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BUS. ADM.'
LISRARY
JAN 2 3 1948
ANNUAL REVIEW NUMBER
in 2 Sections
-
Section 1
Reg. TJ. S. Pat. Office
Volume
167
New
Number 4666
Risks in Anti-Inflation
IWhat; About Interest Rates?
Executive Vice-President, The First Boston Corporation
Mr. Lanston, assuming interest rates on marketable U. S. securities
are basic,
presents as major considerations on future trend: (1)
government's policy with regard to Treasury interest rates; (2)
Treasury's policy on debt retirement; (3) tax philosophy end tax
policies of government; and (4) levels and trend of business and
t
i
?
.
i
resultant
j
i
It
which
was*
were
funds.
fident of
a
time during
£
of incon-;;
Reserve
you a
1"
indi¬
cations
of
in
est
a
m
they mark the
o f
a
long - term
trend?
"If the litter
is
how¬
true,
how far
the rise
ever,
may
be expected to
A. G. Lanston
go?"
If
speak
we
of interest rates, all lumped to¬
gether in one basket, I am in¬
follows:
as
which has occurred is
and
As
natural,
a
expected
event.
Election
The President, last year
*An address
the
Finance
reasonably
a
33)
on page
ishness of the
the
Conference
of
the
time.
not
two and in other ways made it clear
or
has selected
now
a
different
course.
He would
of the control and other devices which not
Franklin Roosevelt found it wise to undertake in peace¬
While the
quite
American
Management Associa¬
tion, New York City, Jan. 16, 1948.
apparently inclined at least to
day, has in his messages to Congress during
past month
so
course
of the
one
gather
that
all
b
a
"opposition" in Congress is
clear, it has become increasingly evident of late
lines of business.
of
b y
of vari¬
means
restrictions
o
t her'
in
ures
y
thing "
L. Scudder Mott
do
much
is
the tabular record of the
all
be
right. The inherent risks appear to
be disregarded. Any specific pro¬
gram undertaken about inflation
must
companion feature of the
ANNUAL REVIEW NUMBER
nor
just enough
too little.
not too
—c-
Obviously to
*
and
high
one
can
rely
only with
upon
very
substantial hesitation and dis¬
it for consistent, forthright and constructive
i
7
the
New
York
the
on
other
peril
of
deflation.
(Continued
17)
on page
deflation, to any marked de¬
gree, means unemployment and
financial distress.
Another
question that is often
(Continued on page 57)
;
State and
Municipal
Lithographing Co.
R. H. Johnson & Co.
Established
★
on
Stock
Exchange during 1947,
problem. But to do too much, also a table indicating the
or
to take wrong action, might course of
Treasury bond is¬
prematurely pinch off the "boom" sues
during the past year.
(that otherwise might last in rea¬
This data is incorporated in
sonably healthy fashion for some
the 24-page SECOND SEC¬
years and work out a relatively
mild solution for itself) bringing TION of today's issue.
little would not solve the
too
Havana
—
every
bond issue in
occurred
prices, by
stock and
which dealings
low
of
months,
And
that
trust
t
published
issue of J an; 29.)
our
A
-and
i 11
received
pro¬
meas¬
w
(A number
were
issue. These will be
or
posed
eve r
statements
too late for inclusion in this
—
controls;
ous
its AN¬
NUMBER,
the CHRONICLE presents in
this issue, starting on page IB,
the opinions of many of the
nation's leading industrialists
and financiers regarding the
outlook for business during
the present year. As in pre¬
vious years, the contributors
to this significant survey in¬
clude the heads of practically
every major company in all
REVIEW
ears
k
c
As is customary in
NUAL
infla-;
pin
tion's
do
even
by Mr. Lanston at
to
to "back away" from the more extreme New Deal-
appear
reinstate many
is
and
is necessary is
are
years
higher levels,
(Continued
would
always Uncertain years. They are
likely to be particularly so when the political contests appear
close, or, at all events, when the outcome is difficult for the
politicians to forecast or foresee. It is in such years that
campaign managers go to all sorts of Unpredictable extremes.
The traditional difficulties of this sort have been multiplied
several fold during the past decade by the increasing degree
in which the national government interferes with and under¬
takes to manage or guide the private economy.
.
enough that he
u
We See It
that
Whether this marks the first stage
of
a
long-term
trend
toward
or
1
many
ts
m en
The Year Ahead
The
general increase in interest rates
i
!
*
upon.
writings
do
beginning
settled
From
phe¬
or
<7
p ronourice-
-
nomena
desirable
<?>
The Year
f
.
EDITORIAL
ates
r
porary
answer
The questions
answer.
j^fter the Turn of
,
i
Although several times since the end of the1 war it seems to
have been difficult for the scaremongers and prophets of doom—as
well as many more serious-minded—to decide whether deflation or
inflation was the prospective peril, the latter now seems generally
inter-
merely t^e
clined to
competent
Copy
FINANCE SPEAKS
•••
t
"Are$
present
rise
business career when I felt less cOn>
my
being able to give
were:
,
Federal
Accuses
.
suggested that I endeavor to answer certain questions
presented to me. I should admit, in the beginning, that I
| cannot recall
i
of
need
Analyst, contending inherent risks of anti-inflation measures are
being disregarded, points out dangers of. enforcing artificial deflation.
Holds present - economic maladjustments are Susceptible to
.orderly correction without specific governmental interference, and
notes potential purchasing power is already declining;. Says problera i* not entirely a dollar matter and criticizes efforts to return to.
-price And other anti-inflationary controls. Warns disruptive controls and restrictions may .intensify existing maladjustments and
' '
result in bringing on hard times.
v
-,
sistancy and concludes, though short-term end long-term Treasury '
rates may increase in near future, a renewed decline is not unlikely.;:
|
t
"
a
■USHBSud
By L. SCUDDER MOTT
By AUBREY G. LANSTON*
[
Price, $1.50
York, N. Y., Thursday, January 22, 1948
STATE
1927
AND
MUNICIPAL
;
Bonds
BONDS
-
INVESTMENT SECURITIES
Bond Department
Hirsch & Co.
64 Wall Street, New York 5
Member* New York Stock Exchange
and ether Exchanges
BOSTON
85 Broad
St., New York 4, N. Y.
lAnover 2-0600
Ohleage
T
■:
Troy
Albany
Baltimore
Teletype NT 1-210
Cleveland
PHILADELPHIA
Buffalo
Harrisburg
Wilkes-Barre
Geneva (Representative)
":
Syracuse
OF NEW YORK
Scranton
Bond Dept. Teletype:
Washington, D. C.
Bankers to the Government
■
~
*Air
Underwriters and
Emery Air Freight Corp.
26, B'ishopsgate.
London, E. C.
said
Branches In India, Burma, Ceylon, Kenya
Colony and Aden and Zanzibar
Reserve
Fund.—.
£4,000,000
—£2,000,000
£2,300,000
Bank
conducts
every
description
Established
banking and exchange business
Trusteeships and Executorships
also undertaken
1899
'Chicago
Columbus
on
.
Denver
Buffalo
:
OF THE CITY OF NEW YORK
Northwest
Brokerage
Service
request
Members New York Stock
Toledo
NATIONAL BANK
Utilities
Analysis
Reynolds & Co.
CLEVELAND
New York
Cincinnati
Toronto
and Dealers
(Incorporated)
of
HAnover 2-0980
upon
request
Common
OTIS & CO.
*
The
Bond
Y.
Teletype NY 1-395
Montreal
.
for Banks, Brokers
*Prospectus
Paid-Up Capital
WILLIAM ST., N.
New York
CHASE
THE
•
York Security Dealers Assn.
Common
Corporate Securities
Subscribed Capital-.
52
* 7
Members
■
New
^Georgia Hardwood Lumber Co.
Distributors of Municipal
Officei
Common
Products, Inc. Com. & "A"
Detroit Harvester Co. Coni.
in
Kenya Colony and Uganda
Head
NY 1-708
*ABC Vending Corp.
NATIONAL BANE
of INDIA. LIMITED
*■' '*
Bell
Springfield
London
Woonsocket
THE NATIONAL CITY BANK BART SMITH & CO.
120 Broadway, New
Exchange
York 5, N. Y.
Telephone: REctor 2-86C0
Bell Teletype:
NY 1-635
Hardy & Co.
Members New York Stock Exchange
Members New York Curb Exchange
30 Broad St.
Tel. DIgby 4-7800
New York 4
Tele. NY 1-733
IRA HAUPT A CO.
Members
and
111
New
other
REctor 2-3100
Boston
York Stock Exchange
Principal Exchangee
Broadway* N. Y. 6
Teletype NY 1-270*
Telephone: Enterprise 1820
2
(302)
(.
THE COMMERCIAL
—~~—
,
——~
The
Portland Elec. Power 6/50
By
Common
—
Bought—Sold—Quoted
Lamont
natural
(4)
resources;
Corporation
Between
States
the
1879
increased
price level.
3/6s, 1956
it
i
n
volved in
a
H.
;
is
-
of
process
that
*An
address
as
the
those
influ¬
will be stronger and
which
'
,
York Stock Exchange
ducible
rate
Slichter
1879 and
wealth
1939,
per
employed
of
increased
almost 2%
a
of
growth
The
in
rate
the
Aetna Standard Engineering
American Time Corp.
outlook
Manufacturing
for
maximum
a
—
end?
Electric Bd. & Share Stubs
country
It is evident
General Aniline & Film "A"
and
the
prices
Hood Chemical
under
and
the
wages
Newmarket Manufacturing
Northern New England
go,
more
Kirby Lumber
serious
will
be
the
-setback
and
as
their
that the higher
International Detrola
population
about
1990.
branch
our
offices
;
& Pfd.•;:•IX
-;J,X-'
Sold
t-
Quoted
Jlilcliclkfompnijl
"120
age
Broadway, N. Y. 5
WOrth 2-4230
V,
"••X
Bell
.t.
„
<*
„•
,
Teletype NY 1-1227
Central States
■'
as
only about 7%
Nevertheless, the tendency
now.-
I
of
or; more
—
Elec.fVa.)
Common
with
(Continued
on
page
Detroit Int'l Bridge
41)
I)
Aspinook Corp.
Hoving Corp.;
Common,
.
'I
,
•;
1
"
"r
.i
-Vl
Frank C. Masterson & Co.
;
Established
Members New
64
WALL ST.
•
-
York
1923
Curb Exchange
NEW YORK
.
Teletype NY 1-1140
6
HAnover 2-9,470
*
Curb and Unlisted
leaders,
The farmers
in and
out
of
Congress, have asked for floors
prices
period
of
that
Warner & Swasey
but
people
gainfully
weekly
employed and
are
higher than
Profits of corpora¬
wages
before.
ever-
opposing
ceilings.. Only if the constant in¬
crease in prices of farm products
tions
could bring about
output would such
about
are
an
increase in
are
income
and.
1127
and
that
prosperity, however, has brought
a
drastic shrinkage in the
the
bring about
increase in
an
supply
creased
leads
of commodities, in¬
purchasing power merely
increased
to
workers
among
and
'
*An address
fore
An ANNUAL REVIEW of
the
by Dr. Nadler be¬
Management
American
Association, New York City, Jan.
Business and the Security Markets
15, 1948.
I
process
brought
inilation
has
great
prosperity to the
country. National income during
1947 is estimated at around
$200
billion. There
;
of
are
was
Members
about 60 million
New
Chicago
39
York
Curb
Stock
Exchange
Exchange
Broadway
New York 6
Digby 4-3122
Teletype NY 1-1610
during 1923-25. The decline
dollar has caused
in
The
it
that
the
Mgr.
sell their products, the
purchasing power of the dollar
today is about one-third of what
in
in
Mgr.
Asst.
farmers
competition
and
KANE,
Joseph McManus & Co.
tified.
later it is bound to end
disaster,
MICHAEL HEANEY,
WALTER
at record levels and farm
is at a new peak.
This
a
lopg run labor does not benefit
spite of the from the increase in money wages?
ravages that inflation has already Industry raised prices and profits
made on the savings of the peo¬ mounted. At the same
time, the
ple, no economic group is willing break-event point is constantly
to
submerge its own immediate rising and business is becoming
interests for the benefit of the more risky.
>
in
Members N. Y. Security Dealers Assn.
37 Wall St., N. Y. 5
Hanover 2-4850
or
in¬
cannot
continue for¬
ever
sooner
rea¬
Securities
I, XVXX,>'.-/v.:Xi Iv.l;\v -I■'
—.
whole.
a
do not
be
flation
Dr. Marcus Nadler
Merchants Distilling
Telecoin Corp.
the
tion
be
purchasing
in
the value of
they
bonds
power
life
or
of
the
Du Mont
great contrac*-
a
our
savings
policies,
and thereby
insurance
pensions,
also undermined the future eco¬
nomic security of
many groups of
people, I The white collar people,
the professional groups and those
living
on
pensions
fixed
or
in¬
comes
have seen their standards
living sharply reduced. XXXi
of
What
XX-
is
worse,. many ' serious
(Continued
on
page
65)
Tr oster, Currie & Summers
-
Members
New York Security
';'
Dealers Ass'n
Teletype—NY 1 -376-377-378
•
I
/XX
'
y,.
FORECAST FOR 1948
We Maintain Active Markets in U. S. FUNDS for
our
Research Department.
copies available
Abitibi
Bulolo
Minn.
Placer
Established 1856
Pow. &
Paper
Gold
& Ont.
United
Kingdom 4%
-
British
STREET, NEW YORK 4, N. Y.
•
Securities
Geneva, Switzerland
Telephone BArclay 7-0100
$2.40 Conv.
;>,
v
®0c
i
'
X»XX1.J
•
-
•
x.
-
.
'
Company
Preferred
Twin Coach Company
;':I-VI-.
$1.25 Conv. Preferred
90c Conv. Preferred
;
/
;
v
:
*Universal Winding Company
..-v..-7/
^ -XXx
Conv.
■
•'"'T
;*
Preferred
Solar Aircraft
•'•s- r-i
x■'>£:; BOUGHT—SOLD—QVOTED
..."
*Prospectus
on
& Common
request
J-G-White & Company
Goodbody & Co.
Detroit
'
-
Department
INCORPORATED
Exchange and Other Principal Exchanges
NEW YORK
;X'.
federal
V •••'. ',
115 BROADWAY
A
:
x *
Members N. Y. Stock
'
■*
water and gas
Scophony, Ltd.
H. Hentz & Co.
leading Stock and Commodity
Exchanges
V*.'
:
Gaumont-British
Paper
Canadian Securities
Members New York Stock Exchange
:*'i
*
Development
Raytheon Manufacturing Co^
atlanta
gas Light
'90
Rhodesian Selection
Department
Pittsburgh
years
realize that, since wage increases
will
lizes
U. S. Finishing com. & pfd.
Taca Airways
Chicago
65
compared
Although
United Artists Theatre
United Piece Dye Works
60 BEAVER
be
is
everyone
the
5 ^
dif¬
more
ficult
Title Guaranty & Trust
and other
to
Members Baltimore Stock Exchange X.
increase than to drop. It is tru(
that the age of starting work will
probably, rise and that by 199/
about 13%. of the population wil
the
States
Bought
proportion
policy be jus¬ purchasing power of the dollar.
Organized labor has asked At the retail food price level the
for higher wages without being
purchasing power of the dollar to¬
willing to make efforts to increase day is less than 50% of the 1923productivity. Don't labor leaders 25 average. At the level at which
•the
Time, Inc.
number of
wires
fairly
readjustment.
Punta Alegre Sugar
Taylor Wharton Iron & Steel
limited
NY 1-1557
Elk Horn Coal
of the United States is in the midst of a serious inflation, with prices
Under these circumstances, the prime question involved in the
short-range
business is: How far will the
inflationary forces go and when will they
:X come
to
an<s>
Clyde Porcelain Steel
has just been completed by
<
La.-Birmingham, Ala.
;;XXX Com.
racing wages.
Boston & Maine R.R.
A
Co!
Exchange
The economy
Artcraft Manufacturing
Baltimore Porcelain Steel
a
'
•
years
Although holding serious maladjustments have crept into our economy which may lay foundation for
serious depression, Dr. Nadler points out forces exist for continued
prosperity in 1948. Warns, how¬
ever, readjustment may come before year ends, and if spiral of inflation
continues, it may be serious.
Concludes the earlier readjustment comes the less painful it will
be, and urges strong fight against
inflationary forces as only hope of maintaining private enterprise throughout world.
Actual "IWaTkels Qu
and
Direct
This is a con¬
servative -assumption because the
proportion of the population ir
the labor force is more likely to
year—about
United
remained
Professor of Finance, New York
University
&
4
By MARCUS NADLER*
Tel. REctor 2-7815
Pacific Telecoin
X' • 'j X'
L
York Stock
HAnover 2-0700
iwilif.ndt''change
gain"
at
has
during the last 50
Short-Range Economic Outlook
BROADWAY, NEW YORK 5
0."
constant
and J assume that this
repror
person
The
reach
York Curb Exchange
Bell Teletypes—NY 1-1126
workforce
Management generally believed to be slowing
Association, New York City, Jan. up.
Population
is
expected '.to
McpONNELL&fO.
.
of
before the American
15, 1948.
'
which
and
Between
fully
Prof.
^
influences I
of them will be weaker in the
fu-t
ture than in the past.
the
estimating
by
'••>/}' :?•; '
St., New York 4, N. Y.
New Orleans,
which 1990 Of 165.9 millioh—-ohly 15.7%
growth in the past will above July 1, 1947.
vX^''!: JX
be substantially the same in the
The proportion of people in the
1.9%.
Bought—Sold—Quoted
the
It
high
as
,
25 Broad
,
possi¬
even
rate of growth will be
it has been in the past.
The
large.
very
Slichter
a
whether
ences
growth in
ble
.
'/i:: ' "
Steiner. Rouse &
wealth outside of households in the'United
second step consists of last x several
years,
represents a
detailed analysis of the permanent gain; though not a con¬
determinants of the growth of in+
tinuing trend.. 'This assumption
dustry for -the purpose of judging gives an estimated population in
future
capital will be
Members
Bought—Sold—Quoted
•••
govern its
-
the amount of
Prof. S.
v:'
7
'
The
the
I,f-
1-1548
Longchamps, Inc.
ture.
disastrous war,
31 Nassau Street, New York 5
Telephone COrtlandt 7-4070
are
unless
becomes
Curb Exchange
NY
reproducible
hostile to making
tion of capital
or
■?.'
a powerful
and aggressive labor
Concludes demand for capital will be
of1
the accumula¬
J
Vanderhoef & Robinson
Bates
(5)
nearly eight-fold. This figure eliminates the effect of the change in
The next 60 years will probably not see an
eight-fold increase in the
cies which
Franklin Process
120
discovery;
Louisiana Securities
Members New
1939
and
very
New
:
"
;'
long-run growth of capital in the have adjusted the Census forecast
theless, unless United States has two principal upward in slight measure on the
the country steps.
The first step consists ill assumption that the
unexpectedly
pursues
poli¬ projecting past trends into the fuf rapid rise,in population
during the
Class "A"
New
Alabama &
University
capital. Never-
-
Savoy Plaza
.'V Bell System Teletype
Harvard
change; (2) labor saving inventions; (3) inflation¬
methods of financing, and (4) upward pressure on prices.
amount
Savoy Plaza
York
SLICHTER*
Professor,
decline in technological
ary
Teletype NY 1-583
New
Thursday, January 22, 1948
York 5
Broadway, New
Members
SUMNER H.
University
movement, and (6) shift in demand for goods and services.
well sustained because of:
(1) rapid technological
New York Hanseatic
120
CHRONICLE
Asserting future rate of U. S. capital growth is likely to be as high as in
past, Dr. Slichter gives
estimate of growth of reproducible wealth in next half
century^ Lists as limits to capital growth:
(1) drop in population growth; (2) stiff progressive income taxes;. (3) slower
development of
When Issued
BArclay 7-5660
FINANCIAL
Long-Range Demand (or Capital
II-
Portland Genl. Elec. Co.
&
6, N. Y.
Teletype NY 1-672
37 WALL STREET
NEW YORK 5
ESTABLISHED 1890
Tel. HAnover 2-9300
Tele. NY 1-1815
Reynolds & Co.
Members
120
New York Stock Exchange
Broadway, New York 5, N. Y.
Telephone:
Bell
REctor 2-8600
Teletype:
NY
1-635
'
•
Volume
167
Number
4666
THE COMMERCIAL
I N DEX
Articles
.What About.
The
and. News
111 Business
_____—___Cover
Long-Range Demand for Capital—Sumner H. Slichter__
2
^
Sources of Funds for Business Expansion—J.
H/Riddle.-Jla
Your Stockholders—And You—E. C.
Potter; JrI____
Looking Into the Crystal Ball—Jacques Coe
.
_
_
-11
_
Capital
r_'„
:
> y
v
.
Francis II. Brownell Urges a Free Gold
Market
;
Anti-Inflation Move
J
__
r
12
_'L .l.
—
^2
.
^2 j J_
_
Finland Joins World Fund and Bank______
63
SPEAKS AFTER THE TURN
OF THE YEAR
today's issue will be found
York
e
issue in which dealings occurred
on
the New
Exchange during 1947, also a table
indicating the
Treasury bond issues during the past year.
or
billion
to
other
they owned, bor¬
rowing $3 billion from the banks
increasing their own outstand¬
ing securities (stocks and bonds)
in
the amount
increase
..........
of $3
to $4 billion.
Einzig—U. S. Industries in Britain
9
:
94
Bargeron*
13
...
or
residential
other
investors
did
result
not
in
increase in bank holdings. Bank
an
holdings
(commercial
Reserve
and
Fed¬
banks)
of Govern¬
ment securities declined over $6V2
billion
during the
*
2
1
______
16
_
95
Security Offerings.
1
94
8
16
Securities Salesman's Corner..—
8
Securities Now in Registration
-__2
92
__^2._
The State of Trade and
Industry.
5
(Walter Whyte Says)
tal
in
1948
little
a
perhaps
billion.
than
less
around
$22
in
assumption that business ac¬
tivity continues at around present
A
that commodity prices
rise very much further.
Twice
FINANCIAL
Rfeg.
U.
S.
Weekly
runaway
would,
price movement
substantial
business
-
the
Publlshei
&
D.* RIGGS,
Business
$38.00
per
per
year.
year..
of
change
course,
or
'
of
—
extra.)
be
made
in
postage extra.)
account of the fluctuations in
exchange, remittances for for¬
New
York
or
slightly less
sources,
lion
tions
Thursday,
r
January
22,
to
ment
secure
market.
from
In
funds.
tial
\*An address by Mr. Riddle be¬
the
the
Finance
American
1948
in
Conference
Warren Brothers "C"
Susquehanna Mills
the
invest¬
addition,
the
and
to
$6 billion
or
DUNNESCO.
Members N. Y.
Security Dealers Assn.
25 Broad
WHitehall
finance
of
Management Asso¬
building- construction.
makes
This
total of $10 or $12 billion
a
of corporate and
municipal securi¬
ties and residential construction
in
addition
securities
to
which
corporations.
amount
of
the
be sold
1947.
by
Common
Thus, the aggregate
securities
and
market
slightly
in
1948
larger
the
BOUGHT
than
(Because of statistical diffi¬
FIRST COLONY
estimates
of
international
the
magnitude
of
CORPORATION
52 Wall St.
il¬
the
Central Public
the country's savings
adequate to absorb this
much
bond
debated*question. Because
firming of money rates and
yields in recent months the
conclusion is being drawn by some
that the volume of
savings is in¬
to
meet
the
demands
developments should not
be given undue weight in
apprais
the.
situation, however, be¬
they resulted in part from
cause
(Continued
on
state
and
city
news,
Other ' Offices:
;
Chicago
i
bank
etc.).
135
-
.
S.
*
La
c/o' Edwards
Salle
St.,
.
Copyright 1948 by William
f
Company
Reentered
ary
clearings,
HI., (Telephone:
State 0633);
Gardens, London, E. C., Eng¬
& Smith. '
3,
Drapers'
land,
news,
as
25, 1942r
N.
Y.,
York,
B.
Dana
second-class matter
at :the
under
post
the
office
Act
CERTIFICATES
We
Southwest Gas
interested in
are
United Public
Possessions.
In
United
Territories
Pan-American
Union,
^and
$35.00
Members New York Stock
Exchange
Members New York Curb
Exchange
50
Broadway WHitehall
Bell
System Teletype NY
New
mone
.
4,
N.
4-8120
1-1919
Y.
offerings of
Prudence Co.
-
U.
S.
of
year;
in
15 Broad
New
York
Stock
Corp.
Spencer Trask & Co.
New
25 Broad
Tel.:
Exchange
York
Stock Exchange
Street, New York 4
HAnover
2-4300
^
St., N.Y. 5
Bell
Teletype
WHitehall 4-6330
NY
1-2033
B. V. D.
Analysis available
Members
Members
York
page 69)
PREFERRED STOCKS
:
New
Members
per
Lawyers Mortgage Co. f
Newburger, Loeb & Co.
States,
Utility (Common)
Edward A. Purcell & Co.
High. Grade Public Utility and Industrial
Lawyers Title & Guar. Co."
March
Subscription Rates
Subscriptions
Producing
Commonwealth Gas
,
N. Y. Title & Mtge. Co.
I, 1879.
v
Bond & Mtge. Guar. Co.
Febru¬
at
of
Utility 5y%s
Southwest Natural Gas
volume of securities is, of course,
of the
5, N. Y.
Tele. NY 1-2425
are
Savings Be Adequate?
be
New York
Tel. IIA 2-8080
Whether
will
1948.
SOLD —-QUOTED
in
I have not attempted
to
include unincorporated businesses
Neither have I attempted to in¬
ing
—
may
culties
a
'
mort¬
likely to be offered to
only
Elk Horn Coal
Government
may
—
corporation
1-956
of residen¬
the deliberate efforts of the
15,
St., New York 4, N. Y.
3-0272—Teletype NY
TITLE COMPANY
Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue
market quotation
records,
1-714
Lea Fabrics
banks
These
ciation, New York City, Jan.
Manager
securities
$5
some
,
•
and
cautious
more
will
leave
something ir
neighborhood of $3 to $4 bil¬
of new money for corpora¬
adequate
than in 1947.
fore
Y.
Hydraulic Press Mfg.
lending policies;
Will
$9 billion to be raised
other
Teletype N.
Punta Alegre
Sugar
This
the
this
Monthly,-
eign subscriptions and advertisements
must
^
$8
from
1908
Broadway
Bell System
problem.)
a
depreciation charges, leaving
some
postage
Record
(Foreign
and
year.-
Record—Monthly,'
(Foreign
Earnings
per
rate
Quotation
year.
Monthly
$25.00
WILLIAM DANA SEIBERT, President
WILLIAM
and
per
Note—On
REctpr 2-9570: to 9576
Canada,
Other Publications
$25.00
Place, New York 8, N. Y.
HERBERT D. SEIBERT, Editor
of
Countries, $42.00
Bank
Office
•
Park
firmer
their
depression
program.
Some $14 or
$15 billion of these expenditures
will probably be financed by cor¬
porations out of retained earnings
page 5.
Dominion
WILLIAM B. DANA COMPANY, Publishers
25
on
Other
and
CHRONICLE
Patent
be
much
lustrate
spending
COMMERCIAL
will
rough and rounded estimates,
sufficiently comprehensive to
levels and
not
Established
Members N. Y.
Security Dealers Assn.
REctor 2-4500-—120
will
lending through private channels.
The figures
given, however, while
on
the
do
J.K.Rice,Jr.&Co»
although
purposes,
be
clude
$23
or
This estimate is based
96
•"See article by John E. Loshar
Published
controls
will
be
It now looks as though business
corporations will spend for plant
and equipment and working capi¬
95
Washington and You
The
capital
rates
investment
Equipment
Expenditures
1947,
Securities
Railroad Securities
.
ing
year.
and
Engineers Public Service
of bank credit for essential work¬
gages
Plant
1948
Governments
Tomorrow's Markets
of
$5 billion of
building construction.
Furthermore, the Government se¬
curities sold by corporations and
$4
some
15
Our Reporter's Report—
Utility
billion
$1.3
13
Observations—A. Wilfred May
Prospective
net
a
14
NSTA Notes
Public
about
of
91
News About Banks and Bankers-
on
increase
eral
i
Our Reporter
credit
nicipal
96
From Washington Ahead of the
News—Carlisle
Indications of Business Activity
.
ip corporate issues'and
corporations, but also took
U. S.
Finishing Com. & Pfd.
Electric Bd. & Share
(Stubs)
enough to stop the flow
state and municipal securities and
Dealer-Broker Investment Recommendations
.
that
severe
financed
14
Coming Events in the Investment Field
Kingan Com. & Pfd.
their
12
...
Canadian Securities
|
programs.
market will be called
upon to ab¬
sorb perhaps as much as a $2 bil¬
lion net increase in state and mu¬
_____Cover
Business Man's Bookshelf
for
obsolete
may
35
Bank and Insurance Stocks._
Mutual Funds
increase
be
the Government securities sold by
—
Wall
of
billion
$3
expansion
believe
J. H. Riddle
obtained
The market not only absorbed the
'
99
borrowing
from banks in 1948, perhaps to
the extent of $2 billion. I do not
and
•
and
during 1948 to help fi¬
their
further
securities which
Regular Features
As We See It (Editorial)
like
profitably
Dorset Fabrics
(w.d.)
$12
working capital purposes and I
anticipate that corporations will
They financed that $9 or
$10 billion by selling about $2 to
$3 billion of U. S. Government
bond
-
•
agree;
securities,
$2 to
some
of
Bank credit will continue to be
available to business for essential
f t
1
these
sources.
Stock
of
t
from
tabular record of the high and low
prices, by months, of every
course
on..
a
be
usual
our
nance
T h
Government
dispose of
of
$10
Starting on page 18 we present the opinions of
many of the
nation's leading industrialists and
financiers regarding the out¬
look for business during 1348.
and
financed
roughly $9
BUSINESS AND FINANCE
of
including savings notes,
al lowances.
I
stock
billion
amount
earnings plus
depreciation
31
_
Street all
STREET, NEW YORK
Telephone: WHitehall 4-6551
during
they still have about
bil¬
60 %,
out of retained
■
In the Second Section of
working
capital.
Of
lion,
'rT.
;
-
99 WALL
business
some
the securities accumulated
the war,
and
they
;15
_ _
.
•While
non-financial
corporations have sold
about $15
Chicago S^iock Exchange Inaugurates Method of
Clearing
% by- Mail'
expansion
of
plant ...and
equipment
this
%
as
_____
•
.
place
no
disposing
in the future, as in
will be provided by business itself
through retained earn¬
ings arid depreciation allowances, unless the
earnings are drained off
by new taxes. In 1947 all business corporations
required about $24 or
the
9:
;
.
Wall
securities.
$25 billion for
^^
Rep. Howard Buffett Urges Restoration of Gold Standards
George F. Bauer Endorses Anti-Inflation
Program of Economists' National Committee on
Monetary Policy
There's
-
the past,
;
i
__
1 \
'
about
-
.hi Most of the funds for business. expansion
_
1
AGREEMENT
'
Men
-
Raymond ttodgers> Sees Present Government Bond
Rate
7:.
•Maintained
__i:j
___------______—____'_Y___i7
Speakers at Investors League Forum to,Discuss
Venture,
i
GENTLEMEN'S
...
up to $15 billion may be financed out of earnings. Holds $2 billion of bank credit will be used and about $3 to
$4 billion will be sought in investment market. Holds current rate
/
Taggart2j-__ 13
,
■
C
of New York
can meet demand for
capital
supplement it from available cash. Says
major problem is not sufficiency of investment
fnnds, but lack of
vv
necessary equity capital.
\
_':V;
Business and Finance Speaks After the Turn of the
Year—Cover
R. W. Valentine of
Halsey, Stuart & Co., Holds Taxation •
Is Undermining: Capital Formation^Li
j. _*
'jl—lzl
6
•
Viee-President, Bankers Trust Company
;;
liof savings and investment institutions
and adds Treasury can
6
u
......
....
AND COMPANY
l-Mf. Riddle estimates 1948 plant and
equipment expenditure around
j
:
New Methods for
Getting Results in Stockholder Relations
—Nicholas E. Crane
:j:
3
»llCHTtnSTEin
Expansion
| " $23 billion, of which
Loshar's Slate for 1948—John E.
Loshar___l__i
Market Discounts Business Decline—Charles A.
2
-
4
_,
_4.
_
ll tf l
f
^
Administration's Swollen Budget—Sen. Robert A. TafL___'^
.v
(303)
By J. H. RIDDLE*
"the Short-Range Economic Outlook—Marcus
Nadler _iJt t2
.
CHRONICLE
Sources of Funds for
Pat®
Scudder Mott
•3
FINANCIAL
.V'V'
Inwresi'EatesT^Aiyife
Risks In Anti-Inflation—L.
&
Albany
-
Boston
Members New
.
York
Curb
135 S. La Salle St.,
L.
Tel.:
FINancial
Exchange
Chicago 3
2330
Teletype—NY 1-5
Glens Falls
-
C. E.
on
Request
Unterberg & Co.
Members N. Y. Security Dealers Ass'n
61 Broadway, New York
6, N. Y.
Telephone BOwling Green
Schpneptady
-
Worcester
Teletype NY 1-1666
9-3565
4
Stockholders—And You
Your
Thursday, January 22, 1948
CHRONICLE
FINANCIAL
&
THE COMMERCIAL
(304)
Looking Into the Crystal Ball
®
By JACQUES COE
By E. C. POTTER, JR.*
Of Jacques Coe & Co.
Co., New York City
Partner, Georgeson &
Mr. Coe maintains domestic
political outlook will govern stock mar¬
of Republican victory, combined
with cyclical pattern, will start a bull market lasting one to two
years. Believes meanwhile advances will be kept narrow by corpora-
stockholder relations and says sound program for that
purpose should be based on continuing effort to encourage stockholder's interest in the company by
aiding their understanding of its problems. Scores propaganda in annual reports, but points out
progress made in furnishing stockholders more frequent and detailed information. Discusses methods
for improving stockholder's relations by better proxy solicitation.
of building
Mr. Potter stresses importance
up
ket's
10
ago
years
asked
and
I
*' capital was needed and fortunately, this does not seem to
representing ownership be the case and unless something
were
sold to the public.
After is done to build up an informed
these
corporations became pub¬ stockholder opinion as an offset
to these erroneous ideas, there is
licly owned, markets for their
to
called
talk
about
her
to
X
the
-
Y
Z
-
"If
you
ties
me
much
the
10
E.
is
C.
Potter, Jr.
of
who
friend
a
share.
for
fault
or
compelled by
in the stock through such
blame
of
jective
him.
with the ob¬
holding
and
tection
their
of
advancement
or
have
act
never
with
been
the
stockholders
as
in
position to
backing of
a
solid
a
group
and
usu¬
ally represent only ; the, voice of
heir leaders.
,: ^
-
1
;
>
-
-
Indeed, -it is impossible to find a
meeting ground for all
stockholders as they represent so
common
spite of such reports as that
Confer¬
In
her
To
building
of
stockholder good-will.
But she had no
for
the. for¬
is
stockholder
regula¬ interests, but these organizations
SEC
many
of other information,
letting
was
serious decline.
but
far
tion,
advisor
at
of the National Industrial
many different interests.
There
pointing out that are institutions, such as insurance
charitable or educa¬
years, it had given her something average profits are less than 5c on companies,
hiore informative that a sketchy a dollar of sales, it is evident from tional funds, trust accounts—both
and
annual report and a ,yearly re¬ other news items, as well as from individual
corporate,
in¬
quest for her proxy.
No wonder independent surveys, that most vestors, speculators, even employ¬
she hated X-Y-Z and all it stood people
There is also
have a completely false ees and consumers.
for.
idea about corporate profits.
By among every corporation's' stock¬
Since that time great progress and large, it seems to be believed holders a large group which can¬
has been made by many of our that higher wages or lower prices not be reached directly, the cus¬
leading corporations in supplying or both can come out of corporate tomers of brokers and dealers
their stockholders with informa¬ profits
without danger
to our owning stock in their names for
tion of value and interest.
account
of
the
beneficial
But economy.
To overcome this mis^ the
Stockholders are people
£ven today there are far too many conception, a number of individual owner.
•mind, the
sible.
Who
If
during
only,
give
those
all
companies such as General Elec¬
tric and Union Oil of California,
and
about the stock
is motivated largely by
reason
which guides
their feeling
necessary
they own
damned," as a to name but two, are doing an the same
slogan, may be out of date, but in excellent job of public education them in their choice of a news¬
some
cases
it has been? replaced through advertisements or other¬ paper, a! motie, or a' radioJ pro"
by "The stockholder is a nui- wise. Whether this individual ef¬ gram—their personal interest. '
,
fort is sufficient or whether our
ance."
While stockholders as a whole
"The
are
public
a
be
corporations should join together may have divergent views, stock¬
a
combined effort to tell the holders in each individual com¬
tage of the days when
was
conducted as an individual public the truth about profits is a
pany have' a common interest in
enterprise; As these small entities question which goes beyond the the
affairs
of 'the
corporation
It is how¬ whose stock they own. But, again,
developed into larger units or scope of our subject.
combined with other groups to ever, an urgent matter and one
(Continued on page 45)
form a large corporation, addi- that merits a prompt solution.
It might be supposed that stock¬
*An address by Mr. Potter be¬ holders
who number anywhere
fore the Finance Conference of from 12 to 20 million should be
This sort of thinking
is
vance
5%
heri¬
business
between
10%.
and
certain
litical
most
of
From
in
better informed
their
than
tion, New York City, Jan. 16, 1948. ters
about these matUn-
neighbors
j
.
i,
Coe
on a
share for share basis
on
it
evident
is
*'
•'
..
'
'•
V
'
i
Mi
possibility of
istration
change
change in admin¬
a
complete
a
could
in
mean
the
•'
•
'•
'
'
115 Broadway, New
fiscal,
administrative poli¬
economic and
.•
.
:
•
'
now
market
decline in the
any
for
next
the
/'
■
Phone:
•
..
Tele.
York
Members New York Security Dealers
''W9
■
Direct
•
ftlaf
r
Wires
'
to
■
PHILADELPHIA
f' "
'
&
Equity
Financing
take the other side.
us
five
than
5%
10%
to
June?
and
we
have
number
of
paragraphs
between
In the preceding
already
important
months to 5% to 10%? It is well
named
drawbacks, but even if most of
the scarecrows disappeared, and
borrowed
out
the
securities
on
country
through-1
is
negligible.
There
are
no
danger spots in
over-extended
margin
accounts
and they are not likely to de¬
velop. The overall trend of busi¬
.
.
.
continues
ness
have
the
satisfactory, and to
possibility
business recession
have
we
of
a
deep
should first
another
inflationary spurt.
The danger of this spurt getting
Under way has not been elimi¬
nated by any means, because the
next few months hold forth pos¬
sibilities
of
automobile
strikes.
Greece,
zones
coal,
and
railroad,
stock
the
its
in
exuber¬
strength to the,
where Dow theorists and
chart disciples proclaimed
point
,
other
the
market
developed
ance
beginning of
market
tions
.
.
a
genuine bull
the leading corpora¬
.
of the
country would in no
time flat utilize the buoyancy to
expedite equity financing by the
issuance
shares.
the
millions of additional
of
The
crying meed
among
largest corporations through-j
the
country for additional
out
capital to take
inventories and
working
swelling
industrial
operating costs is
in
Palestine,
of
higher
care
we
Sparks
China
steel,
a
other
and
other
danger
could burst into flames
.
.
.
so
strong that
see every day the increasing
bank loans and bond issues which
better would be handled by
financing
in
a
(Continued
favorable
on page
equity
stock
77)
DULL
Com. & Ptd.
Sold
on
-
or
Mfg. Co.
DYNAMIC?
Quoted
request
•
105 West Adams St., Chicago
Teletype NY 1-672
Will it contain
uninspiring
statistics only...or facts and
.
pictures, dramatically
sented in
•
a
way
pre¬
that will
'
V •
Crude
Guarantee
NY
2-8700
1-1286-7-8
As
specialists in
Association
-
anj design of annual
reports, in pamphlet form and
for publication advertising,
we can help you. Write, or
telephone—COrtlandt 7-5060
Oil
& Trust
for
complete details.
Bought—Sold—Quoted
Seli^man, Luhetkin
ANGELES
LOS
•'
'
41 Broad Street
prepara¬
tion
Foundation Co.
REctor
.
begging!
Co.
Albert Frank
Guenther Law
'
"
♦. '{
•• •'
to
.
known that the amount of money
INCORPORATED
1926
;
5%
a
Why will the market advance not
Why limit
stock
Broadway, New York 5
120
Established
But should
.
securities will
selling,
scare
any
not go
more
Electrol, Inc.
.y-'.'
,
i
.
*
Title
f '•
.
have
market
stock
Why Limit Possible Decline?
r
Exchange and Other Principal Exchanges
General
'
the
benefit public and stock-
J
.
•
Co.
policies, plus the almost con¬
taxation has made the
fiscatory
Now let
DuMont Laboratories
&
cal
Overhanging
cies.
7-0100
TEXTRON Inc.
Ward
stock
A lack
of confidence in government fis¬
country's
March 1,
'•
•
..
the
years.
many
holder relations?
"
'* t
-
"'V*.
V'
•;
i
in
been
not
for
odds too one sided.
To stockholders of
•
has
market
■
Goodbody & Co.
Members N. Y. Stock
.
all
they start. The real
important money is not
and
and
Jacques
Strrmberg-Cailson Com. & Pfd.
Corp.
*Prospectus
"
,
in
that
.
Rockwell
Telephone BArclay
To be distributed
big
above
Oxford Paper
TRADING MARKET IN
::
other
each
succession,
that the writer regards politics at, 10% decline from this level
this stage as being more impor¬ and with a most interesting if not
tant that economics.
The
justi¬ decisive political situation devel¬
fication for this opinion is ap¬
oping from June on, it is my firm
parent
on
all sides,
for
the opinion and conviction that 'on
Crowell-Collier Pub.
Bought
e..:V
ratio.
almost before
1949.
Art Metal Construction
Giinnell
•
at¬
an
Kendall Co.*
'
dorset fabrics
such
on
earnings"
bursts of market strength dissolve
a
Associa¬
Management
vaudeville
ad¬
the
"times
following
crows
of sub-
Durez Plastics & Chom.
American
tractive
It is because of these many scare¬
they may, the
an
obtainable
tinue
as
begin
.
.
imponderables that securities con-,
and
dovetail
.
market finally
bond
It is because of these numerous
po¬
trends
develop,
the
woods
readjusted itself to the revised
government interest yield.
more
than
has
nor
not yet out
are
Communistic
the
of
ad¬
or
and Italy
France
Board
ence
their
evil.
impression
the
stockholders
respon¬
was
company
cline
••
her stay
word
or
companies have
gone
beyond these require¬
ments and supplement these peri¬
and later to 3 or 4 dollars
Of course, her investment odic reports with a wide variety
30 to 10
m
vance
the
that
<$-
.
wM
So annual gotten man.
From time to time
stantial
proportions
running
issued in efforts have been made to band
less detail.
To some stockholders together for the pro¬ through the remainder of 1948 and
Exchange
Stock
her
after
accepted
strength
voting
is essential.
extent this has been
husband died,
she had watched the price go from
a
invest
to
money
weigh the advantages of one
greater
few weeks
a
interesting and conveniently adaptable cyclical
and June, the stock market (using any or all of
now
interim reports are
and
promised a
20-point rise in
—how,
a
with
company
had
support the opinion by reasons, and finally solidify
very
felt in the stock market
sometime dur¬
shaping of Federal and State leg¬
islation, the voice of.,the stock¬ ing the sum¬
mer
months
holder, as such, is rarely heard.
of 1948 could
It has become a byword to say
their
against another. To form a
sound judgment on individual in¬
vestments, information about the
to
story—how her husband
or
some
Between
should not de¬
If
;
final
stock
bought the stock in the boom days
of the 'twenties on the representa¬
tion
and
must
.
more
survive.
stock¬
Although labor, consumers and
development management are all represented
regulated by the Securi¬ by organizations which can make
Exchange
Commission the weight of their opinion and
Persons
that
in.
There
i
demanded at least a
with its manifold rules.
company,
come
the
where
The
holders.
has been
anything good
about
great danger that our American
listing re¬ profit system may not be able to
the national
on
minimum of information for
ering tone, re¬
tell
found
were
quirements
and, in a with¬
plied.
data.
the
exchanges
scornfully
can
with-
it
averages)
stock
Company.
She looked at
me
then attempt to
lional
had
said
First I shall venture my opinion regarding the probable direction
broad composite stock market trend for this year 1948, and
the
of
the shares
what I wanted.
I
tions'capital needs. Expects resumption of major downswing in 1950
i
I was called upon to solicit a proxy from a lady who, accord¬
ing to the company's records, had never signed a proxy in all the years she had owned
the stock. As I presented myself at the door of her apartment, she opened it cautiously
About
and that anticipation
course
Nj^w York 4, N. Y. j
i
Incorporated
Advertising
131 Cedar Street
New York 6, n. y.
■
Volume 167
m
\ THE
Number 4666,
Steel
The,,./;::;;;;:
COMMERCIAL &
^
T
/
Carloadings
State of Trade
:
Commodity Price Index
Business
.
.
provocative
i
'A.,,.'-,
...
Deliveries
-/"-j
Do Or DOW!
..
the.
.Theory/
.
this
will
^
nior
j.»Model changeovers < in the automotive industry the past tweek
total General Motors passenger car. production in this country
nearly 3,000 units, "Ward's Automotive Reports" reveal. The Cad¬
illac division completed its 1947 model run early in the week and
.began altering plant facilities for work on new models.
Pontiad
operations were slowed down by a transfer to new models embodying
relatively minor changes. Buick continued production of 1947 models
during the week but output of the Series 70 Roadmaster type was
slowed by preparations for new models.
: " ■>i /X-'/vU-:'l \
Retail volume
in
the
week
moderately above that of the
preceding week and the corresponding week a year ago.Seasonal
'clearances and January white sales continued to attract favorable
attention. ' Consumer resistance to high prices increased and
base-j
ment departments attracted a large proportion of the shoppers.
Re-quests for Credit were reported to have increased in some areas. J
;
rose
( Retailers continued eager to obtain practically all types Of mer-j
chandise and wholesale volume in the week was well above that of
the
preceding week.
Order volume compared, very; favorably with
Some buyers were very cautious
purchasing high-priced goods and deliveries generally continued
be prompt.
.
;
•,
i
that of the similar period a year ago.
in
to
v
'!■ /<Cl-.vi' Hardware Wholesalers* Sales Gain 9%inNovember;
:
j
Sales gains averaging 9% were reported by wholesale hardware
distributors in. all parts of the country, comparing November, 1947;
(Continued
\-
'This announcement ts neither
v;
buy
any
these
of
shares.
an
offer to cell,
The
73)
on page
offering
i
not a solicitation
is
made
only
of offers to
Prospectus.
by
1,000,000 Shares
-V".;"vv
»■
Common Stock
>..(Par. Value 8L0Q
■
per
American Cladmetals
A
'
'•4*'
•..
-"
.'■*v'
has been
■
...
j.v
may he obtained
.
*•¥ York ;
Montreal
1
.Toronto
ACTIVE MARKETS
SOYA CORP.
OF AMERICA
the third of November last are
father
than
on
the
number
the old ■
-
iii
.4* i
**•
t
.
•A',/'-
W.*',,
of
shares) to the contrary notwith¬
standing, most commissions for
similar purchases are larger than
SIEGEL & CO.
39
Broadway, N. Y. 6
Dlgby 4-8370
Teletype NY
f
1-1943
ones/;; /\ :■; •.; ■, •
The need for these increases has
con¬
been written in the red ink of too
rampant bull
market Dow!s theory has failed;
the
hypotheses of
harder than ever to trade both ac¬
(the only one with
in complete agree¬
ment) is that is it not infallible.
But isn't it strange, how few (if
any) _Dow Services have followed
through to the extent of forecast¬
ing a bull market? To me that
indicates, to say the least, a cer¬
tain Jack pf confidence on the
part of these .Services in the basic
philosophies they are supposed to
be interpreting! Could it be that
individual judgment concerning
the lapse of time between the two
penetrations has been, placed be¬
fore cold factual? technical appli¬
cation of the Theory? If this is
true, and. I think it must be, then
tively and profitably; And since
many
I don't mean to infer that if we
do not
have
now
indeed one
of
I
am
EARN
$ $ i AT DISCOUNTS
to
a
the ^Theory
Which
INVEST ONLY $9,600
v;/ for $13,000 in Bonds of
V,
■
the active trader is the steak and
corporations rwho»e assetr: to- i-
salad, if hot the bread and butter;
of Wall, Street, this might de¬
velop into a serious situation.
^
has
While the Congress is in a taxcutting mood, therefore, I have
one sugestion that may-alleviate
this problem slightly. Brokerage
commissions, now, for tax pur-;
poses, are added to the cost and
subtracted from the proceeds in
security "< transactions, t'.' Thus the
taxpayer obtains, in effect, a "cap-;
ital gain deduction." Unfortunate^
ly, however, this does not, help
active traders in high income-tax
brackets as much as a "deduction
from income would. Although it is
of A. Wilfred May's "extrin¬
The
•:;vf
tal 3 Billion Dollars.^ Interest
r
been
paid' continuously f
from'23 to>53 years. ^ '
*
Average Income $50 Monthly
Security Adjustment Corp j
Established
::;16 Court
't:
-
"
1935-.
TRiangle 5-5054!
Street,-Brooklyn; New York
sf,
t-
Specialists in
/TEAL ESTATE
generally known that New York
lapse, in this
case, was
slight¬
(Continued on page 77)
•
SECURITIES
i
■
C. H. TIPTON
'; - Commonwealth-Gas
from the undersigned,
SECURITIES CORI1.
Southwest Gas Producing
Members N. Y. Security Dealers Ass'n
MERCER HICKS & COMPANY
111
American Maize Products Co.
BROADWAY, NEW YORK 7, N. Y.
DIgby 9-4224
i
higher; all Wall Street doubletalk (about the principal differ¬
ence being that the. new ratOs are
based on the number of dollars
:///':///•/ /./; v •:/
Underwriter.
150
HAnovor I-HN
Bell Teletype NT 1-2M
1
Offering Price: $1.50 Per Share
Copies, of the Prospectus
52 WILLIAM ST., N. T. 8
sic" factors has been introduced.
Company
Pennsylvania Corporation
■ART SMITH & GO
readers of this publication
require either explanation or
justification. The inescapable net
result, however, is to; make it
s
one
--
store)
bull
firmed!
Common
—
Let's face it:i the new commis¬
on
average
from bear to
.
Company
Preferred
Electrolux Corp.
/
sion rates which went into effect;
John E. Loshar
(
—
Abitibi Power & Paper Co.
Epshar for Secretary of the d' j
Treasury!'
;
;
,
(in the words •
of
the
phi¬
losophers) gave its half of the bull
signal back in July of 1947, at
186.85.. Thus the highs of Feb. 8
1947, > have been I jointly pene¬
trated, and 1 maintain that under
the theory of the late Charles H,
Dow a reversal of primary trend
cut
.
Bonds
■
age closed at>
63.85. The se- "
at the close of February., in pressing their ; demand
postwar wage increase amounting to 30 cents an hour
plus fringe "benefits.
I
the rail aver-
take
third
f
admitted, then it's every
for himself: Do or Dow!
j
11'■■
;
January when
v The automotive industry has at last found its stride and is
presently geared. for high production^ but. this contemplated higlj
output in the months ahead may suffer a sharp revision as a consequence of the announced stand the United Automobile Workers
a
// /
is
man
,
CIO
;
ly over five, months. Next time it
might be three months, or three
weeks. Surely it must remain a
tnatter of individual opinion as. to
what lapse of time between pene?
(rations is necessary to nullify an
otherwise clear Dow signal. But if
:
/■' | etc.Neverthemost Tess, if my
output with worsted mills showing a slight increase in production!. It. is,> a bull "Clothing production, too, held at a steady and high level. On the market. ; was. ;
other hand, a moderate decrease in shoe' output occur red arid new confirmed on,.
the second of
orders for footwear continued to decline,'
'
;
for
-//>
.
.
,
'
:■
Since any criticism of Dow's theory, lately, seems to be answered
,
of raw materials were generally prompt in
regions, but the delivery strike in the Boston area the past week technical un- adversely affected deliveries to and operations in some factories iii derstanding, Is
; that area.
/'
" '
—.> ••
,j. correct,.
Manufacturers of textiles maintained a substantial volume of which I think
,
'
-
by insinuations that the critic, has no understanding of the basic
philosophical implications of the theory, etc., I wish to state cate¬
gorically. that I have no understanding of the basic philosophical im¬
plications
of
..;.
<S>
:■ v—-——:
-7
moderately last week and compare^
favorably with that of a year ago. Over-all employment held at 4
high and steady rate but demand for skilled labor, which has been
.a problem to sortie manufacturers, for a long time, continued; to bd
.
!
for the New Year.
...
Brown
Total industrial output rose
;
v/Vi./;:/;.
offers random comments, some tongue-in-cheek
some
.
/',/
■»vv
^
Failures
,
-considerable-..'
By JOHN E. LOSHAR
Market observer
Auto Production
Industry
5
(Pinch-hitting for A. Wilfred May's "Observations")
Food Price Index
and
(305)
'
Retail Trade
,.
.
CHRONICLE
Loshar's Slate for1948
Production
Electric Output
FINANCIAL
Broadway, New York 6, N. Y.
Telephone
-
worth
2-0510
Bought—Sold——Quoted
NEW
f
ISSUE
Established
.
75,000 Shares
IHC.
FREDERIC H. HATCH A CO.,
HAVE YOU EVER STUDIED THE
BALANCE SHEETS AND EARNINGS
1888
STATEMENTS OF
-
i
ASSOCIATION
' MEMBERS N. Y. SECURITY DEALERS
83 Wall
/
Street, New York 8, N. Y.
Bell Teletype NY 1-897
K1NGW00D OIL
Islip Stadium Corporation
MIDGET AUTO
RACING AND
SPORTS
BONDS
BROKERS and DEALERS in INACTIVE STOCKS and
STADIUM
don't
We
"Our services
more—worth it."
cost
COMMON STOCK
($1.
par
New York,
N Y.
value)
v
>
GEORGE A. ROGERS & CO., INC.
r
Condensed
at
Cash
m
Banks
Securities
Price
$2.
per
share
and
owned
market)
at
cost
$
(lower
Customers
Securities
Debit
Balances
ii
Sold—Undelivered
not
be the
reason
seems
the stock
joined ihe upside parade
producing oil
A small but sound company
consistently made
155,332.73
1,998.50
100,325.14
—..—
(Note
30,721.04
than
-
Miscellaneous
to
other in¬
That
companies.
Hand
on
us
of the other crude
1947
ASSETS
V
to
has
Sheet
Balance
December 31,
Jersey City, N.J.
think many
have eithet.
vestors
1)____^
■
■
f-
thes
pegged crude price
the
654.96
Assets
money
OPA,
and
seems
that
during
era
of
ready to
'
Total
Orders will be
executed by the
LIABILITIES,
undersigned
Bank
Loan
Customers
Securities^
Accrued
<
30
Pine
CO., INC.
Street; Ne'w York 5, N. Y.
%
'
-
Credit Balances-
Purchased—not
-
received
—
show
$ 97,000.00
4,747.73
' 6,189.5013,251.21
some
increased
SURPLUS
real results from the
prices
for
crude
Analysis Available
:
■
oil.
.
—
Expenses and Miscellaneous
Liabilities
Totad
.
AND
STOCK
(Note 1)_.
15.626 32 $136,814.76
-
Capital Stock-_____
Surplus? .u
Note
CAPITAL
Taxes.:
Accrued
E. P. FRAZEE AND
^289.032.37
Assets
—
102,000.00
50,217.61
PETER MORGAN & CO. !
Liabilities,. Capital Stock & Surplus-------- $289,032.37
1—-Securities
to
l
secure
aggregatinir $101 ;031.25
BankLoan of $97,000.00
•
-
cost
at
v
■
31 Nassau Street
pledged, >
are
:
-
■'
Tel. BA 7-5161
New York S, N. Y.
Tele NY 1-2078
6
(306)
THE COMMERCIAL
.
.
Robert T. Cass Joins I
1
Gross, Rogers & Co.
(Special
:
LOS
to
The
Financial
Chronicle)
Gross,
&
Rogers
CHRONICLE
•
Thursday, January 22, 1948
:■
'
i
Scoring Federal bureaucracy built up under New Deal, Republican
Party leader says taxes and Federal activities must be reduced.,
458
Co.,
'•
■
;
Igfit Capital Formation [pft/
s
TJ. S. Senator from Ohio
ert T. Cass has become associated
with
FINANCIAL
By HON. ROBERT A. TAFT*
'
r
&
>
■
.
Administration's Swollen Budget Holds Taxation Is Undermining
CAL.—Rob¬
ANGELES,
^
^
,'
•
R. W. Valentine, Economist of Halsey, Stuart & Co.
Inc., contends,
large demand for capital funds is to continue, a much
broader market for equity securities is needed.
Says yields to in-
,
Holds Administration's program chokes
production,
kills incentive >f
hampers new enterprise. Wants budget cut by $3 billions/ and w
says ERP can be cut by more than $1 billion.
Favors increased
if present
/
and
vestors will have to be increased and taxation of
dends
<
air force but reduced
outlays for
Opposes $
and ground forces.
navy
proposed plan for universal military training, and says proper mili¬
reserve system can be established on voluntary basis. ; Con-
tary
to be made available.
are
Asserting that low income yields and high taxes were undermin¬
ing saving and preventing needed capital
formation, thus putting a
I break on economic progress,, Dr. R. W. Valentine,
Economist, of
billions this year and;V Halsey, Stuhrt & Co. Inc., told the Financial Conference of the Amer¬
ican Management Association in *>substantial tax cuts made.
!
'
eludes national debt
-
reduced, if sufficient capital funds
:
profits and divi¬
be reduced
can
—
New. York
Today
at the opening of a momentous session of Congress
we are
where the issues
Republicans
the
New
Federal
*
elected
were
Deal
the
had
in
two
1946
extended
of
.
•
•
.;v-\
RR.
...:>-,/'
Traded in Round Lots
Walter J. Connolly & Co., Inc.
Federal Street,
Boston 10
Tel. HUbbard 2-3790
Tele. BS 128
the
last
session
was
reduce
taxes,
they
but
could not get the number of Dem¬
ocratic
votes
the
members.
it
put
to
necessary
President's
over¬
which
veto
*An address by Senator Taft to
the Rhode Island Republican
Club,
Providence, R. I., Jan. 15, 1948.
a
program
through and keep' its
a
very
steadily building
tent
and
the
up
C.
O.
I.
Federal
spite of the
Southern
Committee
In
the
last
the
of
is
likely
to
analysis,
it
but
whatever
would
natural
President
is
Union Com. Bldg,
CLEVELAND
Union Cent. Bldg.
Teletype
PH
73
<
soon
the
the
Consider H. Willett
'
to
Reliance
Varnish
dan¬
He
surrendered
by
vetoing
He has now
enthusiastic
an
en¬
Deal, to its
global spending policies, and its
determination to direct the lives
of all the
for-15
people.
years.
Analysis
<
now
up
from
under its
on
own
ESTABLISHED
Floor, Kentucky Home Life Bldg.
any
or
BELL SYSTEM
Bell Tele. LS 186
conscious
intelligent
planning, but in ac-
83)
page
on
Population
growth
and a more rapid increase in the
number of family units in recent
years has intensified the need for
TELETYPE SU
on
Request
BUCKLEY BROTHERS
SPOKANE, WASH.
Company is
Angeles Stock Exchanges
New
Also Member of
York Curb Exchange
1420 Walnut
New York
Street, Philadelphia 2
level.
.>•
Private Wire System between
Philadelphia, New York and Los Angeles
accumulation and investment.
"The
possibilities for the most
of tax revision
field
the
Dr.
Valentine
Federal
appraisal of
these
factors
ous
demands
still
are
the
for
new
large.
very
of
made
There
to believe that
we
of
threshold
new
capital if it
available
(3)
in
the
for
needed
equity
than
tion of
market is
-
of
particularly significant
corporate income,
character
of
ment
»
profits.
of
our
the
future
develop¬
however,
much by
economy,
will be determined very
whether
or
not they are
attained./
"The tremendous decline in in¬
terest rates during the last
years
large amounts if the desired equi¬
in
librium
tor
high levels of production and
capital.
will
r
life
savings
venture
(6) Revision of the treatment
capital gains and losses.
,ahdv.will be:/needed urgently in
economic
to
on
"Accomplishing these objectives
not be an easy task at the
present :time. ^The nature .and
.
our
at least in
apply
undistributed
<
from the standpoint of, being able
in
rates,
they
Liberalization in applica-.
tion of the penalty provisions of
the income tax law relating to
broader equity
a
Altorfer
at
also
was a
several
significant factor
removing the individual inves¬
a
as
direct
(Continued
em-
source
of
on page
supply
63)
for
one
a
Colorado
Manufactures,
freeze units
A.M.,
Pac.
Std.
Time:
on
to
NEW
11:30
Sp-82
grape
industrial
STANDARD SECURITIES
CORPORATION
Members Standard Stock Exchange
of
-
Spokane
Dealers
-
Underwriters
Building, Spokane
Branches at
Kellogg, Idaho and Yakima, Wn.
fresh
milk;
Snap On Tools Corporation
Uarco, Incorporated
plants,
tomato,
orange,
juices; and soups.
Ideal
restaurants,
>
Packing Company
United
and
Peyton
Rath
(Patented)
Dispenses
Company
Company
Itockford Machine Tool Company
PRODUCT
Liquid Vending Machine
at
Machine
MacWhyte Company
food-
Floor
other hours.
Brokera
a
Milling & Elevator Company
Ilart Carter
distributor.
beverage dispenser for use in stores, etc.
Execution of Orders
Quotes call TWX Sp-43
of Exchange from 10:45
or
Gisholt
contract, home deep
known
Fisheries Corporation
Foote Brothers Gear & Machine Corporation
of the largest outdoor
nationally
Brothers Company
*Arcady Farms Milling Company
Booth
■
for
schools,
Printers &
Publishers, Incorporated
Viking Pump Company
BOUGHT
—
SOLD
—
etc.
QUOTED
.
Full details available
on
*Prospectus Available
request.
COMSTOCK & CO.
A.C.AlXYN*™COMPANY
CHICAGO 4, ILL.
231 So. La Salle St.
Teletype
Incorporated
Dearborn "1501
CG 955
Chicago
/
New York
Boston
risk
(5)
which
has' existed in recent years.
on
Elimination of double taxa¬
(4)
securities
that
law
order to
surtax
as
and the return
needed
"If the present demand for capi¬
continues, a much broad¬
market
the
Lower corporation and in¬
far
so
be
can
of
(2) A more realistic application
depreciation and obsolescence
dividual
tal funds
er
in¬
accounting.
amounts at the proper time.
will: be
de¬
which
and
consideration
equalize the tax burden
taking capital.
capital
pppqitunities for the employ¬
ment
serious
with respect to losses in
today of a
era
of industrial expansion
development with tremend¬
new
law
Tax
(1) Liberalization
they have
is good reason
and
tax
clude:
that
on
Income
development
merit
re¬
not as yet
spent their force and that the po¬
are
income
signed to make a larger supply of
capital funds available for busi¬
marked:
tential
to be found in
are
Federal
legislation. Suggested revisions to
ness
funds
of
.
Continuing
'MMiS
Produces, under its own name,
SECURITIES
For Immediate
Los Angeles
Pittsburgh, Pa.
Hagerstown, Md.
N. Y. Telephone—WHitehall 3-7253
capital,
INDUSTRIAL COMMON STOCKS
OHIO
manufacturers.
under
NORTHWEST MINING
Members New York, Philadelphia and
Los
average
capacity to save and de¬
the incentives to capital
stroys
impact of these and other
forces, business activity and em¬
ployment have been at a high
V
464
sign
Data
the
additional
Common Stock
PHILADELPHIA
DuMont Laboratories
an
its
capital.
MANUFACTURING CORP.
LIMA,
Gruen Watch Company
than
more
ing:
ARTKRAFT
1899
160 S. Main Street
Salt lake City 1, Utah
LOUISVILLE 2, KENTUCKY
i,;:
obtaining
rate of return on invested
and (3) a tax structure which lim¬
& COMPANY
Incorporated
Portsmouth Steel Corporation
f
Buffalo Bolt Company
equip¬
prices
mo¬
almost without direction
mentum
Co.
our
.economy has
matured
affords little opportunity for
and
in
EDWARD L. BURTON
Long Distance 238-9
that
new
Few people realize
(Continued
1st
of
tremendous
which rolls
available upon request
BANKERS BOND ^
improved
general rise in
"This need for
Bureaucracy;
built
thinking
m
maintaining a high' level of
economic activity, (2) the theory
adequately to finance the rise and
organization
it,
deyeloprhent, • of 'iiew; industries
Washington,
i
don't think there is anyone: alive which are in the process of com¬
who knows all the things which ing/into being at this time. Risk
the Federal Government is doing
Saking; or .venture capital for this
today. It is a tremendous machine
purpose is relatively scarce today
Amalgamated Sugar
Murphy Chair Company
1946
for any: Demo¬
Taft-Hartley law.
returned
has
American Turf Ass'n
of
more
the
saw
leaders
labor
the
New
move¬
inclination
somewhat
course
Federal
American Air Filter
as a means
of
has increased the need for work¬
"An
We have had the New Deal
SALT LAKE CITY
The
shows
he canceled price controls
housing controls. But his po¬
Tele. CI 150
LOUISVILLE
ment.
no
had
dorsement of the New
CINCINNATI
Tele. CV 174
its
have
appeared in
as
President.
RIttenhouse 6-3717
to
unions
behind the Wallace
to
Stock Exchange Bldg. Phila. 2
and
processes
retaining
of
I. O.
The
cratic
Telephone
it
support
fatal
be
success,
litical advisers
Company
troduction and utilization
Even the defection of Wal¬
Warner Company
field, Richards & Co.
the
left-wing in the Northern
cities.
lace
con¬
of
cannot afford to loose the
and
OFFICE
[personal consumption
the
Action
that
PHILADELPHIA
made
mechaniza¬
tion of production and rising la¬
bor costs have stimulated the in¬
cal
ger of
H. M. Byllesby &
very
largely the
scarcity of venture capi¬
today. Particu¬
larly Important in this connection
are (1) an
overemphasis today on
tal which prevails
encour¬
has
attributed
the
Nazareth Cement
Richardson
increased
an
some
capital
added to the demand for the prod¬
ucts of American industry. Under
the
when
Pittsburgh Rys. Co.
be
'
possible
to
mem*
its
of
conservative
Sterling Motor Truck
progress
time
relative
_
Technological
present
obstacles
bers, the Party has been domin¬
ated by the thinking of the Politi¬
servatism
the
Empire Steel Co.
has
the
immediate, and perhaps the most
significant, results in the matter
In
swung
Empire Southern Gas
ex*
goods
dur¬
years.
housing facilities. A
world-wide shortage of both capi¬
tal goods and consumer goods has
of
power
Government.
ment.
Botany Mills
Iiarshaw Chemical
nar¬
the New Ileal has
years
control if the C.
American Box Board
Drackett
their
on
The Party showed
develop
chance
CLEVELAND
or
will
majority and the difficulty of
crystallizing legislative opinion on
any subject.
*
/For 15
They reduced
the spending of the Federal Gov¬
ernment.
The.y did all that they
to
public
been
four jobs.
ride
24
Robert A. Taft
at
could
i
the
on
arbitrary
promises in spite of
promise. Their
Maine
or
row
.
'out that prom-
Preferred
labor
consumer
realized
accumulation and its employment
in this manner and to them can
aged the enlargement and exten¬
sion
of »■ production
facilities.
and
4
based
&
capital
at
serious
very
large outlay of
investment
during
very
in
that it could
program
Prior
new
this
contrib¬
for
own
principles
o f
freedom, and
they carried
Boston
Houses.'
to
have
be
"Unfortunately, however, there
exist
factors
an'/ end.
either
Party
on
"Several
to
are
ing the next several
the last two years," Dr. Valentine
stated. "The high level of demand
unreasonable
promised
B
both
relations so that the heads of the
labor unions could not
impose an
progress
un¬
der American
&
»
regulatory
powers
to
They restored equality
Spring Street, members of
the Los Angeles Stock Exchange. the freedom of
'the
people
Mr.
Cass
was
formerly in the
was
seriously
trading
department
of
Morton
threat ened,
Seidel & Co. and prior thereto
The
Republiwas with Quincy Cass Associates.
BOSTON
$30 billions.
spending,
uted
of
ployment
gate capital outlays, including new
housing, in 1947 reached a peak of
that
people realized
two-thirds
that aggre¬
of hostil¬
ities and brought most of the war
leaders, to
can
the
regulation, Federal
15
The
clearly defined.
They declared the end
point where
a
South
because
takes
la¬
-
bor
are.
<$>-
dom-.
ination
parties
Federal
taxes,.
the
and
Robert T. Cass
<
between
Jan.
on
Milwaukee
Minneapolis
Omaha
Volume
167"
&
THE COMMERCIAL
Number 4666
Eccles
7Sees Present Government Bond 5
will
Rate Maintained
maintained.
their
would
unless
'
Reserve policies.
strictive/Federal
of
fUnless
inflation gets out of hand the present rates of government
bonds will be maintained and long-term government bonds will not
be permitted to break par in the near future, Raymond Rodgers, Pro¬
fessor
of
University's School of Commerce,
Banking at New York
Accounts, and
'/•■ .V;'::'7 '•
Finance
dicted
at"
gathering
the
continue
pre¬
that
at
they
prices/ and
higher
higher wages sharply increased
borrowings of business and
the
Bond
But
an
Men
of
State
of
New
York
in
New-.
alternative
would
drive
authorities
Treasury
Vhold the line" at par on
term
to
is
has
grin
and
passed,
drop
widespread
are
have
I .Union
a
nounced
become
conse¬
better
concluded,
Union Securities Corporation, Mr.
Edwards
the
in
Brothers
rates
will
j
de¬
a
Barr
since 1929.
Co., Inc.,
other
of
type
(Special to The Financial
PALM
Esther
security."
be
tnere may
with
been
had
&
Daniel F. Rice & Co. Adds
Will
governments
any
Jan.
the
BEACH,
Gries
F.
Staff of Daniel
Chronicle}
—
Mrs.
joined ,tho
FLA.
has
F. Rice &
Co., .24G
South County Road.
Will
Rod¬
be
high i this :
as
gers
declared
Rodgers added.
that
the
/
cent
re¬
Federal
Reserve.
icy
Jrst is
Raymond
signed to rethe inflation¬
ary pressure
Rodgers
ties
In
view -of
the higher
in most indus¬
point
;
.
,
California
2(/2% Bonds
to the first
question
Dated
Rodgers replied, "With
managed
debt;
managed
a
and large segments of
money,
..
.
keep them at the pres¬
answer
Professor
a
.
Angeles City School/Districts
ent levels?
Dr. Rodgers further contended
thai lenders are becoming more
break-even
Los
keep government bonds peg¬
will they
by reducing the volume of
security offerings.
cautious• in
$18,500,000
the monetary authori¬
can
t
ProfessoE/ Rodgers.
ged at presentlevels? The; second,
from capital expend¬
itures
new
talk;
t)r.
Mr/' "
Ing government bonds toddy/; The
de¬
'
-
.
year, •
/
irited two: big questions
pol¬
seems
his
In
New lssu?s
highly doubt¬
volume of borrowing
that the
ful
14.. Pro¬
fessor
business make it
in
on
economy on
a
our
tries, the fantastically high prices,
and the top heavy debt structure,
taken in conjunction with the in¬
aged basis, the monetatry authori¬
ties, with the great and unpre¬
cedented powers at their
have
Due January I j
as
shown below
disposal,
creasing uncertainties in the
January I, 1947
Principal and semi-annual interest, July 1 and January 1, payable in New York City at the
fiscal agency of Los Angeles County, or in Los Angeles at the office of the County Treasurer.
Coupon bonds in denomination of $1,000, registerable as to both principal and interest.
government man¬
and " the
nomic outlook/
"On
eco¬
'
is
likewise
for
ernments
Even
Congress
first
without
exports
10
billion.
more
than
the
a
bonds
to
ex¬
$7.5
Plan
on
any
Tax
level they wish."
the second question
Rodgers
said
that
present inflationary
Exempt in State of California
Legal Investment for Savings Banks and Trust Funds in New York%
California and certain other States
as
pres¬
above
par.
AMOUNTS AND MATURITIES
"Whether, and
of the monetary authorities.
to
'
•
■■
1,——
•
what
extent, this support will
be
forthcoming," he said;//depends entirely upon the judgment
great deal
Marshall
Exempt from present Federal Income Taxes
persists, market support will
probably be necessary to keep the
the
by
Interest
keep the price of gov¬
sure
reduc¬
1947,
imports
It would take
as
In
drop.
months alone of
ports-exceeded
long
through the
sizable
will
Professor
power
Secretary
Snyder
$8,000,000
City School Dish
Both
$8,000,000
;
- $2,500,000 r
City Jr. College Dist.
21/2% Bonds
,
City High School Dist.
2l/2% Bonds %
V/2% Bonds
Chairman
and
7'
$1,000,000 due 1949
$400,000 due 1950
$300,000 due ea. yr. 1951-72
$830,000 due 19-19
! $80,000 due 1950
$110,000 due ea. yr. 1951-72
$350,000 due 1950
,,
$310,000 due
1951-72
ea. yr.
PRICES TO YIELD
We
iire
pleased
to announce
the association with
us
1949
1955
1.05
1.60%
1961
2.15%
1967
1956
.95%
1950
1.70
1962
2.20
1968
2.40%
-
i! 2.45
1951
in
our
sales
department
1957
1.80
1963
2.25
1969
2.45
1.25
1958
1.90
1964
2.30
1970
2.50
1953
CONRAD W. RAPP
1.15
1952
r.35
1959
2.00
1965
2.35
1971
2.50
1954
MR.
1.50
1960
2.10
1966
2.40
1972
2.50
(Accrued interest
The above Bonds
Wm. E. Pollock & Co., Inc.
20
PINE
STREET,
NEW YORK 5, N. Y.
Telephone: HAnover 2-8244
/
are
offered when,
as
be added)
to
and if issued and received bii us and subject to
approval of legality by Messrs. O'Melveny <!j Myers, Attorneys, Los A ngcles, Calif.
'
Teletype: NY 1-2846
The Chase National Bank
J. P.
Morgan & Co.
Lazard Freres & Co.
Incorporated
Drexel & Co.
y
The First National Bank
Portland, Ore.
Stone & Webster Securities Corp.
THE
NEW
PROXY
Mercantile-Commerce Bank & Trust Co.
RILES
Schoellkopb Hutton & Pomeroy, Inc.
A
Booklet containing
the Securities arid
the
new proxy;
Exchange Commission is
:'
rioW
Lee
;
'
ready and will he sent
you
without charge
'
Higginsori Corp.
'
"
v'
N
->
,VR-
•
4 \r
•
on
f.'x
jf]
Merrill Lynch, Pierce, Fenner & Beane
'
;
.
■/
L. F. Rothschild & Co.
.
/
Coffin & Burr
request.
1
;///////-'///^
rules of t
«•
rf
1
t*
t
,
v
'r
'
•
,
\ ' /
/
' '
"
,
"
Laurence M. Marks & Co,
»
y
/
H
x
{. *
..
Hornblower & Weeks
Incorporated
-
> '
/*«
•'
"
-
■>
_
Thcsie! rules
are
permissible for current solici-,:
tatioris and become
commencing
on
.
'
-
The Illinois
obligatory for all solicitations
and after February 15th.
%
/
-
Company "
Chicago
/-
Commerce Union Bank
Nashville
_
Hirsch & Co.
Chicago
Pacific
Company of California
Los
-
./
GEORGESON & CO.
52 Wall Street. New York 5, N. Y.
>'
■
-
■
/
Tripp & Co.
*
Telephone llAnover 2-1470
Chicago
Tilney and Co.
IncBoston
•
Philadelphia
•
Chicago
•
Los- Anpeles
*
San
!■
"
;'f ^
'
''
'T
•.
1
-
Company
Incorporated
Hill, Richards & Co.
J*
Los Angeles
/
'
W. H. Morton & Co.
1Incorporated
R. D. White & Co.
Wm. E. Pollock & Co., Inc.
Barcus, Kindred & Co.
Chicago
Yorlc, January 21, i 948.
Kobbe & Company
Incorporated
National City Bank
of Cleveland
McDonald-Moore & Co.
Detroit
Francisco
New
^
,
-
<,
' i *
*
A
r
Angeles
Martin, Burns & Corbett, Inc.
*
•
Detmer & Co.
Ask Jor Booklet R
;
R. S. Dickson &
■
//
,
/
;
tion,
if it gets
the
In reply to
declining
activity," Professor Rodgers com¬
mented.
"Many people are rely¬
ing too heavily on the Marshall
Plan.
to
means
th£ international side, the
outlook
both
an¬
the sales department of their Newoffice.
Prior
to
joining
quicker, higher, and
than
ing mounts another 10 to 20%, he
it,
City,
York
can
you
Corporation.
that Ogden Edwards has
associated with them in
the inflation
once
the
and
bear
Securities
65 Broadway, New York
"In such
"all
interest
bounce back
increases and the cost of liv¬
Union Securities Corp.
credit
and
event," he said,
knowledge that
the long-
2V2's, Professor Rodgers said.
If, however, there
probably
7
Adds Ogden Edwards
be
powers
obligations down.
seems
an
the
over
which would temporarily
quences
do
and
drastic
restriction-features
consequence
policy, it
all
authorities and the increasing risk
City
bill
/
the
with
from
real anti-infla¬
industry in 1947 the; tightening
policies of the Federal Reserve
York
- ■
bill
a
put through Congress and such
are
weighing
voters
on
bad faith,
to
(307)
country that
tion
public position
from
mand
the
them to
reasonable to expect the monetary
wage
v.;
Although
f
Savings
•
Bank
-1948
fate."
a
o
through
record
on
2%%./rate
For
amount
doubts present volume of business
catastrophe.''
borrowing will expand owing to increasing business risks and re-//
•
CHRONICLE
confronted with
alternative-, of - inflationary
the
Professor Raymond Rodgers
that the
effect
be
abandon
this
categorically
are
to/the
FINANCIAL
8
THE
(308)
COMMERCIAL
FINANCIAL
&
Thursday, January 22,•< 1948
CHRONICLE
Joseph F. Hammel
Securities Salesman's Corner
Joins Kneeland & Go.
(Special
to
The
ILL. —Joseph
F.
associated
CHICAGO,
Hammel
with
Chronicle)
Financial
has
By JOHN DUTTON
Middle West
become
Kneeland
&
Board of
Co.,
FOURTH ARTICLE (Training of
Salesmen)
one share of Central &
stock, thus disposing of
nearly half of its system assets. Last August stockholders approved
a resolution to dissolve
the company, and it was generally forecast
that within a year or a year and<*>
—.
