost all lines just as
they have been accustomed to
higher earned incomes.
our
as no down payments exacted in the sale of house¬
hold appliances and other
itefhs, and the extension gen¬
in
ance
tude of
brackets.
prone to
are
such
mortgages
seen.
income
we
flected in the report generally of a diminution in retail
sales in spite of practices indulged to stimulate
them,
the
still be put to work.
can
but
spite of the evidence of substantial savings in the
form of United States Savings Bonds and
deposits of
savings in banks, the lack of purchasing power is re¬
While it is harder to test the risk for investment and
while it is harder to find outlets at rates hitherto satis¬
factory,
and
lower
ex¬
evident
numerous
local and national
our
in the coming New Year, but with the full appre¬
that sooner or later the "fiddler must be paid**
at the expense of all, whether in the higher or the?
In
building of
plants and of homes, of roads and the like—money sav¬
ings will be idle.
est rates are almost the lowest
affairs,
reasonableness, lest we invite
if not bankruptcy.
seeking investment. Ex¬
forward
goes
their
contributions
erally of longer term credits
country
too
high living cost levels.
ciation
economy,
and otherwise.
the
omy
subsidies,
very
of
and possibly enlarged, plus the enor¬
spendable money to be disbursed to our
justifiably), that we may experience bl
(and
whole economy.
have assumed leadership
we
world
our
utilities,
Unless
with
H. Rossetti
V.
cept for modest cash balances, all the assets of life com¬
panies are invested and represent the debts of others—
Government bonds and the bonds of public
on
a
the essential food items, with-
over
amount of
veterans
national
in the
in
our
on
While
small resemblance to the risks involved.
Savings through
llife
insurance and otherwise have greatly increased.
railroad, industrial companies, individuals
and
almost
mention
tions
carrying charge. While we should all approve
of the theory that there is a lesser total in the national
budget if debt service is kept down, the irony of it is
that interest rates payable
by others for the use of
money are artificially lowered—lowered so they bear
are
and
unwarranted
supports,
practices
of annual
sums
minimum
price controls
reasonable favorableness in
re¬
substantial
our
Government
be maintained
mous
and general trend to the nationaliza¬
tion of all activities, and
many other
as
simple. The U. S. Treasury is interested in the lowest
possible debt service on our large national debt. Round¬
ing figures, 250 billion dollars at 2% is 5 billion dollars
Constantly increasing
to
re¬
high level, unemploy¬
a
of
price
investment, because of the assets
policyowners, the problem is not
our
a
tension
of
admitted
as
Federal
our
conclusion, it can be reasonably assumed that with
the present policies of the Administration in Washington
and
unsound
affairs,
period when
a
to
of
In
in the adminis¬
Federal
an
ment at
everything, not less, including life insurance.
manage
in
income is at
air
or
our
deficit in
Similarly in other
prospers.
oil
and
the
to
tration of
emphasis from
our
continue
policies
the resultant maintenance
reflects, and
area
will
flect, the effect of the
uneconomic policies
change
can
greatly
more
as
we
Angeles
without .doubt
enlarged and enlarging market.
In the
Los
our
and businesses I know, I am
men
logically brought to the conclusion that
an
I
the
by
prodigality, unwarranted and' unjustified produc¬
tion and
an
expression as to the outlook for the
Year, particularly in view of the many
involved, one is constrained to a hesitancy, but
believe I am justified in saying that the
economy in
New
factors
Believing this to be true in
coverage.
of most of the
case
venture
coming
enhanced.
Because dollars will buy less one's present insurance
fs not to be minimized. To the
eontary, there is a great¬
the
incited
their
ing sized dollar but
that the size of dollars will be
There appear to be on the horizon indications for in¬
creased wages on the part of labor for 1950, and no doubt
of Los Angeles
beneficiary must take income
chance
ROSSETTI
President, The Farmers and Merchants National Bank
and
was
FEDERAL
with
formerly
firm, George L.
i
FEDERAL
&
CHARTER
MEMBER
DEPOSIT
RESERVE
SYSTEM
INSURANCE
NEWARK
CLEARING
*
CORPORATION
HOUSE
ASSOCIATION
and
page
in
74
74
(310)
THE
Continued
from
page
COMMERCIAL
FINANCIAL
&
CHRONICLE
73
Thursday, January 19, 1950
•
*
'
'
»
Business and Finance Speaks After the Turn of the Tear
nevertheless, not equal the immediate postwar era. Then,
was of lesser consequence and prices were
keyed to costs, with more adequate profit margins readily
(Competition
attainable.
In
retail
1050
stores, furthermore,
will
no
doubt continue to buy according to a conservative pat¬
stabilizing
in the immediate present tend to mitigate
While this pattern in the long run is a
tern.
factor, it
may
against the favorable situation already outlined. Thus,
in summation, 1050 should foe a good year but in all prob¬
ability not a boom year for the industry.
the
eminent
is
home.
If
we
within
our
most
pressing problem of Congress
needed
at
to maintain our strength we must live
are
ability to pay for our Government, so Con¬
gress must keep us within our means to pay.. Waste and
extravagances must be eliminated from Government ac¬
tivities.
Taxes
order to
Our
decreased
promote savings and
security,
of
nance
be
must
our
primary
where
possible
enterprises.
new
In addition to
Congress.
S.
We have just completed
of 1949 Washer and Dryer
loaves of bread baked each year, re¬
that
mains high.
automatic
With practically all in¬
gredients—wheat, milk, sugar, eggs,
acute
result
We
forecast
washer
,
total
that
outlook
industry
•
for
is
the
indeed
automatic
'
^
workman and the farmer, and for their wives and
washers
has
New,
rated
Eggs alone
cost by
normal
low-pricing
by
Bendix
bringing
$200 million by the end of 1949. They
cost taxpayers an additional
$200 million in subsidies in 1950, un¬
less the support program is modified.
Citizens must perforce meet this cost
twice—through taxes paid to finance
about
in
sales,
ment
could
ance,
increased
nations.
During
strategy inaugu¬
in September is
marked improve¬
and particularly in
a
W. W. SEBALD
President, Armco Steel Corporation
the second half of 1949,
launched
an
automatic
Bendix
J.
subsidies and, again, by artifically higher prices.
Thus there is no question of lowering the selling price of
washer,
articles made from
the
in nature—
Bendix Economat at ^179.95—designed
for
the
agricultural products.
surpluses of agricultural products were made avail¬
public, prices would certainly go down. How¬
ever, if the government is going to continue to bridge the
If
S.
From the present perspective,
Sayre
operate at
revolutionary
masses—which
contributed
has
able to the
always increasing gap between a normal ..selling price
a high fixed parity price, taxes will have to continue
of
and
priced
considerable"
strength to Bendix industry position.
and
The
the subsidies.
cos), of new baking equipment rises rapidly, as
the increased cost of steel is passed on to the purchaser
Of equipment. Though there is much talk about agricul¬
tural prices the public is seldom told about the rising
costs of the equipment without which industry cannot
Today, replacements of equipment cost
produce goods.
more
than, and sometimes double,
priced at $32,000 in 1947, is
creases
in
wages, or
the
of
cost
pension
from
come
raised
hourly
welfare funds, they always result in
or
sound
selling
return to the fundamentals
a
the part of
on
a
high percentage
of
appliance dealers throughout the country.
apparent when Bendix announces (which
become more
it will do
Feb. 6), a Bendix
on
Dialamatic Eeonomat to
retail at $169.95.
the conviction that
favorable year for those with a demon¬
a
strably better product, reasonably
sumer buyers.
priced to attract con¬
All transport
more
Chairman of the Board & President,
and out of traffic jams in shopping centers. This despite
the fact grocery stores naturally want and need delivery
of goods at the time stores open.
Because delayed deliv¬
major cost item, increasing
with every hour's delay, towns and cities would do well
to plan to move or build their shopping centers away
means
commonsense
government
on
to
upsetting events such as extended strikes in major uudustries not now anticipated.
In Balti¬
more
LEVERETT SALTONSTALL
U. S. Senator from Massachusetts
strength of free
To be free there must be
peace
men.
in the world. The at¬
pipelines which will bring
natural gas to Baltimore are about
completed and during 1950 Consoli¬
dated Gas Electric Light and Power
over
—with
strong
to protect
to
our
enough armed forces
shores and to live up
responsibilities elsewhere ha
the world—strong enough in our in¬
our
dustrial
and
keep the respect of peoples every¬
Only
by
such
show of
strength can our citizens feel reason¬
ably secure in this troubled world,
until such time
as
a
true and
within
assured
the
lasting
men
use
their
freedom
most
advantage.
dom
and
to
still
security for old
duce
and other services that
our
kilowatt
with
gas
a
to
plant in 1951.
facilities,
of
unit
be
These
installed
new
at
our
Riverside
installations will pro¬
operating economies and, together with enlarge¬
ments and
extensions of
are
Baltimore
industrial
our
substation and distribution
being made to keep pace with the growth
as
one
of
the
nation's
leading ports and
products;
from
on
mar¬
i.e.,
con¬
durables
struction,
consumer
capital goods.
Reports
major
and
the
show that the
construction
total dollar
ex¬
of
processes and
are
industries generally are prepar¬
electricity
to
new
uses
The
and additional
the extension of natural gas to new areas
expected to push sales of electricity and gas to new
provide the social
unemployment
citizens expect of their Gov-
The
large-scale
expansion
bution facilities begun
is
continuing at
a
1949, which
was
With
there will be
program,
the highest
such
building
a
W. W.Sebald
substantial
a
demand for many
of the major steel products and par¬
ticularly for flat rolled steels.
Last
year's production
refrigerators,
of
and
ranges
major
appliances,
washing machines
such "as
averaged
about 25% less than the 1:948 peak.
Some of this decline
was
due to an inventory problem in the first half of
1949.
When this had been corrected, production was
resuming
rupted.
an
upward trend when the steel strike inter¬
Demand for automobiles, the
rolled. steel, will continue at
six
months, after which
we
a
largest consumer of flat
high level for thej next
become
may
expect the
evident.
usual
sea¬
same
These
sea¬
probably appear in other consumer
goods lines, but the total production of these goods for
1950 should at least match last year's volume.
Current surveys show that expenditures by business
plant construction, machinery, and equipment will
for
continue
slow
the
decline
quarter
increase
Which
started
in
the
fourth
of
1948.
However, these outlays are still pt
record levels, and even with the decline that is fore¬
seen, total expenditures would represent a substantial
over prewar years.
The nature of this business spending will also
change
somewhat from other postwar years.
Outside of a few
capacity expansion will toe secondary to
improvement of efficiency.
This means that there will
be less of the total spent on new construction but pro¬
industries,
portionately more on cost-cutting machinery and equip¬
a field where stainless steel is finding profitable
outlets, particularly in such fields as textiles, chernieajfe,
pulp and paper, etc.
'
ment,
the decline is not yet evident, and
long-term outlook for expansion in this field is we
of the reasons for Armco's increase of pMe capacity,
the
gas
ing to meet increasing demands for their services.
application
of
record.
In the utility field,
centers.
The electric and
to
To keep that free¬
age,
to distribution of natural
gas
records.
promote their individual abilities to
Sen. L. Saltonstall
steel
influences to
lent to natural gas
frame¬
work of the United Nations.
Free
for
patterns will
heating value equiva¬
and will be used
in meeting peak loads and emerg¬
ency conditions.
A
new
66,000
kilowatt electric
William Schmidt, jr.
generating unit will be placed in
operation
at our Westport power
plant and work will go forward on the housing for a
a
agricultural production
where.
is
steel-.ccmsuming
the
of
sonal
Present water gas production
will be converted to make
gas.
to
peace
examination
an
sonal
facilities
power
objective of Congress.
our security is
pressing problem. To main¬
security we must be strong
cur
for
distribution of manufac¬
from
tured
Until it is attained,
tain
demand
will change
of Baltimore
Company
75,000
the maintenance of
also expect business in the
The
tainment of that peace is the first
its most
we
ahead to be good.
-year
taxes must pay the bill. Any one of average
knows that you cannot get something for
Our strength is the
whole should be good barring
be that the year as a
costs,
nothing. There's always a price. And if the price for the
political mirage of prosperity, based on deficit spending,
is the heavy yoke of government debt with a suicidal tax
structure, then the price is too high. With this system,
keeping down the price of the most essential of food
items becomes an almost impossible challenge.
predicting
The consensus ,^ems
1950.
the outlook for business in
a
difficulty is the lack of controls
of Baltimore
Economists and forecasters have been busy
from arteries of through traffic.
When the whole situation has been analyzed, the basic
which
of
products. The statement is based
on
Consolidated Gas
Electric Light and Power Company
Store-door delivery has encountered an acute problem
in increased local traffic in large cities and small towns
alike. Delivery trucks lose hours daily trying to get in
of perishable foods is
re¬
a
during October and
November of the past year and also
in part to the continuing high level
that
WILLIAM SCHMIDT, JR.
doubled, and trucking rates upped to
meet increased costs.
ery
which accumulated as
penditures for 1950 will be close to
costs have risen, with Railway Express
than
of steel
field
increased costs to the public.
rates
average
production averaging between 85% and 90% and the last
half of the year 75% to 80%.
The higher rate for the first half
will be due in part to the shortage
kets
These several influences lead us to
1950 will be
the steel industry will
of 80% of capacity during 1950.
that the first half of the year will show
an
is expected
It
sult of the strike
Currently, Bendix holds a unique position as a result
of this new pricing philosophy, designed to give the
housewife a larger value for her money, and this will
prewar
now
steel
prices: an oven
$50,000. Whether in¬
We believe that we see
which these ber^
certainly worth preserv¬
ing, and all who believe in that system must join-in
devoting greater effort towards bringing about a better
•public understanding of it.
behind soundly priced products.
these
to rise in order to pay
The American system under
fits have been made available is
years.
the amount oi energy and effort that
retail dealers stand willing to put
Margaret Rudkio
chil¬
dren, by providing the conveniences, labor-saving assist¬
comforts and entertainment that enable the Amer¬
ican family to live on a scale that is the envy of other
percent
of
total
washer
sales captured by this bracket of au-
steadily for three consecutive
gas supplied by tax-paying businessutilities have contributed greatly to the re¬
production records of American industry. They
have made living happier and more pleasant for the
Electricity and
markable
The
tomatic
private enterprise, under proper
can do a better and more economical job "of
operating a business and provide a higher standard ' of
living for the public than Government can.
regulation,
managed
.
units in-1950.
daily.
lions of dollars to date.
the
of. this
sales, in the price brackets
to $300, will reach" 700,000
$249.95
Subsidies have cost taxpayers bil¬
will have exceeded
study,
section
1950.
The record shows that
rather exhaustive analysis
Industry Sales, and believe "
this
of
washer
favorable for
butter, other fats, etc.—directly or
indirectly subsidized, prices are kept
at a high level.
All hope of tax re¬
ductions is rapidly fading in the face
of the government's return to deficit
financing, many problems become
more
the
as
utility
socialism are
field and other Government moves toward
checked, investors' confidence in that industry and in
privately operated enterprises may be
seriously undermined.
President, Bendix Home Appliances, .line.
a
of the utility industry
the future of all
SAYRE
There is little chance of any sizable cut in the cost of
production of bread in 1950.
The basic problem of the $2,0.85,000,000 bread industry
is that the cost of ingredients that go into the 15 billion
reasonable level of current earnings,
a
the trend of Federal encroachment in the electric
*
J.
coincidentatly
and
program
they are to be induced to put their
money into electric and gas securities.
The many suc¬
cessful utility financial transactions during the past ygar
are evidence that investors, at the present time, do tostve
confidence in the industry's future.
However, unless
MBS. MARGARET RUGKIM
President, Pepperidge Farm, Ine.
this
confidence if
with
in
of life within our resources are the
of the Second Session of the 81st
way
problems
on
carry
investors must view the future
liberty and freedom, the mainte¬
our
to
maintain well-balanced capital structures.
of production
and
distri¬
shortly after the end of the war
high level.
Electric and gas utility
companies will require adequate earnings to attract at
reasonable rates the large amounts
of additional capital
and the
cooperative venture on .a pipe mill in Houston,
production of large diameter gas pipe. !
Texas for the
Summing
leads
us
,
up
our
impression of these major, markets
to believe that steel production
in 1950 should
be very close
to the 1949 level, if nothing is. done by
the Administration to'unset the economy/ We believe
that flat rolled steels will continue to secure an increas¬
ing share of the total output of steel products, and in
view of that
growth trend
producing capacity.
we
are
increasing
our
sheet
I
Continued
on
page
76
Volume
171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(311)
75.
Continued from
page 5
Day holiday, totaled 506,947
cars,
according to the Association of
The State of Trade and
where
drive
a
by
rank-and-file
United Mine Workers for an allshowdown strike against the
the
out
coal
industry
than
86,000
six
resulted
miners
states.
in
of
be
can
the
On
pattern.
creases
being idle in
$10
estimate
of
firmed
and
emergency
national
invoke
the
Taft-
Steel executives
blunt
result of the fuel
shortages
stemming from the- coal strike
several steel companies this week
a
announced
operate at
lower rate of
capacity.
>i<
dustry
bright
appear
employment
and
with
full
considerable
overtime pay in store for Detroit
workers and other auto manufac¬
turing centers
next
month, Ward's
Auton otive Reports hold.
cicted
further
that
It pre-
nearly
all
plants will operate at capacity and
weekly output records
successive
will be chalked
up. Production of
automobiles
and' trucks
in
the
United
week
States
and
reached
Canada
the
last
highest
since September. It
that
say
to
rose
level
155,184
units, from 116,768 last week and
112,587 a year ago.
for
con¬
study in
where
De¬
revision
very
boost
while
an¬
This
cars,
above
the
holiday
It
was
2.3%
or
preceding
an
mated
decrease
a
29.7%
or
below
to
"Ward's
the
current
highest
output
reached
figure
since
and
was
Sep¬
United
trucks
States
to 207 in the week ended
12 from
161
casualties
were
above
those in the comparable weeks of
1949 and 1948 when 127 and 61
and
built
5,527
in
the
cars
and
2,306 trucks built in Canada.
The week's total compares with
concerns failed
respectively.
De¬
spite this increase, they remained
considerably below the pre-war
total of 380 which occurred in the
similar week of 1939.
112,587 units built in the U. S. and
Failures
Canada in the like 1949 week.
involving liabilities of
Continued
subsidizing the lat¬
old
price schedule.
that
argue
the
designed
was
to
latest
do
two
things: (1) increase prices to meet
mounting costs, and (2) price each
product according to the cost of
the
work
done
add
may
them
that
for
the
pattern
lower
price
than
the
if
on
And they
right with
all
he
the
mills
get
can
a
different
a
do
or
is
buyer to revise his
order
fication
it.
on
it
speci¬
cheaper
work
if
can—even
in
doing this they whittle down the
average steel
price increase to less
than $4 a ton.
Steel
business, "The Iron Age"
notes, is still generally good bat
bit
spotty.
Plate, bars .and
a
Progressive output gains through
February were predicted by
structural
Ward's Automotive
Reports, with
almost all producers scheduled
Sheets
to
operate at practical capacity next
month
and
records
new
weekly
likely.
behird
because
projected
of
Darts
difficulties.
General
still
are
schedules
.
t
Output
Highest
*'
Rises
Since
Steel
the
most
major steel
not then
build
an
coal
to
Age,"
be
now
grind¬
states "The Iron
national metalworking.
steel
current
trade.
And
review
with
them
would go the
booming business of
automobile,
appliance
and
other steel-using industries.
By the
the
big
spring of
steel
1949
most
companies
of
had
boosted their coal stocks to
better
than 60 days'
supply.
by
keeping
up
production
and
commercial coal
offered.
They did it
their
mine
own
buying
usable
wherever it was
They
also
plus coke stocks.
bought
sur¬
entire
with
course
interest
but it
to
they
acted
keep ahead
raised
in
of
self-
Lewis,
all
steel
companies built
big coal stockpiles and even those
that did are
seeing them dwindle
every day.
Some mills will be in
trouble
if coal
get into
a
mining does not
regular production pat¬
tern very soon.
Even before that
electric power cuts will halt some
electric furnace and
rolling mill
operations at Pittsburgh if the
miners stay out there, this trade
magazine adds.
!
are
polishing up their cases for
presentation at the hearings next
now
week
in
Washington
Senator
bers
should be
the outcome.
While
on
O'Mahoney's staff mem¬
reportedly having
finding fresh ammunition,
are
trouble
steel leaders should
come
with
up
some
little known cost
figures and
some
challenging facts.
The ques¬
tion of whether it is
steel
may
user
is
18,
the
that
of
in
the
operating
of
week.
last,
98.4%
right for
subsidize
highest
when
finished cost studies
their
steel
went
have
showing
up
more
Ohio
and
in
other
have
of
corporate securities—bonds, debentures and preferred
and common stocks.
April
rate
was
walkouts
and
coal
2.
mines.
This
week's
equivalent
to
operating rate
pared
to
ago.
rate
1,791,900
amounted
year
ago
net
tons
one
month
A
ago
the
94.5% and production
was
to
1,742,100
tons;
week
war
year,
There
in
pre¬
indication
no
reporting
have
been
steel
forced
fields,
to
curtail
as
of
individuals
and
institutions
securities which
we
have
•
a
in
the
for
As
we
enter
our
fifty-first
the
looking forward to
year, we are
a con¬
tinuing contribution to the growth not only of Ohio but of the
Institute stated.
Electric
funds
yet
as
spokesman
a
the
companies
conditions
of
work
to
underwritten.
at 1,281,210 tons.
is
Pat
through the sale to them of the
aver¬
1940, highest
that
coal
3.
a
it stood at 100.1% and
1,845,400 tons and for the
age
through the
purchase of State and Municipal obligations.
1,810,300 net tons
of steel ingots and castings com¬
week
Raised money to finance vital
public services
is
Output
Attains
New
a
Nation.
Ail-Time High Record
The amount of electrical
energy
distributed
and
power
ended
by the electric light
industry for the week
Jan.
14
6,028,589,000
the Edison
estimated
at
according
was
kwh.,
to
Electric Institute.
This
figure represented a new
all-time high record in the indus¬
try's history and compared with
previous
606,000
week
kwh.
ended
It was
than
high
the
level
of
established
Dec.
OTIS & CO.
5,996,
in
Established 1899
the
17, 1949.
333,217,000 kwh. greater
figure reported for the
CLEVELAND
previous
week 301,881,000 kwh..
5.3% higher than the total out-
or
out
for
the
week ended Jan.
15,
1949, and 658,477,000 kwh. in ex¬
cess of the
output reported for the
corresponding period two years
ago.
Carloadings
Move
2.3%
Above
Previous Week's Level
manufacturers
of
Secured needed capital for
industry through the purchase
point
present
since
the
despite
1.
,
rate
1.0
The
one
another
state
curtailed work weeks in the soft
also be aired.
Scores
row
to
home
important sections of the Nation. We
'
rise
a
last
rate
the
Steel company officials who
our
be
steel-making costs.
Not
optimistic
will
97.2%
week's
consequence
Of
banking service in
operating rate of
industry
represents
from
of
the
this
having 94% of
steel-making capacity for
This
stocks
halt,
a
weekly, in its
the
coke
DECEMBER 9,1949; we
completed fifty years of investment
and
preceding week.
If
ago.
the
compares
companies had
all-out drive to
and
mills would
many
ing
begun
up
year
that
Iron
announced
Institute
98.2% of capacity for the week
beginning Jan. 16, 1950.
This
of
iThe steel industry still has the
edge in its cold war with John L.
L/ewis—but only because it was
a
there
companies
the
98.2%, the
April 18, 1949
planned that way
Entering Our Fifty-First Year
This
Today,
American
week
steel
Week
1948.
very
frantic
as
a few automotive com¬
interested
in
conversion
The
high¬
the
Chicago.
steel.
divi¬
to
in the
easy
only
panies
Ford
to
in
was
Most
sions, however, are close
est 1949 levels, it added.
Steel
it
as
noted.
and
are
tighter in
are
and
demand, however, is not
manufacturing
Ward's
Motors
lag¬
shapes
but
strip
are
in
strong demand everywhere.
are
Chrysler divisions
ging
output
East,
Loadings of
the
week
which
revenue
ended
included
freight for
Jan,
the
7,
New
1950,
Year's
New York
Cincinnati
Chicago
Columbus
Substan¬
weeks,
made up of 123,062 cars
24,269
Show
in the
preceding
week, Dun & Bradstreet, Inc., re¬
ports.
At the highest level in six
is
The total output for the current
week
Failures
tial Increase the Past Week
Commercial and industrial fail-"
155,164 units
tember, 1949.
Auto¬
motive Reports" for the
past week,
Business
ures rose
of
Aute Output Advances to
Highest
Point Since
September, 1949
the
Jan.
the
similar period in
1948, both of
which weeks included
holidays.
in
is esti¬
116,768 (revised) units.
Chrismas
corresponding week in 1949, and
323,863 cars, or 39% below the
According
at
The
represented
production
compared
with the previous week's total of
week.
214,560 cars,
vehicle
motor
United States and Canada
advance, the former
the
will
be
They may
buyer got a
one
price
under
They
could
point.
other got. a $5
was in effect
ter
*
Prospects in the automotive in¬
this
on
$15-a-ton
that their mills would
a
been
troit.)
Hartley law.
As
recent
a
Age"
ton
a
has
in¬
ton
a
Iron
$8
steel
by
basis,
more
("The
$6 -to
automobile
dent refused to declare
this
and
found.
gravity of the situation, the Presi¬
a
Industry
the average of $4 a ton—on
basis of their historical buy¬
ing
more
Notwithstanding
than
American Railroads.
increase of 11,313
Denver
Toledo
Dallas
Buffalo
on
page
77
76
74
Continued from page
It
take
not
does
great deal of courage to
a
The
forecast
vari¬
will
in most lines will be excel¬
activity
good; business
be
reduced
oit, will still be very good. I am
sure that Idaho will not be different
from the rest of the nation in these
lent and farm
income, while
recognize that in our very com¬
practical to ex¬
supply-and-demand
possibly work out.
relationship can
Nevertheless, it is
ment when
Schoonover
A.
John
an
indication of
of courage in
definite lack
in
a
govern¬
peace-time year of
heavy business
tax sufficiently to pay
full employment and
activity the government does not
-its expenses
minimum
of
volume
ment is
and credit policy which the govern¬
$2,800,000,000 of divi¬
going to the servicemen on their government
dends
maintaining, as well as the
this
insurance
conversations these days there is an indication
a continued depreciation in the
dollar.
This, if true, is a frightening development, and
our political leaders by real statesmanship must imme¬
diately convince our folks that their dollars now have
and will continue to have value.
Encouragement of thrift has always been considered
good policy, and when our government takes action
that some folks expect
wisdom in saving, we
no
everything that
•of
have
when
to be up
the
must tax upon a broad
luxuries may be paid for as
forecasts are expected, but
it is apparent that we as bankers should speak up when
the government trends are so obviously wrong as they
are
i'l
look
for
a
small
increase
1950, ancl also some increase
Real Estate Mortgage
a:
weaker
bit
payment of slightly
accounts in banks which are
toward
gage
bank deposits during
in loans, especially in the
Interest rates may tend
category.
receivables,
on
in
with
some
inclination
ended, the record of 1950 will show a distinct improve¬
1949 in sales volume, and, barring an unfore¬
seen economic decline, in profits as well.
ment over
Here are my reasons:
higher rates upon savings
aggressively seeking mort¬
and will¬
service should have no trouble mak¬
reasonable profits in 1950.
well-managed businesses able
On the whole,
they
ing to give efficient
ing
dealers
Tire
1.
Chairman of the
what they
Life
3.
of
tions
the
is
a
Hoover
Report
\yere
on
could
predicted last year, the Life Insurance Business
look forward to an active and successful year
in 1949.
pany
and my own com¬
all-time record both in production of
That proved to be the case
made
an
rising
more profitable
buying tires be¬
that prices cannot remain at their
know
they
cause
present levels for long.
Good
5.
good tire business,
that the level of business will remain high
business conditions mean
and I believe
little profit in selling
was
tires to the replace¬
disappointing in the
business re¬
wave of sharp competi¬
Volume was
in 1949.
of the spring
This in turn caused a
price cutting
began to show a
indicates that people are
becoming more confident of the stability of the country
and of prospects for a long period of prosperity.
I
sales.
at all levels,
at,
had
committed their output for
October at these low
It
was
November that a measure
not until
of relief
in prices, followed by
month later. In the automotive
similar
increase
a
biggest bargain by a wide margin.
writing, both production and sales are at high
field, tires are still the
At this
remain above the level of a year ago
that, the normal
levels, and should
for the first six
curve
months of the year. After
of higher tire
in co'ol weather:
S
*"•
system
in the TV
is developed employing a
tube to emit the three basic
estimate that this
I
will be within a minimum
and a maximum of 10 years.
•
television industry will produce approximately
The
4,000,000 sets in 1950 and Admiral promises to maintain
its position in the field, using the same tools which have
made possible our tremendous strides in the past—mass
production methods, improved design and enlightened
engineering techniques.
"i
'
<
-
'
'
LOUIS SEGAL
President, Segal Lock & Hardware Co.,
'
1
I
'
The
try is
Inc.
.
sales in warm weather, lower
should be restored
.
...
*\
i*
r ma-
*
M* t M
*»■ *
hardware indus¬
favorable and volume should be maintained at a
general outlook for the builders
high level in 1950.
sales
influencing the industry is the con¬
chief factor
of residential construc¬
tion which is expected to maintain
the records established in 1949.
tinued
units
is
pace
slight decline in housing
with private capital
a
financed
forecast,
this will
offset with housing
lated
be
than
more
stimu¬
government
programs
existing
under
legislation.
expected in
The moderate declines
non-residential
building
will
focus
competitive attention on the hard¬
ware
requirements for residential
construction.
Tliis will necessitate
more
intensive
effort
selling
with
quality and service.
Local dealers and contractors will
find
excellent
opportunities
for
hardware
business
through public
housing developments in their areas.
emphasis
on
Louis
Segal
Full cooperation
the factory in properly estimat¬
will be extended from
locks, knobs, hinges,
door closers, plates, hooks, stops and other products of
brass and bronze in the hardware specifications.
ing, quoting and negotiating for the
As
tion
prices.
provided by a 3]/2 % increase
was
a
much of this volume
manufacturers
September and part of
marked increase,
"starvation" prices, and some tire
was
The steady rise in price of com¬
the New York Stock Exchange during
Siragusa
While
tire field, we now have a
Francis P. Sears
past four or five months
As
and
supply more
which began in early
spring and continued through the summer.
When the turn finally came, late in August, and sales
first half of the year.
stocks
and
which means more sales and
Motorists and truck owners are
market,
tive
automobiles, the steel companies operating at nearly
100% of capacity and the probable total income at the
rate of around $200 billion per annum for at least the
the
In the replacement
4.
cession.
thing
mon
This means we will have to
better tires.
first half of the year because
that any¬
extremely expensive will be
adopted in regard to health insur¬
ance.
The outlook for the first half
<of 1950 is certainly most encouraging
with the tremendous production of
tires and even
There
ancl I do not expect repeal
of the Taft-Hartley Act or
still climbing.
ment market
ing the present session of Congress.
I think there will be some reductions
in taxes
per
during 1950.
promptly put into effect.
Some of
them are being gradually put into
effect and I expect there will be
more accomplished on this line dur¬
color
of two years
The
vehicle, gasoline consumption,
driving speeds are Ipgher than ever today,
average
Congressional Election year and,
therefore, it is not likely that Congress will pass any
very controversial measures this year ancl is not likely
to take much interest in the recommendation of thePresident in his address on the State
of the Union.
This is especially true
as
regards taxes which already are
very
much too high and could be
greatly reduced if the recommenda¬
Nineteen-l'ifty
opinion,
my
single
want.
Mileage
Insurance Company
tires, and they will get
experience with postwar
of their
Board, The Columbian National
Ross D.
1946, 1947, and 1948.
mand better
FRANCIS P. SEARS
In
in
picture is still some time away. '* It
will come within 18 months after a
business more aggres¬
since before the war. In short,
will re-tire a lot of cars purchased
Many motorists are going to de¬
quality tires and more tire service because
out one
lines
During 1950, we
2.
in
^
is at an all-time
seconds, and we are now making
excess of 3,000 sets
per day.
learning to sell again.
are
production
turn
soliciting
are
sively than at any time
loans.
months now.
that when the year is
I confidently believe
However,
to be
a
5,000 employees.
continue to
TV receiver every 10
Our
colors.
to
on
peak of more than
the course of the second six
try to predict
today.
present high level.
Too many factors are involved
Seiberling
P.
J.
counting
are
Admiral's payroll
first half of
compared with the first
sales, which were disappointing in
1949, should be ud about 10%, and
recapping ought to continue at its
fourth
electric ranges.
sales should
be even better: 10 to 12% over firsthalf
1949.
Farm
tire replacement
when bright and happy
year
the
Truck tire replacement
be
expected to
substantial
increase in
sales of the Admiral
refrigerator, the most compact-largecapacity refrigerator on the market,
and a similar increase in sales of
We
6 to 8% in the
year,
...
banner 1950
$110,000,000 against $67,000,000 for 1947. The
quarter of the year promises
by far the best of the year.
half of 1949.
thinking person that many
effected by the government which
would also be helpful along this line.
This is a rather depressing outline at a time of the
can
total
standpoint of volume and profit.
Passenger tire replacement sales
volume for the industry are expected
they are enjoyed.
It should be obvious to any
economies
replacement field, both from
the
people to believe that there
have indeed reached a sorry
the good things of life in years
enough scale so that these
upside-
year.
prosperity we
and
peace
replacement tire market, 1949 was an
During the summer, when business should
been good, it was- slow.* In the fall and winter,
it is usually slow, it was good.
But I am optimistic about
1950.
This should be a year of sound de¬
velopment, growth, and better re¬
wards. Business should be better in
down
1
Corporation
Corporation looks forward to a
after a record-breaking 1949.
Admiral Corporation sales for 1949 are
Admiral
President, Seiberling Rubber Company
the
In
in our going out and
sist that if we are to have
SIRAGUSA
President, Admiral
PENFIELD SEIBERLING
J.
lambasting
the government does, but we should in¬
There is no sense
state.
*•
ROSS I).
my
many
is
better.
anything
year.
without borrowing from
and other outlays
which encourages our young
trade; the boosting of
and the upgrading of other wage
wage
present easy money
opinion that to some degree the recent
strength in the stock market, particularly in the Rails,
is because of some flight from the dollar, and in too
is
not be for the
increasing wage-earners' incomes; the great
public works and, public housing and the
rates, thus
the future.
It
other inflationary
production of new insurance.
expected slump in export
be
the
pension increases, and
influences prevail,
it is fairly certain that there will
be higher prices and their accom¬
panying buyers' resistance. If this
should happen we might well run
into
another
period
of cautious
spending which, with its accompanyingjfears, could readily lead to an¬
other recession.
This is not at all
unlikely in the latter half of 1950.
Changes in the world situation might
bring about a similar result.
Banking follows business, so that
William J. Shroder
my
feeling about 1950 is that, on
the whole, the banks will do about
as well as they have done in 1949, but should not expect
and
wage
probable large size of farm income with the government
support; heavy government spending; ECA aid and the
shipment of military equipment to members of the North
Atlantic Pact, which should counteract any otherwise
to
pure
credit changes,
possible monetary or
general prosperity in the long run, yet they
do indicate a great many more dollars to be spent in 1950
than in the pre-war years.
Among these items are the
pect that
its
Should the
1950.
dividends to ex-service men,
surance
forth greater
maintain
will
the first half of
deficit financing, of in¬
of
effects
benefit of
plex society it is not
a
insurance companies to put
increase
efforts to
generally
business
that
believe
I
Cincinnati
Bank and Savings Co.,
current level during
Therefore, it be¬
living.
Although the following matters may'
does cause some
us is the apparent
the government
to
proceed with deficit financing in
years of heavy business activity.
I
believe that most of us have come
to
which I outlined
year,
hooves the life
respects.
The thing that
concern to all of
of
insurance
provement in the standard of
a
inclination
life
of
forms
new
namely, Deferred Endowment Annuity, Juve¬
nile Insurance, the Family Income Rider and
Group
Insurance, all proved to be immensely popular.
But the
fact remains that the growth of life insurance is no¬
where near as great as the growth of income or im¬
last
good business conditions for the current year, for
factors support the conclusion that employment
ous
President, The Peoples
and income.
National Bank
President, The Idaho First
J. SHRODER
WILLIAM
volume of insurance in force, assets
insurance and in
new
SCHOONOVER
A.
of the Year
Speaks After the Turn
Business and Finance
JOHN
19, 1950
Thursday, January
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(312)
more
the
is
initial emergency phase of housing construc¬
passed and building plans are considered on a
basis, tnere will be a definite (return to
orderly
traditional
raw
manufacturers
the
values
in
locksets
mortise
over
types of builders hardware.
With
ample supply, the old established
will offer the permanent type durable
quality
materials
and
other
substitute types.
hardware
recognizable by architects and
increase
at little
This will represent
excellent
builders.
to the industry is the potential
market for hardware products in home:repairs and modOf
great significance
*
if
";1'
Continued:gn page';?8
Volume 171
Continued
Number 4873
THE
COMMERCIAL
jrom page 75
&
FINANCIAL
ter
The State oi Trade and
$5,000
or
more
130
and
size
a
less
marked
to
rose
exceeded
the
from
169
103
of this
The increase
year ago.
was
small casual¬
among
ties, those with liabilities under
$5,000, which rose to 38 from 31
and compared with 24 last year.
Retail failures increased
from
to
101
61, while manufacturing and
construction
slightly
rose
to 55
and 19, respectively.
In whole¬
sale trade, casualties remained at
21
in
and
commercial
service
ing
the
mill
good
sales
in
the
retailing.
of
for
The
largest
New
England
Central
tain
States,
States
Seven
that
and
while
the
West North
more
was
and
Central States where
than
twice
failed
nesses
Moun¬
change.
failures
no
the rise
Mountain
ago;
in
•sharpest
more
had
year
South
the
reported
regions
a
West
as
in
as
many busi¬
the
similar
-week of 1949.
Wholesale
Price
Mild
Rise
had
in
said to
remained
in
last
re¬
lower
Loan
week
ended
in
foods
last
food
foods in general use.
Wholesale Commodity Price Index
Slightly Lower for Week
Following a continued mjiLd rise
-during the early part of the^eek,
juices
dollar
items,
leather
demand.
decreased
for
slightly
ilar
such
reported
for
the
pledged
season
mill
activity
was
discounts
well
into
the
sold
second
accepting
Stocks
of
cotton
reported
were
the current rate of
Retail
Trade
to
at
low in
the
Wholesale
1949
mills
estimated
was
to
to 6% below that of
by the following percentages:
to
—6;
Coast —1
+1
East
to —5;
to —3
weather
helped to
further the usual January retail
decline in the period ended on
Wednesday of last week; con¬
sumer buying
was slightly below
the level for the comparable week
in
1949.
Wide promotions
and
by
a
wholesale
New England
decline
a
Admit
the
of
about
15% for the
decrease, however,'
considerably smaller than
week.
the
This
26%
fall
preceding
reported
for
the
to
Federal
Re¬
index, department
New York City for
weekly period to Jan. 7, 1950,
store sales in
the
declined
by
25%:!! from
period last year.
week
was
registered
week of 1949.
2%
to
like
last
date,
:;:The
For the year
de¬
York
and
have
been
firm for
associated
some
of
Both
with
the
time, Mr. Torrey
the
trading
as
depart¬
ment.
For
Exchange of Bonds
announces
that it has extended from Dec.
31,
by 6%.
1949
large decreases shown for
part the fact
the Monday after
New Year's day was a holiday and
this
New
&
Street,
Midwest Stock Exchanges.
Republic of Colombia
this week reflect in
that
the
Salle
Colombia Extends Time
For the four weeks
year.
of
La
similar
however, volume
creased
South
(revised)
under the
7, 1949, a decrease of
reported from the like
of
Kebbon, McCormick
111
231
Manager
Jam
was
week
the
In the preceding
decrease of 4%
a
nership
members
the
Board's
serve
Cady, Torrey
CHICAGO, ILL. —On Feb. 1,
Paget K. Cady
and George R.
Torrey will be admitted to part¬
Co.,
week.
According
to
within
Dec.
Sinking
year
31,
which
1950,
its
Fund
the
6%
Gold
time
External
Bonds,
due
Jan. 1, 1961, its 6% External Sink¬
ing Fund Gold Bonds of 1928, due
the week therefore included only
1,
1961,
and
appurtenant
shopping days as compared Oct.
with
six
shopping days in the coupons may be exchanged for
corresponding week last year.
Republic of Colombia 3% External
five
NOTE—On another page of this
Sinking Fund Dollar Bonds, due
issue the reader will find the most
Oct.
comprehensive coverage
of busi¬
change of Convertible Certificates
statistics
for
ness
and
industrial
1, 1970.
the
3%
The period for
Dollar
Bonds
ex¬
of
the
showing the latest week, previous
Republic has been extended from
June
Copies
of
which
was
ditions,
number of trade
ordering rose
noticeably in the week.
of
partment store sales registering*
tions
Stimulated
shows,
that
1949 with de¬
the week-to-week trends of
Pacific
and
below
week, latest month, previous year,
Southwest —3
and
held
similar period in
Kebbon, McCormick fa
etc., comparisons for determining
to —7.
Near
Week
Unseasonal
from 2%
—2
Weather;
Level
the
Midwest, Northwest and South
to
consumption.
Trade
volume *" for
dollar
Wednesday
ago
Lower, Due in Part
Un seasonal
vol¬
---
a
year ago.
Regional estimates
varied from the levels of a year
or¬
relation
dollar
•
Total
be
some
diminished
United States in the period ended
re¬
with
mills
Major appliances
ume.
on
many
promotions.
remained popular; the wide use of
through Dec.
29 aggregated 2,383,400 bales, as
against 3,932,300 bales pledged to
the corresponding date a year ago.
Cotton
large unit volume of
bedding was sold with
the aid of "white sales" and sim¬
the
to
week
silverware
as
goods, were in large
A
Cotton
loan
Retail trade in New York last
ended
volume
towels and
index
represents the sum
-total of the price per pound of 31
fruit
high level.
a
goods
bales, comparing
with 189,800 in the previous week
and
262,-000 two weeks earlier.
ders for third quarter delivery.
strength
on
interest
low-priced
articles
preferred by many shoppers.
Small
and
29 totaled 183,400
The
week;
were
Dec.
considerably
rose
and frozen
retail
durable
into
expected.
the
canned
The
been much
been
for
quarter and
price index for
-Jan. 10 to $5.76, a rise of 3 cents
«over the $5.73 of a week ago.
It
Was, however, still 5.3% under the
comparable 1949 figure of $6.08.
The
August
cotton
a year ago, but for the
year
to date show a decline of 5%.
to
The demand for
localities.
some
forward
of
week lifted the Dun & Bradstreet
wholesale
than
has
products
in
months,
Index
Previous Week
Further
South and West.
ported at the highest level in 18
Food
Extends
of
purchased
were
a
scarcity
of
some
vegetables and fruits following
prolonged periods of frost in the
10
were
bought by
remained
counteract
record.
on
women.
largely unpop¬
volume of food
delicacies
to¬
the
government loan stock
entries
the
in
season
movement
Small
in
the
through December
cent weeks
occurred
sales
and
virtually
steady in the week; slightly more
dairy
Volume
regions reported
weekly increases in failures.
declines
The
housewives
year ago.
the
Six of the nine
markets
remained
demand,
generally
was
men
77
period
was
186,300 bales, as compared
with *159,600 the previous week,
and 143,200 in the same week a
be the
clothipg
(313)
cruise
and housedress lines.
and
spot
present
ular, except for inexpensive print
by
taled
than
and
10
prevalence
and
scattered
sought b,y both
foreign
price-fixing, and reports of in¬
creased
activity in cotton goods
markets.
Activity in spot mar¬
kets increased during the week;
markets
1949; the sharpest yearly
increases were in manufacturing
demand
the
stressing
travel
in
were
sport
points for
stimulated
was
despite
While
Dresses
market
dipped to 11 from 17.
All indus¬
try and trade groups except serv¬
ice
had
more
concerns
failing
in
items
week.
The
promotions
needs.
Industry
net gain of 21
a
wear,
of
CHRONICLE
by
of
referring to
Current
con¬
"Indica¬
Business
may
Activ¬
30,
be
tional
ity."
1950
to
the
June
made
obtained
City
June
from
Bank
of
1951.
30,
exchange
offer,
5,
1941,
The
New
Na¬
York,
Exchange Agent.
The dol¬
lar volume of orders did not vary
considerably
week
There
record
was
buyers
a
present
in
the
year
ago.
that
from
corresponding
at
a
number
the
of
various
wholesale centers last week.
daily wholesale commodity
price index, compiled by Dun &
Bradstreet, Inc., declined rather
(Sharply in the closing sessions to
clearance sales spurred shopper
interest, but failed to reverse the
decreasing total dollar volume,
for the week ended
its latest summary of trade.
SEWTY-OM
the Federal Reserve Board's index
DUn &
;Stand at 244.92
"the
with
compared
earlier
Jan.
on
245.49
with
and
This
10.
week
a
268.88
the
on
corresponding date
a year ago.
Leading grain
k et
m a r
s
con¬
tinued to fluctuate irregularly on
the Chicago Board of Trade last
Bradstreet, Inc., reports in
the
was
adversely affected by
weather
unseasonal
tions
prevailing
in
condi¬
many
Jan.
shoppers neglected
win¬
For
7,
on
change
the four
weeks
a
from
the
YEARS
ended
1949,. sales registered
week.
less
sales
Jan. 7, 1950,
25%* from the like
period of last year.
In the pre¬
ceding week a decrease of 3% was
registered under the like week of
1949.
parts
of the country.
Many
store
decreased by
The retail garment trade gen¬
erally
Department
country-wide basis, as taken from
IY
no
corresponding
Trading in futures was
active, averaging 23,600,000
FLY AY EE
fiushels per day for the week, as
.against 26,600,000 bushels the
week
before.
Wheat
showed
.strength at times but demand was
ciot urgent and closing prices were
^slightly under
those
of
An
week
a
ago.
8
Export
'was
demand
for
wheat
slow and government buy¬
ing continued light.
Corn
prices
were
easier toward
-domestic
and
demand
export
2.
•business
•domestic
An
3.
A
4.
from
An
sources,
5.
flour
-dull, with
largely to
market
buying
actual
remained
still
confined
needs.
-values moved slightly
Cocoa
higher, fol¬
lowing substantial advances of re¬
Coffee prices were a
analysis of the broad
study of basic business conditions.
on
and divi¬
to
all
thoughtful investors. You
personal
or
higher for the week.
markets
at
Chicago
^generally stronger, aided by
business stationery.
DETROIT
II. HENTZ &• CO.
were
con¬
:ft
BOSTON
NEW YORK
CLEVELAND
GRAND RAPIDS
Live¬
Members New York Slock
Exchange and other
principal Stock and
Commodity Exchanges
may
by writing Manager, Research Depart¬
cshade easier in less active trading.
Lard
and
other
vegetable oils
were
■4''
and Brokers
Established 1879
Members New York Stock, Exchange
copy
your
| Distributors, Dealers;
& CURTIS
analysis of leading industries.
will be of interest
ment
Underwrite!7%
JACKSON
economic outlook.
and other
a
ft"
PAINE,
The information and views contained in this
review
obtain
☆
I WEB BER,
dends.
cent weeks.
stock
ft
the
past year.
A forecast of
corporate earnings
aided by good export
during the week.
The
covers
,
1. A review of the
-coupled with very light country
-offerings.
Trading in oats was
•duite
active
and
prices
were
istronger,
Review and Forecast letter
following:
the period due to a
lack of aggressive demandi^Earl:Ier in the week prices were sus¬
active
Croups Selected for Largest Appreciation
Our Annual
the close of
tained, by
Appraisal of 1950
leading stock and commodity exchanges
HARTFORD
AKRON
LYNN
PHILADELPHIA
PROVIDENCE
LOS ANGELES
BEVERLY HILLS
ft
<
CONCORD
MILWAUKEE
ST. PAUL
PASADENA
DULUTH
MINNEAPOLIS
SPRINGFIELD
WORCESTER
Listed,
Unlisted Securities
tinued firmness in dressed meats.
Slaughter lambs led the advance
with a rise of about $1 per hun¬
dredweight over a week ago.
Cotton
(market
week.
prices
in the
continued
firm
domestic
the past
and Commodities
60 HEAVER
STREET
New York 4,
781
N. Y.
FIFril
AVE., N. Y.
(Sherry-Netherland Hotel)
BOwling Green 9-8420
Plaza 9-3060
*•"'
Spot values
climbed
to
new
high levels for the season with
the New York quotation show¬
Chicago
Detroit
Pittsburgh
ft\
CHICAGO
Geneva, Switzerland
<
t
78
COMMERCIAL
THE
(314)
Continued
jrom
Thursday, January 19, 1950
CHRONICLE
FINANCIAL
&
76
page
'
,
.
_
After the Turn of the
Business and Finance Speaks
in t.
this field
generally stabilized price levels of building mate¬
will stimulate long delayed renovation plans.
There will be art increased demand for security hard¬
The
the
itself
more
stems
principally
from
increased
Much
from Ohio
of
the
last
to go down and basic costs to rise.
acknowledged by
continue
Costs
otherwise derived
less
than
ing,"
but
made
out
to
books
the
Frederick
C.
Smith
charges on the
interest
as
phantom Social Security Trust Fund; or benefits which
accrue to persons engaged in business and industry who,
obtain the necessary
capital for their ventures directly from private sources
by voluntary agreement, resort to the appropriate politi¬
cal agency at Washington to circumvent their lack of
trustworthiness
and
sequester for them by taxation
private capital to satisfy their wants; or the other hun¬
lacking sufficient credit standing to
I
subsidies that come from taxes.
one
for
sales
new year
price
should
with
shall the President's deficit
Federal
and
works,
be
be
or
what
adopted
scaled
sound
a
of
parts
which
and
the
American
and
world
shall
line
will
$150,000,000. 1950 gioss revenue will
reach $160,000,000.
Earn¬
ings for the last 11 .months of 1949
totaled
$19,422,053, while for the
probably
a
be
basis
Far
East
shall
I
as
000 kilowatts.
To
foreign policy, the outlook is far
the United States, for more
With respect to our
continued
emasculation of
"insanity"
as
John Bassett Moore, our greatest interna¬
on
similar
a
bi¬
part of
the
will be
done
of social
of
C.
SMITH
R.
are
the great
Alexander
H.
President, American Airline
will
ment,
The year
air
just concluded has been a profitable one for
U. S. airlines.
We believe the volume of
the
of
most
transportation
than in
in
1950
will
be
somewhat
greater
1949, perhaps something less than 10% greater.
In the air transportation industry
we
will continue to have problems
of
a
nature
basic
have had during
The
principal
an
which
been
areas
has
such
to
in
that
1950
we
the past few years.
economic
problem
excess of competition,
arises from
increased
an
extent
in many
that
the
result has been wasteful.
Since the end of the war the Civil
Aeronautics
more
has
Board
per
authorized
public
necessity reasonably
This has resulted in higher
costs to the public, rather than lower
costs, both in increased mail pay¬
ments to some airlines and in higher
requires.
C.
R. Smith
fares.
This problem can be
the
Civil
additional
Aeronautics
route
Board
if
it
will
authorizations unless
remedied by
cease
granting
they
are
unmis¬
public adequately, and
previous mistakes by decreasing dupli¬
cating route mileage where experience indicates the
services are neither self-supporting nor required by the
public.
takably
required
to
serve
the
administration
dealing with
of the portion of the Civil Aeronautics Act
mail
times
compensation.
the
identical
amount
system could
Some carriers receive ten or more
of
compensation as competitors on
transporting a ton of mail.
No
be better devised to discourage initiative
routes
for
and reward relative
inefficiency.
authority
an
hope that at least
the President's budget
This would affect
with.
away
number
.
With
a
degree
socialism.
of
Many
Federal
members
decentralized arrangements,
responsibility,
as
a
BREHON SOMERVELL
Inc., made further gains in ex¬
diversifying its activities during 1949.
Approximately $5,000,000 was expended during the
year for capital additions and replacements, bringing
the
total expended for these pur: ,
poses since World War II to more
than $37,000,000,: In this time," the
Company has entered into many new
activities, has acquired new plants,
and modernized dlder plants to attain
more efficient operation.
The year 1949 brought many of
the postwar economic changes which
had been expected during 1948, but
Koppers
dealing
with
welfare
~ "
problems.
-
that both parties in Con¬
gress will resist both of these trends which I have men¬
tioned—that towards deficit financing and that towards
confident
generally
am
which did not materialize because
increasing Federal controls. I expect the wartime excise
taxes will be largely eliminated -and no new taxes will
be
imposed.
scene
ingly
I remain optimistic, but
this
failure
activity such as ljad pot been neces- '
sary since before, the; war.
by a keen sense of frustration over
Administration to present a positive
program
East.
of the
to oppose the Communist
As
member
a
of
the
challenge in the Far
Senate
Foreign
Relations
disturbed over the ap¬
parent unwillingness of the Administration to take both
parties in Congress into its confidence with a view toframing a positive, bipartisan, ail-American policy. But
I am hopeful that the public outcry over the present
Committee,
I
particularly
am
Chinese crisis will bear fruit.
have
I
program
feel
sure
no
to support
an
effort
would
to
is
doubt
will extend the ECA
the Administration on a nonpartisan basis in
frame an equally; effective policy which
to
offer
the
Communism.
now
that Congress
for Europe on a reduced scale. - In addition, I
that fthe vast majority of Congress stands ready
up
Asiatic
nations a
Whether such
a
to the Administration.
Executive Branch will act
fore it is too late.
dramatic alternative
program
will emerge
I earnestly hope the
positively
on
this matter be¬
conscious of production costs
sales efforts to peak
and. spurred
op¬
timism is tempered
the
of
continued shortages.,
Their arrival
made' American; industry .. increase
•
•
world
On the
Company,
tending and
approximating
control
for
1939 to 2.93c in 1949.
living index lor .all
President, Koppers Company, Inc.
of Congress are seeking
emphasizing State and local
pattern
of
growing market,• attractive rates, and an ag*-
greater equality
Other proposed
financing.
deficit
require
a
housing, health and edu¬
people: j But their full enact¬
str^pgAoppdsition if. when added
obligations of the Federal Govern¬
fixed
kwh. in
cost
gressive load-building program, we expect to increase
sales and earnings during 195(0—and to continue to give
the more than 2,000 communities we serve the best m
electric service at the lowest possible price. ,
among the
encounter
they
a
public works -programs. Some of
desirable; I myself have supported
hope of ccVntributing to
enormous
extreme
if it will correct
Another basic problem results from the
forth
the most efficient and economic
ing, housing, and almost all other domestic commodities,
have had to rise far above their present levels.
Smith
particularly that providing for compulsory
national health insurance,
are opposed
not only for
reasons of cost but also because they would require an
I
Increase of almost half the
increase of $94.000,-
of
the
programs,
additional services than
convenience and
set
entirely
are
to the
served approximately
we
would
Federal
of
welfare and
opportunity
ment
/
•
At the same
commodities rose
from 100 (1935-1939) to J68.5 (October) in 1949.
It as
only by constantly improving our operations that savings
can be made.
Otherwise electric rates, like bread, clothr
Those in Con¬
over-centralization
deficit
cation in the
'
our
of $150,000,0p0—ah
3.78c
the lives of the people, naturally
these
:
thirtieth year,
1936,
time
on
several of them in the fields of
lawyer,, has so correctly termed it.
tional
.
generating, transmitting, and distributing elec¬
tricity, we have been,able, through .this policy, to reduce
the price of electricity over the years.
The price to pur
domestic customers has gone down from an average of
financing of government in
prosperity, and "with the
towards
over
.
t
idea of the manner in which the territory
some
the system has expanded in recent years
ol
trend
we
give
Ever on the search for
who .disagree with the idea of
deficit
think—having, in fact, joined the Welfare
State party, what else cap possibly be expected from
this body but more and ever more welfare legislation.
along than
may
;
•
.
T Our $325 000,000 new construction program, begun ip
1947* will continue at la substantial rate during 1950, will
probably reach $75,000,000. During 1949, $80,000,000 was
spent, including partial building oonsti notion and erecr
tion of the first unit in the new $66,000,000 Philip Sporn
Plant at Graham Station, West Virginia—eventually to
become one" of the world's great steam-electric generat¬
ing plants.
The new expansion program, the need tat
which is directly attributed to. ferritoml
growth and
future expectations, will increase our plant capacity by
over 50%—raising generating capacity to almost 2,800,-
means
*
them.
see
times
it
—
"
-
000 in gross revenue.,
coun¬
continued
Broadly stated, those
be further
Welfare State
ents of the incipient
period in .1948 earnings were
$17,464.312—ail increase of SI,957,r
same
681, in 11%..
recov¬
free
in
partisan basis?
issues
Philip Sporn
,
revenue
Europe, and
positive policy be developed
the
for
ex¬
that 1950 sales will exceed
any previous year:
1949 sales were
approximately
10 000,000 000
kilo¬
watt-hours for a gross revenue of
550,000 customers for gross'revenue of $55,000 000; in 1949
we
served
1.090.000 customers tor an estimated grosjs
in
scene,
the
of
world
the
bipartisan
a
it is
—in
ana
policy
leadership for the
support
of
tries
residential,
up,
number of customers served, and an
On
(2)
moving
use
industry
new
industrial,
in;
has grown and
support?
ery
With
countiy.
rural
pected
extend
sub¬
as
down
tax
it
pro¬
in fields of social welfare
mitted
gress
recipi¬
Congress having thus made its own members
controls
public
•
dred and
those
grams
the Farm Price Sup¬
on
scene,
Federal
savings made by
consumers of electricity produced
by the political au¬
thority such as the TV A makes possible; or old, age and
survivors'
benefits derived directly
from taxes, but
spelled
is
The
S. Senator from New Jersey
particularly
program,
Program; or
port
trend
my
(!) On the domestic
from taxes, is no
payments
the
farmers under
<The
judgment the two most vital questions before
Congress in the present session will be:
subsidy, "something for noth¬
a
rise.
to
so.f
U.
In
which is not
which is
fund,
members,
a
HON. H. ALEXANDER SMITH
.
would
supported the measure.
contribution to the Congres¬
pension
from
came
be a profitable one for the airline industry, bat it'will
require due diligence, hard work and good management
to make it
not have
by
year
fare reduction was geared to the increased seatingcapacity of the airplane so that it could be made without
significant loss of revenue.
doing so was prompted by the pen¬
sion
provision in it, that, indeed,
sional
the
The
.
voted for the Re¬
organization Bill that their action in
made
the
market-broadening process must continue and
hopes that the institution of high density,
cost' flights last month (December, 1949) will help.
State.
The
There is
find
American
duties-
of the so-called Reorganization Act—voted its
pensions it largely destroyed its independence
as
a
legislative body and definitely committed itself, parbaps irretriev¬
i®
ably, to the ideology of the Welfare
except for this provision, they
System, which covers 90,000 square
nples of territory in Michigan, Indi¬
ana, Ohio, West Virginia, Virginia,
Kentucky and Tennessee, serves one
ol the fastest-growing territories iti
and
broadening of the market, largely accomplished through
the family fares, which increased loads on light days
of the week, and through season reductions and ex¬
This
making
members
generally
business
promises well for the electric light and
even better than
1949 which was a
record year in terms of total customers served, electricity
produced and sold, gross revenue and net income.
!. The American aGs and Electric Co.
industry,
cursions.
Congress in 1946 in the guise of
efficient to perform its prescribed
passage
is
fleets.
The year 1950
power
moving
improvement
lower
It
President, American Gas and Electric Company
industry profitable if competition is reduced to the level
required by public convenience and necessity.
FREDERICK C. SMITH
the members who
their
modernize
to
ways
partially from greater efficiency of operation.
good reason to'believe the shareholder will
business.
S. Congressman
find
must
1949 will show substantial improvement over
in earnings for the airline industry.
>The better
1948
•
When
others
result
apartment dwellers.
Again inter, siiied selling effort at retail and whole¬
sale levels will be required to maintain proportionate
U.
service,: the cost of providing
price the public must be charged.
re-equipped with postwar air¬
are
The year
home-owners and
HON.
and
SPORN
PHILIP
This adversely
craft show it in their standard of service and their costs.
including jimmy-proof locks, chain fasteners and
guards directly attributable to increased rate of
burglaries and other criminal activities.
The alarming Irenes reported by the F.B.I, will be
manifested by positive protection measures moving sub¬
stantial volumes of auxiliary locks from hardware deal¬
window
volume of this
service
companies that
airlines are
many
of
the
that
ware,
concerned
standard
The
rials
to
major problem is that too
the
affects
the
ers
third
operating outmoded, high-cost airplanes.
expected that
past few years, it is
e
A
great emphasis
ernization. While there has not been too
on
_
,
.
While
these
necessitated
cutbacks
(economic
severe
-
HH
,
.
Lt. Gen. Somervell
,
production
certain
in
cjianges
of
lines
manufactured
goods
is
stabilized
itself, at least temporarily, at a level which will allow
.alert and aggressive industry to continue operations at
a
fairly satisfactoryj profit margin in. the early part
and lowered
some
reason
profit margins in many industries, there
to
believe that our economy has
' .'
of 1950.
Industry, however, jmust continue to oppose
with vigor
present trends toward socialism which, if continued,
undoubtedly will result in still higher and more stifling
the
business
jand personal taxation.
government's
encroachment
American enterprise
now
on
can
In opposing political
.personal freedom,
in
our
point to case histories
IJ0W Zealand and Australia, where socialism was dis¬
carded because, fn $pite of the reasonable degree of
personal security guaranteed, by government benevoContinued
on
page
80
Volume
171
Number 4873
perous
Mors N. Y. Bankers
Comment
times
for
the
COMMERCIAL
of
purpose
the
"A
of
of general welfare for
people is a goal desired by
everyone and toward which we
have made good progress in our
country through the
productivity
of our farms, our ..mines, our fac¬
tories, and our shops," Mr. Whit¬
ney pointed out.
"Further progress can be made,"
he
continued, "but the government
that undertakes to reach this
goal
by spending too much and taxing
too much and by
yielding to ex¬
travagant
demands
of
one
group
and
FINANCIAL
Whitney
business needs."
"inflationary tendencies
are prom¬
"While sensitive to general busi¬
necessity for their ness conditions, the character of
control requires the
thoughtful co¬ our loans appears to be undergo¬
operation
of
government, labor ing a fundamental change," he
and industry."
stated. "The seasonal line of credit
"The major events and devel¬
seems to be no longer the domi¬
opments in 1949," he added, "have
been
reported and discussed
at nant factor, as more and more in¬
inent
great length in the press and else¬
where
dwell
He
the
and
and
no
exists
reason
to
them
in this report.
they reveal that
despite the deep yearning in the
upon
dustries
noted, however, that "activ¬
ity in special types of instalment
loans
to
credit
to
business
provided
requirements
for their
through
long-time
consumer
hearts
of
peace,
ideological
increase during the year.
Furthermore, the short-term fi¬
nancing by the United States Gov¬
our
has
loan
greatly
volume
to
augmented
dealers in
those securities."
a
not
have
too
heavily and
rapidly, will inevitably kill
vitality of our economy." E. Chester
too
the
Gersten, President of
the Public National Bank & Trust
the
year
1949
predicted
that
everywhere
conflicts
for
con¬
seemingly unend¬
ing series of problems which can¬
help
but
influence
on
STATE
unsettling
an
domestic
and
world
and
economy."
Co., in his report to shareholders
for
people
Harvey D. Gibson, President of
the Manufacturers Trust
Established i%\x
Company,
MUNICIPAL
BONDS
Dealers and Brokers in
,
MAmbkr
FKDItRAL I) R POSIT
Railroad, Public Utility & Industrial
♦
INSURANCE COKrORATfON
Bonds & Stocks
%
Municipal Bond Department
Mgr. Ooet-f he-Counter Trading Dept.
D.
t,.
Chester
Gersteir
Charles J. Stewart,
1
new
Presi¬
in
Ingalls & Snyder
foresees further decline
pany,
interest
with
along
rates,
Members
100
George
Whitney, President of J. P.
Morgan & Co. Incorporated,
says forces, such as soft eco¬
nomic policies, mounting def¬
icits, and borrowing against
future
are
of
causes
New
Members New
drop in construction.
i
Head
5 5
dent of New York Trust Com¬
-
Howard Brown
Harvey 0. Gibson
York Stock
York
7-6800
New York
Public
National
Bell
'
Teletype NY 1-708
NEW YORK 5, N. Y.
—
Bell
System
Teletype NY 1-1459
INDUSTRIAL, RAILROAD, PUBLIC UTILITY
grave
Bank
City Bank
of New York
Citv
Exchange
AND FOREIGN SECURITIES
E. Chester Gersten of
concern.
The National
Curb Exchange
BROADWAY
COrtlandt
Office:
Wall Street
says,
despite
?
high business level,
inflationary tendencies require
UNLISTED TRADING DEPARTMENT
control.
During the last week,
number
City
banks, in their annual reports isof
executives" of
New
s©ed to shareholders
their
at
annual
mented
on
ditions
and
for
the
Among
Members New
con¬
York
Stock
Exchange
Members
com¬
economic
York
Curb
Exchange
New
& Co.
MEMBERS
New York Stock
outlook
general
the
in
Adler, Coleman & Co.
in remarks
meetings
current
business
or
a
York
current
New York Curb Exchange
yeaf.
those
commenting were
Charles J. Stewart, new President
New York Produce
Exchange
N. Y. Cotton Exchange
N. Y. Coffee & Sugar Exch., Inc.
Chicago Board of Trade
N. Y,, Cocoa Exch., Inc.
Exchange
Commodity Exch., Inc.
Chicago Mercantile Exchange
of the New York Trust Company.
Reporting
to
bank
15 Broad Street, New York 5
Jan.
on
that
stated
stockholders of the
12,
Mr.
Stewart
banking
is likely to
find it difficult to maintain inter¬
est
rates
at
current
levels
Teletype: NY 1-483
120 Broadway
1-484
HAnover 2-978$
New York
1-485
Telephone:
REctor
this
Cables: Wertma New York
5
2-2300
especially in view of the
government's "cheap money" pol¬
icy. He remarked that a further
year,
decline in the volume of
cial loans
may
also
commer¬
develop
as
a
result of smaller construction pro¬
especially among the util¬
grams,
Underwriters
ity companies.
J.
George Whitney, President of
P. Morgan & Co. Incorporated,
stated to shareholders that "while
the
Underwriters
—
*
Brokers
*
Dealers
Distributors
LISTED
1949 might be looked
upon
with
satisfaction
in
our
country,
some
of the forces at
year
—
ENLISTED
Dealers
SECURITIES
work throughout the year, if con¬
tinued at their presently accelerat¬
ing rate,
give
to
rise to grave
their
cern
as
Soft
economic
ultimate
policies,
con¬
PUBLIC UTILITY, RAILROAD
MUNICIPAL
effects.
mounting
BONDS
and INDUSTRIAL SECURITIES
deficits, borrowing against the fu¬
ture are not
only paradoxical in a
year of prosperity, but can bring
W.
tragic results to our economic and
E.BUTTON
ESTfBtJStfED IM6
financial strength."
•
He
added
further:
"Deficit
fi¬
W. C.
nancing undoubtedly may be nec¬
essary
times
of
great
depression
less
cuse
but there can be
for deficit
no ex¬
financing in
pros-
115
Broadway
New York 6, N. Y.
Tel. BArclay 7-8300
leading exchanges
NEW YORK
when
productive and
yet are too heavy a weight upon
recovery,
and other
Members New York Stock Exchange
in times of war and also in
taxes become
Members Newt York Stock Exchange
Langley & Co.
Philadelphia
Eastorr, Pa. "
Baltimore
Portland,. Me.
a
marked
ernment
have
and
individuals has shown
Outstandingly,
tinue to1 create
nation
79
current
the
George
(315)
business
another, and otherwise bur¬
dening the productive forces of
Charles J. Stewart
CHRONICLE
tinue at least
state
all the
&
generally high level in commenting to stockholders on financing, term loans from
banks
activity would con¬ the;; bank's situation,
noted
a and others, and by an
accumula¬
through the Hist six Change in the character of busi¬ tion
of
undistributed
earnings
months of 1950, but he added that ness loans.
retained for their
stimulating business and trade and
paying for wasteful extravagance."
Outlook
on
THE
CINCINNATI
Boston
Dayton
Lewisfon, Me.
Lexington, Ky.
Hartford, Conn.
Thursday, January 19,
CHRONICLE
& FINANCIAL
COMMERCIAL
THE
(316)
80
1950
Continued from page 78
Speaks After the Turn of the Year
Business and Finance
socialistic
bureaucracy
houses, etc.
purchased
a plant which makes road materials at Rochester, N. Y.,
and started construction of a plant to manufacture pipe
•coatings at Port Arthur, Ont., during 1949. It also pur¬
chased Freyn Engineering Company, Chicago, and its
wholly-owned subsidiary, Open
Hearth Combustion
wood
new
Company,
preserving plant at Richmond, Va.,
well-known firms engaged in engineering
steel plants and their auxiliaries.
products developed during the year by Kop¬
construction of
and
Among
entire new line of chemical intermediates
compound of coating railroad ties,
life; and a new compound
lor use in pressure-treating wood, which gives added
protection against rot and termites.
Koppers also was active during the year in a number
.of
foreign countries;
An extensive survey, looking
toward the expansion of India's steel industry, was com¬
pleted. In Nova Scotia, Koppers built and put into op¬
eration a large battery of coke ovens for Dominion Steel
Company. In Chile; work on a $70,000,000 integrated
steel plant, being erected under Koppers' supervision,
progressed rapidly and the entire plant will be in opera¬
pers were an
useful in industry; a
extends their service
which
special factors pres¬
good business for the next few
months.
The strikes in the steel and coal industries
late in 1949 piled up demands for these products which
can be satisfied only by a full rate of production in the
first part of the year.
Employment remains high so that
the buying power of large segments of the public still
supports considerable business activity.
There
are,
however, certain adverse developments
which may play a sobering role in our economic picture
in the year.
It is apparent now that the program for
capital expenditures by industrial corporations
and
railroads has been pretty well completed.
It is reason¬
able to expect that in 1950 the amount of money spent
for new plant and equipment will be below the average
most
tion
The
the market in 1950. The Company's
built and erected two 17,000,000
of
that
It is necessary to extend their
systems, build new streets, im¬
prove many others, and erect new municipal buildings.
In nearly every municipality schools are operating be¬
yond their normal capacities. It is necessary that many
new buildings be erected.
Many of these will be con¬
structed during the coming year.
State highway systems
are
being enlarged rapidly and costly high-speed toll
roads are being constructed in several states.
industry expects to have a good
price-cutting
\
.
We
STEINMETZ
J. WILSON
Philadelphia
prevailing feeling seems to be
enter 1950, the
optimism for the year as a whole.
This is quite
understandable.
The predicted depression, recession,
call it what we will, for 1949 did not materialize.
There
was
some readjustment, then
a re¬
of
versal
of the trend and
Industry, agriculture and resort
.