'7 7- / r———
a
half the company would have the public holders of North West
completed the distribution of its Utilities.
This litigation has now
:o
holdings^
:
obtaining profit. They will listen
reasonable analysis of "WHY" tertain developments should take
situations"
a
or
Building, members of the
Stock
Exchange.
Mr.
Hammel
was
formerly with
Chicago
Moran
Mason,
Co.
&
f
Co.
&
'
:
J.
J;
and
"
^
Investors
League To
Discuss Venture Capital
Announcement
Investors
hold
an
was made by the
League, Inc., that it will
.all-day Forum at the
Bellevue-Stratford Hotel in Phila¬
delphia, Jan. 29, 1948, on the sub¬
ject^ "How Can We Resume the
Flow of Venture
the
be
principal
speakers
D. Milli-
(R-Colo.)
kin,
Senatewill
Capital?\
Senator Eugene
Among
will
Chairman
his topic,
as
the
of
Committee.
Finance
take
;
He
"How Can
We Resume the Flow of Venture
Capital?" The Senator will be in4^'a
a
n
u
J16 ^0I;Um
the First Boston
cnairman
M
Pone
of
Corporation; and
Pinannp
finance
pViairman
nnmm
committee,
Nathaniel S. Chadwick,
N. Y. U.;
Vice-President National Securities
Research
Corporation; Mrs. Mary
Chairman Trenton
Co.; Mrs. M. C. Walther,
Roebling,
G.
Trust
Investor, Textile Consultant; B. C.
Forbes,
President
Investors
League; N. R. Caine, Tax Consult¬
ant and
Chairman Investors
John A.
Reynolds and
League Tax Committee;
Murphy, Partner,
Company.
\
he
will
get
an
opportunity to see to it that his prospects are
7
type of business; After he has determined that his prospect
is
During the past year his firm has "covered special situations that have
been very Profitable and that he might be able to let the prospect
know if something like this came up in the future. That is all there
is to [t 0f course' y°u can say i{ in y°ur own way* Cal1 il what y°u
that jooks jike an opportunity to make some substantial profit.
1
will-this is the approach that brings in business from those who are
interested in making a speculation for profit. It is the same
that
.g
uged
thfi
at
racetrack
too—but
approach
millions of people go
there
year.
every
After the new salesman has lined up some prospects who fall
into the category which we are discussing, he then waits for a situa¬
tion to come along.
Sometimes a telephone call will do the trick;
other times a visit by appointment, or a luncheon date.
Make it
:7
important/make it hard to get. As they say in show business, USE
THE BUILDUP.
People who "want something for nothing" like it
that way.
to think that
all there is to the securities business is this sort of thing. This has
word
One
been
a
calling
new
For
of caution.
Don't allow your
new
man
frank column. There may be some who do not agree that
spade a spade is good policy regarding such matters.
But
are in a business.
We have all sorts of customers.
The
very
a
we
man
in the securities business had better see the whole
picture
Profit:
'.The $5 Preferred stock of
85-year-old New England
pany,
.which
7 Earnings
years
While
of
-
Unfortunately today, too many people are
cent
com¬
share. '
-a
averaged. ,$21.30 a
7V ";'7'
*7'7'"
dividends
have
been
paid for a number of years,'
earnings in nine of the past
•
ten
years
dend
covered annual divi¬
requirements
by
a
policy,
inflation, high taxes, and the prevailing
The re¬
atmosphere of the public in general, tends in this direction.
ydividend 1
a
$77
Government
an
7 '.*•
■
no
kets.
the previous ten
over
have
Vshare.
"
ha&
accumulation
will reach the treasury
Middle
12 months ended
the
and
West
become
revelations of high government
too; knee deep in cominodity
salesman should have
officials, and many little ones
specuiatioft all! bears out thi^ f^ct; Every
"more than one string to his bow."
he meets one of the^e se¬
your now man;
curity buyers who wants to take
to
recognize
7
a
"flyer," he should know how
him 7(no lessons needed there); and
how to make it hard to
Next week
interested in
So when
we
get,-and IMPORTANT.;-;.
"
Sept. 30,
share
a
Offers Los
the
on
1,800,000 shares then outstanding,
but
on
a
pro
forma basis the
amount
is reduced to approxi¬
Offering of
The stock is there¬
selling
at
only
times earnings (without
mately $1.57.
about 7.3
maturing
allowance for the increased
earnings which may eventually
be expected from the investment
of
the
additional
$4,300,000).
Based
of
yield
priced
would
eventually dispose of their sub¬
stantial holdings, but have gained
to
yield
bonds
The
from
Recent
"'holding
company"
exemption
and will probably be in no spe¬
California.
the State of
in
empt
of this stock They are legal investment for sav¬
until the return of better utility ings banks and trust funds in New
cial hurry to dispose
markets.
York, California, and certain other
Remaining items in the Middle
states.
portfolio, which will prob¬
West
distributed during 1948,
Utilities, Wis¬
consin
Power
& Light, Public
Service of Indiana, Middle West
of
Canada
and
miscellaneous
assets and cash.
Distribution of
be
include
Kentucky
Wisconsin
been
Power
delayed
&
Light
Kirkland, Nelson With ■}
Harris, Upham & Co.
77 SAN
by protracted liti¬
North West Utilities.
There
seph
with
stock
A.
cisco
disagreement over the divi¬
ners
&7. Co., ias j
Both
232
were
.
Montgomery j
formerly part-1
in Coons, Milton & Co.
wide
the
Common
$4.07
earnings
Portland Electric Power
a
in
share.
7
Over-the-Counter Quotation Services
For 35 Years
Recent price 7
6s, 1950
Portland General Electric
special situation mailed
on
% Prior Pfd.
Portland Electric Power
Descriptive analysis of this
request
Common
When Delivered
NATIONAL QUOTATION BUREAU,
148 State
fel. CAP. 0425
:
:
Teletype BS 259
N. Y. Telephones: HAnover 2-7914
W
Established
St., Boston 9, Mass.
and WHitehall.i-9020
46
Chicago
Front Street,
Inc.
1913
Gilbert J.
29 BROADWAY,
New York 4, N. Y.
San Franc'sco
'
Postley & Co.
NEW YORK 6, N. Y.
Direct Wire
to
j
of their new San Fran-it
office 7 at
Street.
7
CAL—Jo¬
Nelson and .Stanley H.j
haveVbecome associated j
Harris, 4 Upham
managers
sion of Wisconsin Power
Chronicle)
FRANCISCO,
Kirkland
were
& Light
between Middle West and
to The Financial
(8pecial
has
gation over the dissolution of the
intermediate
holding
company,
price 37
average
to
present
margin.
Ten-year
are
.95%
Federal income taxes and tax ex¬
was a
is
to
Chase
headed by The
Bank.
interest exempt from
are
he should know,
;7-/;.-*.;'7-
bonds
1949
1,
2.50%, according to maturity and
'^7fv
•; ;• 17
Jan.
made Jan. 21 by a bank¬
ing group
be
Halsey, Stuart will
the
was
from
National
the anticipated dividend
on
$1,
about 8%%
rate
1972
City School
California, 2V2%
Districts,
any
issues of $18,-
new
Los Angeles
500,000
currently
fore
Angeles
School District Bonds
inter-corporte holdings among the
three companies and
the result
will discuss the approach to the investor who
"growth situations." 77 7 ;j:7
$1.95
earned
Chase Bank Syndicate
Service
Public
Illinois
Central
in
ably
right from the beginning.
becoming nothing more than plain gamblers in the securities mar¬
.
of record
stock
of
holders.
Then tell him to use the following basic" approach to
not "forgotten.
after all
y
West
appeal period has elapsed,
the
.
ft
former President
and
Director
Vnrh
Allen
Colonel
change-
Middle
of
and the
common
each -two
.....
"'definitely in the speculating group, he should mention that once in
include:1 a while the
partners of his firm obtain information on something
will
York
New
for
.
Francfs aZ TruZ'
president
Service
$10)
(par
shares
share of Central
one
....
Lamr^t DuPout, reHred executive
Lv
stock
opposition to the plan, and after
Judge Leahy has issued his ruling
company's proposal
Public
Illinois
further
be_ no
.
luncheon
speakers
to distribute
probable
seems
will
,
arise
aiternoon.
Other
the
on
It
10.
that * there
business provides ap opportunity Jan. 26. It appears very unlikely available for distribution. ; 7
for: people to invest their savings—that the price appreciation angle that any opposition will develop
A detailed investigation would
is a secondary consideration—and that if he desires to build a sub¬ and Feb. 26 has been named pay¬ be
necessary to make any careful
stantial clientele he will develop all three classes of accounts . . . in¬ ment date.
determination
of the remaining
7y:'7v\'7 ''7,7 .'7/! 'V. 7-..y
vestors for income, investors for income and price appreciation and
Central Illinois Public Service values in the Middle West port¬
speculators. /
'■ ;77. ' 77 ;• 7
- : " ■
folio. The following figures are
("CIPS") is quoted over-counter
The average speculator as we have said before "wants something
about
HV2-I2; Middle' West is highly approximate estimates:
for nothing." There has been too much hypocrisy among the public,
currently - selling:' on the Curb at
: -7
Millions
the security industry, and the. various government agencies,' such
14%, and on a "when distrib¬ Kentucky Utilities.
$13
as the SEC and the NASD, regarding this growing group of security
uted" basis is quoted over-counter Wisconsin Power & Light
10
buyers who want someone to tell them where they can make a
9.-9% .7
Central
Illinois
Public Public Service of Indiana
8
"turn," or put them next to something good; These people are not
Service is currently selling 430,- Middle West of Canada..
;4 .77
investors. They are plain gamblers, and .their motivation is nothing
000 additional shares of common Miscellaneous and cash
73
more-than human cupidity.. Some of them will be only too g J ad to,
stock to the two owners—Middle
admit it, even if those in the government agencies, and some of the
West Corp. 7 Which, holds about
Total 7-.-.-..
': $38
)
holier than thou people in the investment business, hold up their I
74% and.Haisey, Stuart & Co., of
Amount per share
$11.50
hands in horror at the word "gambler." But that is what these people!
.7
•' "'-v 7v* >;.• v-'u.■.
v
*
Chicago, who hold the remain¬
are
doing—gambling. Your new man had better know this 7 when '
On the basis of this estimate:
he goes out to sell securities, because he should know how to handle der—at $10 ayshare. y Thus the
receive $4,300,000 (which assumes a moderate
this type of buyer when he meets him. Incidentally, he will meet; company will
amount of market seasoning for^
cash to help finance construction
plenty of them. Their numbers are increasing daily because higher
the
Kentucky
and
Wisconsin
taxes,are killing the incentive to invest for income.
"v.
J work and the number of shares stocks rafter distribution) there
be
increased
to
2,230,000
There is only one sales talk you need to sell a person who wants will
would appear to be about 25%
to gamble. YOU MAKE HIM KNOW IT IS HARD TO GET INTER¬ shares, which will make Middle
potential appreciation for Middle
ESTING OPPORTUNITIES. Your new man should know that once • West's holding large enough to
West (ex-CIPS).
convenient
distribution
in a while you do uncover certain bargains in your search; for permit
attractive securities. You should tell him that when these situations (on a l-for-2 basis) to its stock-
be divided into
.
Iruf nftprnnnn'
ana
„
t
James H.
qy. Governor
(R-Pa.).
DXiff.
views
Feb.
ton
parties had until Jan. 22 to
come
Judge Leahy at Wilming-t
before
inter¬
will
also understand that the securities
Tfade
O'Connor
other
request a hearing or submit their
primarily speculators,
should not be neglected by a new man going into the security busi¬
ness.
However, he should be cautioned that this type of business,
although it can be profitable, must be handled in a manner that will
not cause future difficulties for his firm or for himself.- He must
Joseph F. Hammel
or
SEC and
the
before
enforcement order
the
announced
SEC
the
stockholders
ested
.v
.
settled
aeen
Recently
that
other mediums for
place pertaining to a security.
1
Group (1), those security buyers who are
distributed
South West Corp. for each share of its own
comprise
a group of individuals who are primarily interested in obtaining ap¬
preciation of principal. As we pointed out in a previous article in this
series, this class of investors can also be divided into two general
classifications: (1) Those interested in speculation for profit, quick
.urns, and obtaining "something for nothing"; (2) Those who strive
or appreciation of principal, but
are also interested in the invest¬
ment approach to the problem.
They will try and select "growth
percentage of present day security buyers
The largest
Corp. and "CIPS"
Last June Middle West Corp.
Chicago
H j
Volume
COMMERCIAL
THE
Number 4666
167
&
FINANCIAL
CHRONICLE
(309)
Buffett Urges Restoration oi
Dealer-Broker Investment
Representative Howard Buffett (R.-Neb.),
mentioned will be pleased
the following literature:
It is understood that the firms
interested parties
send
to
the
of 7
the
our
Repre¬
Review
Disticraft,
Forecast—
and
brochure
Street,
—
Descriptive
distilling proc¬
Inc.
on
new
coin
fett remarked:
ess—Bennett, Spanier & Co., Inc.,
7
Common Stock Portfolios—Cir¬
cular
tance
storing
cago
portfolios selected to fit
of three differ¬
types of investors—Mallory,
Adee & Co., 120 Broadway, New
York 5, N. Y.
•
South, La
3, 111. V
Salle Street, Chi¬
'
;
' .
,r:
on
Dorset
the requirements
Inc.—Memo¬
Fabrics,
randum—Maxwell,
ent
&
Marshall
Co., 647 South Spring Street, Los
Angeles 14, Calif.
of
gold and end¬
ing
the
de¬
our
of
of
money
direct
New
Allen
Chapter"—Analysis of
Berkshire
Fine
Spinning
B.
Laboratories
DuMont
-Circular—Ward >&Co.,
120
Broadway, New York 5, N. Y.
Associ¬
ates—Scherck, Richter Company,
Bldg., St. Louis 2, Mo.
Landreth
Iiic.-r-Analysis of
Electro I,
•
ufacturer
''The New Look"—Circular on a
diversified group of Texas Mu¬
nicipal Bonds rr- Rauscherj Pierce
& Co., Mercantile Bank Building,
Dallas 1, Texas.
!
'i
<47 /
k:-
>
v
;
Graham-Paige
New Proxy Rules—Booklet con¬
taining new proxy rules of the
Securities and Exchange Commis¬
sion
(rules permissible for cur¬
rent solicitations and' obligatory
for all solicitations commencing
on
and- after Feb.
15)—ask for
Corp.—
Motors
Analysis—Seligman, Lubetkin £
Co., 41 Broad Street, New York 4
New York.
■
Booklet
&
Inc., 41 Broad Street, New
York 4, N. Y. >.
- 7'7 ?; ;'.V/■•>■/>...
Co.,
;;■>i
"
man¬
control
hydraulic
trial uses—Seligman, Lubetkin
.
■j,
of
equipment for aviation and indus¬
Also
"
available
*
analyses ol
Foundation
Co., Wellman Engi¬
neering, and Tennessee Products
& Chemical.
7/7'*.777
R—Georgeson & Co., 52
N. Y.
are
Wall Street, New York 5,
City
lar—A.
Stocks—
Bank
Car
Motor
Hudson
New York
«
M.
Co.—Circu¬
&
Co., 1 Wall
Kidder
Street, New York 5, N. Y.
Operating Earnings and Ratios of
Stocks—Laird, Bissell & Meeds,
120 Broadway, New York 5, N. Y.
20
Nickel
International
of
Co.
Ltd.—Analysis and in¬
vestment appraisal—Kalb, Voorhis & Co., 15 Broad Street, New
York 5, N. Y.
Also available is a reappraisal
of
Mclntyre
Porcupine
Mines,
Canada,
Public
Utility
miscellaneous
an
231
utility
public
stocks
industrial
has
Stocks—List
and
which
in
of
firm
interest—Comstock & Co.,
La Salle Street, Chi¬
South
4, 111.
cago
Railroad
Limited.
the
of
Developments
■
Oil
Kingwood
Week—Current
developments in
industry—Vilas & Hickey, 49
Wall Street, New York 5, N. Y.
Co.
—
Special
survey—Peter Morgan & Co., 31
Nassau Street, New York 5, N. Y.
the
Sec.
Lehman
Situation—Analysis of
85-year-old New England com¬
pany with large dividend accumu¬
lation—Raymond & Co., 148 State
Street, Boston 9, Mass.
Special
Steel,
cular
The
in
Ill
Northwest
Utilities—AnalysisIra Haupt & Co., Ill Broadway
New York 6, N. Y.
Master Metal—Cir¬
low-priced speculative
companies—Mercer Hicks &
Co., 150 Broadway, New York 7
•
.
*
Amalgamated
♦
tion
Sugar
New
—
15 5/21
Time,Inc.—Memorandum—Bond
N. Y.
&
Corp.
Manufacturing
details—Comstock
Salle
La
South
&
Co.,
Chi¬
Street,
Inc.
-
77
.
N. Y.
10.
be
Federal
Reserve
notes
for all
debts,
receivable
the
be
grains
gold
dollar
public and private, but they may
of
9/10
shall be those in effect in 1932. ;
gold is the human freedom
Sec. 4. Standard gold coin and
Sec. ,12.; That' part of Sec. 43 7
which all other freedopcis ulti¬ gold certifies tes ;>• shall,? be
full
of the Act of May 12, 1933, as
mately depend.. **
7;77 1 ■ \ f? legal tender. '
amended by Public- Resolution No..
"It appears that only by the
;
Sec/ 5. All other money of the
fight to own gold can the people United States shall be maintained 10, approved June 5, 1933, pro¬
control the public purse and thus on a
viding that, all coins and curren¬
parity with the standard gold
effectively restrain their political dollar by freedom of exchanges at cies of the United States shall be
full legal tender,? is hereby /re¬
rulers.
Because of that fact the
par with standard gold.
modern tyrants of Europe, Lenin,
pealed.?.:
7/7-.77
Sec. 6.
Standard gold bullion
Hitler and Mussolini, all quickly
Sec. 13. The1 Act of June
12,
and coin as well as gold certif¬
1945
prohibited individual ownership
(59 /Stat. 237), is hereby
icates shall be lawful money for
of gold. Then there remained in
amended
to
provide
that
all
reserves against deposits in Fed¬
the hands of the people no effect¬
eral Reserve Banks and in the Treasury currency, except that in
ive barrier against inflation and
be
5% redemption; fund against Fed¬ process of retirement, shall
war..
counted along with gold and gold
eral Reserve notes.
"If
Congress will move con¬
certificates, as part of the lawful
Sec.
7. Standard
gold bullion
structively to restore to Ameri¬
money
for reserves against de->
and coin as well as gold certif¬
cans the freedom to own gold, the
posits in Federal Reserve banks.-.
icates shall count as part of the
drive here'toward the chaos of
Specifically, all silver and minor
minimum reserve of 25% to be
national bankruptcy and perpetual
c o i n s,
silver, certificates,
and
held by Federal Reserve/.banks
war can most surely be ended."
United States notes shall be added
against
their
Federal* Reserve to
; Thc£text of Representative Buf¬
gold and-gold certificates as
notes in actual circulation.
fet's measure follows: 'Z;7777f'7?
part of the money that is lawful
legally-issued Treas¬
except (a) fraction¬
Sec. 8. All
A BILL
to
citizens
right of American
freely
gold
own
deterioration
and
of
14.
1934
Federal
The
Reserve
Reserve
Gold
337)
(48 Stat.
Act
is hereby
Sec. 15. This Act shall take ef¬
fect Jan. 20,
shall
following
the
Specifically,
in
repealed. "
quality
the
of
Sec.
and (b) bank
notes in the
9,
Treasury
of retirement, shall have
of full legal tender
process
public purse to the people; to
further
Sec.
in
notes
reserves
banks against their deposits.
silver and minor coins as pro¬
al
vided
and
gold coins; to return control over
restrain
for
ury currency,
1949.7
This announcement is not
t
offer to sell or a solicitation oj an offer to buy these securities.
offering is made only by the Prospectus.
J
an
The
'■ V
V:
v-';..-' '/•'
if*-: 7 -a/*
7"
'
.
•
••
•
-'7
u/ -v" 7^.'7
'
Mohawk
Circular
—
Co.,
7'?
.7
•;
.?
'7
V.C.*
••
'•
.
/
v.''
7 '••;/.*/
V*
"■
'
•
7* •••
•-■'7
/.7-/.•
"
y
•'•••? ~
-
;
*•;
?
-
$40,000,00Q
Southern California Edison
First and Refunding Mortgage
Company
Bonds, Series A, Due 1973
' •/
//'--Z(37%)
.
v
Due
January 15, 1948
January 15,1973
Cotton Mill*
Mohawk Yalle;
Inc.,
238
Price 102.187% and accrued interest
Genese
West Penn Electric Co.—Memo¬
randum—Newburger, Loeb & Co.,
15
Broad
Street, New York 5,
Atlanta Gas Light Co.—Descrip¬
circular—Blair & Co., Inc.,
.
Sec.
shall
monetary
Street, Utica 2, N. Y.
Corporation, 120 Broadway, New
5, N. Y.
—
Investing
Hanseatic
York
randum— New
N. Y.
tive
44 Wall
standard
on
Dated
Utica &
Associated Electric Co.—Memo¬
York
Goodwin, Inc., 63 Wall Street,
New York 5,
4, 111.
cago
coins
own
Du Mont Laboratories and
Report—Troster, Currie & Sum¬
mers, 74 Trinity Place, New York
6, N. Y.
tric—Analysis—A. M. Kidder &
Co., 1 Wall Street, New York 5,
Artkraft
on
Shepard Niles Crane & Hoist—
City 1, Utah.
American Water Works & Elec¬
231
silver
,
Buffalo Bolt Co.
Analysis—Edward L. Burton &
Co., 160 South Main Street, Salt
—Full
9.. Fractional
be
informa¬
Also available is late
Lake
the
not be counted as reserves against
other notes or deposits of issuing
fine.
Gold
Howard Buffett
banks.
,7
/„
coins of not less than $10 denom¬
holder, insurSec. 11. All provisions of law
an ce
policy 77 7'" ' 7* v/*-'■' - ination and such larger denom¬
owner, and
every
pensioner in inations as the Secretary of the authorizing the President to alter
America. 77; 77/ ,77? 777,' '.7, / * Treasury finds desirable shall be the size, weight or fineness of gold;,
and silver ; coins-' are hereby re¬
"However, restoring the right of minted and issued upon demand.
the American citizen to own gold
V Sec. 3. Nothing in this Act shall pealed. The mint charges for as¬
may be of much greater signifi¬ be construed to change the size, saying and coining gold and sil¬
cance.
There is impressive evi¬ weight or fineness of ;the present ver, limits of; tolerance, and the
c
•
dence indicating that the right to lawful silver coins,
alloys in gold and silver coins
Portsmouth Steel Corp.—Data-
Buckley Brothers, 1240 Walnu
Street, Philadelphia 2, Pa.
N. Y.
;
of
the industry and stocks
oil
steel
;
Haupt & Co.,
Broadway, New York 6, N. Y.
The
2.
shall
ica
bond¬
every
the
of several
j
Corporation—Changes
portfolio—Ira
Representatives
unit of the United States of Amer¬
7
thi¬
portance
To restore the;
-
of
the Gold Standard Act of 1948.
is
and
-
Sec.
shall
legal tender only up to
United States of America in Con¬ $10. Five-cent pieces and one-cent
pieces shall be legal tender only
gress assembled:
up to 25 cents.
Sec. 1. This act may be cited as
House
of
terioration
notes.
Be it enacted by the Senate and
the
circulation
demand; to establish and
on
a
domestic
gold
coin
standard; and for other purposes.
re¬
immediate iir
"A
■
have the quality of full legal tender:
gold coin and gold certif¬
icates, silver dollars and silver
cerificates,
and
United
States
maintain
"The impor¬
105
•
,
enable holders of
to redeem it in gold
currency; to
paper money
sentative Buf¬
Annual
on
introduc¬
tion
bill,
H. Hentz & Co., 60 Beaver
New York 4, N. Y.
Gold Standard
Jan. 20 introduced in the House of Repre¬
sentatives a bill to reestablish the old gold standard in the United States, to take effect on
Jan. 20,1949, the date the next Administration takes over. In an address, which
accompanied
Recommendations and Literature
;
9
«
World
Street, New York 5, N. Y.
Bank
Bonds—Detailed
The Prospectus may
be obtained in
State in which this announcement is circulated from only such
dealers as may lawfully offer these securities in such State.
any
of the undersigned and other
memorandum—First Boston Corp.,
100 Broadway,
7. B. V. D. Corporation—Analysis
—C.
E.
Co.,
&
Unterberg
New York 5, N. Y.
HALSEY, STUART A CO. INC.
61
Broadway, New York 6, N. Y.
/
Central
Illinois
Public
Co;—Memorandum
Jones
&
Co.,
—
Edward
North
300
Amott, Baker & Co.
Service
SALOMON BROS. &
D.
PAINE, WEBBER,
Chase
the
Wholesaler and Retailer
Service-
Investment
Investment Securities
Our
Depart¬
11
Broad- Street,
York
and
15,
Y.
7
New
bank
Machine
randum—A.
H.
Co.—Memo¬
Department
stocks, title company and
BURR &
COMPANY,
GRAHAM, PARSONS &,
&
Co.,
Detroit 26,
Vogel
Penobscot-. Building,
*^11
■ i
*4 ? * ?
m
j?'? *«
'
r \' '
COOLEY & COMPANY
CO.
HIRSCH & CO.
GREGORY & SON
INC.
STROUD &, COMPANY
R. L. DAY
& CO.
»
.
incorporated
Boston
GREEN, ELLIS &
•,
;
•
participation certificates.
150 BROADWAY
,
DICK & MERLE-SMITH
AMERICAN SECURITIES CORPORATION
JACKSON & CURTIS
KEAN, TAYLOR &
Clinton
»'*v
Trading
-7
R. W. PRESSPRICH A CO.
HUTZLER
i '-
CO.
WM.
E.
ANDERSON
' '
'
?'
'
■
■v"
"
specializes in real estate bonds
ment of the Chase National Bank,
N.
(incorporated)
of
the services of
Service
Investment
L. F. ROTHSCHILD &, CO.
OTIS &, CO.
CO.
Fourth
Street, St. Louis 2, Mo.
Booklet describing
BEAR. STEARNS &
INCORPORATED
•
incorporated
HELLER, BRUCE & CO.
"1-
POLLOCK & CO.,
INC.
PUTNAM
& CO.
NEW YORK 7, N. Y
Philadelphia
January 21,1948
*
i
10
THE
(310)
COMMERCIAL
&
FINANCIAL
CHRONICLE
lery, Inc. 5% convertible cumula¬
M
-Southwestern
debt in
tive
Bell
Telephone Co. plans to increase its funded
$100,000,000" by an issue of deben¬
amount "not to exceed
an
tures to be sold at competitive
bidding. Proceeds are to be used to
fepay advances received from its parent, American Telephone & Tel¬
egraph Co., and to meet expan-*—
——
sion
costs
in the first half of the
current year.
'•
'
G.
i' *
H.
*
"
/"IW'.'
A
-
Deetroit
included
the
,
stockholders
common
the
of
of
&
•
Co.,
(par
Edison
share
per
the
in
450,000
capital stock
Walker & Co.,
St. Louis,
among the group of
19 underwriters headed by McDonald & Co., Cleveland, Ohio,
which will purchase any unsub¬
scribed portion of the offering of
58,612 shares; of common stock,
par $10, of The Harshaw Chemical
Co., which are being offered to
is
*
Corporation
offering
;.'v
V
*:';v
;
ton
shares
$20)
Co.
of
of The
at
$20.50
Stifel, Nicolaus
were
Inc.,
public
Newhard,
Cook
&
Co. and Stix & Co* of St. Louis,
and Stern Brothers
&
Co. of
'Kansas
which
City.
The
for
was
offering,,
the- account
of
the American Light & Traction
Co.,
'
'
1
oversubscribed.
was
'
.
t|l
}|t
5[J
latter company at $32.50 per share
on the basis of one share for each
George K. Baum & Co. and
Prescott-Wright-Snider Co., both
of Kansas City, Mo., and Kenneth
14, 1948.
Subscription warrants Van Sickle, Inc., of Emporia, Kan.,
will expire at 2:30 p.m. Jan. 27,
in
December
publicly
offered
1948.
The net proceeds will be
2,700 shares of 5% cumulative pre¬
used for repayment of $2,000,000 ferred
stock, 1947 series, of The
of short
term bank, loans,
and Palace Clothing Co. of Kansas
for working capital purposes. : ,J
City at par ($100 per share) and
four shares held
*
-
'
of record Jan.
as
$
tj«.
v*
of
ers
this
State
Dec.
on
who
17
in
offering at $27 per
710,500 shares of $10
Gas
owned
Light
Co.,
by
North
Power
&
underwritten
Inc.,
:
the
were
Nicolaus
Reinholdt
&
&
&
St.
of
& Co.
and
Louis,,
and
&
'•
Co.,
Barret,
Co., Inc. and H. O. Peet
both of Kansas City. The
was
oversubscribed.
,'y
....
Service
bonds,
the
of
Southern
Sulphur Co., Inc.
to be used
ceeds
working
(Va.)
for additional
capital.
These
shares
first offered to Southern's
were
and
common
holders
preferred
on
the
of record
basis
of
Dec.
one
stock¬
15, 1947
Co.
first
mortgage
series B,
3%%, due Sept.
1, 1977, at 102.365% and interest.
*r
*
Si:
'*
Associated with the First Bos-
share
new
for each 12 shares of preferred
or
common
stock
5,600 additional
Stifel, Nicolaus & Co., Inc. also
participated in the public offering
of $10,000,000 Central Illinois Pub¬
lic
of
shares
at $47.50 per share, the net pro¬
.
Gard¬
Stix
loans and for other corporate pur¬
block
A
v
capital
•
of
*
■
jj»\
.
of Y
! y:
,
30,000
stock
Busch, Inc.
iy -y
the
Nester
of
shares
on
to
were
be
solely
Old
by
com.
Chicago & Southern Airlines
Collins Radio
&
Missouri
Distil-
Commerce
terstate
Monsanto
The
13
Jan.
on
to
Chemical
Donald
of
a
for
funds
additional
[
costs
the
market
conditions*
*
I;
An
:
order
RICHMOND, VA.—Anderson &
Strudwick
to
of
Oscar
Service
units
new'
placed
Edward C. Anderson
brought
year
pur-
road's
estimated
fcr
the
;
$68,000 000,
Mr.
1
■
Diesel
new
1 *
♦
common
as
firm
Partners Of
Edward Clifford
are
& Stringfellow, of which Mr. Anjderson was a partner;
Western
The
on
D.
an
transmission
the
1,696
'Vf.
Frisco
reports
York
of
1947
were
Francisco
over
Series
months. At the
the company
12
1'
•'
'»,«
year
$4.11
to
which
the
St.
'• '•
to yield from
Louis,: for
Nov. 30,
share,
Proceeds
per
share in the preceding year. The
1946
Ship¬
1947
lar
volume
in
company's
the
history, and represented an in¬
-
of
in
were
ap¬
produced,
or
14%
issue
will
be
and 300 50-ton Box Cars.
$77,886,705 over net
the previous year. A
Stone &
total of 54.000,000 pairs of shoes
Clinton
the
of
Locomotives; 18, 1,000 h.p. Diesel
Electric
Switching Locomotives;
160 70-ton Covered Hopper Cars;
500 55-ton Open Top Hopper
Cars;
918,192, the greatest annual dol¬
com¬
sales
23
credit.
fiscal period amounted to $212,-
crease
of
tax
ments to customers in the
shares to
Dec.
$2,152,414
figure included
carry-back
ac¬
provide for not exceeding
75% of the cost, estimated at $11,051,550,
of
the
following
new
standard-gauge
railroad
equip¬
ment: eight 6,000 h.p. Diesel Elec¬
tric Freight Locomotives; two 4,-.
500
h.p. Diesel Electric Freight
as
$1.62
or
1.50% to 3.00%,
used to
$14,002,017,
per
against $5,448,781,
issued under the Phila¬
plan, were immediately
by the group, at prices
cording to maturity.
Interna¬
ended
to
are
delphia
re-offered
*
'
of
amounted
equal
Curb
1 "
^
A
income
fiscal
1947
'
*
,
•.
tional Shoe Co.,
the
ac¬
before.
a year
:
Wholesale
Ry. Equipment Trust
2%% equipment trust
A,
certificates, maturing $552,000 an¬
nually Jan. 15, 1949 to Jan. 15,
1963, inclusive. The certificates,
1,904 compared with
were
Net
Nelson, President ;of
from 100,000
^
Equipments
of
year,
,
\
on
Halsey Stuart Offers
gain of 12.8%
243 at Dec. 31, 1946.
will
stock
*
stockholders
Supply
sales
year
a
the
of
counts
300,000 shares.
The
full
preceding
close
Jan. 26.
Industries, Inc.
;
total
$121,415,000,
Corp.
increase in the authorized
stock
the
for
(Jan. 22) from St.
New
begun,
$12,518,- I;
A
group
headed by Halsey,
000, an increase of 4.4% over the ; Stuart & Co. Inc. won the award
same
month in 1946, while sales
Jan. 19 of $8,280,000 St. Louis-San
stockhold¬
Brewing
common
the
on
Auto
December
100% stock
common
Falstaff
part of the rail¬
had 257 units in operation, against
stock, which
a
a
(Special
more
:
Yoiingberg Adds
to
The
Financial
Chrcnxcle)
SAN
FRANCISCO, CALIF. —
Frank ,Wi Enos has been added to
Western Natural Gas
the
staff
Russ
Stone
&
Youngberg,
With Herrick, Waddell,
(Special
distributors
underwriters
Garfield 0225
of
Building, members of the
Francisco Stock Exchange.;,.:
'
SCHERCK, RICHTER COMPANY
2, Mo.
business
railroady' public
Anderson and Edmund Strudwick,
Jr. Both were formerly with Scott
San
St. Louis
in
and insurance stocks.
;the
•
Fraser
order for
new
total
an. investment'
specializing
'utility, industrial municipal, bank
in¬
gross
will
year
conduct
_
•
complete Diesel -operation.
Manufacturing Co. of
City, announces that the
stockholders on Jan. 8 approved
Tennessee Gas & Transmission
SL 456
with
gross
units will cost an estimated $7,-
Butler
mon
Bell Teletype
formed
more
44
road's^ long-range .plan
Kansas
Airways
Building
been
•
$18,000,000, while
over
said. The
for
issuable
bution
Southwest Natural Gas
Landreth
has
offices at 807 East Main Street to
improve-;
for
locomotive
about
c
v;
authority to is¬
sue
$4,000,000 of : 3 V2 % 30-year
first mortgage bonds of' 1978 in
order to finance part of its $10,000,000 construction program. A
30,000-kilowatt
generator
and
sub-station, costing approximate¬
ly $4,650,000, is planned at this
time for the company's Riverton,
Kansas, plant.
the
City Pub. Serv. pfd.
Opens in Richmond
y
,
equipment
totalled
close of the
come
9, last, because of unsatisfactory
♦
Kansas
Anderson & Strudwick
chases and capital improvement
series B, was postponed on Dec.
Southwest Gas Producing
.
opera¬
during
\ the Katy's total equipment
working capital.
■f;*
new
-capital
incurred
! at the
4% preference stock,
par
and
income.
be quoted "ex" the stock distri¬
Southern Union Gas
..
placed in
are
President
.
that
I than 25% of its estimated
Diesel
The offering of 250,000 shares of
$100
ordered
for
needed
are
Fraser,
announces
1947 the value of
three years, upon which it may
draw iwhen
Cov,
group
extending
V.
Missouri-Kansas-Texas
■■■■
It ::
line of credit up 8
a
$25,000,000,
Exchange
Commonwealth Gas
Velvet Freeze
the
ments
through
arranged
Co.
that
announced
of banks for
shares of
Consolidated Dearborn
com.
plants
new
tion.
Commission.
RR
Louis.
Kansas City Pub Serv.
be increased to about 70,000,000 pairs annually when the
Nov.,
1947
They were priced to yield 1.50%
to 3.00%, according to maturity.
mailed today
Texas Eastern
in
<
: were
Old Ben Coal
Hearst Consol. Publicat'ns A
RR.
two years ago to switch over to
St. Louis Public Service "A"
Gulf Public Service
during
Gardner,
of record Jan. 9, 1948 are being
Taca
Pacific
Commission
LaPIant-Choate
Ely & Walker Dry Goods
fac- •*
shoe
new
completed
will
1
Jan.
Seven
capacity of the company's plants
;
with the Missouri Public
Poindexter
Delhi Oil Co.
outstanding.
1
were
pected to be completed early in
1948. It is estimated that the
■
ers
Spinning
of
Obear-
headed by
and in¬
syndicate
a
dividend to
Berkshire Fine
stock
of
shares
Sold
—
be.
';'.vi-'f
Certificates for the additional
—
shares
period.
tories
the Nov. 30, 1947 year, and con¬
struction of three more are ex¬
had : operating
revenues
amounting to ' $17,197,241, com¬
pared with $14,915,468 in Nov.
cluding Stifel;, Nicolaus & Co,.
1946. This included freight rev¬
Edward D. Jones & Co., Newenues of
$14,699,021 and $12,074,hard, Cook & Co. and I. M.
968, respectively. Net income to¬
Simon & Co.
taled $547,803 in Nov., 1947 and
■:
*
*
*
...y..*.y":v':
$1,005,887 in the same month in
Oh Jan.* 19, an issue of $8,280,1946. For the eleven' months end000 St. Louis-San Francisco Ry.
;ed Nov. 30, 1947, Missouri Pacific
2%%
equipment
trust
certifi¬ reported
operating revenues of
cates,
series A,
due
annually $180,727,928, compared with
$158,$552,000 on each Jan. 15, 1949 to 797,336 in the
corresponding pe1963,
inclusive, were reoffered 'riod in 1946. Net income was
$6,and quickly sold by a group of
579,969 in the 1947 period and
investment
bankers
headed ; by
$3,808,891
in
the- first
eleven
Halsey, Stuart & Co., Inc., sub¬ months of the
jpreviou,s year.'
,
ject to the approval of the In¬
16
Reinhold
*
Bought
to
within
O. H. Wibbing & Co., of St.
Louis, and Stix & Co. and H. O.
Peet & Co. on Jan. 16 participated
in the public offering of 50,000
of
stock
1948
than in the 1946 twelve months'
,
of
000,000, and is
The V
the State of Missouri.
shares
share
a
Empire District Electric- Co. of
Joplin has filed an t application
held.
common
sold
of
Industries
300,000
Anheuser-
sold at 27% in
was
secondary distribution
a
a
issued in exchange for each
f
v v. ■
\ I 'jv(.; :
;;
Clinton
;Vr;!;
poses.
proposal to acquire
a
seven-tenths
Co.
,
Fitch &
issue
Co.,
stock
common
Acid &
5,600
proved
material stock interest (at least
at par ($20
net, proceeds Of ! 80%)
of Obear-Nester
Glass
stock
the
which will be used to reduce bank
has
Hill Brothers of St. Louis has
American
Co.
Stifel,
net
of
value
A. G. Edwards & Sons, I. M.
Simon
all
share
par
Co., which had been
following:
ner,
public
stock of Northern. Na¬
common
tural
partici¬
the
The
proceeds, to¬
gether with other funds, will be
used to'v: redeem the outstanding
6% preferred stock.
Among the investment bank¬
pated
j
dividends,
preferred
share),
per
"Thursday, January 22,
,;liam
L. D. 123
to The
Financiai,
Chronicle). ,:
WINTER
•!
L.
HAVENj FLA.
WilWilbur, ySr. has become
connected
^ith Herrick, Waddell
& Co., Inc.
■e
~
ilvClvi.T-
ST.
COCA-COLA
LOUIS
Newhard, Cook & Co.
Members
SECURITIES
New York Stock
V
;
Peltason,Tenenbaum Co.
LANDRETH
FOURTH & OLIVE
WM. F. DOWDALL & CO.
Established
1932
»-
BUILDING
319 NORTH FOURTH
ST. LOUIS 2, M0.
v
ST. LOUIS (2), MO.
t
Teletype—SL 486
,
;
''?) l.D. 240
'•••
'
.
Teletype—SL 151 & SL 152
J:
ST.
;
LQUIS 2, MO.
.
Bell
.
St. Louis Stock Exchange
Chicago, Stock Exchange
;
,
'
'
Stix: & Co.
New York Curb Exchange (Associate)
Exchange
■
*
f
INVESTMENT SECURITIES
I
509 OLIVE
STREET
A
.
-
v
St.LouisI.Mo.
L. D. St. Louis 340, 341 and 342
L;-:-:
Correspondent qnd
\
/. '■
Private Wire System y."..yy.
'
Members St. liouis Stock Excbangs
Clark, Dodge & Co., 61 Wall St., New York 5, N. Y.
Teletype SL-68
1
ti
J
'i
'l i*
•
"
.
£r_..
i*A-.
Vtr
Volume 167
THE
Number 4666
COMMERCIAL
&
FINANCIAL
CHRONICLE
first step is for
mecessary
manage¬
its'5 record
sell
to
ment
in
(311)
its
and
G. M. Walker Go.
stockholders
the
of
com¬
it heads.
pany
Branch in Hartford
HARTFORD,
~
;
i
NICHOLAS
By
i
'
CRANE
E.
investors
on
a
(Special
can
forms
'
' '
•
1
This is due
of direct com¬
sure
litera¬
pany
annual
ports
doubt to the pres-
no
Df other postwar problems
to a natural reluctance
ture,' includ¬
ing elaborate
1——
—
j
or
change
to
existing system.
an
industrial
The
id bro¬
have
their
stockholders
informed
not
through financial firms with such
excellent results
strengthening
stitutional ad¬
vertising,
work
know that.it'
us¬
now
etc.
Instead of
use' and
must not
(1) The
lected
relations
lic
to
departments
Nicholas
Crane
E.
spe-
to
industrialists
These
shareholders—who
their
give
all
the
are
the
of
owners
information
business—the
neces¬
follow and intelligently
the progress of their
company.
They also know what
many
others have learned by
to
sary
appraise
painful experience, that manage.'ment may at any time need the
: active support and votes of a large
number of their stockholders in
order
effectuate
to
plan
some
or
'step which management considers
essential
successful devel¬
the
to
opment and progress of their com¬
pany.
A continuing and effective
relations
stockholder
insurance
best
the
ment
backing
is
program
that
manage¬
have for obtaining the
can
shareholders when
of
and
on
talk
company
but
some
we are
a
real need arrives.
spe¬
ment
be
two-sided
a
given and
should
the
to
be
the
clear.
It is
to
As far
as
picture
the
first
financial
pos¬
and
are
This article is written for the
the
of reporting
methods
new
some
tech¬
and
niques which have proven most
Successful to the corporate execu¬
tives who have initiated and established
»
a
sound stockholder
on
been
re¬
factor
has
their
realization, that the
most direct and efficient way of
reaching
i
holders
influencing
and
on
basis
continuing
a
is
to
of
is
virtually
publicly-owned
company
every
in
are
\considerable period of time. Stock¬
out¬
an
six persons from financial
with top-executives.
This can be
done to advantage at least four or
five times
a
year.
If feasible, this
company
h
non-
this respect.
When
retains
company
/■/'•,'
r
Although
[premise is
^apparently
ipany
this
readily
many
■ ■
'■
-
,,
demonstrable
industrial
com-
presidents and their public
relations heads have not had the
Time
or
;
fundamental
opportunity to take
cog¬
nizance of it and act accordingly.
to
The
Financial
Chronicle)
CITY, MO.—William.
J. Kevan is with Herrick, Waddell
&
Co., Inc., 1012 Baltimore Ave¬
nue.
Smith, Polian Co.
to
The
Financial
(Special
Chronicle)
WEST
&
Co.,
Building.
Omaha
National
to The Financial
PALM
with
William
Chronicle)
To be due
S.
now
connected
Beeken
Guaranty Building.
Equipment Trust Certificates'
To be
annually $552,000
on
each January 15, 1949
to
1963, inclusive.
unconditionally guaranteed
as to payment of principal and dividends
St. Louis-San Francisco Railway Company
by endorsement by
Certificates
are to be issued under an Agreement to be dated as of January 15, 1948,
provide for the issuance of $8,280,000 principal amount of Certificates to be
by new railroad equipment estimated to cost $11,051,550.
which will
secured
MATURITIES AND YIELDS
(Accrued dividends
industrial
an
to
be added)
1949
1.50%
1954
2.50%
1959
2.90%
relations, a
of control is pos¬
1950
1.80
1955
2.60
1960
2.925
1951
2.05
1956
2.70
1961
2.95
be¬
1952
2.20
1957
2.80
1962
2.975
ing given to various types of in¬
1953
2.35
1958
2.85
1963
3.00
sultant
on
greater
measure
sible
stockholder
the
over
vestment
.capable
a
w
houses.
manner
handled
is
in
after
firms
and
which
financial
v.".'
-
Issuance and sale
(4)
The
procedure
set
up
to
The
develop stockholder relations
through financial houses must be
on
of these Certificates are subject to authorization by the Interstate Commerce Commission.
Offering Circular may be obtained in any State in which this announcement is
circulatedfrom only such of the undersigned and other dealers as may
lawfully offer these securities in such State.
a
to be successful.'
ing the company's products.
HALSEY, STUART & CO. Inc.
A. G. BECKER
the
end
of
a
fiscal
&
CO.
INCORPORATED
HORNBLOWER
&
EQUITABLE SECURITIES CORPORATION
'
WEEKS
,
Too
period
1
their company have undergone a
decided change, either for better
R. W. PRESSPRICH
&,
CO.
Vi
A
OTIS & CO.
PHELPS, FENN &, CO.
(INCORPORATED)
L. F. ROTHS
GREGORY
&, SON
INCORPORATED
FIRST OF
MICHIGAN
THE ILLINOIS COMPANY
CORPORATION
FREEMAN
THE MILWAUKEE COMPANY
&
COMPANY
WM. E. POLLOCK &
CO., INC.
or
news
is fa¬
gen¬
eral reaction .where the
change
has been for the worse and a de¬
THE WISCONSIN
HIRSCH &. CO.
McMASTER
COMPANY
WILLIAM
BLAIR & COMPANY
SWISS AMERICAN CORPORATION
HUTCHINSON
&
CO.
SCHWABAQHER & CO.
'
A
its
a
earnings is accompanied
sharp sell-off in the price of
securities.
As ;a
result,
MASON, MORAN & CO.
&
CO.
JULIEN COLLINS & COMPANY
FIRST CLEVELAND
R. C. MILLER & CO.
CORPORATION
ALFRED O'GARA &
CO.
the
THOMAS &
company's standing in the finan¬
cial community and with
their
stockholders
R. L. DAY
MULLANEY, ROSS &, COMPANY
THE
E. W. &
COMPANY
F, S. YANTIS & CO.
INCORPORATED
impaired and the
belated explanation for the
poor
showing is met with irritation and
To be dated January 15,i1948. Principal and semi-annual dividends (January 15 and July 15) payable in New York City.
Definitive Certificates, with dividend warrants attached, in the denomination of SI,000, registerable as to principal. Not
the fear that perhaps all the
story
may not have been told.
N. Y.
Where
through
is
redeemable prior to maturity.'These Certificates are offered when, as and if received by us. It is expected that certificates
in temporary or definitive form will be ready for delivery at the office pf Halsey, Stuart & Co. Inc.', 3S Wall St., New York 5,'
about February 5, 1948. The information contained herein has been carefully compiled'from sources considered '
reliable and, while not guaranteed as to completeness or accuracy, we believe it to be correct as of this date.
on or
January 20, 1948.
corporate managements
the medium of agents
*
BEACH, FLA.—.
Henry E. Thamm is
con¬
by
■
(Special
KANSAS
V
Secur¬
cline in
bank, a trust
other financial insti¬
(company, or
tutions.
V'/,/'/.
I
Bank
candid and forthright as
possible. It is trite to say this but
there is still much to be done in
department
a
With Herrick, Waddell Staff
as
sel organization or the investment
of
.
(Philadelphia Plan)
gain and
vorable, the opposite is the
coun¬
Polian
2%%
These
can
complaint where the
throughout the country, a
imember firm, an investment
Chronicle)
MO. — Meta L.
Thielker is with Slayton & Co.,
Inc., 408 Olive Street.
Railway
Equipment Trust, Series A
hold the confidence of substantial
financial people most readily
change
I
Financial
plants.
(3) Managements
firm of the New York Stock Ex¬
Exchanges
States
has become affiliated with Smith,
A natural and
should be combined with visits to
closely with security holders. They
be associated with a member
other
The
St. Louis-San Francisco
houses
worse, and a drastic rise or de¬
cline in their securities is the re¬
sult.
While there is seldom a
of
to
LOUIS,
,280,000
gives the first inkling to many
stockholders that the affairs of
or -
(Special
meetings of about four to
fidence in them;; and are greatly
influenced by their suggestions
and recommendations.
These in-
;may
Slayton & Co. Adds to Staff
Chronicle),
OMAHA, NEB.—Paul R. Wertz
to the present has
subcon¬
resent
often
men and women by the
! nature of their business work most
Middle-
se¬
holders know them well, have con¬
? vestment
&
not
day-to-day continuing basis
Continuity and
close touch with the men who an intelligent follow-up are just
as
essential in improving stock¬
handle their security transactions.
In most
cases
the shareholders holder relations as they are in de¬
have had dealings with these in¬ veloping and maintaining a sue-,
cessful sales department for sell¬
vestment men or their firms for a
Stockholders
(Special
advantage of avail¬
able opportunities.
Coburn
about
Men in the
or
Mid
and
brook.
Joins Wm. Beeken Co. Staff
With
accomplish¬
(2) It is constructive when prop¬
erly handled to arrange small in¬
stock¬
through the investment fraternity.
-
the
Borthers
Mr.
formerly with -Tiff^
about
•
man
consciously
sider doing this for them.
formal
of
was
ities Co.
far has been
up
own appraisal and
industrial companies
apt
very
information
lations procedure.
One
fundamental
so
its
their
decisions
sciously
officer
Industrial
not taken full
by
express purpose
in
unsuccessful
curities business trained and paid
make
well
Perkins
ST.
*
,
ILL. — E 1 d en G.
Gieske has joined
the staff of
David A. Noyes & Co., 208 South
La Salle Street, members of the
New York and Chicago Stock Ex¬
changes. In the past he was an
an
this type of work.
Financial
man¬
manager
Co.
CHICAGO,
important mistake
prejudge a company in
try to
to
to The
the
should
points
on
&
branch at
a
objective
get questions
company
which
being
The New Methods
of
(Special
must
doing and why.
aggressively by giving a col¬
or
a
one-sided
picture to
statistically-minded or securitysible
as
Chicago
Freres
management particularly has this
responsibility and
trained individuals.
job
our
we
Shillestad
invest¬
with
ored
recognize that they have a clearly
defined and continuing obligation
after
by the industrial
call
se¬
pany
lines
which are based on a careful study
of the trends and-, the mistakes
made in this field during the past
years.
persons
only do
can
formerly
Mr.
With David A. Noyes & Co.
help the
other fellow to, understand what
we
Co., 135 South
has joined the firm's staff.
our
training in security dealings.
They should not push their com¬
have branched out along new
five
or
as
cial
'
1
cialized job of bringing stockhold¬
ers closer to the management they
highly
person
ment firms should have
this
to handle
Necessary Factors
;
their es¬
tablished pub¬
ing
&
Street.
II.
tho
agement of Harry L. Perkins.
Donald C. Malmquist, also for¬
merly with Lazard Freres & Co.,
free enterprise
is only necessary to keep
fqur fac-" system. We all know that we have
tors clearly in mind:
a vital stake in this and
that we
in¬
officials,
to'
Financial' Chronicle)
is
from company
*
was
on
happenings the above
likely to be the case.
Salle
for- Lazard
.qualified to disseminate informa¬
tion-have
undertaken /to
keep
chures, letters
"
La
A great deal has been said and
written': about
preserving
and
a
learned
companies who
Spencer Trask
-
current
'
/re¬
*———:
The
G.
of
—
members
252 Asylum Street under
lestad has become associated with
A number 01
progressive industrial executives have discovered and are using a new
technique for improving stockholder relations with striking results. They have changed
from the former standardized methods which-depend principally upon general publicity,
various
to
CONN.
Co.,
changes, have opened
CHICAGO, ILL.—John N. Shil-
■
&
New York and St. Louis Stock Ex¬
Spencer Trask & Go.
y.
States steps toward becoming better known .to financial houses and
be helpful in cm rent needs for raisin* capital.
continuing, day-to-day basis.
Walker
John Shillesfad With
Dean, Witter & Co.
Mr. Crane states forward-looking managements must channelize contacts with their stockholders
Opens
story to the stockholders and po¬
tential
11
..
Co.,
12
COMMERCIAL
THE
(312)
FINANCIAL" CHRONICLE
&
■
,,
■•11+, rty>
;■;
TABLE
;
HI
Bank and Insurance Stocks
Bank
of
Bank
of
By E. A. VAN DEUSEN
Central
Chase
This Week — Bank Stocks
85
94
I
—24.6
500
623
City banks vs. their 1946 figures.
17 leading New York
of
TABLE I
'''.. !'•'
National
Bk.
Bank
of
Bank
Chase
—19.5
14.00
—15.7
1.56
Chemical
Bank
Corn
National
Trust
"Public
U.
Trust
2.61
9.1
1.45
4.03
3.66
"1.88
1.61
4.00
Trust—
_
2.87
—
—
5.50
85.82
17.42
1.35
1.26
•*
; y
1.58
6.54
1.97
7,3
...2.03
—11.6
y
.
7.40
,
1.45
—10.3
::y
3.25
3.03?,:
1.07
6.8
6.7
—
4.72
5.26
::
7.3
—
1.64
+
;y.
2.13
4.85
4.25
—12.4
44.07
36.56
—17.0
1.04
9.7
1.66
—
—
"Indicated
tAdjusted to present capital.
{Includes city Bank Farmers
earnings.
Trust.
net operating earnings as reported by the
security, profits, are shown. Average decline
of the 17 banks from 194-3 earnings is 9.7%; however, National City
actually reported an increase of 7.3%, Bankers Trust and Chase
report earnings approximately only 3% below 1946 results, while
Except
.
banks,
other
the
to
banks
the —19.5%
of
all the
vary
from the —6.7% of Irving Trust
Average dividend coverage
way
of Manhattan.
Bank
of
1.68 times, and ranges from the 2.13 ratio of
of U. S
Trust.
is
Table
between Dec. 31,
12/31/46
•
...
Bank
Bank
V
($000,000)
B.
Corn
&
Guaranty
8.1
807 y
841
+
4.6
249
243
1,484
+
6.7
1,212
1,176
1,492
1,254
1,217
3,697
3,604
—2.5
1,284
+
4.6
1,096
1,008
—8.0
214
>.;+
4.9
183
166
—9.3
182
0.4
—
592
2,452
—
150
611
—3.9
628
2,307
2,215
878
311
77
$12,281
$11,097
31, 1946, total govern¬
constituted
30.9%;
on
242
+ 11.0
139
124
—10.8
28
32
+ 14.3
$6,113
$6,934
—
—14.4
-
inflation and restore world trade
to
:
1,788
3,760
655
127
$23,719
$24,183
—
to
552
451
9.6%
—
—13.4%
+ 10.8%
62.0%
of
total
Dec.
31,
1947
rate
the lowest ratios of loans and dis¬
total
to
counts
assets,
the
and
128
._
2.0%
$19,563
"Including City Bank Farmers Trust.
*
$19,811
.
-•
.
reported higher deposits and seven banks lower, with First
showing the maximum decline of 9.5%.
Section of the
York
New
'
.
of
Trade.
"These
1 i c ies, if
promptly put
into effect,"
p o
viz:
Bank
earning assets were 1.3% lower, while the average decline
Four banks reported moderately higher earnings assets,
of Manhattan, Continental Bank & Trust, National City
and
New
York
Trust.
In Table III, holdings of government
and discounts are recorded.
said
F.
2.1%.
securities and total loans
rec¬
ommended
.
National
was
public Co. (Inc.), Blyth
Inc., and Merrill Lynch,
Fenner &
The
on
as
Chairman
George F. Bauer
of
the
Committee
on
George
Bauer
Section's
Governmental
Re¬
lations, "would permit full bene¬
fit of free enterprise by encourag¬
well
as
as
of offers
as
10.0%; but total loans and dis¬
average increase of 10.8%.
Thus,
a
to and including Dec. 1,
basis.
share-for-share
a
deem 2%
an¬
an
Proceeds
engaged
from
the sale will be
which is
production and
company,
the
in
distribution
gas and
re¬
of the original issue.'■
applied by the
electrical
of
energy,
water, to the cost of
new
construction to meet increased de¬
inflationary
sound
allow
con¬
stock of the
sinking fund sufficient to
on
values of goods mands for service and .for im¬
'
international trade, re¬ provements and betterments.
Upon completion of the financ¬
gardless of countries of origin.
Long-range business or industrial ing outstanding capitalization will
programs would be encouraged, consist of $45,000,000 first mort¬
once
means
are
again provided gage 3V&% bonds due 1973; $5,250 000 serial notes; 211,380 shares
through the gold standard to de¬ of
5% preferred stock with a par
termine the exact units of values value of $100 a
share; the 272,694
shares of cumulative preference
in which repayments ate to be
entering
made
for
advances
in
goods
stock, and 2,181,550 shares o'f
and
"The removal of excessive con-
stimulate
would
trols,
...Operating
months
normal
taled
competition and, by making un¬
necessary
expenditures
the
stock, without
mon
Se^Vices,yyy:;hy^^:!}l£ly^-
in
revenues
ended
Nov.
com¬
value.
par
3C,
the
12
1947, to¬
$37,349,860 and net income
for $5,509,931.
more
and
and
more
more
goods among more
people everywhere.
Our
Year-End Comparison
of
NEW JERSEY
Ratios
SECURITIES
20 New York City
appears
is
stock
common
calculations
and
announcement
& Co.,
Pierce,
Beane.
preference
company
world-wide
Operating Earnings
This
held.
ing production and distribution of
around
13.4%, with an
by-; the
International
—2.1%
-
each-eight
stock
common
ing group headed by Central Re¬
Economists'
discourage
trends
basis,
deposits of the 17 banks gained 2% over the year, with
Trust showing the maximum gain of 11.3%.
Ten banks
declined
world-wide
a
—1.3'A'
2.0%
for
stock
It will have the benefit of
initely
Board
+
cumulative
share, of
one
Subscription rights expire on Feb.
2, 1948. The offering is being un¬
highest ratios of governments.
commerce ' on
—5.9
+
of
preference
shares
of
controls and
—2.8
136
"
put
self-help."
gold standard, reasonable attitude of tariffs, removal
+ 1.3
545
464
3:8
—
will
it
basis of respectable
a
1957
5.2
.1.3
+ 11.3
729
545
132
+
3,957
on
vertible into
—2.8
1.4.
4.3
where
status
a
numans
George F. Bauer, Chairman of the International Section of the New
York Board of Trade endorses return to gold standard, reasonable
—1.6
1,738
+
892
+
+
Trust
increased
218
+
—10.2%
—4.0
2.0
5.1
+
1,073
552
counts
.
—2.2
2,320
National
+ 4.9
143
642
4,993
Trust
Governments
+ 11.1
emphasis on causes rather than effects of inflation,
as
recommended by the 53 members of the Economists' National
Committee recently, were endorsed as most vital to reconstruction
and a healthy^
"The gold standard would def¬
conduct of
636
2,287
Public
Total
1,217
derwritten by an investment bank¬
of
2.0
'
P.
Total
312
_
Return
9.5
—
—
,
4,786
__
City
New York
V
'
3.3
782
2,502
1,021
0.5
—
188
798
654
Average
1,095
nual
—3.0
4,478
"
Totals
1.9
484
reconstruction.
—3.0
Trust
York
+ 29.9
378
475
Endorses Anti-Inflation Program of
National Committee
—2.4
Trust
"National
+ 13.9
851
"O
Section," Mr.
concluded, "merits support
anxious to have private
commerce permitted to
fight off
of those
+ 4.2
+
Tr.__
•Manufacturers Trust
3.4
0.3
—
Change
341
National
.,:,v
($000,000)
204
Exchange
First
S.
($000,000)
Change
1,227
Continental
+
2.3
296
90
Dec.
counts,
%
1,089
National
New
12/31/47
1,500
Hanover
.
Commercial
91
••
tariffs and removals of government controls as vital to
12/31/46
_
1,391
Chemical
Irving
($000,000)
V
326
York-.
Trust
Central
Bauer
0.9
—
earning assets, and loans and dis¬
Total Earning Assets
%
12/31/47
1,007
Manhattan—
New
Bankers
Chase
,
Public to the 1.04
4 495
of
of
On
II
-Deposits—
t
of the International
3.9
Northern Indiana Stock
ments
deposits and total earning assets
1946 and Dec. 31, 1947.
TABLE
,
5.8
+
5.1
2,269
<
+
+
80
291
:
in the opinion
program
52
55
747
■*—17.2
"Their
8.3
/;
the changes in
II shows
of the banks
—13.5
—
be
plain that the drop in earnings
the respective percentages were
assets during 1947 was in holdings
of government securities.
ab.7% and 35.4%.
On Dec. 31. 1946 Bankers Trust
Only one bank shows an in¬
Northern Indiana Public Serv¬
was
the only bank in the list
crease in governments, viz: Conti¬
ice
Co. has
mailed to common
nental Bank & Trust, and only wnose
loans and
discounts
ex¬
ceeded government holdings; op stockholders of record at 2 p.m.
one bank shows a decline in loans
and discounts, viz: Public National.
Dec. 31, 1947 three banks were in on Jan. 19, 1948, transferable war¬
Chemical reports the greatest per¬ this class, viz: Bank of Manhat¬ rants evidencing the right to sub¬
scribe at $18 a share to 272,694
cent, decline in governments and tan, Bankers Trust and Chemical.
the next-to-highest gain in loans Corn Exchange and First National shares of 4%%, $20 par value
and discounts of 25.8%, compared continue, characteristically, to be cumulative preference stock, jun¬
ior to the preferred stock, at the
wit-h Irving's maximum of 29.9%. the two banks in the
group with
noted,
as
exclusive
88
would
an
Publicly Offered
1.80
'
8.5
—
—
2.00
Average
7.3
—
them, would
price struc¬
action
■?:/
■•
it is
1.83
35.00
-
77
at
an
.
2.01
—
5.03
92.54
9.2
—14.4
118.69
'
1.60
•
Trust
S.
2.51
2.40
-w——
City L—'
York
2.59
52
5.4
::!
1.57
0.80
;
Manufacturers
New
Average
3.1
12,00
;
475
1,174
2,289
.
Totals
1.67
80.00
—
Trust
{National
1.67
*2.80
Exchange
First
3.2
—16.9
2.00
Trust-
&
—
6.68
0.80
National
"Continental
3.00
1.80
Trust
21.88
3.10
8.04
1.60
&
25.97
1,255
574
Trust
4.00
"Commercial
Irving
S.
434
-
48
5.6
+
;i
303
City
York
1.80
Bank
Guaranty
1.72
509
1,237
...
Trust
$2.06
Earnings—
76
•
1,451
.
Trust
U.
$2.56
National
72
,v\
—16.8
109
131
.
National
$1.20
_
+ 25.8
_
Tr..
Trust
Public
% Change
Trust
Hanover
Central
+ 17.6
449
468
Coverage
1947
__
1,324
357
National
New
1946
YOrk
New
Bankers
_
411
1,126
First
1947 Div.
—N6t Oper.
Dividend
Manhattan
of
401
—10.0
—33.0
538
National
Annual
.......
&
Irving Trust
'•
'
—10.0
421
Exchange
Manufacturers
2.5
719
1,998
Corn
Guaranty
+
799
628
proper
' Such
important one of
the 14 causes listed by the econo¬
mists as underlying inflation.
24,6
2,221
Tr.
Commercial
pertaining to 1947 earnings and year-end figures
of statistical tables
+
with
toward
directed
—12.9
485
Hanover
complying
tend
+10.6
128
_
in
tures.
361
&
yierical work in administering and
.
+10.6
643
4.5
•
427
386
147
Continental
principally to the presentation
is devoted
column
week's
%
($000,000) Change
($000,000)
Change
378
National
Bk.
■
••
12/31/47
12/31/46
York—
Trust
Chemical
,■
..
—
Manhattan
New
Bankers
This
($000,000)
,
—Total Loans and Discounts—
%
12/31/47
($000,000)
v
'•
—Total U. S. Governments—
12/31/46
Thursday, January 22, 1948
matter of record only, and is neither an offer to sell, nor
to buy, any of these securities.
a
solicitation
The offering is made only by the Prospectus.
Bank Stocks
Circular
Request
on
I. S. Rippel & Co.
Laird, Bisseil & Meeds
110,000 Shares
Members New York Stock Exchange
120 BROADWAY,
Established
NEW YORK 5, N. Y
,
Bell
Inc.
MArket
Teletype—NY 1-1248-49
(L. A. Glbbs, Manager Trading
1891
18 Clinton St., Newark 2, N. X
Telephone: BArclay 7-3500
3-3430
"
N. Y. Phone—REctor 2-4383
Dept. >
Common Stock
WHOLESALE MARKETS IN
(Par Value $2.50
per
Share)
BANK and INSURANCE STOCKS
•
•:
V-
,v
f
Price $15
per
of
Copies
which
the Prospectus
such
may
Share
GEYEft & 00.
be obtained from the undersigned only
in
States
in
y
INCORPORATED
of the undersigned are legally authorized to act as dealers in securities
and
in
which
such
Prospectus
may
legally
be
NEW YORK 5:
distributed.
67
WHITEHALL 3-0782
Wall Street
NY 1-2873
SAN FRANCISCO 4
Reynolds & Co.
BOSTON 9
CHICAGO 4
LOS ANGELES 14
10 Post Office Square
\
231 S. LaSalle Street
210 West Seventh Street
HUbbard 2-0650
FRAnklin 7535
Michigan 2837
YUkon 6-2332
CG-105
LA-1086
SF-573
BS-297
PRIVATE
January 20, 1948
WIRE SYSTEM CONNECTING:
TO:
Providence,
Hartford, Enterprise 6011
Enterprise 7008
Building;
.
NEW YORK, BOSTON, CHICAGO,
CLEVELAND, PHILADELPHIA, ST. LOUIS, LOS ANGELEJS,
TELEPHONES
Russ
J?A$,FRANCISCO
Portland, Enterprise,,7008
Detroit, Enterprise
6066
Jii
Volume
167
Number
& 'FINANCIAL
THE COMMERCIAL
4666
CHRONICLE
(313)
De Walt Common
Stock Offered
NSTA Notes
Reynolds & Co. and
i
offered
$2.50
Jan.
associates
20
110,000 shares of
value common stock of
par
De
Walt, Inc.
The -stock
priced to the public at $15
was
per
share.
BOSTON SECURITIES TRADERS ASSOCIATION
The
Boston
Securities
Traders'
Association
Annual Winter Dinner at the Hotel Somerset
The Committee consists of:
on
hold
its
chase
elected officers for the
machinery
additions
the
and
and
and
equip¬
replace¬
will
balance
be
corporate funds.
The remaining 90,000 shares are
aeing sold for the account of sell¬
ing stockholders.
Sole
capitalization
completion
of this financing will consist of
230,000 shares of $2.50 par value
outstanding
of the
1948:
year
20,-
added to general
At the annual meeting of the Bond Traders Club of Kansas City
were
for
ments,
reservations).
following
of
ment
BOND TRADERS CLUB OF KANSAS CITY
Jan. 6, the
of
plant additions and improvements
and
storage facilities, the pur¬
& Tyson, Chairman; Curtis S. Bates, Draper, Sears & Co.; Fred
Carr, Tucker Anthony & Co.; Harry O. Baker, Boston Safe De¬
posit & Trust Co.; James J. Galvin, F. L. Putnam & Co., Inc.; Carl V.
Well, Paine, Webber, Jackson & Curtis (who will handle the ticket
reservations); Rodney N. Darling, duPont, Homsey & Co. (who will
on
sale
by the company will be
to the construction
of
applied
Friday, Feb. 13,1948.
Henry E. Tabb, Jr., Townsend Dab-
R.
room
the
000 shares
24th
ney
handle the
from
Proceeds
will
company
r
stock.
common
The
upon
company
was
', *
incorporated
in
1928, succeeding a partnership
had previously conducted
•the business.
Through its prede¬
cessors, De Walt, Inc., is a pio¬
which
neer
in the manufacture and sale
of radial
ting of
the
to
for
saws
in
wood,
intends to continue
company
The
engage.
chines
also
high speed cut¬
which business
company's
ma¬
adaptable to cut¬
ting, of light metals, plastics and
other
John
Latshaw
are
composition materials.
.
Net income of the company for
J.
F.
Stevens
Earl
L.
Combest
the year ended Sept. 30, 1947 was
President:
John
Latshaw, Harris, Upham & Co.
Vice-President: Jasper F. Stephens, Herrick, Waddell & Co.
Treasurer: Earl Combest, Prugh, Combest & Land.
Secretary: Donald Belcher, Martin-Holloway-Purcell.
$973,027, equal to $4.23 per share
of common stock.
The next Bond Traders Club function at which the new officers
will officiate will be held in
conjunction with the Bond Traders Club
of Chicago and the
Security Traders Club of St. Louis, The Kansas
City portion of this Tri-City Party will be held at the Muehlebach
Hotel on
Thursday, Feb. 5.
With Thomas Darst & Co.
(Special
tn
The
Chronicle)
Financial
GREENSBORO, :N. C.—Archie
B. Joyner has been added to the
staff of Thomas Darst & Company,
Southeastern Building.
This ii not hn
or art offer tobuy, or a solicitation plan;offerrio}uyi $n}
Shares. The offer is made only by the Prospectus.
offer of these Shares for sale,
r
i
:
:
of such
272,694 Shares
Northern Indiana Public Service Company
4V2% Cumulative Preference Stock,
Junior to the Preferred Stock
Par value $20 per
share
(Convertible into Common Stock through December 1, 1957
unless called for previous
redemption)
Rights, evidenced by Subscription Warrants, to subscribe for these shares have been
issued by the Company to holders of its Common Stock, which rights will expire at
two o'clock P.M., C.S.T., February 2,1948, as more fully setforth in the Prospectus.
Subscription Price to Warrant Holders
$18 per share
Firestone With Hutton
Special
SAN
to
The Financial
Chronicle
FRANCISCO,
Charles V.
affiliated
Firestone
with
E.
j
.
Copies of the Prospectus may
5
undersigned
CALIF.—
has
F.
may
be obtained from the undersigned only by persons
legally
offer
these
Shares
under
applicable
securities
to whom
the
laws.
become
Hutton
&
Company, 160 Montgomery Street;
He
was
formerly with Coons,
Central
V
'
Blyth & Co., Inc.
Republic Company
(Incorporated)
'''.a;'/
•
.•
Merrill Lynch, Pierce, Fenner & Beane
.
•
Milton & Co.
A. C.
Ilornblower & Weeks
Allyn and Company
Paine, Webber, Jackson & Curtis
Incorporated
With Lincoln Securities
(Special
to
The
Financial
Chronicle)
FT. WAYNE, IND.—Drew Kaye
has joined the staff of Lincoln Se¬
curities
Bank
Company,
Building.
Fort
Wayne
A. G. Becker & Co.
Incorporated
January 21. 1948
"
•
Harris, Hall & Company
• •
•
(Incorporated)
F. S. Moseley & Co.
/
*
The Wisconsin Company
'■
p
■
«)C
AHr nni.'
13
THE COMMERCIAL
frospacfar
upon
&
FINANCIAL -CHRONICLE
Thursday, January 22, 1948
request from
or from
investment dealer,
yomr
&
SECURITIES
NATIONAL
CORPORATION
RESEARCH
IM BROADWAY, NEW YORK 5. N. Y.
PUTNAM
■FUND
Ojf
Prospectus upon request
Fund
Putnam
Distributors,
Inn.
50 State St., Boston
Prospectus from your Investment Dealer or
HUGH W. LONG & CO.
iNCQreQRATtD
48 WALL
IOS
STREET,
NEW YORK 5, N Y
AMCrIts
CM'CACC
CANADIAN BONDS
Certificates of Participation in
GOVERNMENT
INVESTMENT FUNDS
PROVINCIAL
investing tlieir capital
U
MUNICIPAL
IN
BONDS
INVESTORS
(Series
PREFERRED STOCKS
(Series K1-K2)
CORPORATION
MUTUAL, INC.
No c k
INVESTORS SELECTIVE FUND, INC
INVESTORS STOCK
COMMON STOCKS
/ INVESTORS
STOCK FUND, INC.
CANADIAN STOCKS
FUND, INC.
(Series S1-S2-S3-S4)
Dividend Notice
Prospectus from
your
local investment dealer
The Board of Directors of Investors Stock
or
Prospectuses
on
Fund, Inc., has declared
request from Principal Underwriter
dend
of
14
cents
1948
per
a
quarterly divi¬
share payable
shareholders on
February
ie
JA.eystoiie L^ompany
of Boston
INVESTORS SYNDICATE
20,
record
January 31, 1948.
on
to
E. E.
Massachusetts
TWO WALL STREET
Principal Underwriter and
Congress Street
Boston 9,
INCORPORATED
Crabb, President
E. E. Crabb, President
50
A. E. AMES & CO
Minneapolis, Minnesota
Investment Manager
NEW
YORK 5,
N. Y.
v
REPRESENTATIVES IN
THE
PRINCIPAL
CITIES
OF
THE
UNITED
STATES
INVESTORS SYNDICATE
Minneapolis, Minnesota
RECTOR 2-7231
NY-1-1045
(315)
Urges
Free Goto Market
a
above
the
$35 level/ -,: This, due ^to 'the purchase of $2 billion
automatically •' diverted
to
the of gold in 1947 may thus be said
States
Treasury,
gold to be a total of $12 billion.
at
Anti-Inflation Move
as
United
Francis H.
Brownell, Chairman of Finance Committee of American
Smelting and Refining Co., in open letter to Senator Tobey and
Representative Wolcott explains inflationary effects of increase of
$21/4 billion in U. S. gold reserve, and urges, as remedy, free
market and free ownership
Francis
H.
Brownell,
Chairman
which otherwise would have been
sold
Finance
the
outside
great
the
Committee
of
outside
'•>—:—
•
•
A
Com-
rency
m i t t
e
e
pointing
s
ary
effect
the
little
in
-
States
stood
ready
fered
at
the
U.
S.
States
gold
reserve
had
—-
1947
was
buy
of
all
to
billion,
itc
of
r
e
a
The
an
s
H.
Francis
e
Brownell
almost
mends
He
year.
change
a
in
recom¬
the
Federal
monetary laws to permit the free
folding and the free marketing
of gold bullion.
U.
As of-
Increase
national
Monetary
member
far
as
nations
as
1947.
a
gold
certi¬
nature
than
counted
that
as
the
credits
amount
of
a
the
if
But
in
money
Federal
as
ware¬
money.
the
Reserve
Treasury
it
were
with
de¬
a
The physical1 gold is stored
by the Treasury, but its value is
■turned into
potent
Fund
should
of
posit.
in
bank
The seller
check he
early in 1947 of the Inter¬
quest
the
receipt
sense
•factor of compliance with the re¬
his
that
of
credit money.
gold deposits the
receives
in
"Over
bank
Reserve.
which,
In
of
payment
that
check, the Federal Reserve
;
gives
the
mercial bank
$21,937,508,765.15
its
20,618,736,810.04
20,064,843,237.30
20,528,847,466.97
22,753,748,547.47
forwarding
simcom¬
deposit credit
a
of
books
the
which
amount
credit
cial
on
appropriate-
increases
reserve
bank.
accord¬
In
of the
commer¬
central
reserve
2,224,901,080.50
cities,
a
(reserves
$2
billion
permits
bank credit
an
increase
in
increase
consolidations
of
this
$12
to
$18
or
dis-
$10 billion.
amount
has
Gold
now
equivalent
years
world
gold,
excluding
to
was
2*/2
over
mine
production of
that of Russia.
Total world monetary stocks
(ex¬
cluding Russian) are about $35
billion, of Which the rest of the
about
United
$13 billion and
States
$22
over
bil¬
lion.
In
1947, the United States
Bankers
and
officers, etc."
revised
The
potential increase of
much
States
and
reason
for
both
infla¬
/
pur¬
One
<
7
Amend
so
Remedy
United
the
to—.
as
of
City
partner of
a
was
Bank
Jan. 14.
on
elected
a
(2)
7./
in
citizens.
Permit
the
free market, both
a
United
where,
for
United
and
States
States
all
mine
son
Perkins, who
Chairman
Board
the
of
production,
(3) Leave the present gold pol¬
icy
otherwise" unchanged,
con¬
tinuing
the
obligation
of
the
Treasury to buy gold offered at
$35
per
/The
that
ounce.
'
demand
for
of
E. Chester
The
Public
the
United
it
as
States
Treasury,
between 1944 and
was
The
National
automatically cures the in-;
flationary effects of purchasing
.and will result in
the
tion)
more
gold being
States.
approximately
billion
of
gold in the
should
of
new
mine
$2
to
billion
*
If
it
at
the
year
and
buy
per
the
mined
production remains
as
1946, the United States would
purchase
in
the
all
the
monetary gold
outside Russia, in
world,
approximately
Even
of
used
of
outside world.
continue
rate
10%
previously
world's
would make
nations to
gold
a
years.
monetary
golc
it difficult for other
return
to
money
standard
countries
form
some
unless
United States is prepared to
the
re¬
National
Bank
International
Monetary
Fund may oppose such a program,
but after the experience of 1947
it
may
not to
be,
reasonably
do
so.
lessening
be
further
on.
an
accumula-7
States
stopping present inflationary
and
ciated with Wood. Struthers & Co.
effect, is rapidly throwing into the
United States Treasury not only 1
the equivalent of all newly
mined,
gold, but also
even
greater quan¬
tities of gold previously mined. '
;
nor a solicitation of an offer to buy
offering is made only by the Prospectus.
any
of these
$10,000,000
Assistant Vice-Presidents.
,
tf.
Prior to
Harris,
of
Chemical
New
York,
ganization
the
Bank
on
of
Co.
or¬
of
the Board
Jan. 15, announced
appointment
dent
Trust
annual
&
the
at
meeting
of Directors
William
as
Vice-Presi¬
H.
French, for¬
merly
Assistant
Vice-President
Appointed Assistant Vice-Presi¬
dents
were
James
E.
Hellier
Rommel, formerly Assistant Treas¬
George
Malcolm H. Foulk, formerly
Manager of the Foreign Depart¬
ment, and Charles E. Ranee, Ar¬
Sherwin
and
Butler
L.
been
has
elected
Secretary of the Empire
City Savings Bank of New York,
it
announced
was
Diehl, President, on
Butler was formerly
Dated January 1,
Alfred
E.