There
answer.
that
even
able,
than
hazardous
a
surprise."
on the future outlook becomes more
$10 bet on a claiming plater at a
we
half.
work
If
and credit should be avail¬
when
and how much the
,
.
J. Wilson Steimetz
slumps do
business
and
lunch
not affect
pails too extensively, bread business should
cake and variety business should increase.
efficiency
Utopian to believe that poli¬
considerations and that the
psychological reaction would always be favorable to the
climate that those responsible were trying to create.
Personally, I believe the most we can hope for is to
level to some degree the peaks and the valleys.
The well-informed people with whom I have talked
are somewhat obscure about whether the readjustment
as
a
There is a feeling that, while 1950
be on a relatively high level, we may¬
enough.
whole may
readjustment after the first half
be in for some further
of the year.
to reflect somewhat in profits.
naturally an optimist, I feel that our in¬
Since I
am
dustry and our company should
a
FRANK W. SUTTON,
With stocks of
the
many
create
a
building
of
homes
oped.
Another
Lawrence F. Stern
and
large
segment
—
,our
the
the government price support program.
of this group
of
farm group — has
as a result of domestic
foreign demand plus aid from
population
prospered
Buying power
has been reflected in belter earnings for
that
being hurt.
present no indication of
increase
in
interest
Deposits appear to be on the
Labor costs in most bank¬
increase.
institutions will probably be
higher in 1950 than in prior years.
This
is
particularly true of the
ing
Frank W. Sutton, Jr.
has
sharply increased the sales of house¬
hold goods.
In addition, new lines
of household goods have been devel¬
depression period
material
any
rates.
helped
demand for new machinery
the
and
headed for a
There is at
especially large contrib¬
prosperity. The expan¬
has
or
were
Fortu¬
nately, the fears were without foun¬
dation and we passed through the
readjustment period without too
utors to our
capacity
we
might become very serious.
ing power has been maintained with
employment and wages high in most
of our largest industries.
The auto¬
mobile and the building industries
plant
that
recession
Despite sharply rising prices, buy¬
of
many
were
fearful
earlier studies indicated it might be.
sion
year
pessimistic about the
prospects for the year 1949 and were
people
of the war, the
been
prospects are good.
this time last
About
capital and consumer goods low at the
have
J.
predict how the economic changes during the next few
activities during the remain¬
der of the year, but at the moment
good business we .have enjoyed in
the postwar years has been a normal development.
The
Size of the recovery, however, has been greater than
end
JR.
opinion the year 1950 will be a good year for
for banking.
It is difficult, however, to
of Chicago
institutions that will be affected some¬
what seriously by the minimum wage and hour law.
Earnings on expected increase in deposits should offset
the increase in operating costs.
New construction during the year 1949 exceeded all
smaller banking
our
expectations. It is believed
high during the year 1950,
tinue
if the second session of the
as
well
pretty
be
I
of different kinds.
am
rejected the major items of
President Truman's program which
ready
establish
force
Great
in
is
this country a
of the type in
Britain. That pro¬
in
state
labor-socialist
before the
the great issue
realizes that
it must go to a. decision in the Con¬
gressional election of 1950, and not
country
in this
If
and
everyone
Congress.
government undertakes to
the
in the United
ought to
of the whole situation and
operating a planned and controlled
charge
construction will con¬
but on a slightly lower
years
many
Robert A. Taft
The
politics of the Truman Program is based on
have
been
the
be fooled into believing
that the government owes them a living and can guar¬
antee Utopia to all.
My recent trip through Ohio con¬
vinces me that neither the farmer nor the workman
believes in any such promises or guarantees.
,
the
theory ,that
people
can
Administration brings up the Taft-Hartley Act,
socialized medicine proposalsp
rather for the purpose of making issues in
the election than with any real hope of securing their
If the
the Brannan Plan or the
it
will
be
passage.
Certain issues, however,
should be and probably
wilH
be dealt with:
First:
laws
There must be
a
revision of the social security
which has
Senate Com¬
dealing with old-age pensions, a revision
passed the House and is now before the
mittee.
Second:
There should be a complete revision
of the
but Congress may content itself with a
reduction of excise taxes and an increase in the corpo¬
tax
system,
which are now 38%.
the appropriation bills will have to be
passed. There will surely be a strong movement for
economy and perhaps a complete block on new spending
plans. No doubt many features of the Hoover Plan willl
be adopted, but I would be surprised if any plan recom¬
mended
by the President produces any substantial!
economy in present spending.
Perhaps the most pub¬
licized battle on economy will be on ECA, where the
ration profits taxes,
Of
course,
Continued
businessmen
|
economy.
basis than last year.
For
re¬
ceive, there is no way for it to per¬
form its guarantee without taking
months will affect business
LAWRENCE F. STERN
Senator from Ohio
States
81st Congress
dominated by political combaft
afraid that almost every ques¬
tion will be viewed in the political light by both sides,
This Democratic Congress has allooks
It
would
and
President, American National Bank and Trust Company
]
ROBERT A. TAFT
guarantee everybody
States that which he
President, First National Bank of Toms River, N.
business
,
prosperity of the nation.
United
work through 1950 with
satisfactory showing.
It is my
expenditures
lower
and
gram
be good—
the economy, it would be
should spend to balance
need
not
do
we
taxation
would
for them.
strikes
ticians would forget political
has gone far
additional taxation, but less
in operating our
government, then there would be no doubt about the
perity
.
,
Improved organization, better training methods and
employer relation programs should generally increase
government
people of our country could convince our legis¬
continuance of our business pros¬
If the
lators that to have a
looking
industry is launching an extensive promotional
program that should bear fruit for those who make it
smart
small
the demand is for large or
loans.
enjoyed
Our
managed economy is
The opposing view is
were
is available whether
find comfort and a modest glow
Having done it before, we feel that we should be able
again.
Without resorting to slide-rules or star gazing, we feel
that 1950 should be a good year for us—at least the first
a
we
conservative policy, but a
future
moment
the
pride in celebrating our 25th anniversary and
record of achievement.
rough going and
our share of boom prosperity.
enough to know when and how much
money
statement
a
We have survived some very
those who believe, and
though
in better finan¬
today. They have adopted a
sound one. Plenty of money
cial condition than they are
back to a rather good
are
lem and that
the
So
of
not all in government, that
have solved the depression prob¬
we
optimistic and
very
pessimism.
to do it
are
are
exceptionally good year.
The rising prices in the stock market that have pre¬
vailed for several months past have created a feeling
of optimism.
Many people look at the stock market as
a barometer of future business conditions.
An optimistic
attitude on the part ot the people of our country will be
much more conducive to business activity than one off
a
many
hath of marvel or
At
and other
remarkable.
they
business constitute the
think it will be an
crooked track.
move up¬
a
strike,
distubing in¬
fluences which might normally have
been all that would be necessary to
throw us into a severe tailspin, this
behavior seems to be all the more
strike
prospects
1950
the
discussed
businessman, in these days of changes
and uncertainty, I have often wished for a fairy god¬
mother to whisper in my ear (either ear) the lowdown
on the future for
a year or even for 30 days.
But being simply a normal mortal, I must be satisfied
with the poetic phrase/ (T know not what the future
In the face of the steel
ward.
coal
This makes it
competitive basis.
a
The banks of our country were never
President, Ninth Bank and Trust Co.,
we
adjusted to
major sources of revenue in our section of the country..
Nearly all of the resort people with whom I have talked
and bankers in the resort sections with whom I have
President, Continental Baking Company
Like
As
inventories carried
reduced considerably and
problem cases has been lessened.
*
in a buyer's market.
Prices are gradually
possible for institutions financing instalment purchases
to do so with less risk and buyers are purchasing many '
of their needs on a much sounder price basis.
operating problems.
one
are now
being
STRITZINGER
K.
water
During the past year the excessive
the number of
currencies.
as 1950 begins one is led to the conclusion
it should be a satisfactory year for business.
■
municipalities.
systems,
by most merchants have been
general,
RAYMOND
1950 should bring about a tremendous in¬
construction operations by our State Govern¬
in
sewer
foreign
In
planning
year
ments and
too, may well be lower in 1950.
While
purchasing power in the agricultural areas will
be substantial it is not reasonable to expect that pur¬
chases will be as large as in this year.
It is likely, too,
that certain industries will face increasing competition
from imports of foreign goods while losing much of
their own export business as a result of the devaluation
the largest in the country.
either doing so at this time, or
are
in the immediate future.
so
crease
Farm income,
A new
gas department was formed in the Engineering and Con¬
struction Division, this department being equipped to
offer a completely "packaged" service to the American
gas industry, including manufacture of needed equip¬
ment, erection of facilities, and consultation and advice
on
to do
the net
Metal Products Division
cubic foot gas holders,
construction
three years.
competition eventually will result in some
and profit margins may be lower.
mid-1950.
plastics field, Koppers continued to grow, and
(Several new types of plastics with improved qualities
on
ning to make improvements and build additions to their
business enterprises, but have been waiting for prices
of materials and labor costs to decline.
Both seem to
have leveled off and many who were hesitant to begin
in 1950, the year will be a competitive one, with
companies placing their emphasis on the produc¬
of smaller and lower priced automobiles.
This
year
the
be placed
assure
While the automobile
tion by
will
begins, there are several
may
of the past
(
In
that
ent
service, Koppers completed a
enlarge its scope of
To
1950
As
existence unsatisfying.
;
manufacturers, mail order
agricultural implement
the
cost in taxation too high, the
inefficient, and the controlled
lence, the voters found the
plan¬
.
■
.
.
;
on
page
Ji ■:";■■■
8%
Volume 171
Number 4873
THE
Chic. R. I. & Pac. Bonds
Halsey, Stuart & Co.
an
underwriters'
offering today
to
mission
Rock
Co.
Island
first
Pacific
2%%'
bonds, series A, due Jan. 1, 1980
at
9.9xk%
and
interest.
accrued
The group was awarded the bonds
at competitive
sale
Jan.
on
18
on
its bid of 98.81%.
Proceeds
bonds
from
to
are
be
redemption of
pany's
general
convertible
A
the
sale
of
of
Bank
Bldg.
Mr.
formerly with W. E.
F.
(Special
to
The
Brink is now
W.
C.
He
was
Co.,
18
owned.
On
property
is
limited
Redemption
to
option of
prices ranging
The company is a leading manu¬
facturer
of
automatic
NEW
YORK STOCK
YORK
CURB
COMMODITY
New
Abbott
He
York
is
sole
City.
pro¬
was
formerly with
Lynch, Pierce, Fenner &
Merrill
Beane and
the
Irving Trust Co.
Corp., Du Mont (Allen B.)
Three With Lee Higginsorr
Laboratories, Inc., Emerson Radio
&
Place,
Webster
prietor.
Phonograph
Electric
Co.,
Hallicrafters
Co.,
Radio
General
Corp.,
Motorola,
&
Co.
and
Inc.,
West-
Financial
John D.
Chronicle)
MASS. —Robert
Richard
Cay,
W.
Moulton,
are
now
Young
with Lee Higginson
eral
inghouse Electric Co.
to The
BOSTON,
Inc.,
Laboratories,
Wells-Gardner
(Special
Co.,
B.
and?
affiliated?
Corp., 50 Fed¬
Street.
STOCK (r
BOND
EXCHANGE
EXCHANGE (ASSOC.)
EXCHANGE, INC.
BROKERAGE SERVICE
for Banks, Brokers and Dealers
AS
by
ANALYSTS
and
BROKERS
IN
RAILROAD SECURITIES
first
new
company
Hardy & Co.
at
103.50%
to
from
also be
may
re¬
Members
ONE
WALL
STREET
Telephone
HAnover
NEW
YORK
of
most
serves
York
Stock
Exchange
Neiv
York
Curb
Exchange
2-1355
30
Teletype—NY 1-2155
principal
cities
and
agricultural
areas
in
New
Members
5
Broad
St.
New York 4
Telephone Dig-by 4-7800
company
operates
7,619
of road of which 7,157 are
It
Waverly
C.
SPECIALISTS
100%.
owned.
Radio
MEMBERS
NEW
ranging from 101.50% to
miles
sold under its
name
Mclaughlin, reuss & co.
deemed for sinking fund purposes
at prices
The
record
are
Initial Investments Co. has been
formed
with
offices
at
123:
directly to the public
and
to
radio-television-phono¬
graph manufacturers.
Its prin¬
cipal customers include Belmont
own
be made at
the
100%; the bonds
changers which
Scott
the
Initial Investments Co.
and
$12,000,000.
may
the
three-size
Magnavox
by
re¬
both
three-speedautomatic
record
company.
buying department.
road
of
owned
the
of
mortgage bonds
East
Edw. G. Taylor & Co. Inc. in the
the company at Jan. 1,
1950, issu¬
ance of additional first
mortgage
bonds
com¬
wire
4 V2 %
$33,644,500),
mile
Jan.
on
125,000 shares of
single-speed
of certain
stockholders, do not in¬
volve any new financing
formerly with
ent $55,000,000 issue will consti¬
tute the company's total
mortgage
debt which will be at the rate of
per
offered
and
stock
of
Webster-Chicago
Corp. at $11.25 per share.
The
shares, being sold for the account
J.
associated with the
the
$7,685
Inc.
mon
Chronicle)
O. —Robert
Thornburgh
4th Street.
18
Thornburgh
Financial
CINCINNATI,
redemption of all of
the company's first mortgage 4%
bonds,
series
A
($25,760,000).
Upon these retirements the pres¬
only
Co.
magnetic
manufactures
series
and to the payment of
promissory
incurred
to
obtain
funds
in
&
Shillinglaw, Boiger & Co.
With W. C.
motes
used
Eberstadt
It
com¬
bonds,
(approximately
Co.,
and
corders.
U
the
the
mortgage
income
was
asso¬
&
changers
(317)
the
to
applied
all
National
become
Devine
Hutton & Co.
Com¬
mortgage
J.
is
subject
&
C.
CHRONICLE
Chicago Stock
Offered by F. Eberstadf
And Shillinglaw, Boiger
OHIO—Welling¬
Garrard has
with
Garrard
authorization, $55,000,000
Chicago
RR.
First
that
group
Commerce
P.
ciated
FINANCIAL
Wehsier
(Special to The Financial Chronicle)
ton
Inc. heads
(Jan. 19),
Interstate
C. J. Devine & Co. Adds
CINCINNATI,
Offered by Halsey,
Stuart Group at 99V2
COMMERCIAL &
Teletype NY 1-733
the
important
the
vast
Middle West plains territory from
Lake Michigan and the Missis¬
sippi River to
tains
and
the
from
Rocky
Moun¬
Minneapolis
St. Paul to the
and
Texas Gulf Coast.
INDUSTRIAL, PUBLIC UTILITY, RAILROAD
With E. M. Adams & Co.
(Special
to
The
Financial
PORTLAND, ORE.
W.
Zerenner
ciated
with
American
formerly
has
E.
M.
Bank
with
Underwriters and Distributors
and MUNICIPAL SECURITIES
Chronicle)
—
Frederick
become
Adams
Bldg.
John
asso¬
&
He
Co.,
UNLISTED TRADING DEPARTMENT
was
Investment Securities
Galbraith
v'f
& Co.
Established
Laurence M. Marks & Co.
Members
New
New York Curb
//
.
II
49 Wall
York
Stock Exchange
Exchange (Associate)
Union Securities Corporation
65
Street, New York 5, New York
Broadway, New York 6
Telephone: HAnover 2-4800
K NO X
&
Telephone HAnover 2-9500
Teletype N.Y. 1-344
BOSTON
•
BUFFALO
HARTFORD
CLEVELAND
•
PHILADELPHIA
•
SYRACUSE
CO., Inc..
MEMBERS
New
York
Security Dealers Ass'n
DEALERS AND
Rights
-
Scrip -Warrants
RAILROAD
PUBLIC UTILITY
BROKERS IN
INDUSTRIAL
UNLISTED
REORGANIZATION SECURITIES
BOND and STOCK
SECURITIES
BROKERS
11
Broadway
MS Pohnell
&
NEW YORK 4
Telephone DIgby 4-1388
Qo.
Members
New York Stock Exchange
New York Curb Exchange
^
Bell
System Teletype NY 1-86
27 State Street
BOSTON 9
120
BROADWAY, NEW YORK
•
-
Vilas
& Hickey
Members New York Stock Exchange
5
Tel. REctor 2-7800
Members New
York Curb
49 Wall Street
Exchange
New York
-
Telephone CApitol 7-8950
Bell System Teletype BS 169
Detroit Office: Buhl
Building, Detroit, Mich.
Telephone:
HAnover 2-7900
Teletype:
NY 1-911
5, N. Y.
82
(318)
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
Thursday, January 19, 1950
Continued from
page 80
Business and Finance Speaks After the Turn of the Year
difference
exceed
between the
billion dollars.
a
sums
proposed
will
probably
The third
subject which probably will be dealt with,
is that of civil
rights. Over Southern filibuster, it will
be difficult to get cloture on
the FEPC Bill, but cloture
probably
be^ obtained
can
the
on
Anti-Poll
Tax
and
Anti-Lynching bills.
to
the
people in November,
controlled
that the weathermen have taken
over,
now
economy
taxes to pay for it.
1950,
handout
and
its.
on
state
of a
program
with
any
governmental
spend,
control
As far
natural
or
business forces, would
the banking business is
concerned, it
as
looks like prospects continue
good, but with more initia¬
tive and judgment
being required than has been the
for several years
past.
case
v
TAYLOR
postwar
Coast
1949
year
was
supply
During the
significant change
demand
and
petroleum
of
one
situation
industry.
1946
years
■
in
be
in
the
the
Pacific
'
through 1946 the Pacific Coast
industry was pressed to the limit to
increase supplies to keep
pace with
a
inventories.
crude
oil
With
production
inventories,
reached
with
the
a
in
rate
1950.
caused
portation
of
by
increased
the
natural
from
gas
Texas, the dieselization
of
West
such
railroads,
Reese H. Taylor
crude
oil
burdensome
prices
declined.
levels,
areas.
Substantial shipments of fuel oil to
the East Coast this
winter have, and. will
further, materially relieve the
inventory situation.
1950
the
distillate oils
is
1949, while
further
fuel
a
oil
Coast
expected
is
to
demand
be
decrease
expected.
A
for
gasoline
and
slightly higher than in
in the
small
demand for
decline
net
resi¬
in
the
total demand for petroleum is
in
indicated, which may re¬
corresponding reduction in crude oil production
avoid further growth in inventories.
place greater and greater emphasis on
selling. Domestic
marketing facilities will be expanded and
and there will be
modernized,
vigorous effort to establish new out¬
lets for petroleum
products domestically as well as out¬
a
of the Pacific
Existing
Coast
refinery
Coast should
area.
crude
capacity
1950
needs.
the
on
Pacific
Nevertheless,
a
rather large construction
program is in order for normal
replacement of obsolete and worn out
facilities,
and
looking to the future, new cracking facilities are needed
to provide for
higher percentage yields of gasoline and
lower yields of fuel
oil
to
compensate
for the constant
demand shift in this direction.
The
curtailment
slowdown
of
has
resulted
in
some
of
drilling and development programs in
proven areas, but there is no indication that
exploration
activity will be diminished.
On
the
whole, the petroleum industry will be in
very sound condition in
continued growth and
1950
and
a
look forward; to>
may
prosperity thereafter.. But the
future success of all business will
depend in large mea¬
sure upon the
course followed
by our Federal govern¬
ment.
We cannot place too much
emphasis on the im¬
portance of this factor.
Taxes
already are too high.
Further increases
many
seriously damage industry's ca¬
pacity to produce useful goods by
unduly draining away
capital needed for financing the
replacement and ex¬
a
government
of
as it
Insurance
THWAITE, JR
J.
K. Thompson
going hunting
or
how the weather
cently,
one
It used to
has
fishing
was
negroes
long
to
been
ask
the
next
far
as
taxes
are
available
money
has been and
ever
dividend
with
many
workers
their
concerned and
are
concerned.
plans
are
pretty
old
negro
old negro
when God
was
running it
you
that
in
and
must
1950;
the
Only then
time
and
The
to
increases in costs, pricing
many
business will
vacations
Company
far
as
satisfactory
labor
situation
most
in
made
are
for the
comments
setting such reductions in
tax
corporation taxes and in the rates
incomes.
'
As far
as
the banks
position to take
ments.
are
favor
of
all
in excel¬
require¬
business,
still
are
investments
due
to-
the low interest yields on
government securities and the
resultant effect on corporate
yields
pretty thin. The
banks generally have shown net
profits in 1949 pretty
close to those for
1948, and it is hard to see any. great
possibility of the
1950
profits
are
being
greater
any
than
We
are
naturally concerned at Federal deficits during
high
consumer
could
incomes,
happen during
a
and
the
period of
implications
poor
of
what
business.
Every
opportunity should be taken to stress the importance of
reduction in governmental expenditures through follow¬
ing
recommendations
Hoover
otherwise.
!
Commission
•
or
•
or
should
we
mine days
more
idleness
in
year
than
the
a
the
tons,
The
last
in
any
quarter-
little
435 mil¬
over
lowest tonnage- since
present
dock
west
shortages
generally in retail
Tuohy
with
demand
Walter J.
for
labor
thecoal
heavy
yards,
potential
for
metallurgical
expansion,
and
all indicate that
utilities
purposes,
construction,
new
given the
scarcity of good coal,
supplies in the north¬
and
inventory
area,
coupled
hoped i'or,
coal loadings in our
region for the first half of 1950 will be at least as good
in
as
the
months
peace
corresponding
there
will
period, of
substantial
be
1949.
In
all-rail
the
half
excess
1949
of
1950
early
movement
coal to replenish supplies in the dock territory.
of
An early
this spring is a certainty. In the
coal
of the last half of
loadings should be greatly in
1949, as most, of the important
interruptions in coal output
concentrated
were
in
the final half-year.
Speaking of business
will
the
be
generally, the first half of 1950
making up lost ground and filling
resulting from the coal and steal shut¬
devoted
shortages
of
downs
ventories.
to
1949.
There
will
Merchandise
be
replenishments
traffic for at
least the
in¬
of
first
six
months may
be expected to hold up well, and of course
Michigan lines stand to benefit from prospective
heavy
operations
Detroit
business volume, high employment and
year
by
the low ebb of
the
periods of heavy
during all
year
1939.
final
are
credit
proper
their
on
off¬
This
lost
probably
lion
lake movement of coal
Their costs, like costs of other
increasing, and the yields
least
larger individual
on
concerned, they
care
at
by increases in
revenues
new
century. As a result, the output of
bituminous coal in the United States
they
elimination; of excise
mines
the
the
1949.
was
maladjustments due to.
articles and services out
as
in
of
were
pension
In all discussions of the Federal tax situa¬
suggestions
j
a
relatively good year, with
operating results far better than
net
While;1 therefore, the general level of
probably be little less than in. 1949, the
taxes andi Administration
TUOIIY
have
to
the
Federal
as
greatly
1948;.
spend
means
Any forecast for the Chesapeake and Ohio Railway and
other coal-hauling railroads must depend on how
many days the miners will work in 1950.
If there is a
situations in individual industries with
respect to gross
business and net profits will fluctuate
tion
large numbers of persons with
can
their
veterans
general adoption of
many
t
»
.
transport industry at home and
development of tourist class- air
the North Alantic to Western
average
costs,, and the thinking ofeach^yeap wage rates- should be
preceding year, regardless of cost of
cause
Trippe
across
that
the
J. T.
governments
air
foster the
of their markets.
area.
It
in,
is
the
too
automobile
industry
in
the
early to appraise general busi¬
final half of 1950 but if there is
conditions for the
ness
peace
along the industrial labor front, the railroads
generally should have a good year.
Progress may be expected in the solution of the rail¬
roads'
the
passenger traffic problems.
It is hoped most of
unprofitable local and branch-line trains will have
been taken off before much of the
new year has
and service on the profitable trains should
be
passed,
improved.
L.
Business
have
been
despite
four
the
conditions,
on.
satisfactory
slight
and
ment
Congress should repeal the 15% wartime excise tax on
transportation, a tax intended to curb pas¬
senger travel during the war, but which still continues
passenger
PAUL TULLOS
President, The First National Bank of Beaumont, Texas
decrease
the
effects
the
whole
during
in
of
1949
employ¬
a
storm
years after the
damaged'
the
rice
Banking transactions compare fa¬
with those of 1948. in vol¬
war
railroads will have
handle
head-end
adequate
In
is
over.
The prospects
to continue for
are
another
that
year
to
traffic, both mail and express, for in¬
pay.
proceedings before the Interstate Commerce Com¬
convincing, evidence has been presented that
mission
both
severely
vorably
the
railroads
and
motor
carriers
are
in
need
of
much
higher rates for handling small shipments rela¬
tively short distances,
The Commission should act con¬
structively and promptly in the new year so as to give
the carriers adequate revenues for
these services.
Prospects of business irr this area
for year 1950 are bright, and most
everyone
believes
that
the
con¬
It is
encouraging to note that Secretary of Commerce
Sawyer, in his report to President Truman of Dec. 1,
1949, states that Federal Transportation
Policy must
give major attention to the need for sound and healthy
tinued
good
when
uncle
could tell,
only through lowtransportation. That
air
mass
resultant
living indices, will
•
the custom
achieved
other
costs
as
going to be.
When asked this re¬
replied: "Boss, I just don't know.
be
future.
near
be
large amount of additional-
a
two
to
annually
But that goal
the
railroads.
ume.
Southern
It
the
Business and; the investors in business will:
again have
the insecure
feeling of not knowing what will happen
President, The Fourth National Bank,
Columbus, Ga.
old
amount
WALTER J.
crops'.
prophets.
could
power.
which
By tradition,
abroad
President, The Chesapeake and Ohio* Railway
doing
large
as
Life
early in, I960 will provide
with freedom of enterprise
through the es¬
tablishment of ill-advised, artificial
controls, is a con¬
stant threat to the success
of business and the welfare
of the nation as a
whole.
weather
travel
abroad.
national
by
E.
as well
recognize tourist travel as
ing foreign dollar shortages. In fact,
development, American tourist
Europe.
We
amount
com¬
witlr
limited
con¬
necessary to cure any substantial
of whether such expenditures
The
the
of
the greatest single factor in overcom¬
establish¬
to
dollars
Many foreign governments-
;
as our own
substantial Federal deficit with resultant
Service
pansion of productive facilities.
This, together with the
deplorable trend toward more and more interference
C.
billion
one
average income.
abroad
in 1949.
production
of
real market. The real market is
service—particularly
large
program.
is
as
financing.
purchasing
lent
oil
be ample for
at
continuation of in¬
buy things is about
did in
Marketing will be more competitive than at any time
since the
War, and as a consequence, the industry will
side
deficit
higher than
Pacific
figure
merely scratches- the surface
concerned
unemployment, regardless
Various
fected, largely in the heavy crude oil
producing
sult
spending
National
heavy
defense
farm
a
are
money
shall Plan.
means
probably
upbuilding during
the
that they will
will bolster the
markets for American
That
tax dollars supplied: under the Mar¬
fare,
Busi¬
in
Estimates
war.
dollars.
,
in
power
of foreign
goods. It will reduce the- demand for
can
will
expenditures
the
will result in
some
and
and
flationary trends with a
Administration committed
changes in refinery operations were made to shift re¬
finery yields from fuel oil to gasoline.
At the same
time, some curtailment of crude oil production was ef¬
dual
and
ment
im¬
heavy oil inventories reached
In
some
maintaining
steady.
oil
billion
a
•
than
and one-half billion dollars
public
smaller than
are
1948
will also have
general decline in industrial activity. By
contrast, the demand for gasoline and distillate oils held
As
since' the
year
travel: abroad
purchasing
in
nection with European
recovery and
the reduced requirements of
the mil¬
itary, and
of
governmental
major product.
This was brought
about by a decline in fuel oil de¬
mand
decreases,
We will continue to have
a
a
to
end
require
condition of oversupply. For
the most part the
oversupply was in
residual fuel oil and in
heavy crude
oil, from which residual fuel oil is
fuel
inventories
the
faced
was
construction
ness
industry
point where it
hold appliances and there will
prob¬
very little reduction ih the
works will probably increase.
adequate
the
automobiles will probably be as
great in 1950 as in 1949.
There will
undoubtedly be a large demand for television
sets.
There should continue to be a
good demand for the various house¬
vate
of
and
1949
greatly different than in
TRIPPE
Americans- will
more
i
depleted
high
not
T
posed of families of limited time and
195(1 will' probably
1949.
The demand ,for
building o£ homes and in building
generally.
To the extent that nrir.
demand which grew to the highest
time level in
history and to
war
Commerce, Cleveland
ably be-
peace
simultaneously rebuild
of
The volume of
general business in
President, Union Oil Company of California
1950
The
"
J. K. THOMPSON
H.
In
increased1
,
REESE
JUAN
President, Pan American World, Airways
In order to forecast what business is
going to be like,
we would have to know what
to expect out of Washing¬
ton.
Beyond this, it would be a question of whether
President, Union Bank
The
there is
telling."
no
prevaik.
When.. Congress has completed its
task, I am, inclined
think the Truman Administration will have
to, go
to
but
just
prior
L. Paul Tuiios
progress- and
years
coming
development of
will continue through the
year.
ernment
The
should
report
study
declares
and
that
resolve
the
as
Federal
speedily
Continued
on
as
Gov¬
pog-
page
84
Volume
171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(319)
83
Continued from page 6
that
The
Budget, Taxes and the Debt
is stated as "the avoid¬
of inflation
and without the
purpose
(2)
ance
ups
of
use
Federal'
of
means
taxation
all
stabilization,
other
such
national
income
at
our
sidies,
a
are
It
is
alone
tionary price rises caused by
failures, labor disputes and
creased
of
of
also true that Federal tax¬
cannot prevent infla¬
course
ation
unavailing*
costs
profits
crop
in¬
exceeding the level
and
productivity.
policy if
morrow a
have
to
are
dollar which has
thai
near
we
to¬
value
a
of
today.
"The war taught the
government,
afld the government has
taught the
people, that Federal taxation has
much to do with inflation and de¬
flation, with the prices which have
to
be
paid for the things, that are
bought and sold.
If Federal taxes
are
insufficient or of the wrong
kind, the purchasing
power
the
in
If the
there
ate
will
high
increase
things
for
in
itl
was
taxes
quantity
This
is
too
It
should
the
ance
ment.
to
possibly
the
and
surpluses
arise
in
deficit
wjn
increasing tax
and
new
to
accepted
anced,
likewise
depress
when
been
is
from
This
A
As
j
tween
from
it
should
way,
low
as
15
This
for
tures,
at
it
financial
tutions
70
home-in
follows
at what
for
from
we
this
would
Economic
set
Cities, States
includes
prin¬
write
of
difficult
to
high
there.
for
and
in
more
million
budget
a
Direct
The First Boston
and
pre-depression
are
pleased
Municipalities
wire
Montreal
to
past
Pine
render
we
and other
to
on
all
new
tax
New
about
us
matters
the
receive
largest
the
a
we
and
fastest
with
Ottawa
Hamilton
London
New York
Correspondents in London, England
OR
SELL
financial insti¬
York
4-3540
5-,
-
Active
N". «Y.
'
Trading Markets■
maintained iii
or
attention
growing
West
PUBLIC UTILITY STOCKS
are
invited
pertaining to this
of
an
executive
Federal
to
INDUSTRIAL STOCKS
area.
officer
Association
on
Coast.
Exceed $24,500,09(1.01)
\
.
|
qAllen
FEDERAL
PETERSBURG
&
Company
Established 1922
30 Broad
Street, New York 4, N. Y.
Telephone HAnover
2-2600
Teletype NY 1-1017
RALEIGH IV. GREENE, President
ST.
PETERSBURG 1, FLA.
to
at
we
Mead, Miller & Co
Mendters
course
have
new
New York Stock
had
is
York
Curb
in
Exchange
Exchange (Associate)
Pkiladelplwa-BaMimore
Stock
level
this:
Troster, Currie
•A.
.
Direct Private
the
budget at Hgh levels of em¬
ployment, the two critical factors
(1) the size of the budget and
to
New
York
Members New
Correspondent
&
Co.
Tel.:
Baltimore—Lexington
Bell
0210
New
2, Md.
&
Summers
Security Dealers Association
Trinity Plaee, New York 6, N. Y.
Telephone HAnover
York—WHitchall 34000
Teletype—BA 270
York
National Association of Securities Dealers
74
lll^E. Redwood St., Baltimore
ductivity.
balance
Wire
Carl M. Loeb, Rhoades
shifts in the level of potential
pro¬
to
Securities
Active Markets in Local Securities
Having been set, these
be let
alone, except
as there may be
important changes
in- public
policy
or
significant
set
Over the Counter
Exchange
.lint'
instrument
a
principle
are
Montreal
constructive
INVITED
originating in
prompt
OF ST.
should
rates
Exchanges
King Street West, Toronto, Canada
Offices:
governmental units.
cooperate
Street
New
powerful
and.
Corporation, New York
Stock orders executed
50
Branch
ployment.
are
private
houses.
FIRST
less.
tax
'
SAVINGS AND LOAN ASSOCIATION
Tax rates should be set to balance
the budget at high levels of em¬
If
of
be¬
unem¬
high
of productive
employment.
rales
CANADIAN SECURITIES
at
unemployed
have today, and of
helping maintain
The
DEALERS IN ALL
h
make
we
people
fewer
recent
a
McLeod,Y6uhg,Weir & Compaky
change in size
BUY
We
investment
Resources
Let me explain more
fully this
basic principle of Federal
tax pol¬
icy, because it marks a sharp
break with past practices and
af¬
fords
a
ourselves, to
employment and
Today we have
million
the
page
of the national
consider
ployed than we should have
high employment.
A year
ago
in
Federal
this is
budgets
were
The
administrative
smaller, it made little difference convenient.
budget was created and has been
which budget was
being referred
to, but today it is necessary to improved as- an instrument of addistinguish between them and to
Continned on
experienced'
Florida's
Development.
higher
reducing un¬
invest; and therefore,
more
items
BANK and INSURANCE STOCKS
this, we are
necessarily the money that private
individuals will have to spend and
even
When
are
some
accrual basis where
an
assistance in
development of
financing, reorganization, of existing debt struc¬
the financing of
self-liquidating projects, Aid
public J relations.
WE
DO
NOT
INQUIRIES
tax rates
any
our
than
we
in
a
"
will
surplus under these circum¬
stances, this statement is the
pol¬
icy recommended by the Commit¬
than
financial controls
appropriate, it carries
on
the
the people where
LIMITED
the
a
a
government and
other
between
new
hands of
money that can be
—
to
Telephone WHitehaJl
satisfactory level of high em¬
ployment.
Except for not asking
had
transactions
Members of The Investment Dealers' Association of Canada
by
a
a
cer¬
tain
istrative control budget; the other
is the consolidated cash
Wainwright, Ramsey & Lancaster
that our tax rates can and
should be set at the
point where j
the Federal
budget will be bal-i
stay
least
prin¬
again:
amounting to
pre-war
Municipal, Finance
for
they
power
ciple
more
It shows transactions
between gov¬
ernment agencies, it excludes
mean?
mere
Inquiries
get
adapted to purposes of ad¬
ministrative and financial control.
budget
planning
SECURITIES.
our
as
service
service
plans
on
manner
it
which
bal¬
and 20%
The
they choose.
to
get is
em¬
today
size,
Trust Officers and others
handling fiduciary funds
we
The administrative
control bud¬
is,
balancing the
bal¬
taxes are,
our
purchasing
people
tee
we
con¬
questions
be
supported
spent by them for the
things they
to. buy, or that can be
saved
and invested in
whatever
If
budget,
Municipal Finance
on
Constructive Service
Consultants
planning
will
want
for
these
talk about
Federal
should
of
Head Office
Consultants
without putting the
money in danger of
our
more
aneed
One
we
high level of
a
have
enormous
made
become matters of vital
cern.
when
them correctly for the
purpose
each is adapted.
which
rates against
The Budget
We
economy
levels of high
has
to
demand.
income.
suggestion
use
have
the
ployment
employment.