Tree, formerly Assistant Managers
of the Foreign Department. At the
meeting, Raymond W. Moore,
formerly Assistant Trust Officer,
was
appointed Trust Officer; W.
Clayton Black, Jr., formerly As¬
sistant Manager of the Madison
Avenue at 74th Street office, was
appointed Assistant Secretary; and
Frederick C. Farnsworth, formerly
Assistant
Manager, was appointed
Manager of the Government Bond
Department. Other appointments
Edward M. Cummings, As¬
At
13
the
of
New
meeting
Bank
York,
tors
were
noted
as
annual
stockholders
National
two
of
-
of
on
Jan.
Lafayette
Brooklyn
additional
elected.- One
in
in
direc¬
Copies of the Prospectus
of
these,
issue,
Benjamin H.
Jan.
of the undersigned
and
William
E.
as are
page 221, is Major
Namm, while the other is William
E. Yates.
V:;...J
#
',
Formation
*
(N. Y.)
of
^
the
\
W. C. Langley & Co.
,
"Brooklyn
Glore, Forgan & Co.
composed of all 7 present ^ active
employees, officers and trustees
who
have
more
club
completed 25
years
7
f
of service with the
company,;
announced on Jan. 15.
The
was
The First Boston
Corporation
Trust Co. 25-Year Club,"
or
Goldman, Sachs & Co.
■
* -
"
■
•
'
organized at a dinner
meeting that night at the Towers
Harriman Ripley & Co.
incorporated
■
■
Stone & Webster Securities Corporation
Union Securities Corporation
was
Hotel
in
following
E. H. Rollins & Sons
officers
were
(Continued
on
page
elected:
90)
Bond & Goodwin
incorporated
Brooklyn, at which the
,
Mar
be obtained in any State only from such
registered dealers in securities in such State.
may
15
our
President, Sherwood C. Conner,
Vice-President;
John T.
Manager of the company's Bedford
j
Mott, Assistant Treasurer; C. E.
office;
Vice - President,
Eugene,
Robert
Clukies, Assistant Man¬
Britton, Trust Department, main
ager, Foreign Department; Adolph
office; and Secretary, Miss Mollie
T. Rasmussen,' Assistant Manager
C. Rowley, Jamaica office. Memof
the
Eighth Avenue at 57th
bers of the Executive Committee
Street office; James J. Brady, As¬
elected to serve for the first year j
sistant Manager of the Madison
were:
Thomas J. Parker, Edward
Avenue at 74th Street office, and
E.
January 1, 1968
Price 100% and accrued interest
with the bank since 1923.
sistant
Frederic
Due
Assistant
an
same
were:
1948
by
Charles
Jan. 13.
Mr.
Treasurer and has been associated
urer;
S.
5% Sinking Fund Collateral Trust Bonds
and
Reginald H. Johnson, Jr., formerly
Assistant Secretaries; Frederick H.
thur
Northeastern:? Water Company
»:«
N. Baxter Jackson, Chairman of
the
morej
important ultimately than follow-';
ing the Fund's proposal which, in'
vanced from Assistant Cashiers to
with
■.
may]
tion of gold by the United
offer to sell,
Jan. 16 that Irving S. Mandel
Theddorb I. Salamon of the
Up¬
■
j
expected*
However that
and
ham & Co., Mr. Perkins was asso¬
tf
and
citizens of the United
effects of purchases is much
present holdings .of 60%
the
of
10
The
other
NEW ISSUE
Gersten, President of
Department, Del.ance.y
Street, office, and of the Broad¬
way office, respectively, were ad¬
City Bank of New York.
,
just
1947.
This
Credit
of
-•
much, if not all, newly mined
gold offered for sale
others than
and
Chairman
7.
such
other
or
among
Trust Co. of New York, announced
also
connection
„
is
gold
would be absorbed by
in
securities. The
Credit Department.
City Bank Farmers Trust Co. and
his
else¬
including
gold,
and
placed
This advertisement is neither
Sattler, Assistant Managers of the
meet-;
He is the
of the late James H.
was
laws
(1) Rescind the prohibition of
ownership
of
gold
by
United
Farmers
Trust Co. of New York at
ing held
J
».
States
|
it
Richard S. Perkins,
Harris, Upham & Co.,
director
as
this
its
of
because
capitalizations
a
by the
lessened
be
possible,
as
chased (in addition to the equiva¬
lent of all current mine produc¬
new branches
new
United
owns
$2 billion gold bought in 1947
owns
that further accumulation
States
Holdings
States
21V2 million ounces, worth at $35
per ounce, over $750 million. The
Some
been
States
The
world
mine
production,
excluding Russia's (which is un¬
known), of gold in 1946 was about
of
through loans
such reserve, or
from
three-fifths, of the
world's rponetary gold.
|counts to the extent of five times
News About Banks
of
United
world
its holdings to
some
Certainly, it is important
the
year,
about 60%, or
in
ingly the
next
billion."
$13
fply
Dollars
the
roughly
distribute
extent. "
tionary effect.
gold
inflow is estimated at from
$2 to
$3 billion. Multiplied by six, this
would
permit an expansion of
payment in
commercial bank
own
Eccles,
Board, said:
the
in turn, forwards it to the Federal
prevent
possible the sale of gold
626,785,9.64.7
589,106,766.0
573,281,235.4
586,538,499.1
650,107,101.4
63,568,602.3
1947
in
and
new
Ounces
Jan. 2, 1946
Jan. 2, 1947-
31,
of
it/ is
greater demand for
the
which
-
is
house
S, GOLD HOLDINGS
Jan. 1, 1944_Jan. 1, 1945-
Dec.
plus
Bank
is
the
increase
Reserve
the
This gold certificate
placed in circulation.
It
more,
sta¬
:,\;-:7.
the
of
cause
was* the
1947
hilars
$2% billion for
Cause
7;-
.
through
ficate. 7
Eank
$22%
ulti¬
are
not
some
fairly
d
e a r e
in the form
ury
of¬
United
for
Mr.
The
receives payment from the Treas¬
States
gold
1
c
.
Federal
approxi-
mately
The
25,... 1947,
Congress
still remains.
purchases of gold
mately
billion.
ounce,
remained
All
the
$2
holdings
Mint.
to
United
the
United
per
the
to
demand
highly im¬
over
sold
be
statement
Chairman of the Federal Reserve
Inflationary Effect
tionary,
as' is
shown
by
the
accompanying "Daily Statement
of the United States Treasury"'
which, in 1947,
advanced
.gold
years
monetary
to
$35
so
his
Nov.
follows:
stocks
of
the
increase
in
but
gold
Although
recent
letter
of
event
United
of
the
kaown
increase
out
inflation¬
of
text
portant
,
the
—— —•-—.
The
Cur¬
was
$35, all gold offered and
very
little came to the United
States
Treasury, except United
States production which, by law,
House
Bank-
States
above
must
and
United
to absorb, at prices well
as
In
of
r.'v
•
the American Smelting and Refining
Co., has written an open letter,
dated Jan. 19, "to Senator Charles W. Tobey and to Representative
Jesse P. Wolcott, both Chairmen, respectively, of the Senate and
ing
7:
Previously, the demand for gold
of gold bullion.
of
elsewhere.
15
A. C. Allyn and Company
.Incorporated
W. E. Hutton & Co.
Maynard H. Murch & Co.
January 22, 1948
Estabrook & Co.
Incorporated
Blair &
77.7
'
Co., Inc.
t'../77 7-'77-7 7
7 '
Kornblower & Weeks
' ' r'7'
7 7
-
Metropolitan St. Louis Company
Starkweather & Co.
Whiting, Weeks & Stuhbs
16
(316)
road
There
ties
quite
are
who
progress of fhe
decline in net.
>—
operating income of $26,358,000, a gain of $21,337,000 over a
year earlier. In the month of No¬
the
formance for the year will be in
line with the first 11 months' ex¬
perience. To
great extent
a
is probably true but there will be
notable exceptions.
some
There
reports.
For
the
adjustments
these
minor
are
nature
and
do
not
From
a
eleven months. In December
were
a
come
1946,
number of
months
a
With
available
for
such
no
the final
of
1946
the
like
period
amounted
credits
to
credit
of
There
will
other side of the
credit
picture,
1946
substantial
made
-
a
num¬
west in
As
Dec.
for
possible liability for over¬
charges to the Government for
transportation < in earlier 7 years.
With
such
no
is
that
final
of
the
Dec.
be
The
with
the
an-
Chronicle)
FRANCISCO,
staff
&
in
covered
of
terms
full
77
CALIF.—
J. Barth & Co., 482
Street, members of the
York
Exchanges.
and
San
Francisco
-
.
.
con¬
.
case
.
.
of member banks.
reserves
(Special
to
The
Financial.
Chronicle)
(Special
the
to
The
Financial
Chronicle)
-LOS ANGELES, CALIF.—Ken¬
neth C. Horrall is with J. A. Hogle
&
Co., 507 West Sixth Street.
.
.
'
-
...
<
On the other hand, there are those who
believe that"^hort-term 3rates and long-term rates as well, have made a top and will not
'
rise from these levels.
This opinion is based largely upon the- •
-■
With J. A. Hogle & Co.
the
.
.
'
.
forecast
that the
the
-
distant
not
.
.
inflationary movement will TUrt itarcourse ini
turn in the-oii^osite
that with changed economic
conditions interest rates would be likely to ease.
> '
direction.
-
readjustment plan.
There were no earnings available
for the stocks. During 1947 the
Ohio. For the 11 months
through
Nov. 1947 the
company reported
non-bank lenders which indicates
loans,from
reigns supreme in the money markets, as is always
during periods of inflation such as we are in now.
Some
experts are looking for slightly higher, short-term rates particularly
,in future offering of certificates and point to the increase in the re¬
discount rate and the advancing bill rate to back up their contentions.
They also feel that higher short-term rates might be a deterrent
to loans by commercial banks.
The latter idea probably emanates
from proposals recently made by the research department of the
Federal Reserve Board that interest be paid on higher primary
the
With Merrill Lynch Firm i
tax
under
being brought
are
There appears to be no lessening yet in
.
.
Confusion
•
of
Stock
credit the company took in 1946,
the junior Contingent interest was
not
demand for
.
in Treasury obligations.
month.
substantial
sellers of the tap
are
order to meet the needs
earnings of the lending
institutions are benefited by the switch from governments, because
the rates obtained on. private loans are higher than those available
speculative
Financial
New
fact, there-will
least a modest
at
to
California
income tax
1947
.
tinued liquidation of Treasury obligations in
for funds by private borrowers. ... Also,
Beane, 523 West Sixth Street.
Even
u
re¬
Baltimore
of
SAN
cated.
One of the widest discrepancies
ports
the
.
.
mortgages and other non-government loans that
LOS ANGELES, CALIF—Wil¬
year-to-year decline of
at least $20,000,000 in net operat¬ liam U. Follansbee, III is with
ing income for December is indi¬ Merrill -Lynch, Pierce; Feriner &
these roads will benefit.
December
for
rail
certificates, or being held as reserve balances in order
expected tightening of the money markets.
the
into these institutions.
cember. A
extraordinary
appear in
an
most
any
it has been in the past
Savings banks and insurance companies
obvi¬
Andre E. Jahan has been added to
than $20,000,000.
certainly be no such
matter
a
(Special
they
In
for
as
into cash.
MARKETS UNCERTAIN
income
year
difficult
are
same
or
issues, and selected eligible obligations, in order to meet demands for
off at best, and
Joins J. Barth Staff
Federal income tax debit for De¬
charges in Dec. 1947 the year-toyear
earnings
comparisons
Of
likely to
last
$1,771,808.
the stock
way
shorts
LIQUIDATION CONTINUES
enthusiasm for these shares..
more
probably
charges
-
of
$95,000 and for
1946 the road took
1947, the year-to-year earnings
comparisons will suffer. On the
in the
Federal
taxes amounted to
month of
ber of roads
Because
on
long
alysts to justify
factors, however, this im¬
provement will not be apparent in
net operating income or net in¬
come
figures. For the first 11
taxes in the final month of
year.
1946.
is
it
tax
major character.
Some roads took large Federal in¬
the
with
to meet
the
a
.
.
into bills and
effective
Nevertheless,
.
earnings
ously
an
compared
change
the year's earnings picture greatly
from the pattern set in the first
however, there
adjustments of
tuted.
improvement will
uncertain
Banks are seeking
greater liquidity through the sale of intermediate- and longer-term
obligations to the Central Banks, with the proceeds going mainly
if there will be
tainly it is not likely that even
the
preferred
dividend
was
earned in full. The prospects for
the
current
year
are
naturally
somewhat brighter because of the
higher freight rates recently insti¬
operating standpoint
Baltimore. & Ohio improved its
earnings
performance
in
1947
most
of
months'
11
two months from longs into
now as
the
on
.
.
the direction of these switches is the
little in the way of earnings avail¬
able for the stocks in 1947. Cer¬
be eliminated in December.
naturally
always
adjustments to distort
December
part
the
are
year-end
It looks
for the full year over 1946 is faced
with quite a shock. A large part of
this
the
continue
.
1946 month.
operating income was $1,257,000,
to $2,081,000. Any speculator who
goes on the theory that this wide
gain in reported earnings for the
11 months presages a wide im¬
provement in reported net income
cumulative-per
government securities markets
side, with prices at or just slightly above the "pegged" levels.
Activity and volume have increased in a minor way, without having
any appreciable effect upon quotations, since the trend is still down¬
ward, with Federal the only important buyer of the middle- and
long-term obligations.
Portfolio changes are being made, but
like
of
Governments
on
By JOHN T. CHIPPENDALE, JR.
The
was
that
above
actually
vember alone the increase in net
monthly reports have compared
favorably with those of a year
earlier the same performance will
be carried through to December
that
The November ratio
Reporter
.
net
to expect that just because recent
Our
-
earlier.
number of the major carriers
are released. There is a tendency
a
and
closely, measuring the
individual road by the year-to-year improvement or
Such speculators should prepare now for a severe
shock when the December results
of
ficulty in getting costs under con¬
trol,
particularly ••• transportation
expenses. Gross revenues for the
11
months
through
November
were
up more than 17%. Main¬
tenance costs were held under
strict control, with the ratio off
about five points. The transporta¬
tion ratio, at 43%, however, was
still unduly high and only about
one
point below that of a year
large number of speculators in railroad securi¬
a
follow monthly earnings reports
encountering dif¬
still
was
Thursday, January 22, 1948
CHRONICLE
FINANCIAL
&
THE COMMERCIAL
;
...
.
Others
feel
,
future, and business will
~
It is also being noted
that
short-term
will
rates
tend
.
.
:
.
decline
to
before
long, irrespective of what takes place in the business picture, because
of the large demand for these securities on the part of commercial
banks.
The desire for liquidity and the fear of greater power
over reserves for Federal will result in lower yields for short gov¬
.
.
.
ernments.
...
CONTROLS
The monetary
This
advertisement appears as a matter of record only and
as
an
offering of these securities for sale,
such
securities.
The
offering
or
as
is under
solicitation
a
is made only
by
circumstances to
no
of
the
be construed-
offer to buy any
an,
Prospectus.
authorities will be exercising greater power over
.
The transfer of deposits from
individuals and corporations to the Treasury for income tax pay¬
ments put the powers that be in the driver's seat in no uncertain way.
Whether these funds will come back into the banking system
the money markets from here on.
.
.
.
.
.
will depend upon the trend of loans and other inflationary forces. . ..
If the spiral continues upward the money markets will be tightened
further
by the money managers.
.
.
.
banks will most likely be the target for
Glass Fibers, Inc.
WILL PRICES HOLD?
"Can
343,000 Common Shares
(Par Value $1
the
per
o/
circulated
the. Prospectus may
from
such
of the
be obtained
undersigned
in
and
securities
-
in
Share
present
this point. . . . The Administration is seeking new controls because
it is claimed they do not have sufficient power to stop the inflation¬
developments in the money markets. . . . In their program gov¬
bond prices will
be supported, supposedly at the 100
ernment
any
State
in
other ^dealers
which
as
this; announcement is
may-lawfully
offer
such <State.
level.
...
.
'
party contends that the authorities
to break the inflationary monetary spiral,
The other major political
'
not using them to full advantage.
but they are
that
Kebbon, McCormick & Co.
Allyn and Company
v
,
these
have sufficient powers
A. C.
at
keep prices at currently "pegged" levels. . . . The all
important question is will they do it? . . . The political factor must
be taken into account here because there are divergent views on
1
'
prices
bond
.
ary
Copies
government
to
resources
$10
hold
agreement that the money managers have the power and
siderable
Price
authorities
pegged levels?" and "are they likely to do it?" are the burning ques¬
tions in the money markets at this time.
.
.
There seems to be con¬
share)
per
Reserve balances of member
impending developments. ."..
a
...
■
!
They contend
curtailing of credit in order to curb the inflationary loan
trend should be brought about by
higher interest.
.
.
.
This prob-
ably means that government security prices would be allowed to..-.seek their own levels. . . . Supports might be withdrawn entirely
;
or lowered in order to cushion the decline. .
.
TheMilwaukeeCompany
Incorporated
.
The First Cleveland Corporation
f Apies, Emerich & Co., Inc.
William R. Staats Co.
-
?
PRESENT POLICY
"
•
arguments wax hot politically as to how the inflation
problem should be attacked and what should be done about the
money markets and government bond prices, the authorities are faced
While
Merrill, Turben & Co.
Stein Bros. & Boyce
-
Dempsey-Tegeler & Co.
>
Estabrook & Co. >
Bell & Beckwith
«
-
Hill Richards & Co.
'
with realities and the pattern for
«
the time
The Ohio
Company
Piper, Jaffray & Hopwood
Prescott, Hawley, Shepard & Co., Inc.
Clement A. Evans & Co., Inc.
Mason-Hagan, Inc.
J. R.
Goshia & Co.
Saunders, Stiver & Co.
Barret, Fitch & Co., Inc.
Westheimer and Company
maintain
.
Rowles, Winston & Co.
.
■.
.1
January 22, 1948
,
O
•
•
•'
.
•
\
^
;•
.
levels
will
:
25
Broad Street
.
New York 4, N. Y.
^Telephone BOwling Green 9-6400
-
-
■
0}
jtwV."
i
*V
a
V'S
•
•
'
■
J
-
'
on
As for
eligible issues, • current
port
sup¬
most
likely be
as
long as the banks shift
from longs into shorts, and hold¬
ings of one offset the other.
j
to
,
.
a
.
movement out
of longs
7;
;
.
.
.
Mead, Miller & Co.
^
^
.
held
serve
.
"pegs"
present
If there should be
Woodard-EIwood & Company
.
government securities.
the-
Special Securities
Mullaney, Ross & Company
Quail & Co.
.
and
Bonds
Boettcher and Company
Wm. J. Mericka & Co., Inc.
Phillips Investment Co.
Guaranteed Stocks
being seems to be shaping:like this.
Curtail credit
by tightening the money markets'
up
Teletype NY
1-1063
in order to build up re¬
balances that would be used
increase
lieved
that
lowered
tions.
on
loans, then it is be¬
"pegs" would be
the
the
eligible obliga¬
i>Hov
Volume
167
Number 4666
THE
COMMERCIAL
(Continued from first page)
.
country from the statism
ening it.
}\;!■;';-'vPolitical Factors
now
threat¬
1
.
i
It would well
repay the reader to review some of the
situations which
depend upon the behavior of individuals
who seek office in this
year of Our Lord, 1948, or others
r
•
;
(317)
,
And if the cry is continued
long enough, the preda¬
tory animal will put in its appearance. Whether that time
will come during the current
year, will in considerable meas¬
ure
depend upon public policy. The extent to which business
government bond market have further added to the
^
\ ''
•
....
'
-,TOf course, much more is involved here than the
govern.
ment bond market, as important as that is in its own right.
It might not
require a great deal more to undermine the
confidence of investors in the intentions
the Federal authorities as
or
the abilities of
respects the price of government
j bonds. It may well be that events have already seriously
) impaired the ability of industry to obtain needed
capital
either in the securities markets
also
or
Offiice of Lord, Abbett
NEW
is
again bludgeoned into raising wages will inevitably in
degree in which it is obliged
by now declining profit margins further to increase its ask¬
ing prices.
\
V,
" ;
.
Abbett
Inc.,
from the banks.
It may
12
next
months.
And
f
0
Co.,
Business
Shares,
A
f
1
i
i
-
Fund,}.;
teed
d
an
t
r u s-
Funds,
Inc.,
in
n c.,
1
n
c.,
Union
will
be
charge
of
the firm's
new
regional
playing hob with business during the
so we
might extent the list almost
o
f i
B
There is, however, one fact which the rank and file must
for a moment lose to sight. It is this: In
this, an elec¬
c
a
e
r
,
r
Street.
f
-
3 4 8
n
o
„.
e
This
Walter
new
in office but all those aspir¬
ing to public office will be most studiously (and on the whole
astutely) studying the trend of thought among the vast
masses of the
population. Their course will conform to what
they believe the rank and file want.
now
very
securities
States
the
j
firms
who
in
Southern
distribute
investment
Lord,
Abbett
ed to review
and, perhaps, revise its plans for capital expan¬
be open to some difference of opinion among quali¬
fied observers.
Certainly* there is no reason to suppose that
too much
money had been obtained or is being sought from
the usual
sources
of outside
and wishes known.
">•
Fewel & Co. Adds
to
.'"-.V"
LOS
liam
,
^
(Special
LOS
to
The
Financial
incidentally may presently turn
out to be
something other than earnings. Current operations
have not as a general rule been charged with the reproduc¬
tion costs of increased inventories or
with replacement costs
of consumed
Los
With Leo Schoenbrun
Staff
Chronicle)
(Special
..
ANGELES, CALIF.—Cline
capital. The exceptionally large M. Koon has been
added to the
capital outlays of the past year were financed
largely from staff of Fewel & Co., 453 South
accumulated
unspent
depreciation reserves
and
from Spring Street, members of the
"retained earnings"—which
sponsorship.
Angeles Stock Exchange.
LOS
ter
to
The
Financial
Aufhauser
Schoenbrun,
is
Chronicle)
with
now
1373
He
S.
618
South
the state of
or
Street,
in American
some
industry in order
$50 billion
change.
with R.
Mr.
F.
Cook
was
Ruth & Co.
& Co.
-
.
must be invested
a
Metropolitan Edison Company.
3% 1st Mtge. Bonds
2%% Debentures
$19^000,000
Northern States Power Company
25/g% 1st Mtge. Bonds
Container Corporation of America
4% Cum. Pfd.
100,000 Shares
70,000 Shares
at
rate.
Food Machinery Corporation
say
nothing of mid-November
respects also the
100,000 Shares
of
Florida Power Corporation.
150,000 Shares
Maine Public Service Company
Capital Stock
200,000 Shares
Springfield Fire and Marine Insurance Co
Capital Stock
.
Common Stock
.
PRIVATE PLACEMENTS AND SECONDARY OFFERINGS
$1,840,000
Creameries of America, Inc
3% Debentures
$4,000,000
during the coming year will be very markedly
by political policies, which this year will as in ail
3%% 1st Mtge. Bonds
$1,650,000
eco-
3lA%-4% Serial Notes
Carolina Telephone and Telegraph Company...
ChefTord Master Manufacturing Co., Inc
2%% Debentures
$1 ,300,000
nomic events
Burger Brewing Co
$3,000,000
on
American Yarn
$1,000,000
next?
course
4% Preferred
"
.
number of other
3 %% Cum. Conv. Pfd.
Minnesota Mining & Mfg. Co
100,000 Shares
this moment to predict what the
political situation will be
June 30, 1948, to
3%% 1st Mtge. Bonds
...
Minnesota Mining & Mfg. Co..
foreign ship¬
country could not maintain itself
21/2% Debentures
Georgia Power Company
$4,500,000
activity in this country during the
year ahead may, therefore, depend in
very, substantial meas¬
ure
upon the rate of capital
investment, which, in turn, will,
we feel
Certain, depend in a degree much greater than often
understood or realized, upon the course. of
political events.
And who, in
existing circumstances, has the hardihood at
a
manager
$10,000,000
The rate of business
In
joint
Food Machinery Corporation
$10,000,000
whom had had their
eyes closely fixed on exports and were
certain that with an unavoidable
decline in
high
manager or
PUBLIC OFFERINGS
$8,000,000
It apparently has been this
unexpectedly
large capital investment by business which so confounded
the forecasters
during the latter part of last year, many of
ments business in this
Underwritings
to enable it to meet "modern
requirements."
so
as
Dallas Railway & Terminal Company
3%% Mtge. Bonds
4% Notes
&
Processing Company
31/2% Serial Notes
$1,000,000
Dejay Stores, Inc
$2,000,000
Houston Oil Field Material Company, Inc
3%% Debentures
to the returns next
$3 ,500,000
International Milling Company..
2Vg% Notes
subject of discussion among
prognosticators at present is "inflation,"
by which is meant
merely a rise in prices. "Inflation,"
according to the politi¬
cian, is already with us, and is
threatening further inroads
upon the "purchasing power" of the dollar.
$2,000,000
Rich's, Inc
$1 ,250,000
Telluride Power Co
3Vg% 1st Mtge. Bonds
$1 ,500,000
Thalhimer Bros., Incorporated
2%% Notes
$1 ,000,000
Thalhimer Bros., Incorporated
United Wallpaper, Inc....,
2V4% Serial Notes
affected
-
election years be formulated with
The most common
?
"
an
November.
eye
$1 ,500,000
100,000 Shares
.
Of course, this situation was
with us a
year ago. Many
goods wbre at that time, according to the
political wiseacres,
being "priced out of the market" or
•
as
:
we
had
was
entered
1947,
we were
pression—unless either prices
a
general recession
were
reduced
or
or
do under
pressure from
further rise in prices.
or
Common Stock
Our
is
experienced CorporateUnderwriting Department
equipped to handle all types of securities issues.
KIDDER, PEABODY & CO.
FOUNDED
1865 "
'
'
<
virtually obliged
Washington) without
•
T
\
extensive
But, obviously, not very many
goods
services have as
yet been "priced out of the market."
Now we hear a
good deal of the same old cry of "Wolf!
Common Stock
in¬
It hardly need
prove possible to grant further ex¬
tensive increases in
wages (as business Was
to
Lone Star Gas Company.
de¬
wages
3%% 1st Preferred
4^% Cum. Pfd.
F. W. Wool worth Company
50,000 Shares
NEW YORK
■
U
BOSTON A
,\'E
,
3lA% Notes
Walter Kidde & Company, Inc
125,000 Shares
the poor
wage earner and
creased without further
increases in prices.
be added that it did not
2.85% Debentures
'
likely soon to be. Thus
being warned that "inflation"
already wrought havoc with
likely very shortly to induce
.
Carnation Company
15,000 Shares
; Still Cry "Inflation"!
mem¬
Leo
Westwood
formerly with
Van Denburgh & Bruch, Inc.
acted
associ¬
Angeles Stock Ex¬
Issues in which Kidder, Peabody & Co.
outlays would make a sharp difference in
business, and would most certainly not conform
to the official notion that
,
I
Chronicle).
become
Spring
bers of the Los
was
mm Corporate
not a
slowing up of the rate of capita
investment at this time is wise—a
question about which the
judgment of the business community itself is worth a dozen
official opinions—it is little less than
certain that a markec
decline in capital
f
•
Edgerton, Wykoff & Co.,
Capital Investment and Business
•
of
CALIF.—Wil¬
Cook has
ated with
ANGELES, CALIF.—Wal¬
Boulevard.
ANGELES,
depreciable assets.
But whether
'
shares
companies under
'
sion may
-•
Scott ,'j
serve
'
;
R.
branch
will
never
only officials
I
f
ated
indefintely.
tion year, not
&
sponsors
American
,
A number of other
without doubt result in
ORLEANS, LA.—Walter
Scott, Vice-President of Lord,
R.
substantial part determine the
well have definitely taken the edge off the keenThis is another way of saying that the year ahead will
f.ness of many businessmen to seek and invest new
Cook With
capital in
their
be largely what we, the people; make it—provided we
enterprises. '
•
t.r
1
pro¬ Edgsrton,
Wykoff
ceed with vigor and
Whether or not the time had come when
clarity of purpose to render our wants
(Special to The Financial
industry need¬
:
17
Scott Heads N. Orleans
points exist at which the year ahead
must
be deeply affected by public
policy and political
responsible to them. One of the first of these is formed in
maneuvering. The amount of expenditures to be made in
the
money market: and the securities market.
What was
connection with the so-called Marshall Plan, and the
termed the "open mouth"
way
policy in Washington some weeks in which these
gifts (or bribes) are to be financed will obvi¬
ago imparted a distinct shock to much of the business com¬
munity. Since that time steps taken by the Federal Reserve ously affect the course of business. Return to extensive con¬
trols and price fixing as desired
by the Administration would
in the
uncertainty.
,
FINANCIAL' CHRONICLE
Wolf!"
As We See It
action to protect the
&
PHILADELPHIA
CHICAGO
'
>
formerly
and
Hope,
After the^Xliiii^ol^ilie^IFeaii
Business and; Finances Speaks
industry's response to the Government's appeal T dustry competition and constricting efforts by dry groups
for an increased food production and for the fertilizer;; (who can be expected to intensify their campaign dur¬
ing, this election year); are in for a particularly difficult
wherewith to produce it. We have had our biggest year.
HERBERT ABRAHAM
,
r
.
We look forward to
building materials throughout the
country continues to be at high levels, and the immedi¬
ate outlook is for sustained demand. Present emphasis
in the industry, therefore, continues to be placed on in¬
creased production to meet the un¬
precedented demand caused by the
for
demand
The
the
as
President, The Ruberoid Company :
a
efforts
intensified
a
facilities
plant
some
v
.
The
:
;
.
in
offset
to
•/.
degree the greatly
some
Wm.
of employees and the sharply increased costs of
materials, fuel and various necessary services. The
effect of the combined plant construction and research
activities has been to increase the total' output of all;
M.
Allen
was
on
the part of each of these
to distribute the existing supply of materials
equitably among their customers and to do everything
possible toward holding prices to the consumer at rea¬
groups
sonable levels.
HORACE
M. ALBRIGHT
President, United
States Potash Company
American potash
The
generally
high level. Also, I
correct in
at
maintain
to
are
we
s
;
rv\
fact
The
fully
that
met
shortage
the
demand
potash
of
was
not
JL
strong
,
While
able
at
safe
to
of
nature
statistics
final
this
the
/»
_
_
_
we
shall agree
avail¬
we
have
state
,
*
-
The
industry has developed from an avverage annual prewar
tonnage of.
less than 200,000 tons of potassium
oxide to a tonnage which in 1948
may
well reach the 1,000,000-ton
mark.
■. /•■''
railroads
of the
country are the suits now pending
against them for violation of anti-trust laws in rate
making and other respects in the interest of economical
operation, and for war material reparations, which lat¬
ter, if the Department of Justice should prevail, would
destroy the- solvency of many railroads and prevent
much needed
would be
brewing industry
has just
Prospects for the year 1948 are excellent. Most potash
is used in mixed fertilizers and
it is an historic fact that the demand for fertilizer (and
the
out the
dependence upon the United States for food
*
V
.
*;
;;
v
have
higher, percentage increases have not been as great,
but tonnage increases have in some cases been greater,.
It is expected that chemical demand for the products
of the potash industry will remain at a high level during
1948 as it did during 1947.
,
v
"
its
potash industry will continue to indi¬
the future by further expansion
confidence in
during the coming year in a sincere effort to
meet the domestic demand.
>
j.
■')
'.•*
>..•!»
*
.lit
as
we
our
railroad
do that the
that
taken
•
•
a
definite
are
but few
from
There
the
alter
by
the
course
economic
'
■
'
-
second
Commission
in
granting
rate increase
is both heartening and encouraging.
It eliminates a factor of uncertainty
emergency
completely
This expansion is
:'*'t
.»<»
li
u
r
modernization
nizes
wage
even
So
:
;
•
Edwin J. Anderson
mum.
greater demand, concerted
;
the
it.
if'*
industry will probably absorb as much of them as
for fear of pricing some consumers out of the
'
//•.'
...
*
If operating costs continue to
rise, some failures are
unlikely among the smaller breweries. The larger
can be expected to exert all possible
national brewers
pressure
to
to continue to
markets in the race
previous volume.
open up new
sustain and possibly exceed
,
Brewery .officials faced with higher costs, within-in'•
w.'SM r
,1 vI-'.VA',
>
level which superadds new arid greatly increased
structure
without
interim protection is in
we
and of
V'V-V:
enter upon 1948 with the
costly hazard suffered
v
,
.
.
.
Traffic volume—always the vital factor in any pre¬
view of transportation economics for a future period—is.
hardly a factor at all in a preview of 1948. While great
the cross roads of
production in almost every section of our national econ¬
omy.
On the other hand, the European recovery pro¬
gram, which in some form or other is certain to be
adopted, will result in an enhancement of world trade
in almost unprecedented volume.
All of this should
result in a high measure of prosperity for all forms of
transportation, particularly the transcontinental rail¬
roads.
possible further tax and freight increases may result in
smaller profits for the brewing industry'in 1948.
*
the
in 1946 * at least minimized if not eliminated. We may
reasonably expect the final, rate adjustment to be at a
substantially higher level than the emergency rate ex¬
;r
Higher overall production and distribution costs and
not
K. Atkinson
A.
recbg-
destiny, it is difficult to visualize any evntuality that
will curtail the widespread demand for vastly increased
price
can
market.
Interstate
now
elevation of
nations of the world are standing at
be expected to be held to a mini¬
pass increases on to the consumer, -J :
any, can
Rather, than
b^oad
piring June 30, 1948.
•
As part of the operation for sustaining demand,
increases, if
The
Commission
a
itself confiscation.
/ ' ;
/ ; ,/v
that to sustairi the 1947 level of demand
stimulate
that
operating costs to what it has held to be a fair, and just
rate
half
are
therefrom.
profit
.Commerce
of
of 1947, will no
during 1948,' Thus,
1946 brought many of our
carriers through the largest
volume in history of peacetime traf¬
fic with
but little, if any, .actual ;
merchandising, promotional and advertising efforts will
probably be utilized by the industry in an effort to sus¬
tain demand and meet within-industry competition. -
designed^,.
-t 14 ri
which in
'strong
efforts of unusual intensity will be employed by
industry. The prospect is for within-industry com¬
petition to become in 1948 keener than heretofore. Greater i
was
The American
saying
In
The recent action of the Interstate
the
sales
ranged as high as 1,000%, present a good example. In
other sections of the country where the original base
cate
.
Commerce
'
r
the
before the war
large quantities
for more. The
increases
latter
for beer, and
the soil. The farmer
has learned the value of fertilizer as an investment; one
which he himself estimates will yield him anywhere
„
and
continue
indications
duction of crops and conservation of
dollar invested,.
the
doubt
probably continue at close to its recordEducation and experience have taught
sections of the country which
fertilizer are now using
of high potash fertilizer, and pleading
Midwestern
States, where percentage
/
being
now
chart.
one
appraisal.
uncertainties
the most
opinion, the outlook for the industry in
beverage of moderation.
in
nation the value of chemical fertilizers in the pro¬
Large
auspiciously for
do not feel that we are attempting to
year we
factual
The trend toward smaller unit pur¬
chases of beer by consumers begun
supplies added to the very high domestic consumption
apparently assures a prosperous 1948 for the American
farmer.
Even were this not the case the demand for
used little or no
-
auspicious beginning will project itself forward through¬
than met the 1948 demand for
more
potash) varies directly with the prosperity of the farmer.
from $2 to $10 for every
•
K. ATKINSON
The year 1948 opens
transportation industry.
existing brewing and storage•; facili-,
ties should enable the industry to
consumed in this country
the
;
„
President, Wabash Railroad Company
is the inevitable
completed
is
construction
and sold, this was a reduction of $3.00 per ton at the
plants.
!.*/;///./:■''/;-/:///// ■
breaking level.
should prevail.
ARTHUR
__
records established last year, sub-"
ject, of course, to such vagaries as
grain supply, Federal restrictions
and general business conditions.
This year will probably see the in¬
dustry's plans for expansion of pro¬
duction well underway. New plant
bad, New Mexico. For high grade muriate of potash,
which constitutes the major part of all potash produced
fertilizer would
of the necessity for further applica¬
if, as above indicated,
escape,
the Government
.
Despite the extremely large outlays for new plant and
equipment made during the past decade, and increased
labor and production costs there has been no increase
in potash prices since 1937. In fact early in 1947 potash
was reduced in price by five cents a unit F.O.B. Carls¬
The world
no
the unpredictable but are
merely stating the conclusion which
equally as good.
There is
even a possibility that 1948 industry "
production and sales may eixceed the
Albright
;
predict
In this writer's
M.
railroad system.
tions for increased rates and fares
.
''
our
possibilities of these pending cases because of the im¬
plications which they contain, and from which there
been, if they contribute; to the estab¬
policy of security in the a;r,
that they have been worth the price that
reaching all time highs.
Horace
improvements in
The industry of the country should take note of the
successful year in its history with production and sales
1948
sertotis situation ]. otherwise confronting thb i
\ The most
•
President, Goebel Br'ewing Company
which shows that this new American
/
by/
Commis-: \
Interstate ..Commerce
result; otherwise, in view of *;
G. F. Ashby
advancing wage rates and material
prices they would deteriorate to the ;/;//A/////:
detriment of the -security of the nation. ,' / /
'
.y "
1
previous year,, by around 10%.'
More impressive still is the record
:
that
EDWIN J. ANDERSON
exceeded that of
the
-V.i"J
otherv;J
year./:
in
maintaining their strong
position, and are necessary to insure *
paid.
1947, it is
total i American
that
;,;J
through; the
roads
writing for
potash production
and that will, in
continue
sion will be most helpful to the rail¬
.,
sound future
a
primary
awarded and under consideration
have
demand.
not
are
•
opinion,
the
our
aircraft manufacturing industry.* Severe as our
difficulties
lishment'of
'
mendous
• •
•
the
The increases in freight and
encouraging
i
^
*
rates, including postal rates, recently
The President's Air Policy
i.i
a
the result of a
but of the tre-
not
was
A
1
the ; railroads
be
of transportation for the dis¬
current
■■■r '/
>1; ^
to
tribution of goods,
my
was
that
continue
means
and,'the opportunities,:,
accomplishments are. un-<
and; continuing
and experimentation! is es¬
if
statement
the
industry has successfully com¬
If during the coming year we do
pleted the greatest year in its brief but active history.
fitness the establish¬
The unprecedented demands placed upon the industry
ment ;of a sound air policy, for our country, perhaps we
by American agriculture and the chemical industry were /.will take a more .charitable view of the past year. The
nri-nl
Kir
1
t.
i
n
:—S—- •
'
'A
•
•
t_ i i-- J.J.
met in large part by production in¬
troubles that we are having have focused public atten¬
creases by all the major companies.
tion on the essential relationship between air power and
iv>
a
would
Intensive
Commission &nd
the Congressional Air Policy Board have proceeded dili¬
gently and intelligently to examine the mahy problems
confronting the industry. It is hoped that from their
reports will come Congressional action establishing a-;
program'which will permit the industry to plan intelli¬
gently and to build for the future. There is a growing
realization that from the standpoint of national defense
alone it is essential that this country have, an aircraft
industry capable of producing the military requirements.
We must have not merely an industrial mobilization
plan to be put into effect on some future signal, but a
continuing program of development, perfection, and
proving of new experimental models, and continuing
production of the required quantity of the latest ac¬
cepted and operating types.
;
1
highly
intensified effort
an
most
the
nation.
our
things are urgently needed.
other is
and thus maintain business
development in 1947
the action taken to establish a sound air policy for
Perhaps
almost 50% during the past two years.
existing
of
.
position of world leadership in aeronautical. achievements,
unsettled conditions two
One is a wider and more.;
accurate public understanding of the essential interde¬
pendence of the three major elements of the building
industry—manufacturers, dealers and contractors. The
the
in my statement a year ago in which
belief that 1947 would see the completion
adjustment from wartime to peacetime conditions,
but correct in the view that demands for staple and
durable goods would remain strong
I expressed the
speed
sential
F- ASHBY
I was mistaken
,•
.
research
increased
-v,7
•-
President, Union Pacific Railroad Company
during the year 1947. Many ,type aircraft, products of
limited.
.•
.
fWiMMM;!i'M G-'
-V*
knowledge,
wages
Under
.
for further
raw
Ruberoid products
industry.
X
in 1947.
propelled planes -approached
of sound, and further;
progress
was
made withvarious
types of missiles. We are continuing
to break into many new fields ofthe
production
total
the
for
rccket
facilities and the
efficient equipment has.
introduction of more
general
served
in
increase
future
of research and development, ;
made their first appearance. Jet &nd
both from the added plant
resulting
sounder
years
of which- are
:
us
progress
advance
of industrial research and en¬
already in operation.
possibly exceeding the sales and production recoids set
Clearly, in the field of technical
achievement, there was substantial;
gineering departments.
During the past 18 ; months, Jfor
example, appropriations totaling in
excess of $6 000.000 have been.made
by The Ruberoid Co. for the acqui¬
sition or construction of additional
Herbert Abraham
;
>
.
the-
on
'
point to some developments/.
durmg the year which may lead to
■
let
wishful thinking,
-in
Rapid progress has been made in
two years
a result of extensive plant expan¬
and
'
say
this direction over the past
part
1
that 1947 has been a difficult year for the
aircraft manufacturing industry is to, state the obvious.
Instead of recounting our troubles, and without engaging ;
To
''-""v
;'/—r-x
Nevertheless, the problems confronting brewery offi¬
and the industry should prove to be the driving
force which will result in the industry maintaining and
cials
WILLIAM M. ALLEN
->V
backlog of new construction,
repairs and modernization accumu¬
lated during the war.
sions
year.-'"
still bigger and better one.
President, Boeing Airplane Company
huge
as
Thursday, January 22, 1948
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(318)
18
V,
■
'■
'iVT
for the Wabash Railroad Company for
1948. is being formulated on a constructive basis to the
extent of going forward in confidence with capital ex¬
Our program
penditures and maintenance appropriations adequate for
service'demands greater than any to which its plant has
heretofore been subjected. There is no doubt in the minds
of our management that a fair and reasonable return
will be accorded all the newly invested capital.
(Continued
on
page
20)
•
Volume
f
Number 4666
THE COMMERCIAL
&
FINANCIAL
CHRONICLE
(319)
New plants and improvements will cost
J
one-half billion dollars...
'
:
-•
16?
'
v.-
•
:
'
■ ■
■?'
We've been spending 20 million dollars
;
■
a
1
month to improve production facilities.
!
Our peacetime steel production has
'
reached
Ijast
more
the
at that
Our
are
extraordinary.
Even with
steel to
so
refrigerators
...
...
?
/'
4
nearly 2,000,000 tons ir)i steeL^I
things
so many
..
.
veterans' ! !'
freight cars.automobiles: ;lr
wire
pipe ...: machinery of
emergency
stoves
...
.
...
all sorts, and countless other needs.
i;
v
mills have been strained to supply 111"
our
industries for
many
housing
emergency
..
before
year
4
increase of
an
capacity since 1940,
.
last peacetime
operations approach full capacity ./Production;
high level is most important today, when -demands
for steel
/
United ^States Steel produced 61%!
year
steel than it did in 1939, the
war.
II
high...
a new
J
"
<
An added difficulty in meeting present demands
'!
was
the
industry loss of 18 million tons of steel production resulting
from the steel and coal strikes since V-J Day.
i
The demand for many
of current
important steps to increase
facilities.
spend
U. S. Steel
year,
than 15 million dollars
ovens... new
ties for increased
...
sheet mills..,
was
production,
shall continue- to
we
month
a
spending 20 ..I.
new
on
this expansion
new
new
blast furnaces. C
wire mills...
new
new
.
fa^ili-
■
.
production of steel ingots, .tin plate and 11"
tubular products.
*
*
^United States Steel has
to
I
We have scheduled improvements and additions
costing one-half billion dollars
coke
/
taking still
are
capacity to produce |
month for construction of
During the coming months,
more
program.
a
our
we
products.
Until November last
million dollars
.
l|; I
steel products is temporarily in excess I IA;
gradually being filled,
the most needed steel
{
,
11
supply. But although steel.inventories throughout
the country are
further
■.
never
;
V
.
-
l-'-
failed to increase its facilities
help meet the steel needs of the country. Our steel produc- l/V.keeping pace with America.
- ■
.
tion is
SUBSIDIARY
COMPANIES
,...
.
.AMERICAN BRIDGE COMPANY
FEDERAL SHIPBUILDING & DRY DOCK COMPANY
UNITED STATES STEEL EXPORT COMPANY
•
•
«
AMERICAN STEEL & WIRE COMPANY
GERRARD STEEL STRAPPING COMPANY
UNITED STATES STEEL PRODUCTS COMPANY
;
•
•
-
•
CARNEGIE-ILLINOIS STEEL CORPORATION
NATIONAL TUBE COMPANY
•
UNITED STATES STEEL SUPPLY COMPANY
*
COLUMBIA STEEL COMPANY
OIL WELL SUPPLY COMPANY
•
•
•
CYCLONE FENCE DIVISION
TENNESSEE COAL, IRON & RAILROAD COMPANY
UNIVERSAL ATLAS CEMENT COMPANY
•
VIRGINIA BRIDGE COMPANY
19
20
THE COMMERCIAL
(320)
Business and Finance
(Continued from
;•
page
FINANCIAL
basis for the first time
in
renewal this year.
G.
:
President, National Airlines Inc.
1948 which those in all
phases of air transportation well might study carefully.
/ The cost in dollars of past errors in judgment is in¬
computable,
and
as we in the
embark upon
tions,
air transport
industry
of opera¬
to meet and
new
a
year
must prepare
in a practical manner the
critical situations which will be en¬
we
overcome
countered.
Increased
fares
not
will
cure
our
troubles.
They might, and probably
price air transportation out of
will
the
reach
short
the
of
periods
seasonal
except for
heavily traveled
masses
on
routes.
Labor must depose its obstruction¬
ist
czars
and
with
cooperate
man¬
•
Premium income
gin
In
planes,
brief
air travel bethe few—with
or
watch
luxury for
and
management
can tolerate.
^
The domestic airlines' hodge podge route
stra'ghtened out, either by mergers and consolidations
or by
disposing of segments illogical to the needs of one
carrier w ich would fit into the route pattern of another.
The ineff ciency and red tape of government regulation,
and the resultant cost to the air carriers is all out of
proportion to the accomplishments. The thinking of the
Civil Aeronautics Board must be directed along sound
consistent channels.
'
.
c
.
-
is
nothing cons'stent or sound in the policy
which virtually overnight permits foreign air carriers
right to
operate
non-stop
between major
cities in
the United States and foreign points and yet refuses
to allow a United States line the same privilege between
the same points.
While the scheduled air carriers await action
on
appli¬
Steadily
some
miles of
have not yet started
routes to
"paper companies" which
operating their original route grants.
Topping all this is the fact that the same policy will
probably pay these so-called feeder routes 50 cents per
mile mail pay, as compared to the few cents
per mile
still paid some of the scheduled carriers.
While
lavishly handing out whole new systems of
"paper companies" at great cost and ques¬
I
and
tension of
cne
denial
■
its
of
of the old, proven scheduled carriers and
competitors for the same route will be
justified by explaining that the favored application in¬
volved a minimum of additional mileage.
If practical,
conservative businessmen in government,
labor, and the air transportation industry are permitted
to direct its destinies in 1948, air transportation can and
will survive the serious setbacks of 1947,
provided labor
really cooperates, and government adopts
and consistent air policy.
an
intelligent
v;:/I June 30, 1948, marks the expiration of the so-called
moratorium, or adjustment period, and insurance must
assume its rew status as interstate commerce.
Regulav. tory laws have been passed by
a majority of the states
and it follows that the fidelity and ./••,;
•
surety industry, along with other
branches of insurance, will be sub¬
ject to more thorough state regula¬
,
tion than heretofore.
sent
mapy
new
confident
hearted
This will pre¬
problems, but we
through whole¬
that
cooperation
services
bonds
the
were
1940
have
period
same
on
In the fidebtv l'nes
I
we
Class
B
even
reductions
.
bonds
several
on
reduced
was
other
•
in
with the
closest
The
uncertainties
licity in the press, brought home most forcefully to
businessmen the dangers of under insurance in this
par¬
ticular
lire.
Another reason for anticipated increased
fidelity writings for 1948 is the fjacfc;that a large n
of. such risks, which were written pri a
three-year
V
rb:Vt--.v.
on
by the
and I the
'
in
■-
-
invest¬
the
have been further
em¬
adopt policies of greater caution than
heretofore.
They have caused sav¬
ings bankers to review again with
much greater discretion the field of
mortgage
loans
rate
banks
the
important contract classifi¬
The classifications affected
lending
since
mortgage
represent practically the only
of
risk
asset
which
savings
form
hold
today.
attitude
of
This
savings
toward
agement
change in
bank man¬
mortgage lending,
have considerable
Robert
A.
Barnet
serve
made
were
available
to our principals and
practically every item of our
increasing, it is evident that your
company and the industry
of which it is an important
part, have already made a truly outstand-ng contribution
toward the fight against inflation.
assureds
own
at
time when
a
operating cost
was
I
believe, will
bearing on the savings bank business for the
Another influence that will bear
banks
II.
BAKER
If the Fed¬
Reserve banks should further lower the price that
they will pay for long-term government bonds, in my
opinion, it may cause a situation in 1948, which would
likely "freeze" government bond investments in savings
dollars,
are
in
huge backlqg of construction re¬
quirements yet" to be satisfied. In
normal
result
of
must
be
least
1956
to
In
marriages,
were
about 765,000 units
added, al¬
though construction soared to a rate
per year during
It is expected that this
H.
is the yard¬
schools, churches, hospitals,
in¬
Contrary to popular opinion there has been only a
modest increase in the
price of the materials we manu¬
facture. 'As a matter of fact, while building products as
have
are
and
up,
advanced
raw
on
95%
We
are
our power
to
some
cases
have
doing, and, will continue to do
to keep construction costs down
building.
rises in the cost of
sarily have to be reflected in
wages or
raw
1947
the
was
of
this
as
my
year
changes in
materials will
selling prices.
This
$218,000,000 lor
.
These remarks relate to
have
■
arising from
Treasury Department policy
a
common
as
that portion
of the chemical 2
the Chlor Alkali Group who
basic process usually
involving the
duction of caustic soda and chlorine by the
decomposition
number
of
of
salt
different
trolytic cells
the
by 25%, with another 20%
pro¬
are
pro¬
electrolytic
solutions.
A
types of elec¬
used but in all
cases
problem has to be met,
namely the marketing in balance of
neces¬
prograifi |i|ivolved the construction of two large
f
total of
a
t
industry often described
same
the
of
coproducts, since for every ton
chlorine
produced
made about
of
caustic
one
soda
and
and
there
one
is
also
tenth tons
conversely' for
every ton of caustic there is about
nine tenths of a ton of chlorine to be
taken care of.
The industry is made up of a rel¬
atively small number of companies
and
although the production and
sale
E.
R.
Bartlett
of chlorine has increased tre¬
mendously in the last twenty years,
there
has
been
no
tendency for
newly organized companies to enter
this field in a substantial way but on the
contrary it has
been concerns already interested in the alkali or
chlor
(Continued
plants, the complete re-building of two others and
v
•
E. R. BARTLETT
If home
jected for 1948.
ew
Accord- '
President, Hooker Electrochemical Company
Any further boost in
building materials than we have ever turned
single year. Our $27,000,000 expansion program
is practically completed and this enabled us to increase
year
\
affecting government bond prices.
own organization is concerned, our ef¬
will be directed toward the production
last
,
approximately $410,000,000.
money rates and
a
volume
\
funds and savings banks are more reductant to
increase
their risk assets because of the uncertainties
more
our
1948
most
building costs are to be lowered in 1948—and there is
a strong
possibility they will—the reduction will be the
result of improved materials that save time in applica¬
tion; quicker deliveries, which will, eliminate long, costly
delays in construction; such techniques as on-site fabri¬
cation; and a more abundant labor supply.
So far
increase for
h
,
our
will
likely that the increase
prospects for 1948, in my opinion arc that less
funds will be loaned on
mortgages in 1948 than in 1947
due to the fact that the trend in
savings deposits is
declining; mutual savings banks are unlikely to dispose
of government bonds at lower prices in order to
provide
since
average,
material costs which in
stimulant
a
an
seem
The
expanding population.
whole
makes it
now
the entire year.
dustrial buildings, stores and public buildings required
an
that savings deposits
than 50% of the increase in 1947.
three months of 1947 which is
Baker
stick against which the total construction market volume
is estimated. By total construction we mean not
only
by
higher interest rates for - mortgage
estimated that
Melvin
attainment of the 1,200,000 figure.
The number of
dwelling units required
new
cause
$168,000,000 for the first nine months of 1947, and it is
they loaned about $50,u0u,0uu lor tne fast
units
housing, but the
policies,
bonds for the purpose of lending funds in the
mortgage
market, the most that can be loaned would appear to be
about $200,000,000.
According to the figures compiled
by the Savings Banks Trust Company on mortgage lend- t
ing in New- York City, mutual savings b^nks loaned
were
1,000,000
lending
optimistic view that we can entertain
savings funds in New York City during
1948 is approximately $200 000,000.
If,- for any reason,
mutual savings banks are unable to convert
government
437,000 dwelling
completed. In 1947 there
rate will be maintained
during 1948
and that the
following year will see
mortgage
of the increase in
1946'-about
units
less
for
ingly,
V
\
believe
York
yearly until at
supply the country's
v •
on
It is esti¬
mated that the gain in savings deposits of the mutual
savings banks of the five boroughs of the City of New
year
built
housing needs,
I
will be
family increases and other factors.
Industry and government forecasters
agree that about 1,200,000 dwelling
units
effect
loans.
but the trend
addition, there is the current need
the
direct
demand will
a
as
If this situation should develop, it will undoubt¬
have
savings deposits to meet the demands for mortgage
money which will be made upon savings banks.
This
of under-building have left
housing which arises each
Department will sustain
•new
prospect for 1948.
for
1948.
since there will be insufficient funds accumulated from
A record peak in home
building and a total construc¬
tion volume exceeding fifteen billion
than twenty years
the Treasury
year
the policy toward
the price level at its present pegged prices.
edly
President, National Gypsum Company
More
and
on
eral
banks.
MELVIN
out in
defalcations, which received nationwide pub¬
banks ?
recently culmi¬
more
prices
protected
Reserve
Obviously, however, there is a> point beyond which
Frank A. Bach
rates and
money
lowering of
bonds
phasized by this important change in
money rates and have led bankers to
blanket
arid
in
tne
ment market
construction
on
33 V3 %
BARNET
including mutual savings banks. This great change
occurred
Federal
/.
1
part.
our
A.
Treasury Department.
blanket
commercial
on
to do
geared
mortgage lending is the new price level of government
bonds and the question whether or not the Federal Re¬
spectacular
/v.r-r
are
reductions
forts
bankers'
a long-term basis.
There is general
country's housing needs, and the ob¬
full production from all factors in¬
by these reductions represent approximately 77% of our
total
contract bond premiums.
Certain of our public
official and judicial rates have likewise been reduced
below prewar levels.
Bearing In mind that these very material premium
fidelity coverage and we attribute this, in
part at least, to the fact that several very large and
k
on
cost increases cannot be absorbed.
of
■r
rates
cations averaged about 25%.
as
supervision, dishonesty losses often go undiscovered for
many years. Fidelity premium writings should increase
during the year. There has been a very noticeable ten¬
dency on the part of assureds to purchase larger
amounts
We
government
approximately 65%. These classi¬
approximately 60% of our total fidel¬
contract
reductions
everything in
greater temptations in the way of those employees who
handle large sums of
money or valuablevmerchandise,
that
requires
nated
approximately 57%.- During
.
110%
quency and amount. This is a natural
consequence
of
the
unprece¬
it must be remembered
rate
exceeded 200%.
that losses will increase both in fre¬
and
tions
has
1939, our present
less than 30%, and are
actually under those of the peak building year—1925.
This has been achieved in spite of wage increases of
period. High living costs have thrown
;
problem of such
ity premium volume.
During the same period the basic rate
prices
antic?note
dented business activity which pre¬
vailed during wartime and which
has continued
through the postwar
reduced
Nova
President, Irving Savings Bank, New York
increasing.
premium
our
been
in
Since September, 1947.there has been a major
change
in the investment market
affecting all financial institu¬
bonds have averaged
a
the
part of
both state supervisory officials and
company managements, solutions to
these problems will be found.
;
a
mines
our
on
the
on
ROBERT
fidelity and surety industry occupies an unusual
say, a unique position in that it has made
the last half.
President, Fidelity and Deposit Company of Maryland
made
volved.
might
Since
of
FRANK A. BACH
feel
jective
reductions in the cost of its principal
prod¬
ucts, while the prices of practically all other commodities
new
tionable value to the taxpayer, an occasional short ex-
be
agreement
and nationwide importance that governmental
authorities, business leaders and others are bending
every effort to bring about price reduction and reverse
the dangerous
inflationary spiral. It therefore, seems
both appropriate and timely to mention in this report
existing routes—for many years,
policy which controls
all a;r carriers freely dispenses thousands of
additional
routes to
must
ser.ous
cases—the unfathomable
the fate of
spe¬
mar¬
is
prices have become
ns.ng
from
rock
gypsum
seaboard plants. It meant the purchase of
to insure a supply of paper used in the
of gypsum lath, wallboard and
sheathing.
Any appraisal of the future of the building industry
penses, together with the uncertainties and dii'f culties
which may be expected at the
beginning of a new period
of state regulation.
cations to add to their
in
raw
our
mills
paper
encouraging from the
on the other hand,
losses, higher operating ex¬
increase in
an
fications represent
pattern must
be
the
outlook
1948
our
visualize
we
and
a
few jobs.
Featherbedding and the
retention of inefficient employees because they are
members of the "Club" are practices neither labor nor
There
we
slight
a
transport
Scotia to
manufacture
substantial
come
few
exceed, by
expansion at our remaining 19 plants. It in¬
cluded the purchase of a fleet of ocean
going vessels to
viewpoint of greater production, but
that the
"
Thursday, January 22, 1948
general
1947 writings.
our
portation,
Baker
for
up
,
the other lines in which
on
cialize should equal, or perhaps
management and labor must work
toward the goal of mass air trans¬
T.
..
struction, will increase during the year which should
produce a correspondingly larger volume of contract
bond premiums.
<
*
I/
■
agement in the promotion of projects
from which all obta;n a living. Both
G.
1945, will come
■■
-I ■.■■■.■/■./'
,v
Despite continued high labor and material costs we
anticipate that building activity, particularly publ.c con¬
T. BAKER
Past events cast shadows into
CHRONICLE
Speaks After the Turn of the Year
mium
18)
&
•bh !/ "/
•s
•>:
on
page
22)
Volume
167-
Number 4666
THE COMMERCIAL
,
&
FINANCIAL
CHRONICLE
;
„.
.
.
(321)
.
21
f:-
'•><:> \>Y<N
.
"*
lil
tBis!!#®
iiit
TO
BUILD
A
SAFER
CAR
®iiiii v i
liiSililll
YOU
FOR
irillliiil
1,1
l#tfiitt§
.
—rn
Hkf
iniii'iiiir
--i.li
'
umiiniin'i >ii>(()i,,ii
i,
lllfil
lli
Creative
They borrowed winter
Tuts is
•
The
1
not a
picture
of the
scene
was
in
an
Eskimo service station.
taken in Detroit—and shows
one
experiments thai helped bring about the
help
to
tell how the
down
to
you
brake
new
20° below
by microphone
to
zero
at
thick dust and other
temperatures
and reports
v' Tlie fur-collared
test
this
winter of the
<
f
He steps
new
man
is
an
artificial
Chrysler Corporation Cold Room.
on
This
engineer, dressed
kind of brake in the
the brake pedal of
a
one-wheeled
to
was
put the
Brakes
one
another engineer outside the
all
our
of the
cars.
experiments that led
It
•
•
"test-car," reads the sensitive instruments that
.
.
.
they bring
the safety of easier brake control with 25%
30% less foot pressure!
you
to
us
proved
Safe-Guard
you can trust
sult of the
them in cold-weather driving.:
O
•
Other
tests
testing showed them
superior for all kinds of driving
revolutionary new Safe-Guard Hydraulic
on
Chrysler Corporation
driving conditions. And thou -
sands of miles of on-the-road
the results
observation window.
to
you at
stop!
works
...
Imagination working for
checked
v
'
.
them
in
the
'
•
j
extreme
heat,
Hydraulic Brakes
are
another
practical imagination that has led
exceptional value of the
De Soto and
new
re¬
to
Plymouth, Dodge.
Chrysler.
CHRYSLER CORPORATION
PLYMOUTH
Airtemp Heating, Cooling, Refrigeration
•
Chrysler Marine & Industrial Engines
•
Dodge Job-Rated Trucks
•
DODGE
:
Oilite Powdered Metal Products
DESOTO
•
CHRYSLER
Mopar Parts & Accessories
•
Cydeweld
22
FINANCIAL
&
COMMERCIAL
THE
(322)
5u
some
cases
The
the traveling
on
It is
public was very pronounced.
past their
opinion that the airlines are now
our
aircraft, and
are
..,
copters ranging in size from the two-place
rather spectacular crashes which
were grouped in a very short total period
adverse effect of these unfortunate events
few airplanes in some
of time.
post-war market demands, has gone forward in a period
presently building heliof rapidly rising costs. If this level of construction costs
YR-13 to the
five-place XR-12, for the military.
During 1947, the ^ should continue into the future, our normal depreciation
allowances for replacement of existing pre-war plants
helicopter made rapid strides forward, We look forward
to equally impressive progress during' i948!'<$■
\ would be inadequate. On the other hand, if future costs
In the military field not counting helicopters, we are; r should prove
\o be substantially lower, our hew; .con¬
rotary wing
from page 20)
Thursday, January 22,. 1948
After the Turn of the Year
Business^ and Finance Speaks
(Continued
CHRONICLE
readjustment period and that with the assist¬
ance of the CAA, CAB, and other Governmental agen¬
cies concerned, they will enter a period of growth and
difficult
prosperity. The new postwar equipment, with the ex¬
ception of certain very large airplanes which were
mainly developed during the war, is just becoming
available to the airlines and will enable them to offer
better service and increased safety to the public and
will enable them to reduce their operating
costs.
on research and development of nOw types
; struction costs would be out of line with normal values.
We as~ume one of the other of these two possibilities
including guided missiles, apparatus pertaining thereto, ana piloted supersonic airplanes. In the; ! must be faced ip the future.
: :
j
last category may be mentioned the, XS-1 and XS-2.
i'r i;
In our plants we have had cooperation of employes'
We expect our dollar volume this year will be well
unions and management towards increasing production,
divided among these three principal categories ;0f activi¬
so
have been able to hold down prices. The present
ties: Non-aviation manufacture, headed by the Prime
average level of Libbey-Owens-Ford prices is only 18%
Mover; helicopters, and other aviation work. Forecasts
above what it was 10 years ago while wages have almost
are difficult to make as yet, but we look to the future
"" doubled and material costs have
greatly advanced in
concentrating
of
weapons,
;
'
with confidence.
field, the completely new and radically differ¬
BEECHCRAFT
20-passenger,
four-engine, two-
=
that period.
'
;
.
In this
ent
propeller Twin-Quad transport is expected to make a
major contribution to reduced operating costs and im¬
proved service to the public. It is especially designed to
operate from small fields in order to eliminate the neces¬
sity of the expenditure of millions of dollars by munici¬
palities whose airports are becoming inadequate for the
older types of equipment under modern operating con¬
ditions.
This new BEECHCRAFT will be available for
f
At the end
aircraft in production were
fected the procurement of military aircraiV
of the
all
war
the military
obsolete and it would have been sheer folly to have pur¬
chased
additional
of airplanes
quantities
of the
same
those which were decomposing by the thousands
on the surplus disposal fields.
Here again the time factor
required to design and test new military aircraft entered
deeply into the situation. From three to five years is re¬
quired to design, construct, test, service test, and procure
initial production quantities of military aircraft.
The
time since the end of hostilities has simply not been
types
,
as
Hong enough to achieve this result. Beginning in 1948
the procurement of new military types will become im¬
portant. The international situation has deteriorated to a
point where even "the man on the street" can readily
appreciate the necessity for a strong military establish¬
ment,'and especially a strong air force. For that reason
we do not believe that much difficulty will be encoun¬
J.
Companies engaged in the manuand
plastics material plant, as one of the units
plant expansion, looks forward to a con¬
siderable upturn in production of coating compounds,
resin glues and plastics molding compounds in 1948. This
unit reflects the outlook in furniture, plywood, cosmetic,
•'!'*'■
,
printers have had a prosperous
the
.
S.
background, however, is a
for apprehension. Pres¬
profits are being made because
of an abnormally high volume of
business.
Costs
have risen
much
tool industry will have a good year
ih 1948.
Business is not coming in
prices, with the result that ;
the break-even point is now so high
when
the
volume
turns to normal some
at
of costs and
</
,
'! NealDow Becker
*
'
*
With the automotive manufacturers
and sell
preparing to make
planning to build about
what,
million homes in
1948, the outlook for continued high level/of sales of
:V ?X ''-'V'/
plate, window and- safety glass is
tion industry
a
ously.
Foreign business is quite good in
There
are
specific
more
and disappear.
soda ash in
of military
benefit
and
company
that all
of
the various phases
turing will progress
gradually, from this
and
develop
in
industry
the
;
i
10, Bell Aircraft Corp. officially announced
product, the Prime Mover, which will broaden
new
Congress there is every reason to be¬
lieve that the steel shortage will re¬
expanded
f
The
nine
domestic
soda ash launched
a
producers
main with
We
the
of
major expansion
beginning in January, 1946, and they'assure us
producing by the middle of 1948.
Thus our supplies of this most critical item should be
good in the third quarter of the new year, and adequate
Assured
of
a
;
.
.
;
,
.
^
tially a strongly built, high-capacity, mechanically dump¬
ing barrow, the Prime MoVer
is
ly from factory shipping docks to installations in new
buildings and motor cars.
*
v., ..
In both major fields of home construction and auto¬
mobiles there is a trend towards larger window areas.
over a power-driven, threechassis, with 3V2 h.p. engine,
wheel
steered
wheel.
by
terial,
is
and
bucket
rear
a
equipped
platform
or.
thousand
a
of
means
This is especially
caster
It will carry wet or dry ma- '
With
snow
When
men with wheelequipped with
a
•separated by
at the edges
-
plow blade, the Prime Mover
a
baby bulldozer.
placed more than
becomes
We have already
40 of these machines in the hands of
carefully selected customers and
ports
have received
we
machines in
use
are
from
re¬
these
Lawrence
ing. Present plans call for accelerat¬
ing production schedules through this
coal
D.
Bell
most encourag-
the Prime Mover has demonstrated
year,
its
and already
effectiveness
in
railroad shops, foundries, shipyards and
chemical plants. It is particularly useful in the construc¬
tion industry.
;-V.
As
yards,
into the
commercial heli¬
copters continue to provide spectacular proof that this
rotary aircraft is a valuable tool for industry, agriculture
and commerce.
Operators of our machines have flown
we
move
new
y£ar,
unit combines two panes of glass
de-hydrated air space completely 'sealed
by metal-to-glass bond. Thermopane is i
fabricated in the factory ready to place in the sash on
the job. Picture windows and solar houses with window
walls pioneered this trend but in the last year whole
office buildings, hospitals, schools, laboratories and tex¬
tile mills have been equipped with these insulating win¬
dows. A special railroad Thermopane, combining safety
glass and heat-tempered glass in the window units, has
stimulated railroad passenger car rehabilitation work
and the improvement of many of the new streamlined
trains.
-I ■'
""■Xy.V ' "■■■' ',v 1 X'vXy/X l,Y
insulating window
a J
load, it negotiates
20% grade with ease.
One Prime
barrows.
our
than i0,000 hours in the first year of commercial
treating all sorts of crops with sprays and dusts,
fighting forest fires, seeding timber land, patroling power
more
lines, conducting geophysical surveys, carrying
mail and performing a host of other revenue jobs.
TVe
are,
of
course,
continuing
our
development
.
a
Libbey-Owens-Ford will
show net sales of approxi¬
mately $100,000,000 for 1947 as compared with $68,350,000 in the
preceding
high total of lousiness
year—a new
for the company.
-
•
i
;
-
;
'
•
.
Approximately 11,000 employes of the company have
been paid more than $34,000,000 in wages and salaries,
the company's tax bill exceeded $11 000,000, and the
more
than
17,300 shareholders received $7,600,000 in
dividends while a moderate proportion of earnings was
retained in the business.
use,
and pipe
noticeable in the market for Thermo-
which has solved the age-old problem of reducing
heat losses through windows. The Libbey-Owens-Ford
pound
Mover replaces four
r
pane
either
with
body.
During 1947 a special charge of $2,000,000 was made
Libbey-Owens-Ford against current earnings to a
reserve
for possible depreciation adjustment.
The im¬
by
engineered and planned as .early
1945, to provide needed modern facilities to meet...
provement
as
program,
are
still higher.
only two classes of peo¬
:
X
present time
-
the base of the company's non-aviation activities. 'Essen¬
mounted
is an
purchasing power are using up their incomes to buy food.
GEORGE
rapid¬
.
if there
reasonably well off at
and those are the
farmers, and most of those who are
unionized.
The great bulk of the
the
Blakeslee
flat, glass., still .do \
not have normal inventories.
Most products move
and
ple who are
L.
A.
window, and safety
X
much concerned over
manufactured products are
on
There
sufficient supply of soda
mobile and construction industries.
Manufacturers and distributors of
throughout 1948.
trend
bound to go
these facilities will be
fourth.
us
very
price
prices
program
the
are
overall third wave of wage increases,
glass should be able to meet heavy demands of the auto¬
On January
a
if the shortage of sheet steel
possibility of
the Marshall plan being passed by
continues and with the
placed con¬
tinued
heavy orders for soda ash
since the end of. war production.
John D. Biggers
heating appli¬
will remain strong throughout
the year
normally.
some
Co.
belief 1hat the present de¬
our
mand for cooking and
ances
have
war,
ashes the makers of polished plate,
President, Bell Aircraft Corporation
^
1948.
Almost half of the
of soda ash goes
glass
Black
L. BLAKESLEE
It is
this essential in¬
war
industries,
during
in
LAWRENCE D. BELL
;
i
A.
of
supply
the second half of
supply.
output
the
to
Newer
Perhaps the disap¬
point> onward.
short
nation's
although
pointment expressed by so many people in the aircraft
manufacturing industry is due to their failure to take
into account the basic problem of the extended..time
required to design, construct and test any type of new
airplane, and that they did not realize that this factor
)ias been the predominant one in all of the various as¬
pects of the postwar aircraft manufacturing business.
increased
an
Duncan
President, Kalamazoo Store and Furnace
will have the
we
gredient for making glass has been
of aircraft manufac¬
favorably,
of
that
Ever since the
is actively interested in this market and
will attempt to secure its fair share of military business.
In conclusion, it is our opinion that the postwar re¬
adjustment period is just beginning to come to a close,
Our
believe
We
increased
secure
S.
to
reasons
look ahead with confidence
we
restrictions
of the many
which it is subject.
spite
favorable.
in this industry.
forward,
been
edly business is s'owing down some¬
but in our opinion not seri¬
than five million units and. the. construc¬
more
aircraft will, from
business and that
they need not fear that their establishments will wither
manufacturers
.
have
that
practically no stock are gradually
beginning to accumulate
a
little, *
which is as it should be. Undoubt¬
Libbey-Owens-Ford Glass Company '
President,
why
the
rate as one year
we have quite
case
our
distributors
Our
^
BIGGERS
that
,
same
-
operating during the past year with
JOHN D.
,
in securing future appro¬
priations to purchase adequate quantities of new mili¬
_
but in
ciency.
•/: '
tary aircraft of advanced design. As a result, we believe!
this time
.
large backlog of unfilled orders,
which. Will make up for this defi¬
companies will
prices.
•>;
a
into the fed at the present level ;
go
quite the
.
ago,
re^'
sales
of
BLACK
& Decker Mfg. Company
H We think that the portable electric
than
that
DUNCAN
' President, The Black
a-
cause
ent
more
new
Toledo
radio, electrical equipment, clothing, paper, paint,
varnish, lacquer and other industries. ■ -
ders appears
In
its
shiall
and the present backlog of or¬
to insure a reasonably
prosperous 1948.
'y
!
year,
tered by the military services
,
ing its
in
Corporation
facture of machinery for newspapers
serious
readjustment period has profoundly af¬
The postwar
DOW BECKER
NEAL
President, Intertype
delivery in the latter part of 1948, as it has been under¬
going flight testing since Oct. 1, 1947.
^ Plaskon Division of Libbey-Owens-Ford now complet¬
V
Partner,
W.
Kuhn,
BOVENIZER
Loeb
&
Company
predictions in a presidential election year are
always hazardous to make. This year, with the uncertain
foreign outlook and with our own confused picture as a
result of the controversy over inflation and taxes the
problem is even more acute. Never¬
theless, it is my judgment that gen¬
Business
business will continue to oper¬
eral
capacity during 1948. To
of
the 'still
unsatisfied
needs of our own country, as well as
those from abroad, its facilities must
ate
at full
take
be
care
expanded
tended
even
needed
and' production
ex¬
further.
This much-
expansion
program
calls for
large amounts of new capital funds.
To avoid fanning
the inflationary
through the issuance of addi¬
flame
tional debt much of the new
capital
equity financing.
Unfortunately, however, the Ad¬
ministration does not seem to realize
that those who should be in a posi¬
tion
to
furnish the needed funds
should
come
from
George W. Bovenizer
have, because of the impact of our continuing high tax
rates
not
been able
to
build
up
surplus capital.
Until,
therefore, tax relief is granted all along the line, from
the highest brackets to the lowest, these surplus funds
cannot be accumulated. It is my hope that the Congress
will, promptly give effective
this direction will go far to
confidence
new
to
tax reductions. Relief in
restore investors' waning
the end that our markets can absorb the
securities which must be offered if the needed ex¬
If this relief is forthcoming,
belief it will be, I look for our investment
pansion is to be financed.and it is my
banking industry to become very active during 1948.
Volume
167
V'%
.Number 4666
:
THE COMMERCIAL &
~
;
alkali business who have met the
increasing demands. b*
This may in part be due to the fact that a
large invest- '
ment is required
per sales dollar and the margins of profit
have been held at rather low
figures.
creased
tonnages have
of the companies
ducers only have
who
LEONARD T.
President,
The required in¬
'
oiiginally electrolytic
greatly enlarged their plants and
were
around
the
some
expected
will
sec¬
that
have
sales
I
profits
after
even
certain
the
by greater efficiency and economy and higher
performance than was available from prewar models.
Businessmen are just beginning to learn that these new
airplanes constitute a valuable business tool for the in¬
M financial
MM;~taken in
usual
'policy.
time of World War I; but from
companies utilized all or a large
sales
conservative
profits
will
just beginning to prove to themselves and to each ether
that the new postwar business
airplanes offer new econ¬
financial
that
1948
omies in
exceed
those
achieved
"are
Indications
and
|£^^^HP^^^H\made in
to the
part of their chlorine for the manufacture of diversified
chemicals. Today practically all the
group have devel¬
oped,, or are in the, process of developing, chemicals 1
which require chlorine and which cover a wide
range
of operating efficiency and the reduction of
oper¬
ating costs of their businesses. These businessmen are
crease
adjustments which may be
accordance with the com-
^l||
pany's
of
year-end
'
is
years
the
large
number
uses,
in
this
involving huge tonnages of the material.
field
,
of
It
is
of
told
t
diversified
chemicals
that
the
,
„
_
,;
,
Leonard T. Beale
large
n.ew products for which raw materials
are
available, manufacturing
techniques have been developed and
under const) uction
with
President,
operation expected during 1948
.There
craft
with
the
certainly
did
then
not
of
in
1947
but
which
may
ceivably be coming toward the close of 1948.
course
unreasonable
caustic
soda
full
loads
and
of
to
expect
chlorine
can
that
all
It
optimism
Beech
the
advantages that I have dis¬
bought the airplane
I would have considered it a gross exaggeration."
The total potential market for business
airplanes
Aircraft
and
Corporation
aircraft for air¬
use.
so-called exgreat disap-
for
business
aircraft
the past.
Why anyone should complain about the failure of such proph-
mBBBISNI: <B
made
'•
to
come
true
is beyond our
understanding. In almost every other
business
large, volume
production
was
of
is of
attained
slow
product
producers
of
fully
operate constantly
at
sumers
or
not
the
but
was
during
also
educated
tages Of the product.
as
period
which the
to
which
the
period, these
developmental
have not
an
had
sufficient time.
still
war
to be suffering
seems
period.
the war their activity was relatively small by com¬
parison with postwar standards. On the other hand, their
present traffic is considerably reduced by comparison
to
developed
Walter
factors > •'
H.
alienated
Beech
care
during the period of the relo¬
of
-
•-
-
of
service.
the
tremendous
time, and
enormous
In
addition, they suffered
(Continued
which
on
a
loss of
quite
a
24)
page
of the 24 American
will
traffic potentials
result, they not only
considerable
\
One
as a
overhead burden,
but also
portion of their old customers
inability to furnish their old-time standard
an
a
due to their
opportunity to operate, due to lack of
wurme
cannot be foretold.
which existed at that
advan¬
ni
year of 1947.
How
product will be converted
the
The airlines,
manufacturing business, have
no lengthy stabilized
period of experience durihg peace¬
time by which to measure their business potential. Prior
tions to take
the
In the postwar
for
cation of people just following the cessation of hostili¬
ties. The airlines were forced to build up their organiza¬
was developed to
needs of its con-
during
BEECH-
during the calendar
desire
with the level established
extended
an
only
satisfy
public
in
by
growth
our
like the personal aircraft
ecies
con¬
this
The air transport industry
from reconversion from the
W
been
of
to definite orders
HK|Ep:
in
have
Bonanza
Bonanzas
much
fl
which
is
airplanes
1200
/
pre-
to the most optimistic
We do know that most of
are being sold to owners at
they operate them an average
distance of approximately 100,000 miles per year, ot
something less than two hours per day. We do know' also
that a recent survey of their readership by a prominent
aeronautical publication indicated that about 6600 read¬
ers planned to
eventually buy BEECHCRAFT Bonanzas.