The
were
disastrous
balanced when
of
the
can be
of
Now
ad¬
attempt to
budget.
Under this
principle the budget will be
balance
will
times
that
which
but
budget.
declining national income
futile
rates to bal¬
under conditions of
But the
public
take
another
ba
inflation. The lower
the
a
the
surpluses and defi¬ ancing
high¬
should
left
that
inflation.
make.
Putting it
be
tax
that
means,
things these producers I
like
value
noticed
budget at high employ¬
automatically
boom
taxes should be high
enough to do.
their part in
protecting the stabil¬
ity of our currency—and no
the
policy
a
1931 of
be
setting of stable
wide-spread unemployment.
Briefly the idea behind our tax
policy should ba this: That our
taxes
or
Tax rates should be set
to balance
'the budget at
high levels of em¬
world at peace.
mean
er.
politically
own
■-■•••
producers of goods and serv-!
ices all the
would
and effi¬
Obviously" under such
kind, effective purchasing
in the hands of
be insufficient to
the
any
be
theo¬
higher our potential national ployment. Under this
principle we
income at high levels of
employ¬ can move forward as rapidly as
ment,
the lower our tax rates budgetary requirements^
and
in¬
could be. In
consequence we want creasing efficiency permit to a re¬
employment with high productiv¬ organization of our whole
Federal
ity, we want harmonious manage¬ tax structure.
Never again need
ment-labor relations, we want a we
repeat the errors of 1930 and
hand, if Federal
heavy or are of the
power
will
of
to
on
we
bringing
mean
something
practice
questions
academic,
other
are
wrong
will
now
raises
once
do not justify ministratively workable.
sake, nor do.
Let me repeat the
basic
wasteful expendi¬ ciple for Federal
taxes once
•
back
is worth less than
before—that
the
prices,
for
Al¬
policy of vary¬
There are two Federal
budgets,
ing tax rates to compensate for
both in good
standing. One budget,
anticipated swings in the business
the more
familiar, is the admin¬
cycle is either
to
production cycle
that causes them and
their crea¬
tion will in itself be an
important
factor
in
proportion¬
the
sale.
that the dollar
On
no
want
a
changed days
business.
in
is
such
be
compensate
grounds^ I do not favor it,
since I have not been
able to con¬
vince myself that a
This puts
economy
there
for
cits will only be in
proportion
the swing in the
satisfied.
rise in
a
be
we
ture.
sion.
demand becomes too
great,
the result will be
and
be
can
on
ciency.: Clearly
spending for its
occur
hands of the public is
likely to be
greater than the output of
goods
and services with which this
pur¬
chasing demand
premium
be.
All the
other means,, in
any case, must be
supported by a stabilizing Federal
tax
tax rates could
to
retical
the
monetary policy, controls and sub¬
should
and. downs
said
Obviously under such a policy
lower the budget the lower
as
rates
down
though
levels of employment.
the
tax
and
up
2-2400
Teletype NY 1-376-377-378
Wires to—
CLEVELAND
ST.
LOUIS
DETROIT
YOUNGSTOWN
PITTSBURGH
DENVER
85
84
Continued
from page 82
Speaks After the Turn of the Year
Business and Finance
what
There
expect
charges
better break in the near year or
a
two.
State
recognize that gov¬
ernmental subsidies to competing forms of transporta¬
tion are imperiling the railroads, and that reasonable
authorities must
Federal
and
soon
I
for increased use of dairy
This will come from population in¬
people living longer, better appreciation of the
crease,
dairy products and
nutritional value of
methods
of
more
of the coal in¬
I
see
prices.
fuels.
service
of first importance, and
are
70% of the
a
|
•
Despite these adversities much progress
to
improve
mines
more
Inc.,
Research,
Coal
mining
the
sumers
industry
They are also sponsoring
the study and design of a Idhal-fired gas turbine loco¬
motive, as well as improvements in the existing steam
locomotive by improving the supply and distribution of
preparation of loco¬
maintenance costs,
motive fuel to obtain lower fuel and
by developing combustion methods and equipment
losses and cinder omission.
and
using pulverized coal as fuel for a gas
turbine locomotive, one of the major difficulties en¬
countered by engineers in the development of the coalfired turbine, appears to be nearing solution. Efficient
its
must
Bomel
Van
place
These efforts
being
in
rails
the
on
of motive
coal competitive are
and keep
coal-carrying railroads, such as
by the
the
of
prevents
it
consumption,
and Ohio, in expanding and improving
facilities to handle coal faster, cheaper, and in
The work has been expensive, but as
it nears completion the ability of this kind of moderniza¬
tion to offset spiralling costs is becoming apparent.
1950 can be a true transition period for both the coal
greater quantities.
industries.
Coal
cardinal re¬
quirement to its progress, a permanent labor peace.
Men, management, and markets need it—now more than
ever.
Both industry and labor talk about security.-The
consumer, too, needs that security, and freedom from
they
also
are
Gould W. Van Derzee
As
com¬
needs,
as
a
The
individuals.
railroads
earning
1950,
in
in
and
attract
to
under existing
petitive conditions.
seems
to
paid out of taxes.
industry rests on its unique ability to give its
more
for their electric dollar than they can
industries and
from
sound
It remains for our
|
,
this
venture
I
-
.
.
tion, of the labor situation, and the
general financial situation of the railroads. These are
three fundamental conditions which can make or break
and
cess
strong
prosperity
those goals can
as
All of the elements of
ever.
are
there, and
we are
suc¬
confident that
and will be reached.
industry,
any
outlook of
W.
ULLMAN
of
Most
are
us
familiar
with
But too many of us
problems.
the
are
nation's
and
activity
for
higher
rates.
They should
•everyone
will suffer if
and
shackled
be
stabilized
that
complex
long
so
as
can
wage
indifferent to defict
to
wage
It
there
but it
too large
government,
true
are
if
that
have
a
rates
Sooner
must
or
later
keep
we
can
way
of sound
likewise
of
its
justifies
years
labor
well
as
.spending and the other inflationary
pressures under control.
That will
Carl W. Ullman
not be easy to do, but if we are to
have constant high production and if
the markets are to absorb the production, we need sound
economic and sound fiscal policies.
With a cold war on our hands, high production is
as
existence.
a
at the
disposal of
which
economy.
not
Cloud Wampler
can
be laid in 1950, and
these include the
Overall business prospects now appear to be good,
activity promises to continue at a
high
level
during
1950,
thereby
widening
*
during the next few months.
There is still
an
not
the
long-range point of view.
good.
And this
accelerating public acceptance of air conditioning,
a
luxury, but as an every-day part of modern
as
Merchants, hotel and restaurant proprietors and
living.
is consider¬
another factor of major importance from
the short and
both
industry has
confronting the
I am
encouraging,
1950 will be a
reasongbly good year.- for,..the,-.railroads, and that most
of .-them-will wind upAh"^ year With a net income which,
in the
be5
-some' instances 11- will,
be
the
owners
of indoor amusement and recreation centers
attracting increased patron¬
have found in it a means of
business and professional people
have learned that they and their employees can work
more efficiently in a
controlled climate. And the use
of air conditioning as a production tool is constantly
age.
More and more
increasing.
Along with this, there has been a marked improve¬
in air-conditioning equipment.
This is true with
ment
situation
definitely
indicate
respect to both heavy and light items and
reflects con¬
tinuing research and development programs.
Throughout the industry as a whole, a highly
--
,
opinion'on the seriousness
is
which
(3) Last summer's successive heat waves will have a
effect on sales of air-conditioning equipment
willing to venture the prediction that
long-range
factors
carry-over
distinct disadvantage in
of the state of the
nation and impress upon our people that the government
itself cannot create wealth, yve shall be making progress.
No one knows how soon that can be done;
We do know
that the coming year will "see much confusion in the
public
the
industry
ap¬
field for air conditioning.
competing for the nation's traffic.
Although
of
movement
fairly
mode
the
terminals, which
competitive forms of transporta¬
possible, but if the Russian question should be solved,
the problem of production and distribution can be quite
difficult.
Certainly with a debt of more than $250
billion we need to'act intelligently.
If we can focus
railroad
timing of
(2) Construction
tax-provided highways and air
tion, places the railroads at a
re¬
coal
ahead is still a matter
However, there are a
to lie
question.
(1)
This, together with subsidies in
transport.
form of
and
following:
other forms of com¬
mercial
steel
that at least the foundation for such
The basic wage level,
benefits in the form of pensions,
the
industry-wide upswing that
number
this
within the railroad
concern
the
pears
of
is
situation
that
It is true that the exact
fair and equitable
be the measure by
If
ably above that prevailing in the
are
from
contribution to the economic
become increasingly burdensome.
bring the
the
ad¬
the
the services each carrier
policy, the services each
and
is now
strikes.
beyond.
The
is
sulting
of the nation
matter
a
ago,
uncertainty
versely
long
regulated and
principle could be
adopted on a national basis the outlook for the railroads
would indeed be bright both for 1950, as well as for the
it
on
must
this
transport performs, should
of
many
share
Only in
welfare
going into
for too long a time, we shall
a
shortage of venture capital.
earnings
taxes
is
are
business
immediate
more
fact
a
performs reflect its real
never
problems which
cause
un¬
expenditures on the part of
usual
our
that
transport
compete for the nation's traffic on a
As
true
is
therefore,
is,
basis.
advance.
world
of
year
a
demonstrated during
industry may be
affected by shortages
Of
railroads, and they must
forecast the future
desperate need for a national
transportation policy which will place all commercial
forms of transport in a position where they will be able
There
know that
business is
prices
modes
time
that marked the winter of 1948-1949.
the industry.
several
as was
months of
the
promoted, financially and otherwise, without any regard
to
a
sound
over-all
national transportation system.
spending and too many of us feel that state responsibility
is inevitable.
Powerful groups keep pressing for more
state
the
as
Youngstown, Ohio
this
at
strong
are
effect,
This unfavorable situation cannot be overcome so
Savings and Trust Company,
President, The Dollar
Vollmer
reckoned with in any attempt to
be
CARL
the
including
W. G.
in the field of air-conditioning
than
indications that the industry
approaching another period of major growth.
Obviously, various things could
happen
which
would
upset
this
promising
condition. , Any
major
change
in
the
general
economic
climate
would
certainly have
its
particular observa¬
there has been a gradual
worsening of the competitive situa¬
;
*
Carrier Corporation
outlook
favorable
more
there
problems just beyond, but our faith in the long-term
as
business
The
is
more,
is
continuously—in the home/
WAMPLER
CLOUD
President,
in the past decade or
because,
promotional departments to tell the
com¬
outlook of the railroads is
reasonably
bright,
but the longrange prospects are none too good.
Government ownership looms up in
the distant future unless .there is a
tion
purchase
and in commerce and industry.
the farm,
on
customers
cleanliness,
source—"in convenience,
and safety."
story of our basic advantages
years' time, a rate of 700 million tons annually.
There are clouds on the horizon, and other difficult
future
other
any
comfort, economy
the
trend.
its march toward a production
analysts estimate could attain, within 15
more
pricing of these services so far as practicable to meet
needs of our customers, adequate wages, and the
reasonable expectation of those who put their invest¬
ment savings in our securities for good steady income.
Aside from all this, the future, of the electric utility
earning
industry start
completely modern¬
opportunities ahead 1 for
this great and growing industry. Some of these lie in the
field of more selective selling of profitable services and
are,'however,
There
change in the economic and political
store
to
retirement or less use
Gains from this source will become
equipment.
the
as to
against
compulsion
in overall generating
ized.
demands
of
and let
frantic
utilities
completed, most electric
further gains
apparent as systems are more
less
'
r
are
some
that the immediate
me
about the levels
efficiency in 1950 as a result of
depends
the volume of traffic they are
able
make
of old
And
therefore
beyond,
upon
It
well
as
power
facilities
new
should
sellers prosper only so long as
This economic
is that
applies to the railroads
law
if the fuel and tax
1949
be kept at
can
of last year.
the economic factors of business which every¬
recognizes
commercial pur¬
provide net income
utility about the
average
in
as
same
bills
President, The Texas and Pacific Railway
one
the
for
of
W. G. VOLLMER
One of
in
of 1950, the mo¬
of electricity for resi¬
dential, rural, and
mass
commence.
moderately
sag
posed should still
and reasonable prices, which come from
coal
coal
which
benefits
The coming year can mark such peace
recurrent
famine.
costly for
for a greater
half
second
mentum of use
buying impulses
the natural
welfare
these commence
by consumers,
realistic costs.
the
the
too
Economic stability will come from increasing
years
the
is
should
duction
the
it
and
unemployment
when
food
decline in industrial pro¬
a
stability in earnings than in most in¬
Thus, if industrial pro¬
reduces volume.
Reduction of
increases unit costs.
Then the vicious cycle of
operate
to
volume
the Chesapeake
railroad
aware
slow to
relatively
are
dustries.
fac¬
part of the price con¬
Business is just a vast
when this economic law
And
consumer.
mences
railroad
and
react to
adequately
increasingly
business
duction and thus make
are
become
these three classes
Revenues from
of
buyers have the wherewithal to purchase.
power.
to make
matched
competition with other.,
real
not
are
pay.
When
of
forms
tricity.
high
as
this.
pulverized solid fuel in a locomotive-size station¬
ary turbine has already been demonstrated.
This was
a major step ahead, although other technical problems
remain before the coal-fired gas turbine locomotive takes
use
A.
L.
to reduce unburned stack
The problem of
of
auxiliary tax collecting agency for
the
government.
And
consumers
(
air for better combustion, by better
because
residential,
commercial sales of elec¬
rural, and
that the three major cost
aware
tors above
coal-carrying railroads are sponsoring the develop¬
ment of a continuous mining machine that will combine
the work now done in cutting, drilling, shooting, and
at the face.
weakened
Prices must include,
Consumers
and
loading of coal
is
gains will be in the
age
bright outlook if the
demand for these prod-
they
inevitably do, government controlled
costs of farm products, wages and
welfare benefits, and added burdens
has been made
the competitive position of coal. More and
are being mechanized and already more than
coal mined is mechanically loaded. Through
Bituminous
ducts
the chances are that from
dollar standpoint the best percent¬
program,
processing, packing and
consumers'
substantial home building
Bolstered by a
1949.
exceed
on the farm, in commercial establish¬
industry, the aggregate use of electric
should equal or perhaps moderately
of taxes.
dustry
Electric Power Company
1950
in
less
a
1949 was a trying
year for the coal industry. Repeated interruptions in coal
output yielded competitive advantages to other fuels,
mostly oil and gas, and the dumping of oil from foreign
countries at our ports at distress prices further aggra¬
vated the distortion in the relative costs of competing
and in
ments,
economical
home,
the
In
outlook
bright
a
see
products in 1950.
distribution.
Chesapeake and Ohio the fortunes
VAN DERZEE
W.
President, Wisconsin
♦.
relief must be forthcoming.
For
G.
BOMEL
President, National Dairy Products Corporation
the railroads may
that
indications
other
are
VAN
A.
L.
should be assessed for the use of
transportation facilities provided at government expense.
sible
19, 1950
Thursday, January
CHRONICLE
FINANCIAL
COMMERCIAL &
THE
(320)
com¬
pattern has again been established.
But this
a stimulating rather than a depressing factor.
the light of existing conditions, Carrier Corporation
petitive
should
In
■
be
fcasybudgeted -an- mere ase^ 1—volume - of
compl^ech-sales.
on page 86
Continued
Volume 171
Continued
Number 4873
from
page
THE
COMMERCIAL
83
fication
&
in
FINANCIAL
terms
of
amount
CHRONICLE
and
(3211
associated with
annoyances
maturity, and get some significant
The
Budget,Taxes and the Debt
ministrative
control.
This
is
size
an
istrative control
budget is
portant budget.
The consolidated
also
cash budget is
way
budget and
important
an
it
have
im¬
year
different but also
has
ours
become
are
policies of debt
management. A debt of $250,000,000,000 has to be managed in one
im¬
an
that
another,
or
and
be made
to
decisions
several times
activities.
Second, there is the debt in the
banks, insurance
a
because,
that
first
it
is, it includes all transactions
the government and the
between
people, and it excludes all trans¬
fers between the internal agencies
of the
and
Government
Federal
second,
it is
because
itself;
cash
a
budget, that is, it shows the intake
and
outgo on a cash basis in the
which
in
year
transaction
the
takes place.
The difference between the
the
hands of the commercial banks.
great deal of difference what kind
of
the
trust
ment
as
tool of fiscal
a
ad¬
fording perhaps
and
to
a new
policy, af¬
instrument
It
is
funds
other
and
agencies.
apparent that
debt
it
makes
a
is
retired, what kind in¬
what kind redistributed
times
refunding operations.
Accordingly, the simple demand
sake of retirement is
is
and
guide
no
whatsoever
sale
of
war
we
bonds
war
individuals,
for
knew
to
that
private
those
particularly
with small and moderate incomes,
an alternative to taxation as
was
a
If
are
means
of
budget
maintain
would
cash budget
cations in the size of the debt
and
billion
three
and
one-half
estimated that
over
the next ten years, on the
average, the cash taken from the
public by the government will be
It is
budget.
about three billion dollars a year
than the administrative con¬
more
trol
budget implies.
when
So
the
we
in
interested
are
look
the
on
economy
balance.
to
The national debt consists of at
retirement
As
a
has
amount
trol budget is meaningless, since
being an administrative budget it
can
be balanced at any time by
■definition, by inclusions or exclu¬
the
cash
consolidated,
becomes
of
budget
importance
which should
in setting rates of taxa¬
special
since it is the budget
be
used
tion.
far this
So
has
never
debt
to
the
that I did
say
application of
have
efforts
our
Redelfs
in
(Special
these
tools
fiscal
of
Open in Omaha
to The Financial
OMAHA,
policy
well-managed, they will
con¬
&
Chronicle)
NEB.—Eisele,
Axtell
Redelfs, Inc., has been formed
with offices in the First National
Bank
specific
curities
business.
Lane M.
Axtell, Eli C. Eisele and
decisions
of
businesses
private individuals.
of
consequences
For
the
at
action
the
level of fiscal
policy are general,
impersonal and appropriate to the
development of the economy as a
John
Bldg. to
in
the se¬
Officers
Redelfs.
W.
merly
engage
All
managers
were
Brinker & Co.
consequences
kind
said
on
the
of
there
Michigan and General Market
Municipal and .Corporate
Securities
Private
create
flRST OFJVJICHIGAN O OXIPORATIOIf
nor
the
management.
The
York
Detroit and New
to
of
did
problems and possi¬
bilities, for good and evil, in debt
I
Wire
Members Detroit
Stock Exchange
Midwest Stock Exchange
classifications
DETROIT
NEW
I"
Chicago
Grand Rapids
YORK
'
Battle
Creek
Lansing
Bay
City
Fiscal Policy
The
are
at
elast
four distinguishable kinds of pub¬
lic debt.
Let me name them.
there is the debt in the
individuals. We
could perhaps divide this classi¬
First,
hands of private
tools
of
fiscal
policy
powerful instruments that
used
to
maintain
are
can
be
high level of
productive
employment
in
the
United States.
They can be used
to
contribute to monetary
sta¬
bility.
The can also be used to
a
assist in the establishment of
KETCHAM & NONGARD
Investment Securities
s.
105 West Adams St., Chicago 3, Illinois
,
con¬
ditions throughout the world that
will be conducive to a just and
Underwriters and Dealers
durable peace. True, fiscal policy
cannot be looked to as a panacea.
But
tools of fiscal policy—
the budget and the debt,
longer merely the chronic
the
taxes,
are
BONDS
no
STOCKS
•
MUNICIPAL BONDS
REVENUE BONDS
•
Telephone: DEarborn 2-6363
V
Teletype: CG 385
been
■done, but now, with budgets and
taxes at their present levels, the
Tax Bill of 1951 should break new
should
and
ground,
rate structure to the
THOMAS & COMPANY
organize its
requirements
UNION
of the consolidated cash budget.
PITTSBURGH
The Debt
Just
the
the
as
budget
and
mew
high
and
TRUST
new
taxes
level
STRAUS & BLOSSER
BUILDING
MEMBERS
19,
PA.
NEW
MIDWEST
of
we
Much
tiave
135
little
SOUTH
Investment Securities
situation for which
had
(ASSOCIATE)
LA
CHICAGO
preparation.
SALLE
3,
STREET
ILLINOIS
thought and much experi¬
a
debt policy
we can
in which
we
Telephone ANDOVER 3-5700
have full confidence.
The
ated
new
will be needed before
ence
-can
a
have
EXCHANGE
EXCHANGE
so
also the size of the national debt
oreates
STOCK
NEW YORK CURB EXCHANGE
has raised
unfamiliar problems,
YORK STOCK
big
with
new
a
Direct Private Wires Coast to Coast
questions associ¬
national debt of the
DETROIT
KANSAS CITY.
MILWAUKEE
GRAND RAPIDS
Underwriters and Distributors
Listed and Unlisted Stocks and Bonds
General Distributors
—
—
OVER-THE-COUNTER
Municipal Bonds
SECURITIES
Fidelity Fund, Inc.
Paal H.Davis & ©o.
Established
1916
$
Members
10
South La Salle
Trading Department
Tele.
PEORIA
CG-405
principal Stock Exchanges
SWIFT, HENKE & CO.
MEMBERS
Street, Chicago
Syndicate and Municipal Dept.
Tele.
CG-934
135
SOUTH
LA
MIDWEST
SALLE
Telephone:
ROCKFORD
STOCK
EXCHANGE
STREET, CHICAGO 3
Financial 6-2800
are
for¬
of Lawrence
not
four classifications
distinguished above,
each
purchasing
power remaining in the hands of
the public.
Debt management is
therefore a corollary of tax policy
in the maintenance of high em¬
ployment at stable price levels.
I
whirlwinds
transference
sions.
The
hasten
invent
classification to
one
and
from
sums
or
of debt from
another
of fact,
matter
of
classification
balancing the administrative con¬
blind
collapse.
withdrawing purchas¬
of
debt
exist, the problems of
debt, that is to say, the national management
exist; these are not
debt is in no sense a homogeneous
creations of the imagination, they
global aggregate. Through the ap¬ are the stubborn facts of our
pres¬
plication of surpluses and through ent fiscal situation. wU""v—■
the terms of refunding issues, the
cash
consolidated
the
to
budget.
If our objective is a
budget that is balanced in the eco¬
nomic sense, then it is the con¬
solidated cash budget that we want
I
are
least four distinguishable kinds of
shall
we
The impli¬
nored.
impact of government trans¬
actions
negligible.
obvious, but those in the composi¬
tion of the debt are generally ig¬
dollars less than in the administra¬
tive
be
the
by
economic
a
that the deficit in the consolidated
will be between two
dis¬
des¬
tribute much to the prevention of
government interference
the
in
and
During the
not
nor
Eisele, Axtel! &
supplying what others need.
mere
meaningless
policy.
the
of
to
of
that debt be retired for the
interest and
by private greed
public
troyed
our economic
freedoms,
buy and to sell, to borrow and
to invest, to move from place to
place, to employ and to be em¬
ployed, and to receive for our own
private
use,
wag^s, rents
and
profits as a reward for skill in
Federal
a
preserve
Fourth, there is the debt held
by the Federal Reserve Banks,
Federal
specific
frame of reference established in
economic
our
individual's
general frame of reference,
torted
prime factors in
ing power from the hands of the
high level of pro¬
people.
We knew that sales of
the consolidated cash budget can ductive employment.
bonds to the commercial banks
be appreciated when it is realized
The possibilities of debt man¬
had different effects.
But in spite
that in the fiscal year 1947, the agement as a tool of fiscal policy
of the fact that we made these
surplus in the consolidated cash arise first from the sheer size of distinctions
in wartime, we do not
budget was about six billion dol¬ the debt and second from its com¬ seem to
have carried a parallel
lars greater than was shown in the plex
composition.
If the debt
conception over, to the long term
administrative budget. For the fis¬ were small, the possibilities and
problem of managing a $250 bil¬
cal year 1951, it is now estimated necessities
of
debt management
lion debt.
control
ministrative
i.
rate should
be,
and who should get it, and, above
all, who should decide. But we do
not get rid of these questions by
snubbing them, and already this
phase of the matter is being ac¬
tively discussed.
My interest in debt manage¬
ment today is in a more general
aspect of the subject, namely in
the possibilities of debt manage¬
consolidated,
is
are
interest
what the
this
a
The instruments of fiscal policy
give us our best hope that we can
Third, there is the debt in the
at
that
in
life.
creased,
an
the contrary they
developed that they
so
companies and other institutional
investors.
consolidated cash budget does
a
On
now
The
decisions may then be taken with¬
are
based on more or
portant purpose. That purpose, as less clear principles and on more
President Truman points out in or less explicit objectives.
his first Economic Report, is to
I am not going to discuss those
measure the impact of government
phases of debt management that
transactions on the economy. The involve
the horrid questions of
serves
have
whole.
com¬
common
hands of savings
those that relate to
important purpose and the admin¬
munity responsibility for
differences.
85
86
(322)
COMMERCIAL
THE
&
CHRONICLE
FINANCIAL
Thursday, January 19, 1950
Continued from page 84
Business and Finance
for fiscal 1950,
Virtually the entire line of carrier uni¬
tary equipment, which is marketed through distributors
and dealers, has been completely redesigned with em¬
phasis on greatest reliability and better styling. And
a number of new products have been introduced.
Ad¬
vertising and .sales promotion appropriations have been
substantially increased. In addition, liberalized whole¬
sale and retail financing plans
throughout the country.
are now
being announced
All told, Carrier Corporation is seeking to take every
practical advantage of the growth possibilities of the
industry which it pioneered.
CHARLES
A.
WARD
deposits
initial
tons
estimated at
operations
a
year
Rising calendar sales indicate
good business
Early returns
in
1951
new
our
the
on
an¬
1950.
advance sales of
show
line
in
year
already projected.
are
ity. Our calendars
sold
are
in
a year
advance, and when businessmen buy
of them it
more
that they are
means
betting on the future.
While
1950
distributed,
calendars
our
being
are
salesmen
.1,250
are
giving
thousands
of
businessmen
tnroughout the country a preview
of
1951
sell,
calendars.
our
barometer
accurate
Charles
A.
ahead
Ward
orders
The
experience indicates,
they
are an
what
of
lies
in business.
THOMAS J. WATSON
of
Canadian
total
I
anticipated that good results will be experienced by
in 1950.
One of the greatest assets
to business in the coming year is the realization that we
American business
an
a
incentive
buyers' market.
for
to
use
This is
inspiration and
get back to
the fundamentals of business—mak¬
ing the best
use
of
to
the
themselves
several
economic
general
factors
should
living makes Canada
particularly vulnerable to changes originating outside
the country.
The problem of adjusting cur balance of
trade as between the
sterling area and the so-called
hard currency countries still faces us, Respite -our loans
to Great Britain and the benefits derived from the allo¬
cation
Marshall
of
of
September
an
goods
that
are
tinue to increase.
viduals in
our
and
In
000,000
of
United
Bonds.
They have
should
to
loan
common
may be
counted upon to give their best
endeavors, both at home and abroad, to the promotion
the
The
Other
a
panies
private
commercial, amount to
$10,800,000,000 in building
liquid savings of our
total backlog of buying power of
on
that
account
have
1950 volume of business.
substantially continue this pattern in 1950.
L.
1
The
year
conditions.
the
1949
was
years
have
continuous
Canada
to
been
effort
volume,
due
-the reduction iii
to
Sales of household burning oil were
drastically reduced,
due
the -extremely
to
mild weather during the early months of 1949.
Large capital expenditures made it necessary to retain
a large
part of earnings, resulting in modest dividend
The continued spending
payments to the stockholders.
the attendant high taxes, and
the possibility of further tax increases will have a detri¬
by government agencies,
mental
effect
maintain
outlays
required capital
on
necessary
to
at a level adequate to meet the
of consumers and their continued higher level
properties
demand
quality requirements.
The .present imports of crude oil
resulting in con¬
are
tinued reductions in domestic production, which in turn
higher unit costs to the producers and less revT
means
for
enue
Ait the
necessary
exploration and development work.
time American exports have fallen off.
same
,
.
The national
by
security has been considerably improved
discovery of important crude oil reserves hj
the
Western Canada which would be available to this coun¬
try in the event of
an emergency.
As these supplies are
through -the construction of additional
transportation facilities, they will, over a period of time;
available
made
present
In
the
further problem for the domestic producer.
a
line
with
?
all
business, the petroleum industry has
important task to fully explain the economic facts
relative to its business and the benefits of
f ree enter-
our
prise system to its employees and the public.
With an
adequate supply assured, 1950 should show increased
demand for all products.
HON. KENNETH S. WHERRY
United
■Perhaps
what the
it
S-tates Senator from Nebraska
is
too
make
to
soon
of the second
course
firm
forecasts
session of the
on
81st Con¬
gress will be, but it is gratifying to observe that among
the membership there appears to be a widespread belief
that the cost of government must be
reduced,
and
that
spendthrift socialism
proposals
j should
for
be
re¬
national economy is to
our
develop
period,
this
sent
a 11-time
an
•exception.
and
outstanding in this respect.
the
country's
have been
reserves
The
year
in 1948, but
were
repre¬
'high with that
'basic reasons
this reduction since 1948
are
one
for
continu¬
ing increases in cost, low prices dur¬
ing the year for both light and -heavy
fuel oils, and the substantial reduc.tion
in
states
L.
S.
Wesooat
allowed production
having
*
production
in those
controls,
particularly in Texas where approxi¬
mately 57% of the total reserves of
the country are located.
$250 to $750 within two decades.
contribute to
value
of production currently run¬
ning at the rate of close to $900
million a year.
Exports of minerals and their products
approximated half a billion dollars in 1948. A very im¬
portant aspect of present mining activity is the develop¬
ment program now being carried on in the fields of
oil, iron and titanium.
The Quebec-Labrador iron ore
of
low-cost
quired
inventories of crude oil
in
the ground
ac¬
in
previous years.
These inventories are now
replaced at considerably higher costs, due to
being
deeper drilling and the generally higher level of costs
applicable to producing operations.
New equipment
only
provides
installed
greater
and
from
in
the
postwar
flexibility -of
period
operation,
making products of higher quality, which
the
north
the
to
south, and 'have addressed thousands
of persons.
demands
Everywhere there
for
were
greater
efficiency and
economy in the Federal government.;
If these signs of growing sentir
ment in the. Congress for economy
bear fruit in tangible results, when
the
appropriation
bills
and
the
spendthrift programs recommended
by President
Sea. K. S. W4»erry
Truman
are considered, the resulting re*
the people will be great beyond' measure^
they will go forward -with confidence to constantly
increasing productivity. / :
\
; '
;
sponse among
and
.
in
generated
the
by
If this
ing
i
action
forthright
of
Congress
the
of
not
but
is
are necessary
today to meet the requirements of improved automotive
Congress
in
economy.
to adopt the tremendous spend¬
were
submitted
programs
the President in his State
by
Union
the
Message, in the Economic Report of the
President, and in the Budget Message, our national
economy would be struck a deadly blow.
Despite
and
spend
of
the
President
of
the
81st
the
of
belief
that
it
his
and
and
tax
followers
in
tax
the
demands
first
sesion
majority of the legislators did
in preventing the more disastrous recommends-the President from
becoming law. And it is
succeed
lions
spend
and
Congress,
of
was
that saved
a
many persons
this attitude of
nation f rom
our
with
Whom
have talked
I
the
majority in Congress
very hard times, with-many-
millions of persons thrown out of work.
The
Truman
credit
for
trend
1948
in
Democrats
taking actions
productivity
elections."
But
despite
crats,
that really
debacle.
.
have
that
that
it
who
was
been
quick
reversed
came
anyone
wlopments knows that
gress,
a
in
the
the
to
saved
the
claim
downward
wake
of
the
has
kept tab on demajority in the Con-r
clamoring of the" Administration
...
national
economy
Demo¬
from ^
.
.
If the
President's recommendations of
'been enacted
Earnings of the industry reflect in part the liquidation
a
Pacific
public <and to provide
reasonable margin for emergencies.
Earnings for the past
an
Today Canada is one of the world's
leading producers of minerals. About
Congress, I have traveled exten¬
sively
from
the
Atlantic
to
the
of
Dur¬
industry has expended $6
much lower than
on
high valued at over $10
billion, the output of about 33,000
manufacturing establishments.
It is
estimated that manufacturing capac¬
ity has increased 60% in the past
decade and per capita production of
manufactured goods has risen from
completion
substantially increased, and are pres¬
ently larger than any previous period.
peacetime
Stanley M. W«<dd
substantial
liquid petroleum
prosperous economy,
mineral products
the
years,
During-
Industrial production reached a new
60
the
in the petroleum industry.
the consuming
• r;
■orderly and
lower
a
more
hewing to the line of efficiency and rigid
billion to make available the facilities
necessary to serve
the rapidly growing requirements of
ail, the year just closed has been a good one
Canada, and the immediate future should bring
satisfactory results in the aggregate, given reasonably
a
at
stability and competency of thq
government at Washington is the foundation and in¬
spiration for private enterprise.
This confidence can
WESCOAT
1949 marked
ing the last three
'
S.
the postwar expansion
for
by
part of
even
be
a
marked
a
were
•industrial activity.
Confidence
President, The Pure Oil ■Company
in
postwar
restrictions, but, 'com¬
foreign plant operations
established
President, The Canadian Bank of Commerce, Toronto
The
curtailment in export
.some
currency
sensitively to economic dips as is the case with many
commercial operations.
The history >of the drug
industry seems to indicate a rather steady and constant
growth over the years and the probability is that it will
State unemployment
pension plans, the
STANLEY M. WEDD
stable world
of
therapy.
other
government
■*"
All
profession has been waiting
as
Demand bank
$2,800,000,000 to be distributed in GI insurance refunds,
the foreign aid and Atlantic Pact defense plans should
contribute to the
the medical
It is to be noted that the drug industry does not react
Thomas J. Watson
These
and
oil
Gasoline
be kept humming and
the United
States remain strong.,
•Since the first session of the 81st
WEICKER
might do fairly well.
and
considerations, including
insurance,
welfare.
industry might suffer
activities
con¬
have
associations.
people add up to
$227,080,000,000.
optimistic
and
remedies that
Savings
deposit $55,-
They
be
Canadians will .continue,
therefore, to follow world events with the closest in¬
for—and improvement in older types of
States
'both individual
$99,850,000,000.
and
but
can
regardless of the pattern 'Of industry as.a
the drug industry should have a good year in
1950.
I think it will -be largely due to the tremendous
activity in the field of research and development—new
330,000,000 in savings accounts in banks.
deposits,
one
I think that
addition, indi¬
own $69,100,-
on
that
will prevail.
whole,
front,
contribute
country
obvious
so
common sense
terest,
annual rate of $200 billion
taxes
The 'currency
were,
showed
new
.
Foremost is the great buying
power of our people.
This is run¬
income
funds.
last
President, E. R. Squibb & Sons
few
,
ning at
Plan
devalu¬
therefore, the most
momentous of recent events, although their full results
cannot be appraised for some time.
In the meantime,
trade and tariff discussions have been making slow but
steady progress since their initiation in 1947 -and, While
the results have not been spectacular to
date, they do
suggest that the principles of multilateral trade have
become more widely recognized.
ations
are
jected if
satisfactory business conditions:
after
present
standard ,.of
and
economy
LOWELL P.
leadership.