This figure compares with deliveries of
approximately
activity in the air¬
business; namely, the design and
expressed
market
dictions
overloads, but the industry certainly is
looking forward to the future with great
long as it keeps moving steadily ahead in
the development of new products by continued or ex¬
panded research activities.
justified
the
to live up
industry will doubtless
point where the output has caught
available outlets, a situation which
exist
of
small businesses and that
^ointment With the apparent failure
The potential opportunities ahead for the
growth of
the production and sale of chlorine and its
products seem
to be almost unlimited but the
up
writers
have
perts
quickly
been
adapted to continuing peacetime uses. Furthermore, the
investment of large sums for additional
tonnage has been
made or authorized by many of the Chlor Alkali
Group.
a
*
three main categories of
manufacturing
/Many
It
reach
as
BEECH
military
;;V.;
time
are
H.
construction of aircraft for business
use,
line use, and aircraft for
has now been clearly demonstrated in the two
and/:
one-half years, since V-J Day that the wartime
growth
in
chlorine
production
capacity
has
some
all
CRAFT
WALTER
or
early 1949 and it is believed that the installed ca¬
pacity then will be in the neighborhood of 1,800,000 tons,
which is nearly six times the
capacity only twenty years
ago.
about
me
totally unknown.
installed
capacity of all plants was about 200.000 tons in 1917,
325,000 tons in 1927,*550,000 tons in 1937 and 1,600,000
tons in 1947.
Several large plants or additions are now
been
For instance, one busi¬
covered for myself I would not have
for wj1ic}1 attractive markets exist.
growth of consumption has taken place.
Speaking in terms of chlorine, the annual
before have
never
wrote to us about his four-place BEECHCRAFT
Bonanza, "It is the greatest time-saving invention since
the telephone."
Another stated, "If the salesman had
-
of
transportation which
by any other vehicle.
nessman
1947. Of particular interest
comPany in 1948 and succeed-
"
ing
only at the be¬
was
terized
that
case
lengthy period that it
a
ginning of 1947 that the first postwar business airplanes
were offered to the
public. These airplanes are charac¬
this
of
reached
W'.:this will also be true in the
<
23
The design, construction, and testing of a new airplane
require such
Company
^tory during 1947." We believe
:
1*
(323),
BE ALE
Manufacturing
highest level in the company's his-
pro¬
electrolytic installations.
Most of the original
electrolytic concerns relied upon
the sale of the basic
products, caustic soda and chlorine
in liquid
form, the latter of which became generally
history
is
It
v
Salt
from two sources; first, all-
come
practically ail of the companies who originally
manufactured caustic soda by the ammonia soda
process
have added
their early
Pennsylvania
•;
ond,
commercial
FINANCIAL CHRONICLE
Flag vessels
spearhead the United Fruit
Company's Great White Fleet in the
Middle American Trade. 18
refrigerated
reconditioned
established
fast, fully
vessels,
cargo
mail.
tomorrow's
are
6
are
new
handsomely
liners of
cargo-passenger
Caribbean
These 24 vessels
are
cruise
distinction.
envoys
of mutual
enterprise
between the Americas
pression of
one
of the Good
BRITISH HONDURAS-
DOMINICAN REPUBLIC
\
JAMAICA, B.W.I.
--
•
•
COLOMBIA
I:L SALVADOR
NICARAGUA
•
•
/
'■ COSTA RICA
GUATEMALA
PANAMA
•
-
•
PANAMA CANAL ZONE
— ex¬
Company's interpretation
Neighbor Policy.
CUBA
HONDURAS
as
.
UNITED FRUIT COMPANY
24
&
THE COMMERCIAL
(324)
Speaks After ihe Turn of the Year
Business and Finance
the
years,
23)
(Continued from page
American
people
President, The Best Foods, Inc.
hazardous any attempt
forecast the 1948 outlook in the food industries.
Several unknown factors make
to
The
first
relief which
foreign
is, of course, the amount
"Ifs"
these
of
America will be called upon
approximately 170% over 1940. During the same period,
Lfe insurance sales increased by 102%, and total insur¬
ance in force
by 62%. These figures indicate that the '
developments
of
fats and oils
our
It may
blackest.
true
to,
the
Until
-
ultimate
net
look
only
both
the
in
vestments and
the
savings
of
vested with
promises a
more than
The year
revolt
much
hear
about Federal
today
curtailment
unreasonable
want
-
At
:
EDWARD
Americans realize
Few
The year
Committee, Weston Electrical
the
moment
were
that
A
S.
Emerson
Bowers
such improvements abreast of
national development. Picthe plight of America, during
either peace or war, without its im¬
proved harbors and channels.
•; Continuing waterway development
is one of the necessary factors for
nationalf growth.
Moreover, water
ways,
like highways and railways,
require constant maintenance. Dur-
both development and
that a
volume
by
Iff'
is true in
be
Caxton
•
If
our own case.
Y'yYY'
"Y
?Y
additional
wage
be sustained at
existing high levels.
division, although the fourth quarter output was lowered
seasonally because of model changes made by some of
our
We are not inclined to view this prospect with undue
because it is our opinion that a modest readjust¬
desolation for thousands.
and
,
in the not too distant future unless
come
and
able
to
improvise
controls
that
salutary and
we
will
are
were
BRUERE
in
nothing of those proposed for the future.
have
We
always viewed the future with confidence.
Knowing that the strength of America means so much to
the welfare of the world, that lasting strength depends
upon continuing growth, and that waterway develop¬
ment is a vital part of that growth, we believe that our
industry, in making its contribution, will keep its em¬
ployees and its equipment reasonably busy for a long
time to come.
; ."A
The
destiny
of
America
far into the future.
the nation;
therefore,
In
growth
and
is linked
development
with that of
believe that it is good.
we
ELBERT
President,
is
Our outlook
S.
National
BRIGHAM
Life Insurance
the
year just passed life insurance sales reached
heights.
Assuming a continued high level of
business activity, this volume of insurance sales should
be maintained without great change in
that premium rates upon investment
.,
type-
policies
have
been
1948.
It is true
V/-^
Y
advanced
rati or generally, and it is quite pos¬
sible that life insurance will experi¬
ence
even
greater competition for
the ] ublic's dollar as a larger volume
of c;nsumer's goods become avail¬
able.
As
duction
result
a
financing
and
in
civilian
experiencing
*vhich has
our
of
the
interruption
the
goods,
postwar
wartime
of
we
pro¬
are
inflation
characteristically followed
wars.
Nevertheless, in
previous
these days of
high prices, life insur¬
remains not only a sound in¬
vestment, but one that offers a bar¬
gain opportunity to exchange this
year's dollars for future dollars likely
ance
sense
Brigham
currency
.
' ~
deposits
billion and
and
prudence
are
exer-
<
builder,
ruptions in our own shops, although our production felt
the impact of strikes in the plants of our suppliers and
customers.
During 1947 Budd negotiated satisfactory
the national trend for
higher wages.
,
will
1948
witness
,■
The year
the introduction of our new sleeping
brought to the public for safer, more comfortable
'land enjoyable travel.
YyY;,:;'Y
cars,
C. H.
"1/
BUFORD
President, Chicago, Milwaukee, St. Paul and Pacific
Railroad Company
I
forward
look
Henry
'
it is important to secure satis¬
factory investment outlets for savings funds. The present
a
good
deal of confidence to
a
1948.
•
prospect for a good grain crop appear to be fav¬
orable at this time. The germination
year
Bruere
To reward these savers,
with
high level of rail freight traffic during the
continued
have greater purchasing power.
Despite unprecedented sales of life-insurance in recent' ^fhost attractive f i§l$ is the field of home loans insured by
car
) V The past indicates largely what lies ahead.
Therefore the
time is opportune, under Treasury leadership, for a na¬
tion-wide campaign to promote savings. In no other way
can the public so easily protect itself against the infla¬
tionary cancer.
%{y.; -AyY
.':-y^'v■ 'i'YY^V Yv.
The savings banks of New York State and Massachu¬
setts have joint programs from savings promotion.
In¬
dividual institutions such as the Bowery Savings Bank
are
carrying on extensive advertising campaigns for
thrift education and encouragement. The Bowery is call¬
ing attention to the many-thousands of its depositors
who have accumulated a balance of $1,000 or more.
These accounts are owned by working people, clerks,
stenographers, mechanics and by small business people.
It is setting a goal of $1,000 for each young person to
save against all the obvious normal contingencies quite
apart from the goals of acquisition or recreation such as
home buying or travel.
Total deposits in the mutual savings banks of America
have increased from $15.3 billion in 1945 to $17.7 billion
in 1947. It should be possible to add another $500 mil¬
1948.
any
or
I contracts with its several unions, all of which refleet
The
by the public.
lion in
Elbert S.
With
CF
type
without
$2,861,495, for the first nine months of 1946.
The company's relations with
its 21,396 employees
have continued good. We had no strikes nor other inter¬
demand
$111.8
credit
expanding,
some
of
speculative purposes, only by
prudent action can the general pub¬
lic protect itself from the continued
dilution of its savings which results
from the advancing price level.
The rate of increase in liquid sav¬
ings slowed down in 1947 compared
with 1946 by about 50%. The public
has been spending its money more
freely with expanding markets and
because of the compulsion of higher
living oosts.
The whole ^economy
will suffer unless exceptional com-
cised
record
and
to
for
mon
Company
up
bank
it
•
circulation
combined
new
car
shipments totaled $2,081,261.
Production for the first
three quarters of 1947 was $4,384,933, and compares with
position taken by the Secretary of the Treas¬
in his statement of Jan. 5, 1948, regarding the impor¬
tance of savings as a means of checking inflation*offers
an exceptional opportunity to all savings institutions to
ury
help stabilize prices.
Vista-Dome
member of the railroad industry, our full
facilities on a non-profit basis.
YThe Agricultural Division of the company began pro¬
duction of plows in February, 1945.
The first year's
President, The Bowery Savings Bank
to the growth and continuing safety of our own country.
The amounts required are small indeed when compared
with expenditures for Europe since the war ended, to
new
research and development
The firm
.
its
of the company's history. Several new name trains
inaugurated.
We also delivered to Pressed Steel
railroad,
Along w.th the vast amounts of money which America
is now providing for the rehabilitation of Europe, we
believe that Congress will not fail to make the necessary
appropriations to continue the Federal works so essential
introduced
designed for British railroads.
During 1947 we made available to
the
inevitable decline.
HENRY
i
-
Co., Ltd. of Oxford, England, a prototype car especially
willing
cushion
railway
year
much less serious than a drastic readjustment that must
were neglected, in some cases to the extent
seriously interfering with the use of important chan¬
nels. Flood control work, too, was neglected. What the
Mississippi and other rivers did on their annual rampage
last year was grim evidence of this neglect.
It is not
good economy to withhold expenditures which would
prevent rivers from running wild, destroying wealth by
the millions rather than creating it, carrying away fer¬
tile top soil from vast upland areas, and causing chaos
its
-
Budd
disc brake which can stop
discomfort to passengers in a
shorter distance than ever before. We delivered 'more
new cars to our railroad customers than in any previous
alarm
of
-
1947,
and
cars
a
^
maintenance
customers.
During
y
de¬
ment of ideas and values at this time to be
' A.
history, we have never equaled the
production of our; automotivev
mands, there seems little prospect that industrial output
can
stock.
!
on
.1947
without -substantial
accompanying
•
,
, of- ^ regularthe commorv
AA-V-* ''';• YY* A''YrV:
YY
payment
■Y'Yy;/In all the 35 years of the company's
Edward G. Budd, Jr.
to
we are
-
quarterly dividends
;
;■
initiates ' the
•
government
economy and tax benefits encourag¬
ing venture capital and if banking
credits are still so restricted, with
Brown
$5 preferred shares. It also resumed
v stock
dividends with; the
payment of $0.10 per share, payable Dec. 30. .It is the expectation of our
board of directors that- this'-action ;
i0%>reduction in sales
easily cut net profits
than 50% and I think this
a
; common
could
more
yet
show
also
..
but
"
general
war
available, but
profit. ' /.A- v
The company paid regular quar¬
terly dividends of $1.25 each on its
ts
but.never¬
believe -
help
provisions for
Audited fourth quarter
not
are
they will
significant readjustment is
during the last six months of
cate
ing
ins the
cannot
after
$4,658,501
figures
orders
the year.; -Reports from many of our
national industrial companies indi¬
ture
v
and-
income taxes.
some
due
the indis-
we
Corripany for the first nine
The Budd
of
$139,894,633, compared with $83,952,383, for
a similar period of 1946.
Net profit
was
$7 342,101 before income taxes
operations for the first half
comparable to those of the
1948
theless
appreciate the importance of keep-
A
incoming
f
ahead looks good.
sales
Total
months
^J
arid achievement.
The year just closed shows progress
last six months of 1947;
pensability of harbor and waterway
both
to
commerce
^improvements,
and to national defense, nor do they
i
G. BUDD, JR.
:
to assure
of
expenditures
of
and
growth.
;
to
consumers
and backlogs would ordinarily seem;*
maintaining national
continuingnational
'.:s /
V
strength
;■
economy,
for
necessary
—
-
of
1948 is
and
rightly so. Of course, every thoughtful American wants
his government to operate economically, but he does
■
enterprise
favorable return upon
75,000,000 policyholders in¬
*
We
But with¬
will.help avert the disaster of a crucial
against high prices with resulting
business collapse.
in
a difficult one to read as a prospect.
elections, foreign aid, tax bills, additional
labor demands, etc., all inject unknowns as regards their
precise effects on industrial activities.
Gulf & Pacific Company
help sta¬
bonds, will
in Treasury
management of the national debt.
will be lost to the
Instrument Corporation
BOWERS
S.
E.
say
the
progressive investment in capital goods production
consumer.
In the end savings invested
out
Presidential
Treasurer, Atlantic,
.
invested
Savings,
bilize
CAXTON BROWN
Chairman of Executive
telephone
Public utilities, the
more
the life insurance companies.
x-factors have
for continued chaos in
domestic and world food
field is
system and industrial corporations are expected to con¬
tinue to be large borrowers.
it is almost certain
and
the corporate
in
YYYV'Y'y'Y President, The Budd Company
now.
not
are
and short maximum term.
has brightened the outlook for insurance in¬
purposes,
that Drices will gyrate
the abnormal pattern they have followed for months
outlook
the policyholder is the recent
The easy money policy of the
interest
and, as a corollary, in an abundance of money and
widespread inflation, appears to be giving way to a more
realistic attitude toward credit and money rates. The
current rates are substantially higher than at the begin¬
ning of 1947. This fact, coupled with a great demand for
residential mortgage money and demand from industries
for funds lor modernization, working capital, and other
picture looked
financing
of
prospect
In the railway field, equipment trust certificates
an attractive outlet because of their serial maturity
good.
rates
been made known, however, we can
L. G. Blumenschine
to
destined
A large percentage of them are
for Veterans' occupancy. V
The
cost
located in Metropolitan New York,
Jersey and in the Philadelphia area of
are
New
Pennsylvania.
Government which has resulted in generally low
be that other for¬
of' the
some
Northern
important factor in the outlook for insurance and
upturn in interest rates.
overnight.
change
as
before the war.
An
eign food sources are now closer to
recovery than is generally believed,
in which event our domestic picture
could
as
public is less fully protected relative to income than was
major unknown,
particularly in the basic fats and oils
industry, is the extent of recovery
in fore'gn supply sources.
One of
the great surprises of 1947 was the
unexpectedly rapid recovery of the
Philippine
vegetable
oil
industry
which relieved pressure on our do¬
mestic
production just at a time
when
The Bowery Sav¬
Housing Administration.
ings Bank has made commitments of about $100 million
to finance such housing in 1948.
These home-providing
A second
provide.
the Federal
their
their income
has expanded. The national income in 1947 had increased
BLUMENSCHINE
G.
increased
have not
rapidly
investment in life insurance
L.
Thursday,, January 22, 1948
CHRONICLE
FINANCIAL
and
-
growth of winter wheat in the
Great Plains area
have
,
Southern
been
snow
good, and the large amount of.
in the Northern Great Plains!;
sections has added much needed sub¬
soil moisture for the
Winter
growth of crops
*
planted next spring.;
wheat acreage for 1948 has
be
will
which
nearly
increased
30%
in
Illinois,
6% in
Missouri and Iowa, and about
the Pacific
Northwest, over last year.
development along our
Industrial
lines
continues,
there'will
freight
be
traffic
a
and I expect that
heavy volume of
from
manufactured
goods in our territory.
C. H. Buford
I realize, as most railroad men do,
that service must be improved.
We
must have more freight cars and there is now an im¬
provement in the output of new cars. I expect that new
car construction this year will exceed by a comfortable
margin
Wp
the retirement of old
arp
rnntirmallv studying
and obsolete equipment.
our
nroblems. narticularlv
Volume
167
Number
4666
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(325)
25
Business and Finance Speaks After the Turn of the Year
our
large yard facilities, and during the year we will
make-improvements which we have every confidence
of grain used for seed, nor should we reduce to
any sig¬
nificant degree the amount used for human food. Hence
will
curtailment must come in the grain used for feed.
The present high price of wheat serves as a p ost effect.ve preventive of the excessive use of wheat for
feeding
materially expedite the movement and delivery of
freight to our customers,
t"
•,
]
,r
1
We are still handicapped by a shortage of skilled me¬
chanics for making repairs to our equipment.
,.
animals.
Limited and the Morning;
I". Hiawathas;
■ •
the record-breaking proportions- of tiie 19*7
but theVe is reason to expect that the 1948 corn
will be equal to or greater than the corresponding7
total for 1947. Of course a late spring, excessive one lcient moisture, or early frost might greatly reduce the
'"I■:'' *1
of 7,600 units, involving an expenditure of
about $24,000,000.
0' V
'
*
year
on
order
Diesel-electric
38
locomotives,
Even
a
part of which will be delivered during the year 1948 and
the
remainder in
1949.
-
...
.
to
comes
Much
and
.
predicting the probable level
of
grain
it
lasting
seems
to
me
is
Once this
peace.
-
we
without suffering
represented by the large savings of individuals comprise
a major safeguard.
With that, and witn the high produc¬
tivity of
it
make
a
American system, it should be possible to
our
successful readjustment to
a
peacetime economy.
prices.
will
on
This
all know is necessary and inevi¬
a serious recession.
The coun¬
try's huge credit balance and the great purchasing power
table
prospects.
,.
have
No crop is sure tint 1 it ,s harvestea.
•
more
unknown factors are involved when
benevolent.
readjustment that
crop,
Our freight car program calls for the construction dur¬
We
weather, particularly in the Southwest,
ikely that the wheat crop of 1948 will
un
crop
'
ing the
it
approach
Afternoon and Midwest
-I?v.y/ ,S;'M;;',I
,
has made
waukee, Wisconsin, 125 new passenger train cars, which
will completely ic-equip such named trains as the Pio¬
however
is accomplished, the people of Europe
may have suffi¬
cient confidence in themselves and sufficient hope for
the future so that they will
go to work to produce the
food and the manufactured goods
they need for their
own
consumption and for export.
Here at home our chief problem now is to effect the
,
Unfavorable
We expect to complete this year in our shops at Mil¬
neer
torship,
essental to the achievement of
any
depend on the extent of European recovery
Europe's production of grain and other foods.
IRVING
T.
BUSH
President, Bush Terminal Company
The large expenditures which we are making for new
Assuming total United States grain production in 1948
equipment and for improvements to our property will'j as equal to or somewhat greater than in 1947, and assum¬
I
In this uncertain world there is one certainty. - It is
contribute substantially to industry and employment in < ing a considerable increase in European
production, we 1 that the people of the United States have developed
our territory."
much more mentally than have the people of jnost of
,y may reasonably expect some decline in grain prices.
the countries of Europe. There are, of
However, as long as our own national income remains
course, exceptions,
near its present level, the demands for the more
like Switzerland, the Scandinavian
A. BULLIS
expen¬
y-v.
sive foods—meat, poultry, and dairy
products—will con¬
countries, and Belgium and Holland.
the Board; General
tinue high, and any downward trend in
It is unnecessary to discuss the men-' 1
grain prices w 11
^'The year of 1947 will be /remembered in the flour" t probably be followed by an increase in the use of
tal changes in the larger countries of
grain
milling industry for its record-breaking wheat crop and y ~fof arii mal feed, and; this iny turn will .tend to prevent/ .Europe, but the fact remains that.
'for the continued upward trend in prices Of grain and
the further.decline bf grain prices.
1 the. people of the United States have 1
ri'y.l
grain products, resulting from the combination of a tre-v f.AAQtepulis^ if • there shoujd* bel a sharp falling off iny
developed a mentality much greater
:
.
•'
ASHAKB&
•
'
f
7,'
i^A00AA:^
mendous export demand and
a
industrial
'-rel-.-L
activity, with resultant unemployment, there
>
Uhanary they have had in the past,";
and that this development promises 1
reasonable prosperity in this country i\
:
I for 1948i
would be an immediate decrease in demand
for
In the
*
com'ng year we may expectK
readjustment, though at least'
some
until the
is harvested next
prices and prices of
agricultural products mav be
new
crop
summer.wheat
I •»other
''''Kjfl
^1^H
'V
;
the
the largest
■''.tion
•
was
1947
•
.M&nMu mtmmm
1947
on
wheat
record,
crop
corn
bushels
of
the
United
produc-
States
to
are lowered.
Of course, any great
falling off in the export demand for U. S. food products
which tariff barriers
in
approximately 800 million
less
than
was
consumed
in
we
in the matter of food depends to a considerable
degree
on the
prospects for peace, as well as on the'extent
was
at least 25% less than it
1946. In fact, the total grain
was
Eventually
may expect; Europe t0 produce more
of its own food,- so that it will be less dependent on this
country for farm products^ Whether or not the vor.ous
European countries; strive Tor individual self-sufficiency
was
in
production
•
;
^e?*"ec*e:l to remain at relatively
While
■f;
meats,
poultry, eggs, aridtdairy' products,, which would; be fbllowed by a decreased demand for grain for animal feeding and a dechne in grain - prices}- .1
•
will necessitate considerable
readjustment in the entire
field of agriculture. I A:Ay ?•
Ay:AAyy% ,lv\
On 'the international front this country's
There
V
-
at
country and exported in the
Harry A. Bullis
crop
year of 1946-47.
Because of
l.'. r
our
commitments to ship as much
grain as possible overseas, it is necessary to curtail
domestic consumption.
We cannot reduce the amount
biggest job
(aside from the relief of famine) is to con¬
our system of free enter¬
based on adequate incentives, is superior to any
present
vince the rest of the world that
prise,
-
of controlled economy, and that the democratic
form of government is preferable to
any kind of dicta-
system
o ***
V
;
V
V'My/
•
tThe
are
recent
I been for
narrow
tendency,
I that
1947
.
during
will
1948
the
varied
Here
store
one
section of
an
we
have
enjoyed
election year, and I
•
an. election year is always a problem
People in Washington will think of votes, until
.the election is past, but after that important day they
will begin to be governed by their basic intelligence.
I am thinking in terms of 1948 alone, and I believe
(Continued on page 26)
,v '
.
organization that
child.
,
.
•
;
Please write
on your letterhead
W. N. Deramus, President,
Kansas
d
&
City Southern Lines,
City 6, Mo., for
Kansas
specific information.
§$i«
our country
of natural wealth—<*// the needs
of
manufacture!
the basic
requirements of the chemical and
light metals
the mineral, agricultural and
forest sources of plastics. Here is
a
plentiful supply of water, free
of impurities ... intelligent, loyal,
are
steel industries... the minerals for
...
.
American-born industrial and
agricultural labor ... fast, con¬
transportation to
domestic and foreign markets.
venient
In
short, here is
a frontier that
urgently to those who would
make the most of America's
rapidly expanding horizons.
calls
CHALK
kansas
£mr/9
Southern
in
am
assured by an important member of the Bush Terminal
a?
•
2$
a vast
prosperity
This is
continue.
Irving T. Bush
*
0
Compressed in this
hast-
however,
better understanding be¬
tween those who direct industry and
( those who
direct labor. This means
a
to
is
'
and
prejudiced
leaders, both of industry and labor, f
'•That is to be expected, for it is so •
I in human nature wherever it exists. 1
.
th's
/ftDusrws
-
<
V$(S
LIGNITE
SILICA
26
Speaks iAfter|the#Turn
Business and Sisianc©
^
that
our
(Continued from page 25)
- r
-
Thursday, January 22, .1948
THE COMMERCIAL & FINANCIAL,CHRONICLE
(326)'•>
.
„
feel
f\ '■
sion is
prosperity will carry on until the end of the
heading.
now
(2) Steel production this year, at about 85 million
tons, is the highest in any peacetime year. It is below
the all-time high in 1944 but it should not be compared
with that year. In wartime there is only one customer
So far as the special field in which this company
we are fortunate.
The bulk of our income
comes from fixed leases.
We carry no inventory except
a moderate amount for repairs and maintenance, and our
—the
business is upon a
operates,
cash basis.
The people of the country as a whole cannot escape
their share of the responsibility for the troubles of the
world,
largely due to the aftermath of the war.
What
will
It is
it?
10
who
Men
would
ago
years
to be critical, but unless we can find some
way to be certain that our help is really helpful, and
does not take the place of money which the countries
hands in holy horror
it is difficult for
us to
avoid being disliked by those whom we are en¬
deavoring to help. The old adage of "You lend your
money to your friend—you lose your money and your
friend" is true internationally, as well as between indi¬
viduals.
I think we may also expect those who ask us
for help to work more than five days a week—at least
until their economic problems are nearer solution.
working bunch of fellows in any
industry. Generations stick to it, beef about it, make,
eyes at other jobs, go on strike, cuss the boss and warn
their kids away from it—but they stick to steelmaking.
(3) Steel leaders harmed themselves by, at, first, clos¬
ing their eyes to the existence of a gray market in steel. <
They knew little if anything about it a few years ago—
because they were not involved in it. But it existed long
if the same job had been handed
them. That is why 10 years from now the same thing
will be true.
Steelworkers, management included, are
Europe spend for standing armies,
of
went
it
and
out
broadened
out
public squabble between steel leaders and gov¬
capacity has led many people
was
tomers
ernment bureaus over steel
to. believe:
brass has not done
its
in
have
as
as
paper
Tom
Campbell
the
steel
industry
The past
was
The old studies
out, refurbished and
cited, the future was looked at
brought
was
through smoked glasses and the industry was{pegged,
after its May annual meeting, as being opposed to ex¬
pansion. The industry wai accused, of trying to keep
supplies short in order to, make more money; and of
contributing to another depression.
Some of the
the
steel
left
alone
they
old
were
stick-in-the-muds;
have
would
this country in
that
the
There
is
evidence
no
that
question.
there
is
any
v
expansion in steel except possibly the high
cost of buying new equipment.
But even that will be
overcome
when it looks
will take the
as
if
some
way
May
one
*An
next
door.
aroused
tion and steel
.
,
*
capacity
then
,
;
r
T
full
ing
•:
'
'r
-
'
»
'
-<
/,J-1
•
v
'
»«
D.
metal
from
the
bessemer,
use
of
engineers and workmen are taking care of it. Competi¬
tive conditions will add more zest soon to the capacity
The drop in steel capacity after the war was
realistic elimination of equipment which was held in
question.
a
operation because of the war. , It was obsolete with no
valid reason to keep it going during peacetime.
New
than
more
whole
—
and sound pro¬
has been easily
although the banks are
purposes
L.
Chamberlain
I
believe
by
large those have
and loans are
and
only after careful consideration as to their effect
the inflationary trend.
are looking forward
to another fine year,
although handicapped to quite an extent by lack of
quality merchandise, and this also holds true in the
upon
,
irate
troubles,
*t/y
'*
T'V'
*
Retailers;
wholesalers.
instance of
still
is
with the real estate situation,
connection
In
there is
great demand for industrial properties, but there
a
tendency toward cost stabilization in those types.
demand for dwellings is still most pressing, al¬
a
The
though
tendency to resist rising prices, especially in
of older houses, is now apparent.
a
instance
industry will cooperate in stemming ris¬
If labor and
and if the old
costs,
principles of supply and de¬
mand,
v-
President, Pullman-Standard Car Manufacturing Co. J
one
policy
per
capita
nation * as a
the
for
it is apparent that whatever affects the
in general will be reflected
people
in the/
insurance business.
life
a
year
with
be,
as
the
only minor devia¬
present levels of
Business will move along
it
did
during
the
same
Sales of new life;
approximately par¬
allel those of the fore part of last year and little dif¬
ference will be noted in the complexity in investment
problems. There will be a continuing struggle to hold
the line against the rising cost of doing business, and
the difficulties which have beset management will in;
Asa
V.
Call
period
in
insurance
no
1947.
will
degree be ameliorated in these' coming months of
the
new
year.
,
We are adapting
sound
practice
fronted
perts on capacity than there is to believe some of the
statements by steel die hards. Somewhere in between
the
with
of
the
j
]
;•
^
>
to the business of life insurance the
the farmer who finds himself con¬
problem of plowing a hilly piece of
To make certain that he keeps a straight line
the field, when he is unable to see the point where
ground.
across
way
furrow will end on the other side, he drives a half¬
stake.
substantial increase in output
cars, in 1948.
a
new
production of more than 16,000
freight cars of all types
during
year as two separate areas, f;
comprising six months. /"'/
4
For the first six months, it is rea¬
about
Pullman-Standard Car.
domestic
coming
operation.
of
such
major legislative proposals un¬
consideration,
it is
probably
more
conservative to look at the •'
from
for
a
and
tions
Production of freight cars by
Manufacturing Co. during 1947 was practically double
the 1946 volume, and given the necessary carbtiilding
--"ateriaT<! »r>d new orders, the company has the capacity
Our
as 1948 promises
Presidential election
in the offing, the likelihood of some
decision being reached with respect
to our course in international affairs,
to
capacity from now on will be the kind that will mean
more production, faster output and better quality. There
is no more reason to take the word of government ex¬
legitimate
made
of such a sub¬
cross-section of the entire population—averaging
Part of it
part by
for
not been out of line,
is representative
life insurance
Since
sonable to expect
cutting down melting time, and part by superior
performance of existing equipment.
Most of the re¬
marks made by steel and government officials have
little to do with the actual question of capacity.
The
and
fully cognizant of the dangers of
speculative activities and excessive
inventories, but for the most part
President, Pacific Mutual Life Insurance Company
But what are the facts about steel capacity,
steel production and the gray market?
k
■
'
blown
maybe
here
CHAMP CARRY
election-conscious administra¬
oxygen,
"
believe
obtainable,
CALL
ASA V.
charges.
more
with
does.
v1
r
who have gotten the short end
actuaji increase in openhearths, part by use of
I
ductive
der
Steel capacity is being expanded now.
and
setback
this condition will
prevail for the most of 1948.
There are few if any reconversion
each
(1)
employment,
occasional
there,
industry is making. If its customers don't know,
one
no
ammunition to fire away at
the industry—regardless of the truth or falsity of the
■
me
without political or other interferences, are
allowed to prevail, there appears to be no reason why
the future cannot be regarded with reasonable optimism.
of the stick have plenty of
will be by
to
the steel
v
/
an
public,
seems
ing
have
consumers
1948 it
same
are
certainly isn't bad when they had a chance to
checks off the worst they could. This is. one of the best
criteria in the world to tell what kind of an impression
about your neighbor—either the one across from you or
the
the
which
is the mistaken
so. Privately
as you
remain
the
It isn't
they hold the same ideas about each other
Haven
that they were.
And about .10.6% said that
their relations with steel companies were "indifferent,"
other steel company
maze
think alike.
men
with
that
In
out of the
New
as last year, except for the price
particularly fortunate in having a
wide diversification of manufacturing and other lines of
business which produce and distrib¬
ute a large variety of products, and
in practically every line there still
appears to be a high rate of produc¬
tion and distribution, which insures
agreed
#
slug their
will
'situation.: vWe
by most of its customers. But
majority of steel customers think the
steel industry is doing a good job. They said so—more
than 84% of them—according to an "Iron Age" survey.
When it came to
asking consumers- whether their
relations with
steel > companies were "bad," only 5%
ball.
notion that all steel
paying for essentials of
in which to exercise
room
some
The outlook in this district for
The great
'Along with the paradox of seeing steel leaders try to
.
still
purchase
preference.
With this prospect
seemingly well founded, I anticipate that life insurance;,
as an integral part of the whole
national economy, will
share measurably in whatever good results from the
hi^h velocity of general business.
..
would be thoroughly hated
stantial
deterrent to
continual
/
think
would
it isn't.
before
that is beside the
is
there
D. L. CHAMBERLAIN
customers, gray market charges, tight steel, high prices
and the administration on its neck, the steel industry
if
the sort.
even
spendable surplus after
living,
individual
problems unsolved here, and financ¬
One
(Too late to prevent harm, the industry heads came to
the country via a Congressional hearing route with a
story that the industry was expanding.
It looked as
though this was a yarn thought up to offset the unfortu¬
nate one booted about last May.
It wasn't anything of
But
rising tide of costs has cut down the mar¬
an
mystery.
plight as England. This was unnecessary because indus¬
try spokesmen did not mean what they said.
sie.
of
People still have unsatisfied wants,
good.
appears
written into the script.-, -/• /
:
the outlook for business activity in
President, The National Bank & Trust Company of
market activity. There are a few companies well
known,for their premium priced ingots but this is ho
same
Expansion, as usual, had been taking place long
capacity became a national 'issue.
StCel has always done things to bring more money
into the coffers, more customers and better customer
relationships (which might mean slicing off a particu¬
larly nice portion of its competitors' business), It has
always expanded year after year.- The record proves it.
It is expanding now. It .will expand next year.
But it
won't take any advice as to how much or how little from
people who it thinks do not know an ingot from a bras-
legislation.
involved in
been
sense,
gray
industry's best friends began to feel that
leaders
tax
of what is
First denying that the gray market was a
i-■<-re¬
admitting before Congress that it was a factor,>steel
leaders finally attempted to stamp it out as far as their
products were concerned. Again the lag in clear-cut
acknowledgment meant a lot of twiddle and twaddle
that was unnecessary.
"Iron Age" men searching dili¬
gently for more than a year have found no evidence
that steel producers were involved in or countenanced
public
against expanding.
were
presented.
that
existing
of
picture
bought and paid for at premium prices. But the
gray market was serious because its existence furnished
the ammunition that the industry was bungling the job
of steel distribution..
,
*' - '
May it appeared from news¬
reports of steel leaders' state¬
ments
have
was
pronouncements.
Last
gin
But it looked to the public and to steel cus¬
if they denied that there was a high premium
most steel officials in Washington did
peacetime it is no crime to sell what you have for
more
than you paid.
That is what customers did in
1947.
It is what many will do next year or until the
steel demand picture lets up. A survey by "The iron
Age" showed that about 4.3% of the steel being used
by consumers was bought in the gray market. Circulat¬
ing inquiries received by many steel users gave rise to
rumors of tonnages far
out of line with what actually
it could
and
1948
Later
In
part
well
official
will
general
a
-
.
But
better
a
;
that a gray market existed and said they were
doing everything they could to stamp it out. What they
could do was a drop in the bucket.
of the
responsibility for these widespread
beliefs belongs to steel management.
At no time in history has the steel
industry lain down less on the job
than
during 1947.
The medal of
merit goes to production men, en¬
gineers, and the sales force.
The
impressions.
second look.
agree
job; (2) that the gray market includes most steel sales;
t
and (3) that a big increase in steel
capacity
would
solve
everything.
There is no real basis for any of
these
as
market.
That the industry is lying down on the
(1)
as
be
and while the
tighter.
tacking.
The
In
Rumors had it much larger than it was.
this fallacious view that steel officials were at¬
It
Age"
News-Market Editor, "The Iron
OP A
revisions
some
will
marks
steel
before
became
a
by certainties, and it is likely that a few new question
the most loyal, hardest
CAMPBELL
C.
TOM
will take
on
may
cur/aid to Europe when the Congress has concluded its
present session, and we will know more about the
nature and probable effectiveness of controls on infla¬
tion. A few of the uncertainties will have been replaced
raised; their
have
we
have
There
They are more numerous and varied. On /that basis this
year's' performance is tops in steel mill history. Who did
easy
very
later
be able to see when we reach our mid¬
point mark is at the moment speculation. Certainly we
The number of orders, the type, the
peacetime.
government.
ear
is
stakes" today, and
size and the destinations are far different in
year.
it
that
impracticabe to make judgments today
which can be sure to hold good much beyond the horizon
of the next six months.
So we are driving "half-way-
is the answer—and that is the direction in which expan¬
We are doing just that in our business.
We
compares
with 8,382
1946. In addi¬
1947
such cars delivered in
delivered 6,460 cars to the
French
railways during the early
part of this year.
-A A. An improved flow of steel into our
freight car plants paved the way "for
tion,
we
.
shaiTly increased production during
the second half of 1947.
Deliveries
reached
new
a
postwar peak in No¬
vember, and we expect the upward
trend to continue in
1948. :
'r
Deliveries of
new
passenger
equip¬
Champ Carry
Pullman-Standard during
1947, although far below the comv
pany's plant capacity, also bettered the 1940 output,,
with approximately 340 units completed. This brings to
ment
by
more
than
630
the number of
new
passenger
cars
de¬
Pullman-Standard during the postwar period.
Passenger car deliveries during 1947 were restricted
by; a combination of factors, including a shortage of
.skilled labor and the multiplicity of postwar car designs.
It has been necessary for us to develop 197 different
livered by
floor
plans for the 2,000 passenger cars ordered by the
from our company since the end of the war.
railroads
While companies
in various other industries turn out
products from the same blueprint,
thousands of finished
order book since carbuild;ng was
has averaged only about ten cars per
the Pullman-Standard
1945
in
resumed
.
.
.
■
(Continued
on page
28)
THE COMMERCIAL
4666-
167 -Number
Volume
&
FINANCIAL
CHRONICLE
(327)
I.
Detroit Stock Exch.
Elects New Officers
i
DETROIT, MICH.—The Detroi
Stock
Exchange announces the
of the following officers
election
for
1948:
n.:..V";;
'
: :
President, Armin H. Vogel of A.
H. Vogel & Company; Vice-Presi¬
;a-;
I. Moreland of MoreSam¬
uel
Hague of Smith, Hague &
Company.
dent,
Paul
land & Company; Treasurer,
through the (olorful Southwest
Paul
I.
Moreland
of
the
Vogel
also
was
made
reappointment of John O.
MacFarlane
Executive
as
President, and
Secretary.
New
Board
elected
A.
of
Horn
Michigan
McDonald,
iii
,,
t<>n
are:
First
Corporation,
Moore
as
the
to
three-year Jterm
a
of
Vice-
J. Oppat
Fred
Governors
for
Clarence
.
H.
Armin
Announcement
of
William
Moore
&
J. Shader
Shader-Winckler Company.
of
Company,
Frank
vOther Governors
<
Board
Samuel
are
Hague
&
Company,
McDowell
&
of
Dolphyn,
Moreland
terms
making up the
Hague of Smith,
George A.
McDowell
Mercier,
Paul
&
I. Moreland of
whose
Company,
expire
in
1949,
and
Dan
Byrne of Paine, Webber, Jackson
&
Curtis,
ling,
Stringer of Wat-
Max
Lerchen
& Company, and
Armin H. Vogel of A. H. Vogel &
Company, whose terms expire in
1950.
Edward
C.
P.
Davis
of
Dickin¬
Wright, Davis, McKean &
Cudlip will continue as Counsel,
and Edwin Bower of White, Bower
son,
& Prevo wilt continue
Elected to the
mittee
for
Auditor.
as
Nominating Com¬
1948
Milton
are:
A.
Manley, M. A. Manley- & Co.;
George A. M:ller, Ferriss, Wagner
&
Charles
Miller;
Chas.
C.
Parcells
A.
A.
&
Parcells
Co.; Andrew
Reid, Andrew C. Reid
Wynn F. Wakeman,
&
and
Co.,
Baker,
Simonds & Co.
R. de La
Ghapeile
Lee Higginson V.-P,
Lee
Wall
Higginson
Corporation, 40
New York City,
Street,
That's
election
right, chico.
an¬
the
nounces
And "all the
of
way" in the finest, modern
Richard de La
Chapelle
V i
c
dent.
La
style—and
as
Mr.
For Santa Fe feels
de
been
a
&
for
Co.
m
a
t
our
,11| | known
cles.
cir¬
He
R.
de
La
Chapelle
way,
the Bond Club of New York and
Governor
responsibility
*' 1
•
of
of
Investment
the
Association
Bankers
to nature
' ■
to
'1
through it in
\ w;
x
Come in and let
as
President
debt
1
has
served
real
patrons, to take them
the finest
irl' investment
great
<r
<
ri>y•
years has been
liking
£
J
.
for:
a
and faster schedules.
colorful, romantic land through
which it runs—and
since 1&37 and
w e
the
of
partner
Shields
as
a
Chapelle
has
bai
now on new
e-Presi-
of
us
'
help you in the planning
of an interesting trip through Santa Fe land.
America.
Theron Conrad Adds Staff
\SUNBURY,
ment
&
firm
Co.,
Inc.,
of
members
Stock
of
PA. —The
invest¬
Theron
SANTA FE
416
Market Street,
Philadelphia
the
Exchange,
announces
that
J.
Kelly,
their organization
representative
LINES
C. E. EATON, Eastern General Passenger Agent
500 Fifth Ave., NEW YORK 18, N. Y.
y
■
William
SYSTEM
Serving the West and Southwest
Conrad
D.
in
Jr.
has
joined
registered
their Sunbury
as
a
office.
Phone:
Pennsylvania 6-4400
•
•
\
R. S. HIRSCH, Eastern Freight Traffic Manager
225 Broadway, New York 7, N. Y, ^
Phone: Barclay 7-4700
^
27
.
1
28
THE COMMERCIAL
(328)
Business and
FINANCIAL
&
CHRONICLE
Thursday, January 22, 1948'
Speaks Alter the Turn of the Tear
(Continued from page 26)
increases in the
ary
-
of credit which has been
use
JOHN
an¬
COLEMAN
S.
nounced
basic specification. Orders have ranged from only one
car each of a certain type
to a requisition calling for
i.53 cars of the same design.
'.i-.;>"■? r ■-''j
Passenger car construction was resumed by the com¬
pany at its Worcester, Mass., plant earlier this year. This
shop, besides adding approximately 60 completed pas¬
senger cars to Pullman-Standard's 1947 total, also de¬
livered 180 street cars and 323 trolley coaches,
,
Pullman-Standard's current backlog of unfilled orders
is
placed
1,400 passenger train
at 23,000 .freight cars,
700 transit vehicles.
and
cars,
_
accomplishments during 1947—in
additicn to the overall gains in freight and passenger
car production—included:
Development of America's first all-welded "package
box car," known famil arly as the P-S-l, and delivery
of thousands of these cars to the railroads.
Pullman-Standard's
,,
first all-dome
Delivery of the "Train of Tomorrow,"
train, to
Corp.
General Motors
Delivery
of
postwar-built transcontinental
Empire Builders—to the Great North¬
the
first
b,y the American Bankers Association, in which
the banks will assume leadership in their communities
to create
consciousness of the problem of inflation and
a
the proper course to be
The stand of the Federal
Advisory Council of the Fed¬
against the proposal for a special
large part of the bank holdings of
government securities is eminently sound.
Such plan
could not be enforced without acting as a curb upon
freeze
to
a
production through which the ultimate cure of inflation*
must be found.
It would be an entering wedge toward
socialization of banking and complete government con¬
trol
tem of free
Here
in
enterprise.
Pacific
the
on
1947
It would be inconsistent
credit.
over
our sys¬
all
of business
areas
need
becom¬
These
that
outlook
the
office
mechanized
for
cedures.
ably
was
and more convinced of* the
more
is
1948
for
encouraging
more5
pro¬
factors indicate
two
prob¬
than* ever
In the extractive
indus¬
Just "as World War I demonstrated
tries, including mining, logging and lumbering, employ¬
ment expanded.
In manufacturing, it remained rela¬
tively static with a recent drift downward. The Coast, of
course, had
two industries which used manpower in
great volume during the war, shipbuilding and aircraft
the
value
the
of
typewriter and es¬
tablished it
firmly as standard equip¬
for all offices, so experience in
ment
last
the
war
that
demonstrated
has
end the Burlington railroads.-. .
..
Delivery cf the first postwar sleeping cars.
ern
production, and which, to put it mildly, are still in the
On an overall basis, employment
said to be holding up, with the future
accounting and figuring machinery
is indispensable to the operations of
modern
business.
Rising
clerical
costs have emphasized the need for
tools to reduce office expenses, and
prospects bright.
stream 1 ners—the
the
.
'
Delivery of New England's first postwar streamliners
—two tra'ns for the Boston & Maine and Maine Central
railroads.
Delivery of the first postwar-designed subway cars—
two experimental trains for the Chicago Rapid Transit Co.
Introduction of# newly designed power track bailaster
machine, capable of tamping the ballast under railroad
ties at a substantially faster rate than heretofore pos¬
throes-of reconversion.
out here may be
The
Metropolitan Oakland
highs.
increasing
rendered
enters 1948 with fi¬
area
nancial indices at all-time record
for business as
as
before.
"
■
in
ing
Coast, employment developments
somewhat mixed.
were
with,
industry,
whole, 1947 was one of the biggest years in history.
The pent-up demand for office machinery, accumulated
during the war period, placed a tremendous burden;
upon the production facilities of the
industry.
In addition, management
a
eral Reserve System
reserve
business machine
For the
pursued by borrowers and lend¬
■'/
ers.
President, Burroughs Adding Machine Company
J(
.
accounting has
business
of
and ink methods obsolete.
factor creating a demand for business
pen
Another
Bank debits for
complexity
John S. Coleman
ma¬
stores showed comfortable increases. The tremendous in-
F.
CHAPIN
H
Regarding a forecast on the Machine Tool Industry
for 1948, I am afraid I do not possess the courage to
go
all the
way on
that
conditions
by
the year 1948, for there are so many
a very- slight influence would turn
everything to sour milk. %
I am quite well assured that the
first half of the year will be satis¬
factory,
Perhaps
1947.
by
eign
agents in an amount over $3,-
arrangements for payment can be
made.
It
acute.
a
Coast banks are able
The
resultant
corporate
would
seem
reasonable to hope
that whatever is done
to help these
\ people,
with the Marshall Plan or
any other method, there should be
F. H. Chapin
an application for funds for the purDo^e
of procuring tools with which
to manufacture, and thus more speedily, get them on a
self-supporting basis.
and ready
to meet the
financial needs on
individual
and
bases, building toward a 10- to 20-year program
sound progress in California.
proper
of
chines is the
is
?
President, Central Bank, Oakland, Calif.
The b^ks of the United States have
a
SAUL COHN
financial and economic trends
year.
As essential segments in the
mechanism of private enterprise, it is imperative that
they should not be handicapped in
their efforts to render the greatest
possible service to the nation. Mis¬
guided attempts to apply arbitrary
controls by law in restricting po¬
bility with respect
during the current
to
.
tential bank credit could deal
blow
ous
the
to
seri¬
a
Banks
economy.
generally will meet their obligation
to restrain inflationary tendencies,
particularly of speculative nature,
through voluntary means.
Both inflation and deflation
serious
evils,;
than
starred
war-created
both
Volume in 1948 will be
satisfactory year.
tensified promotion and
a
very
before
in
losses
due
that
order
to
good as in 1947, which was
The year will require an in¬
a turnover greater than ever
as
merchants
decline
will
avoid
abnormal
prices
during the year. The immediate out¬
look is for higher prices, less unit
sales and the
any
in
corresponding, increase
sale.'
Control
should
be
•Prices
the
main
the
are
American
great
Prices
made
are
discussion
impoitant phase of the outlook for the business
industry is the demand in foreign countries.
Since the United States is now the only important source
An
many
material
human
and
reflection
the
of the
skill.
com¬
Price
not
students
many
feel
lems
transition from
one
of
that
economic
we
our
can
course,-affected by the depletion of dollar resources of
many countries, and some import restrictions have been
imposed in recent months. But on the whole the picture
is encouraging, since there is an urgent need, even in
those countries restricting imports, and business ma¬
chines are frequently placed in essential categories.
For Borroughs, despite the fact that 1947 was a record
new
our
domestic
problems
and
resoonsibilities in world affairs—must not be min¬
imized, there is
no reason
overcome.
to believe that they cannot be
„
The
large bank holdings of government securities,
recognized as having inflationary potentialities, are an
unavoidable result of the tremendous expenditures for
war purooses.
The war could not have been fought to a
successful
bank
conclusion
credit in
this
without
manner.
resorting
There is
no
sound solution of the problems resulting
I am wholeheartedly in accord with the
to
the
use
short-cut to
of
a
from it.
plan for volun¬
tary action by the banks to avoid excessive or inflation¬
commodities
suppliers to do the
same
more
the
sonnel
and
and
addition
effective
and
not
which
will
that business
procedures
less complicated,-or that there will be any
in the need for reduced office costs and ac¬
decrease
curate, current data for management decisions, the out¬
look for the immediate future seems bright, and with
and improved machines already
the introduction of new
there is every reason to look for
tinuation of the upward trend.
on
the
way,
S.
JOHN
and_economic job. It is timely to reverse
President,
con¬
a
COLEMAN
Birmingham'Trust National Bank
1947 was a good one for business generally
The steel, iron and coal industries, the
manufacturers, the lumber producers, the farm¬
ers, the wholesalers and the retailers
The year
in
this
cement
district.
have all fared well.
\
Bank deposits and loans arefup
substantially over a year ago. There
has been a strengthening in interest
rates and bankers are scanning their
up
a
period for crimination
manufacturers blame all
acrimoniously
and
means
point
and
loans
recrimination
wages,
on
have
can express
consumer.
counts
.
,
Fear, and that retailers will be in the forefront of those
who want to
see
this result achieved.
*
'
/:-'■**
receivable
concerns
have
costj of
made
conscious of the
ize they are
a
in
Sac-
many
increased
prices
some
ward
will
John S. Coleman
and
outlook
for
in
the
demand for
There is a feeling that at
period there must be a down¬
readjustment in prices which
mean
at that time that
and wages will
,
The
position as they real¬
facing the possibility, of
recessign and consequent decline
goods.
;
facility to create confidence in our
enterprise system, now being torn down because of a
lack of faith. It is to be hoped that 1948 will begin to
lift itself out of what has been thus far a Century of
every
Higher
hazard of their
cour¬
.
closely.
more
.
inventories and the expansion of
and labor
to
by which the retailer
ageously the position of the
We
per¬
grow
profits" of production
and distribution.
It is a time when every retailer must
review his situation as to costs and every producer must
find ways of restoring a more even level with groupings
of family income.
The low income groups are being
priced out of the market. There is a great deal of room
for bold business statesmanship in retailing.
There are
ways
of
provide even greater speed and efficiency for
business operations. :
Since there is no evidence
towards better production.-Thereby, the
status of our personnel will be raised. They will have an
opportunity and a responsibility to bring more goods to
the market for more people at more reasonable prices.
leaders
expansion
Burroughs engineers are working on new products
which will
job.
policy ot doing this only from the top down.
period we have to join with men and women of
us in retailing, to work from
is
substantial
to
facilities, intensive studies are being made
the field of mechanized accounting,
a
the bottom
It
production had in¬
1947,
of business needs in
good will who work with
in
of
end
with increased production and the growing
In
demand.
period which calls for increased efficiency.
retailer is faced with the need of simplifying every
is
By
period.
keep pace
Cohn
basis
Every phase of our national activity is involved: the
government, which in an inflationary period must act
promptly to check waste, eliminate extravagance and
abstain from policies abnormally affecting competition
for consumer or capital goods; the manufacturer who
must see this period as a time when the market needs
freedom in order to increase competition and, therefore,
who will refrain from any act of .monopoly, price rais¬
ing or price fixing affecting production; the retailer who
will "hold -the line" if he can prevail upon producers to
do likewise and if the producer can prevail upon mills
In this
the
high level of employment and a
elimination of adverse factors. While dangers
of
bring
long-term
procedure and of seeking the help of the personnel to do
a
account
will
a
the former
forward hand in hand with the various branches of pro¬
duction and distribution in industry and agriculture to
ahead—taking
on
necessities within reach of the American pocketbook?
a
Duniap C. Clark
vening shock of very severe recession or depression, if
we are cautious and sane iri our approach.
As I view the outlook for 1948, the banks will go
gradual
things
which
The
present level of feverish activity to
continuance of
ele¬
the
the outlook for
expansion in all phases of its
levels, and an even greater in¬
crease is scheduled for 1948.
Plans are being made in the Marketing Division to
Saul
those
1948
somewhat lower, but more healthy, without an inter¬
assure
are
production and sales volume,
in
creased 50% over prewar
ments that make up the price struc¬
ture and how far can business do
and
be
prob¬
make
ourselves—what
and
niques has been expanded to meet the growing demand
and to fill the large backlog of orders produced by the
is
acts of govern¬
ment, production and retailing.
We
have,.reached a point where we have
ask
business
equipment,
figuring
and
operations. One new plant facility was purchased dur¬
ing the year and two spbstaniial additions are now
under
construction.
In addition, products have been
standardized and the use of volume production tech¬
today.
public
of
up
accounting
government throughout the world are turning to this
country to satisfy their needs.
Export markets are, of
1948 has meant extensive
of
plex elements, not only the yard of
cloth with a given amount .of raw
of
sought through a sudden and vigor¬
ous jamming on of brakes.
A great
become
which mod--
applied to the vast amount of paper work
ern
conditions have made necessary.
year
the amount of the average
in
easily
more
stopped.
inflation
can
produce
only answer. The volume production techniques that
have become commonplace in the factory are now being
the
for
President, City Stores Company
to
vital responsi¬
•
based on up-to-date information, ac¬
counting procedures have been called upon to
accurate data quickly, and mechanization has
war
DUNLAP C. CLARK
the highest profits in many years, due
record-breaking production, there is a nar¬
management error. Thus, in order that
enjoying
largely to
machine
some
000,000 that will be released as soon
as
stimulus during, World War II, con¬
tinues since the cessation of hostilities. Despite large
scale housing developments, residential shortage remains
great
so
that
arrangements for credits
will be made with respect to foreign
countries.
We have positive sched¬
ules for machine tools from our for¬
time
decisions may be
industry and population into the Bay Area, which
although somewhat less in
than
value
rowed margin for
month, for instance, were 10.4% above those of the
previous December^ and bank
clearings, 16 % ahead.
Postal receipts advanced 17.5% between the same dates,
and dollar sales of department and independent retail
received
National Acme Company
President, The
growing need of current and. complete in¬
formation for management. Although business in general
ilux of
sible.
last
salaries
also be affected.;
the immediate future appears good
production in iron and steel far behind the needs
of the nation and of the world. The steel mills and fur¬
naces will be kept busy for some time to come.
Birmingwith
Volume 167
Number 4666
THE
Business and
COMMERCIAL
largest center for the production of cast iron
pipe and the five plants here have bookings of orders for
interest
a
estimated
the
advise that the demand for their products still continues
a
cotton
in
in
1947
Alabama
was
over
in much
formerly. There is quite
Like
nomic
noticeable increase in the
and
two
will
the
which
certain
be manufactured.
Calument
&
The
Hecla
has purchased a site and is
ing
now
Copper
:
of
Company
detinning
into
a
rials.
The
up
our eco¬
a
(329)
which
the
1948.
Nor
were
now
broaden
be
may
of the
pected
yields
the
this
new
that
the
volume
of
ex¬
out
programs
Company several weeks ago pur¬
Kilby Steel Company properties in Anniston
certain types of agri¬
place automa¬
We no longer face a situation of short
supply
declining rates, but instead we find an abundance
and
of
income-producing
tested
in
our
with
an
the
Julien H. Collins
of capital expenditure in
remains to be seen.
at
largest operations started in Alabama is
mill of Coosa River Newsprint Company
the
face
in connection with the
all
aware
of
the
unprecedented capital needs
in the industrial field, and of public utilities and rail¬
as well, if proposed expansion and rehabilitation
programs
are
carried forward.
A recent estimate reveals that
new
Kimberly-Clark Corporation has acquiied
Another
roads
Childersburg, 40 miles south of Birmingham.
of the facilities will be used
are
ars are
believe
new
More
an
total of $6.5 billion of
municipal issues have been authorized
than $2.5 billion
of
to
supply
capital
at
time
any
the
various
members
this financing
or
proposed.
will likely
of
our
worsted
in
purchasing
recent
of
W.
H.
COLVIN, JR.
President, Crucible Steel Company of America
The
great
has hidden
from
time
current demand
as
ventories
many
forms
Men's
Motor
V
V
t
wear
car
•
Women's
IN
AVENUE. NEW YORK
wear
upholstery fabrics
•
•
and
occurred
and
suggest the interesting
readjustments in relative
commodities, liquidation of war in¬
some
between
similar
of
the
developments, which
(Continued
on
page 30)
mparw
WOOLENS
3, N. Y.
Blankets
•
-
steel
the sharp contractions which have occurred
time in demands for some other forms.
be
en
of
to
Contractions have
values
for
fabrics produced
C/Tm&liCLffi
FOURTH
bu!
their
.
22 5
power
years,
provide themselves
security made possible by the wise place¬
own
accumulations, and in performing
these services we will also assist in
meeting the capital
needs of industry.;
ment
superlative facilities for producing them
GREATEST NAME
pro¬
industry will continue
"tightness" of style and quality
THE
com¬
years
place where accumulated
be used advantageously is in the purchase
acknowledges two prime considerations:
Ipt/
in¬
meet
one
Che established leadership of the American Woolen
Company
in the woolen and
to
billion in the
known to have less
than
that
possibility that
a
efforts
to encourage individual investors to
with the added
private needs which have been estimated to exceed
$7.5 billion in 1948.
company obtained the site of the government pow¬
plant operated there during the last war and certain
operation.
increased capital costs
We
securities and a more deliberate
The supply of money and credit wil"
average of $50
commodities
and
implements there.
of
1948
tically.
The
new
Whether corporations will continue to go into debt to
Case
in
dollars may
of income securities which
have not registered the ad¬
vances
common to commodities.
This we believe is a
hopeful sign for the investment banker and the
investing
public as we enter the new year.
last year.
carry
needs
investment banking industry.
Effective distribution to institutional and
individual in¬
vestors is a process which does not take
in
financing in 1948 will exceed that of
this
$300 million approved for
vestors than in any year since 1930.
The financing of the
apparent capital
will be a challenge to the
many
be¬
levels, it is
the
Although capital could not be raised with ease during
1947, corporations obtained more new money last year
through, public offerings to private and institutional in¬
These dol
for
discouraged
and
Ohio.
figure
few
rate
the State of
of
ceeding World War II.
will
a
$400 million soldiers' bonus to be
State of New York
pares
which
market
While
the
the largest
by the voters
issued by the
The quantity of dollars and other
liquid assets in the
hands of individuals in this
country in the form of cur¬
rency, bank deposits and U. S. Government securities is
estimated today at around $165 billion. This
com¬
investors
to
of all types.
borrowers
cause
generous
available
is
authorized
dustry's needs.
four
was
already
question is whether capital and credit will be forthcom¬
ing in sufficient quantities to finance the various public
I.
29
nearly $1 billion will be
sold to provide veterans' benefits.
Among
these veteran issues
be
gained
closing
So marked
offered during
1948, of which
*
customer attitude.
factory for the manufacture of insulation mate¬
the newsprint
der
America
Tne J.
cultural
located
which make
of
Chicago
immune from
more
securities
in process of construct¬
will continue to manufacture
One
Company,
of
chased the
and
in
eventually
Company
spring. The American Rock Wool
of Chicago has recently purchased the old
plant in Birmingham and is converting it
way
Association
&
the pres¬
brought about by these changes
The
are
a
under
,
in the rate structure.
plant at Decatur for the manufacture of copper
tubing. It is expected that the plant will be expanded
into a large operation and that initial manufacture will
get
Collins
securities
stocks
sures
types of farm machinery
Wolverine Tube Division
Consolidated
per
COLLINS
of the other parts
some
weeks of
mon
placed in operation a new tire plant in Tuscaloosa
by the government during the war. The AllisCompany has purchased a war facility plant
at
in
change that nothing resembling sta¬
bility was apparent until the first
re¬
started
Gadsden
H.
Bankers
Julien
months of 1947.
Chalmers
at
Investment
momentum
additional
The B. F. Goodrich Company has acquired
industries.
increase
an
machine, the investment banking business faces
come
handsome profits to the producer.
has been fortunate in attracting
in
Alabama
in
much better
We enter 1948 loilowing an abrupt
decline in the prices for fixed in¬
are
sulted
result
a
manufacturing and agri¬
of potential heavy volume during which the capac¬
ity of'our industry will be tested.
use
a
will
between
year
better circumstances than
mechanized
which
President,
ap¬
equipment on farms.
More cattle
grown in the state each year and higher prices have
of
firm belief that there will be
a
President,
one
and are
crops
-
JULIEN
million bales, or an increase of 10%
the preceding year. Most of the farmers have sold
their
an
$40
,
still exceeds the sup¬
ply but it is believed that not as many residences and
apartments will be started this year as in 1947.
The
cement, lumber and building supply companies report
that they see no decline in the heavy demand for build¬
ing materials in the near future.
of
into
entered
the running of the plant. It is
million will be invested in
around
capita
wealth, better markets, better educational facilities and
generally a better way of life. •
:
,
Production
CHRONICLE
undertaking.
culture
The demand for housing
proximately
has also
and
company
that
balance in the South
high level. Many small family
unit apartments and
many small houses have been com¬
pleted here and a number of others are in process of
erection.
the
There is
high and that they expect it to remain this way for some
time.
The shortage of pig iron is curtailing production
in these lines.
in
agreement to supervise
.year or more in advance.
The foundries, stove plants
and other manufacturers of iron and steel
products here
on
FINANCIAL
FinanceSpeaks'filter the Turn of the Year
ham is the
Building is still
&
Uniform fabrics
Machine and hand knitting
yarns
are
inevit-
30
(330)
.
all
at
or
least
most lines of
liquidated position which can ease the overall
at the time in which such readjustments become
severity
The 1948 forecast for the
With
^
task to keep
able
L.
COLLYER
new
upon
tries incident to the production, processing and
consumption. The estimated total for
is 1,080,000 tons, topping the
actual 1,039,000 tons of 1946.
Because the industry drove ahead
normality,
the
1948
tons.
Collver
'
demand,
will have disappeared
before that year's end. Even so, the estimate for
is that total rubber consumption may reach 870,000
This would still be considerably larger than any
yeqr (33% higher than 1940)—larger, in fact,
than any years except 1946 and 1947.
The rubber industry was able to play an important
prewar
role in 1947 in one of postwar
America's most important
battles, that for food production. Farm vehicle tire sales
set a new all-time record, at more than $100,000,000, as
continued
farmers
American
to turn to the speed
and
of rubber-tired tractors and other implements
in their intensified efforts to boost production to meet
domestic and aid-to-Europe needs.
economy
marked the start of official congressional
action on deciding policy as to disposition of the plants
and facilities created to produce American rubber as a
war measure.
Meanwhile, as physical need for this rub¬
ber declined with the increasing availability of crude
rubber from the Far East, activity in those plants was
The
year
until, at the year's end, roughly half
designed capacity had been closed down.
steadily cut back
the original
used in
1948.
national
total
rubber will nrobablv
tons of American
About 350.000
be
of the anticipated
of 870,000 tons. In
This would be 40%
consumption
rubber
1945, the partly wartime year, dependence upon Ameri¬
can rubber reached a peak of 86.9% of total use; for 1946
it
73.3%, and for 1947, approximately 50%.
was
the basic
necessity of seeing to it that the nation's rubber insur¬
ance policy which these rubber-making facilities repre¬
(
There seemed to be little disagreement as to
vital national-security meas-'
and means"
of retaining this rubber insurance most effectively, from
the standpoint of the nation's economy as well as its
defense, that any differences arise;
Our company's position, consistent with that which it
has held ever since the creation of the American rubber
sent be kept in
effect,
as a
It is only in the working out of "ways
tire.
is that (1) government participation in rubber
making, as well as in allocating and other' regulation,
should be confined strictly to that area necessary to as¬
sure military security; (2) the facilities should be con¬
tinually offered for sale or lease to industry, subject to
conditions to be prescribed by the National Security Re¬
sources Board, and (3) wartime agreements for exchange
of technical information pertaining to man-made rub¬
ber shouldibe terminated, in the interest of stimulating
plants,
extra-low-pressure
equipment
on new
tion by The B.
be
A
in
available
tires,: mainly
regular
commercial
however.
sale
in
a
Chemical
Company
crude
American
rubbers
or
of
both
introduced
expected
rubber
several
and
new
in
with
blended
to contribute
plastics.- This
finance
or
greatly
to
in
1948.
hot stove in the kit-
a
company
some
The
trend
domestic
smaller homes,
toward
help have had
discourage
merely
every
come
more
they
eye
methods
The future seems to
tinue at
a
immediate major problem
practically
Delaware and the Eastern
any
cause
Much depends
have
a
good future.
Insurance
am
interested in each of the three de¬
partments of life insurance—Ordi¬
nary,'Industrial and Group.
There
seems to be no doubt that Group in¬
surance
a li
the
war
on
insects,
Cooper
steel,
include
paints,
using
serves
a
,
individuals?
lower interest factor for re¬
interest rates on
are increasing.
What is
and just now
the
condition' of
the
Agent?
the
selling
•
On
new
than the old ones, and
the
.
whole, it appears that the
policies offered are better based
larger amounts of insurance is
years
.
come,
will improve.
paper
known,
-
America for many
and generally the Life Insurance
1948 may not show the
but it will be a
insurance
The need for
apparent and admitted.
private industry will thrive in
to
dividends
it may be assumed that
will not be decreased in the coming years.
Free
force—
Will inflation and un¬
employment curtail sales?
Guy W. Cox
the
machinery, chemicals, automobiles, and other in¬
dustries supplying markets where the demands will not
be fully met for many months. Consequently, there is
good evidence that these industries will be operating
throughout the year at high productive capacities.; , . .
by
investments
floor,
coverings, rubber products, textiles,
purchases
c e
Many if not most companies are now
processing of food in the south¬
part of the company's territory.
of
incomes
of
Light Company
industrial activities
seriously restricted the margin
available for life insur-
have
of indus¬
trial manufacturing in the Wilming¬
ton area to the intensive production
manufacture
substan¬
1947
in
increased
tially in a greater percentage than
Ordinary and Industrial.
<
Is it true that rising living costs
year
of Delaware Power &
his opinion.
formation available to the person who states
subsidiaries
its
variety of facts and in¬
1948 depends upon a
heretofore.
We believe such a possibility to be
remote.
"
'v:-v.,
The economy in the service area
Stuart
Mutual Life
Company
outlook for the Life Insurance
One's opinion upon the
Field for
unrest, there is no reason why the
throughout the' company's
service area should not substantially
ern
COX
GUY W.
Chairman of the Board, John Hancock
business
The
level.
optimistic, do not see any depression dangers
immediately ahead, and we think the baking industry
as a whole and National Biscuit Company in particular
-We are
Virginia, is entirely favorable. Except ,for the
•:
possibility in the third'and fourth
quarter of business adjustments hav¬
ing their origin in national political
and
the limit, will
good world crops in 1948 to keep
on
commodity prices at a fair
Delaware Power &
any
is the continuing rise
decline in tonnage volume of all foods.
a
Shore areas of Mary¬
that in
should con¬
,other food, there is the danger neverthe¬
Personally I
together with
exceed
continuing high level
less that the consumer dollar, stretched to
COOPER
serves
a
agricultural commodity prices. Baked goods, of course,
consist entirely of agricultural products. Therefore, costs
are increasing, and narrowing profit margins or
price
increases are ihe alternatives. While baked goods have
shown a much smaller price increase since 1941 than
President, Delaware Power & Light Company,
which
indicate
income; consequently, volume
high level.
in
,
Company,
-
to the lines
greater number will be added
Light
industry
of expendable
The
The outlook for the year 1948 for
baking
appealing, and careful
George H. Coppers
insure their
rea^b'-'g tbe consumer in palatable
condition; When the expended effort and possible waste
of material, are considered, it is cheaper to buy baked
merchandise than to bake at home.
tive and
distribution
gas
STUART
to
improved its products in quality
The packages are attrac¬
in extending electric service to rural customers and
even
reluctant
more
Furthermore, the
of
utilities this year. This latter development will supple¬
ment farm labor, of which there is a momentary dearth,
and cannot help but benefit (the industry - as: a. whole.
an
and
and variety.
and brought high prices, farm income . was enhanced.
Barring inclement weather, 1948 should be another ex¬
cellent year for farmers. Steady progress was made last
year
women
war,
to kitchen drudgery.
return
has
Furthermore,
have be¬
serving unit.
a
after
Agriculture will be a predomifiant factor in sustaining
few
are
tendency
a
the home as a proc¬
essing unit for food and to make it
to
prosperity.' The corn crop was small last year due to
unfavorable weather but, as other crops were satisfactory
the
also
•■■■■'■«•■/': 'A 'V
smaller kitchens and the problem of
plant expansion.
by
the
plastic
>a"
sufficiently hign expend¬
a
realize that desire.
utilities will be slightly retarded
because of inability to secure a sufficient supply of gas.
Most companies distributing natural gas are faced with
a persistent shortage of that product and it will be sev¬
eral years before additional gas transmission line capac¬
ity can be completed to remedy the situation.
It has
accordingly been imperative" to impose embargoes on
new
househeating installations. The overwhelming de¬
sire for natural gas is accounted for in large measure
by the fact that its cost has remained unchanged while
that of other fuels has greatly increased.
Sales
which
agricultural chemicals that
molds, and grasses and weeds.
prevail
over
able nat'onal income to permit her to
panies are permitted to earn an ample rate of return,
they will not be able to provide such efficient service
materials to achieve end products having the better fea¬
tures
possible
ehen; and
is widely varied from one
"polyblends,"
are
will
conditions
favored by two major factors:
to soend as little time as
are
of the housewife
The desire
ruction work will
commissions also are alive to the problem and that
development and marketing of .materials, called by B. F.
Goodrich
same
cons
COPPERS
H.
.
recognize their own two primary functions: To see that
the electric utilities provide the public with efficient
service and at a reasonable cost. Unless the utility com¬
1947 saw considerable
growing muture interests,
three categories.
Such manufacturers
are
the field where rubber and the chemicals industry
have
and
merchandise is decidedly favorable.
not alone in surveying the rate situation,
Evidence is increasing that state regulatory
agements
original
as
change in tire conception since
for
activity
of
one
believe that the outlook for the producers of bake'd
I
present
plied by the rising costs of materials, fuel and labor, but
these have been previously absorbed by the revenue ac¬
cruing f*om the enlarged volume of sales. However, the
trend of spiraling costs of new plant facilities with their
higher unit fixed charges and operating exoenses may
render the maintenance of present rates difficult. Man¬
within the next two months.
areas
be
President, National Biscuit Company
,
change from square-woven fabric to cords, is expected
to
in industrial establish¬
as
should
.
model automobiles, and the introduc¬
tire, goal of tire designers from
biggest single
well
as
1948
year
Conrad
exceed that of
1947, particularly in the electric generating department.
Orders placed two or three years in advance are now re¬
quired by manufacturers of generating apparatus but, to
compensate for this, deliveries on orders initiated in the
past are currently being made.
Continued inflation is creating a threat to stability.
Operating expenses of the electric companies are multi¬
beginning of the automobile age. This tire, representing
the
L.
Frank
of adequate appli¬
t':.e
of
F. Goodrich Company of a tubeless, self-
puncture-sealing
the household
the
GEORGE
than
loads.
1947 saw construction on a scale comparable
extent
Significaht developments during 1947 included a trend
toward
more
war
purchasing power, is responsible for the sub¬
amount
land and
renewed private research and development.,
:
have
large
with the prewar years but limited materials and equip¬
ment prevented maximum achievement.
Although to
of
cutting down the war built backlog,
John L.
in not only tires but in industrial
products and sundries, will be pro'•
gressively less of a factor in determining total
long
industrial
and electrical equipment, together with the
The year
work
most articles the backlogs
of
stantial gain in these
the
and in
phases
loss
availability
some
the
The high level of
war.
advanced
a
obviously,
the area,
ment in
progress, not only to Delaware Power & Light Company
but to the people generally in Delaware and throughout
the Eastern Shore area.
spots in inventories as reminders of
1948,
in
ab¬
con¬
of housing facilities still to be met,
the products produced by industry
and with demands for labor saving equip¬
a lack
demand for
ments,
the wartime drought.
In
sales
be experienced. Peak de¬
mands are now greater than during
The
by the end of 1947
relatively few thin
and
only
were
in
increases
throughout the area employed at high
everyone
with
sistently
ances
reached
there
field
will
utility
electric
the
normal
offset
supply and de¬
nearly normal
balance before mid-year. Tires were
one of the very first of major articles to "come back" to anything like
■
In
With
wages,
with a
fair margin of safety.
a
commercial
its high postwar pro¬
tire
level,
had
mand
with
'
was
demands
industry
electric
distribu¬
tion of food will be correspondingly active.
activity and the tremendous expan¬
sion
in the
residential, rural and
1947
duction
the
yet
again to supplement shortages of other meat prod¬
ucts for months to come. The numerous smaller indus¬
the
so
and maintained
expanded and improved, will be called
and subsequently
able to handle its 1947 peak
set what probably will prove to be a
all-time record in total rubber
doing
was
the Eastern Shore
capped by the lack of assurance that
construction schedules can be met.
and
During 1947 the American rubber industry, thanks
to its outstanding record of sustained high production,
all but erased entirely the large war-born tire shortage,
in
which
and
ware
*
,
during the coming year. The poultry
greatly developed in lower Dela¬
area during the war years
that. business
industry,
companies will be somewhat handi¬
President, The B. F. Goodrich Company
and
in
equip¬
However, these same obstacles were
encountered the latter part of 1946
period.
JOHN
abreast of the growth as necessary
ment will be hard to obtain and the
the
noted, and with the great develop¬
in the distribution of processed and frozen foods,
there is little likelihood that there will be any slackening
standpoints.
A "general acceleration of
business will be keenly felt but it will be an arduous
general.
If this possibility has merit, there is a foundation for a
more
optimistic view of the latter half of 1948 than
would otherwise seem justified. If carried far enough,
it could warrant an optimistic outlook for a consider¬
the
Eastern Shore area is
encouraging
public utilities is
the
ments
various
from
apparent demand continuing well into
diversified food products for which
tiie
for
future
Company
President, The United Light and Railways
business, may be
proceeding independently from time to time in selective
tines and thus getting them individually into a more
CONRAD
L.
FRANK
(Continued from page 29)
in
1948
Speaks After ( the Turn of the Year
Business and Finance
able
Thursday, January 22,
CHRONICLE
FINANCIAL
&
THE COMMERCIAL
policies.
Field
greatest increases
good year for the sale of
life
>
(Continued on page 32)
,
,
..
..
Volume 167
Number 4666
THE COMMERCIAL
FINANCIAL
&
CHRONICLE
(331)
31
PorSer & Renter With
Baker, Sintcnds & Go.
DETROIT,
Porter
MICH. — Claude
George Reuter, for
and
many
associated
years
with
the
investment
here
banking fraternity
Detroit, have recentlv
in
Claude G. Porter
George A. Reuter
M COOPERATION WITH MANAGEMENT AND LABOR,
joined the firm of Baker, Simonds
*& Co.,. Buhl
Building. Botn men
will
THE EQUITABLE EIFE ASSURANCE SOCIETY ESTABLISHED
augment the trading depart¬
staff
ment
where
they will
con¬
tinue to
serve and cooperate with
throughout the country.
Mr. Porter was previously with
Mercisr, McDowell & Dolohyrr
Mr,
Reuter
was
with
Merrill
GROUP EIFE INSURANCE IN THIS COUNTRY.
dealers
Lynch, Pierce, Fenaer
Baker, Simonds & Co.
bers
of
the
change and
tified
Detroit
&
tributors
Ex¬
and
the
Exchange
has
inauguration of
for
the
bers.
by
A
plan known
Mail,"
and
developed
Day,
method
put
into
action
Raymond
of
within
this
new
Ex¬
the
town
members
Stock
Exchange
clear
their
the
same
of
be
next
of
out-of-
The
will
Chicago
able
to
transactions
own
way
bers.. Use
plan,
be
in
in-town
as
teletype
of
securities
town
tact
will
members
with
the
mem¬
sary
ber firms to place orders
give
up
member
In
1912
Group Plan
just 36
established
—
Equitable
ago
years
first
the
Splitting
this
Ward
ife
&
duced
profits
members
tions.
of
insurance.
on
to
insurance.
\
was
on
a
The
exchange
They will
wider
pro¬
seek¬
benefits
'
v
number of
One of the
receive
the
full
benefits
of
to
their
memberships.'
.
c:The
Exchange
firms
located
which
have
Many other
locatecb
West
come
in
50
member
;*: the f; midwest
Chicago
no
brokers
and
throughout: the
will
When
to
case
is
that
Middle
likely
in.an
now
business
offices.
dealers
be¬
exchange
more
prof¬
available.
Thus the plan will tend to unite
Today the protec¬
is
available
on
or
blinds
or
em¬
double the
now
for
maims
proceeds to the family. Pol¬
in
force in
this country
pro¬
$9,500,000,000 of such protec¬
When
ployee
econ¬
an
is
family
medical
make
and
bulk
duce other
ness,
a
underwriting
collection
of
;
.
.
ex-
Present V
comfortable, life-time
a
Present
Four Great Hazards
ward
the
markets
in
should go far to¬
building
the
of
Middle
securities
today, Group Insurance in its
various forms provides
all-embracing
security against the four great hazards
of serious illness, disabling accident>
dependent
old
age
were
West.
•VW
premature
than 300 million dol¬
paid
within
growth of Group
the
framework
off
cooperation
between
can
management
achieve.
an
employee or his family
hospital treatment, Group Insur¬
ance will
pay the bills, including those
for maternity care. Present
policies pro¬
vide for $55,000,000 in daily benefits.
necessary,, protection is
EQUITABLE
and
death.
needs
Other social advantages: accrue from
Group Insurance. Because;no medical
TI3E
-
So that
i.
LIFE
393
ASSURANCE
Seventh
Avenue,
SOCIETY
New York
1.
OF
THE
New
York
W
I
0^
9
PRESIDENT
the midwestern securities brokers
and dealers and
Group An¬
1,550,000 employees.
cover
and labor
Social Benefits
is
with
the free American business system is
one
of the finest examples of what
.costs.
examination
him
retirement income.
The creation and
•
re¬
retire¬
reaches
Group Annuities, combined
Social Security benefits, will pro¬
Insurance
I
policies provide for
\
'
weekly payments of $140,000,000.'
expenses,
premiums,
living
penses.
with
vide
employee
an
in benefits, under all
forms
of
group
protection, in large
measure to
employees and their families
who had no other form of protection.
by accident
able to' eliminate many
are
grow¬
age,
Last year more
disabled
dealing^ with
single unit,
at
hospital, or at
physician's office. More than 700,employees and their families are
When
lars
or sick¬
Group 7 Insur¬
ance will
pay week¬
ly benefits to cover
;;as
for
home,
by this new and rapidly
ing form of Group Insurance.
em¬
omies are made possible
by the ? em-,
ployer's willingness toi Use Ihrsfwholesale
purchasing power for the benefit of his
employees.; - Life insurance -companies,
people
000
at
an
off the job, Group In¬
tion.
;:Vv"''
;-of
the
th-e
■
bills
nuity plans
lump sum benefit. In
of accidental death, it will
normally
icies
important features
Group Insurance is its extremely
- groups
the
ment
will pay a
surance
people.