On
the
time in pro¬
our
develop
At
may
The dependence upon international trade of the Cana¬
dian
duction,
selling
and
service
and
giving close attention to the im¬
portance
of
encouraging
youngermen
requirements.
rival agriculture in importance
prairie economy, and, together with substantially in¬
creased shipments of metals, it should go far toward
reducing our trade deficit with the United States.
of
an
oil
to
products which will widen the
sales during the year
substantial increase.
Sales of industrial fuel
producing
industry's markets.
Today we face many uncertainties. Efforts to establish
orderly trading world are complicated by attempts to
direct men's thinking
along totalitarian lines, but the
advantages of a peaceful and universal exchange -of
Machines Corporation
in
de¬
In addition, the research laboratories and re fin r
design.
eries
an
Chairman of the Board, International Business
are now
titanium
The
expected to be in production
are
with an objective by 1952 of 220,000 tons of
titanium slag and 175,000 tons of pig iron annually.
The oil development program, centering in Alberta but
extending over the Prairie Provinces and into British
Columbia, is the largest .ever undertaken in this coun¬
try, and of great potential importance.
Producing wells
have doubled
within a year and output has tripled
within two years, present production being sufficient to
meet the requirements of the Prairie Provinces, while
prospective output (100,000 barrels) is approximately -a
confidence
coming year's business activ¬
on
this year,
rate of progress,
other
over 300 million tons and, while
necessarily be some years away,
a minimum
scale of 10 million
posits in lower Quebec
third
President, Brown & Bigelow
are
actual production must
into
ernment, controls
national
a year ago had
law, there would be today tight gov¬
upon
virtually every phase of our
and all industries and agriculture
weighted down by unbearable taxes in various
economy;
would be
forms.
Twelve months -ago President Truman told Congress
the country the major national problem was in¬
flation.
He asked power, .pow.er,, and more power to
and
-control
the
recession
nation's
was
economy.
already under
As "he
way.
spoke, the price
Wiser heads in Con-
Continned
on
page
8$
Volume 171
Continued
Number
jrom
1
4373
THE
COMMERCIAL
market
open
Effects of
what
European
The
r-
Devaluation:
i$od of time. There seemed
why
reasons
to be
higher fig¬
a
should be established only
ure
be followed
level at
felt
by
that
would
a drop to
It
was
over-devaluation
an*
be
to
lower
a
future date.
some
better
than
under-
devaluation.
'(-2) The'British authorities
«-
were
foully aware that the devaluation
probably would be accompanied
fcjy an increase in prices and that
might
wages
somewhat.
soned
well
with
that
devaluation
a
of
30%, increases in costs and wages
from 10%
of
15%
to
could be ef¬
fected
yet
British
commodities
Still would enjoy competitive ad¬
vantages in world markets.
(3)
devaluation
the
If
should
successful
at the
lower
level, it would be possible to raise
prrove
the value later on.
Such
tion would indicate
to all holders
situa¬
a
of British currency and securities
that the
pound sterling could im¬
value and would not
necessarily decline constantly.
in
prove
There doubtless was some
thought that in effecting a lower
value than was warranted by the
international
position,
exports
(4)
,
would
imports
be restricted, tourists would
would
be
low
and the foundation might be
laid for good
business activity for
of years.
number
a
the
of
because
attracted
rate
The Effects cif the Devaluation
In
States
should
upon^he
States.
deflationary
be
of the United
economy
However, the total volume
export trade while large in
our
itself, is small by comparison with
the 'country's total national prod¬
uct.
Nevertheless,
might
one
rea¬
sonable-expect exports to decrease
and imports
the United
commodities in
States
doubtless will be higher when
ex¬
business
the
versely.
place
is
when
reaching
than
Will
be
placed
from
does
not
likely.
When
the
valued
in
employed now and it remains to
be seen as to the extent manpower
materials
and
can
be switched
productive
more
may
In
was
dollar
to
see
In due course, one
might
the gradual elimination of ex¬
change
has
controls, import quotas,
rationing,
allotments
and
such
cover
gold
for
other restrictive
reasons
ad¬
were
The savings
the people were low, unem¬
ployment was large, business was
at
a
low ebb, many banks had
of
been
closed
depression
the
and
however,
been
the
the
throughout
Since
economy.
economic
severe
prevailed
that
United
chief
time
States
market
has
for
the
of
na¬
is
un¬
world's gold production.
Devaluation
tional
is
bankruptcy
thinkable
would
do
that
it
the
under
It
would
and
foreign
intended to
as
a
cir¬
the
restore
their recent
entirely
States
existing
would
of
it
United
cur¬
deval¬
correct.
destroy
strongly
trenched creditor nation.
our
en¬
It would
the
holders
of
government
secu¬
costly
the
There
measures.
sullied
dent
for
the
create
manifold
Federal
Reserve
in
its
The
Presi¬
States
innumerable
has
times.
Chairman of the Federal
and
Federal
the
President
Reserve
Bank
The
Reserve
of
the
df-New
York
both have stated emphati¬
cally that the dollar must remain
fixed.
Perhaps
leave
gold
alone
and
well
we would
make
need
do well
devaluation
and
some
other
repairs
economic
many
on
fences
John Canned & Co. Is
Formed in Boston
deflationary.
time
some
re¬
However,
before
the
be felt in this country.
Unlike the situation which pre¬
after the
dollar
trary,
1931,
no devaluation of the
indicated. On the con¬
is
so
long
as
the United States
economy is maintained cm
sound
a
basis, the dollar will
prove to be
the anchor to which all others will
seek
to
lash
rencies.
their
Let
would
Ms
tamper
drifting
cur¬
say to those who
with
thus in
bat
the
may
so operate our
toward the end
remain
vicious
strong and
forces
that
are
cial
by
and in part to
war
countries
have
yond their
been
to
goods
to
imports
many
been
at
49
Federal
Street, to engage in the securities
business.
merly
Mr.
Cannell
partner
a
Cannell,
French & Copp and prior thereto
with
W.
H.
Bell
&
Co.
With
(Special
The
DETROIT,
Financial
Chronicle)
MICH.—Charles
Bldg., members of the New York
and
political
"''i
Lerchen
&
and Detroit Stock
Co.,
living
SAN
be¬
FRANCISCO
STOCK
dollar
the
EXCNANCE
areas
BIG BOARD
have been sending 'man¬
ufactured articles ifito -other ster¬
ling areas with'which to pay'ster¬
ling debts. Devaluation thus be¬
inevitable when the postwar
period of the sellers market grad->
ually came to an end and especi¬
ally when the United States
ductive
its
caught up with
requirements.
Doubtless
crisis
lease,
pro¬
capacity
own
the
sooner
would
had
it
not
UNRRA,
have
been
direct
come
for
lend- :
loans
and
Marshall Plan aid.
To the extent that the devalua¬
tion
removes
some
of
the
malad¬
justments in the price Structures
of various countries, the action is
constructive. If prices and wages
in
European countries are pre¬
will
effects
help
increasing materially,
will
be
beneficial
and
the
of
competitive price
those countries.
If
managed properly, free
everywhere
wen
may
countries
be
bene¬
be possible.
due
course
of time prices of
commodities' internationally
traded may decline.
Such items
some
.
wool, cqcoa, copper, rubber, tin
and others which
originate pri¬
marily in the sterling area quite
as
likely
will
dollars.
be
for
demand
a
some
commodities
wool.
The
lower
in
of the
such
-
will
more
jute
as
and
abroad
less
areas.
It
for sterling area oil
coming from the dollar
seems
reasonable
to
probability rail and
transportation
adversely
Where
as
will
be
exports
truck
affected
decrease.
Americans
have
direct
investments abroad, earnings from
these sources will be lower unless
the
volume
ulated
when
of
business
sufficiently
devaluation.
Open for two and
ern
a
In
foreign
to
1919
is
stim¬
offset
and
investors
convinced that the pound
in
mar¬
traded.
in
more
serve
ties
investors nationwide
than 200 securities dealt in
on
eastern securi¬
exchanges.
A market
place for the stocks of many Hawaiian and
Philippine companies.
Y
A Preferred Rate of Commission is
extended to
members
of
registered
Sessions:« 7 AM.
exchanges
to 2:30 P.M.
7 A.M. to 11 A.M.
and
the
except
:•
banks,
N.A.S.D.
Saturday—
Pacific Standard Time.
*
m
the
1931
became
was un¬
are
half hours after the close of east¬
securities markets to
ex¬
pect
fewer
commodities
to
be
shipped in American vessels and
in -all
leading regional securities
than 350 stocks
demand
still is -'great
It is quite pos¬
sible that greater demands will be
With
more
con¬
scarce
for tin and copper.
made
One of the nation's
kets where
,
.
Doubtless
tinue
quoted
155 SANSOME STREET
Ford
Exchanges.
so¬
European
produce and export
and ' services with
from
A.
Du Charme is now affiliated with
for their necessary
food and other com¬
of
and they
and
Watling, Lerchen
to
pay
modities
for¬
was
in
They have no't
means.
able
enough
offices
'Can¬
Cannell •/&
part to the damages in¬
experiments,
Which
John
'Watling,
social
What Conclusion Can One Draw?
flicted
MASS.—John
formed
seeking to undermine the world's
as
welfare.
Due in
with
dollar,
better position to com¬
a
has
Co.
us
economy
we
Cannell
F. L. Putnam &
Co., Inc.
Finally, let
that
BOSTON,
nell
was
the
"Hands Off'!
own
John
sterling devalua¬
economic,
posts
new
fresh pickets.
as
positions
problems
hope.
United
un¬
that the present price will
changed during his Admin¬
istration, thus repeating what the
Secretary of the Treasury
has
the
It
of
the
vented from
flight from the dollar.
vailed
the
not be
Board
be
tion of
remain
stated
said
as
will
must
star
of
and the overall effect must be
garded
it
this
following the most
in the world's history,
war
its vast refunding operations and
a
mon¬
in
currencies/
adjusting "to eco¬ results will
of
dollar
rities, embarrass the Treasury in
cause
world's
unstable
period
came
act
an
the
today and
nomic realities
per
plausible
some
would
goods
this
-of
de¬
to its present
fine ounce, con¬
ditions were vastly different than
is true today.
It was not neces¬
sary to devalue then but at least
from
in" manufactured
be
1933/34
price of $35
some
pursuits
those unproductive. Perhaps
increase
to
appear
Government and its obligations. It
would be a breach of faith with
fully
are-
55%
a
standard
which
This
undermine confidence in the U. S.
United
the
plants
87
fited.
be
now
Reserve
Standard" is
various
Be Devalued?
may
restrictions
British
of former
ef¬
the importation of
upon
commodities
the far
European Devaluation Cause
the Dollar to
It
more
lar
etary
to
leadership
States.
effects
that, European
consequences
markets.
further
be
periods.
were
fective,
the
not have
can
uations
devaluations
to
self-sufficient
so
devaluations
foreign -advertising, budgets and
thus attempt to hold these foreign
the
not
brought about here
by labor stoppages. v "the United
States is so strong industrially and
which
However, in order to al¬
leviate the dollar shortage and to
the
-be
can
rencies
make
should
compared
which
overvaluations
be
in
1950
However, what has taken
relatively insignificant
will
effort
those
noticeable. When reaction sets in,
however, some industries compet¬
ing directly with the cheaper for¬
eign goods will be affected ad¬
cumstances.
prices
activity
of
devaluation
Perhaps
cut
to
of
probably
will be high in the United States,
and increase
made
all
inflationary!
Federal
period
months
devalued
American
some
Since
of
terms
countries'
that
as
>periods.
currencies.
in
pressed
great
as
earlier
Prices of
to increase.
be
earlier
vanced for the action.
theory, the European deval¬
uations
of
United
the
on
(323)
its currency and
deposits Whereas
the legal requirement is
likely
to
stimulated,
be
CHRONICLE
might well be an increase in in¬
only 25%.j ternational trade and, eventually,
Surely, the only ones to benefit free convertibility of currencies
dervalued, free cheap pounds were from so unwise an
act would be
might be restored, The secret of
purchased
for
eventual
profit., the gold
producers, mostly South success, however, lies in how the
Today, however, the pound re¬ Africa, Canada and the
Soviet devaluation is handled.
mains
an
inconvertible
pegged Union; and the
speculators in gold
Since the United States is selfcurrency, it is not free, and for¬
shares.
sufficient to a large
degree, the
eign investors still can not get
Under existing
elsewhere
Should
conditions, the devaluations
their frozen balances or sterling
United States
currency must re¬ not bave serious broad repercus¬
securities out. Under existing cir¬
main
fixed, strong and tied to sions here. Certain industries, to
cumstances, the effect of the de¬
•gold at $35 per ounce.
The ''dol¬ be sure, will be affected adversely
valuation does not appear
increased
be
They apparently rea¬
operations and
It would
purpose?
definitely
more
good
FINANCIAL
11
page
for
no
&
SAN FRANCISCO 4, CALIF.
88
Continued
from
page
igress prevailed and his misguided recommendations were
pigeonholed.
he says inflation has been beaten
in appropriations
to spend in
Now
Inflation.
but asks for
whipping up
'
„
While
deploring deficit spending, he recommends
program^ for the expenditure of money that would be
Imppssible for the economy to stand through taxes. And
.If his programs were adopted, runaway
deficit spending
inflation automatically would ensue.
The President in his messages to the
second session
«of the 81st Congress, which has just convened, has subanitted virtually the entire program of quack proposals
that he made a
year
ago.
And I predict that his
recommendations for repeal of the Taft-Hartley LaborManagement Act, for passage of the Brannan Farm
Plan, and Compulsory Health Insurance, and for a net
increase in the tax burden upon the people will be
rejected.
1
Speaks After the Turn of the Year
today stem from agreements that were made at Teheran,
Yalta and Potsdam.
It was at these conferences that
China
years.
many
This is
a
Given all the
the right decisions.
There
several
basic
problems that should be
wrestled with by Congress at this time. They have been
-completely by-passed by the President in all of the
are
thousands upon thousands of written words that he has
to- this Congress.
I am hopeful that these funda¬
•sent
mental
■of
problems will be tackled in the present session
Congress,
but I
am
doubtful
that
they will be
re¬
solved.
The
the United States, during and since
the war, has been kept at a high rate of
productivity,
mecessary to win the war and to provide grants in aid
to foreign countries devastated by the war. Our econ¬
omy, has been going along very'largely with artificial
economy of
extraordinary demands arising out of the war
requirements due to failure to nail down
props,
and subsequent
the peace.
As the Western
European
nations
regain their
pro¬
ductive ability—and they have made great progress in
that direction—the impact upon the United States econ¬
omy will be
substantial.
All of the ECA receiving countries are now above
their prewar levels of production. The economic prob¬
lems that now confront them can be solved only by
them.
Of
the American people want to do all
help these countries to get firmly on the
highway of prosperity; and our people certainly have
been very generous in their contributions to that end.
they
course,
to
can
But the problems of those countries
today
are
largely
problems involving integration of their economies and
WILLIAM WHITE
President, The Delaware, Lackawanna and Western
Railroad Company
1949, with the railroads earning only 2.75% on invest¬
depreciation,
less
ment
another
was
year
of
compara¬
tively good volume with low earnings, thus following
the pattern of preceding postwar years.
Yet we are
optimistic because we think there is
a growing awareness among thought¬
ful people of the fact that what has
been
is
called
"the
as
convertibility of their
At
this
of
session
^Among the fundamental problems that ought to be
*
given consideration is how to establish procedures for
a
transition
period from United States Government
gifts to ECA countries,- to a resumption of private in¬
vestments, and re-establishment of the-prewar channels
of private enterprise.
When
the
Program
the
as
ECA
it
program
or
the
European Recovery
originally called,
was
was
presented to
people's
of
aid to the long-term
in which free enterprise would take over.
This
period
not accepted and we have now
reached the point where, in my opinion, the mechanism
for transition to private enterprise should be established.
Since the ECA program for Western Europe got under
approach
was
made
We
tremendous
advances
ernment
right
'"to V1' '-
favors
Management
portation.
some
a
Wiuiam
white
compete
in
every
tionalization
the
all
If there
can
a
be
Congress
the Congress and State Legislatures
is why it is the people's problem.
our
toward
obtained
from
way
a
policy.
It
was
never
Constitution
that
contemplated
the
the
framers
should
have
by
President
of
the
absolute
takes
in most of the
industrial cities outside the
Detroit metropolitan area.
It also
embraces extensive farming and re¬
larger
to
report of
Michigan's popu¬
20.8%
between
a" recent
the Census Bureau,
lation
has''grown
1940 and
July 1, 1949. Among states
Mississippi, only Florida
had a larger percentage of growth
during this period.
In number of
additional residents, Michigan's in¬
crease
was
exceeded by only one
state in the whole country, namely,
California.
These facts suggest the
east of
Justin
R.
Whiting
of
America's
automobile
makers
best
tries, producing, among many other things, paper, food
products, chemicals, seating, food processing machinery,
printing presses, farm machinery and furniture. Nat¬
urally, since our plans in the electric and gas business
must be closely geared with those of our customers, we
The
area
also includes
a
we
that
Malachi
informed
vain regrets all
as
spit
we can do
hands and do the
on our
we can.
If what Mr. Truman said
were only true and we were
behind the times," then, glory be,
we would be looking forward to the Golden Age of this
country; but as is, perhaps we will have to look back
actually "160
to
years
it.
see
MARION
J. WISE
Company
The outstanding feature for review, and the hope on
the horizon for the future as respects the Southeast and
its railroads, is the increased productivity of the terri¬
This applies both to industry and agriculture, both
to volume and variety, both to the
larger centers of population and to
tory.
the smaller communities.
These statements are based on the
experience of the Central of Georgia
Railway, whose 1,815 miles of line
serve
directly the States of Georgia
and
Alabama.
During 1949, a tota?
of 84 industries were located and ex¬
panded
on
the Central
of
Georgia's
line, bringing to 798 the number for
the past five years.
aging
as
the
new
Just as encour¬
industries is the
fact that inquiries for locations con¬
tinue at even an accelerated pace.
production of trucks is antici¬
-
reminds
will.
along with many factories making automobile parts and
Our automotive customers expect to con¬
tinue producing passenger cars at a high rate in 1950,
action, far-reaching in its ramifications, they should be
presented to Congress and the people, debated, dis¬
cussed, and subjected to final approval by the Congress
or the Senate as the case may be.
The truth is that most of the ills that beset the world
never
accessories.
■
we
If enough people will remember and be guided by the
preaching of Jefferson that debt and revolution are
inseparable as cause and effect; also "the government
which governs least also governs best"; and of Wash¬
ington that "nothing but harmony, honesty, industry and
frugality are necessary to make us a great and happy
people," all will be well, but enough people never have
are
and some increase in the
and
tax, spend and;
and watch one's step.
located in the Consumers Power Company service area,
pated.
increase,
and
which, best one can do is to remember
vigilance is the price of liberty, read the
eternal
The home plants of sev¬
known
tax
"Chronicle" carefully and thoroughly to keep
steady and healthful growth that has
contributed
to
Michigan's
current
best
are
the face of
the
prosperity.
eral
taxes
President, Central of Georgia Railway
in foreign relations.
We live in a Republic. The
President has full power to negotiate. But before agree¬
ments are made that bind this country to a course of
power
In
how
sort districts.
According
We
Hinnissy once asked Mr. Dooley if he
Berkeley Williams
thought the world was: getting any
better.
"Nope," replied Mr. Dooley,
"Well, do you think it's getting any worse?"
"Nope,"
said Mr. Dooley, "I think if it's doing anything, it's going
round and round like it always has done."
under the circumstances is
From all present indications,
business in the large
Michigan territory served by Consumers Power Com¬
pany will continue at a high level, in 1950. This territory
includes 56 of the 68 counties in Michigan's Lower
to
Which
i-M
Nothing being so useless
President, Consumers Power Company
and
indifferent.
spend, elect and elect, Private Busi¬
ness will
decrease, until eventually
and inevitably we face the facts of
life that spell no business, no taxes,
no
government, then we will have*
to start all over again or fold up.
WHITING
Peninsula
and
continue
and
JUSTIN R.
the present session of
truly nonpartisan American foreign
to decide, and that
The time is getting
late.
very
thorough ventilation of all the secret agree¬
ments that have
been made without consulting the
people or the Congress, then I believe we will be on
transportation will
on
States will be
a
of
transportation deficits and
now
only
Administration
had
forms
other
paid will be a burden on all taxpayers
the users of transportation.
it is for the people and their representatives in
taxes
and not
But
of
Then the burden of
follow.
has been doing in foreign
great effect upon our 'living
conditions in this country.
It behooves the American
people to take more interest in foreign policies, because
they are having to nav the bills for mistakes.
our
has
'
..
form
thoroughly combed.
What
ment
*
to
some
longer a Republic but a Democ¬
racy and until and unless a majority
of voters fully realize that as govern¬
no
.
>-chance
and
long-term
outlook
for
private business is good, some
is bacl and
Given these
the cheapest
Undoubtedly, during the present sessioii. of Congress,
affairs
is a headline reading, "Washington Continues
Optimistic Businesswise"—government business
of course.
On the other hand, imme¬
diate
alike.
in the Orient.
foreign policy of the United
in
now
Highly
Management favors equality of regulation and taxation
of all forms of transportation, with subsidies to none or
dam.
entire
long-term outlook for more gov¬
business is conspicuously good.
Before me
permit restoration of credit
so that capital is available along with adequate earnings
to finance the expenditures necessary to constantly im¬
prove
plant and equipment.
This is fundamental if
proper service is to be provided at reasonable rates and
fares.
WILLIAMS
and
ficient to
back to secret agreements made at Yalta and Pots- r>
the
development is apparent to us at present. We feel that
would not be justified in relaxing our preparations
for the continued growth we see ahead.
BERKELEY
public interest.
To do
this successfully as a private entity
requires a policy of providing ever
better
service, and earnings suf¬
to all
slow-up in business activity
a
cannot be entirely ignored, no such
we
in the
ministration's foreign policy, and the roots to this failure
go
possibility of
Management must operate the rail¬
reaping the whirlwind of failure in the Ad¬
are
While the
they shall have.
roads
12,000
some
before the year-end
But it is for
people to decide which
the Communists, under direction of Moscow, have
way
to
for it.
leading to it.
the American
a
of reconstruction
service
Both immediate
for
nationalization and the trends and
factors
provide gas
additional customers,
practically all of whom were already using gas for
cooking or water heating. It was also possible to remove
most of the restrictions on use of gas heat in industry.
We look forward to a further improvement of the gas
supply situation in 1950, which we hope will enable us
to supply heating service to thousands who are waiting
greater supply of natural gas enabled us to
problem.
private ownership and
operation and will try to keep the
people informed about the dangers
fight
system that would function through
the early stages of relief for the destitute, through the
period
striking testimony as to Michigan's progress. ^Despite
the fact that Consumers Power Company has increased
management will continue
Railroad
to
Congress,^ about two years ago, I did my utmost
to have established
is, in general, optimistic,
electric facilities_mffers
own
railroad problem"
the
actually
opportunities, railroads will prove to be
of transportation available and will
prosper under private ownership.
If these things are
denied, nationalization of railroads will ensue and na¬
well
our
heating
respective currencies.
Congress the ECA appropriation,
no doubt, will be reduced
by not less than $1 billion
dollars, and it is my opinion that it can be reduced up
to $l1/2 billion.
free
as
of
again to reject it, restore sound fiscal policies and right
Ship of State.
the
respect on a basis of equality with other forms of trans¬
barriers,
trade
of
expansion
Congress, the policy-making branch of our government,
though it may take many years to do so, will
there be a lasting, durable peace.
And so, to prevue the present session of Congress
with the evidence now at hand, it appears that economy
and foreign policy will largely dominate the session.
President Truman, having presented again his recom¬
mendations for spendthrift socialism, it is now up to
away,
establishment of
removal
The
its electric generating capacity 95% in the last-ten years,
projects under construction in 1950 will boost-capacity
about 25% above the present level. Our .total construc¬
tion budget for 1950 will be in excess of $40,000,000 and
will be one of the very largest in our history.
In 1949 our company made a net gain of 21,646 electric
customers and 11,024 gas customers.
New applications
for electric service were coming in so fast that 7,100
remained unfilled as the year ended.
During 1949 a
And not until the sins of these conferences are washed
the future of our
year of crucial de¬
facts, the people will make
of
border
keep in close touch with customers' business prospects,
Practically all our industries have done very
.
in
1949 and their outlook for 1950
in
mendously in winning the war.
Fortunately, there will be Congressional elec¬
at which the people
next November will give
tions
along the
Europe were handed over to Russia without
the approval of the American people who helped so tre¬
cisions.
their verdict.
and nations
betrayed
was
Russia
What this Congress does may shape
country for
Thursday, January 19, 1950
CHRONICLE
86
Business and Finance
Millions
FINANCIAL
COMMERCIAL &
THE
(324)
It
M. J. Wise
great diversity of other indus¬
is
significant
number
.
that
whereas
of business firms
the
in opera¬
tion, for the country as a whole, rose
30% between 1944 and 1949, the in¬
in the South
crease
tion's bank
.-
-
-
-
-
-
was
43%.
resources were
-
':
Similarly, while the na¬
doubling, those in the South
Continued
on
page
90
Volume 171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(325)
89
Continued from page 5
tion
Observations
50
most-favored equities of which
$210,000,000
To
that
assume
and
a
sample which
holdings—in
equity issues, we
have gathered from 29 open-end
we
favorite
30
closed-end funds represents the average of all the funds.
In this sample 70% of invested assets is
placed in common stocks.
Applying this 70% proportion to the §?J/> billion of invested assets
of
all
156
common
fifty
funds,
deduce
we
that
$1,750,000,000
in
invested
is
stocks, of which the
represents
36%%, and
$639,300,000 placed in the favoritethe $210,400,000 concentrated in the
trend
toward concentration is recognized in the article
trusts, "The Little Capitalists Get Together," by Mr.
Beardsley Ruml, in the current (Jan. 21) issue of Collier's, as
follows:
"The investments of the investment companies serve
only in the most indirect way to ease the tightness of capital for
the
on
investment
most
in
business.
new
Most
standard companies.
in the near future.
afield
The
too great
are
investment
companies have
easily marketable securities of
It is not likely that this situation will change
of their investments in
the
risks
and
costs
of straying
much
very
to
justify for most investment companies the
chance of an occasional bonanza
turning up out of the unknown."
Because of Mr. Ruml's objectivity toward the
funds, because
of his directorship on one of
them, because of his experience and
wisdom
in finance
current
advertising
Ruml
generally, and because of the trust industry's
glorification of him and his article ("Mr.
ought to
etc.),
know"; "Invest 10 minutes in Beardsley Ruml,"
sought and held a discussion with him this week on this
we
and related Fund
No
other
months
by
phases.
Mr. Ruml's apposite reaction to the Blue Chip foible.
On the other hand, the deficiencies of the Funds vis-a-vis the
capital market in their "rush to security" should not be
exaggerated, Mr. Ruml believes.
"Even under the over-concen¬
tration process the funds are useful in giving tone to the
equity
market, which is very wholesome. And you must remember that
Wintertime
many outlets to
dition
mining,
forestry
to
blue-chip media like the savings banks,"
Mr. Ruml rebutted.
The
of
interests
vis-a-vis
management and
the onslaughts
other
community groups, supplanting the small shareholder's
reliance for his protection on a few individuals' chronic needling
and
fisticuff threats—-which
was
discussed
this column of
in
last
week—is
heartily approved of in principle by Mr. Ruml.
"The
assume "the
degree of interest on behalf of their
stockholders gauged to the amount of their holdings in the respec¬
trusts
should
tive trusts.
A fund
times
as
Ruml
holding 100,000 shares of stock should be 100
believes.
active
in
matter
a
as
if
it
holds
only
100 shares,"
Mr.
It
is
note
The
,
Load
the
Price
of
Canadian
Regarding the all-important DISCOUNT, and particularly
disparity between the discounted closed-end listed com¬
panies and
Brushf'
the premium-priced open-end which
sold,
priced
Mr.
in
lieu
Ruml
of
the
open-ends
conceives
of
the
being
"load"
"Fuller-
are
thereby
over¬
them
on
being
merely the lay public's justified "price of education."
In
other words, the
changes
rather
at
discount
a
be
regarded
initiative.
.
cessfully
critical
by
as
the
informed
reward
a
sophisticate
for
his
ex¬
should
knowledge
and
investment cannot
Middle South Utilities
be
now
deter¬
mined.
After
Stock Offered
by Union
Sec. and Equitable Sec.
giving effect to the sale
the new shares, Middle. South
Utilities, Inc., will have outstand¬
of
Jan.
on
640,000 shares of
Middle
$19,125
18
total
a
common
awarded the shares at competitive
on Jan. 17.
sale
The
proceeds,
together
with
funds, will be used by Mid¬
South Utilities, Inc., to pur¬
other
dle
chase additional shares of
stock
its
of
subsidiaries
four
assist
to
common
operating
them
in
financing the current construction
programs. Subject to necessary au¬
thorizations from regulatory bod¬
ies,
the
invest
company
$4,000,000
common
&
stock of Arkansas Power
Light
tional
will promptly
in
additional
Co.;
$4,500,000
stock
common
in
addi¬
of Louisiana
Power & Light Co. and $3,500,000
in additional common stock of Mis¬
sissippi Power & Light Co.
expected
tional
but
before
the
in
Amos
possible
to
amount
end
of
of
such
it
storms
look
is
now
forward
to
sailing in the resurgent
period which normally commences
with the Spring thaws.
There
is littleMoubt that
difficult
phase
ada's
natural
again
proved
With
the
the
normal
vast
mineral
in
crises
finance
with the U. S. Government which
has just been announced
by
Cobalt Chemical and
is
it
that
fields
of
Shield
Albert
U.
tion
This,
in
the
mentioned
be
deposit or
dis¬
new
Steep
Rock
the
has
of
Chicago has
area
been
found
option on
deposit
an
in which the
and
turn,
new
expects
to
development work im¬
with the objective of
attaining production of 3 million
tons per annum within three or
four years.
In order to finance
the preliminary operations U. S.
dollars will flow northward, pre¬
sumably at the free rate, but as it
is proposed to market the bulk of
the ore in this country this will
mediately
the
will
ne¬
undoubtedly
further flow
a
It will
be
the
not
U.
of
S.
that
Ore
Co.
mence
long also before
U.
numerous
nies
S.
comprise
of
steel
the
Canada
proposed
in
to
consid¬
a
are
the production stage is
factor
of
exports to this
likely to
in
the
impor¬
bal¬
Although the
uranium
considerable
coun¬
Canadian
payments.
question of
in
prove an
is
shrouded
secrecy
there
is
also little doubt that the existing
and new discoveries of Canadian
resources
play
an
of
this
adjustment of its present grossly
undervalued price-level is ulti¬
mately inevitable.
during
the
past
difficult
period,
as a result of opportune
mineral and oil discoveries, pres¬
sure
on
the
Bancroft, Assist¬
The
of
Canadian
dollar, both
free and official, has been success¬
fully resisted.
Also the realiza-
funds.
Persistent
narrow
free
ley
Road,
Mr.
New
Bancroft,
Frederick
erts
B.
at
of
the
born
was
from
School
Conn.
Elizabeth.
should
be
noted
that
the
free
the
official
and
level.
same
dollar
were
There
was
rate-arbitrage field but
remained
the
14 !4 % -13 V2 %
discount.
New
in
movement
York
but the
make
industrial group failed to*
appreciable
any
headway.
Atlantic Oil, Federated Petroleum,
and Golden Manitou were promi¬
in
the
advance and
from
and
Value Line Fund
Distributors Formed
Value Line Fund Distributors,
Inc., has been formed with offices5
44th
East
City, to act
new
are
Street, New York
distributors of the-
as
Value Line
Arnold
Fund.
1917.
as
Lieutenant
Force
and
in
has
the
George C. Berg, Secretary and4
Treasurer; and Walter C. Boschen
and Gavin H. Watson,
Directors.
Morgan-Cochran Corp.
*
DEAL, N. J.—The Morgan-Cocfc-
ran
Corp. has
been formed witlr
offices at 270 Norwood Avenue to
engage
Officers
in
a
securities
Frank
with The First Boston
S.
Air
associated
President;
Secretary.
and
Alfred
Cerceo,
Mr. Morgan Was pre¬
viously with McDonnell & Co. of
New
York
City.
SEYMOUR
STREET
OIL SECURITIES
★
MEMBERS:
VANCOUVER STOCK EXCHANGE
A. E. AMES & CO.
NEW
WALL
YORK
Uhlmann & Latshaw Adds
The Financial
KANSAS
Clark
staff
of
has
CITY,
been
Uhlmann
CALGARY STOCK EXCHANGE
INVESTMENT DEALERS ASSOCIATION
TWO
to
★
INCORPORATED
1925.
(Special
★
STOCKS
Corp. since
OE CANADA
STREET
5,
N.
Y.
★
WORTH
4-2400
NY
★
★
1-1045
Chhqntcle)
MO.—Wesley
added
&
to
the
Latshaw,
Board of Trade Bldg., members of
the New York Stock
Exchange.
FIFTY
CONGRESS
BOSTON
9,
STREET
business..
W.
Cochran,
President; Peter J. Morgan, Viceare
MUNICIPAL
Harvard
U.
been
Officers
Bernhardt President;
CORPORATION
an A.B. degree in
He served in World War I
reached
1949-50 peak levels.
SPECIALISTS ALBERTA CANADIAN
University with
subse¬
quently staged a strong recovery*.
Western oils, base-metals, and the
golds figured strongly in the rally-
GOVERNMENT
CANADIAN
Stocks-
following a heavy initial decline
sympathy
with the
similar
in
late
was
Private Wire Connections With All EASTERN Markets
MASS.
aaaggggassBBS
rate
virtually unchanged at
CANADIAN BONDS
Mass.,
at
also
considerable activity in the corpo¬
ROSS WHITTALL LIMITED
Rob¬
He
Newton,
official
exchange reserves would benefit
exceedingly in the event that the
May 25,
Newton, Mass.
graduated
High
son
arid
Bancroft,
1895,
Canaan,
mar¬
improve¬
VANCOUVER, CANADA
PROVINCIAL
de¬
by the sustained
free
ZAZ
540
First
the
investor
ment of more than 2% in the past
few weeks.
In this connection it
vital metal will
increasingly valuable role
in the Dominion's economy; some
Thus
of
with
renewed
ket has brought about an
fields
erable investment of U. S. dollars.
try
rally
nent
the
involve
usual
of
interest induced
the St. Lawrence
on
itself,
link
than
demand in the
new
operations in the Quebeciron-fields.
The
con¬
to tide-water
will,
hand, displayed greater ani¬
velopment
Iron
„
is
other
com¬
struction of the railroad by which
it
the
Domin¬
external section of the bond mar¬
ket was again conspicuous by its
absence.
The
internals, on the
compa¬
new
will
Labrador
trict of Ontario.., The Inland Steel
Co.
be
capital.
addition
can
in
investment
In
the Canadian situation.
will
greater
provoke
ance
the discovery of a
iron-ore
the
tant.
these
of
cessity for the financing of addi¬
tional
pipe-lines and refineries.
"rnd
developments that have
recently exerted a beneficial in¬
return
oil firms interested in this
will be greatly accentuated.
The greater the resultant
produc¬
cir¬
portant
the
in
S.
trade
;:he
mean¬
area
ore
such as Alberta oil, Lab¬
iron, and Quebec titanium,
have been many other im¬
on
with
reached
interest
there
and
the
continues
favorable weather conditions
activity on the part of the many
demon¬
to
In
oil-boom
more
successfully
of
orders.
the
as
publicized items of economic
rador
further
As soon
temporary
Refinery Co.,
$3% millions with the probability
the
of
the
Ltd., of Cobalt, Ontario.
It is re¬
ported that initial orders from this
country amount to approximately
be
can*
cumvented.
more
reserves
more
the
once
riches
Laurentian
oil
prairies
once
has
timely saviour.
development of
a
fabulous
strated
passed the
strength of Can¬
wealth
unrivalled
the
in the
just
latent
enormous
devel¬
new
"very substantial contract"
time
ci
currency.
mation
interesting
Canada
smoother
office in New York at the age of 54.
Mr. Bancroft's residence is Green-
L.
may
Roberts
Vice-President
Boston Corp., investment banking
firm, died suddenly Jan. 18 at his
New-
Inc.
the
ant
addi¬
of
stock
Public Service
necessary
1950,
investment
common
Orleans
foe
an
It is
addition to the official
holdings of
of
to
the
of
Amos Bancroft Dead
stock of
South
per.
a
distinctly
Having weathered
5,600.000 shares of common
stock, without par value.
The
of
Utilities, Inc., at
share, .^bte group was
customary
negotiated
immediate
important
an
U. S. dollars.
Another
contributed
ing
Union Securities Corp. and company has no other securities
Equitable Securities Corp. jointly authorized or outstanding.
head an underwriting group which
offered
to
economy,
stage.
commence
the
on
An unexceptionable conclusion!
.
.
buying of the closed-ends
not
the Do¬
minion's exchange reserves regis¬
ter
at this time
a
distinct gain
rather than the anticipated set¬
back.
Consequently it would ap¬
pear that the Dominion has suc¬
Among
Education
while
the
to
is the
therefore,
that, despite
lead
ad¬
seasonal drawbacks and the
many
recent threats to
the welfare of
the
eventually
devaluation
out of the question
During the week activity in the
and
In
sea.
significant,
fluence
*
the
ion's
opment in the mineral field which
is of immediate benefit to
there is accentuated activity in all
sections of the economy.
Canadian
stockholders'
the
of
prospecting
activities
and
suggestion of the duty of the mutual funds to represent
closing
a
the
Representing Their Shareholders
af¬
more
complete halt are
seriously handicapped by the rig¬
ors of Winter.
During the Sum¬
mer
months, on the other hand,
new
this gets the small man's capital into the market, which otherwise
would go into even bluer
is
foreign trade is retarded
the
the
"Soundness consists of making the same mistakes that every¬
body is making at the time they are making them. Even if you're
right in bucking the crowd, you'll be considered 'unsound'," is
situation
fected by seasonal influences than
the Canadian. *
During the frigid
brought
top ten stocks is the equivalent of 12%.
The
further
is in the 10 most
stock
common
further
now
growing strength
By WILLIAM J. McKAY
estimate the concentration of
the entire
portfolio—in the
of
has
Canadian Securities
popular issues.
lieu
that
sterling is
Continued
from,
88
page
After Ike Turn of the Year
Business and Finance Speaks
increased
nearly threefold.
Income and consequent pur¬
chasing power in the South are likewise increasing at
a faster rate than in the country as a whole.
In the Southeast, both industry and agriculture are
developing and it is most gratifying to note that they
keeping in good rhythm and proper harmony with
each other.
Manufacturing enterprises are attracted by
are
availability of materials. Agriculture
benefits by supplying this increased demand. For ex¬
ample, there is the recent rapid growth of the pulp and
paper industry in this territory.
The source of supply—
the forest—covers two-fifths of the land area in the
South.
A new type of enterprise is the Coosa River
Newsprint Company, just now getting into production
near
Childersburg, Alabama, financed by a group of
southern newspapers, which will obsorb the output.
Agriculture shows a continued trend toward livestock
good markets and
„
threats
are
ing pot with the rest of the country, is handicapped by
of venture capital to invest, while there is
such a marked lack of incentive.
Industry, with the
heretofore unmatched physical plaht,
is menaced by the overhanging threat of oppressive tax¬
ation, particularly the iniquitous payroll taxes now in
such high favor.
It seems that freedom of action once
enjoyed under an independent business system, is now
a
thing of the past.
Whether it will be replaced by
statism, or by a sort of hybrid economy remains to be
seen.
But in any event, the.Southeast, and its railroads
with it, may be relied upon for stability, indeed for
progress, during at least the first half of 1950.
asset Of
a
CLAUDE A. WILLIAMS
President, Transcontinental Gas
Natural gas
Pipe Line Corporation
in 1950 will have its biggest year
in his¬
tory.
production of natural
be around 5% trillion cubic feet.
Marketed
gas
1950 should
for
major in¬
dustry ours is may be shown by
pointing out
that in 1931 U. S.
How
relatively
new
a
marketed
production of natural gas
trillion cubic feet, 2.8 tril¬
1.7
was
lion cubic
lion cubic feet
Natural gas
of the energy
tril¬
in 1941, and 4.6
feet
in
1947.
provided less than 4%
supply in 1920; but by
1947 it furnished
of
gas
utility
companies back in 1932 there were
eight using manufactured gas to five
using natural gas. In 1948 the situa¬
tion
11
was
reversed when
natural
there were
customers
gas
manufactured
eight
to
Leadership in the natural gas in¬
dustry has passed to the Southwest
from the Appalachian region.
Texas in 1911 ranked
ninth in the production of natural gas, accounting for
1% of the U. S. total. It has been first since 1931. Since
1945 Texas has accounted for about 43% of U. S. total
With the upsurge
in the
of natural gas there has
use
questioning with reference to the adequacy
of the natural gas supply.
One of the phenomena of this expanding industry is
the fact that up to now estimated known recoverable
natural gas reserves have increased faster than con¬
sumption. These reserves at the end of 1945 were 147.8
trillion cubic feet; 173.9 trillion cubic feet at the close of
1948. We believe this same experience has been repeated
Among the factors contributing to the increase in the
natural
of
is the new system of long distance
gas
transmission lines.
What might be termed the first mod¬
big interstate gas carrier was a line from the Texas
Panhandle to Chicago, completed in 1931.
Since that time the network of natural gas lines has
ern
extended
swiftly to
include most of the United States.
Today the natural gas line system exceeds 250,000 miles
extensive than the nation's railroad system.
—more
This natural gas system is not yet complete.
Our own
company.
Transcontinental Gas Pipe Line Corporation,
has
construction
under
which
extends
from
a
the
30-inch
Rio
line
Grande
Mexican border to New York City.
late this year,
our
1.840
miles
Valley
long
on
the
Due to be completed
line's ultimate daily capacity of 505,-
000,000 cubic feet will be the principal supplier for the
New
York
New
Jersey
City
metropolitan
area.
It
will
also
the Philadelphia metropolitan
There are other important extensions and
new
under construction or planned for early building.
So
tance
and
cheap is natural
gas
gas,
on
efficient
now
area.
lines
C.
with Russia,
it
the future
of the railroads today than during 1949. as is evidenced
by the increased demand for railroad securities at de¬
clining rates of return.
(11) There is Some indication that the trend toward
socialization in this country is beginning to slow down.
Two years of heavy Federal deficits in years of high
national income have shocked tlie American people into
realizing the high costs of governmental service and to
the necessity of re-examining our" national spending
and
place
times
at
The readjustment that business¬
while
employers
afraid
been
to
carry
inventories in the hope that
wages and, therefore, costs Would be
readjusted dowhWard, thus enabling
them to stock up at a low level, it
large
has
sold
coal
Because natural gas
is clean, dependable, and requires
storage customers have long since voted it their fa¬
vorite fuel.
There is greater public confidence in
(10)
have been anticipating since the
termination Of hostilities has already'
have
..-
policies.
quite apparent that the
become
labor unions, along
with the blessing of the Government
strength of the
ROBERT
will stave off any
substantial reduc¬
tion in wages, and therefore costs.
The policy of government is mow to
create full employment, if necessary,
through deficit financing and while
s
Norman
-
definitely indicated
swing to the right of the Leftism which has been some¬
what apparent in the U.S.A.
Primary produce will con¬
attitude of their legislators has very
a
for Canada
if
becomes
necessary
provide further steling credits.
The de¬
sold
be
to
U.K.
to
even
it
of great
mag¬
Alberta and iron-ore in
Labrador, together with a realization by the people of
Canada that they must take steps to consume Canadian
coal and utilize Canadian manufactures, as against im¬
evidenced
nitude
the
all
in
oil
loss to Canada of U. S. dollars, bodes well
future.
Two items 'alone, namely oil and coal,
porting at
for
by
a
S.
would
in Canada,
produced
Canadian-U.
A.
rectify the
adverse
balance which has been
trade
cus¬
The financial outlook in Canada
tomary for many years.
with consistent large government surplus Over the last
three years appepars to warrant optimism that the U.
dollar question will, within the next year or two,
eliminated and that
a
fer of
in 1950.
else, a tough time for his political oppoliehts
Sailing
so
smoothly
into
such
a
Whittall
R.
fashion, their social troubles have been at a mini¬
with those experienced
in the U.SA; and the
to
j
'
appealing welcome to
Congress helps to explain the uninterrupted rally in the
financial markets since midyear and forecasts, if nothing
-
increased
during the past
decade, due to higher wages and
more
complete employment, the consumptive require¬
ments of this continent are also at a high level. ""L": *
Insofar as Canada is concerned, they have survived
the disastrous effects of the last war in a highly credit¬
tinue
Railway
The President's soothing and ail
rially
mum
R. YOUNG
Chairman, Chesapeake <fc Ohio
the output of this continent has mate¬
able
service
vigorous in its efforts to improve
more
and attract business than it was a year ago-.
men
taken
is
ment
if the outlook for business through 1950
only be favorable.
;
(9) There is some evidence that the attraction of
traffic by competing forms of transportation is beginning
to level off in certain classifications. Railroad manage¬
1950
beautiful harbor
servative critic
*
the most con¬
even
will hesitate to rock
the boat.
That
harbor, however, is becoming
clearly delineated as a Re¬
more
ever
publican approved New Deal of in¬
ternational scope.
In our coming
of
will
take
it
to
surprise
only moderate
disequi¬
vulnerability
period
librium at some point on our
pulsat¬
ing perimeter to suggest to our, for
the
first time
personally, exposed
policymakers, sitting in Washington
pond, that our happy
state, for safety's sake, should be
like ducks on a
universal?
made
Here
at
Robert
the Brannan Plan
home,
Young
R.
push the balloon back
in where it is bulging the most, thus preserving a few
years longer the delusion that the $60 weekly income
of 1949 is a gain over the $30 income of 1939. Actually,
if you exclude housing, transportation, and other ele¬
promises
to
ments of
living cost held down by confiscation of private
capital, the purchasing powtr of the average Voter since
1939 has declined. Despite vastly increased productivity,
S.
be
prodigal have
so
relaxation of the pestiferous regu¬
we
become overseas that it could not
otherwise.
be
foreign exchange, travel and free trans¬
securities between the two countries is in sight.
where volume is so important,
while longer on the thin ahd
melting ice ot an economy that is producing more than
it can consume, after taxes. Despite their long one wfty
railroads,
the
Thus,
promise to skate along a
L.
A.
WIGGINS
M.
Chairman of the Board,
Atlantic Coast Line and
Railroads
haul
Louisville & Nashville
As
with
increase
lated
in
backlog of
by
individuals
The government
out more money
1949.
will
have
also
users
cleared
expected
up
and
shortly.
so,
strikes
in
men
results may be
There is also a
the
year
employment, record unemployment re¬
politicians of both parties, hence numerous
who might have modernized our
President's longed for
A.
L. M.
Wiggins'
another
erafts-
railroads were put
Here is 1950 opportunity for the
"business investment" of the first
order, but it will probably again be ignored.
So
on
being taken out and dusted off;
of boondoggling, such as the thirties, when
shooing starlings.
to
ahead.
tem and of the threats to its progress.
to fork up
it looks as though we may be headed for
; decade
a
There is increasing awareness
airways, waterways and highways
make-work projects are
rates.
prospect for fairly stable
labor conditions and a minimum of
(3)
of
lief absorbs
reasonable
serious
dollars more of
now
politically unprofitable things as railway mail
Even with full
a
growing
public demand that the coal situation
be
ICC
their fair share of the freight.
seeking investment and the continu¬
(2) There is evidence of
hundreds of millions of
commutation fares, consolidation, etc., and requires
pay,
contra-deflationary effect, with a re¬
sult of increasing the supply of funds
ation of low interest
such
on
is continuing to pay
than it takes in and
will, in part,
purchase of goods. The
deficit
Federal
some
nonchalantly
million. Even our linpefturable Presi¬
dent, diverted by the railroads of Zenda and Graustark,
will have difficulty keeping the transportation balls here
at home in the air much longer unless he acts quickly
these excess payments
flow into the
return of only
estimates at $875
accumu¬
in
a
their investment in 1949 and, therefore, accu¬
deferred maintenance, which the
increasing
the
assets
on
mulated
into
move
the railroads earned
seaboard,
to
2.75%
1950, I regard the outlook for the
confidence. My reasons, are:
(1) It is fairly evident that production and distribu¬
tion of goods for some months ahead will continue at a
relatively high level. There was an
we
railroads
the part of the
public of the essentiality of the rail transportation
is long dis¬
that natural gas can be
the mid-Atlantic seaboard with
transmission,
competitively
so
serve
and fuel oil.
no
least through
scare
war
B.
Vancouver,
at
ahead.
results in the year
will continue with good
some
in 1949.
use
serious
no
would appear as
can
of ERP
finding
and
spirit of ad¬
lations regarding
production.
been
presuming
and
if
gas users.
A. Williams
Claude
continuation
the
velopment of additional natural resources
13.3%.
customers
Among
With
Limited,
Railroad management has been alert during 1949
ways to bring expenses under better control
more in line with reduced revenues.
These efforts
(8)
in
WHITTALL
R.
Whittall
sound finan¬
(7) The heavy investments made by the railroads dur¬
ing the past few years in improved roadway, equipment
and other facilities are beginning to pay off. This will be
reflected in further reduction in certain costs in 1950.
aqd optimism?
NORMAN
evidence that railroad labor leader¬
tion paid and that this is necessary for the
cial operation of the railroads.
-
They will want to avoid being declared natural gas
companies and having their earnings limited to 6 or 6%
percent on their depreciated investment ih what is a
very risky business.
What with its problems, can any industry in America
productivity justify a
reluctance
-
and gathering of natural gas.
Otherwise,primarily are producers of oil and gas will be
to sell interstate gas carriers their natural gas.
Ross
some
ship is beginning to recognize some responsibility on the
part of labor to give an economic return for compehsa-
producing
venture
(6) There is
.
those who
today match the natural gas industry in its
1950 is
indicated.
potential hazard exists in how the Natural Gas Act,
which regulates interstate natural gas lines, is finally
amended and interpreted. It is the view of the industry
that the. final policy on this matter shoUid exclude the
reluctant
the actions of railroad manage¬
uneconomic operations.
A substantial increase in rail mail pay in
(5)
Commerce.
approve
eliminate
to
ment
and
A
Director,
degree of Optimism.
But Optimism, unless tempered by
realism,'lacks the stability essential for the foundation
of sound thinking about the future of the nation and its
railroads.
The Southeast, which after all is in the melt¬
great
of taxes
the movement of natural gas in interstate
also to mechanization, which in turn creates
market for electrical appliances, tractors, and ma¬
chinery of various kinds.
These evidences of increased
recognize and to
is not without its problems.
controls aimed to limit
natural gas industry
The
Thore
and grasses,
a
Thursday, January 19, 1950
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(326)
90
critical
carriers
as
has
the
situation
become
for
sys¬
the
The public is be¬
such
Pennsylvania and New York Central,
government's
imposition
of confiscatory
key
under
rates and
taxes While coddling competition, that it looks as though
ginning to understand the inequities of tax treatment
and of subsidies to competing forms of transportation
.-.-the only solution that can come in time is wholesale
and shows evidence of support of action to remedy some
consolidation, in no other way, it sehnis, can we get
of these inequities.
expedited through service and eliminate duplications we
(4) There is some evidence that governmental author¬
can' no longer afford.
ities dealing with rail transportation are.beginning to
""'
Volume
171
Number 4873
THE
COMMERCIAL
of Current
Business Activity
AMERICAN
IRON
The
&
FINANCIAL
following statistical tabulations
latest week
week
or
month available
or
month ended
Previous
'week
CHRONICLE
on
Month
(327)
91
production and other figures for the
cover
(dates shown in first column
Year
are
either for the
are as
that date, or, in cases of quotations,
of that date):
STEEL
INSTITUTE:
(percent of capacity)
Jan.-£2
Equivalent tc—
ingots and castings (net tons)
Steel
AMERICAN
•Cru-ae
oil
ana
gallons
iCrude
condensate
ouiput
to
runs
'Gas,
oil,
and
Residua:
luei
—
daily
Stocks at
distillate
and
Kerosene
average
Gas, oil,
fuel
7
4,926,700
(15,524,000
5,626,000
5,2.4,000
18,710,000
19,0a1,000
18,219,000
18,27tt,000
Jan.
7
2,ti87',000
2,476,000
2,038,900
Revenue
(bbls.)
OF
'Revenue lreight
(bbls.)
7,348,000
7,591,000
7,037,000
irom
MINES)
—
8,444,000
7,853,000
9,916,000
Jan.
7
116,774,000
113,497,000
106,143,000
107,111,000
__jan.
7
20,215,000
20,838,600
23,397,000
23,249,000
75,338,000
77,801,000
85,926,000
69,377,009
61,b'Ol,Uu0
€1,675,000
64,476,006
•
and in pipe lines—
at
Jan.
7
7
'
Mixed
Jan.
connections
(number
£506,947
ENGINEERING
CONSTRUCTION
RECORD:
Total U. S., construction
1
—
7
§471,344
§430,233
ENGINEERING
Public
§668,825
(M
iM
I
(bbls.
of
and
Jan. 12
86,826,000
54,479,000
268,919,000
44,055,000
52,837,000
38,860,000
OUTPUT
(U.
S.
BUREAU
Bituminous.coal and lignite
fPennsylvania
anthracite
.Beehive
OF
216,082,000
$132,583,000
75,379,000
imports
STORE
SALES
TEM—i!)3.->-;J9
stocks
Month
of
Adjusted
Jan.
7
5,630,000
"6,385,000
9,250,000
7
401,000
408,000
636,000
11,585,000
1,032,000
Jan.
7
22,600
"25,300
INDEX—FEDERAL
RESERVE
13,500
149,200
Jan.
7
seasonal
seasonal
and
STREET,
INC.
Finished
.Pig
steel
iron
INDUSTRIAL)—DUN
205
"197
i
of
Scrap steel
gross
542
272
6,028,589
5,695,372
5,996,606
AND
(per
(E.
&
M.
J.
207
161
161
3.705c
$45.88
$46.91
$26.42
$26.25
$27.25
$40.92
18.200c
18.200c
13.200c
BOND
PRICES
40,389,677
11,770,000
6,062,000
5,708,000
DEPT.
S.
5,706,000
"143.7
157.6
"335.0
366.7
13,903,000
______
;
__
in
manufac¬
manufacturing
Durable
138.9
321.3
__________j—
manufacturing
All
DAILY
ICAN
23.200c
18.425c
18.425c
goods
77.500c
79.000c
103.000c
12.000c
12.000c
12.000c
21.500c:
11.800c
11.800c
11.800c
9.775c
INSTITUTE
STEEL
OF
"6,896,000
7,121,000
"158,216
140,794
112,265
"97,488
169.796
8,393,000
(AMER¬
STEEL
CON¬
21.300c
9.800c
STRUCTURAL
"14,312,000
"7,416,000
101,583
__
15,514,000
7,006,000
6,897,000
goods
STRUCTION)—Mcnth of November:
23.425c
77.000c
Jan.11
at.
18.425c
Jan.11
Jan.11
MOODY'S
$367,712,000
42,342,413
indexes—
FABRICATED
Ycrkt
$387,528,700
42,561,789
QUOTATIONS):
Jan.11
(New
20,510,530
11,382,000
31..—
workers)
number of employees
turing industries—
3.720c
$45.83
Jan. 10
____
3.837c
$45.88
Jan. 11
tin
20.872,186
SERIES—Month of
Estimated
43.837c
Jan. 10
Jan.11
Straits
Oct.
—
manufacturing
Payroll indexes—
127
Electrolytic copper—
}
20,292,583
of
_____L___
goods
Nondurable
METAL PRICES
at
(production
All
Jan. 10
;
ton:
357
5,676,000
customers
goods
Employment
Jan. 12
_
gross
290
293
■
consumers—
omitted)
ton;era—month
cu:
PAYROLLS—U.
manufacturing
Durable
5,741,663
PRICES:
ton)
276
3.59
—_
^
ultimate
EMPLOYMENT
BRAD-
&
(per lb.)
(per
276
$383,250,200
(OOO's
LABOR—REVISED
October:
___
COMPOSITE
19,636,000
variation
ultimate
October
All
AGE
184,226,000
»4,940,000
„
adjustment—
October
of
from
Nondurable
IRON
185,104,000
7,968,000
export
.
month
Revenue
All
.Jan. 14
AND
3,876,000
SYS-
AVERAGE—100
(COMMERCIAL
7,460,000
November:
for
Without
OF
'
28.000
1'2,572,000
_
(bbls.)
ELECTRIC INSTITUTE:
Kilowatt-hour sales to ultimate
—Jan.
j—
—
EDISON ELECTRIC INSTITUTE:
-Electric output (in 000 kwh.)__
FAILURES
11,000
11 228,000
9.080,000
(bbls.)
STORE SALES (FEDERAL RE¬
SYSTEM)—<l9»n-!SU Average-=1H0)
SERVE
14,604,000
MINES):
(tons)_
t
'
12,805,000
30,000
15,365,000
186,350.000
oil
Number
DEPARTMENT
174.581,000
13.259,000
DEPARTMENT
59,243,000
5,195,000
187,414,000
148,206,000
13.935,000
EDISON
(tons)—_
itons)
coke
17,148,000
$119,434,000
161,476,000
155,908,000
oil
products imports (bbls.)
Indicated consumption—domestic
58,736,000
Jan. 12
—
$323,358,000
165,546
84,588
169,873,000
crude
Refined
73,340,000
69,678,000
—__•
municipal
Federal
COAL
106,668,000
Jan. 12
________
$193,494,000
70,739
42-gal-
tach)
Increase—all
.--Jan. 12
2,128,632
145,741
INSTITUTE—Month
pi eduction
output (bbls.)
Natural gasoline output
(bbls.)
Benzol output (bbls.)
5.14,516
2,378,766
2,212,153
162.691
1
therms
2.428,633
2,419,3,4
d.,,116
therms
therms)
PETROLEUM
lons
721,507
§592,621
sales
domestic
Domestic
63,346,000
—Jan. 12
—
construction
State
10,263
October:
Total
NEWS-
———.—
Private,construction
.
54,526
Month
(bbls.)
CIVIL
*
2,675,170
(M
gas
sales
AMERICAN
of
§495,634
cars).— Jan.
of
7
sales
gas
gas
Crude
cars)
For
—
therms)-.-
iM
gas
Natural
Manufactured
RAILROADS:
of
OF
October:
Total
2,493,000
7,824,000
8,.>36,000
J. n.
(number
received
5,507,650
1
(bbls.) at
AMERICAN
4,979,300
7
at
-
freight loaded
4,995,500
-
Jan.
i
•
53,597
5,820,000
7
(bbls.)
output
fuel oil
49,742
46,b0<
of
7
I
-
gasoline
47,790
(BUREAU
AMERICAN GAS ASSOCIATION
Jan.
oil
Ago
Production of primary aluminum in the U. S.
lin short tons)—Month of October
1,845,400
Jan.
...
at:
ana distillate
ASSOCIATION
1,742,100
42
(bbls.:
unnnished
Residual fuel oil
1,791,900
Year
Month
ALUMINUM
100.1
Jan.
(bbls.)
-
ouiput
(bbls.)
1,810,300
Previous
Month
Ago
94.5
,-Jan.
stills—daily
refineries, at bulk terminals, in transit
Finished
(bbls,-- of
average
*
oil
Ago
97.2
:
each)
Gasoline output (bbls.)
Kerosene output tbb.s.)
•
Jau.-22
PETROLEUM INSTITUTE:
Week
98.2
Latest
Stocks of aluminum—short tons—end of Oct.
AND
Indicated steel operations
9.750c
17.500c
Contracts
closed
(tonnage) —estimated.
(tonnage)—estimated __I
Shipments
FREIGHT
CAR
ICAN
of
AVERAGES:
OUTPUT—DOMESTIC
RAILWAY
CAR
—
(AMER¬
INSTITUTE—Month
December:
'
U.
S.
Goveinment
Bonds
Average corporate
.' Aaa
Jan.17
Deliveries
104.25
104.54
104.42
101.16
Jan.17
116.61
116.41
115.82
121.88
121.88
121.46
Jan.
17
120.02
120.02
11.9.61
117.00
Jan. 17
116.02
116.02
115.43
108.70
107.80
Utilities
Group.
104.83
112.00
.U.
S.
BOND
YIELD
Government
Average
"Ala
Jan.17
DAILY
___
17
2.19
2.17
2.17
an.
17
2.82
2.83
2.86
2.42
Group
MOODY'S
2.56
2.58
2.67
INDEX
Orders
received
Production
2.88
3.07
3.23
3.24
3.2.9
Percentage
PAINT
—1
DEALERS
Odd-lot sales by
,
Number
Number
Dollar
of
158,730
7
74
53
96
INDEX
FOR
AND
dealers
THE
ODD-LOT ACCOUNT
SPECIALISTS
ON
EXCHANGE
(customers'
THE
N.
OF
Y.
other
(in
short
24,869
28,192
686,555
629,727
744,891
822,815
$26,374,439
$25,535,429
$29,448,934
$28,943,651
Dec. 31
28,789
26,269
28,973
Lead
136
130
247
58
Dec. 31
28,653
26,139
28,726
28,400
837,327
757,493
819,060
808,699
New
sales
(per
Quicksilver
2,358
752,790
809,959
806.341
$27,623,674
$23,874,279
4,703
9,101
348,130
301,540
287,700
239,240
348,130
"301,540
287,700
2~39~24U
NEW
SERIES—U.
S.
Dec. 31
OF
174,590
268,420
257,690
LABOR—
Jan.10
151.2
♦150.5
151.1
161.3
154.6
153.2
154.2
155.9
*154.5
156.5
Jan.10
145.2
*155.1
145.3
Jan.10
137.4
137.4
137.4
•Jan. 10
166.7
18,062c
23,200c
18.290c
23.454c
„
Yoik
12.000c
12.522c
21.500c
11.800c
12.326c
21.300c
York
(per
(pence
ounce)
per
S.
73.250c
70.000c
64.000d
42.500d
$2.79750
$2.79750
$4.02750
Louis
9.753c
9.750c
17.500c
79.038c
91.191c
103.000c
90.191c
102.400c
1
i_.
min.
U.
73.250c
64.000d
...
Straits
ounce
!___
_
ounce)
(§§)
78.038c
price)
$35,000
$35,000
$35,000
$71,000
$71,870
$82,154
35.280c
(per flask of 76 pounds).,
(per pound), (E. & M. J.)
35.280c
41.670c
32.000c
32.000c
38.500c
32.500c
32.500c
39.000c
Nominal
Nominal
Nominal
$69,000
$69.000
$93,000
$2.00000
tCadmium
(per
$2.00000
$2.00000
(per .pound)
$2.07500
$2.07500
SCadmium
(per
$2.15000
$2.15000
$2.10000
$1,800
$1,800
Not avail.
17.000c
17.000c
17.000c
20.500c
20.500c
20.500C
40.000c
40.000c
40.000c
pound)
pound)
97 %
Aluminum, 99%
:
_
plus, ingot (per
ingot (per pound)
pound)—__
—
NON-FERROUS
(thousands
Copper
145.8
Magnesium
130.4
♦130.1
130.4
136.8
169.5
169.5
168.7
175.6
Jan. 10
190.3
190.3
189.8
116.2
115.5
115.8
127.0
Zinc
(thousands
of
(DEPT.
OF
COM¬
of
(thousands
pounds)
29.071
of
35.542
60,771
91,311
796
727
36,418
35,609
1,278
pounds)
"27.546
58,249
pound?)
1,319
708
202.5
Jan.10
CASTINGS
$2.05000
MERCE)—Shipments, month of Oct.:
Aluminum
152.9
'
Jan.10
Lead
(thousands
die
PORTLAND
Month
.Jan. 10
CEMENT
of
160.4
_•
(BUREAU OF
from
Stocks
end
190.2
184.9
185.3
217.4
Jan.10
210.7
204.7
207.9
1,366
MINES)-
18,040
mills
of
(bbls.)
18,435
21,277
18,110
9,340
(bbls.)
month.)
"19,069
17,269
Capacity used
Jan.lo
(at
n
November:
170.1
161.9
pounds)..
(bbls.)
Shipments
160.1
of
(thousands of pounds)
Production
Special indexes-
"3,569
88%
6,399
226.0
.Jan. 10
190.1
"191.1
198.6
((Includes 534.000 barrels of foreign crude runs.
JThe weighted finished steel composite
yedrs 1941 to date. The weights used are based on the average
product shipments for the 7 years 1937 to
1946 to 1948 inclusive.
§Reflects effect of five-day week effective
sept. 1, 1949.
197.0
"Revised
was
revised
1940
for
inclusive
the
and
86%
92%
figure.
tBased on the producer's quotation.
fBased on the average of
and platers' quotations.
§ Based on platers' quotations.
^Domestic, five
tons or more but less than carload lot
packed in cases. f.O.b. New York.
""F.O.B. Port
Colburne,
N.
S., U. S. duty included.
§>Tin contained.
ttDecrease—- all
the
figure.
18.200c
18.425c
refinery.
refinery
(per pound), bulk, Laredo
(per pound), in cases, Laredo
Antimony (per pound), Chinese Spot
Platinum, refined (per ounce)—____■
175.8
Jan.10
"Revised
52,498
QUOTATIONS) —
""Nickel
Jan.10
skins
3,174,669
"41,863
Louis
Cobalt,
176,370
1926—100:
and
New
St.
Magnesium,
DEPT.
"2,212,449
37,988
fCadmium
Dec. 31
Dec. 31
:
32.540
Antimony
$27,090,706
dealers—
,
PRICES
domestic
export
York, 99%
Gold
832,626
—Dec. 31
sales
167,855
"30,534
Sterling Exchange-
York
$26,522,220
by dealers—
Round-iot purchases by
Number of si,ares
J.
69,568
"183,679
:
_.
M.
&
"58,006
203,422
29,779
2,165.365
tons)
(E.
New
Dec. 31
sales
60,180
ounces)
London
Dec. 31
4,701
129.$
(per pound)—
HAntimony
Antimony
Dec. 31
ttl08.2
the
j.
Sterling Exchange
(Check)
Zinc (per pound)—East St.
Tin (per pound)—
28,458
Dec. 31
total sales
sales
shares—Total
fine
PRICES
New
Dec. 31
t1114.4
—
tons)
short
Common,
Common,
sales) —
sales
other
Hides
(in
(in
Electrolytic,
Electrolytic,
20,764
100)
MINES) —
recoverable metals in
(in
Silver and
22,998
2,522,831
of
States:
Silver,
value
WHOLESALE
142.1
—
middle
(in
Silver,
short sales
Customers'
Short
124.9
ODD-
•
Other
•124.8
STOCK
sales
of
123.2
Dec. 31
short
Number
361,252
Dec. 31
Customers'
Dollar
421,332
purchases)—
(customers'
oi shares—Customers'
.Round-lot sales
359,271
980,070
Average for month of December:
Copper (per pound)—
COMMISSION:
orders—Customers' total sales
Customers'
399,645
Dec. 31
OF
Lead
1926-36
shares
Customers'
Number
7
.Jan.13
PRICE
average
at
short tons)
fine ounces)—
METAL
505,937
mcnth
of Octobci:
Copper
79
642,485
421.633
COMMISSION—
(BUREAU
production of
204,405
210,286
of
459,014
317,746
955,100
(1935-39
United
Zinc
147,044
111,463
203,493
170,281
1,148,422
715,685
397,939
Gold
350.0
210,930
value
of
390.4
Jan.
Odd-lot purchases by dealers
Number
345.8
352.3
7
orders
of
2.78
_Jan.
-
REPORTER
EXCHANGE—SECURITIES
>
2.65
Mine
880,647
COM¬
tons).
end
Railway Employment
Month
3.26
OF
(short
at
COMMERCE
December
2.99
7
at
DRUG
TRANSACTIONS
LOT
3.13
2.79
2.63
Jan.
AVERAGE=](K)
STOCK
3.06
2.79
Jan.
(tons)
AND
of
9,967
103,899
October:
tons)
METAL OUTPUT
ASSOCIATION:
of activity—
Unfilled orders
3.07
2.78
2.62
(DEPT.
4,376
14.146
(number
tons)
Silver
(tons)
of
(short
sale
Index
3.46
Jan. 17
(tons)
month
tons)
2.80
2.85
Ian. 17
COMMODITY
3,330
of
CASTINGS
(short
INTERSTATE
2.70
2.65
2.85
Jan. 17
Grcup
NATIONAL PAPERBOARD
OIL,
2.56
2.65
Jan. 17
Utilities Group
end
For producers own use
Unfilled
orders for sale
3.01
(an. 17
Jan. 17
Industrials
For
113.31
117.40
Jan. 17
Public
IRON
MERCE)—Month
108.34
117.20
120.02
■>
Jan. 17
Railroad
at
_
Shipments
(short
Baa
•
110.70
120.43
Jan.
—
Aa
-
117.20
120.63
cars)
GRAY
AVERAGES:
Bonds
co; porate
A
.
117.40
Jan. 17
MOODY'S
of
111.81
108.88
111.81
-Public
cars)
119.0C
Jan. 17
Baa
of
12,036
Backlog of orders
112.93
Jan. 17
___
________
(number
producers'
fiPreliminary
stocks.
figures.
11II Cur rent
figures
comparable
only
from
June,
1949,
to
date.
'
I
(328.)
S2
COMMERCIAL
THE
Thursday, January 19, '1950
CHRONICLE
FINANCIAL
&
•
Securities
ABC
27
Dec.
(par $1).
shares of common stock
amendment. Underwriter—Rey¬
Proceeds—For new machinery
equipment to expand activities. Expected week of
Price—To
nolds &
and
be filed by
Co., New York.
Telephone & Telegraph Co.
(1/31)
Jan. (i filed $200,000,000 of 21-year debentures due Feb.
American
1, 1971. Underwriters—Names to be determined by com¬
petitive bidding. Probable bidders: Morgan, Stanley &
Co.; Halsey, Stuart & Co. Inc. and The First Boston Corp.
(jointly). Bids—Expected to be opened at 11.30 a.m.
(EST) on Jan. 31. Proceeds—Together with other funds,
will be used "for advances to subsidiary and associated
companies; for the purchase of stock offered for subscrip¬
tions by such companies; for extensions, additions and
improvements to its own telephone plant; and lor gen¬
eral corporate purposes."
Ashland
1970
Oil
&
and
&ock (no par),
of which 30,000 shares are for account of
and 20,000 shares for account of selling stock¬
Price—To be filed by amendent.
The pre¬
-company
holders.
between $97 and $102 per share, and
the debentures between 100% and 103% of principal
.amount.
Underwriter—A. G. Becker & Co. Inc.
Pro¬
probably
ceeds—From sale of stock,
$1,883,747 will be used to re¬
imburse the company's treasury for the cost of 45.53%
<s£ the stock of Aetna Oil Co. purchased by Ashland
Nov.
on
capital.
to
Halsey, Stuart & Co. Inc.; Kidder,
Lehman Brothers, Goldman, Sachs &
(jointly); Morgan, Stan¬
Beane;
&
Peabody
Co.;
1949,
23,
the
and
balance added
working
to
From sale of debentures, $10,859,767 will be used
•
Commercial
•
Community Credit Co.,
Discount
III.