Group Insurance, remarkable
calls
a
Insurance
accident
employee,
most
'/....V"
pay
doctor's
ago,
Group Life Insurance
families.
Group
When
than
more
interested
membership
itable
has
of
vide
low COSt.
of
success
their
tion
re¬
able
years
against all the major risks of the
ployee's daily living.
ev&r-increasirig
an
com¬
transac¬
be
"now
established 36
to extension of the same
prin¬
ciple to meet other needs of workers
ing new - ways to
provide more; and
and
care,
Insurance
has led
the function of life
—
family needs
covered
gressive concept of
In
was
other insurance
companies have partici¬
pated actively in its development.
Equitable-
based
em¬
member
Group
phenomenal
Together with The Equitable,
growth.
:.v
.
byr'The
of
of his
Group Insurance has had
plan today covers
55,480 employees with $100,961,000 of
through
out-of-town
an
or a
will
Since it
That
mem¬
commissions
ployee
medical
Company with $5,900,000 of
insurance
has {always
manner
Present
When
afford
premiums their
requires for in¬
dividual policies.
The
Group
Department in this country.
The first major group
policy ever writ¬
ten was set
up by The Equitable to pro¬
tect
2,900 employees ofMontgomery
ing orders and clearing the trans¬
action.
pay the surgeon's
policies provide for $1,250,000,000 yearly in surgical benefits.
fee.
workers
cannot
an
member of his family.
or some
Group Insurance will
em¬
—
mission for the service of execut¬
in
employee
aver¬
of the
older
way.
operation is required by
an
the
1
<
Insurance
neces¬
portion of the
a
First
con¬
firms
age
When
age
of this tremendous modern social foree.
•
for all stock exchange
it.
Medical Care
physi¬
the
on
who
continuing leadership^in th^'eycdt^ion
out-of-
direct
Exchange.
correspondent
to
ably proud of its pioneer *role---and:i'ts
placing
Heretofore, it has been
safeguarded through
ployee-group, it
brings protection
,
Equitable Society is understand¬
delivery
bring
into
The
age
and
in
orders and mail for the
are
buy individual life
Group Insurance is
based
an
it since the end of the War alone,
M.
the
days,
Uncer
to
mem¬
adopted and will
was
Because
unprecedented pace.
They have created 10 billion dollars of
originated
was
by
cannot
reasons
"Clearing
as
Vice-President
change,
30
which
insurance.
extendmg tRis? protection
employees at
ror
exchange
transactions by out-of-town,
their families
and
made available to those who for
cal
arid labor -are
Chicago
of
employees
\V70RKING together under the
W American system, management
announced
a new
handling
American
Thirty-six thousand corporations and other organizations protect their workers in this
growth securities.
CHICAGO,'ILL.—The
million
dis¬
Chicago Slock Etch,
inaugurates Method
Of Clearing by Mail
Stock
Fourteen
prominently iden¬
are
of
Today 32 billion dollars worth of Group Life Insurance is in force in the United States.
mem¬
Stock
underwriters
as
Beane.
are
UNITED
STATES
32
THE COMMERCIAL
(332)
Current gasoline use in the
1941, a year when
more
in service in this
country. The production and use of more economical
cars, then, is a service to the nation, as well as a neces¬
sity in every day living.
postwar gasoline shortages.
United
States alons is up 18.9% over
than 34,000,000 vehicles were
CROCKER
WILLIAM W.
President, Crocker First National Bank of San Francisco
The year 1948, in my opinion, presents a satisfactory
in the banking field. The Federal Government
outlook
will continue its
policy of debt reduction, thus
reducing
commercial and
real
with
loans,
estate
gradually
resulting in
profits for the year comparing favor¬
ably with those of 1947. This, I think,
is possible even with the anticipated
higher
costs of
increased
In
rates,
interest
recent
years
President
able
in
were
we
1947
year
was
four-way
a
ur.used.
is likely,
It
and
The
will
other forms of long-term
An active
Crocker
W.
must
ng
present year, in my opinion,
a better year.
While we do
such
tinue during the year,
of
merchandise, a more cautious attitude will be taken
before
granting loans for the purpose of expanding
inventories,, which in turn will tend to repress excess
instalment buying.
there will
and
high, I don't believe it
sharply as it did in 1947.
Our costs will stabilize, our volume
POWEL
CROSLEY,
JR.
will rise
will be somewhat up
believe
will
we
in the very
Perhaps
in
1948.
see
trying
but will level out—in short, I don't
as many adverse factors as we did
year
of 1947.
elements will be more favorable to us
Last year brought more; catastrophes in the
the
industry than for a long while back.
insurance
ters that
piled
up
We had
the North Florida
other disas¬
the losses for the insurance industry.
this
COULTER
RUSSEL
other
and
factors,
the
over
Here, in the great Central
in
1948.
trend
of
demand
is
highways.
Meeting the transportation needs of
these forgotten lower-income groups
the;
on
which,
"must" not only in 1948 but also
the years ahead.
Recent surveys
is
a
in
show that from 45 to 60% of today's
Powel
Crosley, Jr.
prospective car buy¬
have deferred purchasing new standard automobiles
because of present prices. The requirements and budget
over-all
the
deficit.
job
mass
of
market must be met as part of
solving the
nation's transportation
.:;/■>.
These buyers want and heed
automobiles
geared
budgets.
with
fit
to
first
today's
There is
no
costs
v':-
efficient and economical
and
operating
expenses
limited family and individual
point in hauling around an extra'
thousand
pounds or more of steel and frills just to trans¬
port a few hundred pounds of people. Eliminate the
dead weight and you have a car weighing just over 1,000
-
pounds.: Power this car with a lightweight, high-com¬
pression engine and the result is efficient, low-cost per-:
formance* in. a vehicle capable of doing 35 miles or inbre
on a gallon... ;>V.■
V;;
Vv-v • .■
The new. Crosley is a fulfillment of my lifelong dream
build
reall.y fine light car within the means of
every family able to afford any car.
r
Consistent and growing consumer demand for Crosley
cars embodying these
basic principles is demonstrating
that a rebirth of the idea of less costly mass transporta¬
to
a
.
is in. the practical interest of many Americans.
They need and are buying cars they can afford to pay
for and operate. There is more than ever today a def¬
inite place in our economy for smaller, economical cars.
tion
For America's original
was
not
based
conception of mass transportation
vehicles, but rather upon
luxury
upon
pos^iuxe
economical vehicles.
have
farmers
been
turned
heavily to
the nation in
rest on the
poultry
rank among the leaders of
production of livestock,
the
products and
and dairy
unwilling to
for their income, but have
products on any single crop
now
these fields.
incom¬
mineral
the states of the
Any mention of Illinois' resources would be
plete without due recognition to the coal and
industry.
Union in
Illinois ranks fifth among
the value of mineral output, first in the upper
Mississippi
Valley.
These
are
industries to the state.
many
bring
which
resources
"
-
;
:
■
Manufacturing, regarded by manyvas a ready index
of development in this modern age,: distinguishes Illinois
as
a
great industrial state, the third
first in the Middle West.;
heights.
modern,
up-to-date transportation service the world has ever
known, and will be able to meet any emergency, if the
people of the country will take a more active interest
wartime
rationing, • most
Americans would
gladly have traded -superfluous trim for extra mileage
A coupon and extra mileage between tire retreads.
Peacetime, too, has brought a comparable situation, with
per
better
This
than
30,000,000
cars
drain
builds
even
on
the road averaging nine
only old cars can.
on the
nation's currently short fuel supply,
stronger acceptance for the lightweight car.
of age and burning
years
Between 1927 and
up
gas
as
1941, Americans scrapped about 2,-
200,000 vehicles every year, when the common concep¬
of an "over-age" car was a vehicle that had seen
tion
eight
or
more
years' service and used up its efficiency
and economy
over-age
in thousands of miles of travel. Millions of
vehicles now in service are a year or two
past the "scrapping age" and they have
contributed to
income and
railroad
between
relation
the
in
railroad;
that this great railroad system of ours will
ever remain healthy. 7". "■
: ,?<.
\
•
i ' ■
/ ••
With sustained high levels of traffic, with the better
service which the future will bring, and with rates ad¬
expenses
so
present-day costs, the railroads will continue
basic transportation of the nation.
justed to
to furnish the
C. DONALD DALLAS
outlook for 1948 is
The
now
and
able to
are
we
purchase raw materials on a firm price basis,
now selling our products
Second, the principal
we depend—the
that basis.
industries
largely because three for¬
prevail! First, we are-
circumstances
economic
tunate
promising in the copper and
industry
fabricating
brass
and Brass Inc.
of the Board, Revere Copper
Chairman
which
on
electrical, housing and automobile—
are
operating at full caoacity with
heavy backlogs. Third, there are no
excess inventories of copper, zinc or
held
by
the
government,
fabricators or
the
the
producers,
the
consumers.
While
year
writing it ap¬
will be a good one
and
for the non-ferrous
at
this
present
Revere
fabricating industry as a whole, we
must keep in mind that continuing
success
depends on uninterrupted
world
production and
flow of
free
because world production and
c. Donald Dallas
world consumption are just about in
balance. Current domestic consumption is running about
in the nation, the
Only New York and Pennsyl¬
vania lead Illinois in the value of. ftianufactured^
Manufacturing, in Illinois has .made a
goods. '
generation of
40,000 tons a month ahead of domestic production, so it
immediately becomes apparent how much of a deter¬
mining factor is an uninterrupted flow from American
mines and the availability of imported copper to Ameri¬
can
fabricators.
going to continue to import 40,COO tons of
month, principally from South America and
perhaps Africa, we will, of course, have to be willing to
pay the world price.
The world price will probably be
If
are
we
copper
a
determined
amount
of
by
production
uninterrupted
dollars made available
Marshall Plan.
:
■
,
and
in
the
to Europe under the
•
consumption of copper was
production, and the government
had made up the deficit by bringing in copper from
South America and itself absorbing the 4c a pound excise
During the war, domestic
far
ahead
of domestic
Early in 1947, the government had
tax.
ceased to import
and ; absorb the tax, and as the government
stockpiles of copper accumulated during the war were
practically
exhausted,
consumers
became seriously
alarmed. We were domestically consuming copper at a;
copper
rate of about 50,000
than domestic
tons per month more
production, and it was becoming apparent that we had,
changed from being an export nation to being an import ;
nation as far as the red metal was concerned. Soon there1
two prices for copper-2ji211/2t and 24c. 777'
7! >
Sponsored by a group of consumers, actual bills were introduced in both houses of Congress to abolish the 4c;
were
77
As in most democratic;
compromise was worked out* and bills were;
finally presented suspending the 4c excise tax until
petus by: the war, the mass
nois: have maintained their trend of development since: April 1, 1949. These bills were.put through both Housesof Congress and signed by the Presdient within 78 days
the: cessation of hostilities. The manufacturing leaders,
after their introduction.! Lifting of this inequitable tariff
assuming the long-range viewpoint, are taking advan¬
has had the two-fold'effect of making world copper
available and leveling--the price at 21^c.;
tage of the industrial training and skill the workers de¬
,v7 The reciprocal agreement now in effect has reduced:
veloped during the war to expand their operations. This <
the 4c import duty on copper by 50%, but this 2c tax twill;
is evidenced by the number of-plants which have so
not become effective until April 1, 1949, at- which time:
rapidly converted to peacetime operations with but little
it will probably be necessary to have the excise tax
retraction in their output. The number of strictly war¬
either cancelled or again suspended if the situation is^
to continue to be Wealthy.
f
• '
time plants which have also been taken over by private
progress
ini-;
production facilities of IllL
in the past four' or five, years. - Given real
a
pound excise tax oil copper.
processes, a
.
.
Under
;
1
copper
combined with the natural advantages, makes
a mgnly productive agriculture in Illinois.
Illinois
ers
limitations of this
forthcoming year
Illinois'in its early-years had begun to flex ils muscles
an agricultural giant of the Middle West.
Its excep¬
tional soils make possible a diversified agricultural pro¬
gram
The state possesses natural advantages suitable
to the growing of various crops. Illinoisans miss no op¬
portunity
to capitalize on these natural advantages,
coupling them with progressive farming practices. The
state's fertile soil and level topography are well adapted
to the use of power machinery.
The people of Illinois
been leaders in the development of such machinery,
is needed to put the average Amer¬
ican family, with its $200-a-month
back
Illinois region, it is expected
;
proving our contention that a light¬
weight, low-cost, easy-to-handle car
income,
Railroad
Western
''
industry will progress to greater
It will give the citizens of this country the most
for
as
v.
consumer
&
industry and agriculture for the
will approximate 1947 levels.
four mil¬
cars
The
Peoria
Toledo,
that
industry
produce well
should
lion
pace
vital link between East and
a
<
The railroad
pears
J.
President,
for at
least three years should help restore
a semblance of prewar efficiency to
America's automotive transportation
system. Barring material shoitages
WTest railroads.
lead
brief, I believe that while 1948 will not be one of
it will be far better in every way than
1947 for the reasons mentioned above.
best years,
our
years.
of
communities—provides
on
In
Continuation
.
as
hurricane, the New England fire and many
Aiming for its second straight 4,500,000-car year since
1941, the nation's automotive industry in 1948 will be
striving to erase another substantial portion of the ve¬
hicle transportation deficit piled
up
during the war
how one form of transpor¬
the progress of the state in ways
other than through the movement of freight and passen¬
gers.
' :■ •' .V
'■1
'
•
■
•
:
w.: '• ' ;
We feel, from an agricultural, manufacturing and min¬
ing standpoint, that these industries are on solid ground,
that they are in good hands from a managerial aspect,
and that they will in the future, as they have in the past,
make a great contribution to the economic aspect of the
Middle West.
'' /.v'/
■ \\<...
' .
The Toledo, Peoria & Western Railroad—its 239 miles
of track unfolding across rich Illinois farm lands from
the Indiana border to the Mississippi River, serving 56
industries reveals concretely
tation is contributing to
ratio will be
Vincent Cullen
several floods, the Texas City disaster,
President, Crosley Motors, Inc.
not be
a
will, I believe, experience some in¬
crease in volume, and while the loss
the appraisal of properties
carefully scrutinized, with some resulting curb on specu¬
lation.
Also with the existing high prices for all types
1948
sharp increase in fire volume.
The Casualty and Surety companies
expansion of home build-
co
great profits in the in¬
I believe this will sta¬
values.
bilize in
will develop a more cautious attiand that there will
be a certain degree of buyer resistance to the prevailing
inflated prices.
i;
;. *
Future commercial loan- applications will be more
in
falling
year
ary
but I think the public
utde
a
of consolidation. The large
volume of fire premiums in 1946 and
1947 was caused mostly by inflation¬
a
iinar cing. "
Wm.
and
dustry in 1948, we believe it will be
heped. that this type of financing
be diverted to the capital mar¬
to
be
not look for
will
ket and
ratio
loss
market.
to
be
in
crease
amount
still
sharp increase in
in cost ratio, in¬
squeeze—a
voiume, an increase
operation.
banks have been
is
Corporation
perhaps one of the most difficult
years in tne insurance industry for a long while.
We
experienced nearly every adverse factor. In other words,
The
industry, and a consider¬
of these commitments
to
Surety
National
liberal in the extension of long-term
credits
CULLEN
VINCENT
investments. This,
however, will be offset by tne in¬
the income to banks from government
creased demands for
1948
Speaks Alter the Turn of the Year
Business and Finance
(Continued from page 30)
Thursday, January 22,
CHRONICLE
FINANCIAL
&
capital since the
cacy
war
give further testimony to
of the workers and leaders of
Illinois to key manu¬
facturing development to the tempo of the
of
its
development
agricultural and other natural resources.
Illinois railroad
mileage is 11,777, being exceeded
by Texas with 16.356, but Illinois far exceeds
all other states in miles per
Railroads in Illinois
ther development
of the railroads in
trial
this
the effi¬
development
are
only
Texas and
unit of area.
vitally interested in the fur¬
of manufacturing potentialities.
Each
Illinois maintains well-staffed indus¬
departments
to
assist in expanding
opportunity. The railroads' record of attracting new
postwar booms have
months, and this one
has run more than two years.
Another round of wage
increases
might well be the straw that breaks*.the
camel's back, as it would increase prices generally and
tend to decrease the large volume of business and em¬
Historically,
not
lasted
as
more
we
than
all
know,
about
18
ployment presently being enjoyed in this country.
In conclusion, <I should like'to make this observation
for what it is worth.
Although the earnings of the
American
on
manufacturing
average about 5%
compelled to go to the
industry
sales, corporations are being
premanent expansion. High
plants and equipment, large dollar value of
banks for money to finance
cost of
new
(Continued on page 34)
■
•
7!
-
■
:
Volume
Number
167
THE COMMERCIAL
4666;
forces
What About Interest Rates?
debt
permanent
and
only
slightly prescribed by the Federal Reserve
higher plateau, or simply a tem¬ Board.
This plan was not as broadly
porary
condition,
will
depend
upon
a
number
of
important developed by Mr. Eccles this year,
things, among which are future as were similar recommendations
business
conditions, Government of a wider scope which were made
debt management, credit, tax, and by the Board in the annual re¬
other policies.
ports of 1945 and 1946. The latter
\
Lumping together in one basket were received by bankers and
all of the different rates appli¬ students of the subject with ex¬
prime credits, and label¬
ing this basket "interest rates," I
believe that the major portion of
the rise in interest rates has taken
I would not attempt' to
the peak for the current
but I believe that the pres¬
place.
guess
move,
ent levels are about what we may
expect, on the average, for the
next few years.
If I had to be
:
; more specific, I would guess that,
if anything, the average of interest
'
interest
rates
to types
terest as
,
of credit.
business,
the
of
interrelated, although
relationships will be variable.
rowings. The demand for private
capital and credit has become the
tail which
Major
Considerations
on
U. S. Treasury securities. This,
turn, breaks down into the rate
short-term Treasury securities
of
one
on
in
rates
obligations.
Treasury
of
because
longer-
or
the
Yet,
policy
Treasury's
"tailoring" its securities to meet
investors' presumed "needs," we
have two
rates for longer term
of
securities:
which
those
the rate on
not eligible, in
namely,
are
general, for purchase by commerrcial banks, and those which are.
Securities eligible for commercial
1 banks naturally have commanded
rate than
interest
lower;
a
which
those
not.
are
of rates might
prevail for other
The second group
which
those
be
such
securities,
short-term
as
prime commercial paper, bankers'
acceptances, and prime commer¬
cial loans of about one-year term.
The third group
might be those
prime business loans which are
longer than one year, and* either
of a term or serial character! We
on
might include in this group serial
issues,
such
as
railroad
bond
.
equipment trust certificates,
f The fourth group might be loans
;(and bonds) which are of a longer
term, and which find placement
primarily with insurance compa¬
nies, savings banks, pension funds,
and the like.
The
loans
and
;
-
(
might be real estate
which, while tied into basic
fifth
interest
other
rates,
af¬
are
materially by the policies
cf the FHA and the Veterans' Adr
fected
ministration.
The sixth,
might be
a
of all other loans, or of
as
mentioned
have
I
is of
credit involved
character,
less prime
the
interest
a larger in¬
reflect
premium against
surance
the
where
a
that
so
thereon
rates
miscellany
loans such
loss
of
principal.
The Eccles Plan
When
terest
U.
I
rate
speak of the basic in¬
as that prevailing
on
Treasury securities,
S.
I refer
to the
yield of marketable obliga¬
tions;
It has been claimed in some
quarters that Treasury debt, and
the Interest rates thereon, may be
Segregated from other debt and
:6thex Interest rates. The!Federal
Reserve
j f Board
seems
maintained- that
this
is
! to
-
have
not
only
possible!.but, should be effected.
'Mr. Eccles, in presenting the' rec•ommendations of the Board to the
'present' Congress,
line of thought.
as
an
the field of
banks
.
followed
be
thai
He recommended,
anti-inflationary
move
in
credit, that commercial
required to carry a
larger
percentage
of
reserves.
Actually,
' however,
this
plan
amounts
reserves
vide
to
a
redefinition
that the banks
to hold
of
the
of member banks to pro¬
be compelled
Government securities, as
Interest
increase
the
amount
inflation.
of
-
postwar
s.
Effective
securities) and other interest rates
Kaiser and the Frazer is
a
tribute to the beautiful
postwar engineering of these truly great
standard of excellence in
smoothness of ride. And the
design
can
be
seen
in
on
need
the
Gov¬
ernment's
policies with regard to
Treasury
interest
rates.
have
I
new
cars.
styling and
They have estab¬
performance, roominess and
style trend set by Kaiser-Frazer
every new car
ing rates.
parity
The effect of this dis¬
to
was
increase
unneces¬
sarily
the
war-created
supply.
As
commercial
needed
or
actually
desired
were
the wartime
means
by
low-rate
money
banks
earnings, they
encouraged
to
financing set-up
which
to
short-term
transfer
use
as a
the
Treasury se¬
curities, designed for them by the
Treasury, into other intermediate
longer - term,
higher - yielding
Treasury securities which were
Fourth, the levels and trend of
(Continued on page 35)".'.
producer of automobiles. The public acclaim that has greeted the
a new
first
is
In 18 months Kaiser-Frazer has* become the world's fourth largest
lished
resultant
/
be
First, the Government's policy
with regard to Treasury interest
segregation of public rates.
By "the Government,!' I
debt from private debt has not
treme coolness, and the latest rec¬
specifically mean
the
Treasury
yet been achieved. The influences and the Federal
ommendations do not seem to have
Reserve System.
which affect one, therefore, have
met with any greater approbation.
Second, the Treasury's policy on
an
interrelated effect
upon
the
Any steps, such as these, which
other.
The tail of private credit debt retirements during periods
would be effective in .segregating
cannot continue to wag the dog when the Treasury has a cash or
the public
debt, would exact a
of public credit indefinitely. Con¬
price for this segregation require¬
budgetary surplus.
sequently, my discussion bases on
ment.
The Government has met
Third, j the tax philosophy and
the
premise that basic interest
with difficulty in its attempts to rates
tax policies of the Government.
(i: e., marketable Treasury
avoid the repercussions of natural
the
,
dwell
us
33
wagging the dog. It
There are at least four major been consistently critical of the
kept in mind that at¬ considerations which bear 011 the Treasury's interest rate
policies.
tempts which have the relatively interest rates of
Treasury secur¬ During the war, I criticized pri¬
narrow
objective of obstructing ities, and, therefore, on the in¬ vately the disparity which the
natural forces, -exact
a
penalty. terest rates for highest grade pri¬ Treasury maintained between its
The penalty so far has been to vate
short-term and long-term borrow¬
credits.
should
less, and the
or
intermediate
on
"term
term
year
on
Rates
and
funds.
Let
Thfc
that which prevails
(333)
will remain
First, however,: I would like to
differentiate among rates of in-
.basic rate is
.
.the
Rates'..):^..
Various Classes of
>;
:
the distribution of public
and Von
be something lower than v;: those
presently prevailing. ; ^
i' / v,.(
:
•
CHRONICLE
the next few years may
rates for
.
FINANCIAL
which it has imposed on such bor¬
(Continued from first page)
cable to
on
&
announced by other manufac¬
turers! This trend will be followed by all others in the years to come.
34
THE COMMERCIAL
(334)
■
large
inventories,
\' 7
(Continued from page 32)
;
and a
payrolls,
-
vidua!
'.
just as it has already
tax structure that
7:7:,';^Y;7; I
the
When
>
category of traffic during
with the single exception of air
which remained at about the
level. Domestic airfreight rose
every
ume
takes
five
to
the
be substan¬
seven
but
a
it
creasing
cocoa
should
-
cocoa
prewar.
sumer
; This in
American conwill have to pay $240,000,000
amount of finished chocolate products.
While this is a relatively small sum in a country that
thinks in terms of billions, it is a fantastic figure when
you
realize that the total prewar
dustry's output will now cost almost
times the total prewar sales value of
can't help
asking the question
—
alone of the in¬
two and one-half
the industry. One
where is this money
situation, not only in this country
but in Europe, is consumer resistance. It is very difficult
to evaluate this intangible because to date a large part
of the industry has not been selling finished goods on
the basis of replacement costs. By and large the industry
has been giving consumers the benefit of an inventory
accumulated at lower prices. Therefore, we do not know
how long the consumer will continue to buy the same
number of pounds of chocolate products when priced on
the market.
V
'v -7-'771'Y.-- "•v-.1:
YvY.'V'-Y
■■>. The Association of Cocoa and Chocolate Manufacturers
has been taking steps to alleviate this situation. Immedi¬
crux
into
creased
in
cocoa
British
the
.
through
Furthermore, maintenance of high prices is fa¬
by the fact that cocoa beans are stll under
through the I.E.F.C. The Association
Cocoa
and
Chocolate Manufacturers feels very
prices.
cilitated
world
of
allocation
strongly that cocoa should be removed from the pur¬
views of the I.E.F.C. Prior to the expiration of OPA,
when cocoa was selling at around 15.cents, our Eurooean
this year.
This
another
an
area
because moisture
excellent, except for i
crop
are
in eastern Montana
western North
treme
.they are
and
ex¬
Dakota, where
;77;
fair.r
:
..
\7
Increased winter wheat and sugar
is indicated for 1948, ;
while the livestock population will
be down, because of heavy liquida-,
beef
acreage:
high cost and scarcity of7
lion due to
feed, and record meat prices.
E.
C.
Denney
cellent
remaining
livestock
ever,,
j;
A
big
conditions
ments
shape.
,
food
for
Hows,
the
on
entered the' winter in good
flesh and Winter ranges are in ex¬
ranges
•;,
■
.7. Continued heavy domestic and foreign
assure
a
ready
relief require¬
market for grains and
livestock, and for fruits and vegetables produced in
the
construction main¬
tains heavy demand for western forest products, y '
Several important new industries located along the
Pacific
"Main
of
Street
the
Northwest"
in
1947
demand
and
sites continues brisk.
Pacific's
Northern
accelerated
and
Northwest,
for industrial
ment
of track
continuing
and roadbed
of
program
improve¬
and additions to equipment I
the
and
extended service to
.
erally remain good;
In the realm of safety, the domestic
t
Chairman, Union Dime Savings Bank, New York
airlines suffered
only five accidents fatal to passengers,
in
The
compared with
131
Mutual
Savings Banks in
the State
of New
--
The revenue plane miles flown per.
1946.
-
~
■
.
,
growing compe-;
W.
tioh, due to the Federal Savings and
Loan Associations, which by the way
LAIRD DEAN
Bank, Topeka, Kan. , are not Savings Banks, and the many
banking business can anticipate experi- ; Commercial Banks which are again
the
so-called
thrift
ac¬
ences in 1948 very nearly paralleling those of the year
; running
counts. I have no brief against this
just closed.. The slight increase of interest rates and the competition because these;-Federal
continuing demand for loans should result in a very
Savings and Loan Associations and
satisfactory year from an earning
'v ,77"-' 7
President, The Merchants National
I believe the
standpoint.
clouds
cause
on
any
financial
aware
of
I
the
see
Commercial
serious storm
no
that
horizon
.
serious difficulties in the
field.
Bankers are well
the dangers of further in¬
eral
when mak¬
future since
administrative
so
acts
in
to
•'
•
vY"
--a;:
Savings Banks
our
year there
investment of
ing
will be more favorable opportunity for
surplus funds in desirable securities at
higher yields than at present, and that the banks will
reduce somewhat their holdings of low yield Govern¬
ment bonds.
W. Laird
WashWton
1
The ratio of the
Dean
quickly and seriously affect the economy of mm
country. It is our hope in the Middle West that the
can
L. De Bost
,
tongues in their cheeks
the
;7--'lY
7;
Mutual
support
character, but to fulfill their
obligation to assist in stimulating
of
William
have given outstanding
Government, both in the'purchase of
bonds for their own portfolios and for their superb ac¬
complishment in the sale of E, F,c and G bonds to their
depositors and others.
'
. / ji
•
•;
In looking ahead it would seem that during the com¬
Our
tive
estimates
also preach¬
are
public that it is the safe and wise thing to save for
the future.
ing their loans with unusual care to
eliminate advances of the specula¬
ing
Banks
ing thrift and spending mqch money,
as our Mutual Savings Banks are, in educating the gen¬
would
production and assuring adequate
transportation and proper distribu¬
tion of the products of the farms
and factories of our country.
Bankers must always have their
good purpose, and that furthermore it blocks
the free action of the law of supply and demand.
The
Chocolate Association has gone on record to this effect
with the State Department.
The $64 question still remains as to what prices we
may expect on cocoa in the future.
Basically the indi-
,
fatal'-*, York have not only held their position admirably during
1947 but have made much progress in the encourage¬
accident totaled 65,971,228 as compared with 34,397,826
ment of thrift during the year.
Accounts and deposits
the previous year.
The industry as avwhole";and the v
have increased substantially.
\j •
airlines individually will continue this year, as in the v.
The services which they are ren¬
past, to consider safety their number one objective.
dering to depositors are : constantly
;
Improved aircraft; modernization of airways- equipimproving and it would be difficult
ment and traffic techniques; the prospect for continued
to imagine how it would be possible
growth of traffic; the construction of new airports and
for the great number of depositors
passenger handling facilities—these and other consider-^ .
to do without our: Mutual Savings
ations motivate my belief'that 1948 will
Banks.
'
,7 777'' /• 7- ;. ]
for the airlines.
7-.
7777
7--7
There has been a
nine
present prices, there seems little likelihood of any nation
buying large quantities of cocoa to the detriment of
others.
Therefore, it is the feeling of the American
manufacturers that continued world allocation does not
■h
JO;'7 ern Pacific territory should produce
system
flation and I believe they are screen¬
any
prevailed for farm products.
| If . the growing and • harvesting*
weather, is favorable in 1948, North-
..
,
'.
allocation were maintained,
the United States, having the most dollars, would buy
substantially more than its share. In order to perform
an
equitable distribution, our Government agreed to
continuation of allocations.
However, with cocoa at
allies felt that unless some
serve
have
Starting
.'through
physical plant put this railroad in better shape[
new cities in every
than ever to handle expeditiously an anticipated heavy
States, bringing high speed trans¬
volume of traffic in 1948.
portation to business and pleasure travelers who for¬
Offsetting the outlook for a satisfactory volume of
merly had to depend upon surface means. New cities
traffic in 1948 is the steadily increasing cost of providing
provide new sources of passenger, cargo and mail traffic
transportation/ Rising wages and advances in the cost
which will undoubtedly aid in the growth of the industry
of everything the railroads buy makes it imperative that"
this year and in the future. ;
*
'
'7
the industry be permitted to. increase. its rates suffi¬
Rising costs and sizable expenditures for route expan¬
ciently to meet these additional costs,
sion and
modernization of equipment prevented the
industry as a whole from showing a profit during 1947v 7; y Only such a policy will enable America's-.basicytrsinsportation to continue to serve the nation satisfactorily •
The net loss will probably exceed that of 1946, when
in peace — and be prepared for any eventuality. 1
7 '
the airlines went $7,000,000 into the red.
However, I
believe the airlines'. performance during" 1948 will be
WILLIAM L. DeBOST
brighter financially, provided business conditions gen¬
airline
The
The
West
production ;ib the;,
territory and high prices which have';;
part of the United
the normal channels of free
monopolistic methods of selling raw
two principal producing areas, namely
Africa and Brazil, tend to maintain high
market
safety.
eighth;
the
to
of high agricultural
;Y7-;7:7;;7
Soldier mail in the 7
permits airline planes to land and take off under some¬
what lowered ceiling and visibility standards with in¬
.
to
season
1946 swelled that year's
is still some years in the
service
widespread
more
yi j
Company
the-head of the;
primarily
due
year,
prosperous
successive
major airports and will come
approved for -use at 41
they formed the American Cocoa
and engaged the services of Mr.
Leonard J. Schwarz as Director.
The chief objective
of the Research Committee is to stimulate production
of cocoa in existing growing areas, and to explore and
encourage the growth of cocoa in new areas. The Com¬
mittee has made very substantial progress, but because
it takes so many years to bring a tree to bearing, the
results of its efforts will not be tangible for some years.
Among other projects,
the Committee has made a
scholarship grant of $50,000 to the Inter-American In¬
stitute of Agricultural Sciences at Turriabla, Costa Rica.
It has also been instrumental in
bringing about the
creation of a Cocoa Committee as an agency., of the
Pan American Union whose purpose is to interest itself
in the production and cultivation of cocoa in the Western
Hemisphere. In addition, it is working closely with the
newly formed Liberia Company, whose objective is an
exportable annual crop of 50,000 tons of cocoa beans by
I960.
Y'
v Y
While the apparent world shortage of cocoa beans is
the primary cause of current prices, the prices are prob¬
ably higher than they would be if cocoa beans could
enterprise.
another
•
Instrument Landing Systems (ILS) were
ating record.
of the price
ately after V-J Day
Research Committee,
flow
in-
future, important steps were taken toward that objec¬
tive in 1947, and I am confident that continued improves
ments this year will be reflected in the industry's oper¬
coming from?
The
toward
,'try figures are
Although all-weather flying
Railway
Great Lakes to the North Pacific Coast, has experienced V
h-/--
planes and will receive more this year. Offering passengers higher speeds at greater comfort, they also afford
some
operating economies over prewar and vwartime
aircraft still in widspread use.
sales of the finished
only $100,000,000.
output of the chocolate industry were
In other words, the cocoa component
denney
E-
Pacific country, from
-
,
for the same
more
Northern
The
increase over the same month of the
previous year.
.
* ■,
,r
'
*'
•: Air express climbed 26.2% above '1946,: and domestic; %
revenue passenger miles increased 5.6 % ^ This increase y.
in. passenger traffic compares significantly with a .diop
in revenue passenger miies for other.forms of ti;anspor-:7
tation, notably for railroad Pullman and coach service."
"Improvements initiated during 1947 will affect the
industry favorably during 1948. American Airlines and
several others took delivery of the first postwar transport
effect means that the
.
c-
Northern Pacific
President,
v
7Y;
of 270,000 tons, and if our
remains at this figure,
amount of cocoa at 40 cents
amount, of
.
September—the last for which indusavailable—showed an
Ralph S. Damon
pound would cost the Jgrinders
$240,000,000 more than the same
Day
1946
111.5%
*
per
E.
was
figures disproportionately.
in- June, 1947, every month
current usage
Clive
and we can increase production to
bring prices within the purchasing power of rrore of
people and at the same time we can fulfill all cf our
World obligations and continue the retirement of our>
public debt. .
.
-•
V
:'
'*77 V'7, "'Y,f
our
...
.
trend
loads.
first half of
not
average
this
mail
The
to
tree into production,
be assumed that:
we will experience a world shortage of cocoa for that long a period be-;
cause
at some point price will act
as a deterrent on consumption. Pre¬
war the United
States consumed an
bring
try from earnings,
previous year " and gives
indication of increasing in vol¬
during 1948. : Allv figures arb>
months of 1947.
years
our own
y If we have the will to do so we can substantially i
reduce the tax burden to permit the expansion of indus¬
subject to slight revision when final'
reports are compiled for the last two
■
stability-but we believe that the ma'ntenance
leadership depends upon our ability, to keep
country strong.;::; -;.;'' V';vYY^7:Y':Y77'777,'?.Y"'vY
the
over
tially higher than prewar.
It
1947;
mail,
every
but when it goes up eight .or nine -times, then it's
front page news—and so it is with cocoa beans. The
world supply of cocoa beans is at least 10%
under
whereas
economic
of America's
flying equipment by manufacturers warrant an optimistic
outlook for the industry during 1948.
77,,;' Y
ine
airlines
made increases in
news,
consumption,
noube cured by using the financial:'
can
tax.ng authorities
of
nize
gains made by, the domestic airlines during
prospect for deliverey of additional postwar
Traffic
article doubles or triples, it's
demand would appear to
ills
stability will come with lightening the heavy
and instituting practices, of!
in all departments of government; We recog¬
America's obligation to. lead the World- bacK to
hand
1947 and the
C. DAY
prewar
economic
economic
77.;:-7;77;7;:'7'.}; President, American Airlines |7Sv-:f.
capital. This process puts
Kohler Swiss Chocolate Co., Inc.
Association of Cocoa, & Chocolate Manu¬
facturers of the United States
price of an
ail
system of our country gs a whipping posc:pul;,fatner':tha'f.-i-'
S.: DAMON
RALPH.
President, Peter, Cailler
President,
Administration and Congress may recognize the fact that
.'throughout
by his resistance to high
world,
economy
expansion of our economy
done in Europe.
.
:
1
CLIVE
both in this country and
prices of finished'
goods, will determine the price which the manufacturer
can and will pay for cocoa.
This.in turn will determine
the price which the producer can obtain at the source.
the
'prevents the formation of venture capital from which
expansion should be financed, dictate this course. This
is not healthy because companies should finance per¬
manent expansion out of earnings or sale of equities
and not through temporary bank borrowings, prevent¬
ing the formation of venture
an artificial limitation on the
consumer,
Thursday* January 22; 1948
CHRONICLE
FINANCIAL
&
Bonds and
the past
.
,
v"
7
;
Savings Banks in the holdings of their
Mortgages to resources has decreased during
few years, largely due to pavments on account
(Continued on.page 36)
...
.
Volume
167/v Number
4666
"
-
/.
,
THE COMMERCIAL
,
creases
&
I in
FINANCIAL
interest
President,
offered
to
others.
The
in
latter,
encouraged
were
accept
to
a
middleman's
profit / in • such
transactions, and then to reinvest
,
amount
of
.
v,
spect to interest rates in
;
digious
totals
of
achieved
sales
War,>• Loan
the
these
under
meth¬
ods, methods which unnecessarily
increased the money
dividuals
>. and
the
V
this
supply of inSince
businesses.
supply has
V been thrown against an insuffi¬
cient volume of food, goods and
war
services.
.
a
b i
n e
t
against
dan¬
volume
for
chasing
corporate
the need
general
for restraints.
on
money
•
■
-
'
,
-/'
-
credit.
Just
all of this Would, and should the Govern¬
ment ^.support the prices of Treas¬
offering of. long-term;
ury securities? Would, and should
criticized
able
then
mand
It
restatement
a
new.
The
accompanying
etiology
accelerated
ward, trends of
•
rities.
prices (arid /the
System
was
now
attitude
of
i
•
bank
is
the
dent's
the
in
are
engaged
opposing the extension of credit
higher
to
high
it
Price
of
Economic
in order that the interest rate
ceived
might include
crement
insurance
of
( principal
risked.
in
re¬
a
against
It also
year
seemed
should
so
(Continued
which
banks
on
page
for
Treasury securities
System for
the purchase of longer-term high¬
er-yielding bonds. Indirectly, this
,
savings
banks
anc
other (investors
for
long-term
bank-ineligible Treasury securi¬
with
the
est
cumulative
a
Under
circumstances,
the
even
greater
set new
so,
peactime records
prepared themselves
future production.
beginning. But 1947
Exceptional
Here
reduction
level of all
general
rates.
others
National Steel Corporation has expanded
since its
companies,
ties
accumu¬
and. improved its operations in each year
demand from insurance
a
many
...and/while doing
to the Federal Reserve
created
any
whole made solid gains
as a
cutting into the mountainous demand for
dustry,
were
using the proceeds from the sale
short-term
greatest
Industry
and
progress;
are some
was a year
of
and 1948 will equal it.
of the facilities
we
have added
adding:
are
inter-
attendanl
reductions
in
in-
'■terest 'rates held
dangers.
i
v
I
the
Treasury'( (and
Reserve
resolve
to
-'
.
While
Federal
their
the
Expansion,of a plafit manu¬
facturing SJRAN-^^
attempting
were
attitude
toward
■
Treasury short-term interest rates
the
funds
.
other
or
new
93-inch cold mill which rolls
highly finished wide sheets required by
huRdings and building
Treasury sold about $1.8 bil¬
long-term securities from
the automobile and other industries.
'materials'.
lions of
trust
fw A
accounts.
These* sales
began in April,?:1947,
continued
throughout ' Sep-
and:
tembervj; ?'•I
;
{
tfie; middle 0^1947 tK£;eom*
mercial
banks, for
of
reasons,
volume
of
securities
he Id
that,
it
One/hundred^
combination
a
such '
re'duced
Treasury
becoming
.a"
short-term
was
tional coke .for \ the >
increasingly difficult to manufac¬
the
ture
needed
reserves
for
by-
The steel
prod uct ovens,to." provide addi¬
making , of
iron and steel.
industry's largest
producing installation
tons
I
of oxygen per
furnace
the
-oxygen-
provide 400
to
day for
use
in
operations.
extension of private credit, by the
sale of these securities to the Fed¬
eral
Reserve
System.
Simultane¬
ously, commercial banks began to
withdraw from the market for in¬
termediate and longer-term Treas¬
securities, and
ury
New Bessemer
increasing
an
number of commercial
banks, and
facilities
insurance companies, were
being forced to resort to the sale
to
converters
increase the
some
of
intermediate
and
Treasury securities.
the
of steel
and other
A
production
coal mine
new
to
insure
a
continu¬
ing supply of high grade metallurgical
ingots.
coal.
longer-term
In July, 1947
Treasury and the Federal Re¬
permitted short-term inter¬
serve
est rates to
vtoward
their
commence
somewhat
higher
move
levels.
;Irifhe third;quarter of 1947, the
consistent la'r^ge demand for new
mon^y had; eaten into the
lated
>
uninvested
funds
of
and
the
ance;;1 companies
commercial
1
o a n
s,
of
c
prices
annual
rate;
insur¬
like;
rate
of
a
mile
a
the
icy
a
was
new
;
easier in
Oovernment
or
moves
iwill be
policy,
just been reversed.
NATIONAL
with
abandon than
which
C
a
and
certificates
July,
rates
and
on
u
\
111 c &
an
plant and facilities
addition of 3,000,000.
brought into operation in 1948. '
,
tons to
.
of National Steel Corpora¬
are part
important part-of the
aggregate program
in the steel
•
ingot capacity, much of which
«
'
.
-
''
/
/;^By'its%prdduction record and its heavy investment in improvement and growth,
Lthe
steel-industry gives tangible evidence of its continuing faith in the future of
way of life.
- ".
/America and-the American
,,
In addition to
April through September, permit¬
the
HouS'
has
selling $1.8 billions of bonds from
ting
STEELv
to
current program—an
(industry/to provide
interest rate pol¬
I Nothing, however;
These and other additions
tion's
matter of guesswork.
greater speed
at
to, serve
new,
..the/second quarter of 1947) began
10' move sharply' upward, and the
scope ,of
warehouse
Texas
growing South west.
minute.
a
new
ton,
mill, /which; foilsIdmlf of^stEel lat the
commodity
(which had been
A
The world's fastest cold •; rolled sheet
member
banks began to increase at
"Higher,
cumu¬
Treasury
to
creating
bills
increase
a
in
desirable
N
:
.
•
-
A\T
DO NAL
'
STEEL
CORPORATION
"
*
n.
:
Owning and operating—weirton
steel company, weirton, west Virginia—great lakes steel corporation,
detroit/michigan—r-hanna iron
ore
new
york, and detroit, michigan.
company, cleveland, ohio—the hanna furnace corporation, buffalo,
'
the
conducted
lated throughout the war. Like the steel in^
important to decrease the aggres¬
siveness' with
some
Support
management
be
goods and services of all kinds that
of
securi¬
Presi¬
we
find
following paragraph:
virtually
was
year.
higher in¬
a
longer-
for
Report
IN 1947, far the industry's production
by the steel
in
peacetime
com¬
rates on loans to
such as yourselves,
of
corporate
new
summary
"Debt
right hand, while "will¬
extending
ingly"
a
Government
In
and the Government
ih% and long-term Treasury securities.
at
those
years.
The net over-all result has been
with the
and
•'
-
that, whereas interest rates have
advanced,
the
Federal
Reserve
larger holdings of intermediate
to narrow
was
eligible securities and
longer-term
ties
the
Federal Reserve in its earlier pur¬
chases.
various
on
But, the yield spread
Treasury short-term in¬
rates
term
secu¬
of
\
.
stated,
rates.
terest
a
This represented a decided
change from the
(against support bids) from their
thd; down-
publicly that the Fed¬
Reserve
far
market;psy|
York
"willing" buyer of Treasury
was
( (J)//
ing
eral
-
obligations
Reserve
between
announced
quite sharp. ing limited to the sale of a reduced
In-fact, during the Fall some capi¬
voluipe of short-term Treasury setal needs had to-be deferred ^be¬
Cu(ity (Tioldings, now could, sell
cause 'of marketAcohditions.'
come
Federal1
been
terest rate policies
eral
Reserve Bank of New
left
the spread between the
Treasury's
short-term and long-term borrow¬
policy, the President of the Fed¬
The important impact,
however,
placements was; reaching a
on
the credit objectives
of the
new"1-peak.
Prospective) demandFederal Reserve System was this:
seemed even higher.- The'effect
on
the markets for alL fixed in¬ commercial banks, instead of be¬
vate
of
has
the
occasions, that one of the objec¬
tives of the Government's new in¬
pur¬
securities.
response
with
other
and
encouraged
businessmen
in
It
with
3j
(I
:
desir¬
seemed
banks
that
lenders' be
*
of
purpose
/.
the
reasons.'
ferent
of
the
restriction
Treasury's-interest
policies, but for slightly dif¬
rate
'
without
hand.'
recently, and apparently in
to some clamor/ for a
—the Treasury followed
.
'. With the war's close, I publicly
in¬
..companies v could
sell
Government bonds in reasonable
gers,of further price inflation, and
re¬
as
surance
Reserve
the
(335)
Also, other investors such
Officers,
Federal
forth
The
proceeds in the unlimited of-. Treasury - bonds; >; Althoughf :the
the long-term financing
rate of
ferings
of
long-term
Treasury Treasury's
offering ;;w a s ^an¬
2%% be protected? As anticipated
bonds.
Apparently,
there
was nounced in August, subscriptions
nothing that could be said or done were not taken until late Septem¬ by close observers, large scale
of
to dissuade the authorities from ber, and by that time the schedule support '
Treasury
security
thi§ hocus-pocus. Then-Secretary of new corporate issues and pri¬ prices. was ultimately rendered.
Morgenthau widely applauded and
hailed from the housetops the pro¬
-
with
uncertainty
the
>
and
launched
(Continued from page 33)
turn,
C
Treasury,
rates.
CHRONICLE
policies
that
ap~
37)
y;
36
Thursday, January 22, 1948-
(336)
Speaks Alter the Turn of the Year
Business and vTinance
(Continued from page 34)
I do not think
that
be a great im¬
provement in the opportunity to invest substantial
amounts in safe Bonds and Mortgages, in view of the
fact that during and since the war, and at present, there
is very little new building creating new mortgage loans,
and until prices and wages have been trimmed, I cannot
and to increased deposits.
during the coming year there will
of principal
operations.
set up safe re¬
serves
against another rainy day and soon, I believe
and hope, that the Banks may be able to pay the deposi¬
tors a higher rate of interest,, but of course they should
not consider doing so until there is definitely a more
favorable opportunity for the safe investment of funds
at higher yields than at present.
A few of the outstanding optimistic thoughts for 1948
foresee
any
extensive building
Banks had
The
fine opportunity to
a
mind are:
whole Savings Bank structure is well
which come to my
That
our
K
RODNEY
alkali products constitute the basic tools for the produc¬
tion of chemicals and a great variety of other essential
,
is placing increas ng
diversification of products, and is discover¬
ing new uses for its established products. Sodium chlor¬
ite may be cited as an important example. Both in itself
and as a source of chlorine dioxide, this chemical is
In addition, Mathieson
products.
emphasis
In the oil field
on
1948 bus'ness of about 5 to
drilling
new
be
more
than
casing available.
We look for increased pressure for
that
adjustments with a probability
increases will have to be
and
some
granted, and that these may be re¬
flected in slightly increased prices
service
for
We''intend
work,, In
to
existing levels.
at
of manufacture
costs
done so much for ;
labor, will undoubtedly be improved and strengthened
so
that employers will have a reasonable chance for
.:
President, The Norwich
and labor will not be so much dominated by a few v
• ;:-V;V I*
\ 2
Much economy-in Government, operations will be de¬
manded by the public from both major parties.
Altogether it seems as though 1948 opens up with
brighter prospects than did 1947.
the
of
ores
radical leaders.
Department
W.
GEORGE
President, The Mathieson
increased 31.5%
and that
proprietary business in a good
cases had quite a set back in
1947, primarily due to the fact that
retail druggists, chain stores and job¬
bers were liquidating their inventor¬
ies] The natural result in the proprie¬
the
up
in
the
is also the chemical
growth
of
on
,
its goals
of providing
public with the class of service it
the waiting
telephones
"tight" alkali
11
also
consumes
change.
important quantities of alkali.
,
Glass, the largest single consumer of soda ash, can also £
be expected to maintain or increase its requirements,
due to the greatly increased use of glass containers and
to
the
diversification
fiber
Other
future.
To
take Mathieson as an
example, the ca¬
pacity of our Lake Charles, La., soda ash plant will have
been doubled by the fall of 1948. Production of caustic
soda at our Saltville, Va., plant, particularly rayon-grade
caustic, is being increased, and facilities for the produc¬
near
South
tion and distribution of other related products are being
improved.
Just how
soon
supply will become adequate,
however, cannot be foreseen at this time.
From, the long-range point of view, it can
the alkali industry is in a
be said that
relatively strong position, since
before
*;
l
.
-''-I:.;,!
or any
■
'.
fair break. We do
navy to support,
certain amount of financ¬
mendous
de¬
other time. '
government would eliminate a
great
its expenses
that it would not be necessary for such tre¬
taxes and it then would give industry a breath¬
if the
of its unnecessary bureaus and reduce
thereby,
ing spell and an opportunity to
expand.
expansion of industry, it would mean millions
in turn would assist in pre¬
venting unemployment.
■ ■
'
I am fully cognizant that this is a Presidential year and
With the
additional jobs which
of
politics will have its place in the picture,
that
but prop¬
erly directed I can not help but believe that the future
is not only bright for 1948 but for a number of years
to come.
If these factors which I have mentioned are
I
materialized,
am
sure
will be satisfied with the
we
of 1948.
results
■<
1
GEORGE A. EASTWOOD
;
of the Board, Armour & Company
Chairman
for
outlook
The
1948 is
good.
the
livestock
and
meat'
jj'
industry in
Though there was a reduction in
t)be 1947
.
with 130% in the entire country.
justly proud of the progress made by the South
in it. but the situation is clouded as far as
telephone industry is concerned by the sharp de¬
crease in earnings.
The "cost of living" of the telephone
business (wage rates, material prices, etc.)
has risen
are
and our part
the
sharply along with the general price level, but the rates
paid for its service have not kept pace. All our expan¬
sion since the war ended and all our plans for the future
are predicated upon faith that our rates will be adjusted
in line with current costs so that we can continue to
forward with our Southland.
'
-
<
necessity of the high ;
but the war is over now
will have to do a
we
believe
many
.
move
.
readily appreciate the
during the war period
government must give industry a
have the tremendous army and
I
ment; and a better balance is being achieved between
agriculture and industry. While per capita income here
is still low by nationwide standards, the area is moving
steadily forward in its efforts to narrow this disparity.
Between 1930 and 1946, consumer income rose 230%
We
relief in its taxes.
could
this
at
orogress
in the South, compared
these
have
well
ing for Europe, but I think that we should proceed
cautiously along these lines and not write a blank check
levels far above anything ever expe¬
war, the telephone industry in the
to 1948 as another year of intense
-
rates
demands from labor and increased freight
as
material' and supply increases. For
reasons I am firmly convinced that industry must
taxes,
although
of :the telephone industry reflects the
economic progress of the area it serves. Ever since the
early 1930's the South has been developing, economically
and industrially, at a faster rate than the nation at large.
New industries by the thousands are being added; large
cities and small towns are showing remarkable develop¬
The
?,
the
great many
both in the
proprietary and the ethical iines. The break-even point
in all business has reached a new high largely due to
not
looks forward
activity.
^
most of the chlorine in the next
period include:
bleaches, ssnitizing agents, insecticides and weed killers
such as DDT and 2-4D; pharmaceuticals; anti-freeze;
chlorinated styrene and polyvinyl chlorides for plastics
and rubber; chlorinated hydrocarbons for dry cleaning,
degreasing and refrigerants; and synthetic detergents.
With respect to supply of alkali products, the industry
is expanding in an effort to reach adequate levels in the
consume
mand currently at
;
proprietary industry. There, of course are a
factors which can and will affect business,
and
was
backlog of such proportions and with new
a
rienced
of
glass applications in construc¬
glass insulation, and various other fields.
traditionally important markets for alkali,'1 such
as pulp and paper production and textile finishing, also
show an ever-growing need for these basic chemicals.
Chlorine' demand also exceeds the industry's present
production capacity. Important uses which probably will
tion,
With
well.
as
readjustment has been made I am firmly
convinced that 1948 is bound to be a good year for the
Now that this
I
,
Large
facturers
-
the
that
*
scale
Hal S. Dumas
consumers cf chemicals include plastics, textiles, rubber,
of \our recent accomplishments and
of the magnitude rf the iob remain¬
fertilizer, coal products and industrial explosives.
In
these fielos, caoacity production is expected to continue.
ing for 1948 and the years beyond can be gained by
Other major users of alkali also indicate continuing de¬
comparisons with the country at large. The rate of in¬
mand.
The largest single consumer of caustic soda is
crease in telephones in the South in 1947 led by a wide
the rayon and transparent film industry, and this indus¬
margin all other major sections of the country. Never¬
try's need for caustic is increasing. The production of
theless, we are entering 1948 with by far the heaviest
soap, winch requires a considerable amount of both cans- f backlog of unfilled orders. Also, we have a greater need
tic soda and soda ash is continuing at high levels. More- V for additional telephone plant to furnish existing cus¬
over, the rapidly growing synthetic detergent industry
tomers the class of service they desire.
of
C. Eaton
taxes
mand, that we were able to reduce
only slightly our large waiting list
for telephone service.
A fuller realization of the extent
respect to demand, the out¬
for the coming period shows
signs
fact
some
list, and of extending
the best two prewar years
industry.
cases,
improved.
as
greater than in
combined..
•Additions to telephone plant (new
buildings, switchboards, wire, cable,
poles, etc.) surpassed by 60% the
previous record year. Yet, so great
was
the current and baeked-up de-.
in
is the bas;c
war
towards
service into rural areas. The increase
alkali-consuming
for the current
back to normal if not
I personally feel'that the
druggists did reduce
their inventories is a sound practice,
not only for them, but for the manu¬
most
I;
desires, of furnishing service to those
With
little
ilize, the proprietary volume imme¬
diately began to pick up so that the «
last four months of 1947 were, in
t
demand for service. In 1947, the telephone industry
the South made substantial prog¬
ress
industry
situation.
look
prices for all building materials as a group have
107.4% during the same period. Whether or
for the
However, after
druggists' stocks began to stab¬
the
?
>The?war years with their restrictions on materials and
limitations on manpower left lis with a great deficit of
telenhore olant and facilities and a tremendous backed-
combined
industries since the
George W. Do'ai
S.
have \
October, 1947 \
S. DUMAS
'-•t
}
President, Southern Bell Telephone* & Telegraph Co.
itself. Onecaustic soda
and soda ash production goes into
the manufacture of other chemicals.
Similarly, the major chlorine con¬
chemical
reason
between August, 1939 and
HAL
easily understood when it is realized
the chief market for alkali is
Rapid
U.
M.
(Inc.)
that
sumer
the
DOLAN
Alkali Works
ply despite efforts of the industry to
expand production to the necessary
'levels.""
4;
-"
•
'
Increased consumption of alkali is
of
of
prices for cement can be kept at their present rela¬
tively low levels depends entirely on costs and volume.
point out that the den**nd for caustic soda, soda ash,
to outrun sup¬
third
Statistics
loss of
first half of the year.
not
chlorine and related chemicals continues
the
tary field;was considerable
business for the manufacturer
that cement prices
show
Pharmacal Company
many
advanced
Regarding the outlook for the alkali industry in gen¬
eral and The Mathieson Alkali Works in. particular, I
can
Labor
of
Labor
Rodney S. Darkee
The
will continue to rise.
Bureau
of
:
field is divided into what is known
as the ethical and the proprietary business. The ethical.
business in general was very good in 1947 and from all
indications 1948 looks like an extremely good year also. ;■
those of any
peace
■
<
,
EATON
The pharmaceutical
selling prices of cement have been kept below
other major building commodity. The fig-]
I The
prices
our
C.
M.
case
own
our
to hold
try
_
bill which has
be
5 to 10% increase in
a
the amount of
President, Pennsylvania-Dixie Cement Corp.
fully demonstrated dur¬
ing the past years and will continue to be so managed.
The
1948 outlook for the Cement Industry
in the
The Presidential Campaign and election will be over ,
United States seems rathef' bright from a volume 'of
in 1948 and then we can again settle down and try to do
business point of view.
It looks,as though the actual
what is best for this great country of ours, instead of
construction volume in 1947 aggregated about $12,665,all thoughts and actions of those in political power be¬
000,000. If the construction volume in 1948 should in¬
ing concentrated on how to attract votes, regardless of
crease to a figure anywhere between the low and high
what the cost is to the country. v']
predict ons by various agencies—that is to say a figure .
Labor, I believe will again deliver a fair day's work at
between
$13,500,000,000 and' $15,200,000,000—then the i
good wages, and will realize how fortunate they are to
cement volume
should increase somewhat.
Of course]
live and work.in the finest country in the world where *
this means heavier wear and tear, in other words, heav- f
they are under no restrictions for life, liberty and the; n ier depreciation in the value of plant, machinery, and
pursuit of happiness, and in the only country which is tri¬ equipment not provided for by the -present rules and
able and willing to help the whole world.
regulations of the Internal Revenue Bureau.
The present confiscatory income taxes will surely be :
; Whether or not the Cement Industry will benefit from^
somewhat lowered across the board by whatever party ;
the increased volume predicted will depend upon this.
is elected next November, if not before.
This must be
depreciation problem1 and upon whether or not other;
done to permit our industries to progress.
Taft-Hartley
will
1948, I do not believe that there will
chlorite in sugar
intelligently- managed has been
.The
wells
old
oil well casing and difficulty in
securing certain other materials, and
while we hope for some relief in
DRUCKENMILLER
W.
of
work-over
of
wage
B.
the
and
There has been a serious shortage
.
production as a bleach and as an inhibitor of fermenta¬
tion, ordinarily a source of important loss in the storage
and transportation of raw sugar.
.
above the 1947 volume.
10%
limited only by the materials avail¬
able. > Vr
.V'
':<• "?/.;•
plies is well known. In the light of recent developments,
its ability to bleach and age flour is of particular inter-,
est. Another recent development, announced by the Bu¬
of Standards, is the use of sodium
Company
service industry we are counting on a
The demand for oil is at record levels, and we feel that
regularly finding new applications. Its value as a bleach
in textile, pulp, and fat processing, as well as in the
destruction of unpleasant tastes and odors in water sup¬
reau
DURKEE
S.
President, Lane-Wells
drought and though there
are plans to export great quantities of grain to tyingry
nations, government authorities esti¬
due to last, summer's
corn crop
mate available
the
able
feed supplies will en¬
production
of
21.5
billion
pounds of meat in the year ahead of
The average feeding
livestock will have to be
us.
period for
somewhat
shorter than in recent years and
mals
will
come
to
ani¬
at lower
market
quality, but
supply
of 146 pound—ten pounds under the
1947 supply but 13 pounds above the
average for the five years immedi¬
ately preceding the war. The pro¬
duction, processing, and distributing
weights
and
the outlook
of
21.5
with
less
is for per capita
billion
pounds of
meat will
keep the industry busily employed.
Price levels are expected to con¬
tinue in line with consumer
ing
poweA and with what
Geo.
A.
Eastwood
purchas¬
appears
to be an ever-increas38) <
(Continued on page
\
Volume
I
167
THE COMMERCIAL
Number 4666
'•
FINANCIAL, CHRONICLE
(337)
37
recent
message.-.We all know that available for
dividends, continues
taxes are a powerful force in de¬ to haunt
.many business
What About Interest Rates?
manage¬
termining
propriate restraints
it
be
can
bank cred¬
on
applied without aban¬
doning or impairing the
principle
of
Government
sound
price
first
quarter,
Treasury's
support of bonds which the people
bought
expression of
reasons.
their
faith
Government's
debt
financial
an
the
security."
Before
Federal
as
in
the:
Treasury
and
the
The
Reserve commenced sup¬
port
operations
many
of
in
-
on
is
Effect
of
the
on
effect
of
of
have
to
add
continued
savings
an
to
high
individuals, it is not
equity character must prising that
largely from the savings
we
and
ness,
the resulting need for
Perhaps the more imme¬
funds.
diate
ness
problem
the
is
confronting
prospect
sur¬
wage
demands
insufficient volume
ment
in
seems
to
have
been
the,
third
a
—
busi¬
renewed
incre¬
national
increases.
wage
of
spiral of
labor
costs
If
to
higher levels, then, cer¬
tainly in some lines, these will be
translated
into
higher
prices,
while, at the same time, inflating
move
earnings of businesses (after taxes inated
more by speculative than the demands, for
goods and ser¬
dividends). With respect to
This would mean that the
business corporations, you gentle¬ by investment considerations. Nor vices.
is it surprising that an increasing volume of capital and credit needs
men know about the adequacy or
Gods, and Con¬
and
Taxes
The next consideration
November,
[
an
this
When
earn $5,000 to
available to business via equity
$10,000 per annum or more, or financings. It also is not
surpris¬
they must be met from the de¬ ing that equity
markets, from time
preciation reserves, and the net to time, seem to have been dom¬
-j;\, ■';J
gress.
met
Capital
the of individuals who
because
The amount available for
in the lap. of the
'-VHv
be
surplus will be
reduced for seasonal
retirement from there
taxes
needs of
cash
materially
have
ments.
viduals and businesses.
is likely to be on a smaller scale
than that which is in prospect for
the
the
volume, and the
character; of the savings of indi¬
(Continued from page 35)
:
&
concerns
inadequacy of depreciation allow¬ percentage of the capital forma¬ of business would be increased, or
philosophy, apd the tax
ances
for tax purposes.
I don't. tion necessary to the present level that the current volume of pro¬
the
support for
2Vz% policies of the Government, and
of business production has had to duction would decline.
•
long-term ineligible bonds would of the Congress. Perhaps I should Certainly the 38% corporate tax
be at 100y2, 101, or 101%.: This omit much reference to the tax is a substantial one.
Section 102, be met by debt.
It seems reasonable to guess that
us
guessing
were
to
as
the
tax
whether
,
.
.
support
first
was
price of 101.
such
sues,
■purchase
seemed
those
as
by
eligible
commercial
reflect
to
at
rendered
a
Support to other is¬
less
a
philosophy of the Administration,
as
evidenced
by
the
which,
President's
in
general,
disbursement
of
for
requires
70%
of
The fourth and final point con¬
the
earnings
cerns
if
the
the level and trend of busi¬
present
(Continued
trend
continues
on page
39)
banks,
decisive
point *of;. \dew;' on the part• of
Treasury-and Federal Reserve! ;bf?
-
[y !ficials.
After
purchaseshad
bill ions,>the
: point of support
for'Treasury in*.
;eligible 2%s was reduced to 100%
:.
.totaled
•/>
'and
<
$lf(
about
the
'issues
stantially*; in
have
great deal of
a
sub¬
more
cases. '; Not
been able to
most
people
many
make
prices for other
support
were; reduced
of this
sense
reduction in support prices.
.
•
,
If the
Treasury and the Federal reduced
their support prices, after buying
approximately $2 billions of bonds
will they be inclined (for similar rather unknown reasons)
to
■
,
•
reduce
<
if
their new support prices,
they buy several billions more?
The
second
' mentioned
was
consideration
the
policy
Hie
;
'
the retirement of pub-
on
debt.
Until
Treasury
been
I
Treasury's
'
debt
recent
months
retirements
have
effected
largely by redeem¬
ing the Treasury security holdings
of
commercial
duced
the
banks.
volume
This
of
re¬
short-term
; Treasury
.
securities
which
the
commercial banks could sell to
the Federal Reserve to obtain
.
,
re-
with which to extend cred-
serves
'
it.
-
Actually,
which
the
balances
the
with
Banks
serve
retiring
mechanics
the
for
debt,
Federal
the
the
trary
the
commercial
the
to
commercial
the
•
of
credit
G/yfitiotuU Mechanized Accounting
Con¬
belief
debt
banks is
mechanics
had
and
banks.
of
of
purpose
accepted
retirement
its
Re¬
precipitated
1 facilitated the extension of
by
by
Treasury increased
that
held
by
deflationary,
this
operation
cuts
inflationary results.
some
More recently, the Treasury has
switched its retirements of debt to
costs
Treasury securities held solely by
the Federal Reserve System. This
places a greater restraining pres¬
sure
commercial
on
desirous
are
order
to
extend
credit.
just at the time
ever,
:
which
maintaining or of
their reserve position
increasing
in
banks
of
up to
How¬
when
the
Government emphasizes its desire
to
restrain credit
by retiring only
securities held by the Federal Re¬
serve
System, it becomes a "willbuyer
for
ALL
Treasury
ling"
securities.
This
commercial
longer-term
with
;
now
Treasury
securities.
simply to
securities
The
net
make
result
bank
seems
reserves
more
ex-
pensive.,, As
is true in nearly
every instance where there is a
large -demand for a commodity,
the higher costs of bank reserves
are
)
sell
much
readily -available-but
;
the
can
facility, as they
formerly
sell
short-term
as
could !
that
means
banks
passed
to
on
the
borrowers.
In'[other words, while the struc-
v"
ture
of
-
basic
; marketable
; lias shown
.
;
•
interest
Treasury
some
increase,-" the
(i.e.,
securities)
small
loaning
,
prime* private
rates
••
fractional
rates
borrowers
swung upward more
to
have
sharply, and
Hotels
..
.
department stores
in this range
.
banks
.
These savings often
:
continue to increase
strong
demand
for
as
long
capital
as
indefinitely! Some of these
a
and
.
businesses of
every
type—all report savings
concerns
correspondingly? Ask
bet-up, and report to
Machines.)
paid for the whole installation the first year—and then
were
chances favor that these rates will
cut costs
.
after mechanizing-their accounting with National Accounting
you
your
ran
<^
r
on
large—some employed only 50. Could you
local National representative to check
fully and specifically. There is
no
cost
or
your
obligation of
■
*AccommMM
present
any
kind. ^
-
'
'
*
j
^
credit exists.
; I Beginning
debt
in
retirement
April,
of
the
1948,
the
Treasury
http://fraser.stlouisfed.org/
—"...
Federal Reserve Bank of St. Louis
THE
NATIONAL
CASH
REGISTER
COMPANY
•
DAYTON
9,
OHIO
THE COMMERCIAL
38
FINANCIAL
&
-
Finance Speaks Alter the/Turn of the Year
Business and
(1'
(Continued from page
?nfr
In
about 200 billion dollars
annually and they appear destined to remain high. His¬
torically, consumers spend a fairly definite por
*
their incomes for meat and this fact assures high pi ice
levels because the increase in incomes, as compared
to prewar, is far above the increase in meat supply.
Furthermore, the desire for meat is so insistent .■ mat
American families are spending: a greater portion o
their incomes for meat than they; spent in piewar da>s.
The price and profit situation would doubtless be
rate of
the
at
are
Western Union
1948
gram on
In times of high prices business concerns, like
require increased sums to maintain their
efficient basis.
EDISON
HARRY
President, Edison Brothers ■ Stores* Inc.
nation-wide
will close the year of 1947
with the highest sales volume in its entire 25 years of
operations. Sales will have mounted to approximately
$71. million for 1947. The company's
program of expansion is geared to
an anticipated volume of $75 million
M
"
annually-and construction plans have
Brothers Stores, Inc., operating a
,
system of ladies' shoe stores,
approved for 13 new
during 1943. I
feel that business will either go for¬
ward or backward" in 1943, and that
it will not be a case of simply main¬
been
units to be completed
taining the "status quo."
of
for most
enters upon the New
with worldly
Messages
employment exists
people and at good
Full
blessings.
our
car.
They possess a high degree
purchasing power eager to acquire
consumer ''merchandise
of
honest
wages.
and
automatically/oh; the.-Telefax,
received
is received the Telecar is on its
message
to effect delivery to the addressee.
Telegrams
picked up by the messenger in the Telecar are immedi¬
ately transmitted by radio to the Western Union main
office where they are flashed to their destinations.
Harry
Edison
substantial means, will continue to receive high prices for their com¬
with
blessed
each
As
way
Our farmers
quality, at fair prices.
are
recorder located under the instrument panel of the Tele¬
of
are
A
small, simplified Telefax machine developed in 1947
accomplishments.: This steady progress is evidenced not
only in speed of construction, but also by architects and
engineers who are developing new procedures and de¬
signs for homes; commercial and industrial buildings.
There are still a few matters to be ironed out in our
is known
length is written in longhand on tape in the
machine and a button pressed to start transmission. The
hindrances.
can
move
towards these
new
is
I look upon
given by
exchange
rapid
large bank uses.it for the
information between < points i in > its
the fact that
of
offices.
horizons
Vice-Chairman, Board
will also become far more evident in
in 1947.
ning 1948 treading
The shoe
burdened
of
its
on a
that
finds itself begin¬
operation.
narrow
mark-up, neither can he price himself out of
The remedy rests, therefore, with the tanner
and the shoe manufacturer, and those actually entrusted
with the job of finishing the product. In the shoe indus¬
try today it is no longer a matter of greater production,
but proper production—production as it relates to proper
quality, style, and workmanship, and at prices that will
justify consumer acceptance. Manufacturers in all lines
of consumer goods, who cannot meet these needs of the
hour, more than likely will be by-passed during the year
Realizing
overcome
that
our
*
fident that
our
free
will certainly solve both our
:
foreseeable
be
future.
Council,
A;
the people, and that
classifications. .There are
political problem and our
union
labor
politicians; and the
of the country
leaders
their equilibrium and
lost
have
are
increase in wages from
time to time which, of course, is the
fundamental cause of the rise in the
demanding
an
/ cost of living.
It/,
-
,
The average salaried man, no mat¬
ter who he might be, is at the mercy
/of the politicians and labor union
/
leaders,
I
and
do
shall land.
,we
salaried
man
have
use
to
order
to
and
some
make
we
know
of
ends
his
where
capital in
because
Crawford
meet
Eller.
hopeful prospects that before
•
Ellis
,
,/•
should continue
after the war
is
for the war
through which we have lost so many of our fine young
men, and not require the present generation to pay for it.
Taxes are simply
outrageous and there is no excuse
whatever for this.
Expenditures in Washington are also
out of all reason, and unless we elect some strong man
as President who
will be a real executive and reduce
the expenses of the operation of our government, I do
such high taxes nearly three years
ended.
We should let posterity pay
to pay
W.
(H.
leaders
the excessive income taxes
: / •'•/•/V-// /
/.; It is unreasonable to believe that we
P.
/
of living due to the labor union
as well as
all have to pa.y.
politicians,
which
F.
not
I do not know of any
who does not
today
of the high cost
virtually every building mechanic in Metropoli¬
tan New: York will; be covered by
"'There are many benefits to the
Feb. 1,
have
more—we
>
re-/
/,-/ • / /'/
construction./.The accord, which freezes wages/hours
and working conditions from Jan. 1, 1948 . to June 30,
1950, unless the cost of living rises far beyond present;
expectations, has been accepted by 30 of the 41 trades
*
living to ever return to normal con¬
ditions. We have no statesmen any
help stimulate urgently needed new
am con¬
/-'Z-'>//%?:/?:/•
will
of L.,
covering a majority of the,
building mechanics, is a major step
toward
stabilizing
costs and will/
enterprise system in our democratic government
economic problem.:■*
costs
v?
the year 1948 with Considerable misgiving.
through several panics and they are usually
preceded by an unreasonable boom. Aside from this,
the politicians and labor union leaders of this country
/are dragging it to a point where it
will be impossible for business arid*
^
indication at this time
Trades
I have been
year
where they will not be
Construction
democratic system of government, -which
is government for the people and by
cur
economic, I
the
a
sub-'
jected to normal economic forces. f /
The 30-month wage freeze recently
negotiated between the Building
Trades - Employers
Association
of
New York City and the Building &
country's two. major problems to
this year are political and
in
vacuum
business.
necessity.
Directors, Thompson-Starrett
allel, to a degree, the present infla-/'
tionary trends.
It is impossible to \
isolate construction costs in a/
his
present
1948 cut of dire
.
is inevitable that our cost must par¬
a
lie cannot further
no
construction
duced
dangerous plateau of high prices.
"tight squeeze" being
with continued mounting costs in every branch
retail
billion
$15
There is
retailer is already in
W. ELLER
,
building and construction in¬
dustry is an integral part of American industry and as
the general economic structure of the nation governs
all industry's costs, so too does it directly control build¬
ing costs.
/ / /'//;./
'*■
The
serious impact of consumer resistance to
high prices will continue to expand, and a greater con¬
sumer consciousness as to proper quality for the prices
The shoe and leather industry also
'
Company, Inc.
The present
1948 than existed
of
CRAWFORD H. ELLIS
a
*
PETER
prosperity provided we can break the backbone of
existing high prices and the present high cost of living;
pay
booming before long.
Presidents Pari-American,;i Life Insurance * Company
of
they want to
hoped that the estimated $2,250,000,000
construction needed in Metropolitan
be
to
of essential
New York will be
is reproduced in facsimile in a matter of
seconds by a similar "Teletape" machine at the receiving
end. Some idea of the future usefulness of this machine
foregoing adds up to real
We
is
It
worth
sent message
prosperity, if we
can wisely put to use these fundamentals in 1948.
How¬
ever, the impact upon our present existing economy by
what actually does occur at home and abroad will either
push us forward to new horizons of prosperity, or push us
backward.
A single line message up to
the "Telctape."
16 inches in
lars into our economy.
All of the
as
field,
these
industry as there are in every other progressive
but we have many factors at work to overcome
.
unlimited.
Billions of dollars are pent up awaiting the "green light"
for industrial and many phases of commercial expansion.
The building of homes and the replacement of general
obsolescence will create a further flow of billions of dol¬
natural resources are
Our nation's
modities.
reas¬
t
packing industry is
favorable, with prospects for a large volume and a strong
demand. By-product lines.are also in a favorable posi¬
tion and provide a diversification of activity a.id of op¬
portunity which constitutes an element of great strength.
Currently the outlook of the meat
endowed
should
investors in building, as a basis for
calculating labor costs is afforded over a long period.
Potentially, perhaps1 the outstanding features are the
prospective
sure
.
duction and maintenance.
richly
agreement
•_
enough to be a factor of consequence in price
to be substantially higher than they were
Our country
w&ge-freeze
hd.( , ;
joint pledges of labor and management to provide an
the mechanization program
adequate supply of building mechanics through appren¬
completed,-switching centers in
tice training; to lower costs where possible through in¬
16 major cities will comprise the na¬
creased man-hour productivity, and to encourage the
tional
network, with each center
use of all machinery, tools, appliances, or methods which
serving an area of several states.
may be practical.
Through the push-button switch¬
There have been many cost problems to confront the
ing system, telegrams will flash to
all parts of the country, - with vastly // industry in the postwar era that have beeft vigorously
dealt with by consruiction men.. Through our efiorts w'e
Joseph L. Egan
greater speed and efficiency/- This
are
bringing, about ■
system speeds Jtelegirams/ta;'?their;
ernment restriction's | have hampered postwar building.
destinations by the mere pushing of a- button, "where
Slowly these dilatory legislative acts* have been lifted
under the old method each message had to be retransand the industry is breaking forth into a
new
era
miited manually at central offices. With the new, system
wherein the volume of business is steadily increasing.
each message will be typed only once/ at ithe' point, of
Therefore, any further thoughts of shackling legislation,
origin.
.
.
/ «
which only breeds black market activities and increases
The telegraph company also is
expanding'its fre¬
construction costs, should be abandoned for the good of
quency-modulation carrier systems to increase the capac¬
the. country./.
j
•
.
v
ity of its network in all parts of the country. In the first
There has been a .critical shortage of building mate¬
nine months of 1947 Western Union added a capacity
rials until only recently. This condition has been greatly
of 275,000 channel miles to the 206 p00;^channelk. m
alleviated/ In a great majority1 of cases, materials are
in operation at the beginning of the year;* The installa¬
reaching projects as needed.
/
< ),
tion of carrier systems is proceeding in T948f^;-»J^&5vl'
It has-been a popular pastime to blast the construction
During 1947, a 150-kilocycle carrier system was' de¬
industry with repeated charges of low productivity of
veloped specifically for use on the radio beam telegraph
labor:
There have Ibeen
isolated cases of production
system. The 150 kc band is subdivided into voice-frefalling below prewar levels, but in my experience, labor
duency bands which will accommodate telegraph, tele¬
is giving a good day's work and in many instances new
phone or facsimile transmission.Each of these 150 kc
.production records have been set with today's improved
systems is capable of providing 576 teleprinter .channels
' construction methods. There is no fair basis of comoaring
operating in each direction.
^
today's man-hour production with prewar standards
Radio towers spaced 30 to 50 miles apart/ha ve been
when you consider the greatly J advanced age of the
erected and associated equipment has been installed in
average mechanic, and construction design,
the New York-Philadelphia-Washington-Pittsburgh .triLabor costs have risen, but the percentage increase has
been less than in many other major industries. A com¬
angular radio beam network. At present the New YorkPhiladslphia section is in experimental traffic operation
prehensive study made by the Building Trades Employ¬
and will be followed by tests of the New York-Wash¬
ers Association revealed
that in 21 selected industries
wage.scales have increased 69% since 1941; that labor
ington, New York-Pittsburgh and Washington-Pittsburgh
for a plan's suit is up 83%, for shoes 98.4%, and labor
sections.,
.-V*. //;/;//.
for automobiles is ui> 65.7%, yet the;total rise? in hourly,
The Telecar, the nation's first radio-telegraph car, has
had a successful tryout in the Baltimore suburbs./The
wages for the building trades in New York City from
1941 to 1947 was- only,40%.
Telecar cruises in an assigned residential area, receiving
.'//; )
YeSr the. building j industry has a proud record and
telegrams over a radio system from a Telefax 'sending
continues to improve its methods to achieve even greater
machine in the main Western Union office in Baltimore.
and distributors of
livestock and meat, while substantially larger than pre¬
war, have only kept pace with increased costs of pro¬
York
//■//
.
York
New
When
Earnings of the producers, processors
-
is
is
individuals,
already
The
uaKic
levels—need
Edison
It
negotiated between labor and management
with labor.
pacts
mond, Atlanta, St. Louis, Dallas and
with economic law.
an
the public
ultra-modern;?' nusb -hi dton/.struction industry iii other cities may follow the example of New York and negotiate similar stabilization
ing systems already in use at Rich¬
earnings which tile industry obtains from the
service it renders—and incidentally earnings have never
on
was
and
agreeemnt.
.