Jan. 12 (letter of notification) 1,400 shares of $3.50 prior
preferred stock, par $50, to be issued in exchange, par
for par, for outstanding preferred stock. No underwriter.
Corp.,
Chicago,
Phoenix, Ariz.
$200,000 certificates of in¬
(letter of notification)
Jan. 6
at $1 each. No underwriter.
Proceeds to
security loans in connection with general loan and
business.
Office—239 North Central Avenue,
debtedness,
siock
Co.
Refining Co.,
of $5
shares
Ashland, Ky.
cumulative preferred
to be offered in exchange for outstanding
and common stocks of Freedom-Valvoline
Underwriter—None.
Baltimore
Dec.
15
and
&
33,097
(no par value) and 40,425 shares of common stock
(oar $1),
preferred
Oil
Oil
filed
110,000
Trotting Races, Inc.
debenture bonds, due 1970,
of
shares
common
stock
($1
par).
To
be
offered at $1,330 per unit, each unit to consist of $1,000
bonds and 110 shares of stock.
will be used to build
with respect to
of
No underwriter.
Proceeds
racetrack. Three officers also filed
a
voting trust certificates for 290,000 shares
par $1.
stock,
common
Beverly Gas & Electric Co.
Dec.
20
to be
filed
offered
33,000
notes
qf
capital
stock
stockholders at the rate
to
for each two shares
writer.
shares
(par
of
1 xk
$25)
shares
held, at $30 per share. No under¬
The proceeds will be used to pay off $575,000 of
held
the
by
now
New
England
Electric
System
and
bank loans.
•
Jan.
Botany Mills, Inc. (1/23)
16 (letter of notification) 2,200 shares of common
(Stock
-r-At
(par $1) for account of selling stockholders; Price
market (approximately $10 per share).
Under¬
writer—Lamont
&
Co., Inc.,
•
Co'., Jackson, Mich.
Power
Consumers
Mining Corp., Ltd., Vancouver, B. C.
Aug. 29 filed 1,000,000 shares of no par value common
stock. Price—800,000 shares to be offered publicly at 80
cents per
shares."
share; the remainder
registered as "bonus
Co., New York, N. Y.
are
Underwriter—Israel and
Proceeds—To develop mineral resources.
Statement ef¬
fective Dec. 9. Offering expected in January.
Citizens
Telephone Co., Decatur, Ind.
Oct. 21
(letter of notification) $250,000 of 4V2% pre¬
ferred stock.
Price $100 each.
To be offered initially
to
common
and
property
■operation.
•
Color
Jan.
stockholders.
6
additions
No
to
underwriter.
convert
For
plant
automatic
to
dial
Office: 240. W. Monroe Street, Decatur, Ind.
Television,
Inc.,
San
Francisco,
be
for
share
to
to
offered
stockholders at
common
each
shares
10
held,
and
the
also
rate
to
of one
be offered
to
employees of the company, and its subsidiary, Michi¬
Gas Storage Co. Rights will expire Feb. 20. Price—
by amendment. Underwriter—Morgan Stan¬
gan
prices ranging from $7.25 for the first 1,000 shares; sec¬
ond 1,000 at $8.25; third 1,000 at $9.25; fourth 1,000 at
f40.25; arid last 1,000 shares at $11.25 per share. Under¬
writer—Hooker & Fay, San Francisco. Office—30 Ster¬
ling Street, San Francisco, Calif.
Columbia
Gas
ley
&
property additions and to
construction. Expected
Proceeds—For
Co.
bank
loans incurred for
around Feb. 2. /,
repay
(no par),
representing unsubscribed portion of 1,345,300 shares
^offered stockholders May 24, 1949. Underwriters—Names
(The)
Coral
Ltd.,
Strand,
Honolulu,
Waikiki,
11
(letter of notification)
Kalakaua
Dow
Nov. 4 filed
175,000 shares of
common
(par $15).
stock
to stockholders of record
one
Dec. 20 at $44.50
share on
share for each 50 shares held. Rights
new
expire Feb. 1, 1950.
Employees of
per
company,
its subsidi¬
and associated companies are also given an oppor¬
ary
tunity
subscribe
to
be
Proceeds—To
approximately
for
added
to
70,000
Statement ef¬
Underwriter—None.
corporate purposes.
shares.
treasury funds and used for
fective Dec. 9.
Duval
Texas
Houston, Tex.
shares^of capital stock (no par) to
be offered to stockholders at $13.50 per share at the rate
of s/4ths of a new share fop each share held.
[The United
Gas Corp., owner of 74.71% of the outstanding Duval
capital stock, has agreed to purchase at the subscription
price any shares of stock not subscribed for by other
stockholders.] Underwriter — None. Proceeds — To be
used, along with a $2,500,000 bank loan, to provide min¬
ing and milling facilities to mine potash in Eddy
County, N. M. Name changed Dec. 30 by stockholders to"
Duval Sulphur & Potash Co.
, * £
p vr
Sulphur Co.,
filed 375,000
Dec. 21
Harness
Eastern
Racing Club,
Inc.
(2/1)
27 filed 1,000,000 shares (5c par) common stock.
Price, $1 each. Underwriter—Tellier & Co., New York.
Proceeds—To
purchase, improve and operate the Fort
Steuben Raceway. Expected in about two weeks.'
Front Range
Oil & Drilling Co., Denver, Colo.
Dec. 29 (letter of notification) 1,702,707 shares of com¬
mon capital stock.
Price—Par (5 cents each).
Under¬
writer—Inter-Mountain Shares, Inc., Denver.
Proceeds
—For drilling of test wells for oil and gas.
Office—711
Security Bldg.,
•
General
Jan. 12 filed
be sold
Portland
Office—907
Jan.
16
stock
Cement
Co.,
Industrial Plan,
•
Jan.
Price—To be filed
Underwriter—White, Weld & Co., New
Shale
Corp.
Brick
(1/23)
dealer,
member
a
of
NASD,
share for resale at not in
at
excess
not less than
$3.62Vz.
$3
per
of
Jan.
Gobel, Inc., Brooklyn, N. Y.
(letter of notification) 45,000 shares of common
12
stock at the market (about $2 per
of
selling stockholders.
Guaranty
•.
3,086 shares of common
Office
(3/1)
Electric Co.
&
82,011 shares of cumulative preferred stock
6 filed
7%
stockholders also receiving $5 per share in
Any unexchanged shares, which will include 5,650
preferred
cash.
shares
the
for
issued
be
to
presently:
preferred stocks
sold to underwriters. Under¬
Probable biddersL
Union Securities Corp.; Harriman Ripley & Co.; Blyth
held in treasury, would be
filed
be
writers—To
& Co., Inc. and
by amendment.
The First Bostpn
Corp. (jointly); Merrill
Lynch, Pierce, Fenner & Beane; Stern Brothers & Co.;
Harris, Hall & Co. (Inc.); Kidder, Peabody & Co.
The
company has applied to Kansas State Commission for ex¬
emption from competitive bidding.
Proceeds—To be
used to redeem at $115 and $110 each, respectively, the
and $6 preferred shares not surrendered
old
7%
the
exchange.
is
It
that
expected
will be made early in February, and
and
have
will
which
not
per
of not
rate
on
4.5%
than
less
will be issued
year,
on
or
Jan. 24 will vote
on
authorized issue of 200,000 shares of
new
a
5%
The stockholders
about March 1.
approving
dividend
a
than
more
under
the exchange offer
that the new stock,
preferred stock, par $100.
•
Kaye-Halbert Corp.fLos Angeles, Calif.
(letter of notification)
Jan.-9
50,000 shares of common
capital stock (par $1)/; Price—$2.50 per share.
Under¬
writer—None. Proceeds—To consolidate operations and
for additional
Income
to
be
offered
underwriting.
to
share), for the account
Life
Insurance
Kerr-McGee
Dec.
22
stock
$10
Oil
Industries, Inc.
1,500 shares of
(letter of notification)
$1),
for
share.
•
Second Fund,
Loomis-Sayles
Inc.,
Boston,
filed
16
shares of
25,000
common stock (par $10)*
Loomis, Sayles & Co., Inc., Boston.
Investment manager:
Business: An open-end investment company.
Lowell
Electric
filed
30
Light Corp., Lowell, Mass.
shares of capital stock (par $25).
at $35 per share to common
55,819
be
offered
stockholders at the rate of
held.
shares
bank
•
one
loans, for construction
Madison
stock
Diane
new
Underwriter—None.
provements.
.
-
and
share for each three
Proceeds—To
to make
Proceeds to increase business.
Office
,.v
;
Petroleum
offered
by
the
75,000 shares by
$1 each.
No under¬
Proceeds to drill/additional oil wells.
B.
Griffith,
and
company
Treasurer,
at
are
■
to be offered by the company
.
HUllift:
Jpliilf/
-
V-
;
i'hi
7.,;;. -|
litllf/:
Jed
Co.,
\B6$
the
per
Transportation
Irokirs
York
ha"lgS
.
and
fl0st°n
nF,U'
Jacksonville,
Florida
May 31 filed 620,000 shares of class A participating ($1
par) stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares of common _will be offered for
subscription/by holders, oil .thV
^onfe-fof^t^d* at
repay
further im¬
Co., Basin, Wyo.
(letter of notification) 75,000 shares of common
writer.
gy.v
10,000 shares of capital
at $20 per share.
stockholders
Guide Post, Inc., Winnemucca, Nev.
.
(letter of Jhotification) 9,000 shares of common
Atlantic
common
Dean Terrill, selling stockholder.
Underwriter—Straus & Blosser, Chicago. Price—$12 per
(par
Co.,
(The)
9
Office—4921 Exposition
working capital.
Blvd., Los Angeles, Calif.
No underwriter.
Rouge, La.
(letter of notification)
12
Gulf
,
Gas
Kansas
Jan.
Jan.-10
(Adolf)
share, and 4,500 shares to be offered by Buck
Nimy, President. Proceeds—For investment purposes.
Office—Humboldt Star Building, Winnemucca, Nev.
■.
Inc. of New Jersey
(par $1) at $1.75 per share. No underwriter. Pro¬
to pay bank and individual loans (used lor expan¬
stock
Offering—To
(letter of notification) 12,900 shares of common
(par 50c)
for account of selling stockholders.
stock, of which 4,500
.
share.
per
(letter of notification)
9
Jan.
Chicago
Underwriter—P. W. Brooks & Co., Inc., New York, who
reserves the right to sell a portion of these shares to a
at
s
$1.75
at
to
are
Massachusetts
by five selling stockholders.
Glen-Gery
•
Private, Wires to all offices
common
No underwriter.
pay
loans and for working capital.
Shipley St., Wilmington, Del.
$1)
(par
Proceeds
Dec.
•
Jan.
stock
Denver.
71,913 shares of common stock (par $1), to
by amendment.
No
Cleveland.
of Delaware
3,086 shares of
.,
—Louisiana National Bank Bldg., Baton Rouge, La.
San Francisco
Inc.,
$6 preferred stocks on a share-for-share basis, with
Co.
Offering—On Jan. 4 approximately 105,000 shares offered
stock
Chicago
Plan,
(letter of notification)
9
(par $100), to be issued in exchange for existing 7% and
Avenue, Waikiki.
Chemical
Baton
Philadelphia
Industrial
•
Jan.
be
3,600 shares of common
stock (no par), to be offered at $10 per share. No under¬
Proceeds are for working capital. Office—2979
Jan.
Pittsburgh
buy 387,295 of these shares and the
offered public stockholders. Under¬
Proceeds—To pay advances from A. T. & T.
will
sion), and to provide additional working capital.
—168 West State Street, Trenton, N. J.
s
Hawaii
•
Boston
Co.
shares of capital stock (par $100).
Offering—To be offered to stockholders pro rata at $100
a
share.
American Telephone & Telegraph Co. will be
Bell Telephone
Illinois
Nov. 30 filed 389,982
ceeds
®
•
System, Inc. (1/23)
»Dec. 28 filed 304,9.98 shares of common stock,
New York.
14,000 shares of common
be sold by Gwendolyn
MacBoyle, executrix for the Estate of Errol MacBoyle,
deceased.
Underwriters—E. F. Hutton & Co. and Davies
& Mejia, San Francisco.
To be filed
Calif.
of
Maryland Mines Corp., San Francisco, CaL
(letter of notification)
at $1.90 per
share, to
12
stock
York.
notification) 5,000 shares of capital
stock (no par) to be sold for five selling stockholders at
(letter
Idaho
Dec.
writer—None.
(2/2)
Jan. 13 filed 454,457 shares of common stock (no par)
Oct.
Boston, Mass.
Canam
capital.
remainder
ratio of
$1,000,000 5%
to
given the right to
writer.
filed
plus
Phoenix, Ariz.
ing expected Jan. 24.
13
unsubscribed shares of the new common.
price of class A $5. Proceeds—To complete
ocean l'erry, to finance dock and terminal facilities,
pay
current obligations, and to provide working
shares
finance
Jan.
Ashland
Underwriters
Co.
&
an
outstanding indebtedness of Ashland and its
subsidiaries, of Aetna and of Freedom-Valvoline Oil Co.
.and the balance added to Ashland's general funds. Offer¬
•
and may
Shields & Co. and R. W. Pressprich & Co.
(jointly); Blyth & Co. and W. C. Langley & Co. (jointly).
Bids—Bids will be received at the corporation's office,
120 East 41st St., New York 17, N. Y., up to 3:15 p.m.
(EST) on Jan. 23. Proceeds—For construction.
prepay
Jan.
share. Underwriters—Names by amendment,
include John J. Bergen & Co. and A. M. Kidder
will buy the remaining 135,000
25 cents per
Offering
make
(1/24)
Refining Co.
$15,000,000 of 3% sinking fund debentures
50,000 shares of $5 cumulative preferred
Jan. 6 filed
ferred
&
Fenner
ADDITIONS
SINCE PREVIOUS ISSUE
Co. and Union Securities Corp.
ley & Co.;
Jan. 23.
due
competitive bidding.
Probable
Merrill Lynch, Pierce,
by
The First Boston Corp.;
bidders:
INDICATES
Registration
determined
be
to
(1/25-26)
Vending Corp., N. Y. City
filed 200,000
Now in
UNDERWRITERS^
/VGA:
ttos;
n«isz»ri' mwi a
Li!i! JG
Volume
171
Number 4873
THE
COMMERCIAL
•
Pitney-Bowes,
Jan.
NEW ISSUE CALENDAR
January
Southwestern
Public
19,
January
Botany Mills, Inc
Columbia
3:15
Gas
23,
Co
.Common
Common
Common
•
.Preferred
(EST)
a.m.
January 25,
Vending Corp
ABC
1950
Common
(EST).
January
a.m.
31,
•
1,
to
amendment.
Common
stock
February 15, 1950
Sharp & Dohme, Inc.
(no
229,085%
Common
Nov.
1950
Monona
12
Co., Chicago.
Office—1
N.
La
,
working capital.
No
Office—215 W. Washington
Avenue, Madi¬
underwriter.
Wis.
son,
My L. A., Ltd., Los Angeles, Calif.
Jan. 11 (letter of
notification) 7,330 shares of class A
stock and 1,460 shares of. class B stock in
units of five
shares of class A and one share of class B at
200
$102 per
An
additional
shares
Trenk
to
40
and
of
class
pay
1,000 shares of class A
B
stock
will
be
issued
$20,400 bill and 200 shares
a
shares of
class B
to
Loeb
stock
to
Expected in January.
South Pacific
class A
and
Loeb, attorneys.
No underwriter. Proceeds to
produce a stage play called
"My L. A." Office—1338% Miller
Drive, Los Angeles 46,
Calif.
•
New
Jan.
16
ferred
Jersey Power & Light Co.
filed
20,000
stock.
shares
($100 par)
Underwriters—Names
cumulative
to
be
pre¬
determined
through competitive bidding. Probable
bidders; Kidder,
Peabody & Co. and White, Weld & Co.
(jointly); Smith,
Barney & Co.; W. C. Langley & Co.; Lehman
Drexel &
Brothers;
Co.
Proceeds—For property additions, to re¬
plenish working or pay off bank notes.
Expected in mid-
March.
•
Northern Wholesale
-
Hardware Co.,
Oregon
Jan.
9
cates of
of
Portland,
(letter of notification)
$125,000 10-year certifi¬
indebtedness, bearing 4% interest, and 100 shares
stock to be offered at
par ($1,000 per
underwriter.
Proceeds to provide
common
No
and retire obligations to
share).
working capital,
stockholders.
Office—805 N. W.
Crlisan, Portland, Ore.
•
Jan.
Northwest
9 filed
350
Petroleum, Portland, Ore.
"participating interests in oil"
of $500
each, each interest being entitled to 1/3000th part of the
interest of registrants in the total
production from regis¬
trants' oil tracts.
Registration statement was filed by
Ralph A. Blanchard and George P. Simons. Proceeds
are to be used to
develop oil interests.
•
Lindsay.
Price—$15
Underwriter—Bache & Co., New York, N. Y.
Placed privately.
share.
Pacific
Gas
&
Electric Co. (1/24)
1,500,000 shares of 4.80% redeemable pre¬
(par $25). Underwriter—Blyth & Co., Inc.
Proceeds—To retire all or
part of bank loans outstanding
under the company's credit
agreement of March 1, 1948,
and to finance in part, its
construction program. Offering
Jan. 10 filed
ferred stock
—Orror about* Jan. 24.'
share
Rights will expire Jan. 18.
& Co. Inc.
for
each
repay
eight shares held.
Underwriter—Dillon, Read
bank borrowings for these
Expected Jan. 19.
Teco, Inc., Chicago
Nov.
21 filed 100,000 shares ($10 par) common stock.
Offering—These shares are to be offered to holders of
N.
Mr
(letter of notification) 1,000,000 shares of com¬
mon
capital stock (par 10 cents), to be offered at 30
cents per share, the net
proceeds to be used to drill
wells. No
underwriting.
Albuquerque, N. M.
United
Dec. 21
stock in Zenith Radio Corp. at rate of one share
for efech five held. Underwriter—None.
Proceeds—For
working capital and the promotion of Zenith's "Phonevision" device, whereby television users could
pay a
special fee for costly television programs by calling the
telephone company and asking to be plugged in.
•
Texas
Petroleum
Co., Dallas, Texas
$3,000,000 of 4%% senior cumulative in¬
terest debentures due 1965; $1,200,000
of 5% junior
income debentures due 1970; 32,000 shares of $5 class A
cumulative preferred stock (no par), with no rights to
dividends until 1956; 52,000 shares of $5 class B cum¬
ulative preferred
stock (no par), with no rights to
dividends until 1956; and 2,000 shares of common stock
(no par), represented by voting trust certificates; to be
issued under a plan of debt adjustment.
Any interest
payable on debentures must first be approved by RFC,
which recently loaned the company
$15,100,000. Under¬
13
Corp. (1/24)
$25,000,000 of first mortgage and collateral
trust bonds, series due Jan.
1, 1970.
Underwriters—
Names to be determined
by competitive bidding. Bids—
Bids will be received
by the corporation at Room 2033,
No. 2 Rector St., New York
6, N. Y., up to 11:30 a.m.
(EST) on Jan. 24.
Probable Bidders—Halsey, Stuart
Co. Inc.; Dillon, Read & Co.
Inc.; The First Boston
Corp.; Harriman, Ripley & Co. and Goldman, Sachs &
Co. (jointly); Equitable Securities
Corp. Proceeds—To
&
$18,000,000 of first mortgage bonds, 4% series
by United Gas Pipe Line Co., its
subsidiary, and for general corporate purposes.
/
due 1962, to be issued
United
States
Business—Oil production.
Tiffin Art Metal Co., Tiffin, O.
Jan. 6 (letter of notification) $98,500 of
fund debentures, due 1964.
Dec.
27
filed
300,000
shares of capital stock (par
$10)
Offering—To stockholders of record Jan. 13 at
$40 per
share at the rate ofi one share for
each 3% shares now
held.
Rights expire Feb. 1. Underwriters—Alex. Brown
& Sons, John C.
Legg & Co., Stein Bros. & Boyce, and
Baker, Watts & Co., all of Baltimore. Proceeds—For ad¬
ditional capital and surplus.
Statement effective Jan. 13.
•
Universal Jet
Industries, Inc., Fresno, Calif.
12
(letter of notification) 10,000 shares of non¬
assessable common stock to be offered at
par ($10 per
share). Proceeds to develop patent applications and for
Jan.
engineering research, and equipment.
Hammer Field, Fresno, Calif.
Underwriter—The
Ohio
Co.,
Office—P.
O.
Box 4,
Upper Peninsula Power Co.
Sept. 28. 1948 filed 154,000 shares of
$9.
Underwriters—SEC
stock
common
(par
has
granted exemption from
competitive bidding. An investment banking
group man¬
aged by Kidder, Peabody & Co.; Merrill
Lynch, Pierce
Fenner & Beane, and
Paine, Webber, Jackson & Curtis,
may be underwriters. Proceeds—Will go to
selling stock¬
holders.
Consolidated Electric & Gas Co. and MiddleWest Corp. will sell
120,000 shares and 34,000
shares^
respectively.
•
Jan.
Utah, Inc., Huntington, Ind.
11
(letter of notification) 1,200 shares of capital
at
$25
per
working capital.
share. No underwriter. Proceeds for
Office—1123 E. Franklin Street, Hunt¬
ington, Ind.
Younker Brothers, Inc., Des
Nov. 4 (letter of
Moines, la.
notification) 1,000 shares (no par) stock,
to be sold at $27.50 each. Underwriter—T. C.
Henderson
& Co., Des Moines. Proceeds—To
selling stockholder.
Prospective Offerings
American
Telephone & Telegraph Co. &
Dec. 21 directors,voted to make a third
offering to em¬
ployees of the company" and its subsidiaries of up to
2,800,000 shares at a price of $20 per share less than
the market price when payment is
completed, but net
more than $150 nor less than
$100 per share.
•
Carolina
Jan.
13
Power
directors
&
Light Co.
approved
for
1950
a
costing $18,000,000 as part of
$80,000,000 postwar expansion program.
program
Central
Dec.
of
27
it
Maine
was
Power
construction
the
company's
Co.
reported that
a
block of
stock
common
this
company now owned by New England
Service Co. may reach the marketing stage this
Public
springs
Chattanooga Gas Co.
Jan.
3
stock
interest in this company (7,500 shares of
stock), par $100, was authorized by the SEC to
by Southern Natural Gas Co. to Equitable Secur¬
ities Corp. for $1,875,000, subject to the condition, among
others, that the latter dispose of said stock in 12 months.
common
be sold
Colorado
Jan.
7
it
Interstate
Gas
Co.
reported that 531,250 shares of common
stock (42%% of total outstanding), which was
purchased
was
in 1948 by group headed by Union Securities
Corp.,
may
be reoffered early this Spring.
Commonwealth Edison Co., Chicago
10, announced the company plans $90,000,000 addi¬
tional financing through the sale of securities.
Neither
the nature nor the time of the new
financing has been
Jan.
41/2%
sinking
Price—<100%% of principal
amount.
Fidelity & Guaranty Co.,
Baltimore
filed
writer—None.
Office—4012 N. Second Street,
Gas
filed
common
Jan.
and
(1/19)
Proceeds—For construction of additions and
improvements and to
purposes.
Columbus,
O.
Proceeds—To buy a lot and building in Toledo for use
determined.
Probable bidders for bonds
or
debentures:
Halsey, Stuart & Co. Inc.; Morgan, Stanley & Co.; The
Corp.; Glore, Forgan & Co.
First Boston
•
Consolidated Edison Co. of New York,
Jan.
CONFIDENTIAL
13 company
money
financing
that
Inc.
officials estimated at $96,000,000 new
required through 1953.
Indications
short-term
bank loans of $12,000,000, plus
will be sufficient to carry construction
program through until next fall before permanent financ¬
ing will be necessary. Refunding of $5 preferred stock
were
SERVICE
9
shares by the Estate of Arthur H.
per
Southwest'n Public Service Co., Dallas
new
Office—2nd
13
Dec. 30 filed 168,729 shares of common stock (par $1)
to be offered common stockholders of record Jan. 18 at
Outboard Marine &
Mfg. Co., Waukegan, III.
(letter of notification) 11,900 shares of common
stock to be sold by the Estate of Jacob
Stern and 1,200
Jan.
Evans, President,
a $25 per unit
selling commission.
Proceeds—For
industrial and mining projects in Oregon and Ecuador.
one
and distributing point.
Avenue, Tiffin, O. *
\
Transcontinental Oil Co., Inc.,
Albuquerque,
stock
Engineering Corp., Portland, Ore.
Jan. 3 filed 5,000 shares of 4% preferred stock
(par $100)
and 25,000 shares of common stock (no
par) to be "of¬
fered as a speculation."
Price—In units of one preferred
share and five common shares at $100 per unit. To be
and
William
of
Underwriter—Names by amendment.
Due 1979.
the rate of
•
unit.
Columbia,
with
2,500 shares of class A
($30 per share), the net
stock to be sold at
par
proceeds to retire debt and for
common
Co.,
redeem
sold by salesmen directed by James L.
Broadcasting Co., Madison, Wis.
(letter of notification)
Gas
a
like amount of outstanding
Underwriter—Names by amendment
'(probably Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; The First Boston Corp.; Union Securities Corp.).
Messenger Corp., Chicago
(letter of notification) 2,000 shares of common
(par $1), to be sold for the account of Harry M.
Messenger, President.
Price—$11 per share.
Under¬
•
Due 1979.
bonds.
Common
Chicago.
&
$22,200,000 first and refunding mortgage
Proceeds—To
stock
Jan.
filed
22
bonds.
Jan. 11
Salle Street,
exchange. Business—Pharmaceu¬
Carolina Electric
South Carolina
Bonds
&
15.
South
•
writer— Cruttenden
Underwriters
Statement effective Jan. 3.
.Bonds
April 10, 1950
Utah Fuel Co., 11 a.m.
(EST)..
for
pref¬
shares for
Proceeds—To redeem at $75 each
accrued dividends any $3.50 preference stock not
ticals.
Georgia Power Co
Offer expires Jan. 19.
surrendered under the
7, 1950
April 4,
about Feb.
or
plus
Preferred
Equip. Tr. Ctfs.
(EST)
new
company up to a maximum of 86,000 shares of $4.25 pref¬
stock which may be offered
by the underwriters
1950
Gulf States Utilities Co
ones.
exchange
convertible
stock, series A, at rate of three
erence
on,
Kansas Gas & Electric Co
in
Brown & Sons, Baltimore, and Drexel &
Co.,
Philadelphia, who have agreed to purchase from the
Common
a.m.
par).
Offering—Offered
shares of $3.50 cumulative
—Alex.
February 21, 1950
Mississippi Power Co., 11
Business—Manufacturer of ethical pharma¬
each four old
.Preference
Greenpoint Coal Docks, Inc.
3:30 p.m. (EST)
March
(par $5),
Sharp & Dohme, Inc., Philadelphia, Pa. (2/15)
9 filed 171,815 shares of cumulative
preference
erence
Pennsylvania RR
stock
Dec.
Equip. Tr. Ctfs.
•
m
purchase
Searle & Co., Chicago
246,573 shares of common
ceuticals.
February 14, 1950
1,
filed
Common
.
March
Office—1620 Market Street,
26,573 shares will be offered by the company
employees and 220,000 shares will be purchased by a
1950
Maryland R,y
Colo.
group of underwriters headed by Smith, Barney & Co.
from certain large stockholders.
Price—To be filed by
1950
Consumers Power Co
Western
18
warehouse
as
Broad
Jan.
of which
1950
Club, Inc
February 2,
Scarry & Co., Denver,
(G. D.)
Jan.
..Debentures
February
(E. J.)
(329)
Pro¬
Denver, Colo.
Bonds
_
(EST)
Eastern Harness Racing
underwriter.
working capital.
additional working capital.
American Telephone &
Telegraph Co.
11:30
No
pur¬
11 (letter of
notification) 1,000 shares of 8% pre¬
ferred stock to be offered at par ($100
per share).
No
underwriter.
Proceeds for expansion and to provide
Equip. Tr. Ctfs.
International Bank for Reconstruction &
a.m.
share.
a
Jan.
Bonds
Indiana Harbor Belt RR
Development, 11
per
for general
employees under
,
Debentures
Pacific Gas & Electric Co
11:30
plan at $11.63
are
to
magnetic tape recording field and for general corporate
purposes.
Office—35-54 36th Street, Long Island City 6,
N. Y.
"
"
"
1950
Ashland Oil & Refining Co
United Gas Corp.,
stock to be offered
Reeves Soundcraft Corp.
Jan. 6 (letter of
notification) 200,000 shares of common
stock (par 5c) to be offered at 25 cents
per share to
common
stockholders. Rights will expire Jan. 25.
No
underwriter. Proceeds to provide capital to enter the
Common
Co
CHRONICLE
•
1950
p.m.
FINANCIAL
Inc., Stamford, Conn.
notification) tip to 10,000 shares of
ceeds
,
January 24,
of
chase
System, Inc.
(EST)
Glen-Gery Shale Brick
(letter
common
1950
Service
11
&
treasury funds,
II
SINCE
mo
m
PRINTING CO., Inc.
80 SOUTH ST., NEW YORK 7,-N; Y.
(1,915,319
under
•
shares
outstanding)
Delaware Power &
Jan.
is
also
reported
to
be
plans
spend
study.
17
company
Light Co.
announced
that
it
to
$25,000,000 this year for construction in continuance of
the five-year $60,000,000 expansion program of the com¬
and its. subsidiaries, Eastern Shore Public Service
Co. of Maryland and of Virginia.
pany
-
v.
sr."
-
/
-
Continued
on
page
94
94
Continued
•
East
jrom
93
page
Tennessee
Gas
PeaProceeds to
retire $5,745,000 first mortgage 3%% bonds/series A,
and $1,250,000 of first mortgage 31/4% bonds, series B.
Jan. 10 reported company will shortly file with the SEC
a new issue of
securities, the proceeds of which would
be used for the laying of a pipe line into the Oak Ridge,
and for
•
announced
be
offered
Power Co.
Gas
Jan.
stockholders
26
Light Co.
will
consider
authorizing
a
640,957,
Smith, Barney & Co. and Goldman, Sachs & Co.
(jointly); Lehman Brothers, Merrill Lyncn, Pierce, Fen¬
& Beane and Reinholdt & Gardner (jointly); Harri¬
ly);
by 3:30 p. m.
of
used to finance part of $20,000,000
Feb. 21
•
planned
Gulf, Mobile & Ohio RR.
12 reported planning offering of about $3,500,000
The
Gulf
Utilities
States
16
Jan.
filed
Co.
shares
the
with
authority to issue and sell $6,000,000 of common
Offering tentatively expected
RR.
Belt
Dec. 15 company reported to
Harris,
Hall
Expected
(Inc.).
Development
for
•
•
10
bonds
to
meet
for
rates
rested,
the
In
was
not
only
ar¬
since
months
that
time
gilt-edge liens have pushed stead¬
ily ahead in price with corre^sponding reductions in yields. And
now we are back to a point where
some
borrowers can obtain 30mortgage money on a 2.66%
yieid basis to the investor.
year
be¬
Bank officials have been tell¬
ing
must
vested
at
vestment
These
of
of
securing
on
their investments and under¬
time
to
writing bankers are
For
back
a
brief period
it
vestment
appeared
market
been passing
and
the
a year or so
that
in¬
the
might
have
its peak in prices
trough
in
yields.
But
with the shift of the Federal Re¬
serve
an
and the Treasury
back
to-
all-out "cheap money'' basis
up
against
the
once
choice
ding-through-the-nose"
more
of "bidor
just
foregoing new business as it de¬
Money is in plentiful supply and
seeking employment. This is espe¬
cially
true
in
the
case
of large
,
The contributions
Utah
The
Fuel
referee
Co.
will
as
>
intended to aid the two sub¬
are
(4/10)
offer
at public auction at 11 a.m. on
April 10 all of the 100,000 outstanding shares of stock of
this corporation at the Guaranty Trust Co. of New York,
140 Broadway, New York.
Business—Mining, of coal in
Utah and
Colorado and
and sale of said
Western
manufacturing of coke in Utah
products.
Maryland Ry.
Jan,
9 company
ance
(2/14)
of about $2,500,000
to be planning the issu¬
equipment trust certificates on
Feb, 14.
Probable bidders: Halsey, Stuart &
;Co. Inc.; Harris, Hall & Co. (Inc.); Salomon Bros. &
Hutzler; Harriman Ripley & Cq. and Lehman Brothers
or
was
reported
about
(jointly); Lee Higginson Corp.
a
bit slow, with one
run
of competition in. their
job of raising funds for corporate
new
big western insurance firm men¬
tioned
Corp.
financing their construction programs. Prob¬
able bidders may include W. C. Langley & Co. and Union
Securities Corp. (jointly); Lehman Brothers; * Stone &;
Webster Securities Corp. and White/Weld 8c Co. (joint¬
ly); First Boston Corp.; Kidder, Peabody & Co.
moving, but
a
substantial buyer.
borrowers.
Competitive bidding for term;
Big Stock Issue
groups.
of
101.26999 down to a
all for a 2.75%
100.63,
It marked the first public
financing by the Niagara Mohawk
Power Corp., formed recently as
a consolidation of Buffalo, Niagara
loans, bringing in the commer-,
of
group
fixed
a
the
investor
indicated
of
that
a
the
sent
in- the distribution of
issue, which closed on Tues¬
price.
Term
under the offering
™Y' '
Loaft Bidding
Underwriting ^bankers
Reports
clined to fret a bit these
bonds
were
This
made
day a fraction
fear
that
thev
may: be
are
to
shop
around
Gas
Corp:
went
a
♦
borrower •
enterprising
invitations
banks,
to
a
of
most
New York, to bid for a
dozen
or
them
in
$14,000,-/
000
loan
and
received bids ranging from
2
to
to
run.
for
five
years,-
2.35%.
Term
'
bank loans
were
'.
a
~
increas¬
in¬ ing in popularity prior to the
days for
facing
for
But. Consoli¬
seek.
Natural
step further recently.
reported be¬
net yield to
2.66%.
they
dated
more
reoffering price of 101.85 for the
bonds indicating
funds
^
Good progress -was
this
successful
basis
term
successful
.
.
,
-
$191/8 less 35 eents a share to
dealers.
Power
Power
the
case
paid the company a price
of $18,545 a share for the stock
and fixed a public offering price
ing
Central New York
Corp.,
and
New
York
& Light Corp.
this
In
group
Electric Corp.,
The
velops.
banking
high
low
some
best
;
sidiaries in
Probable
themselves in¬
rates possible.
ranged all the way from
the
low
for
the
Co.
,
coupon.
come.
in¬
Edison
•
ing their stockholders at current
returns
keep
Service
South Util¬
cial banks as competitors, is thei
Niagara Mohawk Bids
ities Corp. opened bids for a block
latest development to
add to,
The big new up-state utility's of
640,000 shares of
additional
their woes.
five
offering of $40,000,000 of new 1st common stock and • found
It has been common practice for
mortgage 30-year bonds brought banking syndicates in the running
out a total of four bids from in¬ for the issue..
potential borrowers on ~a; short-
annual meetings of the problem
satisfactory
as
Island
Meanwhile. Middle
coming quite evident, must recon¬
corpo¬
such
companies and the grow¬
new
element, pension funds,
cile themselves to the prospect of
high-grade
costs.
surance
which
Public
May 18, 1949 offered $£0,t
$25.
an
N. J.
issue
&
institutional investors,
par
Corp. applied to the SEC1
exemption from competitive bidding to sell the
entire common stock (325,000 shares) of Staten Island
Edison Corp., through a negotiated sale.
GPU plans id
make a $4,000,000 capital contribution to Metropolitan
Edison Co., of Reading, Pa., and a $650,000 capital coia-^
tribution to New Jersey Power 8c Light Co., of Dover,
for
Light Co.