Two
"The
and their operations
industry,
switching centers were installed, at
Philadelphia and Cincinnati m itm,
m addition to the high-speed switch¬
legitimate channels with harmful effects upon the in¬
dustry, and without benefit to the public. However,
there is reason to hope that our previous experience with
black markets and meat shortages will discourage politi¬
properties
proceed with all possible
the
mechanization p;ro-/; in construction at a time when living costs are rising
which s.eady progress was made last year..Tais
^ and unpredictable. It could well set a pattern for other
will result in materially improved speed and/; industries as an effective stabilizing influence and a
capacity and/greater efficiency/of//potent check on inflation.
: : k
telegraph service.
••/'-'/
•
\
Already there are indication^ that leaders in the con-
program
politics should dictate a resumption of efforts
the law of supply and demand.
Price
controls and rationing would probably again create black
markets and reduce the amount of meat available in
prewar.
will
from
speed in carrying out its nationwide
circumvent
been large
Union Telegraph Company
The Western
affected if
cal tinkering
generally to be de¬
significant that this
unprecedented accord, the first of its kind in any major
rived
Personal incomes
for meat.
preference
consumer
currently
labor, the investor
EG AN
L.
JOSEPH
36)
President,
to
Thursday, January 22, 1948
CHRONICLE
(338)
THE COMMERCIAL
FINANCIAL
CHRONICLE
Other credits, and' that these rates
^hy/be/more resistant to a re¬
What About Interest Rates ?
versal
(339)
W. M. Zuber & Co. Now
n
.»-,
of
trend; in the yields of
Treasury. securities. : V
Finally, if we lump together, in
//'VT;T:A
■;
&
Is
\i
-
•
'•.
■'■
*
.
i-
.
,
Mr. Crum was a
stock trader for Vercoe & Co.
ing department.
Corporation
a
-
Caswell Co.
commodity prices and living costs income after taxes in those brack- one
COLUMBUS, OHIO — A new
basket, all of the different
may increase
by %0% over (thev| ets , where the .resulting savings rates
corporation, W. M. Zuber & Co.,
applicable to prime credits,
next year.
It is possible that the would be available for equity inInc., has been formed with offices
Special to
,
volume
of
production
crease
from
prices
advance
3%
in-
may
] I believe that the major portion of
vestment,
i
the
.
increases in
has
them
at
taken
16
Walter
^
to
5%.Should
East Broad
are
Street.
Officers
M.
39
Admits
The Financial Chronicle
CHICAGO,
ILL.
—
Caswell
&
Co., 120 South La Salle Street, has
admitted
Robert
C.
Caswell
to
Zuber., President
'Place. Present levels are apt to be
partnership in the firm.
and Treasurer; Edwin P. Schnei¬
probability of these various hap^bout what we may
on the
volume of production increase by pemngs leads me...to gugssAjja.
der and James F.
Crum, Viceayeragg. for the next few years.
Presidents, and William J. Eschle5%, then an overall analysis of' From the short point of view,its,
.f T .
f
hp
p
ifl>
Kruge Sole Proprietor
our,; economic
budget
requires some continuation of recent fifflaWalter C.
Kruge Is now sole
t ^
average'of man, Secretary. Mr. Zuber was
some
43
corresponding , increasein UOnary trends .is-likely, and..this
formerly proprietor of the firm, proprietor of the firm of James D.
the expenditures of business and means a further increase in .the rates for the next few years may
by
10%,
and
•
the
{_
^
r
„
.'
.
with
individuals for personal con- capital and credit needs' of ihdl-i! be lower than those which presFor .fhe ently prevail,
sumption.. ; •/. / •//. /..4'// ./;; / J/,/: V. viauals and!, business.
Early /in
194(3
personal. conT longer run future, the probability
.sumption stood at about 89 of per¬ seems to be for a repetition, of.
of
.
which
associated
Mr.
as
Schneider
was
of the trad¬
manager
Cleland
York
Broadway, New
Co.,/ 50
City.
.
,
sonal income alter taxes.
By the.
1947, personal
consumption! had increased to
95%.
if
personal * consumption
/ were tp increase in 1948-: to prac/tically 100% of personal income
after taxes, and if Federel, income
/
taxes were, to be reduced by 20%
second
quarter
.
-
:
'effective
retroactively to Jan. 1,
volume/pf busi¬
production:'could be/:main-
then the presentness
bust."
and
•boom
/
in closing, it is possibly pertifollowing ofeserya-
of
lent to add the
If
ions:
ains
ah
■main-
Government;
the
annual
rate
expendit
ol'
of from $35 to
$40 biilibhs;
tax/ base ;?by
amoving millions of people from
he tax rolls;: if it reduces taxes
ures
f
it
the
narrows
Adhere there
votes instead of
are
savings; - thenv the / impact; -on
Treasury receipts from a moderate
tained with a;'total expenditure
in business
will /fee
by business for plant, equipment, down-turn
and inventories at a rate
It
equal to more sharp than heretofore.
that for the third
would not take
ACCEPTS THE CHALLENGE
major recession
>—*$26 billions per annum. Inciden- to turn a budget surplus into a
substantial deficit,
tally, it was the volume of capital
demand resulting from "this level
But, while most of us will agree
of expenditures that was a major that it is proper to give to ERP
/influence/in bringing about fur¬ and to• thq > .retirement.£■•■: ofbublip.
ther increases in interest rates last debt a chief priority relative to
;
:
fall,
•
/ >
a
tax reduction, the investment re¬
^
■
/•
' hand, it is unlikely quirements > of trust funds and
personal consumption / will agency accounts effectively pro¬
v
•,
'
■.
-
On the other
that
advance to
100%
of personal
after, taxes,
••come
-
quarter of 1947
and
it is
in-
more
vide
for- the
retirement 4qf
.
.#ubir
licly^held
unlikely that we will meet with figures of the investment require-,
-/any such tax reduction. If, how- merits of these accounts total $3
per
annum. / This
wUl
;; v ever, ;/ personal *. con sumption -- ;• is billions
maintained at 95 % of personal ih- providethe/reducfibh/c^
...
•/
•
after taxes, and if Federal
come
/individual income: taxes are re> dbced by 10% effective
July lkt,
then it would be necessary! for
eral billions in
"even
publicly-held debt
,
in the circumstance that the
leum
-In
an
•
people
industry than.
are.
ever
demanding
more
of the
More people
before.
petro¬
driving
are
the
beginning, I:differehti-;
interest -rates, with
respect to types of credit.: My con¬
clusions are ^as follows: /
/ cbnditiohs for continuing the boom
> are
One, the rate on short/term'arid
becoming moire and more dif¬
ficult to maintain. This is because long-term Treasury securities may
a continuance of the boom seems
increase, over the near term fu¬
to require a sequence of events as ture, by small fractions," but the
higher rates are likely to prevail
/ follows:
.'s
'
individuals must be willing to only as the capital and credit de¬
business expenditures to-be at
v;. annual rate of $35' to $40 billions.
/
In short it sCCms tb me that the
The American
Government budget shows a small
:
ated
among
more.
More oil-heated homes, more conversions of
industries
oil,
to
more
r
motives and
farm machinery,
more
giant airliners. More products
oil—plastics and paints and insect
sprays
big
Diesel loco¬
from
now come
and chemicals.
,
"
spend
■
higher proportion of their
a
remains at its current
mand
or
The oil
a
companies of America
are
setting
new
all-time
'
When these demands
/ income after taxes.
••<•""/? *.;?
: Business must be willing to ex¬ diminish, then chances favor that
pand plant, equipment, and inven¬ these interest rates will again de¬
tory at a substantially higher rate. cline, and' ;that this decline-,
../Individuals and business must be led by the short-term rate.
Two, other short-term interest
go deeper into debt.
Banks, and other investors, must rates, such as those on prime com¬
mercial paper, commercial loans
be
willing and able to extend
)f one year or less, and bankers'
more credit in the face of increas¬
higher level.
records in
production and refining, finding new ways to bring
you more
and better oil products, at world's fairest prices.
,
ing risks, and at
bank
higher cost of
a
reserves.
The
ling
move
some¬
facilities
expanding
currently
are
so
as
fast
as
possible, transportation
sorely pressed that the demand for
products is running ahead of record supply in some places.
what higher and should be /some¬
Government
continue
to
should
icceptances,
But while
must
to
be
wil¬
the
support
whole structure of Treasury secur¬
ities' prices.
what slower, to follow any
of trend
reversal
the part of Treasury
on
securities.'
The
oil
industry is investing 4 billion dollars in
new
equipment for production, refining and distribution. How
Three, the rates for longer-term
-
'
If the
boom
is to
change in an
/ orderly manner to a period of ac.five business with Stable prices,
it
seems
to
/developments
//
•
that the following,
me
seem
necessary:
The Government must bring its
house in order
ing
quickly, by reduc¬
host of; luxury expenditures,
a
instead
■
of
j endeavoring
to
find
or
serial
business
to follow the
loans
pattern set by short-
term business
fbi- longer-tenri
in
rates
the
credit
able.
As
a
all this
new
equipment
how fast other industries
sary
can
are
be.
able
'
materials.
The oil
has
become, unavail¬
group,
these rates may
bq/remewhat. / more responsive to
.
1
on
put to
to
work depends
provide the
*
'.
,neces¬
'
'
■
obligaUonis./ Some
businesses iwill
bank
soon
loans, but . with ac-
increases
celebrated
apt
are
ways and .pieans to maintain or
any reversal on the part of Treas¬
dddi to - sdchj 'expenditures.
ury securities than '.would:be/tfhe
•/ /The; ^oVefnment .piust radically
industry made
a
magnificent .record in 1947 in
spite of great handicaps, arid
lenge to achieve
even greater
now
it gladly accepts the chal¬
accomplishments in 1948.
of business
change its parity support program
-
/for
the
../high
support
unnecessary
farm
other
and
of
commodity
or
less.
•'
'
prices,
in
general,
^ must retreat without disturbing
v/the bpom psychology of business¬
,
;
i
,.
.
loans
placement
securities, .such
or
and individuals.
Labor / must
crease
its
order
that
be
unit
more
produced for the
with
/
PURE- OIL
COMPANY
insurance
companies and savings banks,
increase
over
the
near
may
term, but
will be quickly responsive to any
r
Willing
to
reversal of trend in the yields of
in¬
productivity
in
goods/may
be
same
Treasury securities.
/
policies
AND. //-/"/ './;
' :
.;..
Five, while real estate loans will
continue
to
be
dominated
labor cost.
v'
of
certain
by the
governmental
bureaus, I would guess that these
*
The
THE
as
,
v// Commodity
men.
term
find
/•.prices.
"
;
'
Four, interest rates on longer-
reduction in taxes
enacted, rates
by the Congress must increase the
jrease
will
be
than
more
will
likely to iii-r
those
of
most
Be
suref|pure!with Pure
40
THE COMMERCIAL
(340)
Speaks After the Turn of the Year
Business and Finance
38)
(Continued from page
country and, if properly run, there is
the merchant,- farmer and every one
As
of
annual
Inc.
500
tne
metals.
of
quantities
large
1:
.
•'
these
000
United
32 500
materials,
and 63,000
palladium from Canada,
ounces of platinum and 36,500
Engelhard
Charles
■.■■■:;
■
The
Russia, and
18,500 ounces of platinum and 4,700
ounces of palladium "from the United
of palladium from
1 K?ncfdom,
•
•*" j'
-
,
'
:
*
-
Although most people think of platinum arid palladium
platinum metals in connection with jew¬
elry, a large proportion of the available supply of these
precious metals- is used for'industrial purposes because
they reduce costs of production and maintenance. The
economic advantage of using platinum metals for critical
and the other
parts of equipment is well recognized by producers of
rayon, glass and electrical instruments, and manufac¬
turers in other fields are giving increasing attention to
the money-saving possibilities of platinum metals.
The
development and perfection of bi-metallic products com¬
prising a base metal faced with platinum has enabled
users to employ these previous metals to a better ad¬
vantage.
industry continues to be one of platinum's
The economy of this metal al¬
The rayon
loyed with rhodium is demonstrated by its constant use
as
spinnerets which are utilized in generating rayon
fibers used in the manufacture of clothing, fabrics, tire
"cord" and many other items. These spinnerets are fine
examples of the excellent fabricating qualities of the
platinum metals as over 15,000 holes of about 2 V2 thou¬
sands of an inch in diameter- are* not uncommon in
other
to
steel
having
facilities,
glass fiber
under
The
their
new
Due
We
diction
Few
low
daily existence.
platinum metals as catalysts in a complicated process
requiring utmost care to obtain quality and high purity
in the finished product.
Lower operating temperatures
and pressures are possible with catalysts of platinum
metals, and this contributes importantly to safe oper¬
the
jewelry
other
and
metals
are
of
platinum
used in production
Alloys
adornments.
of
iridium have been used for a long time
diamond-set jewelry.
During recent years an increasing quantity of jewelry
has employed an alloy of 95% palladium and 5% ruthe¬
nium.
Wedding and engagement rings made of this
material have the strength and whiteness desirable for
the
expensive
most
type
of
type of jewelry and palladium also has lightness
weight in earrings, brooches' and other large
this
is
at
of opinion is that such
capacity of the corporation,
for all time. Because the total amount of the
assessments paid by the member banks has increased
materially since a the corporation was organized, the
Congress decided that the advances made by the Treas¬
is ample
and the Federal Reserve System should be returned
present time more than half of such moneys
has been repaid.
The fund has been economically managed with the
ury
and at the
Frank
E.
with the major
are
not
'
\
•
times
ladium
on a
recent development of palladiumPalladium-filled is l/20th precious pal¬
base metal such as nickel. This new product
is in regular production for use
cases,
watch
cases
in compacts, cigarette
and many other specialties.
banks in rural districts.
The demand for loans should
are
:
The jewelers
have; found rhodium plate increasingly
popular for costume jewelry. In spite of rhodium's high
imposed)
ther increases.
finish, yet relatively inexpensive.
and
lighters, razors,
have
finish
a
Many items such as
and countless pieces of costume jewelry,
of
rhodium
plate.
Rhodium
plating
is
being used in production of a front-surface mirror. This
new
type of construction eliminates the error of refrac¬
tion and secondary
Rhodium
has
the
image found in conventional mirrors.
highest reflectivity of the platinum
metals and its hardness and abrasion resistance
make it ideal for optical instruments.
/
■
••
group
The immediate demand for
num
metals shows no signs of
platinum and other plati¬
slackening.
Research and
development continue to find new applications for these
assuming an important role in modern
metals which are
I do not believe there is a research laboratory
importance anywhere which does not consider
industry.
of
the
any
employment of the platinum metals, particularly in
their
which
purest state, to reach that perfection in quality
eventually will lead to, and form the basis of,
remarkable developments
in industry.
-
,
•
-f;
j •* ■ ^
continue (unless restrlc-l
•
-
;
.
.
sharp decline in prices of government, municipal
bonds now affords new purchases at a
greater yield.
A source of additional income may be
found in 1he government bond portfolio. Because of the
price decline it may be possible to discover situations
where the sale of one issue and purchase of another
would result in an increased yield providing a slight
The
corporate
extension of
ment.
maturity
Smaller
bracket could
banks
or
call date did not prove a deter¬
in the high income tax
who are
profitably explore the possibility of higher
earnings by an exchange of taxable corporate bonds for
tax-exempt issues which now appear to be selling at
attractive prices. True earnings are what remains after
payment of taxes and due consideration should
thereto in this period of high income taxes.
Adverse
costs of
factors
in
operations as
be given
the increased
high prices for equipment and sup¬
bank
earnings
are
plies, together with an increased salary and wage scale
an impact thereon.
Also profits derived from
the sale of securities will be a far cry from the past few
will have
issued at various
public
with bonds deposited with the
practically all business was conducted for war pur¬
poses the banks had little commercial use for.these Gov¬
ernment deposits. Consequently the banks would pur¬
chase additional Government obligations but always in
the open market and at a premium. .As there was a
good demand for these obligations by the banks and as
many other subscribers immediately sold their bonds*
at a premium the banks bought additional amounts.
A§ the interest rates were higher on the longer term
bonds, and as banks needed income which was not avail¬
able otherwise, they purchased a goodly proportion of
their portfolio in long-term maturities. These purchases
had the tendency of sustaining the bond market and in¬
creased the desire of the public to oversubscribe addi-,
As
and with
-
Bonds were
a
ment, but were secured
Federal Reserve Bank.
,
cost, a very thin-layer of it may be plated on most any
base metal, furnishing a very bright and rich looking
balance.
percentage of each subscription. Banks purchased
and the Government left the money
in the banks until such time as it was needed. As the
Government was always in funds the banks enjoyed a
reasonable use of these Government deposits which
were
free of reserve requirements and FDIC assess¬
for
there will be a large
cated
the
necessity dictated and were offered for
these bonds at par
a big" building year indi¬
demand for mortgages.
The long decline in interest rates has been arrested*
and some hardening has occurred with prospects of fur¬
tiens
as
In every case the amounts offered were
oversubscribed and consequently bonds were allotted
?
of
The versatility of palladium has been further
World War II it was nec¬
subscription.
high rate of
demonstrated by the
pieces.
for
bonds
banking should bene¬
.
prime.
this country entered
for the Government to raise vast sums of money
to finance the war and while a large portion was re¬
ceived from taxation it. was necessary to issue, and sell
accordingly. Barring new labor disturbances a high
level of employment should prevail and with a further
increase in wages, together with a prospective lowering
of Federal Income taxes will, for industrial workers
result in their take-home pay being greater thereby
-
year
essary
fit
permitting more savings.1With favorable weather
as
When
activity
filled jewelry.
save
account is increased each
further safeguard, banks
a
nated
conditions and f high ~ prices
due to the * demand for food products both here and
abroad, farmers should enjoy prosperity to the advantage
to
capital
part of the earnings on its investments.
generally and especially
the member banks of the corporation are constantly re¬
quested to increase their capital assets because such
assets are no longer in the proper relation to their great¬
ly increased deposits. With increased capital assets the
risk assumed by the FDIC is relatively decreased.
It has been the recent custom when figuring capital
assets relative to investments to eliminate Government
bonds and designate all other assets as risk assets.' Un¬
der the recent manipulation of the Government bond
market it would seem that the Government bonds are
the risk assets and many of the others might be desig¬
and with a large
carry-over
of unfilled orders, the
business outlook for at least the first
Felt
the
that
result
time become effective.
half of the year appears good and
System
the idea
amount, plus the borrowing
that it will
a
then
000, and the present concensus
outright pre¬
the future and possibly
some
was
that when the fund grew
$500,000,000 such amount would
be ample for all times. As deposits
of member banks increased during
the war the fund grew to $1,000,000,-
W. J. Field
an
As 1947 ended with
bus'ness
platinum
hardened with
in
will
1
All
one
It
$150,000,000
Reserve
to
eventually prove fairly accurate.
In endeavoring
to evaluate this
year's earnings, due consideration
must be given to such action as goveinmental
authorities may take to
restrict banks' loaning practices. We
have recently been aware of a dras¬
tic
suggestion in that respect and
undoubtedly less severe regulations
people realize, however, that their production at
cost through chemistry depends upon use of the
ation.
for
that
contributed
Federal
the
of Congress
A
entertain the hope
and
constantly learning more about the vital role
are
wonder
the
corporation was started
in
need—the U. S.
$139,000,000.
the only course is to hazard a guess
mass
that vitamins and hormones play in our
small
is
inclined to venture
of
immediate
Treasury
and
regardless
that it should have money
of
case
a quandary as to the accuracy in estab¬
lishing this year's budget. With recollections of how
prognostications a year ago were far wide of the mark
metals.
num
—and
in somewhat of
ic
fund is accumu¬
of each deposit.
When the
As
ahead, bankers
the
insured uu to $5,000
deposits
amount
FELT
to uncertainties which loom
are
insurance
the
all
of
Vice-President, The First NatT Bank, Jamestown, N. Y.
a
doing
of
by assessing member banks at
the rate of l/12th of 1% on the total
ingot and cast¬
ings capacity of United States Steel since Jan. 1, 1947,
amounts to
1,679,000 net * tons.
This increase reflects
additions to facilities, as well as restoring to active status
certain marginal steel producing facilities which have
been kept in operation, although previously authorized
to be dismantled, and also includes the full capacity of
the steel mill at Geneva, Utah, purchased by United
FRANK E.
banks
the
lated
increase in the rated annual steel
orifices of platinum
produced from
and
Steel
States Steel from the Government in 1946.
with
Deposits
1
1,841,100 net tons of pig iron, have not
they now are being operated
ownership.
production of electric light bulbs
molten glass is fed continuously by feeder dies of plati¬
In the
furnace
been lost to the country, as
spinneret of 2% inches in diameter. Fireproof fabrics
as the new
covers for ironing boards are made
metals.
blast
Corporation was or¬
Insurance
country.
companies. These last mentioned
annual capacity of 1,292,000 net
an
tons of steel and
such
from
Deposit
business
net increases in capacity represent
smaller
tonnages than these actual additions largely
because obsolete facilities were taken out of: production
following their intensive use during World War II, andalso because further facilities were sold by United States
most enthusiastic users.
a
Federal
The
ganized to insure the safety of small depositors
foregoing
Steel
Jersey
Some reasons
why:
actually had
added 7,537,600 net tons ;to its steel
producing capacity during |this eight
year period, an increase of 27.1%.
The corresponding increase in blast
Benjamin F. Fairlef*
furnace capacity during this period
was
5,932,500 net tons, or 26.5%. Thus United States
Steel has increased its basic productive capacity by more
than one-fourth during the war and postwar-years. :i; ; .
of
ounces
additional
States
FIELD
country banks entirely forgotten?
Are
capacity which are now in course of
installation by United States Steel.
•
mostly
from
Colombia.
Imports of refined plati-.
num metals included
approximately
ounces
of
.'
,
„
President, Commercial Trust Company of New
producing capacity and 1,000,-
tons
1948.
net increase? in
a
past eight years of 2,494,700 tons,
than 11%.
steel
260,000 ounces of platinum metals in
all forms including 44,500 ounces in
45,000 ounces of platinum
and other
pig iron
undoubtedly
make bankers cautious in their
WILLIAM J.
foregoing figures do not in¬
clude 300,000 net tons of additional
States
unrefined
optimistic attitude for
The
imports during the
first 10 months of 1947 approximated
United
of
tons
products,
:
situations will
progresses,
that will tend to
loaning and investment policies but upon striking a bal¬
ance between the now seen favorable and unfavorable
factors it would seem that banking can take a reasonably
more
or
largest consumer of platinum metals,
industrial reconstruction in Europe
requires
net
previously charged-off assets
on
dwindling rate.
a
year
Jan. 1, 1948, amounted to 24,860,-
at
ferrous
Although the United States is the
recoveries
at
the
arise
1, 1948, United States Steel had a rated
capacity for the production of steel ingots and
maintained
at a high level this year, with United States consump¬
tion estimated at 375,000 ounces including approximately
200,000 ounces platinum and 150,000 ounces palladium.
be
As
Jan.
platinum metals has been
World demand for
Steel Corporation
casting amounting to 31,226,200 net tons. This capacity
represents a net increase of 3,431,200 tons, or 12.3%,
since Jan. 1, 1940. The Corporation's
rated annual blast furnace capacity-
CHARLES ENGELHARD
President, Baker & Co.,
United States
President,
and
years
will
why
cannot enjoy a
good living at a reasonable cost; but every thing is en¬
tirely out of line and it will take many years of good
guidance to bring us back to a normal condition.
;
■
FAIRLESS
BENJAMIN F.
,
no reason
Thursday, January 22, 1948
CHRONICLE
FINANCIAL
&
.
„
IIa,
tional issues.
>*•
times, when the banks were buying, the.
Government sold at high premiums large quantities of
In
recent
such as the insurance
and the FDIC fund. The bonds
sold represented the investment ef idle moneys in. such
funds.
The assumption was that as these moneys were
held in trust for a particular purpose, the investments
being safe and legal for such funds, such investments
would be retained until such time as money; might be
needed. Insofar as the FDIC moneys are concerned such
time has not arrived and the possibility of its arrival is'
bonds
held
in their trust funds
fund, social security fund
quite remote.
.v-l
In early 1947 the Treasury and the
Federal Reserve
obligations were selling
in order to depress bond
but before getting this movement well under way
System believed Government
too high and withdrew support
prices,
the Treasury
sold all Government bond investments held
by the trust funds thereby reaping a considerable profit.
The selling,by the Treasury caused others to sell, with
the result pf depressing market prices to a point where
11'
(Continued
on page
42)
.
Volume
167
Number 4666
THE COMMERCIAL
unions
Long-Range Demand for Capital
will
undoubtedly be to postpone
of retirement.
Further¬
more,
the proportion of women
in the workforce is more likely
the
age
to
increase
rather
than
If
reproducible
worker
the
wealth
continues
rate
2%
of
rise from
increase
to
per
per
at
it will
year,
present level of around
$390 billion to approximately $913
billion
a
in
This
1990.
is
some¬
a
the
rate
which
may
cording
,
duce b!e
only
to
wealth
2.34
increase
would
in
times
During
the
well
the
next
43
be¬
tween 1889 and 1929, it increased
years.
40
six-fold.
over
";
years
i
,
in
There Js
jecting
another
the
purpose of
making
timate
the
of
reproducible
cf
way.
trends
past
pro¬
tentative
a
future
volume
look at
us
which
wealth.
It
increase
the
income and reproducible
wealth.
There
two
of
viewing this relationship. Repro¬
ducible wealth may be looked at
as a way of
producing income or
the
as
are
of
result
ways
which
demand
a
is created by income. At the pres¬
ent time the national income is
about
$200 billion a year.
If it
continues to increase at the rate
2%
of
capita per year, as it
19th cen¬
tury, the national income in 1990
per
terms
1947
of
will
dollars
be
the
of
impede
the influences
capital;
growth
the
sustain
to
include
I
influences
of
limit the
which
in
may
of
capital some
conditions which competent and
responsible thinkers believe will
the
growth
not I
or
regardless
conditions
some
suggested
by
which,
else,
war
tions
may
limit
the
capital:
(1) The
/
drop
income.
at
grows
the
per
income
in
1990
dollars
would
in
of
terms
1947
be
approximately
$824 billion, or $5,000 per capita.
In the past about 25% of the
national income has been spent
to compensate property. This re¬
turn on property has been suffi¬
cient
to
maintain
reproducible
volume
the
of
wealth
outside
of
households at 1.5 to over 2 times
the
size
There
the
of
annual
be
to
seems
product
slow
a
ten¬
in
the
the
national
against
him
ginal
productivity of
Likewise,
the / more
the
national
of
$811
income
billion. \ If
in¬
to
were
capital, the
marginal produc¬
tivity of capital. The tendency for
capital to increase has always
higher
is
the
been limited
ulation
has
by the fact that
not
been
I
reach
cap¬
On the basis of these twe
methods of
I
per
ratio woulc
same
projecting past trends
three
tentative
estimates
of reproducible wealth
outside of
households in the year
1990:
$913 billion based upon
jection of past increases of
ducible
wealth
a
pro¬
repro¬
slower than in the past.
even
$811 billion based upon a ratio
of 1% times the national income
-with the national income increas¬
ing at the rate of 2%
per year;
'
"
capita
per
1
$1,236 billion based
ratio to
the
the
v
the national
upon
a
1.5
income with
national income
;rate of 3%
The
would
lowest
give
per
of
increasing at
capita per year,
these
figures
rise of only $421
billion in reproducible wealth outa
produce a smaller and smaller in¬
true
in
Every
rate of population growth
important
indirect
effects
the increase in capital. The
has
upon
businessmen
could
count
upon
a
pro¬
against mistakes in ex¬
plant or in introducing
articles. In this way popula¬
panding
new
tion growth has made for business
confidence and
has
encouraged
managements
take
against
in
to
pioneer
chances.
This
and then
new
someone
mistakes
importance.
business
will
is
As
near
(Continued
diminishes,
mounts the
an
important
platform and tells
capitalistic system is antiquated, out of
There is
is
plain
one
the Russians have
answer to
word for it
a
—
everything that A1 Smith used
this kind of statement and
to wrap up
Some
tax.
may come
reduction
in
the Jax
during the next decade,
standards.
prewar
What country
at
in the expression,
has virtually all other countries knocking
its lunch boxes and
What country
and still
home?
;
•"*
":
safety deposit boxes?
is expected to help feed most of Europe
maintain
the world's
—
highest standard of living at
L. r;
are
ficiently
not
will
stiff
to prevent the
to raise capital. Thus
The
resources.
country's
natural
been
best
of
on
additional
will
be
the
have
resources
developed.
now
From
obtained
increased
What
the
globe
materials
raw
only at greatly
Scarcity of raw
high costs of extrac¬
costs.
materials and
II,
more
economic system
more
tion will limit the volume of in¬
vestment opportunities within the
United States.
automobiles,
—
more
schools
than almost the
dom cf the press,
search and
to
in
Capitalism
—
rest
bathtubs,
more
more
proteins,
telephones,
fats, more
more
of the world combined?
provides freedom of speech, free-,
freedom of assembly, freedom from undue
seizure, freedom
worship?
has provided for its every-day
more
What economic system
dom
systems
mention World War I?
country's monetary system is recognized throughout
the only real yardstick of value today?
hospitals,
starches
outproduced all other economic
not to
as
What
citizens
particularly hard for
make
the economy less
dynamic and less progressive.
(3) Slower development of nat¬
ural
World War
likely to be suf¬
generous
new concerns
it
What country
Further¬
more,
to
travel, freedom
to vote,
free¬
'
on
trial?
Chepukha!
Cities Service is
proud of its part in the American capital¬
istic system, the most self-reliant that the world has ever
known,
where the growth of business and of the individual is in direct
proportion to service rendered in
a:
free competitive market.
(4) A decline in technological
discovery as a source of demand
for investment
seeking funds. The
industrial revolution has
going
It
is
on
been
now
for virtually
reasonable
to
200 .years
suppose that
investment opportunities
greatest
been
small.
The highest *i«ure of $1,236 bil¬
now on
lion
produce
would
indicate
too
an
increase
of
volume
in
made
and
technological
a
smaller
that
fro-u
progress
and
will
smaller
ties.
slightly more than $800 billion
reproducible wealth during the
next 43 years
This is moderately
above the present rate of capital
formation.
Somewhere
between
the fairly wVe ra^^e of $811 bil¬
lion and $1,236 billion is to be
•.
"Baloney."
to expansion.
(2) The stiff progressive income
have
^-obably
.
"Chepukha." Its definition
spur
tion
s
to their
of
investment opportuni¬
(5) The powerful and aggressive
labor
movement.
The
United
States has the most powerful and
most'aggressive
the world has
labor
ever
movement
seen, and trade
The
for
Cities Service Company
:
source
43)
trial?
the discoveries which open up the
an4,
past.
demand
on page
step with world progress, on trial.
to
diminishing
it
lose
and
that the American
us
protection
side of house'*fids during the next
years. It ''^ol'es a drop from
the present rate of capital forma¬
43
the
the
upon
United States
in the demand for capital.
crease
The
already
worker;
per
been
effect
as
billion.
the
year,
has
net
i
CHEPUKHA!
•
for
will be quite limited. It
clear that natural resources
rapidly as capital. ;;In the future
the increase in population will be
will make it
a
gen¬
plant and
of output
on
•
of
support
in America will be scarcer in rela¬
tion to the demand for them than
pop¬
growing
give reproducible wealth of $1,236
ita
some
that the demand
workers.
income tax from
discouraging risk
taking. Since new enterprises are
particularly risky, the income tax
at the rate of 3%
crease
in
be
case
manufacturing,
however, is not clear.
mining, capital,
transportation,
and
agriculture.. Some industries will find it ad¬
Hence a given rise in income will
vantageous to locate outside the
mistakes
abundant
profits
households
ratio oi
a
would in¬
dollar
per
as a
advanced
that
will
the
do
as
income
workers in relation to
of
billion,
much
view
en¬
dicate reproducible wealth outside
this amount
as
capital
seems
of
questioning
reasons
the
produce. The more
abundant is capital in relation to
workers, the greater is the mar¬
it will probably continue to
discriminate
drastically
against
risky ventures. The rights of tax¬
payers
to charge losses against
is .$541
the
of
in
capital
Part
to
by
times
consists
of
equipment, and inventory to
but the tax will still be
very
1990
use
equipment
and this in turn will reduce
protection
rule
sustained.
certain amount of plant,
a
ible wealth to the annual product
to decline. If the national income
1.5
well
impor¬
believing
for
of
rate
dency for the ratio of reproduc¬
in
service industries do not
eral
This will reduce the rate
which
tect them
only 3%
year, the national
per' capita
i
going to property
thereby reducing the amount of
the
capital which will be sup¬
ported in relation to the national
population growth. The increase
in population affects the demand
for capital because each worker
large growth in population to
increase
for
for
demand
ap¬
growth
income
should
demand
the growth of industry
and the demand for capital.
on
number of
a
to me to be worthy of con¬
sideration.
The following condi¬
however, output per manhour has
increased nearly 4% per year. If
•
the
the
re¬
are
reasons
pear
stimulated risky ventures because
the
in
further
41
V
There
tant
if not
even
everyone
ing
before
rise
striction
a
receive
national
increase
of
fact that the growth of populathn
has been rapid has
tremendously
decade
the
in business risks and
an
I include also
slightly more than $541 billion,
or
roughly $3,250 per capita. Dur¬
the
and
of the
means
in agreement
am
with these thinkers.
did during much of the
in
likely
in
list
able
based
is
some
may
of
some
are
es¬
of
the relationship between the
upon
to reduce
the lag between the rise of wages
upon
concerns
growth
This
national income
at
which
accumulation of reproducible
and let us attempt to ap¬
praise their importance. Then let
requires
national
counted
business
the
income.
wealth
look
us
the
for
be
which
from
the
Let
influences
limit
slower
the most powerful eco¬
organizations
which
the
country has ever possessed. They
are
(341)
labor, thus reducing the volume of
(6) The shift in demand from
opportunities and the commodities to services. As in¬
demand for capital.
Put in an¬ comes rise, the demand for goods
other way, unions may
be ex¬ will be more and more a demand
pected to reduce the share of the for services of various sorts. The
whether
but it reflects the
of population growth
be anticipated.
Ac¬
this estimate repro¬
CHRONICLE
investment
IV
;
in
past,
figure for re¬
in
the year
wealth
1990.
what slower rate of increase than
the
correct
producible
dron.
to
Finally, the reduction in hours of
work and the spread of the Sat¬
urday holiday increases the pro¬
portion of the population which
is w lling to be in the workforce.
'
found
FINANCIAL
nomic
may
(Continued from, page 2)
&
A
42
CHRONICLE
FINANCIAL
&
THE COMMERCIAL
(342)
Thursday, January 22, 1948 •'
■i
.'V
BusinessandFinanceSpeaks
the whole is optimistic. The industry, Workihg ari^
"
under-,this natiori?straditional free ^ enterprise XXXv
xvX;XX'-:^XX™XXXvXt '
ro-*ViVV ''•
"fystem> must take imaginative' and- determined action; • X.XXX
RAYMOND L. FITZGERALD ./;,;V;;,vto meet its schedules..;
X'X.X /.-Editor, "Boot' and Shoe^oorde^t'X;:jser-rFrazOr^ Corporation enters 1948 with confidence
X.X;
,'X.
' •
"<'-that it can be a banner year. In 1547; webecame the
.Indications point to
gearfourth targest automobile producer in the world, making "
.the fact that, some observers loo;k fo 1 a
d c
. about 145,000 cars.
It is - out intention to morp tljan ■ft.';" -:
in production from the
t°tal figure,
^hich has been double that figure in 1948. January production, schedules '.
estimated at approximately
for 1,000 cars a day. By mid-summer we plan to VVV;
future existence.
the Federal to again lend support
necessary for
was
to. prevent the bonks breaking par; To aid the Federal,
the Treasury began buying at the depressed prices, using
the trust funds, to replace bonds sold at much higher
prices. This speculation by the Treasury with trust
funds, while showing a profit for such trusts, resulted
in
considerable cost to the banks
a
as
Mmi
Sw
1
^
on
^
j
.
T
arise and shout for his;
banker to
for the small
sary
(Continued from page 40)
it
i
.1
4
.
their bonds pur¬
.
chased
in
good faith at a premium were so depressed
time
peak in snoe production in
reached"in 1946,: when more than 525,000,000 pairs- were
premiums and
undoubtedly leave many bank Government bond port¬
folios in the red, These actions certainly increased the
potential risk of the FDIC by undermining the safety
; in the market as to wipe out most of such
,
of
banks
member
relative
the
to
loss
the
on
manufactured^ In thatits inventories which hadb
year^ thebranch: Our climb to
rebuilding
trade
of
premiums, but after all
part of their productive capacity to
The
and
from
;
through the
reduction of deposit assessments, but without result.
•'X.The net earnings of all banks have-been considerably
significant. :
salaries
and the
further increase of these costs is beyond contemplation.
Should the FDIC cut present payments'by the banks
in half at this time,'such cut would enable banks to
meet the high costs of doing business and also enable
banks to increase surplus and reserves, thus adding to
capital assets, a condition much desired by the FDIC.
As more than half of the advances made by the Treas¬
it might seem that there
returning the balance. At the
is
which
were
not members at the start
Another
made by
There
to be
other
more
pressing
no
not in
lower
FDIC, but
The
can
a
entitled to
some
seem
these
several
standpoint,
matters
Joseph
bankers
of
the details of
.
add
should
the
to
have
the
^
•
safety of
immediate
They cannot be
expected
to
bank.
safeguard the probably 12 thousand
a
an
•
.
eco-
power
/
unit
tractor-trucks, thus cutting depreciation.
the
truck-trailer
•,
is more flexible
same
capacity.
than
It
can
a
be
w
turned around in tight spots, can get to and from con¬
FRAZER
gested shipping terminals faster. Another valuable fea¬
ture is the opportunity for -one power unit to operate
two or three trailers, due to the easy detachability. X
i
built up during
the
war years.
r,
.
market has been af-..
fected by a shortage of dOllafsXbut
at home the public ;is' hupgty for
The
foreign
.
A "sellers' market" for the in-
One
4
^
7
Ointment
in the
Fly
only one fly in the ointment, so far as the
trailer manufacturer is concerned, and this, is the prob- /I;,
lem of mounting manufacturing costs. These costs have
'•<,> There
is
4- 1
What
is
seem
to
-i.
rn
rn
«
4-
I
*■
Ui
i
rn
f%
4- l-\
*.
W*
nil
/T|
4
or more
present financial manipulations,
it would
small banks
seem
neces¬
^
.1-
enjoying
a
;
1936 the average
Dot
;
>
I
to
Give
in
Order
know that businessmen are
to
Receive
•
,
X
t6 do
going to continue
in their power to improve efficiency and
manufacturing methods in order" to give customers the
everything
■
healthy postwar-econ-X
omy.' The 60,000,000 job level is holding and industrial«
activity in 1948 Will be high, government sources indicate. Steel industry spokesmen place, ingot; productidh.
t
d
4.
^jOMwn
r.AAnor0+ih«
is^qing tqg^r afty^
to
You've got to give in order-to receive. >ouve got to
; •..; ^»■' (Continued on page.44)
■ ■ ;r
a new postwar peak, about 98 per cent .of-capacity.■<
Consequently, the outlook for the automotive industry
v-'-'X
iXiqfi:
:
■
best dollar value they can. Birt consitoahle coqpevat on
along this same line is needed from labor if the public
at
.
.
monopoly's 'unending demands for'higher waig.es!) Higher
costs must be reflected ih higher prices—which means
that the customer, the public, must-pay.;XX,
higher,
might force automobile prices up.X-X.xXX),
Our nation is. now
a
under the
us
^
laoor is me mnaameniat oas^s, iqe idiscai.pao,f,
hourly wage in the automotive
;jndustnr was ar0Und 60 cents. Today it's around $1.60sn incr^ase of over 150%
in approximately ten, years,
Jf labor js auowed to force wage increases on employers
.;onthe same scale during the next fen years, we can
to be paying an average rate of $4-84.50 iji the
:.automotive industry by 1958. or sol
Think-what that
; wouU <lo to our economy! - Already we're .suffering from
a
serious inflation brought about largely by theilapor
summer,
of labor and material costs. Should these costs go
their effect
every¬
Therefore, to
be forgotten
a-nef an
rationing.
industry can make cars available to the public at lower
prices. Present automobile prices are largely the result
.
country, which
trailer is
Fruehauf
straight truck of anywhere the
All-out, unfettered production as a means of achiev¬
ing manufacturing economies is a fundamental tenet
that cannot be stressed too often. It is the only way the
banking economy and would undoubtedly
the home
last
Hnnp
done.
know
day knowledge to the average banker is sometimes
the
C.
In addition
by govern-^v.-f
Our entire epqnow would
such conditions. A look at present-day Eu-
should teach
continent
V.'.-*-XX'-
complicated study to the average citizen.
of
eral
this lesson. During a visit to that
I. saw business and; production
crippled in a number of nations by government controls.
But Switzerland, Belgium, Sweden and some other countries presented a striking contrast. There the economies
were relatively free and the people were getting things
rope
♦
the
welcome advice from
all, the
—by pulling rather than carrying—
to move greater loads.
Gasoline is
; saved, maintenance is lower, and the trailer outlives sev¬
Harve^
imports of hides and skins.
cars.
Frazer
suffer under
country must support the indesystem which is the lifeblood of our
economy.
To that end, they should
matters.
w.
ment controls and
pedent banking
free
enterprise
educate their representatives in the Congress.
Members
of Congress are busy men and handle a multitude of
different
of
nomical tool. It enables
TV
71 .
.
.rir
—
not be attained if the nation were hampered
constructive attitude
a
would
banking system and
attention of Congress.
our
The
occupy
First
diminished cattle kill -in 1948,
prices will undoubtedly be deter-
Was
:
that
their invest¬
,
to
why trailers have
such a permanent,
important place in the business life
Of America are very fundamental.
to
profitable basis their safety is
on
>
-
*
,
reasons
come
high-priced.; The
by the net results of these various demand and
charges for deposits
reasonable returns
economic
>
Trailer Advantages
The
hand,(there are some indications pointing
of shoe
trend
,
^
Surplus and reserves must be increased reg¬
ularly from operations as a guard against losses and
depressions.
an
a
constantly.; proving
themselves.
X-X
,
ments.
From
and
the trailer
r
immediately jeopardized. After all reasonable costs of
operation the stockholders whose money is the bank
are
scarce
.u§es,- are
-
.
people and business, and unless banks
on
are
point to
question of their being safe depositories for
be maintained
,
markets, applications of
The year 1948 should see the nation's automotive in¬
In other words, while one trailer is being loaded at
dustry produce. approximately 5,000,000 passenger cars
terminal "A" and a second is being unloaded at terminal XX-to break a record which has stood for eighteen years.
"B," the tractor-truck can be enroute between "A" and
In 1929 the industry made 4,587,400 passenger cars, V
"B." This is called the shuttle system and is in use in
an all-time high.
Now we are faced
a
good many trucking operations.
•
,•
•
with the challenge of topping this
figure.- The key factor in achieving
/ Keeping Pace1 With Modern Requirements
,
the
necessary
production will be
Meanwhild, trailer manufacturers have constantly en¬
steel. Mills all over America must
deavored to improve, their, units—increasing
payload X
produce sufficient sheet steel for the •
capacities by reducing the weight of the vehicle, adding
: X
industry's needs if goals - are to be V
new safety features,: streamlining and refining appear¬
met.'
X X;:X'';./:"r'Xf XX'*''
:iX- ance, increasing its overall efficiency.
Passenger car production in 1947Just as motor transport itself is an indispensable pub¬
will be; over 3,500,000.' In 1946 the
■
total was negligible,; ohlyv. slightly ^ lic service, so the truckrtrailer is vital to the successful
role which over-the-highway haulage is performing and
XX.;.
over 2,000,000,
We have; made; little
will cohtiniie; to 'perform.
'
*
4
» '->■",
; more than a dent in the demand that
War Loan Account must maintain with its Federal Re¬
Bank high grade securities to insure to the Treas¬
no
jXv
-X 1:
President, Kaiser-Frazer Corporation
serve
there is
calfskins which
JOSEPH W
a War Loan Account subject to
by the Treasury. . During the war banks
were
not required to maintain reserves against such
balances and the moneys were free of FDIC assess¬
ments.
This, situation, however, has now been changed.
Reserves are now required and FDIC assessments are
collected regardless of the fact that * a bank having a
the funds of our
X1
^
..
withdrawal
would
a
very ^ necessary, businessf - vv ' .
Virtually all long distance high-;
way hauling is dene with the.lraileXX:^ ':
as is a good percentage of ihtfa-state XXX
and other shorter hauling.; - And hew
X.;;,
tool.
no great change in the picture appears
probable during the early months of 1948.
,
because the banks receive no ^compensation for
selling. They are permitted to deposit the pro¬
Reason
become
s:
supply factors, but
government
secured with the best grade of bank assets.
Banks must be maintained in such a condition
HARVEY C FRUEHAUF
prices reflect seasonal conditions to some extent
mined
reason
the safety of such deposits.
' ^
leather
in the direction of increased
ceeds of such sales in
ury
sleeves and i
up our
■iv.
President, Fruehauf Trailer Company
?•'
On the other
a certain
balance the contributions
to dictate the elimination of FDIC
|
Now let?s roll
,
whiqh would tend to hold hide and leather prices up.
has been advanced that such
such
great onel
compensating factor
and indications
refinance the
love,
a
get to work.
their present
high levels or show some further advance at retail in
the Spring season. There have been noteworthy declines
in prices of certain hide classifications in the last few
weeks of 1947 and these are beginning to be reflected
in prices of heavier and medium weight leathers, but
issues, although the
proceeds are used to
Treasury for the purchase of gold importswhich they desire to sterilize.
The selling of savings bonds by banks is a labor of
idea
tiative is
-
Prices of shoes are expected to remain at
why new members should
have a free ride by being insured with funds contributed
by those banks which joined the fund at its inception.
The Treasury now asks all banks to use every endeavor
to sell savings bonds, and the general idea advanced
is that the proceeds of such sales will be used to redeem
no
u
.,,
"
the first half of 1948.
the original members.
seems
,
decline, the figure was nevertheless, third from ■
highest annual total production in the * industry 's :
history. The present outlook does not indicate,;apy con-^
siderable further decline from 1947 figures, at least for,
have joined since, to pay full assessments for
number of years to somewhat
,,
i.
,
the
same
of the
v*
w
..V
;: ity, the automotive industry will biickle .down ai>d do. its?;;
production and consumption that ; j0b :if it is given a free hand by the
government and; ;.
enough steel from the mills. The challenge to bur ini-^-^- v.
siderable
undue
time it
would take but a short extension of time to accomplish
the desired result as half of the present assessment plus
surplus earnings would only extend the time for the
total amount now due to not more than one year.
This
time could be considerably shortened by requiring banks
in
r* £
XX
Amid every indication of continued business prosper?- X.X-1;
fact that while overall production
and the Federal Reserve System to the FDIC have
returned
,
.
expected
inconventional types of
reduced because of high taxes, largely increased
and the greatly increased cost of all supplies,
been
,
shoe
;
>
.
increase in the inflation base when the Federal Reserve
haste
.
iit
W<>rkersX'CIQyX *
United Automobile
to continue in 1948 is 'reallyvless serious
than mighLbe inferred from the actual statistics because
a large part of it has been in certain footwear classifica¬
tions that enjoyed a very rapid growth in the;war period;
due to restrictions on normal shoe production. • These
included some of the so-called casual types manufac¬
tured by new processes and utilizing to a considerable
extent materials other than leather,
a patriotic
standpoint, it surely does not
with the Federal Reserve System holding the
bag for sales of bonds from trust funds and the relative
ury
.normal^ba^is was
hide, leather and labor eosts,
decline in c^hsumptiOn and.
considerable
a
s?lef:
•is
compare
issues additional funds for such purpose.
Banks have requested aid from the FDIC
caused
The decline
-
Have been goodi and we ex¬
pect them to continue good. Safe, clean work conditions
have been provided for our nearly - 200,000 employees.
filled
be
Buridfeds of workers have ' been promoted from the;
a.X ranks! Our 1947 employees' security trust futid, intbWhidb
f^ctor affecting produqtiOn in,1948.>An-; we pay $5 for every car made; amounted to $6:50,889. '
important factor is the increase; ip; shoe' pricps ;
was distributed. before Ohristmas to,members of the XXX'
other
and
K-F's employee relations
.
a
that has followed increased
small
tioned
to a more
for the decline in
reasons
continue to be
Much has been said in
margin and reaping a considerable profit on
such bonds when sold. While such action might be ques¬
of the
beginning5 to
piplines were
stocks restored
retail
one
Washington regarding individuals subscribing for bonds
when offered by the Treasury, carrying such bonds with
a
that
fact
'
>
-
in October.
18.701
the making, of shoes V
for the armed forces.
bond is only worth
a
what it will bring in the market.
p
^stwa^r periodlarge
^
devoting a
From this situation and the recent drop in the sup¬
port price by the Federal Reserve System, it is obvious
.that should Government bonds be permitted to sell be¬
low par value it is questionable as to whether there
would be a solvent bank in the country. It is true that
the Federal Reserve System permits banks to hold bonds
at the purcKase price as long as there is proper amortiza¬
-;
leading position.among the automobile X
company independentsisillustrated by the fact that in .
1947, we produced 7,141 cars as compared to
was
depleted during the war and early
to the fact that manufacturers were
market
value of their Government bond holdings.
tion
this output to 1,500 daily and 2,000 a day later
'.
in the year , -...
;;v^xXX \XX
increase
■
X'".:
..
>;
•
.- •
*;i
.
j.,
4 ..
■
;
i bnun •
k
.
.:
ri
.
:
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t-%
m
Volume
167
Number 4666
THE COMMERCIAL
&
FINANCIAL
CHRONICLE
which, are tending to limit
.demand and thus which are tend¬
ences
Long-Range Demand for Capital
ivVV'/.(Continued from
of
materials.
raw
Others will be
41) '■ V-
page
credit
system, the production' of
to be
(3431
particularly worthy of
con¬
fidence:
ing to increase it. Nor can one
pretend to be able to see all of
the long-run influences which will
will be
pressure
upon
prices
will
stronger than in the past.
e
(1) The
of
If
population
tant
much smaller creator of
a
demand
growth
,
for
these
be
the
only impor¬
affecting the de¬
capital, one would feel
influences
mand for
capital in the future
than in the past. This will be true
were
43
compelled to make greater use of' capital goods had to be financed .be important. Ten or twenty years
fairly safe in predicting a very
transportation. The inaccessibility by the voluntary savings of indi¬ from now (or perhaps sooner) the even
though population increases large demand and a very rapid
important, gaps which this anal¬
of some resources (oil, for exam¬ viduals, and the
savings of busi^
during the next generation far increase in capital.
There are,
will
be
evident;
ple) will increase the investment ness " concerns.
The ; industrial ysis /contains
faster than recent estimates indi¬ however, many important unpreper unit of product. No one knows revolution .created a chronic short¬ Some, of the major assumptions
cate.
*
dictables.
One,
of
course,
is
will undoubtedly turn out to be
whether the industrial revolution age of
investment-seeking funds
whether or not the world will
(2) Technological
discoveries
correct. Nevertheless, I have no
has made such progress that the and led
to the development of
will be a far more important in¬ have peace. A second is the policy
discoveries which creates demand arrangements
by which voluntary apologies for offering the analysis.
of the government toward indus¬
All that one can do is to define fluence in the fyture than in the
for investment-seeking funds have individual and
business savings
try.
Most
people
are
not
yet
as clearly as possible the
/V.'
-■ V:
principal past.
already
been
made.
It- seems were supplemented by the expan¬
aware of the fact that the United
(3)
likely that the industrial revolu¬ sion of credit. As a; result; 'the' conditions which are likely to
Inflationary
methods
of
tion is still in its infancy. The de¬
the
basic
industrial meeting the need for capital will States is a laboristic community.
quantity of money has increased determine
trends."^••
be more important in the future By this I mean a community in
velopment of atomic power would several times faster than the
vol¬
seem to be quite as revolutionary
-Three conclusions seem to me than in the past, and the upward
(Continued on page 45) ume of production.
>•.
as
the
development ofpower
Today the economy is /.better
from steam, electricity, or internal
prepared than ever before >to fi-^
combustion.
That
is '
.
-
.
.
-'^change
a
which
still
is
the
in
future.-; Al¬
though it is reasonable to assume
that the rise in per capita income
will
produce
the
demand
faster growth
a
for
services
in
than
in
the demand for commodities, it is
hot clear that the kind of services
demanded will not require a large
amount of
plant. One of the most
insatiable
of
all
demands,
to be the demand
seems
for transporta¬
its capital needs by, credit.
iance
Particularly if income ; tax. rates
'high; as they are;;ljikely 'fe
do, voluntary savings will have
increas|ng difficulty; iri coinpeting'
remain
wim credit
.will
sums
from
rates
Which
This
available fbr term
commercial
acceptable
be
•
be
loans
tion
.'source :of ; myestr-',
funds. ' Substantial
-as a:
ment-seekirig
are
to
too
^nks ?at
low
to
individual
v
be
sav,ers.'
of
and travel.
This appears to
the kind of demand, however,
which can be met only by large
additions to plant.
There
!
demand for capital.
lowing
The fol¬
the
be
to
seem
principal
ones:
/ •( 1)
be
Technological
change will
rapid than ever. Expen¬
more
ditures
industrial research have
on
been
growing rapidly for some
They increased ninefold be¬
tween 1920 arid 1940; In 194*3, ex¬
time.
penditures
were
research
approximately double 1940.
Some
industrial
more
spends
a
research
because
research
prise
its
industrial
on
way
same
accentuated
increasing
government
government
by the
outlays of the
research.
upon
The
is
engaged in keen
military competition with Russia.
It will be compelled to sponsor
research in many deferent direc¬
tions. Some of the discoveries will
remain
military secrets, but much
work sponsored by the gov¬
of the
will
ernment
have
industrial
ap¬
plication. Consequently, the mili¬
tary
competition
between
the
United
States
stimulate
Russia
and
the
will
development
of
technology.
(2) The predominant type of
invention; has always been the
labor-saving invention — that is,
the type of invention which raises
the
marginal productivity of capi¬
tal relative to the marginal pro¬
ductivity of labor. The
this
is
that
the
and
to
like
control
ratus.
enable
more
one
and
worker
more
Labor-saving
appa¬
inventions
the ratio of capital to labor
cause
to
reason for
the
development of
controls, automatic stops
signals,
increase.
greater
tions
the
Consequently,
/■
proportion of
which
rather
than
are
labor
than in the past; the
more
will
put
prices.
upward
the
inven¬
-
saving
capital-saving,
the
ful
they are,rfroiu encroaching
as
profits
sufficiently
make
the
pressure
labor-saving inventions
be greater than in the
past.
to
will
now
on;
have
a
ment
and
large
military
rate of obsolescence.
less,
members
were
has
because
only
a
been
union
small part
of the labor force.
From now
the upward pressure of unions
will
wages
quently,
the
labor-saving
be
make
1792
to
the: United States
of surplus in the
Federal budget and 61 years of
deficit. Taxes are now higher rela¬
had
95
1947,
tive to
in the past.
As incomes rise, the
yield of taxes will, of course, also
rise.
Nevertheless, there is'« a
will refuse to permit the govern¬
to meet its expenses out of
ment
current
revenues
prosperous
are
'
,
j
'
Small in size, but
"
.
'%f
U
.
•
,J.
.
""'V*
"*i J
Y f* *.'2
''
„
'
'
"
•
.
•*
-
large in residential
mercial and industrial
<2'
■'
growth, this
com-
many-
sided state offers unusual opportunities to
its
citizens, its businessmen and its manufac•'
"
1
'
i'
,\,
turers—-and to you
•
/ ,n.-V "' A. '
V";
»x'
«v
\f
'
„
'
who wish to locate here.
in very
Hence, deficits
years.
likely to be
main
will
low,
the
probably
frequent
lead
to
surpluses
less
.
more
As
arid
be
can
than
the
will continue to
participate actively in the
steady growth of "The Garden State".
.
It is paradoxical, but true,
no
Jersey and its subsidiary companies
deficits
creeping
a
/1;
flationary
New
frequent in
more
increase in the bank-held part of
the national debt. ' •
government
During 1948, Public Service Corporation df
that
in¬
govern¬
community
more aware
the
strong upward pressures on prices,
individuals will gradually become
to
fixed
own
in¬
This will tend
tri
'concentrate
in the hands of the banks;
ments of bank-held
bank
the
Repay¬
debt will in¬
reserves
and
expansion
of
thus
bank
be
strong.
Conse¬ credit arid, the growth: of ,the ^mnney
incentive to make supply. If the money supply in¬
inventions will be creases at a dangerously rapid
The incentive
labor-saving inventions
inflationary methods of
the
1
\ * yJ; i
except
the future than in the past. Since
the propensity to save will re¬
stimulate
financing the demand for capital
Before
-
strong probability that the voters
rate, the inflationary effects of; re¬
paying bank debt can be avoided
by paying off debt held by the
Reserve Banks.
VV.
VI.
(3) The demand for capital will
of
-v
;
incomes than at any time
thft product of other machines.
use
Jersey,
vy
years.
on
be sustained by greater and great¬
er
Neverthe¬
typically run in
During the 156 years from
crease
will be increased also by the fact
that machines are in large meas¬
ure
New
2
of
large;that'^e.;go^rameri$
so
Progress is bn acknowledged fact today in
in the future will
the red.
on
greater than ever,
to
cost
of, governrrient .will
expenses
reluctant
unions
The
out of current revenue.
securities.
from
establish¬
the military establishment will be
financed in considerable measure
more
limited
iwlll
the capital used by this
will have a high
come
wages
pro¬
.
establishment
Until
rather
to
the, United (States
recent years the upward
pressure
on
•
(4) The upward ' pressure yon
prices is likely to be accentuated
by government fiscal policy. From
ment deficits.
future
on
vestfneriVseekihg. funds. /It/ yyRl
help prevent tradri unioris. pbwefr
becomes
the
and
rise will help sustain; the return
on capital and the demand for in-
ment-seeking funds.
In
Will
pressure
The tendency for prices to
greater is the demand for invest¬
v
expari-
sion of plant and .production
increase the money supply
duce serious unemployment.
will continue to mount rapidly.
The
growth of research will
rapidly
loans and then to pay off the loans
from
resulting
earnings.
Even
enter¬
if
competitors must do the
be
financing
upon
thing or be left behind. Conse¬
quently, expenditures on research
doubtless
the
begets
in this
money
facilitate
important equipment out of proceeds of term
several
are
trends which will tend to sustain
the
will
capital needs by plowing back
earnings because enterprises will
be able to expand their- plant arid
rise
of
the
modern
What
conclusions
follow
from
this analysis of the future demand
for capital?
accurately
One
to
cannot pretend
balance the influ¬
PUBLIC SERVICE CORPORATION OF NEW
JERSEY
;
AND
SUBSIDIARY
COMPANIES v
44
COMMERCIAL
THE
(344)
Business and Finance
1
*
k
'
«»n»i
*
*
.
*
i
>■
4
*
*
*
»
'
*<1-
'
i
»
^»
i.T
i
».o
*
;
t
Speaks After the Turn of the Year
i
i
(Continued from page 42)
receiving and not in giving.
can expect to see
today are .nterested only in
That attitude has to change
before we
values return in this country.
proper
of
the
a
year ago
"Commercial
outlook
for
1947.
pattern
columns
on
the
time I thought the economic
follow largely the,same
after World War T1 would
curve
that after World War I;
timing might be a little dif¬
as
that the
the
beginning
the
of
and
pression and banks should be wary
W. W. Gasser
in scrutinizing their loans most care¬
fully, and keeping their deposits in
u
ll;r
as short maturities as possible.
.
I look for a leveling olf in the rise of deposits during
(
slightly receding earnings, with slightly
the year, fair or
rising costs for banks.
Earnings on government bonds would undoubtedly be
considerably higher today if the Federal Government
and their agencies had not controlled the prices of gov¬
ernments.
In a system of free enterprise such as we
have, I firmly believe in as few government controls
the
on
utmost
ine
Trust
and
should
they
GOCK
task for
those
Savings Association
of
in the
us
coming year will most likely be much the same as
it was during 1947. We shall continue to be called upon
furnish
to
necessary
opportunity, and for the raising of
foods not only for America but also
as
much
as
possible
for
relief
abroad.
mands
the
do
possible.
CHESTER
E.
in
GERSTEN
As
we
in The
Public
the
broadly diversi¬
fied clientele faces continued activity and good prospects
for
known shortages in
are
public utility companies are
struggling to meet demands of thou¬
sands
of
homes
already occupied.
now
housing of many more families,
doubled up or in emergency
facilities, is pressing.
There is
no over
abundance of
raw
several
agricultural
and mineral lines, demand continues
to exceed
supply, and not in any
materials.
In
foreseeable
be
E.
Chester
Gersten
time
can
the
situation
reversed.
I
No less important are the acts of Government in Wash¬
ington.
We need conscientious application to legislative
and executive
ment.
This is
requirements of honest economic govern¬
no time for political tampering with the
monetary, banking, and credit machinery of this com¬
plex and vast economy.
-/■v."::;
}
A most vital factor is within
of r.s,
our own
control.
Each
action by others or by
Government, must refrain from buying other than that
strictly essential to increase production. We must re¬
strain those desires that compete for available supplies,
until production has time to catch up with demand, and
thus increase the purchasing power of our income.
one
without relying
upon
The banks will do their part, undoubtedly, by granting
credit for only productive purposes which will not stim¬
ulate influences fostering the inflationary trend.
;
>
This is a crucial year in many ways, but it is not a
time for discouragement if our people will have regard
for and act in their
The
own
and the
public welfare.
good to us, providing the
vital factors mentioned above are not permitted to cause
an
upset. It is a time for conservative, but aggressive
planning 3nd action. Hard work will continue to pay
out in sounder and greater prosperity.
outlook,
over
all,
seems
commerce
which
East,
perhaps
at
Also, we here in the West are
assure
in
a
Western business the necessary credit
expansion of sound enterprise, with operating funds
for
and
loan
term
capital.
-
to encourage individual
contribute to the common prosperity by look¬
We should do all in our power
citizens to
ing to their own economic health, conserving their re¬
sources
wisely, and regularly appropriating a part of
their incomes for future security.
?•>.
We must continue to be vigilant; and intelligence,
faith, and patience will be even more important during
the coming year if we are to accept our responsibilities
and protect our opportunities in the American way.
CHARLES J. GRAHAM
a
This
at
will
We
from
feeling of greater confidence
business standpoint than in any year since the
enter
a
1948
with
There
is every
labor
the
of the
constitutes
indication of
a
better relationship be¬
management,
and
indicates
a
ever
It
inevitable
seems
that
form
some
of
government
living—especially food, clothing, and rent—will have
to be instituted in-1948 to keep inflation within bounds.
The
American
of
would
Federation
prefer
price
of Labor
selective
controls,
free
a
in
economy
does
or
not
relish
the
otherwise.' We
which
competition
would keep prices down to reasonable levels. But unless
the present economic crisis takes an immediate turn for
better it will be necessary for the protection of the
consuming public and for the preservation of the free
enterprise system itself, to clamp Government brakes
on the uncontrolled price spiral.
Labor is ready to undertake its responsibility toward
the
increasing production.
To attain this goal
we
than willing to meet management half-way.
are
But
more
we
fear
that any
attempt to bring about intelligent, constructive,
and decent labor-management cooperation, will be han¬
dicapped by the Taft-Hartley Act.
That infamous law
wish
to encourage only
those who
with it., It
to promote industrial warfare rather than labor
to
serves
serves
fight labor instead
of cooperating
Already its provisions have contributed to ar'
long-standing peaceful labor-management
relations in important industries.
I fear even worse
peace.
breakdown of
consequences
in 1948.
that
know
I
casual observers are beginning to
the Taft-Hartley Act has been a suc¬
cess because there are fewer strikes in progress at this
time than at similar periods in past years. However,
many
think that maybe
they do not realize that a large number of unions signed
new contracts just before the Taft-Hartley Act went into
effect and these contracts are exempt from the law's
The test will come at the expiration of these
in
contracts
1948.
that time
At
many
unions and employers who have
getting along well together will discover that they
standing contractual relation¬
been
ships
on
the same basis because of the Taft-Hartley law.'
be chaotic unless industry as a whole
not to take advantage of the special benefits
cease,
if
we
are
represent them.
;
;.V
Hartley Act indefinitely.
That is why we are now
,
•
,
tion
Labor
of
has
J.
Graham
The upward spiral
to have
any
degree of
hope
our
in full force.
certain
;
Education
• ) m
*
of
If
and
we
electing
can
a
succeed in this endeavor
new
Congress which
we
hre
will repeal
Taft-Hartley Act and which will enact a program
the
decides to approve the increases
'
American Federa¬
Political
determination that the members
of organized labor and their families and friends will
respond to our pleas and go to the polls next November
is
It
Charles
Labor's
formed
League for this purpose.
tL.i'N''--
organizing to get out the vote
for the national elections of 1948. The
We, in the railroad field, are striving for proper rates
to give us a fair return. The increase so far authorized
assures us of a better situation than we experienced in
If the ICC finally
it by the Taft-Hartley Act and proceeds
oppressive conditions imposed upon us by the 'Taft-
the
permanent stability.
1947.
progress
of
before.
commodities and of the cost of labor.
must
the
Organized labor does not relish the prospect -of hav¬
ing to depend upon the largesse of big business .4 to
protect economic and working standards which were
won
after hard years of struggle.
We cannot tolerate
deeper
Should
this condition continue and we have
no
serious labor disturbances, 1948
should be a very satisfactory year
from every standpoint.
Of paramount importance to a con¬
tinuance of such a condition, how¬
ever, is a leveling off of prices in all
both
to
The price situation is
1948.
regulation of the price of items which enter into the cost
unions which
feeling of responsibility to the nation
of
chief threat
in
to accord fair treatment to the nation's workers and the
employment. Our entire economy is
dependent to a very large degree on
the maintenance of
both, and the
attitude
the
The results may
part of both, of the importance
whole than
Green
cannot continue their long-
high productivity and continuous
a
William
rapidly getting out of hand. Wages, as usual, are losing
ground in the race against runaway inflation.
conferred upon
as
will
year.
insurance
American people
understanding of their various prob¬
lems but also by a full realization, on
present
best
with
shortages of many commodities unslaked,'
labor, industry, and the farmers will be faced with re¬
sponsibility for reaching new production records. The
needs of the American people and our commitments for
foreign relief, make increased production an inescapable
duty.
..v;.:-.;-';
'
resolves
of
present
and
brought about not only by a better
the
af¬
against any possible recession set¬
ting in. With a peak demand for the
products of farm and factory certain,
a
end of the war.
tween
from
employment
high level next
be
provisions.
President, The Pittsburgh & West Virginia Railway Co.
The
output of our industries is at
a
raoid pace, but at high cost and
resulting hi^h prices. Wages and prices must have a
period of stability during which some basis of equilib¬
rium can be attained. Responsibility on labor and busi¬
ness leadership, therefore, is of major importance now.
Further wage increases ahd resulting unsettled price and
labor conditions can interfere with our orderly progress.
slowly
a
of
flow
will in¬
first but
tremendous volume as
Far
economic conditions improve abroad.
Gock
position to
adequately accomplished.
Our
The
J.
the face of
large demands, The replacement of
production equipment, worn by years
of war-stimulated over-activity, has
not been
A.
and, particularly here
in planning for the
the
for
expand to
In capital goods, there
generally profitable trade.
West,
the
crease
of New York look forward in 1948, our
to be eliminated in
to come we can look Westward
the Pacific and lay our foun¬
dations
with
National Bank & Trust Company
de¬
ahead. We have plenty to
in the performance of these im¬
across
of New York
•
economic
these
is likely
domestic
that
continue
return
of
year
years
President, The Public National Bank & Trust Company
likely,
appears
conditions,
sound credit for providing homes,
Neither
in
.
banking field during
the
mediate tasks;
|i
It
of labor in its
Inflation
The
do everything within their
to keep as sound and as liquid as
reaction
fairs.
employment, and business enterprise
and
years
affairs and
F. Gimbel
Chairman, Board of Directors, Bank of America National
In summary, I look for a
power
Bernard
so
national prosperity
during 1948 depends upon our wise handling of these
problems. I feel sure that American business and labor,
aided by government, will respond to the sobering re¬
quirements of the present situation. Generally speaking
we are looking forward to 1948 as a year of lull employ¬
ment and good business.
possible.
in
people
next
November
register an overwhelming man¬
date against isolationism in foreign
are concerned,
restraint on the part
J.
realities
will
The whole question of our
A.
the
American
profit margins
ot
continuation of rising prices
and continued high business activity for the first few
months of 1948, with slightly rising interest rates and
higher costs. The latter part of the year could see the
beginning of the first postwar depression. Banks gen¬
erally are in the best financial position they have been
;;
not
of living for
in largely in¬
part of business
which is
of the
government
a
face
to
domestic and international problems
facing our country and act construc¬
tively. No longer can we afford a
policy of too little, too late at home
or
abroad.
Our
hope is that the
cost
but
elect
willing
business operating expenses.
situation calls for the utmost
rising interest rates, as well as
as
end
WILLIAM GREEN
;<
must
satis¬
a
the
in
reflected
increased
demands.
de¬
a
now
year
found
has
one
individual
far as
past.
nearer
a
Labor's chief task in 1948 will be to oust the present
stand-pat Congress and elect a new one which will be
more responsive
to the needs of the American people.
If we want lasting peace and real
prosperity, we
solution to
the problems
b,y the wage price spiral,
is
restraint
I look for heavier demand
for loans, and especially in the con¬
sumer credit field.
Each day brings
us
No
The
thoroughly than they have in
the
could then look
long period of prosperity and the greatest
development ever experienced in our history,
>■
J''
to
President, American Federation of Labor
creased
their loans
more
the
during
h|
*
stabilization point in costs, we
a
forward
•
.
retail
normally
be
However, every experienced
merchant believes, I think;* that sales
are
meeting consumer price resist¬
eral trend of business in
screen
reach
ending.
only in
banking will largely follow the gen¬
other .lines.,
at
"
sential to the future development of the entire country.
If labor and management work together as a team and
1948 to continue
least as high as those
experienced
created
Bankers iri 1948-should be very cau¬
should
'
*
during
levels
at
which
of that statement. V.,;
my opinion that the trend in
and
*
•
Gimbel Brothers, Inc.
volume^ would
expected
factory
accuracy
tious
i
'it'
inflationary
ance.
ferent, but as a whole it would be
closely the same.
Events in 1947
make me more convinced as to the
It is
1
F. GIMBEL
tendencies evident in our national
economy
continue unabated. The government depart¬
ments
concerned estimate that personal consumption
The
trade
h
I made a statement for the
and Financial Chronicle"
At that
:>*
<n
i
than during 1947.
Under these circumstances
National Bank
President, Gary
About
i
-
expenditures during 1948 will be at an even higher rate
GASSER
W.
W.
i
'»'*
i
President,
practice the
order
v.
•
BERNARD
Golden Rule in everyday business life in
to have things run properly.
Too many people
Thursday, January 22, 1948
CHRONICLE
FINANCIAL
&
progressive economic and social legislation necessary
of
for
the nation's welfare.
In
this
includes
category the
an
effective
American Federation of Labor
housing
law,
improvement
and
requested, the railroads should then be on a par, from a
expansion of the Social Security system, lifting of the
profit standpoint, with industry generally and be in a
position to improve and maintain their properties so es-
minimum wage
; "
standard to at least'75c an hour, and the
5(Continued on par ",x
"Volume
167
Number 4666
THE COMMERCIAL
have
Long-Range Demand for Capital
cipal determiners of public policy.
It is a new type of community in
the history of the world.
Prob¬
ably it is fortunate that the United
States has become a laboristic
nological discoveries. So long as
this capacity to make technological
discoveries
weak,
was
omies
of
sarily
very
the
world
the
were
econ¬
neces¬
sensitive to unfavor¬
able
political influences. The tre¬
vigor and strength of
technology in modern civilization
community because this type of
community has a far better chance
mendous
of: surviving
protects
in competition with
police states, such as Russia, than
a
community
controlled
from
above
No
knows,
one
however,
whether this nation of employees
will feel a strong stake in the
prosperity of
business enterprise
.end hence will be willing and able
to
public policy skillfully in
use
order to encourage
industrial
ex¬
pansion.
One of the most important new
.
features
of modern
civilization
is
Th6 tremendous vigor of technol¬
ogy and the tremendous capacity
S4 the community to make tech¬
the
from
economy
un¬
come
company
at any
tory.
(Continued from
period in the world's his¬
:1
•
:\-y
[%
'' ■
■;
-' £".
largely
what they know about it.
■
4)
page
pages
hand,
not
idea
every
must therefore
the
should be
its management.
to
is known
This is what
stockholder relations.
as
A concise definition of
holder
long-range,
the
in
the
are
their
problems."
based
undertaken
time,
u
of
stock¬
of which
to in¬
company
and
owners
understanding of its
Such a program is de¬
prestige of the com¬
pany among its stockholders.
Keep the financial community
informed
of
the
company's prog¬
ress.
market
interest
greater
for the
in
the
company's securi¬
foundation
of
in
Create
the
stockholder
report, in
share
per
on
the
It should be
is
given
tax; carry-back
a
ownership
$1,550,000
that
so
the
actual
-
arouse
and
of its stockholders.
planned- to^ go
relations
techniques
so
the
the
in
any
and
must
to
count
Cause
the stockholder
in
investment
to retain
the
company
to
a
bare
a
far
0_
Strengthen the stockholder's loy¬
alty at times when earnings or
dividends decline.
Eliminate
latent
might
dissatisfaction
handicap
in seeking
Increase
of
year
of the high¬
accompanied by
must
also
a
statement
in technical
whether
used
some
now
new
•
J
•
•*
has almost been lost
of
stock¬
pnanagement's
Whether
should
or
directly
by stockholders as
position in industry
comparison with competitors:
profits and dividends; the stand¬
ing of its securities in the market
.
both with relation to other stocks
as
whole
a
of
- and
particularly to
competitors; the amount
of
held
stock
the
in
names
how
logical
individual
many
such
owners
company's
reports
a
corporation is inter¬
stockholder
relations
or
When
beneficial
holdings
of
all
(Continued
represent.
factors
these
on page
as
i
^
$
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,
*
v
9r
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•
vn
<s
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Here's
—
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.
47)
be
that
an
the
annual
effective
report
of
means
and
the general
be
the
public
Theoretically, this may
true, but in practice the inter¬
ests of these various groups are so
divergent that in attempting to
satisfy them by means of a single
document the result is merely one
compromise.
United
BUSINESS has drab, congested surroundings of big city.
discovered that- it doesn't always have to
locate in the
In
fact, in many
where
After
all,
report
value
nual
the
to
should
contain
to him and
same
be
report
is
stockholder.
can
sion
type,
bene¬
many
where they live.
near
especially if it is
perhaps of
or
possible site for
a
'
j
have been considering
a
a
"
I
%
1
*
,
*
.
*
„
^
your
^
(
'
site for
new
of the light
one
research nature,
look into the Nassau-Suffolk County
you
as
you
If so, and
we
area
your
preci¬
or
suggest that
of Long Island
expanded activities.
,
' '
'
h
*
i*
*
'
i
\
%
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;
*
'
^
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i.
>
J
v
"
.
,
_
a
Full details of what
of
only to him.
to
Perhaps
concern.
It
information
information
given
plant location
States
of employees ask
the annual report
the annual
it is found that production is higheT
employees and executives alike enjoy the
fits of suburban
Steel, Eastman Kodak, and others
have learned by experience that
only about 3%
a
cases
If
of available property,
Long Island has to offer in the
way
labor supply, public utility services, etc.,
use¬
employes
or
nual report.
others and if the report to stock¬
holders is not suitable for that
limited
will be
gladly furnished by
Business Development Depart¬
our
purpose,
In the old days when
the ownership of a company was
to a few stockholders, it
simple matter to get them
all together at an annual meeting.
a
some
than
it is better to; prepare
special form of report rather
to
attempt to
adapt
the
of the whole and usually includes
those who have some axe to grind
set themselves up
or
practice.
supposed
crusaders
as
crusaders
several reforms in
It
must
cor¬
not
be
that the ideals of these
are
always
visionary.
can
ful.
be harmful rather than
Many
a
help¬
your
outlining the nature of your business and
us
...-r.tr
requirements.
■
-
Address:
tention from the unpalatable facts
of corporate life is
likely to say,
Business
■■
■
>
■
.'.j.'..
,
.
"
V-
.
.r.v,
•.j..
■■
.•y-,yyy
Development Department
LONG ISLAND LIGHTING COMPANY
stockholder receiving
elaborately gotten-up annual
report, which by the use of color
or illustrations
to distract his at¬
•:
.
v
250 OLD COUNTRY
an
Often they arise .'but'of the uri- "Why -spend so much money trywillingness of a b^teward-lookifig1 ing to kid me?
I would rather
Just write
-
cost or obligation on your part.
stockholders'
report to uses for
with the widespread dis¬
tribution of ownership, this is no which it was never intended. This
is also true of charts, pictures and
longer possible and attendance at
other forms of dressing uo the an¬
annual
meetings is
largely
by
nual report.
If these things are
proxy
rather than in person.
for
the
more
complete
While some companies go to great needed
information
of
the
stockholder,
lengths to encourage attendance at
If they
annual meetings, the number of they should be included.
stockholders present even in such are. in any way extraneous to the
cases
is a very small percentage single purpose of the report they
Today,
ment without any
MINEOLA
ROAD
NEW YORK
is
r
•
V;-:V-v
—}
/
'
v
Remedy
a
sight of.
well.
fully
an¬
A -i'
are
holder but for the employees,
this
meeting; the other, the
*. ;V: Si-'
.c-.j-^v.: V
V?.'
*
*
'
of
brokers and other fiduciaries and
pro¬
propaganda not only for the stock¬
not,
there
are
invariably
two
points of contact.
One is the an¬
porate
the
business;
not its products can be
thought has sometimes been
advanced
com¬
might seek to upset management.
one
ac¬
in
acter of its stockholders' list. Sec¬
'' .V
f *
*'
}'■
of giving factual information
pose
of
the
capital.
confidence
in
in
\
\lic
filled with pictures, charts
so
annual
accounting
terms,
policies for copies of
pave
the way
for
better
though it. is available to all. They
understanding
of
management's have solved the
problem by pre¬
problems.
senting the salient information in
Result
in greater
support for informal style in employees publi¬
management's proposals.
cations, many of which are edited
Deter possible opposition which by
the
employees
themselves.
or
survey,
consumers; its
1
c^
com¬
taken of
be
TIRED of CONGESTION?
Vv/v V*-
such
stockholders.
the
such
interest-
In contrast
summary
and
for
more
de¬
balance sheet and profit and loss
com¬
panies, if necessity forces him to
holders
been
and
compelling document.
consumers
rather than in stock of other
was
cases
nature of the company's
special situation and to the char¬
that actual compara¬
some
a
to
In addition
this, the
be
the-
but
cross-section
two essential factors
conform
In
can
tionnaires
those
First—it
gram.
survey
prehensive and useful background
can be obtained through personal
interviews with a representative
program will differ in
of each individual corpo¬
are
company's product,
other items of essential
be conducted
through the use of written ques¬
interest
stockholder relations
also employees
are
information.
But when it is
beyond
stock; their
companies;
other
of the
a
:
There
:
that the usual form
balance sheet' and profit and
loss statement would .not only be
easier for the layman to under¬
so
case
ration.;
of
stand, but
or users
and many
type and extent of the stockholder
Clarifying Accounts
they
recognized that the
maintain
in
!
whether
meeting' and the annual
report are simply the very mini¬
mum of what a company can do to
credit
their
purchased
ers
annual
$12,721,245 and there
as
also
of
goes
other factors. Information must
or
form, a simplified com¬
parative statement of income and
stock.
common
survey
This
be developed as to why stockhold¬
standard
for the year was reduced by $4,800,000 due to the. refund of Fed¬
a
list.
geographical distribution
women,
addition to the
be
making the annual report
informative
more
a
an
his investment.
ested
annual
should
communica¬
thought and effort has
voted to
The
aopreciation for the soundness of
pany
long period of
over a
ties.
which
beyond a mere breakdown into its
various; components,
men
and
company should not publish in its
The next to last paragraph of the
President's letter read, "The loss
and color that their essential pur¬
Arouse
:
stockholders'
respective jurisdiction. Neverthe¬
less, there is no reason why any
in
full color and five pages of finan¬
statements in 8-point type.
cial
there
the
-
The
lights of the
Enhance the
sell.
unless it is
logical premises and is to
on
be continued
stock¬
signed to:
his
products
Before any program can be laid
out
is "A tion with stockholders is the an¬
effort to nual report, and
recently much
continuing
the interest
holders
crease
of
with the Joneses.
Commission
relations? program
encourage
they
a
pictures
of
Commerce
a
which govern accounting practices
for the corporations under their
Attempts have been made to
is equally clarify / and > simplify accounting
useful for every company and no
stockholder relations program
develop in them to
degree knowledge of
the company's affairs and loyalty
interstate
report consisting of a onepage letter from the President: 18
ideas which other companies have
used to advantage.
On the other
fullest
24-
page
management to accept progressive
company, if it wishes to
body of satisfied stockholders,
one
a
operating resultwas a loss of $35,906, but this figure is not stated
separately.
is
Every
have a
In
published
must
be
a
continuing
long-range effort and not merely
spasmodic attempt to keep up
efforts have not been approved by
the Securities Commission of the
em¬
The profit on the sale of securities
•"
by
company
lessened
or
mind.
to
ond—it
operations might be
So far, these
clearly stated.
more
.
,45
(345)
tive results of
pretty., pic¬
v.1',. 5;
case,
a
CHRONICLE
outgo.
Many companies, in fact,
political influences. Re¬
eral taxes on income of prior years do so and all could
profit by their
gardless of turmoil, regardless of
based upon carry-back of oper¬
example.
One advantage of such
polit cal
conflict,
regardless
of
ating losses and unused excess a simplified statement is that it
political uncertainty, technologi¬
profits credits, resulting in a net sets forth, in high relief, two of
cal
discovery will
go
forward
loss of $1,401,325.64."
Not a word the principal items which govern
rapidly. It will be used by indi¬
about
why the
actual
loss, of the net return available for divi¬
vidual
business
enterprises
to
$6,200,000 occurred.
Another re¬ dends to the stockholders—that is,
adjust themselves to a changing
port states that consolidated net the salaries and wages paid, and
and
uncertain
world.
It means
earnings, including extraordinary the sum of all Federal and State
that
today
political
conditions
profits .on
sale
of
securities, taxes. These basic figures are also
have much less capacity to inter¬
amounted
to
$14,235,339,
equal often shown in the form of a piefere with economic progress than after preferred dividends to
$2.06 chart or other visual presentation.
favorable
Your Stockholders and You
liking for that
than
.
Two examples of this false
of
increased
dividends
tures "
was
their
FINANCIAL
phasis
(Continued from page 43)
which the employees are the prin¬
&
•
*
•
have
46
THE COMMERCIAL
(346)
FINANCIAL
&
CHRONICLE
Thursday, January 22, 1948
Business and Finance Speaks After^the Turn of the Year
sions, and quartenary ammonium bactericides valuable
pharmaceutical antiseptics and for industrial applica¬
(Continued from page 44)
inauguration of Federal insurance against the costs of
medical
In
opinion the people of the United States have
realize the full advantages that modern
production miracles and the free American way of life
can
confer upon them.
They will never enjoy these
advantages under a repressive government which looks
only to the past We can achieve the promise of the
future only through leadership which looks to the future
and sees that promise as a boon not only for those who
possess great wealth but for all people of our country.
our
not yet begun to
GRETSCH
President, The Lincoln Savings Bank of Brooklyn
The
tion.
and
Other products have emerged from the laboratories
in pilot plant production. Countless new prod¬
ahead, 1948, looks like another boom year
generally. In a few instances there will be a
readjustment of price's due to ample, production, but to
year
for industry
ucts evolved
the
entire
which it
through research portend new heights for
industry, and for the industries
with
the
resultant
products,
prices
for
demand
will
remain
and'
not,, to
\
v
ize
omy
of
gifts for food and clothing, with
idea of ever being repaid.
In the building line, the demand is
most" likely * to
continue with increasing prices. Our Federal Gov¬
Fred
Gretsch
ernment
and
Municipalities
should not go in for any improvements, unless they are
absolutely necessary such as hospitals, etc. All other
public works should be held in abeyance until such a
Prices
because
one
commercial
and
will increase, but at a lower ratio than the past year.
CHARLES
P.
GULICK
industry is probably the most dynarhic of
all business pursuits. It continued in 1947 its alriiost
interrupted
there is
growth
of
confidence.
The
un¬
the
every reason to
■
past quarter-century, and
view the future with unalloyed
1947
chapter of the
chapter featured
by new plants, new products and
new records of production and sales.
industry's trend is
a
been
raised
and
the
by
will
continue
contributions
to
of
be
housing, clothing, food, medicine,
transportation, communication, and
in many other unseen places.
Prac¬
tically no other industry can operate
pr progress without the contributions
their origin
ment to
and
Charles P. Gulick
develop¬
chemistry^
are
Gund
big clouds
There is
on
ways
economy has so well
avoided the maladjustments of recent years, and none is
in sounder condition at the present time. Plant construc¬
tion
and
manufacturing costs have advanced
Notwithstanding these increases, together with
sharply.
wide gy¬
rations in prices of raw materials, the
price structure of
the chemical industry as a whole is closer to
prewar
levels than is the case of domestic
prices, generally. This
minimizes the industry's vulnerability to any temporary
slackening of the industrial momentum.
The
outlook
for
demand
for
chemical
products
is
bright. Despite the new records attained in 1947, the in¬
dustry has not yet filled the vacuum created by World
War II. Many of the domestic chemical
processing plants
built for
war
duction.
sums
cannot be
uses
adapted to peacetime pro¬
construction costs are high, huge
Although
must
be
invested
in
new
facilities to
bring total
plant capacity in line with present day demand. Mil¬
lions of dollars will be spent during 1948 to achieve
this end. ■;
In addition to: interrupting the normal expansion of
peacetime facilities, World War II stimulated ttip de¬
\
velopment of new chemical products. And the virtual
destruction of the German chemical industry has
placed
American producers in
Foreign
demand
accentuates
plant capacity.
i
But
research
position of world leadership.
a
/
is
the
■
key to
the
for
additional
chemical
industry's
need
•-
,
the
v
growth.
Nopco Chemical Company in. 1947 made the
largest commitment in research in its history. As a
result, existing products have been vastly improved, and
important new products have been developed. The new
centrates,
include
drugs,
hormones,
pharmaceuticals, vitamin con¬
detergents, synthetic resin emul-
onward there
Harlan
but
hazardous
upward
can
as
that
well
be no doubt.
HAGEMANN,
FREDERICK
II.
;
;
-
■
as
(/A-V-}?:
JR.
nothing basicaliy
wrong
As
; more
dent, to become as strong as
yvitl^^erma^^bat"
,
;]
merely because they may. in the £u1 ture encounter trouble. To be pru-:
ities and
-
J.*:(
possible,"
to accumulate, reduce liabil¬
to save,
large inventories, and pre¬
' pare for falling prices sometime., is
all that
•
a
business
man
can
accom-
"
qiish.' *
v.
ought to understand, if it does not, that .this
country has been drifting toward a socialized economy- i'.CUp to the year 1948, practically
alt the Government's receipts have
for the past 15 years. .The Federal. Government has a>
been used to meet} its various ex¬
hand in a great many things, which affect the daily lives
penses.; In the first half of 1948,
of the people.
The structure of the Government has be¬
however, the Government expects to
come not only complex but sprawling.
It requires some
have a surplus of from $5 to $7 bil* *
700 pages in the "U. S. Government Manual" to describe
lion, much of which is scheduled to
the activities of all the various Departments, Agencies,
| be used to retire Government debt H. F. Hagemann, Jr.
Bureaus, Offiees, Administrations, Corporations, and so ;
held in the "banking system.
From
: ■
forth. The operation of such a complicated structure re¬
the standpoint of economics, this proposed debt reduc¬
quires innumerable Commissioners, Deputy Commission- ;•
tion, if carried out, will be quite deflationary and the
ers, Executive Officers, Directors, Deputy Directors, As¬
strongest measure so far used in the battle against in¬
sociate Directors, Assistant Directors, Chiefs, Assistant :'
flation.
'
The public
\
;
'
Stopping inflation and
accomplish all this, there has been
a pronounced
True, the war caused
great bulge in the number of Government employees
Since the close of the war
increase in Government personnel.
a
which
1
probably unavoidable, and the number has
declining steadily since the war.
Even so, the
number is now nearly 14 per thousand population, com¬
pared with 7 per thousand in 1939, and 4.7 per thousand
in 1932.
Part of this gain is due to the larger number
of civilian employees needed in the administration of
and
; are
for
;
greater military establishment, the greatly increased
activities, and the cleaning-up of functions re¬
lated to the war, such as the disposal of surplus property.
But in spite of these activities, it is an open question
as
to why the Government has to have almost twice as
employees
Government
as
in 1939.
:.\-i A-A-v
;
be held
responsible only up to a certain point—namely, maxi¬
mum efficiency of operation in each case.
Beyond that,
departments
and
agencies
can
responsibility for consolidating or reducing the func¬
of government rests with the people themselves
through their elected representatives in Congress. As
long as Congress passes laws adding new functions,
Government agencies have no choice but to carry them
out.
If the people really desire a less costly form of
Government, with a resultant lowering of taxes, they
can
accomplish it through Congress in two ways: (1)
give the present sprawling structure of the Federal Gov¬
light of an anticipated larger loan demand and
a
shrinkage in deposit total it seems highly probable
that the trend toward higher interest rates which has
•
been
and functions.
ments in the
by the Federal Reserve Board in lowering the support
-
of these
analysi^ to determine which func¬
proved
desirable
to
of the free enterprise system, and which are in
the direction of socialism and thus opposed to the maxi¬
effectiveness of free enterprise.' In any event, the
of
a
moves
deflationary nature. The immediate effect
has been to cause a further slight tight¬
ening in credit conditions* with a resulting further slight
correct
increase in interest rates.
abuses
mum
prices on Government bonds; also the Board's action in
raising the rediscount rate from 1% to T% % is very
significant from a psychological standpoint.
The full
effect of these changes, not only on bond prices—corpo¬
rate and municipal as well as Government—but also on
the over-all economic situation will probably not be
known for some months.
Suffice it to say that these
moves are
.
have
increasingly evident during the past mopths >vill
One of the most significant recent develop¬
interest rate situation has been the action
continue.
a thorough over-hauling so as to do away with
duplication of functions and put the operations of
Government on a sound basis, as in a weil-managed
private business; (2) eliminate entirely all unnecessary
It requires careful
tions of government
p'
In the
the
powers
...
debt reduction scheduled for the first
half of this year will tend to contract commercial bank
deposits and offset to some extent the increase which
may occur with the anticipated
larger loan demand
mentioned above. On balance, therefore, it seems rea¬
sonable to expect that deposit totals for the comriierpial
banking system as a whole will decline in the first half
of 1948 if the administration is really serious about con¬
The government
trolling inflation.
the
tions
a tre¬
both long
from corporations, states;
municipalities. Their needs for additional capital
still far from being satisfied which provides a basis
believing that 1948 will see a further increase in
loans.
veterans'
many
have witnessed
term and short term purposes,
was
been
our
we
mendous increase in the demand for loans fpr
ernment
.
spectacular growth to date, and continued investment
in organized research is the best assurance of its further
products
A.
leads
President, The National Rockland Bank of Boston;a,
v
of dqing business
mending is the national habit of indulgence all the
from the little fellow to the top, ahd[particularly
To
domestic
our
road
;
the economic horizon;4;
needs
"...
.
j No segment " of
w.
re-
effective.
more
controlling a credit situation
such as we now have, is very difficult and requires
skillful handling. There is no middle ground—we are
work.
1
r
•'
t
either inflating or deflating, and once deflation is started
This vast bureaucracy is engaged in all sorts of ac¬
it is extremely hazardous to guess as to how mild or
tivities involving regulation or control, many of which
how strong the reaction will be.
Unless we want to
have come into existence since 1932. ;• To mention only
go on inflating and run into eventual bankruptcy and re¬
a few, the Government fixes minimum
wages, controls
pudiation, it is necessary that we turn back to a sound
certain materials through allocations, decides crop acre¬
and sober national fiscal policy. We must be realistic
age, influences agricultural prices, makes subsidy pay-; in turning back, however, and realize we shall face many
ments, initiates large public-works expenditures; estab¬
economic
discomforts.
Nevertheless, it is absolutely
lishes required margins for trading in securities, 'con-;
essential for the long-range welfare of the country, and
trols security-issue financing, guarantees housing loans,? 1
particularly the wage earner and white-collar class, that
and regulates rental rates.
' ' *'
"
inflation be stopped as soon as possible.
chemical industry.: It touches all of
in such phases of our
living as
owe
v A
business
to the immediate steps
as
extremely
the
our
.
us
will
Guesses
our
them
make
are
so
the
of the chemical industry.
Products
yet unthought of in other industries
is
efforts'
lated to
Chiefs, Coordinators, Assistants, Special Assistants, and:
on
down the line to the 1,900,000-odd Government;
workers who grind out the daily mountain of paper
^ No other industry touches more
intimately the lives of people in all
walks of life. The standard of living
has
To ail
these
'
Chairman of the Board and President, Nopeo Chemical Co.
The chemical
people all over the world.
of
another for
Expensive living and expensive
our
savings bank deposits
destruction of
ing overcome by the physical efforts
and
people have. been will-
■
we
move
forward; into the year 1948, it! seems
;riecessary than^^vever toAeep^^ ih imnti
/':
13^5- Arther/;
:
the
would be a wise procedure today.
%To^p^imthe xbank;,;> Ja'f. business reaction is inevitable at. some time in.who v
future. Just when it. will occur ho one knows. Men
>
or in safe investments, suWs not
reaIlyirieeddd, woqId be V J
do the business of the world can¬
at qnteu road; to security,? dv chedkvdrf
^lntibn
not cease to carry on their businesses ;
spur to confidence.
A'A'.v.i/A :
George
way
believe that
great
of
^
of
the
by
capital during the- war years is be¬
>
L
export, program,
in the political field.
I
caused
They compete
jgodds'short
supply. Not so very long iago, .people would save their inoriey When prices
were Jugh so that
)wo|ild" go fur- u
economy.
i
perceptibly, the strains and stresses
economic
high V because
are
our
4
-
ing to spend freely.
time that the work would be necessary to stimulate our
;
moral's; affect
Slowly, and at times im¬
the future.
is related
Government's
with
The outlook in the banking field
to me to 'promise much for
included in that belief; ;
that is that, the national econ¬
well-being.
..
no
HARLAN
seems
is
Economic
high.
nature
be reasserted.
/
.
into view,
what
and
our
governments.
the
President, Western Bank, Long Beach, Calif.
A
prosperity is fairly y
general, employment is high; but so are prices. On the >
average most people are doing fairly Well; but they, are
really worried. Their worry is that our seeming pros-'
perity will not last/ Most Americans
are
sure
that
the
country's " pre¬
eminent
position in" ari' economic sense, comes fromjour system of: free
enterprise. But let us likewise real- "
comes
work and necessities for their popu¬
Other help should be in the
can
be
■;'''
President, The Cleveland Trust; Company
As the New Year
adjustment in prices coming for the
next year.
Everything that we are
doing has helped the inflationary
spiral. To my mind, funds that we
loan in Europe should be loaned di¬
rectly to industry that will provide
lation,
initiative
will
W. A.
For that reason, I do not see any re¬
.*
•
1948 will be
all
we
GUND
GEORGE
mind this will only be in rare instances. As long as
we
keep sending money to Europe
my
;,
,
planned
as good a year as we deserve.
gainers if a national tendency
toward old-fashioned thrift, self reliance and individual
But
chemical
serves.
The year
•
are
care.
FRED.
adoption of legislation looking to a permanent
economy should be opposed with vigiliance.
as
;
seen
a
As
a
result many banks have
comfortable appreciation in their bond* accounts
■
c-i*i
(Continued
on page
48)
Volume
167
Number 4666
THE COMMERCIAL
-'KY;: -VY/;/';
relations
the
stockholder
tailored
program
utmost
dais, strolls around among them
talking in a conversational tone
about the company and its prob¬
needs' shortest
letter
arriving
Methods in Stockholder-Relations
tne
■ri Some
companies
h a v e
em¬
barked oh a stpckhoider relations
programwithout
sufficient
worse
stock
-
Probably
a
has been merely an imita¬
tion of other successful
programs.
As a result
they have failed of
their
objective
trial.
the
So,
in
which
have
mail.
form
letter and few
-
stockholders
convey a personal mes¬
also include
may
time
new
^
holders
the
person: or
United
Quarterly.
This is
on
by
proxy
and listing the
by
rapidly,
the
Others
farther than this and,
" the case of Standard
go
notably
directors
elected.
call
some
the
or
"free
ment and
It
our
must
process
the side
on
of
of
enter¬
been
public
that
the
education
stockholder
how
body, and
complete
the
stockholder;, ' > ■'"
]y:)
*t*'- 7.*>:
Y ">t
'
there
tone
We
have
Y
Electric Hoists
4
already - mentioned
-
As
should
a
complement
letter
come
some
to
the
wel¬
s
companies write
stockholders who have closed out
their
investment.
This
is
a
companies
cannot help but question the
stockholder's judgment in dispos¬
of
appearance
difficuty
from the company's records
name
does
dis¬
stockholder's
a
not
invariably
that he
mean
has disposed of his stock.
have
been
transferred to
account
erage
the
or
It may
brok¬
a
stockholder
have died and his estate been
may
distributed.
under
only
such
A;
letter
inappropriate
harmful. In the
come
or
of
regret
circumstances
case
is
not
regret letters, it is
!o
so.
•n
each
essen-
the
more
While
pattern
that
case,
How P&H
same
planning to
are
the
followed
American
are
brokers,
financial
every
detail
carefully
to
of
.
contribution to the final
bankers, and
people.
distributed
the
the
arranged.
It may
Releases
press,
and
M
r
.
B
e
far removed
as
the digging of copper
an
electric motor,
be
ing time and
11
as
manpower
materials and parts.
tion
D
R
E
D
G
IN
;
G
4
But the result is
finished product
which
i > iff,
Or in faster, lower cost produc¬
-—
inescapable,
r
v
-y
/i
;
I-'
though the final
even
rather than that of the equipment
y
.
(^arbdierlmproyements^: Deep ^Water^y^YY
;
in
goods for
bri^; :ist^theferbl#; which Pffi^equipment
helping American industry produce more
more
people at lower cost.',: v ,Y''
Yy';YtV:';YY and Ship Channelsftf/Y
are
equipped
to
execute
all
kinds
of
dredging, reclama-
'
tion and port work
anywhere in the United States Y/vYY.!■/
Y
Contractors
Y
to
the Federal Government
Correspondence invited
YY;YY.;
,
-Y Y'\
from
Corporate
Interests Everywhere
Longest Experience
y
and
..•
L
Y'Y'*
Y
y
; < ••
Private p;-/
i
.
'*>
-
\
,
PsH
Y
Milwaukee 14,
WV
" •'
'
..Wisconsin
Atlantic, Gulf and Pacific Co;
New
York
7
'
15 Park Row
..
'.•
/
Houston
Citizens
2,
State
TexasY
Bank
y
to think in terms of the value of the
helped to build it.
That,
plays
Y/r -Y
We
-
P
Canals and Port Works
Riy er ;and
prone
or sav¬
by thru-the-air handling of
through welded fabrication.
purchaser is
Filling, Land Reclamation,
lowering of cost.
that will be used to build
ore
meeting1" is
-
Industry
It would be difficult to find the industry where P6H
products do not facilitate manufacture or make some
ing within a short distance of the
^elected city. The services of local
district
agents
are
enlisted
tp
up
||H
by
Letters signed by Mr.
Bell, Chair¬
man of the
Board, are sent well in
advance to all stockholders resid¬
-ound
serves
differs
General Mills is typical of the ad¬
vantages to be gained. In the first
place, there is careful preparation.
iher
but may be
of either wel¬
around
following the
are
practice and
you
Another
holding regional meet-
various cities
a concentration of
stockholders exists. Several other
difficult letter to. write because no
matter how tactfully it is worded,
ing of his stock.
in
country where
very
arises from the fact that the
done by
ngs
Y
Bldg.
4
K»<srs
■
wuOMC UECTiooES
•
ss
miois
connotes
getting
highsome
¬
something he would not
reached
It is sometimes be¬
.
a
might be
solicitation
.
existing; situation. ■that,, even with the most
carefully
always be warm thought-out'
effort, it has^ proved
but never patronizing and even
mpossible to get a large stocky
though it may evidently be a form bolder
attendance at annual meetletter, the stockholder should be
bigs.
Some years ago, General
made to feel that it is
actually a Mills hit on a
plan to bring the
personal message to him.
meeting to the- stockholder^.;' This
Its
solicitation
to do
ever
Regional Stockholders Meetings1,
conform to the
on.
corporate offi¬
develop-;
'* * ,*/""'■•
X'"*'*"C»"
There has
ment of good stockholder relational
:prd>
' V'V,
them?
misunderstanding
groups are engaged in a battle for!
votes.
Possibly, if the
a
gram, its dealings with labor>-and
other matters of interest to 'the
'Jxfvl'v J.}.y "y.~
serve
grave
that proxy; solicitation is*
useful only in a contest when two,
an
the r Company's / expansion
large group of stock¬
if only to ask them
lieved
Steel
eight-page
leaflet in letter-size, attractively
orbited, and gives information of
a
otherwise do.
maga¬
States.
bo
even
part of many
one
; or
infor¬
a
them
matter
no
written
contact
„
pressure methods of
.
long-time (job.
Even regional
stockholder
meetings bring to-'
gether only a small fraction of the
substitute
The question
vantages of proxy solicitation. To
the
of stockholder education is
even
no
cials of the real purposes and ad¬
manage¬
admitted
is
personal
can
better
can
way.'!
economic system.
be
There
and rectify their
complaints, to
get to know what they are think¬
ing about and how the company
on subjects of econ¬
importance is encouraged, a
more
outspoken
and
effective
body of public opinion can be
up
peo¬
form
is
encourage them to ask questions
about their company, to listen to
an
respondence
built
are
what
to send in their proxy. What bet¬
ter opportunity could be found to
subjects
"American
in
is by proxy solici¬
Year after year, at annual
holders
omic.
annual
the attendance in
of
This, naturally, cannot be done
bluntly or tactlessly but, if cor¬
some
an
what
prise"
matter
meeting time, the occasion arises
management to foster among
its stockholders a
greater interest
in
isy
fully
or
answer
to talk to
the dis¬
Here is
how
tation.
engendered,
cases to
broader
even
it.
on
One
for
not
namesYof
is proved
to- the.
is
commenting
this procedure peed not be
to
companies making
is,
the
train
read
made?
this
whole
s
no
information
act
re¬
write
stockholders
not
It all gets back to the
for personal contact.
opportunity, if wisely developed,
-
meeting
is growing. Some such reports are
merely; in the form of a letter
figures v;.ar6; . included.;
products
why, in
procedure
i
the
and
to
than company affairs.
The in¬
annual
holders after
:
addition
its
a
many
of
to
replies
Thus
leading in
some
cases, such
only imprac¬
tical but may be unwise, the prac¬
tice of issuing a report to stock¬
a
Other products^ top,;,
ref:
-nptrce' and the quarterly
latest
after
reasons
-
growing list of stockholder
of
year, the state of
business/and other
I factors;! and its details should be
changed from time to time to
a
personally to
meeting, a
stenographic report of /the pro¬
ceedings.
Whiles there • are good
sue,
announced,' prizes
-for the; inew
zines—the
consumer.:
welcome letter should be
.Its form should be con-
the
the
Company.
advocated by certain stockholders
is that every company should is¬
stockholder's
a; name
for
the
stanUyundec - review; i depending
on
short
a
consumer
a
the company's
or
describing
son
That
no
static.
This
-
confined
inquiry as to any
phase of the company's business.
-
leaflet
a
earnings
It should invite;
But
them.
One of the ideas which has been
■.
arrival.
about the company's
business, particularly if the stock¬
a
is
ceive
paragraph
holder /may also be
sometimes
,
birth of her
member of the corpo¬
a
interim
an
earnings,
offered
thattthe^ stockholder: immediately
family. It
prepare
stability of the Company's
stock can probably be traced di¬
rectly to this experiment;
One of the. most inter¬
esting of these is that put- out by
Borden.
Elsie, is featured,
accompanied by the latest annual
report or interim statement so
rate
to
2,000 of his stockholders.
more
magazine.
the corporation to the new. stock¬
holder. It should in most cases be
becomes*
other
not v even
product
sage of welcome from the head of.
.
merely
is
.
it
a
j-would! take it;otherwise. .Never¬
theless, so far as possible it should
attempt to
and
leads
how
In addition
to
is
47
given, it will
touch only those who are willing
to give it their attention and to
regional
floor
his
advantages of this mailing use a
variety of enclosures. Sometimes
generally
essentially
at other
of
the, company's
printed on it; Those
companies which are alive to the
a;Welcome letter, to 'new.
It is
it
the
is
meetings.
creased
enclosure
an
ple and
port of the meeting, General Mills
prints questions asked from the
cussion
ti ade-mark
case.:
is
ages attendance
he has talked
is
This
it
truism that stockholders
com¬
ing; partly of General Mills prod¬
ucts are
served, sometimes with
an-accompanying demonstration
how
the holder's interest in
with
all, of. these methods, can!, or
should be used in any specific
use
At the close of
correspondence
report, ( of^
or.
stockholders.1
surprising
magazine.
given
of
understood.
only a means of informing
the entire body of stockholders of
what took place but also encour¬
let¬
a
other
much
not
Stock¬
is taken and
name
and
the meeting, refreshments consist¬
his
an
the
stockholder
a
carefully worked out plan has
proved eminently successful and
Mr. Bell reports that, as a result,
often than not
programs,
it is not .to be uhderstood that
any
in
is
is asked
there
effective
;V'5;
^ v':
One of the items most
it
public,
ter is sent to him.
those when
are
in
answer
holder's
all,
nothing but if
developed /well-
arid
after
happiest days in
dividend .check
a
Yet
crease
used
have
the
question
a
Mills
company or its products. After
the postage costs
been
half-hearted
a
to
few companies recognize the value
of this timing and use it to in¬
describing some of
by companies
methods
rbimded
and
after
finds
months
if
or
mation
are
General
answered
are
Jersey and R. H. Macy
in eifect a transcript
entire proceedings.
Co.,
panies which hold regional meet¬
ings use these reports as part of
which- Mr. Bell does' not feel free
been
stockholder's life
he
result
freely,
be
A welcome
bbught is.
useless.%"■ /"Y:: YY
.
thought arid preparation and the
six
has
than
of the
lems.;.; Questions
tnat1 tne
possible time elapse
fore the letter is sent.
confidently planned./ Y
abandoned
checked witn
and
care
&
(347)
Oil of New
a
45)•••vY.Y '".■Vr; Y.yyL'v
page
uai tnat tne list be
to 'fitV the
individual
company's
be
can
(Continued froma
CHRONICLE
greets the arriving stockholders at
door and instead of " sitting on
■
coordinated,-
FINANCIAL
ine
iSYoiir St ockholders and Ifou
been
&
v
stage of perfection,
no need for proxy
as
(Continued
such.
on
But
page
49)
there
48
THE COMMERCIAL
(348)
Thursday, January 22,
CHRONICLE
FINANCIAL
&
Turn of the Year
Business and Finance Speaks Alter the
(Continued from page 46)
cut
down
It
within
materially
weeks.
%%
the
space
>I'v;I'y%:Z7-%%/.
;
.■
reasonable
seems
l'i/-I%;;
of only a few
".V/-■"■■■
/■
■
•% %%';;,,%-a
expect that banks will
to
to food retailing. Our own
company, ior example, instituted such a system in 1947
and the results have already been most impressive, both
in terms of improved service to customers and efficiency
ot operation. From the viewpoint of store layout, equip¬
ment and personnel, grocers are expending great effort
have
further increase in operating costs this coming
and also that they will experience more losses from
loans and securities than has been the case during the
some
to make
year
past several
On balance, however, it would seem
years.
that the income from
together
with
of
higher average interest rate on both
loans and investments, should more than offset the above
factors, with the result that 1948 bank earnings should be
somewhat
a
higher generally
than in
shopping
satisfactory experience.
a
,
In 1948 record emphasis will be placed on consumption
fresh fruits and vegetables.
Wartime promotion by
Furthermore, these are commodities which are scheduled
to be in full supply during the coming year and readily
available to fill gaps
1947.
created by possible short supplies
of other foods.
JOHN
A.
It is in this field that the most intensive experimenta¬
HARTFORD
tion in
pre-packaging is now under way. Several years
we pioneered the pre-packag;ng of produce in our
Columbus, Ohio, stores. Under this plan, produce was
washed, trimmed of waste, packed in cellophane at the
warehouse and sold from open, refrigerated self-service
President, Great Atlantic & Pacific Tea Company
The food
industry will place major emphasis
and service during the coming year.
omy
ago
on econ¬
While it is safe to predict that overall U. S. food
sup¬
plies, will be ample for national needs, the lack of
definite
picture
foreign food
our
on
carrying this experiment
to its logical conclusion with the opening of packing
houses on the west coast, where produce will be pre¬
packaged at the point of origin before its shipment east.
This program promises substantial reduction of freight
costs, a cut in waste and spoilage and better produce at
better prices for our customers.
These efforts to reduce waste and spoilage, not only
in fresh produce but in the case of baked goods and
other perishables, have assumed great importance in
view of the urgent need for conservation of food.
commitments makes any specific pre¬
diction as to either domestic supplies
prices
or
speculative
so
worthless.
But
we
to
as
be
can
food distribution, will be
sure
be
that
effi¬
more
cient and service to customers vastly
improved.
As
%,.%%.%
housewife
knows, the
always been the
most highly competitive in the na¬
tion.
The impact
of rising living
food
every
business
has
industry is now entering a new competitive
era. In recent years competition between food merchants
has been concerned principally with price. Today, ^how¬
during the past year has served
heighten that competition, with
all' food
their customers every pos¬
sible
John
saving and at the same time
give the consuming public the im¬
proved services that current prices merit.
A.
Hartford
prices rose in 1947, grocers generally have
the efficiency of their operations in their
trend.
Nobody has worked harder than your grocer to keep
and prices down.
Fifteen years ago, when you
spent a dollar in a food store, 25 to 30 cents went to
formed
for
which
15
that the volume of
Such
to
efficiency,
&
A
P
control. We
the year 1947,
during which period / tonnage was
greater than in 1944; \ the peak of
the
war
years.
During 1947 we
prevailing business conditions beyond
have
you would be paying 10 or
dollar's worth of food vou buy.
reaching its peak, is not limited
merchants.
now
the chain
or
It
has
rising costs and
stores
but
achieved
been
is true
than
attribute the food industry's increased efficiency to
variety of factors, including: larger stores with a
greater volume of business done under one roof: im¬
proved techniques in food production; direct delivery
from farm and factory to store; greater emphasis on selfservice through development of prepackaging methods;
and improved personnel training.
One of the major improvements in the food picture
has been the stra'ghtening out of the retailer's inventory
problem. The end of the war, with the return of many
hitherto unavailable items, resulted in heavy stocks of
I
the
a
This created
a
range
program
loss.
,
(
same
time required
an
overall
tinue
the
of
J.
Hi:!
B.
intensive, longat a
ahead.
The
recent
for
follow the lines of
the health'est it has
been
rates
in
the
been
in many
business
the
lowest
in -the
almost tripled from 1943 to 1947.
will
continue
50%
war
the
I
the
of
of
tonnage
sanguine that
am
continues
to
shrink
from
level, but is something ahead
prewar
level.
Until
we
are
in
action
of
the
Interstate
freight rate matters
could but have
a surcease of
Commerce
is encouraging.
If
the demands of labor for
railroads would
general business, whatever that may
be-V
always
H.
country,
Actually, therefore, all
of
HITER
HARRIS
/%■v"/%/it%:/ZZ;//i
As
Richmond, Va. .:
consumer's viewpoint, perhaps the most
change in food distribution in 1947 was the
improved service in stores. This can be attributed to
the return of favorite brands of merchandise, and to the
fact that after five years supplies at last became avail¬
able for the building of new stores and modernization
of old ones.
f :,)I •
' •
■%%■%"
But the
major factor making for better service was
the .marked improvement in store personnel.
This re¬
application of modern,
fa/van.
this year,
particularly on non-productive loans. Term
going to be harder to obtain. Money is going
little more.1
/
/ /%
'_%'.'
loans are
to cost a
.
I
I am definitely in-
not
am
pessimistic at this time.
be hopeful but careful.
clined to
%
% I. J. HARVEY, JR.
President, The Flintkote Company Inc.
Tight supply conditions in a few construction materials
expected to prevent construction activity from going
above 15 billion" in 1948, in contrast to 1947/
estimated
construction of $12,878
million, according
to
Department of Commerce esti¬
are
.
"much
mates, with lumber, nails and certain
ch.ef bottle-'
iron and steel items the
neck
products.
Building activity, most authorities
agree, should continue at boom lev¬
els until at least mid-1948
despite
%
decline antici¬
construction. The
unprecedented backlog of demand
for building materials for repair end
the
slight
probable
ap-
accentuated
by
lescence of the
at
now
a
new
year, business in most lines is
National income is probably being produced
the rate of $200 billion or more per year com¬
pared with $73 billion in 1939 and $104 billion in 1941.
Corporate profits before taxes for the
year just ended were about $28 bil¬
lion compared with $6.5 billion in
•
i .%:>
existing structures,
known
but
are
are
of
near
After mid-1948 the
I.
J.
future.
*
,
.
costs.
prices of new residen¬
construction, noted during October End November,
has disappeared and the public has apparently
concluded no appreciable reductions in building costs
are likely in the immediate future.
Funds are available
for loans at easy rates for residential construction.
The slight buyers' resistance to
tial
1947,
Production
industry generally is expected to
for the
high levels during 1948. However, little
change in the overall supply-demand relationship is
anticipated since only small improvement in the raw
materials shortages faced by the individual producers is
continue
at
likely in the foreseeable future.
During 1948, barring unforeseen contingencies, in¬
creasing shortages of freight cars or greater difficulties
in obtaining raw materials, The Flintkote Co. expects
to be able to supply increasing quantities of its products.
%
enlarged productive capacity, improved equipment
more
efficient manufacturing processes,
due to
Our
nationwide
should enable
expansion and
to do so.
modernization program,
us
a|
Z
WILLIAM A. HEBERT
President, Springfield Fire and Marine Insurance
Springfield, Mass.
From
a
Co.,
j
conservative point of view the fire insurance
have
of our best
no
that the premium volume
higher, and by the same
the cost of replacing property
be
by fire or other perils
against will be more costly
ever
before.
,%
elements that cost the fire
H. Hiter Harris
h %%%%'%:/ '■,'■■■■
matters
the measure of prosper¬
ity in 1948:
'
(1) Taxes—lower individual and/or higher corporate
taxes/
% •% :
.
1
During
1947
there were
many
major catastrophies caused by the
Congressional action relating to the following
on
occur
,
ing the early months of 1948, they will undoubtedly be
reflected in higher material costs and on-the-site labor
insured
avert any
significant bearing
may
outlook is more
Possible adjust- %%
with a leveling
destroyed
before November
will have
assay.'
particularly in the industrial field,
have in general been somewhat more stable during the
latter part of 1947 than was the case a year ago. If an¬
ticipated demands for increased wages materialize dur-
than
addition, this is an
and certainly we can
Administration
efforts
to
■•'■■y
to
Construction costs,
token
In
%/
difficult
present heights.
near
should
year
hand.
>
menls
out
saying
mentioned
semblance of a depression
if possible.
They,
also should seek to prevent price in-]
flation from getting further out ofi
Harvey, Jr.
depression and inflation
continues to mount, it goes without
point out that forces
working for a continuation
good volume of business in the
election
keeping
years,
levels.
we
now
a
obso¬
is a vital
demand/at high
war
first part of the year, which, however, some
economists are not prophesying.
If
Prices are high; employment
high; wages are high; profits are
large. There exists a huge supply of
dollars and therefore a big demand
for goods.
These facts and figures
is
well
enforced
the
premium volume for 1948 should not be less than that m
of 1947 unless we have a serious depression durmgUhepy
1939.
are
factor
enter
we
expect
the
noticeable
In
applications very carefully
loan
examine
to
■/% /- ■; •%• %. %-;i
booming.
nrmical.
from/the extensive
for many
savings for abso¬
historically high level
the
ities dictate caution and conservatism.
our
here in order to
sulted
of
prices and industrial production, the possibil¬
Bankers are going
of current
and
§
President, First and Merchants National Bank,
:
r
grocer's equipment is being charged off at a ridicu¬
lous]/ low rate in view of present high replacement
ccsto.
We are all faced with the problem of pouring
greater sums of money into our business to keep the
machinery of distribution modern, efficient and eco-
From
Because
our
further increases, the general outlook for
years.
have
netting only
about 1.5% on sales in the case of A & P. Although net
profits of food merchants generally rose slightly last
year, there was an even greater increase in the financial
demands on food merchants stemming from the current
price situation. ; *
.
■
Higher commodity prices mean that a grocer has to
have over twice as much money tied up in a normal
inventory as he did before the war. In an uncertain
market such as exists today, it is necessary for every
food merchant to
build up and maintain reserves in
anticipation of a possible break resulting from a reversal
of the current upward trend in the commodity market.
Furthermore, it costs four to five times more to equip
a modern food store than it did in the
prewar years. The
ccs i of fixtures and equipment in our own
stores had
among
Commiss:on
Thus, the inventory pic¬
food
retail
coal
is
judgment
trains and cars which
are on order, it may be that we can¬
not successfully stop the present lower trend in passen¬
ger business.
This ra'lroad faces large commitments for improve¬
ments in both roadway and equipment for the years
we
is
mv
able to get new
generally are now back on a prewar inventory
basis, with no heavy supplies of slow-moving commodi¬
ties. Now a retailer can use his funds most efficiently
Profit
It is
freight operations will con¬
on
a
high level.
Passenger
business
.
procuring items in demand.
about
this ra'lroad
longer any
to liquidate these supplies, usually
■
)
\
.
for
in 1948
extension
Another
1947.
demand
tutes
Grocers
ture
in
under way..
which
through 1948 and, since that consti¬
public demand.
dual problem in that it tied up merchants'
funds and at the
living on fixed
persons
being forced to use up
are
necessities.
lute
our
will have higher production
despite progressively
well
was no
things and
those
being priced out of the market
are
finished
just
orened several hew coal fields
of most food
wages.
goods for which there
incomes
traffic will depend generally on
our
brought this about,
15 cents more for every
and
white-collar workers
modernization of
Without the efficiency
cents.
We must consider pos¬
probabilities.
With respect to my opinion as to the 1948 outlook for
on this railroad. I. of course, can only indicate
grocer's cost of doing business, including his
Today these functicns in many cases are per¬
as
on
sibilities, too. It would seem to me to be probable that,
on balance, 1948 will be a good business year.
However,
business
the
profit.
little
decisions
many
J. B. HILL
costs
as
Four months be¬
crash, statisticians claimed and proved on paper
that everything was all right for the near term.
History
can and does sometimes repeat.
We bankers cannot pull
aside the veil of the future and therefore have to base
fore the
President, Louisville & Nashville Railroad Company
efforts to restrain the upward
cover
of scarce goods.
(4) Money and credit nolicies.
You and I can recall tne 1929 boom.
pated in industrial
While food
up
(3) Price controls and rationing
indicating they realize that price^
do not determine value. Naturallyx
grocers must give every customer the maximum amount
of food for her dollar.
But the grocer who will best
satisfy today's shopper is the one that will place even
greater emphasis upon quality and-service.I
striving to so
streamline their operations that they
siepped
political purposes.
ouiiays for
ever, customers are
and quantity alone
merchants
cari offer
we are
The food
costs
to
Now
in the stores.
cases
a
self-help or bountiful
(2) Foreign aid—coupled with
programs
governmental agencies called attention to the nutritional
qualities of these products in the average family's diet.
probable larger volume of loans,
a
training
proved
1948
.
insurance'
companies large sums of money, and
it is hoped that during 1948 we will
not be visited with similar catastro¬
phies—or at least in not such large
numbers.
The
new
rating laws .brought about
+v»e Punre^e CViirt decision
Public
Law
No.
15
states,. They become
Wm.
A,
Hebert
and,
now .been, adopted
by most
effective arid i,P full force during
have
Volume 167
Number 4666
:
THE COMMERCIAL
,
&
FINANCIAL
CHRONICLE
>
(349)
-
49
'
1
■■
0
i
Business and Finance Speaks Afler ihe Turn oi the Year
1948. The enforcement of these
rating laws should not
have in any
way a detrimental effect on the operations
of the
insurance
It is
companies..
be explored to discover additional underground reserves.
\
Transportation facilities, which were an important bot¬
tle-neck in supplying the demands of 1947, will be in¬
creased by the construction of new pipe line facilities \
T'M''/'-vi,Vv'''
extremely difficult to prophesy what
to investments
happen
may
PAUL
Perhaps
automotive
of the country to
panies
more
future purchases.
Economic
industry
com¬
events
have
profound
a
influence
and the insurance business is
on
efficient
utilization
essentials
Two
all
pansion
exception. As
change, so must insurance. Serv.ng the
constantly growing number of policyholders and the
public at large is a challenge that has been met in the
past and will be in the future.
no
these conditions
for
of
oil
crude
carrying out this
construction
are
the
materials
of
program
and
capital
can be outlined by reviewing briefly
industry accomplished in 1947, for the pattern
the year to come
will, I believe, be very much the
in
Let
same.
that
processed.
industry
the
country's
me po.nt out first of all
oft-heard charge that the
automobile builders trav¬
eled in low gear during 1947
simply
"ain't so." The industry as a whole
ex¬
funds.
built
Shortages of construction materials, particularly steel,
an important problem for the industry.
The drilling
of new wells, the laying of new pipe lines and the build¬
ing of new refineries all require large quantities of steel
cars
more
did
for
W.
are
to
the
T.
IIOLLIDAY
of this
such
for
industry
essential
basic
a
needs
The volume of petroleum
products which will be pro¬
duced and distributed
by the oil
the
steel
for
any
The
oil
national
our
expansion
The
oil
all
deserving
are
other
growth.
may
so
major portion of its earnings into the construction of
settle
consumers
tion
of
The
areas.
dicate
prospects
that
mands
the
already
to
If
in-
B
large
will
major
which
expansion
program
will
require normous capital
expenditures.
Approximately half
of
the
the current production and the
crude
oil.
The
drilling
of
;
the
to
domestic
^^B
The
new
have
be
petroleum
easing
personal
than
more
send
out
the
a
funds
The
in¬
a
.
to
,
instead oUa si*r<f>":-:
••
^
Paul
coupe
sedan.
G.
Hoffman
are
on
With
such
jobs—more
United States!
.
than
of
growth
throughout
demands
than
more
ten
every
were
•'■'"ft.
.
erably not when proxies
ing
all-time
of
more
in
record
in
the
U.
S.
in
than
2Va
total
a
million
former
the
over
1941.
by automotive vehicles reached new pro¬
It is estimated that approximately 370 billion
vehicle miles
were recorded, an 11%
increase
highest former total recorded in 1941.
>,
all
over
material
and
need
await
Broker
cus¬
no
same
percentage of in-?
ones
or
tomorrow
ones
or
put-it-off-tillplain
to anticipate much
reason
supply problem during the
If
it
is
before,
com¬
that
true
these
then
to
overcome
inertia
(Continued
with-it
are
of
ones as
those whose
record.
be
reached
directly,
to-hell-
(Continued
the
as
broker
shadow of
a
on page
50)
page
names
Consequently,
these persons, whose names are
unknown to the company, cannot
vote shrinks to
on
IT'S
THE
AMERICAN
WAY
itself,
55)
being
stocky
and
to explain in
simple language a complicated fi¬
nancial proposal. Take the case of
Keeping
annual
an
meeting requiring a
majority vote for the election of
directors.
is
listed
If the
and
up
with America
company's stock
active
market-wise,
probably 30 to 40%
of it is held
in the
of
name
brokers
representing
nees,
of ,beneficial
owners.
nomi¬
or
thousands
some
Under
rules of the New York Stock
change, when there is
nor
material
any
no
the
Ex¬
contest
proposal to
be
voted upon, brokers are permitted
vote stock
standing in their
to
owned
name
by their customers if
the proxy material
tributed
and if
ers
these
to
no
has been dis¬
beneficial
What does it
own¬
contrary instructions
steps up to
have been received by the broker
asks for
up to ten days before the meeting.
Thus, in most cases coming under
the so-called ten-day
rule, a com¬
pany will receive a vote of 90%
or
of
more
this
According to the Stock Ex¬
change
rules,
vote stock
without
brokers
standing in their
authorization
beneficial
may
owner
on
names
from
any
not
the
proposal
which alters
and
materially the rights
privileges of the stock. This
restriction
financing,
sion plans, stock
options
other
or
proposals likely to be controver¬
sial.
Under
ceiving
broker
the
necessity
of
authorization, '' all
is
obligated
to Mo
re¬
the
is
to
a
woman
cake of
and
Ivory Soap—by
sponsibility
we
performance of
the
honest value it
cast
This year,
meat
Armour and Company celebrates 81 years in the
packing business.5 Through the years, Armour has
with America—kept step with our nation's
Today, the Armour label is known everywhere as
grown
the best in meats,
it will continue
to
progress.
a sign of
shortenings and dairy products. And so
be known—as Armour
goes on
produc¬
ing always finer foods for American tables.
The
best
and
nothing but the best
labeled
ARMOUR*!
vote
product and the
represents. She
of
confidence
in
integrity of the Company which
Because
of this
quality of
»
•
.
and
has
whenever
the
will
pro¬
serve
of
The
confidence
maintain
to
every
to
product
offer
possible
them still
our
of
for
our
millions
on
of
women
brands—their "votes
confidence"—p|aces
sponsibility
-
we
are
our
a
big
shoulders. A
the
high
make
we
customers
products
which
better; It stimu¬
factories.
preference
show
to
lates the
present and future activities
duced the brand of her
choice.
Makers of:
is
a
glad indeed
are
accept.
;
It indicates her faith in
the efficient
will
certainly include
waiver of rights,
mergers and recapitalization and
may include such matters as pen¬
new
when
grocery counter
encouraged
brokerage-held
ings of directors and large stock¬
holders can usually be counted on
to make up the required
majority.
The case is quite different when
something material is to be voted
a
mean
a
name?
stocki' There, at once, you have a
vote of 25 to 30% and the hold¬
upon.
our
coming events cast their shadows
accomplishments during 1947, far
Proxy solicitation has two basic
holder
are-
that
37,164,000,
of
solicited.
functions:
1947
Travel miles
portions.
year.
different
47)
are
the
•:
registered
and pref¬
year,
six
in
any
increase
an
world
from
in
registrations for 1947 would reach
problem,
the
vehicles
in
job
one
•
previous year. While final tabulations
still to be computed, it was estimated at
year's end
the industry for
the
than
.
>:•
More
additional
huge
trucking industry alone provided
million
will
as
the 1948 prospects for the do¬
on
there appears little
different from any
stockholders—there is ex¬
are
contact—probably
once
an
consumption
of the overall
actly the
for
ability of the
capital
requirements,
present?
bearing
industry.
sources,
further
the customer's reply.
a
demand
direct
a
mestic
"
•
wells must
other
to be
for
had
yourself
you
•
Potter
would still continue
assure
additional
new
pressing needs of Europe and the outlook for in¬
creased
w- T- Holiiday
tomers
page
to
such
consumption
world-wide
HBBy^B
-
also
and
attract
Apart from the increasing demands
underground reserves of
Your Stockholders
(Continued from
production,
we are going:
Employment in the manufacturers' plants of the auto¬
industry in 1947 reached a peak never before
achieved—with a payroll of nearly a million salaried
and hourly-rated workers.
°
be required from the investment markets.
expanded to accomplish this result, and new areas must
And You:
truck
fair
that
motive
favorable
capital funds for
dustry
^Bl
contemplated
toward increasing
directed
a
expenditures
t
Hk;
expenditures
will- be
of
provide av major portion of the
-jfrO^WjjP'.
5
-
facilities to'-keep
ahead of the
constantly increasing
consumption, the industry has undera
«*■
de-
j To provide the
taken
continuation
only
time
.
certain
1948
pertoleum products
increase.
for
continue
for
alloca-
The
is
same
many
more
statistics
which indicate the direction in wnich
earnings level is, therefore, of particular importance to
necessitated the
some
products in
facilities.
and
There
new
and
it
the
of
volume
passenger
by plowing back the
records, the industry's inability to
supply in full all of the demands of
better
matter
mobile,
**
industry has traditionally generated from its
It will continue to do
two
And
it
the
exceptions—
in
reached
an
ali-time
These overall figures hold in
spite of the fact that your neighbor
is still waiting for that new auto-
operations most of the capital funds needed for its
own
only
1941.
than
year
high.
high
of
single
any
with
and
1947
that its
allocation of this product which
'
past
1929
industry holds
economy
become necessary.
industry irfc 1948 wjll
dependent primarily on the capacity of the available
facilities of the industry rather than on
any limitation
imposed
by
consumer
demands.
While
consumption
of
petroleum
products in 1947 reached new high
be
with
compete
material.
in
position
recognition in
must
during
trucks
and
point out at
in
which
users
President, The Standard Oil Company (Ohio)
indication of what lies ahead for the
what the
producing areas
the refining centers. New refinery fa¬
cilities must be built to provide manufacturing capacity
for a larger volume of products and also to make use of
new
technological improvements which will permit a
on
a better
for the movement of crude oil from the
during the coming year. Because of the
fact that high grade bonds are
carried on an amortized
basis the decline in market
values will have very little
effect on year-end statements.
However, it would seem
that higher interest rates will benefit
the-insurance
G. HOFFMAN
President, The Studebaker Corporation
our
research
laboratories
•;
Buying by brand
name
is
.v
a
re_
expression
of life. It is the Americcn
way.
our
.
■; >•/
typical
re¬
of
and
'
democratic
way
50
THE COMMERCIAL
(350)
Speaksiflfler IftheiTurnlufIthel Yeai^
Business and Finance
.
duction
than
more
will
prophecy,
1948.
opinion
the weathervanes
as
serve
;
is
for
It
my
unforeseen circum¬
will reach new heights
barring
that,
stances, the automotive industry
in the year just begun. Employment,
tion—all should establish new all-time
look
I
records.
firm, and I suspect other
is making thorough
preparations for the eventual return of a buyers' market.
Unless all economic signs are grossly misleading, 1948
should be a year of unparalleled accomplishments for
time.
Nevertheless,
own
my
manufacturers as well,
automobile
industry.
the nation's automobile
HOLMES
JOHN
President, Swift & Company
;•
.
supplies in 1948 are expected to be well above
levels, but somewhat below the peak war pro¬
duction year of 1944. Supplies will be about 7% under
Meat
prewar
of Agriculture esti¬
1947, according to U. S. Department
supplies
of
all
classes of meat—beef, veal, pork and
lamb—are expected to result from
two causes: a
general decrease in
Reduced
mates.
suplies
feeding
strong, and it is likely to
ideologists running
heaven for the overthrow of
cur private enterprise system of free government.
In 1932 the government was worrying about the bank¬
ing situation; today bankers are worrying about the
government. In 1932 the people were in debt to a dan¬
gerous limit. Now, the people are on easy street and the
government is on the refinancing end. The crying need,
as seen by bankers at this time, is a shift from extrava¬
gant spending to economy in government management."
A substantial part of the government's tremendous in¬
large shouting to high
come
•-
a
the
of
ment.
^
consumption
domestic
efforts to improving- their
facilities and bringing costs
V.;. '".V:.■
Many bus lines improved and extended their garage
facilities during the war. This should improve mainter
agement will devote their
present routes, service and
'.
'
dOWn.,<!..,f,^
procedure would reverse the inflationary trend
have
not
shall
construction will be postponed and only
essential will be undertaken.
•
depression
a
in
1948;
Prices on
j'
things may go down, but the cash cushion held
cannot
pounds
it
oils.
Holmes
John
per
but a slightly larger output of butter and vegetable
*.
-
-
-.
•
•
,
'
;'<•••;
.
*
■
■
-,
demand for meat in relation to the
supply has prompted some government source^ to advo¬
Continued strong
cate
return of consumer rationing.
a
Rationing will not alter the fundamental fact that the
number of dollars on one side of the meat dealer's
counter has risen much faster than the number of pounds
of meat
the other side.
on
.Rationing would only be an
the symptoms,
attempt to treat
causes.
without touching the
'
In considering the various proposals
must
law by
unscrupulous operators, waste of meat and
by-products, and unequal distribution.
We
from experience that controls tend to dis¬
courage production. Instead of controls, our objective at
this time should be to encourage production by every
valuable
know
means
at
our
command.
in
(3)
1947;
better
we
see
will
be
be
President, City National Bank & Trust Company,
Oklahoma City
^
low
-
the stock market, or the
V"-*U7"V;A
in the stock market, and consequently retailers can¬
but will
from 5% to 12% under 1947,
run
fares. Passenger miles traveled will be less by
10% to 15%, which will be offset to some extent by a
decrease in the number of bus miles operated. Load fac¬
continue gradually down to normal
will
business,
which
almost
tion.
tain
ever
greater task than this has
confronted the diplomats of the
United
States
and
it
is
now
up
to
the people to find another
Lincoln to pilot the Ship
Abraham
of State
through this impending crisis.
;
At no time in the history of the
United. States has the position ~ of "
,
Bankers been
York
New
don
Dan
W.
Hoean.
Sr.
boats
were
the
as strong as it is today.
City has succeeded Lon¬
banking center.
The modern
bank is
no
more
like
it was 50 years ago than Columbus'
liners. The
.
sail
as
like modern trans-Atlantic
pencil formerly used by bankers have given way
to modern machines that do everything but name the
pen and
rate of interest which the borrower, more
fixes
himself.
The
so-called
often than not,
"ThriftiCheck,"
or
one
of
possible for the smallest depositor
to have a bank account. A machine gives the small de¬
positor instant credit on his savings account or on his
its cousins, makes it
installment
wish
to
loan
for
any
household appliance he may
purchase.
Under the
private enterprise system, our farmers pro¬
greatest crops of food and fiber
duced in 1947 one of the
inauguration
new
and
de
luxe
the setbacks of war has
before that they
will attract thousands of tour¬
air,
by
than
-
1
over
Airlines'
Northwest
"overland"-
island
a:rport never more
30 hours. The scenery,*
en the
trip through Alaska, along the Aleutian Islands;
and thence into Japan, China, Korea and the Philippines,is unmatched anywhere else for grandeur and variety.'
The. war turned many places, like Hiroshim a—target;
route—with
an
a
mainland
or
hour's flight away—in
of"th&ifirsP^tdm^b^
by
effort^to modernize their hotels and to provjde modern,^
and rest
''Jfr:
progressive lines of additional
service
ules with few stops
with: coaches
equipped with
cities, on faster sched-s
%
:
'
-*
•
frequent headways.
dealing with
will
Present
be
high
little
cost and-the difficulty involved
construction
facilities will
a
of
major bus
depots.
be improved and brightened up.
The old established and well
managed bus lines should
good year, although net may be slightly
1947.
Many
newcomers
forth in increasing
I''-: I'V'"-.
;• :-v; .:•
Airlines, because of its shortcut route to
Orient, expects to get a substantial share of this
already
numbers.
•
-
are
fly.ng
;•
back
' •"
and
:••••
the
international
traffic to and from
the Orient.
The
year.
this trends
prospects should keep pace with international.
Domestic
Extension of Northwest Airlines' routes
public should show substantial improvement.
of the
cials
1948 should set the pattern for
Courtesy and salesmanship of employees
Because
•
The
Northwest
ijpcial service will be improved with better equipment
more
the peace treaty is signed with Japan.'
^ahguard of business executives, salesmen; buyers,,
engineers,; missionaries, educators and government offi-i
beg n shortly after
by stew¬
and reserved seats, will attract new
riders.
have
last.
It has been carried along l'ar enough to show
many
reached
,
than
-
-
Express runs between major
there
-
of them from the United States. So certa n,
is the Orient of playing host to these visitors that it is
already bustling with preparations to entertain them.They figure it this way: The Orient, once a matter of
weeks or even months from the United States, can be-
*
toilets, buffets, all seats reserved, and manned
ards, will increase long haul business.;
the
-
the Orient began
suppressed: desire: to travel will- lure many "persons to>
distant places. :i
v
t;'
equipment, improved service, better on-time, per¬ iiV Japanese," Chinese, and Filipinos are making every:
The
and
•
much
Even
ists,
disappeared
formance, more seats, improved depot, meal
stops, will attract new business.^ ^
and
,
greater than is popularly understood. They
will be in the world markets m the not too distant futiye.,.
been
slatklari&;<dife^^
business.
war
New
•»
service to
and the.r rate of recovery from
from the
with other forms of transporta¬
compared
Airlines'
Pittsburgh and will soon start
•«
a vast field for business and for sight-seeing". The
industrial needs *of these countries are almost limitless,-
the further elimination of unprof¬
trains and general curtailment of
air schedules, with low bus fares and wider differentials
compared with other forms of transportation, will take
up some slack and offset the loss of certain war business,
tailment of air schedules, with low bus fares and wider
differentials
■
■:£ offers
itable local passenger
tion;, will takeup some
•
■
representatives, while making my own personal observa¬
tions.
The experience convinced me that the Orient
Gasoline shortages,
has placed our Government
(the leading role. We should ac¬
cept that challenge and play our
part with courage and determina¬
■4
'
■
.
fly to Washington, D. C.r
to
government officials, industrial leaders, and our,
Eastern
per
coach
cities.
certificated
present value and its future possibilities. Both are
impressive.4
:
£■ I recently completed a trip to Japan, China, Korea and
the Philippines,
during which I conferred with Far
high level,
unless the in¬
effort to increase pas¬
dustry is successful in its present
of
with exten¬
its
Lines
senger
operation.
July 15.
will continue at a
revenues
been
Northwest
-
dollar
has
by way of Cleveland and
HUGUELET
President, Southeastern Greyhound
Gross
It
that
expected to hit the nail on the head in guessing
the future. However, this should not be any reason for
relaxation into careless judgments, v
not be
GUY A.
Croil Hunter
;;
.
sions to various mid-west
Lester Hutchings
hit
investors do not expect to
them.
It has rounded out its domestic structure
likely make this year the most important one in all
history. The setting of the international financial and
political stage by the swift-moving
diplomatic
maneuvers
of
various
No
accom¬
hy.:
of the first of these by next summer.
the high in
Charter
in
of
program
■/
^ It has ordered 10 double-deck, 75
passenger; Boeing. Stratocruisers,. expecting delivery-
should be reminded that the shrewd¬
est of
of
more
•
during the war because of shortage of equipment
ODT restrictions, will be substantially increased.
nations
overall
;>It has entered the global field wilh
scheduled service to the Orient by
way of Anchorage, Alaska.
VV-A It has acquired a fleet of Margin
202 airplanes as replacements for its
Douglas DC-3s,. and is getting still
,
solving of the unsolved reconstruction problems,
both in the United States and in the world at large, will
The
its
plishments:
reducing bus miles operated revenue in
mile should remain constant with or slightly
less than last year. Net income will be slightly less be¬
cause of higher operating costs.
•
'
"
>
months, this airline has
major developments
:
-
cents
HOGAN
W.
million-pas¬
certain
to
wartime high. By
DAN
in a-record
North¬
It may be
first
year.
recent
In
-
'.<4,
' V"Taking a look back over the year
1947, retailers have acted very bad¬
ly. They were poorly advised and
-as
a
result they sold
merchandise
at
low
prices
and
turned
right
around and replenished their inven¬
tories
with
goods at
still higher
prices. Retailers and their advisors
year.
tors
•
-
proof will be
Airlines'
added
1948 is election
remembered that
the
senger
It must also
good in 1948.
when the company will realize, in a substan-1
the benefits accruing from a forward-looking
volume of traffic.
west
that business
factors would indicate
•
year
way.
and
profits in
signs that
now
for rationing, it
total supply available. * We have learned from ex¬
perience that with rationing will come a return of black ~
markets with all of their evils, including disregard of
also
slightly
therefore
earned
'
many
the
the
and
were
kept in mind that rationing will not increase
be
as a
.<
,
this threshold of 1948, accepts
on
believe, the wis¬
dom of policies already adopted and
the soundness of steps already taken;4
expect expenses to be under
we
Airlines,
postwar program.
It will piove, I
equals demand on' a
things. There are still
some shortages of supply, and farm
income, full employment and other
supply
great
•
:'
eggs,
than
1948
capita which is well above
the prewar average.
Military purchases and exports
amount to only a small proportion to total production
and are expected to decline somewhat in 1948.
The outlook for production of other commodities is
for somewhat smaller production of lard, poultry and
to be to about 145
1947; (2)
control
better
percentage as
Domestic consumption for 1948 is expected
production.
President, Northwest Airlines* Inc.
Northwest
.
HUTCHINGS
'. ' CROIL HUNTER
* •
Ameri¬
We expect retail volume to be a little better in
(1)
capita
per
JNew major garage?
that absolutelyI-V
methods and lower these costs.
nance
today and immediately deflation would begin in an
orderly way, which, like an airplane landing, would
1948 than in
probably decline by about the same
will
f
,,
productivity of labor should increase.,
*
will be little expansion of existing lines or the
establishment of new lines during the year. Good man¬
of
LESTER
supply! of meat available for
The.
people.*.,;;
buses will handle more
Fewer
.
equip¬
and economies in the use of
There
Chairman of the Board, Western Auto Supply Company
Compete
to
dollar
consumer
.
The
tial
employment, pay rolls,
remain at high levels.
consumer
goods become
meat.
,,
■
vide better service
should be used in paying off the government debt.
Such
by the people will break the fall. After all, the
can
people have a lot of common sense. One
afford to sell them short. >
available, however, there will be
more
competition for the consumer
dollar; This probably will leave less
for
equipment.fry'$<,vj-iWi*■»'['• V,vS.
( The continued development of two-way radio will pro-i
'
,
many
as
more
due to higher
;
higher prices for oJ,
apparent to all of us, we find certain
at
income
As
increase,
to
efficiency,
Improved highways will decrease costs and help busi¬
ness.
"
[./,'<■f'f ,;v;'v .'r:{?■£. v
remain so
long
and
lower
and obsolete
continued
as
continue
will
and
costs
tires,, parts and matetiaLC.
High maintenance costs will be offset by the receipt
of much needed new equipment and the disposal of Old-
gas,
'
-
has
meat
for
Demand
going tough and as a result there
class.
>;•
number of failures from this
a
Expenses
labor
business, I have never seen a time when everybody was ,
nearly out of debt and where there was so much cash
in the hands of the people.
Yet, with all the facts so;
We
livestock
season.
will be
we
scarcely be noticed.
production, and smaller
of feed grains during the
current
export,
so
to continue for some
market
sellers'
the
for
payrolls, produc¬
for
will find the
babies"
of the raids made on this pro¬
still have abundance for home
consumption. Our manufacturers are fast catching up
with the heavy demands on their plants., The hous-ng
shortage should be fully covered within a few months.
During the many years that I have been in the banking
In spite
recorded.
ever
(Continued from page 49)
•
Thursday,- January 22, 1948
FINANCIALCHRONICLE
&
lower
and over-expanded "war
the
into Washing¬
nation's capital directly with
capitals
ton
will link
and
metropolitan centers of many northern states.
Meanwhile, as its network spreads and its fleets grow,i
airline is moving to increase the dependability of
service by installing the instrument landing system
this
its
(ILS)
on
its'airplanes.
This will enable crews to com¬
plete about 75% of flights now canceled because
of un-
Volume
167
Number 4666
THE COMMERCIAL
&-FINANCIAL
CHRONICLE
(351)
51
Business and Finance Speaks Alter the Turn oi the Year
favorable
weather, and will assure .completion of more
of all scheduled flights.
'
the end of the
war, aviation was confronted with
of its most
will
than 99%
some
in
the
y:'
"
will
surrender
to
the
Administration
the
//power to tax and to
direct when and how the money will
spent."—Hansen—National Resources Planning Board.
be
■
IGLEHEART
President, General Foods Corporation
Asst.
.
Already
have
we
seen
with
power,
emphasis
bor Board.
growing
foods, fruits,
vegetables meat, poultry, and dairy
products.
Today, I believe, house¬
wives
not
only are buying more
carefully—they are using food more
carefully and with less waste.
'01;
•:
:left ffee
•tain
to
prices.
year,
we
food
consumption
may
In
assume
the
coming
and
in
pig iron, 40% of coal and lead.
gold.
It
by Congress. Nature herself will of
important voice in setting consump¬
y;£y.ivv •,:.•>•;r-v.per capita consumption of certain foods
destitute
any
case,
over
a
probably decline.: Meats, poultry; and animal fats
largely the end products of grain. 'Even if continued
'heavy exports draw down the supply of the
grains, we
•can still
compensate by reveriing to more direct uses
of basic grain foods, and
by diverting them from live¬
'
-
soon
its
it was widely predicted that food
compete more with durable goods,
increased share of the consumer dollar.
I
have
believe that this kind of
competition is already visible to
extent, although the signs are a trifle hard to read
in view of the
general advance in prices of goods of all
sorts.
It dees, seem
food pvices are
tihe
me.
however, that the
high will
verv
fact
that
mean
production of durable
goods may be much closer to
meeting demand in 1948 than is
commonly supposed.
This is not to be taken as a
prophecy of gloom how¬
ever.
There is a vast difference
between a recession and
a
Vwhicfi•■■■•it"
of-capacity.
power
depression, between
assured
an
"pompous
But
leveling-off
a
process and a
or
is greater
was
created
are
substitute
that the methods by
is only
ness."
as
one
come
material
side
of
life.
They must
go
Nor
can
changes of
government
they control the flood—and ebb
the air.
No
scientist
seed which creates the harvest to feed the
GOD CAN DO THAT.
order
and
be
that
he
may
Nature insists that
reach
his
highest
make
can
man
of service to his fellowman—not
to
ditional
sources
shift began late in
deposits this
state.
9
1
1
on
page
52)
4
2
4
3
9
9
4
4
4
5
contains
so
many uncertainties and when the
prospect of sharper
competition may be closer at hand than
has commonly
EDWARD
Special
F.
HUTTON
Partner, E. F. Hutton
If you or the
president of any
what the
ideologists within
office who have
sworn
1
Company
business, want to know
Administration plan for
our
all of us, it's in
print. And
statements has been made
&
every
by
one
men
of
the
1
following
appointed
to defend the
to
4
9
been supposed.
high
9
4
7
4
9
8
Constitution!
have
All of these statements
made
by men in
been
appointed
high
positions
the
nation
todians— not
lTiSn
Constitution and
—
has
changers
—
Bill
our
of
Just listen to.these:
■'
/'Having
From
appointed by
elected
as
of
as
,many
chew.
fully,
large industries
development of the SOUTHEAST.
With confidence that the natural
Rights.
Southeast
once
could
indications, 1948 should be the biggest YEAR yet in the
our
captured the Gov¬
ernment
and
shelved
the
Supreme
Court,, we Socialists would national¬
ize
all
industrial
cus¬
as
can
fulfill your most
location, the COAST LINE is
mation
we
advantages of the resource-rich
exacting requirements for
in
new
plant
position to furnish complete infor¬
regarding available industrial sites.
Inquiries
are
invited.
if
We would
do
it
peace¬
possible, and otherwise, if
necessary."—Blanchard—State Dept.
R.
"The whole capitalistic shell
game
can sink and be
damned. Tell them
we've got a war on—a war to
a
workers'
—Interior
government."—Sifton,
Edward
F.
Hutton
Dept.
"Ownership will become
any
active part in the
more
and
more
divorced from
business of society. T^e
>nw:v
P.
JOBB
Manager Development Service
estab¬
lish
i
ATLANTIC COAST LINE RAILROAD COMPANY
WILMINGTON, NORTH CAROLINA
■?-n
owners
'
<
to attract ad¬
meet all the possibilities of
the
,
v
spending which is pressing upward the
(Continued
19
coming
inventories closely, make
capital investments with great
care, and give special
heed to improved
production methods during 1948. These
are simple
principles of good management which
apply
at any
time, of course, but they will reward special em¬
phasis given them at a time when the
outlook
■
re¬
con¬
year.
price
year, management must watch
may
new
stream of current
position
uncertainties, ranging
would
Through such efforts, they
can make an
important contribution to the battle against
inflation.
When people deposit
part of their incomes in
savings banks, these funds are withdrawn from the
the
;from the size of the world's food
crops to the develop¬
ments in the world's
political arena.
ready to
investments whenever
Savings banks will continue their elforts
in
be free in
any
other
from savings banks and other investing institutions.
or
people. ONLY
possible
into
secure funds for
private investments. These trust funds and
agencies are collecting a large proportion of current in¬
dividual savings, and they are not permitted by law to
buy corporate obligations or mortgages for their own ac¬
count.
They can shift the funds they receive to where
they are needed by purchasing Government securities
No
seasons—nor
at
investing institutions will sell to
making
hand-in-hand.
a
was
contemplated all along that a part of
Government obligations during the
m
be shifted
Such
other
the
as
did any country
place in the earth—minerals—oils—fish
the waters—fowl in
instal¬
Government trust funds and agencies provide a logical
market for the Treasury bonds that savings banks and
country—no government—can abolish nature—the hand¬
maiden of God.
year as
1947, and it
tinue during 1948 and in subsequent years.
'
well
production collapse. By and
large, I believe that 1943
will be a year of
generally well-sustained business ac¬
tivity.
It will also be a vear of
To be
vive.
just damn foolish¬
as
was
the demand for capital from private
^London "Sphere."
We in America, (believe in the
spiritual
It
placed
would
war
to char¬
way
low ebb.
•the funds
all wrong, ought to be aban-
There
being received each
the demand for capital from other sources
cause
a
political management for individual initi¬
ative and supervision.
are
'
looking
doned, must be discarded, and that the time has
to
sums
common with other investing institutions
savings banks
/bought Treasury securities to the limit of their ability
•during the war to help finance the war effort, and be¬
prosperity is
statesmen
still
increasing, although at a slower rate
than during the war years.
Secondly,
portant asset of mutual savings banks.
Today, about two-thirds of the investments of mutual
.•savings banks consists of Government obligations.
In
$22,614,410,582
banking re¬
its people
three
are
by the banks exceeds their operating expenses.
Thirdly, large sums can be secured for other investments
through sale of some of the United States Government
•obligations that presently constitute by far the most im¬
world's
of
/estate solemnly declare
tides—the
to
that fewer dollars will be
available for other
goods and services. Hence I am one
of those—and
perh p? one of t e few—who believe tnat
the
*
to
rome
It has
the
acterize that proposal and that is
At the start of 1947
hold
purchasing
of
bulging economy into
will
'are
to
two-thirds
from
First, deposits
.
lected
and
area
investment
sources.
.
mortgages owned and in redemption
of maturing bond investments and as cash income col¬
people of Europe or all. the people
// of Asia." Responsible leadership which cannot translate
such
would
has
The
sources.
tion levels. •V
stock.
of the world's
0'2■000 f11 r^er either by (a) price: itself, if
ofgoyernment cqhttrols^pr (by 'ali^atibh'bf pe^ /; than/that of all the
food supplied
substantial
7% of its
It has 60% of the telephones, 80% of the motor
cars, 35% of the world's railroads.
It produces 70% of
the world's
oil, 60% of wheat and cotton, 50% of copper
'course also have an
In
S. has 6%
case
ment payments on
Re-
people.
affected
be
"The U.
for
main
,
•
that domestic
will
labor and
property."—Evelyn Burns—National
sources Planning Board.
-
all productive
are
no
~
August ihiefeid
own
'
In
the
funds
'000^10.. •;/
"Society will have to devise methods that would refuse
individuals the right to make what use
they wish of their
This is one of the first and one of
the healthiest signs of the consumer
resistance
nance
"The
quality
on
>/•
be
do they fi¬
hoarding of commodities
or speculation.
i
1
Savings
banks
accumulate
new
government iwill provide the market and
say
what and how much is to be
produced."—Durr—Federal
or
They
in character.
Trade Commission.
case
demands
investments by savings
able goods.
chasing
Igleheart
Loans and
or
purchases of food by
pound, although not by
dollar volume. During the war years
per capita consumption of 'food rose
steadily in response to increased pur¬
the
these
banks finance the acquisition of dur¬
Secretary of State.
stocks, bonds, mortgages, land, build¬
equipment shall be required to surrender them
in return for common wealth
bonds."—Porter—War La-
ings,
that
Additions to the supply of
pressures.
"All owners of
leveling-
a
off in domestic
interest
housing and to industrial plant ca¬
pacity, in meeting prevailing short¬
ages,
help to relieve inflationary
"The government will
gradually come to own most
of the production
plants of the United States."—Bene—
food.
S.
lic
satisfied.
already been suggested that business will logi¬
cally be required to disappear. This is not an overstate¬
ment for the sake of
emphasis; it is literally meant."—
Tugwell—Governor of Puerto Rico.
By present indications, 1948 will see no overall short'age of food in the United States although some con¬
sumers may get less than
they want of certain types of
Austin
.
for industrial expansion will assume
record proportions.
It is in the pub¬
"It has
WiS.
"
The savings banks are in an excellent position to
help
satisfy the increased demand for capital that has devel¬
oped as a result of business prosperity.
•
.'i
This year, capital demands both for home
building and
'■
/ .republic."—Trippett—OPA.
"Congress
I-:
understand."—Harry
:
0
.f''y 0 '-'',
IHLEFELD
President, Savings Banks Trust Co., New York City
industry and government, abolish
capitalistic system, and build a workers'
belief that the air age was no longer any vague
but an era already upon the commercial
I believe that 1948 will demostrate the wisdom of this
>;
;1
;)
-
too damned dumb to
"To take control of
the present
carriers..
i
AUGUST
:;;• •'
are
Hopkins.
•
abstraction,
/course'.
necessary."—Olds—Federal Power Com¬
i"
■
.
"People
weighty problems—many of which
could net he solved
merely on the basis of past experi¬
ence.
Northwest Airlines laid out its program boldly,
•
to be
cease
mission.
,
At
52
THE COMMERCIAL
(352)
After the Turn sol the Year
Business and Finance Speaks
(Continued from page 51)
,
,
\V;
.
volume
nations
of housing.
productive capacity and the supply
SIGMUND JANAS
President, Colonial Airlines, Inc.
be
opportunity during the year
the immediate postwar period of
American Aviation has an
benefit from
to
1948
expansion and reorganization. However, in order to take
advantage of its opportunities it is my opinion that the
the
of the airlines in
management
'
■'
public.
trial
of
a
higher yield.
for
able
.
j
•
periences with certain types of equipthe larger airIt is reasonable to
ernization and improvement.
~
believe that the worst of these prob¬
lems have been met and are being
Janas
Sigmund
ficiency from the equipment
and is in use.
.
this
Of
solved and during the year 1948 the
airlines should be able to obtain the
maximum of ef¬
which has been purchased
,.
has been placed on speed by the vari¬
ous airlines and I think in laying the stress on this point
that the airlines have overlooked the real fundamental
need of air transportation.
In my opinion this need is
safety. It is my experience that people are interested
in getting to their destination safely, and if they can do
that rapidly that is to be desired, but above all they want
safety and demand it.
'
Unless the airlines concentrate on safety they will be
unable to encourage thousands of Americans who want
to fly, to adopt air transportation.
Federal regulations of air transportation in the United
States has reached a point where it has the opportunity
of making the future a great one or delaying it for many
years to come.
The delays in obtaining decisions from
the Civil Aeronautics Board are most costly and dis¬
astrous. I am sure that it is the fervent hope of airline
~. Great emphasis
r
on
Board will
considera¬
the matters which so seriously
If the airlines of the
tion
decisions
and
;affect
business.
our
1
concentrate on safety and safety always, 1948
biggest year in the history of air transpor¬
will place the industry on a solid footing
able to face the future with optimism.
If this is done
there must be among the operators a universal decision
be the
will
and
not, under any circumstances, to compromise
with safety.
GEORGE C. JOHNSON
Deposits—In
during 1947, and even though compe¬
of an increasing
tition for depositors' funds in the form
supply of consumer and consumers' durable goods made
itself felt, deposits in mutual savings
banks
again
reached an all-time
This made the
sixth consecutive year in which the
mutual
savings
banks
surpassed
their previous peak.
During these
six years a truly impressive growth
high during the year.
was
shown
sets.
The
in
both deposits and as¬
former
have
from
risen
about
George C. Johnson
$10,500,000,GOO at the end of
1941 to $17,600,000,000 on Nov. 30,
1947—a gain of over 67%.
However, as in 1946, the rate of
gain in 1947 was substantially less
than during the war years. During
1945, for example, the deposit gains
in mutual savings banks in this coun¬
try averaged about $166,000,000 per
^
month.
to
receded
for
1947
and
1946
this
figure
approximately $122,000,000, and
that
the
monthly
average
are
$70,000,000.
These gains have of
war
In
postwar
.
had
indications
about
was
New York.
York
State,
Bond
<
costs have also risen for
a
plagued during 1947 with
estate transactions reflected
declined since the
ing
market.
security acquisitions.
financ¬
ing in 1948. One informed source estimates that such fi¬
nancing could exceed $13,000,000,000, as compared with
greater yields
on
new
All indications point to a record volume of new
lems
This decline
should
as
Dol¬
months
with
Kapp
should
continue
of
care
that
surpluses
no
mulate.
leather
are
expected
Inventories
to
of
be
to
are
the
low
on
W.