Dec. 24 reported that company's tentative plans call for
funding of $9,000,000 bank loans, probably in March. On
Sept. 15 it was said plans to do some permanent financ¬
ing of approximately $7,000,000 through the sale of
additional first mortgage bonds to retire outstanding
reversed.
but
Power
on
stock,
Staten
bonds:
Pacific
a
(Inc.)
Jan. 5 General Public Utilities
Halsey, Stuart & Co. Inc.: Morgan
Stanley & Co.; Kuhn, Loeb & Co.; Shields & Co.; First
Boston Corp.; White, Weld & Co.
hardening tendencies in in¬
terest
yields on
rate offerings
to
installation
plant and
'
during
privately-held indebtedness. Traditional
underwriter, Dillon, Read & Co. Inc.
expects
part, for construction.
toward the start of the summer,
it is
company
Public Service Co.
has received permission
Commission,
Co.
common
Southwestern
company
S.
P.
1
Co.
'Dec. 10 reported company plaris to sell about $2,500.00Q
of debentures and is said to be considering plans to re-,
approving issuance of
the
investors,
Valley
reported
Wisconsin
Edison
8c
.
fund some of its
that this
announced
Ripley
.
California
Hall &
000,000 of
(3/7)
Power Co.
was
Mississippi
bidders
l-for-2
basis, the unsubscribed shares to be sold to underwriters
at subscription price.
It is also planned to issue and
sell $7,995,000 first mortgage bonds at competitive bid¬
ding.
Probable bidders—Halsey, Stuart & Co., Inc.;
White, Weld & Co.; Blyth & Co., Inc.; W. C. Langley &
Institutional
Harris,
on
Feb. 21 will consider increasing the
preferred stock from 185,000 shares to 215,000
it
'
jointly headed by The First Boston Corp. and
ing group,
New Jersey Bell Telephone Co.
Company filed Dec. 8 with the New Jersey State Board
of Public Utility Commissioners a plan for financing
$65,000,000 of construction.
Company proposes to sell
$50,000,000 in common stock and $15,000,000 in long-term
Supply Co.
on
RR.
plans to spend approximately $51,500,000 for new
plant and replacements.
A nationwide investment bank¬
$3,700,000
bonds. Traditional underwriters: Merrill
Lynch, Pierce, Fenner & Beane; Carter H. Harrison &
Co.
Proceeds to retire outstanding bonds and to pay,
& Co. and Merrill Lynch, Pierce,
(jointly); Kidder, Peabody & Co. and
Bly & Co. (jointly); Equitable Securities Corp.; Lehman
Brothers; White, Weld & Co.
stock
Line
Air
reported
'1950
first mortgage
Ripley
on
16
Jan.
from
in
common
in
additional
Jan. 9 W. C. Mullendore, President, said company
grams.
Fenner & Beane
50,000 additional shares of
i
would probably be
with
*
Southern
Halsey, Stuart & Co. Inc.; The First Boston Corn.: Glore,
Forgan & Co.; Equitable Securities Corp., and Shields
& Co. (jointly). Proceeds—To finance construction pro¬
Public Service Co.
Jamaica Water
it
«
on
Feb. 3. to file a registration with the SEC covering
$3,000,000 first mortgage bonds. Bids are scheduled to be
opened at 11 a. m. (EST) on March 7. Probable bidders:
proceeds (approximately $5,0OO,Q00) to pay for construc¬
tion costs, etc.
Probable bidders: A. C. Allvn
Co.;
•
•
Mississippi
Jan.
1953 to 1962 at the rate of
Jan. 31 stockholders will vote
1
Brothers; First Boston Corp.; Harriman
Jan. 10 reported that corporation plans tt> issue and sell in
March approximately 42,000 shs. of preferred stk., the net
Harriman
(3/1)
company
March
Co., jointly.
1950, its
Bank, The First Boston Corp., Salomon Bros. & Hutzler
and C. J. Devine & Co., Inc.
A second group will be
headed by National City Bank, Kuhn, Loeb & Co. and
J. P. Morgan & Co. Incorporated.
The third will be
headed by Bankers Trust Co. and Morgan Stanley & Co.
The fourth group is Halsey, Stuart & Co. Inc.
Iowa
certificates.
Stockholders
$10,000,000 annually.
Bids—Bids for the new issue will
be received by the Bank at Room 520, 33 Liberty St.,
New York, N. Y., up to 11 a.m. (EST) on Jan. 25.
Four
banking syndicates ate expected to bid for the new issue
of serials. One group is to be headed by Chase National
•
RR.
about
that company has under consideration
the refunding of its long-term first mortgage 4% bonds
involving not less than $30,000,000. Probable bidders ini
elude Halsey, Stuart & Co. Inc.; Kuhn. Loeb 8c Co.; Leh*
shares.
$100,000,000 10-year 214% bonds due July 15, 1957, and
intends early this year to replace them with an issue of
like amount that will mature
increasing the
to 6,500,000
man
(1/25)
The bank has called for redemption on Feb. 17,
shares.
5,000,000
9
about
&
Reconstruction
consider
from
De.c.
authorized
Bank
will
2
stock
reported
was
Seaboard
(bonds); Kidder, Peabody & Co. (bonds); White, Weld
& Co. (bonds); Smith, Barney & Co. and Goldman, Sachs
& Co. (jointly on pfd.); Glore, Forgan & Co. and W. C.
Langley & Co. (jointly on pfd).
Jan. 25.
International
preferred
$7,000,000 first mortgage bonds due 1980 and
30,000 shares of $100 par preferred stock, at competitive
bidding.
Probable bidders: Drexel & Co.; Harriman
Ripley & Co. and Union Securities Corp. (jointly); Carl
M. Loeb, Rhoades
& Co.; Halsey, Stuart & Co. Inc.
(1/25)
for
American
ably in February, to help finance its 1950 construction
be planning the issuance of
Co.
&
Z
Proceeds—
program,
$1,800,000 equipment trust certificates.
Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Harriman
Ripley & Co., Inc. and Lehman Brothers
(jointly);
common
Nov. 30 reported company plans to issue and sell, prob¬
Co.,
Harbor
of
A
Inc.; The First Boston Corp.; Union
Securities Corp., and Equitable Securities Corp. (jointly).
Indiana
through the issuance to present
subscribe for 592,185 additional
stock.
Underwriters—Dallas Rupe &
Metropolitan Edison Co.
Lynch, Pierce, Feraier & Beane (jointly); Lehman Broth¬
Blyth &
share
one
$10,200,000
equipment trust certificated series Y. Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Harriman, Ripley & Co. Inc. and Lehman Brothers (joint¬
ly); Harris, Hall & Co. (Inc.); First Boston Corporation?.
Jan. 9 also reported company is expected to take care of
additional equipment financing through issuance of series
sell
and
$2,000,000
stock.
through competitive bidding. Probable bidders: Dillon,
Read & Co. Inc.; Kidder, Feabody & Co., and Merrill
ers;
Dallas, Texas
plans to issue
Co.,
company
indebtedness, finance the construction
of a cast iron pressure pipe plant, and for other corporate
purposes. Registration with SEC expected this month.
To be effected
March 7.
Steel
Star
it
9
market
To retire present
seeking
FPC
March
common
Pennsylvania
the
Son, Dallas, and Straus & Blosser, Chicago.
(3/7)
application
an
stockholders
Jan.
the 1950-1953 period.
announced
13
additional
(jointly); Lee Higginson Corp.; Harris, Hall & Co. (Inc.).
of
shares.
Proceeds—To be
construction program
stockholders of rights to
Hutzler; Harriman Ripley & Co., and Lehman Brothers
rate
preferred held.
or
78.17%, of the 620,000 6%
or
authorized
$5,000,000 10-year first mortgage bonds and to raise an
equipment trust, certificates next month. Probable bid¬
ders include: Halsey, Stuart & Co. Inc.; Salomon Bros. &
•
over
Lone
Dec.
Jan.
the
at
common
Ripley & Co.; White, Weld & Co.
man
capital stock (all of the outstanding stock
of the corporation). Bids must be received at the Office
of the Alien Property Custodian, 120 Broadway, New
York 5, N. Y.
common
stock
common
Proceeds will be used to retire bank loans and to provide
for additional expansion, additions and improvements.
ner
on
of
Telephone & Telegraph Co. owns 3,732,493 shares, or
91% of the 4,068,165 common shares outstanding, and
stock (par $25),
of which 160,000 may be presently issued, and on chang¬
ing name of company to Laclede Gas Co. Probable bid¬
ders; The First Boston Corp. and Blyth & Co., Inc. (joint¬
for the purchase from the Attorney
General of the United States, as a whole, of 2,500 shares
(EST)
and
Telephone & Telegraph Co.
announced a plan to offer to its stock¬
the right to
subscribe for 8f4,694 additional
each six shares of
j
issue of 480,000 shares of preferred
new
Co.
15 company
holders
Corp.
Gas
On
(2/21)
Inc.
Electric
&
Hutzler
&
Pacific
Dec.
shares
To finance construction piogram.
Greenpoiiiit Ccal Docks,
©
on a
Laclede
April 4.
Probable bidders: Halsey, Stuart & Co. Inc.;
Glore, Forgan & Co.; The First Boston Corp.; Equitable
Securities Corp., and Shields & Co. (jointly). Proceeds—
Jan. 17 announced bids will be received
for
Weld
White,
1,906,748
3-for-l basis, according to plan for liquida¬
tion and dissolution of latter company and Continental
Rys. Co.
&
Bros.
(jointly); Blyth & Co., Inc.;
Harris, Hall & Co.
(Inc.)
(jointly); Carl M. Loeb, Rhoades & Co.
Light Co.
shares of common stock
subscription by United Light &
City Power &
11
would
(4/4)
Jan. 17 reported company expects to file a registration
statement with the SEC on March 3 covering $15,000,000
of debt securities. Bids are scheduled to be received on
•
Kansas
Jan.
Moseley & Co.; Elder & Co.
Georgia
other corporate nur.mses.
Salomon
kwuuicing may total about $2,750,000, to
include preferred and common stocks.
Probable bidders:
White, Weld & Co.; Equitable Securities Corp.; F. S.
Tenn., plants,
•
postponed to about May 1, 1950.
Probable bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co.; W. C.
Langley & Co. and The First Boston Corp. (jointly);
Union Securities Corp.; Equitable Securities Corp. and
body & Co.; Carl M. Loeb, Rhodes & Co.
Co.
had been
notes and to finance its construction program
Securities Corp., (jointly); Kidder,
Union
and
Co.
Natural
Thursday, January 19, 1950
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(330)
war,
but the call for bids on such busi¬
ness
gives it
an
entirely
new
twist.
Volume 171
Number 4873
THE
COMMERCIAL
&
FINANCIAL
redeemable
through
tirement
prices
to
Securities Salesman's Corner
oil.
Often your prospect, or your
customer, would rather eat candy;
a
good, stiff dose
of
although.
medicine is what he really needed.
Many
think
people
ho\y to invest
they
know
successfully.
But in the aggregate they know
so little about the
specialized field
of
money
that
management
money
the
financial graveyards are full of
Many of them even
after grievous losses are still un¬
willing to admit that they just do
not know as much as they think
they know.
such failures.
So
the
salesman's
task
is
firmness
your
is
based
upon
a
do
things which will redound
to hjs benefit, you are in!
No one
can tell you how to convey this
feeling to another hut it will come
about automatically
if you be¬
lieve this way
The other
ing
on
could
yourself.
day I .saw the follow¬
friend's
a
desk.
If
we
these things and at
time know our job well,
do
all
same
fold:
He must not only sell his
customer, but he must educate
and he must lead. It is not enough
to, make the sale.
The
proper
Be Brief—Politely
Be Aggressive—Tactfully
Be
Emphatic—Pleasantly
Be
Positive—Diplomatically
securities must be sold—they must
Be
Bight—Graciously.
be
the right time—and despite
care and experience,
it
must
no
also
one
be
that
understood
earth
on
be
can
right all
of. the time, but through sound
advice and the exercise of good
judgment,
the
should
such
be
overall
to
as
preserve
So that js the problem in a
generalized
way.
What
is
the
bggis for achieving a relationship
between customer and salesman,
that
eventually evolves
into
a
harmonious working together to¬
ward a high degree of investment
success
First
we
for
part
the
first
in
time
discussion
investor
an
his
home.
held
was
the
in
living room, and
his wife silently sat by and list¬
ened. Immediately, it became ap¬
evening
parent,
his
in
that here
was
a
who
man
securities,' etc.
In fact, he was taking great de¬
light in discussing various stocks
and bonds in a most superficial
specific
underwriting
An
spliLup
the
that
and
stock
from
covered
its
had
group
share
a
re¬
price
on
the
company's general improvement
in earnings, etc., which
he had
just previously and proudly pro¬
claimed.
Although
corrected
him-
out then
that
I thought I
tactfully I found
you
tact¬
never
can
in front of
So, first of all, comes
fully. correct anyone
wife.
his
population of ap¬
3,800,000.
served
Principal
also
well
as
another
man
to
general
mortgage
bonds,
2%%
series
due
1980
accrued interest.
awarded
Jan.
sale
the
on
and
101.85%
at
The bonds were
18
at
competitive
group's
bid
of
101.26999%.
—that
will
you
sound
With
not
1948
the
116
in
Fifth
South
and
First
National
Bank
of
Winsted,
association
the
therefore
are
to present claims for
undersigned at said bank.
notified
hereby
1949
payment
to
CLARENCE
H.
BUNNELL,
Liquidating Agent.
Dgted December 9, 1949.
The
Hurlbut
National Bank
of
Winsted.
located at Winsted, in the State of Connectfcut, is closing its affairs. All prqditors
of
the
association are therefore hereby
notified to present claims for payment to
the undersigned at said bank.
EDWARD
F.
McARDLE,
Liquidating Agent.
Dgted December 9, 1949.
Seigniory
Club,
Montebello,
Sent, 26-30, 1950 (Virginia Beach,
Va.)
Annual
Fob. 2,
Feb.
(St. Louis, Mo.)
1950
Security
Louis
Club
Trader?
winter
of
tional
St.
tion
of the Na¬
at
the
Cavalier
Hotel.
With Luckhurst & Co.
(Chicago, HI.)
3-5, 1950
winter
Convention
Security Traders Associa¬
dinner.
BOSTON,
Investment Bankers Association
board
meeting
—
MASS. —Arthur
Street to
hurst & Co. of New York City.
FINANCIAL
Republic
NOTICE
of
Chile
Service of Bonds of the External Debt
engage
service of the external debt
offices
of
securities business from
a
at
60
Broad
City.
Street,
-
company's
the
part
The
bonds
time
104.85%
to
They also
Hudson
interest for the year
shareholders .of
business
on
principal amounts ' of bonds were amor¬
during the year 1949 with, the sum of US$2,531,000
assigned under the aforesaid Law No. 8962 for amor¬
record at "the close of
tization:
February 10, 1950.
H. E. DODGE, Treasurer.
lows:
DIVIDEND NOTICES
of twenty
CASH
has
stock
of
declared
($.20) a
upon
the
ADDING
been
MACHINE
Mar.
10.
COMPANY,
1950,
10,
record
the
at
to
close
payable
shareholders of
of
business
benture Stock will-be paid Feb.
1, 1950,
to
stockholders of record Jan. 23, 1950.
Feb.
25 cents per
s|iarc
the "A" Copnppp
and Yotipg Common Stocks will be paid
op
Feb. 15, 1950, to stockholders of record
Jan. 23,1950.
A. B.
§Unm£6w
1950.
Newhall, Treasurer
Jktanu|-o4uu ivq (B$.
Framingham, Mass.
Detroit, Michigan
January 13, 1950.
were
Sheldon F. Hall,
Secretary
fol¬
Francs
was as
£22,426,482, US$119,547,000 and Swiss
The
the De¬
"A" COMMON rnd VOTING
BURROUGHS
share
on
COMMON: A quarterly dividepd of
cents
US$6,138,000
97,722,100.
DEBENTURE: The rogufiir quarterly
dividend
and Swiss Francs
retired from circulation.
making these amortizations the balance of prin¬
£296,900,
8,955,000. These bonds
cipal amounts of bonds of the external debt
dividend of $2.00 per share
$1,000.
per
tized
After
A
1949 at the rate of $20.
The following
($1.00).
has been de¬
Stuck of this
Company, payable March 1.1, 1950, to
are
DIVIDEND
cov¬
bond.
Smelting Co.* .Limited
DIVIDEND NOTICES
197ih CONSECUTIVE
and the Municipalities
plan under the aforesaid Law No. 8962, have been paid
Hay Mining
Dividend -of-one dollar
A
at
Burroughs
Decem¬
on
that holders of bonds in dollars,
external debt of the Republic
(Canadian) per share
clared on the Capital
ranging from
100%.
announces
pounds sterling and Swiss Francs of the direct and indirect
dividend no. 41
^
construc¬
redeemable
are
at prices
7, 1948,
ered by Law No. 5580 and which have assented to the new
tion program.
any
approved by Law No. 8962
July 20, 1948, and published in New York
ber
New
DIVIDEND NOTICES
and
in
Caja Autdooma de Amortization de la Deuda
Publica, in accordance with the readjustment plan for the
A. R. Grossman & Co, 1? engag¬
ing in
,
Caja Autonoma de Amortization de la
Deuda
Publica, in accordance with the provisions of Article 3 of
Law No.
8962, also announces that holders of bonds of
the external debt who assent to the
plan of service of old
the new plan under
Law No. 5580 and who do not accept
Law No.
8962, will be entitled to receive for the
year
1949
interest at the rate of $11,259 per $1,000 bond, calculated
on
the basis provided in Law No. 5580 with respect to the
following
revenues:
Participation in the profits of the Corporation de
Veritas dp Saktre y Yodo of Chile
Share in the taxes on income of the 4th category
US$4,287,412.00
of copper companies.
228,573.44
Share in tax on
importation of petroleum for the
nitrate industry (Article 7th of Law No. 6155
67,931.98
pf January 6, 1938)
Share in tax
of
limn in nntui
i ii nullum m inn n ■ ii ii i it nil i M i hi i mi i mi..
DIVIDEND
f
Birmirsham, AUbsms
=
Common Stock Dividend No. 44
,
|
dividend
of
50
share for the first
March 15, 1950
qf record
at
to
§
business
$1 .00 per share
Common Stock,
per
share has been declared
\
|
|
|
on
the Common..T>tock of
i
Southern Natural GSs Company,
payable March 11,
1950 to stockholders of rec-
|
stockhold¬
ord
§
§
on
15,
cou¬
Schroder Trust Company, Trust Department,
1950.
57
Broadway, New York 15, N. Y.
§
=
February
per
pres¬
on
corresponding to said payment, together with an
appropriate letter of transmittal, at the office of the
correspondent of the undersigned in New York City,
the close of
cents
5580 will be
of $11,259
pons
of 1950 upon the $5
Preferred Stock,, payable
=
§
74,906.19
entation and surrender for cancellation of the two
lowing dividends:
per
.
and after February 1, 1950, against
$1,000 bond
quarter
ers
A
=
.
US$4,658,823.61
entitled to receive the aforesaid payment
has declared today the fol¬
Si ,25
|
companies (Article 7th of Law No. 6155
January 6, 1938)
Holders of bonds assented to Law No,
NOTICE
The Board of Directors
GAS
importation of petroleum for the
cowAEAR
SOUTHERN
NATURAL
on
§
=
i
at
the close of business
February 27, 1950.
'
\
I
H. Di-McHENRY,
f
Secretary.
i
:
Datec): January 19, 1950.
: 11M11111111111 f 111 >
111111111111,1111M111 • 11111111M11 ■, 11111111 n
=
M11^
the
payable
upon
transmittal may be
March 15, 1950 to stockhold¬
ers
of record
business
at
February
15,
Letters of
obtained at the office of said
corre¬
spondent.
the close of
1950.
The Dofldyppr Tjre ft Rubber Co,
CAJA AUTONOMA DE AMORTIZACION DE LA DEUDA PUBLICA
&y W. D. Shi Its, Secretary
Akron, Ohio, January 16, 1950
AUGUSTO MERINO S.
General Manager
The
Greatest
Name
in Rubber
January 17,1950.
G.
Fitzgerald is connected with Luck¬
Edge-
water Beach Hotel.
in connection with
It
the
the
Quebec.
Kansas
Hotel.
The
York
COMPANY
at Winsted, in the State of Con¬
necticut, is closing itp affairs. All creditors
of
bach
A. R. Grossman in NYC
stituent companies and to finance
LIQUIDATION NOTICES
lopated
of
securities business.
a
construction program of con¬
that
and
Club
Traders
City winter dinner at The Muehle-
500,000 of bank loans obtained in
!
The
Bond
VEGAS, CALIF. — Lester
La Fortune has opened offices at
compromise
principles,
(Canada)
of Canada 34th Annual Meeting at
Proceeds from the sale of these
If
do know what you are doing
yOU
1950
palities.
bonds will be used to repay $38,t-
that
see
5-8,
Investment Dealers Association
(Kansas City, Mo.)
copper
begins
Hotel.
as
stubborn in their egotism.
respect.
Shoreham
utica, Rome, Oneida and Little
Falls and certain adjacent munici¬
ill the realization that those who
comes
June
niture Club pf America.
public
the
serves
Dealers, Inc. annual meeting
the
at
of Chicago
are
know the least are often the most
next,
Club
Traders
State
tact; and you must always use it,
never letting
up for one minute
And
Bond
Corp,
basis,
not
headed
Power
reverse
low
very
dollars
of several
a
one-for-ten
a
on
ties
(Chicago, 111.)
1950
30,
Lester Lb Fortune
Mohawk
common
because there had been
cities
company
Niagara
stock
then selling about 45, it was
was
total
a
proximately
York
and Fulton and certain
adjacent municipalities.
The
by Halsey, Stuart & Co. Inc. today
(Jan. 19)
is offering $40,000,000
it was obvious that he had
convinced his wife that he was a
very astute investor/ I made the
mistake of mentioning to him that
a
having
New
(Washington,
C.)
LAS
way.
although
Jap.
Feb. I, 1950
of
14th
National Association of Securi¬
York
area
26-27, 1950
H.
The company renders electric
service to residential, farm, com¬
mercial and industrial customers
an
City)
Club
George, Brooklyn.
Feb.
Field
annual winter dinner at the Fur¬
Power 2zk% Bonds
anxious to show his wife
that he knew a great deal about
and
St.
constituent companies, were con¬
solidated under the name of
Niagara Mohawk Power Corp.
in
Bond
with manufactured gas in Albany,
was very
investments
Corp,, Cen¬
Power Corp. and
York Power & Light Corp.,
New
New
Schenectady and Troy,
of the cus¬
tact.
Once
comes
talking with
were
The
the
on
tomer?
tral
(New York
Night
95
annual dinner dance at the Hotel
EVENTS
In
11, 1950
Friday
falo Niagara Electric
wego
Halsey, Stuart Group
Offers Niagara Mohawk
average
capital through thick and thin.
Power
with natural gas in Syracuse, Os¬
'
watched—they must be ac¬
quired at the right time—disposed
of at
Mohawk
000.
The
company
owns
and
operates an interconnected distri¬
bution system serving the public
Gems
Memory
Feb.
COMING
that this interest¬
sure
Five
two¬
the utmost of
re¬
Buffalo, Syra-^
cuse, Albany, Utica, Schenectady,
Niagara Falls and Troy. Territory
ing and complicated profession of
securities salesmanship would be served by the company with gas
has a population of about 1,120,even more
so for
most of us:
the
then 1 feel
(331)
103.55%
Corp.
is engaged in the electric and gas
utility business
in
New
York
State.
On Jan. 5, 1950, the Buf¬
conviction that the only way you
can evef do business with him is
to
debt
a
from
100%.
Niagara
By JOHN BUTTON
I have sometimes thought that
selling securities is somewhat like
persuading a child to take castor
at
CHRONICLE
PEDRO CASTELBLANCO A.
President
96
&
COMMERCIAL
THE
(332)
CHRONICLE
FINANCIAL
Thursday, January 19, 1950
and
BUSINESS BUZZ
his
The
A
from the Nation'*
gl
M
eral
Senator
Government
balancing it if in
economy
should
a
expanded,
cdifrtr#£v -the
Keep
sharp
a
the final
slick trick
on
eye
veto
pulled by the conservative Rules
have
to speak. Keep an
because the final
it,
upon
eye
lies
what
and
outcome
much
legislative
the
of
pattern
for the 1950 session of Congress.
Committee
Rules
The
for
has
been not only the
traffic policemen "for the House's
years
many
legislative business, but has been
the group ordained
to take the
rap for throttling all the crackpot
schemes everybody proposed and
was afraid to vote against—when
they came to a vote.
The
Committee bailed out all
once
Rules
the little children by
simply fail¬
get it to a vote at all.
80th
the
Since
If this should be the
was
Mr. Truman saw it,
schemes and
the
House Rules Committee was the
wisdom,
as
his
many
of Mr. Tru¬
man's schemes were at that time
throttled, the Administration de¬
termined a year ago to perform a
prompt neutralizing operation on
vehicle by which most
committee.
that
1949.
request,
the "21-day" rule was adopted.
Under this new rule, if a legis¬
committee fails to
lative
get a
Committee
for its bill, then the Chairman
rule from the Rules
Legislative Committee
concerned can within 21 days
force House consideration and a
vote.
So the Rules Committee
was neutralized.
the
of
Mr.
in
small part attributed to that
What
legislative
White
successes
Deprived of its power
to
word
the
it
the
fight,
pass
put
then
up
(in which
up
forces
put
tle for
proposition. Al¬
though Chairman Sabath of the
Rules Committee was assuring the
White House of the prospects of
favorable action, the Committee
suddenly voted to
restore the
Rules Committee's excised viril¬
ity, recreating its veto power to
what it was prior to Jan. 3, 1949.
9 to 2 vote,
Democratic member
Installed
last year by
Speaker
Rayburn to help give the Truman
brand
of enlightenment
to the
Rules Committee, voting to repair
the operation of a year ago.
done by a
a
Administration
that
in
the
moving
toward
peaceful session, toward
in which
will talk
it
a
year
a
Fair Deal
hut make only such gestures as
dise before
the voters.
'They just
If the Administration does
the ending
of the 21-day rule,
the
means
White
is
House
would
messages
action
its
on
indicate,
vast
to
program
get
this
other
the
On
ministration fights against
the
would
mean
ministration
cians is
in
ending
and loses, that
clearly that the Ad¬
rule
21-day
losing, its grip
was
on
preliminary
professional politi¬
best
The
of
if the White
that
its
weight
the 21-day
House
behind
rule, it
re¬
can
It originally was adopted
1949
vention,
the
White
of
rule
the 21-day
restoration
and
suggests
nose-count
a
ending
inter¬
House
Committee veto
the
of
Rules
by
power
a ma¬
jority of 50.
An
irony of the fight is that the
Committee may not get its
Rules
until after the
the House floor
under the 21-day rule.
restored
power
FEPC bill gets to
the
worked
out
compromise
bill
to provide a reduc¬
in
the
cost
tion
Federal
the
of
55%
proposition which might other¬
wise make great progress, such
veteran's bonus, won't
beyond
get
the
preliminary
stages this year.
The next
thing to keep an eye
is what kind of a fight, if
any, the Administration makes to
retain the 21-day rule.
Members
ci the House speculated that it
upon
was
with
strange that such a savvy guy
scouts as Speaker
Rayburn has. was "surprised" by
this
so
many
apparently sudden action of
Jhe Rules Committee to restore its
hand, FDIC still
substantial annual incre¬
a
ment
other
the
added
built up to
its
FDIC's
around
funds
resources.
of assessment
to
a
year.
It is added to
J3o is the 40%
income,
year,
investments
million
$25
This is untouched.
a
capital
meet future losses. The
from
income
runs
to
or some
suggesting
of
resources
a
not
$45
net
less
than $70 million per year.
Senator
Maybank
others,
and
inclined to feel that
the circumstances justify a greater
however,
are
reduction in
sessments.
deposit insurance as¬
It,-is understood that
they will seek to carry an amend¬
ment increasing this percentage.
.These
will
Senators
tary Report is likely to be a single
shot
dud.
The
Illinois
welfare
under
get
a
present
reduction
to
The
out
the
in
to
banks
fact
approaching
60%.
compromise
bill,
worked
compromise formula pre¬
serves
rate
of
to
FDIC
1/12 of
the
assessment
1% uuchanged.
Hence, if for any reason
year
substantial
losses
in
any
should
develop, FDIC avoids the neces¬
sity of having to ask for a boost
hi the assessment rate, as it
would
have
had
to
and
Senator
virtually
adopted the Federal Reserve line
the Sys¬
credit, in¬
increased power for
for
tem
over
money
and
cluding the reserve requirements
of all
have
done
Investments—Second
Edition-
Dowrie and Douglas
R.
Fuller—John Wiley & Sons,
Inc., 440
Fourth Avenue,
New
York 16, N. Y.—Cloth—$5.
George
W.
banks, state-chartered non-
Congress does not regard mone¬
tary powers as a pressing problem
in 1950, when time is so scarce,
and is most likely to duck legisla¬
tion
Breen,
cloth—$3.00.
New
members, which accept deposits.
on
this subject. Even
the in¬
tervention of the President, in his
Attempt at International¬
Conferences
Trade
A
International
A—The
ism,
and
the
Charter:
and Means—Ed¬
Wilgress—Thesis No.
62, University of Gepeva, Geneva,
Study
ward
of
Ends
Dana
Switzerland—paper.
Economic Report message, on
be¬
half of greater
Reserve Board
powers, is unlikely under present
Bureau of Government,
circumstances to change this out¬
of
look for inaction.
—paper—75b.
backed
be
by bankers and presumably also
by the Federal Reserve Board,
which also opposes a minor facet
of the proposed legislation.
The
Joint
Mone¬
subcommittee
economist
— George
Ed¬
Ralph
Burnham
Thompson, and Harry West—Har¬
per
&
Brothers, 49
East 33rd
Street, New York 16,
N. Y.—
Selling
Effective
ward
$
Senator Paul H. Douglas's
Senator Douglas also adopted
the idea of compensatory fiscal
policy enunciated at
ber
hearing where
a
Novem¬
of the
some
economists of
the country were called to tes¬
tify. They phrased the idea that
the government should tax more
and spend less in boom times,
best
Under
fs whether the House goes along
happens, it means
nice billion-dollar
On
has
$3.50.
statutory reduc¬
tions in the assessment rate.
Economic
shrink.
addition
Without
would
circumstances
year
credit under this formula would
million
opposed.
for
These proposed
of course, then the
reason,
any
Republicans and 25 Democrats
111
plus
60% of this.
under bills considered last year.
tj?
FDIC's
a
Insured
losses should rise
If FDIC
vote of 225 Demo¬
49 Republicans, with
by
Authoritarianism and the Indi*
vidual—Harold Metz and C. A. H.
tion, Washington 6, D. C.—cloth—
liability.
.
members would get
hand,, if the Ad¬
banks,
a
a
Thomson—The Brookings Institu¬
assessment
year.
assessment
of
doing
see
determined that the mild opening
Insurance
damage
on
another—I didn't
one
down and
it
the floor, yell, and write
anyone sitting
good day's work!"
around, throw paper
more
Deposit
Rules Committee and
run
notes to
fight
insured
as, say, a
(This column is intended to re¬
sham bat¬
a
must
he ratified by a majority of the
House. So the first thing to note
a
report, his
the
will
Before this power to veto ac¬
tion is in fact restored, it
this
of
21-day rule, then it
fact
means
is
FEPC
If
that
to
Administration
only
up
the
crats
many
the fu¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own views.)
vigor¬
a
thing
the
the
If
Friday of last week the
Rules Committee met to "clear"
for House action Mr.
Truman's
On
that
something for
the second thing to
So this is
watcli.
keep it.
ago.
present situation,
easily.
might never otherwise have seen
the light of day.
the
not
was
President's,
against the principle of trying to
get an annually balanced Budget,
already
doesn't
House
of
undoes
to the
was
voice
be ap¬
writing and
publication), OR, if the White
ail
with the
a
said,
Douglas
He also added in his
the
between
throws
even
If
delay calling
might
proved
tention
was
to
rule change
new
legislation, the Rules
This
which he
recommendation
related
Majority Leader John
McCormack
Committee let some stuff out that
with
Senator
Yet,
this
a
pass
doesn't
House
judgment
Federal
advocate
an
State,
better test of
a
however,' shortly.
this,
no
to bottle up
was
balanced Budget.
but
Congress.
rule.
have
he
ture.
There will be
Truman achieved in 1949 were
new
to
Welfare
be
could
that
to be
ashamed
the
and
said
the
said could be achieved within
legislation.
Ray burn's
Speaker
of
He
of
that,
that
will keep the brand of merchan¬
This was done, on Jan. 3,
At
not
little help in throttling the crazier
stubborn about understanding the
of
like
would
all
should
White House perhaps
the
that
or
replied
Budget
it either means that the
Speaker, a 95% Truman supporter,
is getting a little sick of the game,
after
theory of
believed
he
balanced.
then
case,
Douglas
course,
maybe
ous
Congress
sur¬
before he could do any¬
prised,
case
ing to grant a special rule making
1+ possible to take up the legis¬
lation out ci' order, or hence to
Mr.
not
being
at
bad
too
the
to
as
compensatory fiscal policy.
thing to stop the move.
under¬
neath it will furnish the tip-off to
felt
might
Speaker
the
maybe
Committe right under Harry Tru¬
man's nose, so
They don't pretend
power.
know, but they suspicion that
to
at¬
not
few years the
did not dis-
Senator
practical nature of his
outcome of that quick,
the
if
asked
was
tempt to balance the Budget, but
only make an "approach toward"
JL UU/
jfJl twits
Capital
adopted whole hog
position taken by the President in
his Budget message, that the Fed-'
Washington...
Behind-the-Scene Interpretation*
of
staff
subcommittee
other PH D's
university
tax less and spend
pressions
pages
This
—
in de¬
more
phrased in
a
dozen
of choice big words.
idea
the
Illinois
Senator
State Aid and Local
Selected
Michigan
Michigan,
Twentieth
Ann
Finance
Counties
—
University
Arbor, Midi,
Century
Money
—»
Roger
Amory — Rockland-Atlas
National Bank of Boston, 30 Con¬
Street, Boston 6,
Paper—Copies available
gress
Mass.—
on
re*
quest to the bank.
JoftfH&i
Dickson
Opens
TEX. —John B.
Dickson will engage in a securi¬
ties business from offices at 108
LONGVIEW,
Hughes Street.
by Senator Burnet R. May-
bank,
withheld
who
action
last
at the FDIC's request, pro¬
year
vides
ment
that
the
of
FDIC's
Teletype—NY 1-971
IIAiiover 2-0050
assess¬
income, 60% shall be cred¬
Riverside Cement
Firm Trading Markets
ited to member banks after FDIC's
operating expenses have been de¬
ducted plus current losses, if any,
plus
Under
FDIC
lion
present
collects
in
lieved
would
about
provide
for
Oregon Portland Cement
Coplay Cement Mfg.
All Issues
conditions
about
S120
assessments.
that
Spokane Portland Cement
FOREIGN SECURITIES
for losses.
a reserve
It
S6
all
is
mil¬
be¬
Giant Portland Cement
r ARL MARKS & CP- INC.
million
the
FOREIGN SECURITIES
de¬
LERNER & CO.
SPECIALISTS
ductible items. This would leave
S114 million at the end of each
year
which
against
could
each year's
be
credited
succeeding
Cement Stocks:
Investment
50 Broad Street
New York 4, N. Y.
AFFILIATE: CARL MARKS & CO, Inc.
CHICAGO
.
10 Posl Office
Securities
Square, Boston 9, Ma*a.
Telephone HUhbard 2-199*
Teletype BS 61
@FedFRASER