Man-hour
production throughout
the industry should continue to im¬
during 1948, and thus make
little
each
get
more
between
year
vehicles
to meet the demand
side.
prove
a
million vehicles
v : V,
3V2 and
would
that
nor¬
try at the beginning of 1947 was to
reduce the back-log of demand as
much as it could and also somehow
and
world
,
of
total
mally have been produced.The major goal facing the indus¬
accu¬
hides
the
KELLER
1947 the automotive industry made several
production records and this in spite of short steel
million
4
adequate to take
much production, but
considered
still
ma¬
be
throughout
T.
During
new
to
should
terials
The
of 1929, 1937 and 1941.
During the war years of "no pro¬
duction." the American public failed
the year.
raw
will be told beautifully,
medium of the phonograph record.
today as never before.
the
through
prewar years
throughout
Supplies of leather and
can be
that has
world needs this story
than 4%
rolled from the industry's assembly
lines in United States plants.
Only
three other years were better, the
demand, and this competitive sit¬
uation
Much
already been made in our industry.
story of America can and
The
A
equal
supply
firm belief in the future
a
supplies.
probably be up about 10% over the
previous year.
The industry has
been on a competitive basis for the
12
have
I
about 440,-
prices of shoes will
average
discussions
President, Chrysler Corporation
000,000 to 450,000,000 pairs, almost as much as 1947.
lar volume should be higher than
1947
objective
done to further the progress
K
run
through
of the record business.
JARMAN
Shoe production for the year
to
before the ban. 'S
presently available, it would be
MAXEY
M.
normally occur¬
ring during the year. / \
? •
While trying to produce as many
Jarman
vehicles
new
possible still better
value to the consumer,
many
roads
W. ALTON JONES
as
the industry also
as
as
supplies permitted,
K. T. Keller
attempted to keep
old vehicles running on the
possible, and turned out of its factories during
replacement parts, valued at $2!/4 billion
times that of any
1947 automotive
President, Cities Service
Good management strives
and
in
bad,
Company
at the
unceasingly, in good times
of expanding
offsetting the upward thrust of costs,
so
far as possible, by technological
improvement.
The petroleum industry, for ex¬
ample, has made great strides to¬
ward cutting transportation costs. It
has built a great network of pipe¬
lines. It has developed inland water¬
•
and river barge equipment.
ways
It
aided and financed the construction
ocean-going tankers. The
better transportation
costs, with incalculable
benefits to the public.
At the same time, the petroleum
large
result today is
and
W.
Alton
Jones
lower
industry has been called upon to increase its production
petroleum and
petroleum products in the world and in the United States
is today at the highest level in history.
To meet this
demand, the oil industry in 1947 and 1948 is investing
to
unprecedented
levels.
Demand
for
factory doors, a measure many
previous year.
■
In this connection, it
twin objectives
toward the
production and reducing costs.
In the oil business as in all others, many costs continue
to be driven upward by factors over
which management has little or no
control. Thus, management's efforts
must be directed principally toward
result,
However, the past few months of falling bond nrices
sons
Chairman, General Shoe Corporation
earnings have continued to be depressed.
have meant
The number of
Jack
From the information
paucity of suitable invest¬
a
possible
deeds recorded has
presumptuous to attempt to predict the future of the
mortgage and real estate market with any assurance of
certainty.
regrettable that it was not
bring together all per¬
involved to solve existing prob¬
It is also
•
„
long-time
As
prevent its membership from en¬
gaging in any recording after Jan. 1.
indicate that some of the feverish buying and sell¬
that followed the war has disappeared from the
may
of
a
in
and fall of 1946.
summer
savings banks were again
S. Government bonds.
,
rapidly during the past two or three.
real
The interest in the
greater today than when
they were first issued.
<
•
It
is
regrettable, however, that
the American Federation of Musi¬
cians
has
deemed
it advisable to
of just one year, building
period of 15 years, albeit more
a
five years.
over
-the latter is
the exception
With
years.
;
Investments—Mutual
ments other than U.
exceeding
business to be good in 1948. Decca
backlog of new unreleased recordings
in addition to thousands of records
that
have
not
been available for
i
„•
;
our
sizable
more
rose
been the result of high
along with a shortage of
for example,
expect
a
have risen
deposits will continue to rise, the rate of gain will be
further reduced.
Even a modest gain, however—only
half of that for 1947—will show the savings banks of
goal of $10,000,000,000.
has
It is not generally realized that although prices
steeply during the last three years, they also
gradually during the preceding eight or 10
poised.
goods.
Increasing availability of the latter, continued
high cost of living, and some stabilization of the income
level, lead most savings bankers to feel that although
New
We
GI
Certainly the present real estate market is delicately
course
incomes,
"■>
-
'
,
in
Nation-wide figures are comparable to those for
gages.
to
spite of the fact that the cost of living
continued to rise
was
KAPP
President, Decca Records> Inc.
ing problem is indicated by the fact that at the end of
1947, they held approximately $250,000,000 of GI mort¬
past
President, The Dime Savings Bank of Brooklyn
>
JACK
1
solving their hous¬
the State have aided the veterans in
'above,
tation
'
The extent to which the mutual savings banks of
loans.
'
■1
v
*.
i
new
approximately $144,000,000
figure,
United States will, as I have said
operators that in 1948 the Civil Aeronautics
become so organized that it can give speedy
that
are
production
men
production to meet the all-time record demand, and by
keeping the closest possible control over costs.
Time and the play of those forces inherent in free
enterprise are the principal requirements in the achieve¬
ment of this goal.
fi
dwelling units
mortgage lending by savings
banks in New York State exceeded $500,000,000 in 1947.
Indications
push onward and upward .toward new
everywhere are determined to do their utmost
to meet the challenge which faces them—by increasing
Department of Commerce has estimated 950,000 for 1948.
At the same time, many existing mortgages are being
increased in connection with sales, or because of mod¬
ment which many of
lines had in use.
.
Oil
completed in this country last year, and the U. S.
were
been some unfortunate accidents and
there have also been unpleasant ex-
period in the history of the world. VThese bilhons are being spent to find and develop new
oil fields; to construct new pipelines, tank ships, tank
cars and river equipment; to build new refining faciLUes
to produce more and better products; and to discover
new products from hydrocarbon sources.
^
^ f /
Modern science is being brought to the ..aid of the
industry on a scale which would have been deemed
impossible a few years ago. It is unfortunate but true
that for half a century the record of the petroleum
industry was far from brilliant in utilizing the benefits
of science, particularly in the field of production.
But
we are now in a new era.
We are using technical skill,
the laboratory, and the engineers to help us understand
the excesses of the past and to avoid them in the future,
and to
'
Latest estimates are that about 825,000
largest indus¬
industry in a
; goals.
over-supply of money avail¬
is already somewhat of a
there
investment,
shortage.
this period there have
routes. During
their lowest levels.
In many quarters, where a
rates.
short time ago there was an
personnel and obtain equipment
suitable to the needs of the various
;
need of
Many bankers believe that this problem
although not solved, in 1948 through ex¬
its effect on mortgage
new
f
,
savings banks at this time is a more adequate supply
investments other than government bonds, bearing
Mortgage interest rates are now at
'
-
the
:
However, the upward trend in money rates as reflected
in the bond market of recent months is bound to have
of the war the
been trying to train
have
airlines
1
•.
\
,,
.
like
;
pansion of the mortgage market.
close
the
Sinee
■
'
i
will be eased,
recognize that
air transportation is not now univer¬
sally recognized and used by a suf¬
ficient
number
of
the
traveling
must
States
United
possible.
Mortgages—As already suggested, the greatest
than $4 billion. This is perhaps the
expansion ever undertaken by any
more
approximately $10,500,000,000 in 1947—an increase of
Even though many of these new investments will
not be eligible for savings bank purchase under existing
laws, their availability will tend to reduce market pres¬
sure on the part of those whose investments are not re¬
stricted to "legal lists" or other formulas.
This in turn
should enable the mutual savings banks to obtain "legal"
bonds at a somewhat higher yield than would otherwise
25%.
jjrices of consumer goods, and are added to the
of savings which go to finance expansion of the
1948
Thursday, January 22,
CHRONICLE
FINANCIAL
&
,
is interesting to note that whereas
before the war the average passenger car was compara¬
tively
youngster—about 5J/2 years eld—passenger cars
a
standards, better than nine
today are oldsters by prewar
old.
Chrysler
years
United
•.
Corporation
during
States and Canadian
-
1947
plants
a
^
shipped from its
total of more tjhan
million, six thousand vehicles. This figure compares
well wiih our,> prewar, yearly production. ; figures.
The
million vehicle mark was surpassed by us four, tim^s 111
a
the
prewar
period.
.'industry
mv
' i-Vf
^ p
:
producing nearly 5, million
operating at only two-thirds
of capacity, because ol" materia] shortages, it nevertheless
offered jobs to. 790,000 factory workers, about 40%, more
than in 1941, and paid them about $2% billion,.
This;
wage bill was 75% more than was paid out by thedndus^
try in 1941. :
•'
/V •
During 1947 about 9 out of every 10 passenger cars
produced went to an American buyer. Exports of cars
and trucks remained at about the same percentage levels
this
While
vehicles
as
•
during
1947
in
was.
when governmental export
A
total
of
about 260,000
countries last year,
controls were in effect.
motor cars went to foreign
about 7l/2% ,of total
production.
spitdof high1 production levels in 1947, a big job
still remains to be done to meet? the demand for motor
In
Volume 167
Number 4666
THE COMMERCIAL
&
FINANCIAL
•
CHRONICLE
(353)
53
Business and Finance Speaks After the
Turn ©f the Year
vehicles.
Estimates
from 4 million
to
to how
as
10 million
large the demand is
cars.
facilities in five years.
This will
in
run
'
1
coal is the
demand for coal, as
mean
a
large increase
pre-eminent iuel for
Something of a dent has already been made in the
^ this purpose.
demand by the 71/2 milliorvcars
produced since V-J Day,
The export demand
but how large a dent no one can
certainly will be no less for the
say.
current year.
There is a strong possibility that with
The year 1948 starts with lines of
customers still
added production, we may
export more coal this year
forming on the right for all the vehicles the
industry can
than at any other time in our
history.
produce—and the industry is still in the odd
,
,
position of
doing
customer
a
favor if it sells him
a
u
car.
Steel supply remains the
key to car production. Sheet
and strip steel are still almost as
tight as at any time
since the end of the war..
'
,J' '
' '
1
""
From where we
stand, no relief in the form of more
steel is in sight
during the first half of 1948—and it is
much too early to tell
what the last half of 1948 may
bring.
that
means
barring interruptions to production,
industry should produce
1947
rate—or
"While
perhaps
sheet
steel
motor vehicles at about the
few
a
more.
supply
is
the
big hurdle for 1943
other factors cause concern.
The price
spiral gives no
signs of having reached the-.top. and several
strong
pressures
remain to push prices
higher.
pressures could have serious effects.
The effect of the Marshall
Plan and the proportion of
American production of goods that will
go into
exports remains unknown. Of
course, this
industry
can¬
not escape the effects of
these factois, and any
resulting'
limitation of the supply of
goods available for domestic
consumption.
industry for the
rapid
current year.
Improvements in washing plants and other
means of
preparation makes the use of coal more
desirable than
ever before and with the
price relationship against com¬
peting fuels, we'should retain without trouble
the mar-,
we
1948
with
have.
now
Therefore
the
coal
industry faces
an
increased production,
ample markets and
competitive price relationship with other
fuels and a rate
of profit for the
industry that assures the stockholders
a
satisfactory return on their investment.
CHRISTIAN W.
KORELL
President, Underwriters Trust Co., New York
Many of these'
total
a
lessening of the
of coal for
use
kets
This
the
Steel'and other industrial demands continue at
rate and there is no indication of
any
The outlook for the
banking business in 1948 is better
than it has been for
many years.
The opportunities for
the extension of more
commercial credits at better dis¬
count levels will of
course add
materially, to bank prof¬
its. The need for more
efficient op¬
eration
all
along
in
necessary
bank
the
order
line
to
will
better
be
even
HENRY P. KENDALL
^ President
The
net
A substantial part of our
business is surgical dressings
the balance textiles and
textile specialties.
In the
first field, because of the
shortage of
textile products, I feel the
demand
will be
reasonably good. On the tex¬
tile side, the cotton
manufacturing
\
and
industry
has
undergone
a
than
stroyed?
Again I reiterate
and
show
decided,
a
their
stronger
O. J. LACY
President* California-Western States
Life Insurance Co.
t...In the
general
tendency
goods finished
sened
the
free
feeling
own
show
end
good
a
.of
the
it
market
for processing.
Because of the
my
and
year
as
that
demand.
1948
Before
will
there
business
Hamilton
ning
are
Watch
A growing
1948,
is
any
consumer
on
the
the
Here they are:
more
methods
important, let
is the
with
experience, training
cope
with
the
real
lacking
and
of
a
is
apparent that the
getting
Christian W.
Korell
Congress is desirous
business, and if this is ap¬
pri¬
The key to the
prosperity of our country today more
ever is less
government in business and more
busi¬
ness in
government, and of course this means less taxes
for every one.
The Truman idea of a
long range
under the Marshall Plan
is
spending program
ridiculous, since conditions
so
and
relief;
connected
all
those
of
Commodity Market;
Industrialists, Mer¬
chandisers, Farmers, Laborers, all
as
rather
than
O.
of
J.
harvesting
the
Greed does not pay.
crop
for
the
good
rapidly that it is difficult
to
see
Real estate loans should be
made in
in
1.948.
still
planning
badly
is
the
of construction
increase.
This
during
war years and due
condition
applies
particularly
ahead.
(Continued
on
page
54)
appear to be wise.
President, The United Electric Coal Companies
Without being too optimistic, it is my firm belief that
1948 will be a good year for the coal industry.
during the calendar
yeaf 1948.
Railroads
,,
for
several
last
Unable to furnish suffi¬
cient cdrs to keep all mines operating
at full capacity.
Undoubtedly with
new cars'available this year, trouble
should'be avoided with a resultant
year
International Shoe Company
.
months
were
ST. LOUIS
substantial increase in the total ton¬
nage for
the
however,
'is
year
1948.
subject
to
All of this,
any
long-
drawn-out'strike by the United Mine
Wdrkers of America or a further re¬
duction'1 in the
number
of
hours
worked per day.
M
Consumption of coal last year was
at a new peacetime high. The biggest
Frank F. Kolbe
increases were in exports which were
45% above 1946 and in electric power which was 24%
above 1946.
Export demand last year was only limited
by our capacity to mine coal. Railroad demand increased
slightly clue to the increased number of diesels in .service
and this will continue,
panies call for
an
,Plans by the electric po\y.er com¬
incre^cpf 35% in electric, generating
cessation
on
the
West Coast where
population increase has been
greatest
depleted, make this
has been; added to old property will
a
to population
FRANK F. KOLBE
have their effect
all.
"backlog" of orders for industrial and commercial
build¬
ings and homes in great numbers due to
plus the need
Production should increase over 1947, New mines that
have started and improvements and new
machinery that
they
increasing volume
replenishing dealers' stocks that
are
of
Though measures directed toward the
curbing
of -undue expansion have
been taken a certain
amount
of expansion will be
done of
necessity. There
demand
for
that
"Garden-of-Plenty"
sub¬
Hamilton watches
Lacy
a
group are grabbing to
"get theirs now," awaken to the
realization
are
sabotaging and wrecking the
of
employment with tremendous
savings to the tax¬
changing
Government
whom
bank, and that is
payers.
are
with
its
purchases
commodities at sky¬
lative Food and
Fourth:
Let
the government, who
are
in one
way or another
competing with the banks,
their funds can be
returned to the United States Treas¬
ury, and the thousands of
employees can return to
vate
competition
fellowmen also get out of the
specu¬
present
government out of
the 20 or 30 agencies
of
the
vision
function
and
high estate who should and do know
harm they are
doing to their
of
are
out
Enterprise in
foods
prices for Foreign
Third: Let individuals
real function
credits,
and
previous
for
Kendig
largely solve
plan¬
production,
stantially larger than
year.
for
Company
capacity
on
uncertainties
horizon
the
Eccles;
And
rocket
than
President and Treasurer, Hamilton Watch
Company
While
bonds in¬
discount business,
number
commercial
plied to
the
briefly discuss
It is just that
simple.
Government
control
of
inactivity
of
be
the
a
discounts.
will be downward from present
high demand.
M.
great
the
demand,
to
present situation.
First:
Let
ket
bank.
It
pent-up
like
Government get out of
speculation
the Food and
Commodities Mar¬
government
course
a
to
CALVIN M. KENDIG
C.
of
sell
year
will
in
doing
of
which of
les¬
pipe lines and
Henry P. Kendall
pretty well filled,
but no recession of
importance will
be indicated
although the trend toward the end of the
shelves
invested
stead
to
textiles
would
Let
Government do two
things and
Enterprise two, and we can
Private
has
of
beginning, I
situation.
Private
For the past 14 or 15
years banks
have been largely investment
trusts,
with the greater
part of their funds
in
companies
we need
less government in
business
business in
government.
more
Second:
present day
younger executives in the banks and
in the
supervisory agencies, because
of this
prolonged period of
change in the last two or
three years than for
many years be¬
fore. More
independent mills being
by
Marshall Plan
on
in
A
more
marked
purchased
have a sufficient
for stockholders and add
to sur¬
evaluate
places entirely too much
impor¬
American dollars, and will
do no more
good
the $20 billion
already expended since the end of
the war. If
private capital is expended in
Europe there
undoubtedly will be a reasonable basis for
its protec¬
tion, and a fair chance to have
it repaid.
There are
plenty of securities and cash of
the peoples of
held in this
Europe
country and other places, to form a
basis
for the extension of
private credit.
Why should the tax¬
payers of this
country be penalized for
winning the war
and the
possibility of our entire
economy being de¬
tance
money and credit through
advocated by Marriner
pay
direct '
representatives—Congress—could continuously
the various
programs.
plus accounts.
and Treasurer, The Kendall Company
space of time.
Congress should adopt a
calling for periodic reports at
frequent inter¬
departments, and then the people's
vals from all
employees,
'
short
a
program
.m
'
Speaks After the Turn of the Year
Business and Finance
(Continued from page
4,000,000 in the 3
•—approximately
since
3940.
tomer
53)
is looked
for real estate loans
An increase in demand
So,
capital
new
trial
being experienced by large indus¬
public- utilities. I do not expect to
now
and
concerns
>
climb of interest rates become very
drastic as ' long as the Federal Reserve supports the
Government market, which it has announced it will do
overthe foreseeable future; however, a change of front
upward
the
see
having served their purposes in the interim, or a change
of administration could bring about an abrupt departure
at that time.
the present pattern
C\v
ALF
■>v
Topeka
inteBd to
peace
sible.
without which
Instead the world will continue in a state of chaos.
social unrest, semi-starvation, civil
war
and revolt, which, of course, is
exactly what the Kremlin is seeking
because such a state of affairs plays
right into its hands.- For its avowed
aim is the overthrow of all non-
everywhere
and, finally, world domination.
We, and the rest of the world,
therefore, in sheer self defense, must
communist governments
allow
not
Russia
to
forever
delay
If Russia will not join in
us, we must proceed, as I have
several times, without her.
the peace.
with
said
Paris
The
These powers consulted
Japan.
with
1918
together in December,
to when and where the conference
Paris was selected. The powers decided
regard
would be called.
ta meet
conference fol¬
peace
lowing World War I was called- by
the live principal allied and associ¬
ated
powers — the ^ United
States,
Great
Britain, France, Italy and
Alf M. Landon
It
is
to
aware
credits
should
as
a
peace
new
conference.
in
■
-
M.
President,
,
of Philadelphia
could
proceed
good business in 1948.
"
'
.
'
/
^
,
remote.
A balanced budget, a systematic reduction of the na¬
tional
debt,
and
at
least
taxes
return in this
a
(all
modest
a
burdensome
them
of
in
reduction
concurrently
over-
it is today.
a
possible)
/'/,
•
M.
be necessary to
have
action, and in
hazardous
■
Government.
For
This could easily cause a
it is
of
year
predict the
that would result in
course
principle, I think, applies also to the United
It will remain sty- s
allow Russia to block every con- ;
Nations.
Today the UN is stymied.
mied
long as we
structive move the rest of the world tries to
should do
our
best to get Russia to quit her
make.
We
obstruction¬
but if she refuses, proceed without her.
If she walks out, so what? She can torpedo the UN even
better from within than she can from without if that is
ism in the UN,
she is seeking.
home,
as
for
the
agricultural
section
of
the
country, it has not begun to exhaust its buying power.
Because the agricultural
Our banks are full of money.
depression set in in the early 20's and lasted all through
the added burden of the drought years, and
because of the second World War and conditions since
the 30's, with
opportunity to get new
bedding, new furniture, new cars, new radios, new trac¬
tors, let alone the new gadgets such as gasless refrigera¬
tors, propane heating, and new machinery that will take
the drudgery out of farm work, such as two-cow milking
then, the farmer has not had the
machines
and
mechanical post-hole diggers.
The banks in the agricultural country are chock-full
of money. The automobile dealer is still doing his cus-
be
recession
instance, will the
approved as re¬
quested by the Administration?
the
means
tion
of
the
sion of the
area
action
mental
majority
can
business.
Add
in
which
and
today.
will
G.
Lawson
which
demands will
the
to
further
affairs
.
will
affect
undoubtedly
the (
a
one
how
in
1948.
forces will act
I foresee
a
If
one
can
assure
cataclysmically upon
good year for our own
business
that none of;; these
business in. general,
will
In
ing
I
be
our
that
planning for the coming yeary we are assum- ;
there
will
be
a
continuance of
population
and
in¬
;
:
;
■
for
construction under
present conditions, are
discouraging. Adequate rents can be obtained now
perhaps for five years to come. But, what will hap¬
after that when housing will probably be much more
plentiful? Would the homes now built at high prices
be attractive then at the rents we would have to con¬
pen
tinue
T
-
the crying
most
and
are
program,
properly.
of
Prices
business in California.;?;
planning to go ahead with our capital expenditure
and this is based upon a belief that volume
increased in the sale of natural gas, electricity
and bottled water. However, shortages of trained per¬
sonnel in the utility of phase of our business will pre¬
vent our pursuing as large a replacement program as
would otherwise be desirable. ■ ',
''-I;
We
■.
of these questions which does not
important influence on this nation's
an
health
economy—but
,
~
There is not
have
own
our
much?
employable person in this coun¬
If it does not, it will be
nation to manage our
needs of the moment is to get rid
of
"feather-bedding" and other restrictive practices
which prevent the performance of a fair day's work for
a fair day's pay.
In particular this is true in the field
of housing; Our company wants to build much needed
homes for people to live in. We would own these homes
and rent them. They must be of good quality since the
rents we --must
charge must hold over a substantial
period of time so that the money invested may be re¬
paid in due course, and in the meantime yield a fair
rate of return. In order that this may be achieved the
rents must therefore hold over a 25 or 30-year period.;One
be met.
problem one must inquire as to what Mr. Stalin will do.
And Mr. Attlee, and the Premier of France.
And the
Italian and the Greek people.
Foreign developments
demand, even excluding a
try for several years to come.
of what
complicate
comparable with what exists
This unprecedented
because we are incompetent as a
labor will demand and the extent to
E.
1930's and fear
useful work for every
affect
''
■
on
reason
large part of the demand from abroad, should provide
Govern¬
this uncertainties
to
between prices and the
reestablished again. Such a de¬
balance be wholesome.
the equilibrium
lated demand in any sense
What
entire
the
slow-down in business activity
drop in prices and a short-lived
by analogy from the great depres¬
a major recession soon seem
to overlook the fact that in 1929 there was no accumu¬
who
Those
party in
will the Federal
Reserve System do in the field of
credit and monetary controls? These
represent but minute fractions of
or
until
a
to buy had been
velopment might
Will
possible tax reduction follow the
Then,
Ir'. !
her.
I 1 The same
Plan
lung
point where the number of those who can still afford
are
willing to purchase what is available will be
so
reduced that unemployment will begin to develop.
or
Governmental l
election
an
to
present,
If the rise conenough it will arrive at
to be active.
nn« es
-
a
knowledge than is
wide number of interrelated :f
on
'
still
although
ceases
Linton
"•
more
presentlyavailable on a
forces. Many of these forces depend
.
every
A.
To give an opinion on the 1948 outlook for business,
it would
■
priced out of the market and to that
extent the demand
for goods and
service*.
President, Pacific Public Service Company
peace
effort should be made to get Russia
to quit this business of trying to dominate the world and
to follow a policy of live and let live. That has been our
policy from the start. But it has come to nothing thus
far, and after one more early effort to induce Russia
to play ball, we should go ahead with the game without
fl believe
,
primary domestic problem is,
inflation. As the price ad¬
vances, more" and more people - are
Our
of course,
;
•
-
,
v
vt
country to old time religion.
E. G. LAWSON "
would dare
to make
*
<
•
Russia, would accept. In the end, Russia
would probably find it to her advantage to come in. If
she refused, the world would still be no more divided
At
Provident Mutual Life Insurance Company
*
.
if Russia boycotted the conference. But it is
all the rest of the nations would accept.
conference
t
ALBERT LINTON
.
.
that
the
Leonard
Tn a nutshell the business outlook for 1948 is good with,'
with satisfactory earnings- and they seem to have
somewhat feverish tinge. Apparently the
power to take care of all legitimate I? however, a
huge aggregate accumulated demand for the products of
credit needs.
*' '
'
The opinion is somewhat general that 1948 may ex- . America's plants and factories is about as large as it *
;-••••/ j was .on V-J Day. Despite a record .:
perience some slight recession from present high levels "
output by industry, the volume of
of activity and profits, but the majority.opinion seems
unsatisfied demands for semi-durato expect nothing worse.
'
* '
■
'
ble
and
durable goods, including
If Congress makes even a modest beginning in the
construction of all kinds,- remains
matter of tax reduction, it will have d stimulating effect.
enormous.
Furthermore, the amount J
Our leaders are fully nware of the seridusness of theof money available with which to
threat of excessive inflation, but it is the common belief *
buy is also enormous. Until this sit¬
that this matter will not be allowed to get out of hand.
uation changes the chance for any
In short, we of the Southwest are looking forward to
recession
of major
significance;; is
If Russia re¬
today none of Russia's satellites
Herbert! H.
.
>
sufficient lending
which all, save
what
overall'recession dur¬
year
one.
as
any,
of
will be very I"
:
country have had one of their
best years and in many cases results have been recordbreaking.
The banks in Texas and adjoining states closed the
Congress?
course
latter half
the
there
ing the year.
delegates. The Big Powers had five each. Some of
the others had three delegates, some two, and some only
than
in
believe
I
the
70
Then
lines
some
While
somefSlackening, off
F. M. Law
recommendations of the Administra¬
up
.
little, if
a
rule merchants in this part of
to
cinch
exist today^a high leyeh yof
1948,
pated in the conflict against the Central Powers were
invited.
There were 32 states present, represented by
i Of
but"' with
of .orders and
backlog
therq; mayk; be
Marshall
a
present
business Will be: maintained.
discour¬
be
specific
very
any
Some lines are already
<cl$mah$Slpfcahd| an^mobii^s;
play why couldn't the others go ahead, agree
on a time and place, and send out the call?
After World War I all the nations which had partici-
show
make
to
be
should arrange
fuses
prevailing, at/, present that: it is v
•which
■
Bankers are well
aged, if for no other reason,
check against further inflation.
a
uncertain fac- ;
many
that speculative and non-pro¬
ductive
As
the
else-;
The banks in this section, as
so
cdtching6 up' with dem&nd
where; have experienced a healthy
Banking practices, as they have come under my obser¬
vation, are sound and particularly so
will mark
in January, and sent out the calls,
remembered that, after the conference
started, Italy walked out because she felt she should get
a
larger share of the spoils. But, in Italy's case, be it
noted, the conference went right on after she took a
walk. And, eventually she returned to the peace table
—after a shake-up in the cabinet at Rome.
While I think the situation in Russia is not exactly
comparable to Italy in 1919 there is a "Big Five" today,
composed of America, Britain, France, Russia and China.
As I have previously advocated I believe these powers
j
multi¬
are
are
prediction.
V
in the credit field.
not
the
world reconstruction will be impos¬
been quite clear that Russia does
cooperate with the rest of us in making
It'has long since
tors;
.
demand for loans.
LANDON
M.
have been and
plying rapidly.
LEONARD
H.
Machine & Foundry Co.
There
difficult
high. Smokestacks and
business, and other enterprises.
Chairman, Executive Committee, American \
ably good year;
v;
....
Industrial development continues
payrolls
water
HERBERT
greatly increased.
This is due to heavier yields and ;
higher prices. In Texas alone the farm income will be
well over $1 billion for 1947.
The
•
.
■
cattle man has enjoyed a compare
by the present administration after election which may
be expected once they are re-elected, the present status
from
bottled
-
at an all-time
.
outlook, I expect California business to remain
high level in 1948. Pacific Public Service Company
looks toward a good year in its utility business, in its ;
during 1947 farm and ranch income has been ;
found that
is
The population
a
of the United States we have
In the Southwestern part
to prosper.
national
National Bank of Houston
Chairman of the Board, First
destined
is
of the state proceeds apace. Thus, given a satisfactory
national economic environment and an improving inter¬
on
I ex-;
during the year 1947, and
pect to see this trend carried somewhat further in 1948.
This -change is accentuated by moves of the Federal
Reserve Board to combat inflation and by the great need
for
California
LAW
M.
F.
pronounced in- >
field, we witnessed a
in interest rates
ious to
expenditures, our plans are subject to change^
developments make changes inevitable.
external
growing by leaps and bounds, and the industrialization
say there is still a tremendously unsatisf;ed .1
buying power that has the money and is anx¬
make up the arrearages of almost 30 years.
• •'
.
.
In the securities
,
I
reserve
until demand is met by supply, and I antici¬
pate that this point will not be met for some years to
come.
• v'
crease
if
,
for by me
.
of capital
lets him have a new car. 'The
favor when he
a
agricultuial implement dealer is still doing his customer /
a favor when he lets him have a new tractor or a new
cultivator.
\
I
West Coast states
^
Thursday, January 22, 1948
CHRONICLE
FINANCIAL
&
THE COMMERCIAL
(354)
54
charging to get back original costs? If not, how
such a venture the money
could be justify investing in
which
policyholders have intrusted to our
card for the
^
protection of their families and themselves?
In the
light of this situation, one of the greatest con¬
make for the welfare of all,
growth and new construction in the area we serve
are
making our plans for about the same rate of
crease in 1948 as was experienced in 1947.
(
tributions that labor could
the imponderables mentioned
above, we are so planning our program as to be able to'
call a halt if the economic equilibrium is upset.
sible.
However,
because
of
be necessary if costs continue to
But the spiral must stop somewhere, and in our
Increased prices may
mount.
internal planning we
or
have made no provision for price
the year. But, as in the case
rate increases during
including labor itself, would be to do everything in its
power
would
to increase efficiency to the utmost extent pos¬
More houses and other needed goods and
then
volume,
and the
be
services
produced at lower costs and in greater
employment would
continue
on
a
high level,
foundations of lasting prosperity would be more
firmly established,
(Continued
on page
56)
Volume T67 '* Number
4666
■
THE COMMERCIAL
-
ercise
-v.,,:(Continued from page 49)generally to something • between
'30 to 50% of the broker
holdings
i nstehd of the
customary> 90% for
an
annual
meeting.
30%
of
miscalculation
.lent
!on
'most
of
proposals
than .'
a
more
must be
•'individual stockholders.
that the
the
because
for
in
proxy
of
advance,
>or
•misunderstanding,
even
•rescue
before.
a hurry-up or
campaign must be put on.
This, is certainly ; hot
conductive
tq better stockholdef
-
It
-
a
/..„.
can
complicated proposal
to explain. A contest is
essentially,
there is
a
matter of personalities.
ter how courteous
•1 ater
names
*
Ibe/sooner
course';
or
are
misconstrued.
they
were
.
.any
responsible
-
to
.avoid
the slightest opportunity
v
CHRONICLE
.independent
judgment.
misrepresenta¬
There must be no
tion of any material fact
concealment
of
the
nor
anything
which
would influence the
stockholder's
decision.
tails
nical
Unfortunately this
en¬
setting forth, usually in tech¬
and legalistic
language, of
multitude
a
of
details,
accom¬
panied by voluminous financial
statements. Proxy statements con¬
forming to the rules must of ne¬
cessity become documents of six-
j;thirty-two,
or
sometimes
hundred pages. As a
result,
even a
most
such
read,
stockholders
proxy
put
reading,
throw
aside
decide,
for
of
on a casual in¬
time
studied
the
dend
been
destroyed
rare
and
that
cases
takes
mislaid,
or
duplicate.
a
on
an
It
the
is
trained,
cable
the
and,
conversation
he
avoids
discusion
note,
and
for
on
further
against the proposals
a
leaves
tone
is
and
ami-
!
the
door
j
After all it is im¬
encourage
a
com¬
that
can
be
pursued;
really., wins a contest-^both
sides, are r lose?s-r«and the); stock-1'
holder, loses,most.of,;alh
1 ■
•
space of a few
weeks, the stock¬
holder' is bedeviled- with a com¬
munication from one side or: the
•
In the
:;v.
days before proxy solici¬
under the jurisdiction
of the SEC, information
given to
tation
possible to get everyone to
explain/must he meretricious.
mony,
W-*.-"'g-Y/f'.:.'■ /•'"."i
came
■
•
\-;;V/ vg.
"
;
with
>
sjtep^ inv He /calls
phones. the
he, has
on
or
tele¬
stpckholder, asks
received
the
if
documents
and. then inauires if he has
mailed
his
but if you avoid
there is at least
a
acri¬
fifty-fifty
proxy# More than three-quar¬
of
r
presupposes
experience
urbane,; tactful,
j
the
ment
result,
obtained
ill-feeling.
the
necessary
without
stockholder's
judgment of the
is
friction
confidence
manage¬
strengthened.
When
conducted
spect for the spirit
with
as
letter of the laws and
proxy solicitation is
adjunct of
as
re¬
the
regulations,
an
important
stockholder
relations.
If progress in
closer
due
well
bringing stockhold-
ers
so¬
well look forward to the
day when
to
management
and
a
who
is
above
all
all
>
interests
—
stockholders
consumers,
and
con¬
will sit
tor
their common problems
interested
in
building
uo
good will for the company which
down
labor,
management
single-minded. The trained solici¬
is
;
letter
and
solve
them with benefit to all.
denying the allegations-; of
mergerr'or-recapitalizationvwas
theprebeding; 6.de;^i
^wohder meaglei an.d the proxy itself gave
;
sthat
;
thdy'ppor stoc^oldph is ■ <cont
fused ahdpf^h signs every proxy
hOt
;
•
opportunity to dissents/It.
a/? case of
:yote in favor'
all'.-'
•sent him So- thht at the end he
may
.have voted six oreight-
;or
was
/not-at
#$?&&&
liiill
different, i:Tbq;:■/fifcst':1proxy:. rules, .fmder,
Sectidnyl4 pf'the/1034 Act/became
times for both sides with
only the
effective " in ^'October,; 1938 and
last dated
proxy counting; in the since then have been
araeiided, in
final tabulation;
:
Most
.ment
contests
'•
whole
against manage-
motivated
are
by
instances
when:
a. desire
made
petent
or
serves
io be dusted.
barked
the
incom¬
an
on
its
course
several times.
The
•
as
objective of
it is
also
statements/ and
of
pro¬
spectuses, ; is to furnish the stock¬
holder with all pertinent informa¬
em¬
through
effective.
proxy rules,
registration
greedy management de-
Having
part,
The latest revision has
just been
for personal power
although there
are
in
or
tion which will; permit him to
a
Chartered
ex¬
17991
their
suf&cient timeate ever
study to
eive
ne0ple cfl-R 5
—
^
NEW
YORK, N. Y.
Condensed Statement
of Condition
;
.
Other Public. Securities/v
••'Other Securities
thesfc P
o*ner
°f
rnflsetV^11
i
v it enge
chalieng
of the
ntServiceDep««ne^
to
Chase is
Uen e.
Hete,
ASSETS
•,
Cash "and Due from Bank? and Bankers
U. S. Government
Obligations,
;
?.,
f^'t.
Loans ah<LDiscounts
.
-
^
360,915,917.94
g
13,284,915.93
ifg, 22,957,783.10
V / 42ti,782;l04.6l
.
,
v,
4
$; 365,643,523.38
.
,
.
/,/,
«
Real Estate; Mortgages^ r
'«
syste
funds.
_:
5,827,954.78
.
.
Customers' Liability fol^;AcCeptances /;
V/'*1-
ceiving
,
y
^
Banking Houses//Owned;;
.Other'Assets
.he
of December 31, 194 7
as
Vet
pt°^ertl .* 0f iticoff*e an
investment
J
on ot
m0uuung^ P£ ea greater and g
of capital be£° ttrities.
.
.
"
.11,544,972.80
\
4,42.7>403.99
•'
••
there is
vg5,195,200.86
:
'
$1,216,579,776.79
,
would De\
M
«.
i•
LIABILITIES
n°
tnent
sefld fot
.
"To;
r;
can
»p»»'
1
Capital '(2,600,000 sharfcs)
,
Surplus '!.
'
*
•
.
.
V
$20,000,000, 00
>
*,30,000,000
booWet
00
.
-i
I Ondiyidied /Profits V' V V g* ;v»;g;gT4,487,235i 49 $
•
Dividend Payable January
2,'1948
^Deposits T
.
.
:
gggv.*'':
'Certified and Official Checks
Acceptances Outstanding
Other
.
.
.
1,088,906,235.02
*
m
...
600,609l00
.
'• ^
•
*
.
.
51,096,879.13
,
.
Liabilities, Reserve for Taxes, etc.
1;
6,277,025.04
-.
•"V-
Of the above assets $29,604,951.57
are
pledged to
other purposes f and certain of the above
Member. Federal Reserve System
deposits,
secure
OF
THC
5,212,402.11
.
$1,216,579,776.79
,
Kll^
64,487,235.49
public deposits and for
are preferred
as
provided by law.
Member Federal Deposit Insurance
Corporation
u
V
cervice Depar,m
investme"' S
york 15»
Brood
.
Sheet, Nev
•
y
—
together to discuss
new
»
a
tinues at its present
rate, we may
-This method
licitor
or
unanswered, he
the facts and seek to
see
it your way.
This, is .where -the
proxy solici-
.'tor•
you,
agree
chance that the dissenter will
:'■
Where the Solicitor
Steps In
No
one
.Within -the
principal that anything that
takes so much': paper/ and ink to
eraf
the
divi¬
gone
a
the
in
offense,
if
as
vote
an
interview
of
a
has gone astray
This is good stockholder relations
then, if the solicitor has been
closes
only
to invite
or even
all
the resulting
overcome
only in
argumentative
check
will report
fur¬
not
phases
operations. If
complaint
questions and, if the material has
nishes
about
company's
proposal, the solicitor tells the
story in language easy to under¬
stand, answers the stockholder's
has
is prepared to
and
questions
inquiry
Then, with full knowledge of the
He
*
company
answer
anyway."
him.
55
the proposals in
question
knows the background of
but he
"Yes, I got it but it looked
difficult I just threw it
away.
My vote doesn't count
that is needed.
the gen-
employs
or,
open
on
the
so
un¬
future
(355)
the
answer
is
either "I haven't time to read
all
that stuff," "What's it all
about?"
well
statements away
them
or
either
ters
spection, that they had better vote
both., sides together, to,
.and
propose
called,1-records
assailed,- characters .vilified, rao-
•itives
than
promise, thatwill be the wisest
the
or
even¬
/.t-when£veri^
to. bring
No mat¬
side
one
exceeds
and
soliciting w-ofganiiation;
is-no
other: may set Out to
far
safely be said that it is
.
contests
there
The cost
/_■/„..j/. /';/;,
desire ' of
Here
proxy contest.
off
worse
the!
The, mort thankless task- of the
solicitor is
win.
levels
FINANCIAL
,
relatiohs^^^ '
V
unethical
ment turns its attention to
other
speculative opportunities, leaving
the company and its stockholders
either
over-confidence
descends to
pealed primarily to his cupidity#
the stockholder finds
that, as soon
as
its personal
.objectives have
been attained, the hew
manage¬
solicitation becomes apparent and
sometimes, if it has not been
arranged
opposi-
many an
in/powera
It is then
necessity, for active
manage-
tually the stockholder is the one
who pays: the bill; After putting
.
obtained from
the
by
higher
usually
tworemaining
50%
or
the
£;*
of
>
strength,
the: results- achieved
vote
a
majority,
thirds,
whole^ and
controversial
these
require
s
in its eagerness to
of such contests
30%
is less than 10% of the
'as
"- '"v -
&
>
THE
50
Business and
Co., Inc.
unknown factors it is dif¬
opinion on 1948. One thing, how¬
Because there are so many
ficult
to
an
express
while many of the underground mines, where
labor costs are a major factor, are struggling to make
any profit at all. It has been stated in the press that the
21-cent copper price is too high. This is not an accu¬
rate statement. The price of copper should be considered
in relationship to the prices of other commodities and in
terms of today's purchasing power of the dollar.
When
price,
LUNDING
J.
F.
President, Jewel Tea
is certain—we will all have to
to rapidly chang¬
ever,
be alert next year
ing conditions and flexible
operations so we may meet
ever the future holds.
our
While it is
in our
more
efficiently
more
prices.
-
v
.
•'
i
.
major
continue to be a
-Prices will
uncertainty " in 1948 with the out¬
come
depending
on
next year's
crops
F.
the
at home and in Europe,
of wage and other costs,
gevernment action on taxes and the
J.
Lundingr
pattern
Marshall Plan, and
political developments here and abroad. The only
answer, as I see it, to these price uncertainties will be
to concentrate on turnover and avoid speculation on the
future course of prices.
_
„
,
;■ , other
.
Co., Ltd., Inc.
are
gains in 1948, however, are
be held to moderate pro¬
not
will
market
all
at
tunity
comparable
will
that
We
have
a
very
well-organized,
effective
and a good inventory of aged leaf at costs
which compare favorably with the rest of the industry.
Also, the company is in the strongest financial position
in its history with the largest net working capital that
sales program
it has
ever
had.
from the United States
high rate despite a continu-'
ing shortgage of underground miners and a strike at one
of the large open-pit mines. Domestic consumption figurges for the year are not yet avail¬
able
but
probably
established a
peacetime record.
potential
V The
at
a
copper
require¬
ments of such consumers as the elec¬
trical, building, refrigeration,
and
automotive
conditioning,
airin¬
has
not
dustries
are
enormous.
It
generally been recognized that the
large increase in the American pop¬
ulation
will
stimulate
the
demand
metals for
years to come.
Fur¬
the gradually improving
standard of living should result in a
higher per capita consumption than
for
thermore,
before
the
war.
Probably no basic American in¬
End'cott R. Lovell
dustry other than copper has units
within
its
borders
operating over
"
such a wide range of production costs. For this reason
opinions Within the industry regarding prices and profits
are greatly at
variance. The large open-pit mines can
make
a
very
handsome profit,
indeed, at a 211/2-cent
since the
\Ve
THOMAS
President,
i
drink bottling
S.
Mack, Jr.
States
the
today
war.
war.
selling'' prices
field
and
There are ap¬
as
many
soft
plants in the United
there were before
my
opinion, that is
to. retire and go into some
other hand, those
reasonably low price,
a
both in quantity and in
Thomas
I
r
new
We have just
C.
con¬
lowest
effort and the spirit of the
'
expenditures in machine betterments
and
continued insistent consumer demand for all
products, in excess of our abilitv to sup¬
ply them, means that in 1948 all our plants will expand
output from existing units wherever possible.
plans the
.the company's
; ROBERT B. McCOLL
President,
American Locomotive Company
promise has opened for the American rail¬
Many prophecies for what is the greatest trans¬
roads.
General Manager,
portation system in the
completed a satisfactory year
sales and unit
company,
the nation's
are
of opera¬
equipment
are
confidently
record-break¬
amount of equipment to satisfy
ing
of
both
the railroads
the
demands
and
their customers this year.
the American Locomotive
At
the ratio of steam
locomotive
vidual's dollar.
ahead
equipment are such that depre¬
ciation charges based on original cost
production to diesel-electrics
increased
cost
This increased cost
of
even
meet
replacements.
materials re-
account.
at
will be
our
Robert
B.
McColl
^h^-
92% of our total locomotive back¬
is for diesel-electrics and the 8% steam will be
mainly constructed for customers in foreign lands.'-1
At the beginning of 1948, our company-wide backlog
iviac .
— cit'
demands made on
Break-even points of
which also adds to the
reduced
log
must be provided
jn 1pr°,f3>* invPn+OT"-
further
nectady. N. Y., plant.
current income. The higher
prices being paid for
Co.,'
of our tritical problems of 1946 and 1947 be¬
hind us.- Material shortages are eas¬
ing, our worker morale has never,
been higher and our production ca~
pacities are greater than at any time
in our 112-year history.
It is likely that during the upar
start 1948 with many
we
.
facilities are insufficient to
;
expected to supply a
has ad¬
and
„
railroad equipment
manufacturers, who
production
and at a fa*r
in purchasing power as the indi¬
Costs of construction
world are expected to come true
railroads achieve the moderni¬
during 1948. Helping the
zation of the»r plant, and
Minneapolis-Moline
Implement Company
very little is heard or said about the
rapidly increased cost to corporations
doing business, yet the corporation's
dollar has sustained the same shrink¬
tion's bank
to
the
equipment changes to take full advantage of the new
facilities, and to effect further operating economies.
While we are not ready at this time to make any def¬
inite announcement with regard to its longer range
MAC FARLANE
profit, although the price of farm machinery
vanced. very little compared with
the price spirals reflected in almost
all other lines of industry.
We hear much, of the increased _j
cost of living to the individual but
for out of
on
power
ing substantial
necessity in their American
tions, having the largest dollar
volume in the history of the
the
of
form
A year of
Power
of
savings
the
/£■' • \'V v•
'■.<
4■
: 1- •: > •-<. •.:'-v
plant at Chester, Pa., began operation
in November. The additional steam caoacity thus made
available will permit further efficiencies in paper pro¬
duction during the coming year. The company is mak¬
A
of life.
President and
age
through
equipment,
achieved new high records in
production,
shipments
and
earnings in 1947. The additional pro¬
duction is particularly
noteworthy
because
it
resulted I entirely from
increased efficiency in
operations.
tribute to the fine
a
obtained.
I
\
these
in
better
during the year a new high rate of production. Current
receipts of pulp manufactured for Scott by the Brunswick Company are also at a higher level than previously
qual¬
for the industry will probably be
somewhat larger than the pre-war years of 1941 and 1942
due to both an increase in the population since that
time and a gradual increase in the per capita consump¬
tion of soft drinks, as the public has been accustomed
to soft drinks more and more in their daily lives, so that
become a
and
personnel at all plants.
V
In September, 1946, the principal towel manufacturing
unit at Chester, Pa., was damaged by an explosion and
has only recently returned to production.
Important contributions to Scott's progress were made
by its West Coast pulp producing subsidiary, Coos Bay
I Pulp Corporation, and by Brunswick Pulp & Paper Co.,
which Scott owns jointly with The Mead Corporation.
Both
the
pulp mills of the subsidiary, located at
Anacortes, Washington, and Empire, Oregon, attained
other
The total volume
today they have
McCabe
B.
-
is
This
with improved sales and
^
been
years—to reduce costs
total
companies who are aggres¬
ity, will come through the year
reasonable profit margin.
has
phil¬
ucts,
sively merchandising a product that the public appre¬
ciates and are giving the American people great value
at
been ^advanced
Paper Company
in existence for
Scott
sumers
greatest value
first
to avoid
possible prices.
Scott, which is the world's largest
manufacturer of toilet tissues, paper
towels and household paper prod¬
of endeavor.
On the
have
of
passing
and maintain¬
be the
company
This reflects a basic
only 35%.
than is needed to
during the year have
our
selling pripes at the rate that raw
material, supplies, equipment, replacement parts and
shipping costs have risen. Manufacturing costs have in¬
creased 65%" over 1941
levels, but
average
efficiencies
as
In
McCABE
B.
Scott Paper Company
many
fill the demand of the American
families. The result in '48, therefore, will indicate that
those bottling companies which are not giving the public
the best value in quality, quantity and price will not be
able to stand this keen competition and will probably
more
availability of materials.
Production efficiency enabled
.
will
in 1947, but our production
able to, produce
were
largely be dependent on the
which
twice
proximately
Walter
Production of primary copper
mines during 1947 was
necded farm
osophy
production
unlimited
of
sales
W.
Co.
money,
exception to this rule.
The year 1948 will
R. LOVELL
President, Calumet and Hecla Consolidated Copper
world.,"
capacities to produce the muchmachinery in greater amounts in 1948 than
Calu¬
policy, advertis¬
ing and service. The soft drink in¬
dustry, in my opinion, will be no
way
ENDICOTT
European nations,
domestic mar¬
the expense of our
We have greater plant
/
ing aggressive sales
con-
finue to be extremely active compe¬
market, and the aggressive pro¬
will probably be con¬
within the tobacco industry.
confidence.
the least
for
;year
unquestionably
radical change in
the costs of leaf tobacco during 1948. It is true that the
reduction in purchases by the United Kingdom of fluecured tobacco and an oversupply of this type brought
some price weakness in the latter part of 1947.
This is
offset, however, by the government's support program.
In the latter part of last year the government through,
the Commodity Credit Corporation acquired about 14%
of the flue-cured tobacco sold at auction, but the large
carryover should be offset by reduced planting.
It is impossible to know what extent the parity price
on which the support price is based may change before
next June, but it seems likely that the support price will
prevent any significant decline in leaf prices.
Philip Morris & Co., Ltd., Inc. enters the new year
with
that larger exports are sent to
it will no doubt be at
Pepsi-Cola Company
giving the public the
V
not likely to be any
channeled to our industry, no doubt its
channeled also; and, in the
of free competition. The result
of such competition will be to elimi¬
nate those companies who are not
offered in 1946,
dollar ex¬
motional activities of the past year
There is
should be
s
year
tition for the domestic
tinued
self-sustaining through their
If governmental controls are again
even though additional critical ma¬
ul imale destination will be
by commodities so protected, for the
first time since the war will have a
-
There
teria
reasonable to expect that those products
under the Marshall Plan for
shipment abroad will maintain a steady price, sales and
profit margin. All other products not so protected by
Government purchases or influenced
which will restrict the for¬
eign sales.
.
In this country higher costs to the
i consumer
are
resulting nrincipally
from the rising tide of state taxation
of cigarettes. -This is a restrictive
factor.
imposed upon us,
will be purchased
change
Alfred E. Lyon
V:'.'
be met
production of food.
1948 it is
In
which
foreign
to
'-.V
-
until Europe can be more
c r
S. MACK, JR. ;
WALTER
President,
inadequate
of
.r.vTV"
for farm machinery can
will depend upon the final outcome of the Marshall Plan
ai d its demands on our industry for the next few years,
fabricating copper and brass
Wolverine Tube Division of the
Consolidated Copper Company.
present an oppor¬
which it temporarily
because
v'
How well this demand
expanded. An outstanding example is the
$8,500,000 tube mill now being built in Decatur,
likely to
For one thing, the
sheets, and strips, and
also faced with an inadequate sup¬
are
ply of sk lied labor,
also being
1948
.
portions.
instances
increasing
containing 0.77%? copper.
Production facilities for
met and Hecla
to be favorable. Per capita use of tobacco, par¬
ticularly cigarettes, in the United States has been ex¬
panding, and I see no reason to anticipate a reversal
of this trend. Total sales of the in¬
dustry in 1947 are believed to have
been over 360,000,000,000 cigarettes.;
Sales
some
ket and the rest of the
appears
..
in
enacted, and the need for sup¬
Alabama, for the
tobacco industry for
sales-outlook for the
The
malleable ancl gray-iron castings,
be a falling-off in domestic demand,
take up the slack.
There is ample evidence that important units in the
industry view the long-term future of copper with con¬
fidence.
For example, several mining companies are
planning to spend huge sums to develop and mine large
low-grade deposits by underground methods. The most
important of these are the Butte deposit of the Ana¬
conda Copper Mining Company carrying 1% copper, and
the San Manuel orebody of the Magma Copper Company
new
President, Philip Morris &
greater extent than was the case a year ago.. We are still
confronted with shortages of materials, \ such as steel,
event
,
LYON
E.
A.
many consumers
ahead.
•
The demand for farm machinery continues to an even
lems to be solved in the years
words, should there
these factors should
competitive
at
,
.
the prob-
extremely high levels which adds to
at
now
plying copper for the Government stockpile should ex¬
ert stabilizing influences on the copper market. In other
merchandise presented
attractively and distributed
of
selection
cause
Marshall Plan, if
The
maintain sales
will require a wider
This
volume.
in
to
will be
will
per
present a
1947. The
field
-
to switch to cheaper
substitutes, especially aluminum, this must be accepted
as
a
natural competitive development.
On the other
hand, new uses of copper are constantly being found,
and the net loss to the industry should not be serious.
what¬
greater challenge than
primary job during the new year
it will be seen that the price
:
: :
"
unfortunate that the present price of cop¬
thought of in that light,
is not high after all.
,
opinion 1948 will
In my
After the Turn of the Year
Finance Speaks
(Continued from page 54)
1948
Thursday, January 22,
FINANCIAL CHRONICLE
COMMERCIAL &
(356)
is
welldoer $100,000,000. Production of 6,000 h.p. .pas¬
units, 4,5^°
°r»1
j}V o road freight units
senger
the corpora¬
business are
"
V*;
(Continued oh page 58)
r-S>
Volume 167
Number 4666
THE COMMERCIAL
Risks in Anti-Inflation
(Continued from first page)
largely overlooked
which
to
the
is
the
permanent and the
which it is temporary.
first
World
War,
extent. large
"inflation"
present
is
extent
to
After the
.
there
emerged
,
sections
the
of
population
savings would
witnout substantial
be
priced out of the market and
have
would
tion,
to
which
reduce
would
consump¬
cause
some
higher price and cost of living
levels as a whole (which even the
goods to back up on their makers,
record
duced
depression of 1932 did not
permanently
wipe out)
and
a
higher productive capacity. Thus
comparisons
cost
of
with
prewar
which
prices,
living and production
that in all
probability a large part
of, the increase will be retained
indefinitely.
in
turn
Not Entirely
a
However, it
is
The way the public
primarily to the
mental
cause
re¬
Dollar Matter
are
less impressive if it be considered
looks at it is due
would
production, meaning unem¬
ployment and presumably lead.ng
to deflation and depression.
look
to
neous
production
matter.
absorption oi
entirely a dollar
There
must
be
limit tc
a
of
goods and services
on a unit basis regardless Of
pur¬
chasing power.
If prices came
difficulty (usual in such
periods) of adjustment to perma¬
nently lower purchasing power of
the monetary unit. There is also
down relative
similar inability to grasp 'the sig¬
nificance of the present'"shortage''
glut
economy while the
omy of the '30's is
"surplus"
econ¬
well, remem¬
so
bered.
I
This does not, of
course, obvi¬
the
maladjustments ' in;
ate
the
the
economy, such as between
prices of different goods and
serv¬
ices and between the
incomes of
different groups.
are more
susceptible
orderly correction without spe¬
cific
governmentalinterference.
Indeed,
of
some
the
maladjust¬
ments may have been
created, or
at least
enhanced, by restrictions
and controls.'
£
( The origin of the problem, of
course
back to the produc¬
tion of goods and services
for war
goes
use.
People
were
paid
production, but did
for
not
this
produce
consumable goods, and goods to
be
bought with their pay were in the
main either unavailable or
priced
(due largely to controls) much be¬
low the point at which
the value
of
available goods would have
equalled income.
At the same
time, saving
was
urged (and made
facile by pay-deduction
plans) as
a patriotic
duty. Hence the pub¬
lic
emerged
savings
claims
duction.
the
the
on
war
sales
of
pro¬
much
that paid for the
from
with
tremendous
future
Furthermore,
money
came
from
representing
potential
of
government
■
Potential
Purchasing Power
Declining
The liquid assets of
individuals
have
the
increased
war
since
(though
the
the
end
of
abnormal
wartime rate of saving has fallen
back to approximate
normal) so
that the tremendous
supply of po¬
tential
purchasing
in dol¬
power
lars has not on balance been used
to buy postwar
production.
This
is "on balance" because
the in¬
crease
in individuals'
liquid
as¬
sets has taken place
despite a sub¬
stantial liquidation of
savings by
some, this
increases
being overweighted by
ini savings by pthers.
.
new
goods and
the radical
or
improve¬
ment of old ones,
Indefinitely.
could keep
When
pace
fell
demand
off, production and the purchasing
it
power
and
creates
would
we
substantial
would
reach
decline
point
a
readjustment,
depression.
of
accumulated
savings would be
might seem to
Actually, however,
such a process would be accomoanied by such maladjustments as
reduced
and
be
a
to
cause
this
serious
trouble.
power
goods'
on
units
(of
services) because of the
jcise in prices.
v Since perhaps the most
accepti able definition of inflation is "an
•
increase in the means of payment
relative; to the supply of goods
and; services" it is
pertinent that
and
for
balanced
A
ered
be
to
always
But
created
the
by
increase
in
managed
since
If
the
purchasing
production
consumer
to
absorb
power
though
well,
wages
seems
increases
by
over.
higher prices over
Higher material costs
(often largely the result of higher
wages) are another example.
Few of the proposed anti-infla¬
tion controls arid
restrictionsap-
individual income taxes
are
signi¬
ficant
in non-corporate
business,
especially including farming.
that
fact
the
in
their
It
be
may
to
wage
controls—is
the
most
likely of all to be enacted.
un¬
How¬
there is a legislative pro¬
gram,
apart from > anti-inflation
proposals, and popular for other
reasons,
that
nevertheless
does
ever,
or
would
further
tax
increase
in
reduction * should
costs.
Such
lessen
the
tent observers and
lieve
that
extensive
one
of the most, if not
pressure
cially
the
most,
the
economic
for higher wages—espe¬
with taxes deducted from
and salaries before receipt
workers—and might bring to
wages
ay
our
permanently greatly
are
important
anmiti/
Interest
ir.
with
indi¬
viduals' liquid assets, which would
find their way into useful invest¬
ment.
Certa'nly
such
a
the
war-created
purchasing
handling ol
reservoirs
of
abroad has been
power
difficult problem, the attempted
solutions
levies
being
or
usually
devaluation
rency
(selective,
bear most heavily
capital
of
in
the
cur¬
Russia,
large
on
to
accu¬
OPEN YOUR ACCOUNT TODAY
mulated savings).
Ineffective
FROM $5 TO $7500.
Anti-Inflation
Measures
When
the
real
nature
the
of
problem is borne in mind, most of
the "anti-inflation" measures pro¬
posed
seem
discussed in this country,
rather far afield from it and
Over
or
in¬
Half A Billion
In Resources
de¬
the
"of
be for present mal¬
Open Thursdays
adjustments to be reasonably cor¬
rected and prices and wages to
settle
;at
levels
of
approximate
balance
constituting
normal.
Whether
without recession
hard
to
say,
The
and
or
but
it
within
is
likely
depression is
is certainly
reason.
significance
balance
of
in
the
great
our
inflation
picture is sometimes minimized,
particularly by those who strongly
favor heavy foreign aid.; Without
entering the controversy over for¬
eign aid, this does not Seem ten¬
In
a
much
smaller
degree,
course, it is equivalent to the
wartime process of building
up
demand
without
ply, since goods
equivalent
are
sup¬
produced and
ihe
producers paid for them, but
not, available
for
purchase
here—resulting again in an accre¬
are
tion
to
the
Until 7 P. M.
postwar
a
this
demand
side
of
the
nhe niAyfr SAVINGS BANK
y|jy|£ OF BROOKLYN
jnc
FULTON STREET AND DE KALB AVENUE
Bensonhurst:
86th
Street and
19th
i
Avenue
v/
Flatbush: Avenue J and Coney Island Avenue
MEMBER
FEDERAL
DEPOSIT
INSURANCE
CORPORATION
i
controls
reason
situation
(Continued
economy
larger
economists be¬
the
abroad
unil
operation
nations
lowering costs. However, aid, which will place a burden on
probably aid in correct¬ the United States, has been the
pear tc deal with the basic cost ing maladjustments. More
impor¬ reason (or excuse?) for proposing
controls here.
Yet many compe¬
problem and the only direct one- tant, it should aid in
preventing
tion
it
periods.
that
adjust
European
generally burdened with controls
in income taxes of greater than those proposed here
have turned to this country, the
wage and salary earners would of
course increase
purchasing power last great free market producer,
without per se increasing produc¬ for economic aid. This request for
cushion
to
serve
such
•
A reduction
take
would
•
In the first place, consider
matter.
un¬
of
wage
"infla¬
recession would reduce
or
however,
would
able.
lated savings would be eaten, into
to absorb goods and services. But
before this had gone very far
and
also repre¬
re¬
reduction
power
shorten
and
the
increased relative to
and salaries, the accumu
tionary spiral" of
followed
are
deplored
Indeed
in sound
are
reduction
pression
has
war.
the
accumulated savings, which might
plus
prices
of
olace if price levels were higher
than when they were created. De¬
credit
production
alone, and
sentative
likely under such circumstances
export
seem\ that
■
production
savings
purchasing
However, since people are paid
for
production, production also
creates purchasing power. Indeed,
liquid
assets
have shown net increase, it would
a basic
inflationary factor, rectly so. The mere fact that they porations that would tend to raise
particularly where such increase are placed on profits does not costs and prices and limit expen¬
a resulting increase in
for
upping
production.
change the real situation.
Such ditures
production, or with an increase in taxes must be and are taken into This is the opposite of what is
production
needed.
relatively less than consideration in pricing goods and
/that in cost.
Higher wages are services. Unfortunately, corporate
The Administration anti-infla¬
usually an example of such an in¬ tax reduction is not included in tion
proposals, and some sponsored
crease mainly or entirely on the the
'present proposals.
However, by others, are a very different
is without
is consid¬
where
marked
accumulated
possible
individuals'
tion is
leading tc
economy
one
consumption
lation.
increased! production
\ should be
regarded ;as an inflation remedy.
since
known dispropor¬ duction.
in the President's message to Con¬
v."
1
tionate effect of marginal demand
Taxes are costs, and this is true gress on the other hand, link a
supply variations on prices is of income
taxes as of other kinds. reduction,
which, though small
operative in this case.
Corporate or other income taxes individually, would increase de¬
The increase in cost of produc¬ on business income are
quite di¬ mand with a new burden on cor¬
cr
it is probably these accompanying
maladjustments rather than infla¬
tion per se, that give inflation its
reputation
trouble.
57
deal with the problem, even if a halt or at least retard the infla¬
largely willy-nilly; This is tax re¬ tionary spiral. The tax proposals
solution.
events would
purchasing
Further¬
If prices and wages rose to¬
gether, the unit purchasing power
Relatively in ,terms of.
potential
commensurate
well
(357)
noi
likely to be either relatively
effective or to bring on real
flation, which is certainly not
object.
The happiest course
the
a
the supply side.
the
CHRONICLE
of
if
has increased in terms of
dollars^ ; it has: obviously shrunk
.
Though
FINANCIAL
actual severe
war
obligations
to
the
commercial
banks, representing direct credit
expansion.
of *goods, s'nce it is unlikely
services,
But these mal¬
adjustments
to
to wages and rec¬
ord peacetime production contin¬
ued, there would, ultimately be a
that the creation of
without
on
more
cost side
erro¬
at
as
absorption
doubtless
ledger
one
&
why
abroad
on page
59)
is
58
22, 1948
Thursday, January
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(358)
Business and
mistake that so many did in the early 20s—of expanding
to meet temporary abnormal consumer demand with the
v;
In conclusion let me say that, from where I sit, the • result that once tnis was satisfied, inventories smarted to
signs, although a bit vague and confused, seem to point - . mount, sales fell off, workers were let out, and the seeds
were then planted for the 1920-21 slump;
;
;
to
a
year
of near-capacity activity in the electrical
There is and there Will be a natural tendency to main¬
equipment industry, but there are indications of numer1ous detours and washouts along the way, with
the pot '••• tain large inventories in the face of rising prices. How¬
of gold at the end of the trail somewhat smaller than; '• ever, there are some indications that prices cannot in¬
the end of the year
(Continued from page 56)
1,500 h.p. combination road
as rapidly as possible.
and
switchers is being accel¬
erated
demand for diesel-electric loco¬
reflected elsewhere; too. For example,
Canadian affiliate, the Montreal Locomotive Works,
motives is being
our
manufacturing diesel-electrics of the
start
will
Ltd.,
design during the year.
Alco-GE
v
.
the
one
found in 1947.
1948
In
railroads will start to
and efficiencies of diesel-elec¬
than one Class I railroad will
completely abandon steam power and realize 100% diethe year.
approaches the future with
American Locomotive Co.
♦justifiable confidence in its products and in the future
of American railroading. To support our beliefs we have
search
Co.
i
•
special significance to the American
in September we will observe the
1948 will have a
Locomotive
for
of our Schenectady plant. Since
days of the pioneering "Lightning," the first loco¬
Centennial anniversary
the
motive
built
be
to
locomotives
have
at
gone
Schenectady, more than 75,000
forward to the railroads of the
from Alco.
world
W.
F.
MAGIN
Square D
Company
activities of the year 1948 I
am inclined to take an optimistic view of the prospects
of the electrical equipment industry, at least that seg¬
ment of the industry with which I am directly associated.
This optimism is based upon several
assumptions.,
including
continuing
demand, availability of materials,
stable labor relations and absence of
adverse governmental action.
It is
entirely possible that unfavorable
trends in any o^all of these factors
might develop during the year which
would throw an entirely different
light on the prospects of the indus¬
try, but knowing its versatility and
the diversity of the interests which
it serves, I am of the opinion that
As
we
embark upon the
.
be
will
there
adverse
no
develop¬
F.
W.
Magin
of
demand, which had shown signs of weakening earlier
last year. Work is already in progress on a huge expan¬
sion of electric generating facilities by both private and
publicly owned utilities; there is a tremendous potential
market for additional electrical service in homes, old
been
a
definite
stiffening
farms, and in industry; research and devel¬
opment activities are continually producing new and
improved devices. Under such conditions it is difficult
to imagine any serious drop in the overall demand for
electrical equipment in 1948, unless there is an unfore¬
seen decline in purchasing power resulting from a major
recession in general business.
^
and new, on
be agitation for increased
is likely that increases ,will be granted,
although probably not as generally or generously as
in the last two years. I am convinced that any reason¬
able increase in labor rates could be largely offset in
unit costs by increased efficiency, and it is my belief, or
at least my hope, that responsible labor leaders, as well
as a large majority of the rank
and file of labor, will
recognize the tangible benefits to be derived from such
a
policy, both by themselves and by the country as a
There
will
undoubtedly
labor rates, and it
whole.
difficulty of obtaining sufficient supplies of basic
materials appears to be the most serious problem facing
the industry in 1948. Sheet steel is one of the most criti¬
cal items at present and there is no indication of any
The
early improvement in the supply; however,
considerable
is being made in the adaptation of substitutes
to keep plants operating, although the usp of substitute
materials willy in most instances, result in substantial
progress
increases in costs.
,
instruments, which are manu¬
Kollsman Instrument Division, for the
The outlook for aircraft
factured
at
our
1948 appears to be somewhat more favorable than
Although it is impossible to make any definite
year
1947.
by the Government may
It is inherent in our
by in¬
adjust- '
be found necessary before
selling prices
may
some
will
decline, although
back to the
ever go
it
as
commence,
just
forecast
was
whether the
or
this
When
drop will
after the first World War, or whether
be
.
,
We
put
can
i
brakes oh inflation if
some
together and if
we
all work
The bank-
we
all act wisely and soundly.
g industry stands ready to do it >-part to help win: the
;toghf /for c6ntihue<b prosper
the war.
1
"
,.v
iff
„
;v^v.
a
Sidney
Chairman of the Board, Federation Bank &
Maestro
Trust Co
yv-i'-f-', :
;■
New York City
•'
"third round" of wage increases seems
My observations on the business outlook for at least •
the first six months of the current year is of an opti- •
mistic character.
That we shall have to face the wage ;
,
magnitude of such increases may be less
•
'
•
f
;
if consumer credit cohtrol is re-imposed.
,^
sion and the Legislative Division. .'
f
far, /the governrnetd^has>jfestr^
f < a -These "conditions resultin what'
inflationary efforts to the monetary sphere. The policy f might be termed, a dazed mind for
of debt retirement from cu^ent'"reyeira^'.1Vidir;li^oubt^v. £ Mr. "John Q. Citizen."- He is becom¬
true even
,
Thus
the first quarter.
ing greatly confused as to the intel; iigent pursuit for him to follow.
An
rates may tend to restrict
credit expansion.
The decline in the price of govern¬
ment securities induced by governmental policy has
already resulted in some increase in the rates charged
commercial borrowers, and the recent rise in the redis¬
count rate may have some further effect but, except
in some special cases, it seems improbable.
A continuance of the inflationary spiral will probably
result in the demand for additional monetary measures
designed to combat inflation. In view of the large vol¬
ume
of liquid assets, however, monetary measures to
curb inflation may not be effective; Direct measures to
combat inflation, such as price control and rationing,
have at present little chance of securing Congressional
approval, but that may not be true later in ! the year.
Perhaps, the most important deflationary force to be
exerted during 1948 will be shifting from sellers' to
buyers' markets in many lines. Another important fac¬
tor to influence markets'in the coming year is the fact
that high prices for necessities will cut down appreciably
the volume of funds available for the purchase,of lux¬
goods.
;
The banking system will, therefore, in
augmented in the public mind if this
conflict continues.
It is a sad com¬
f
1
of t.ie '"public" is -subordinate ;to
Wrangling between leaders can.and,
partisan politics;.
does lead to wrangling amongst
There
PERCY
C.
great public.
We
for many years
ucts
already
and
;
in
far
industries
refiner
the
age of
in
As
-
■■■
past
H.
the
^
spiral
soundly liquid position.
before engaging
further expansion,
should first survey its field as
long-term future consumer
Otherwise
some
N.
in any
to the
Mallon
year,
the footage
drilled was
greater, than ever. This is a trend 1
which is expected to continue, inas¬
much-as there is
considerable drilling through existing
in an effort to locate additional oil-
oil field structures
bearing^ sands below.
;
'
1 '
Faced with this feverish search for oil, the petroleum
adopt new ideas and new equip¬
in part, at least, from ten Dresser
companies who build and distribute apparatus for oil
and gas. well drilling, for pipeline and pumping station
operations, for recovery and refining processes, for con¬
version of natural gas into gasoline, and for the storage
of gas and liquified petroleum products.
industry is hurrying to
ment^ both available
-
demand for its product.
are apt to make the same
industries
indus-:
facilities.
"Today wells are being drilled miich':.
deeper than ever before. Although .
fewer holes were drilled during the
.
possibility of an
of an unknown
period and extent, it is essential that
individuals and business alike keep
a
'full im-
pact of the demand upon the
try's crude oil production
base its
Indusfry,
petroleum, when the curshortage is remedied, new
doing will simply turn the
•
prosperity over a long
n
states and a
pipelines may improve the existing
transportation bottleneck, but in so
With the present
in
for
rent steel
production plans for 1948 on
abnormal demand. ; V
Jr.
middle western
''
period. But to obtain it, both indus¬
try and financial institutions must
plan
wisely,- conservatively
and
soundly." It will be the duty of the
banks this coming year to convince
Madeira,
the
shortage of natural gas in many other
communities throughout the country.
will have
to be taken to
neverthe¬
less the banks of this country in 1948 will have an im¬
portant role to play in helping to hold down inflation
by advising caution to business, in¬
dustry and the individual pver the
coming year, '• V-V-v
Our goal should be to maintain an
C.
unprecedentedly busy year. '
this moment, a short¬
gasoline and home heating oil'
an
There is, at
and more essential steps
make the whole effort succeed,
P.
of anything anticipated by
the pipeline operator, the
of gas appliances
manufacturers
face
v
•
excess
'
demand for oil and gas prod¬
the driller,
even
Co., Philadelphia
present
.
President, Dresser Industries, Inc.
MADEIRA, JR.
inflationary
>
MALLON
N.
As the result of a current
those
industry that it should not
then look for continued prosperity
can
H.
for
of sound
a
to come.
While many other
era
Let
apparent.
play among themselves.
Let there be cooperation and mutual confidence between
them. jSuch an example will be quickly followed by the
leaders inaugurate such
struction, and instalment—will
President, Land Title Bank & Trust
the rank and file.
time when the necessity for a def¬
never a
was
inite and constructive program was more
our
uncertain-cir¬
demand
Majfuire
in this enlightened age, to'
mentary
loans—commercial, con¬
probably continue high,
but it is imperative that the uncertainties mentioned be
recognized and this fact alone argues for more cautious
lending and investing policies.
'/
'
The
J. D.
conclude that the good
1948 be com¬
pelled to conduct its business under very
already existing fear will be greatly
ury
cumstances.
•
JEREMIAH D. MAGUIRE
inevitable,
than is
generally expected since the unions may trade "union problem is to me a certainty. I feel an orderly solution .*
security" provisions for wage increases in future con¬
in most cases may be looked for.
To-; /.'•
•*
.i.
tract negotiations.
To the extent to which, wages are
increased it will add to the price of finished goods.) ; me, one of the serious phases of our
whole general situation—and in that
Whatever the long-run effects will.be,. theyshort-run eft;.
I irelude the field of banking—is ihe
fects of tax reduction are almost certain to be inflation¬
continuous and, I regret, much pub¬
ary. * This is true since it will release a Specific • volume ;
of purchasing power for the * ppfchase of goods which ; licized wrangling between the execu:< tive branches of our Government.
I
might otherwise be used for the retirement of debt. The
increased volume of consumers', goods will result in an
.'refer particularly to the great-vari-jv|
increase in the volume of instalment credit; this will be
a n.ce 'between
the v Executive Dfvi- " !
ent
but the
margin of profit is
present profit margins are largely absorbed
and labor, some upward
of
.
not
Likewise,; dollars
spent abroad to buy goods'under
that program will sooner or later be
spent in the United States. At pres-
will
prices.
aircraft instrument industries have long been
creased costs of material
will
in the United States by the
government to fulfill its commit¬
ments under that program will tend
raise
later—judging by all past
or
be
it
gradual. Any price decline will undoubtedly
occur -at different times in d'fferent : products.
Where it
is rapid, inventory losses cannot fail but be large. Busi¬
ness must protect itself against such losses. : It can do
so
only in one way—by keeping- its inventories on a
reasonable basis..,vpyij", .-.
Business and industry should so .manage their affairs
that they can not only weather future economic "storms"
if anB^when they may arise, but also so that they will
be able quickly to take, advantage of any changes that
mav develop.
"■ r
'* >-.
/•
■',/. v>' ...'
■,
rapid,
goods
result in some ex¬
imperative, although this margin has shown a declining
trend in the past few years. I am sure that most execu¬
tives in the industry feel, as I do, that price increases
at this time are to be avoided if at all possible. However,
ment
decline
strength during the coming year.
will undoubtedly approve
the European Recovery Program in
some
form, and the
purchase of
capital and to provide incentive and security for man¬
agement and labor. Due to the nature of the business
and the risks and skills involved, the electrical equip¬
if'
^ ;
Congress
free-enterprise system that busi¬
profit to attract
recognized as those in which a fair
are
Sooner
more.
istory—they will begin to suffer
it is highly unlikely that they
1939 level. ' No one can now
ed
activities must produce a reasonable
ment and
l
|
.
panding activity in this field.
ness
V
likely to survive.
Inflationary forces may gain add¬
predictions of the demand for these instruments, it is
felt that the enlarged program for aircraft now being
considered
firms
much
crease
t
Moreover, the rise in interest
magnitude to seriously retard its
activity and progress.
In recent months there seems to
have
some
edly be continued in 1948, especially in
during the year of sufficient
ments
and
markets
to
President,
t
will be affected by two divergent
monetary trends—inflationary tendencies associated witn
the high level
of spending and counter-inflationarymeasures to be adopted by the government officials and
monetary authorities.
In addition,
:«'
the
"pent-up" demand for many
products will probably be satisfied
during 1948. This means obviously
increased
competition
in . certain
dollars for our own scientific re¬
development program. ;
and
*
,
;//,.f
Valley Trust Company
President, Mississippi
enjoy the new economies
tric motive power. More
budgeted millions df
-
Banking in 1948
and more U. S.
selization- during
,
SIDNEY MAESTRE
customers.
more
.
.
expect to be suffi¬
ciently advanced with a tremendous backlog of domestic
orders at Schenectady that we can start making deliv¬
During the second half of 1948 we
eries to foreign
.
,
.
overwhelming
The
shareholders /;
to protect the interest of
employees.
and
Most
"oil
urgent needs for the exploration phase of today's
are three In number—(1) better equipment
rush"
for deeper
drilling; since this in itself
is proving a source
(Continued on page 60)
At.i
■
■
Volume
167
THE COMMERCIAL
Number 4666
fallacy in much present
Risks in Anti-Inflation
This is the old
amcun'.s instead of
bad
that
turned
In
<
these
nations
far
so
enacted
or
re¬
pro¬
posed here, would be. unlikely to
check
/
;
'
or mend inflationary presbut instead would cause or
sures,
is inflationary.
governments are
able to borrow too cheaply, it is
maladjustments,
Lessons of OPA
The
depth
under
days
maladjustment
of
OPA—especially in its later
the patriotic motive
and
business
consumer
is
a
more
pur¬
a
consumer
new
credit has risen
high record is due to the
in other elements of the to¬
retail
With
tal.
trade
at
record
levels also, it is only normal that
accounts, for example,
should be at new highs.
Actual
installment credit is far below the
other controls
or
efforts are directed mainly at
consumer credit and bank lending.
might
In
result.
both
The
these
fields
there
is
a
easier
These
terms.
of interference with normal mod¬
a
informed
in
opposition
under
use
than
result
high record but, though
increased,
new
rise
purchasing
could be considered in the nature
installment buying has
the
some
other fields, quite poss.bly less desirable economically.
And there is a gratuitous injustice
involved.
Many people will be
deprived for a considerable time
of articles they could have and
to
supply and demand processes
hence as making for more
maladjustment. In any event, the
amount by which increase in con¬
ern
Total
to
of
diversion
power
expanded
In other words,
quarters and the indeterminable
and
unpredictable situation that
spread
compliance, which had been
very real had largely disappeared
t
v
Eccles'
The
for
and
sumer
relationship to disposable
The
income.
restrictioins
of
result
is
likely
reapplied
to
be
fact that business must have more
accommodation.
ness
This is that busi¬
has been driven
'
3
market to rely on
banks for money (needed above
that supplied by liquid assets and
retained earnings) to expand and
improve productive facilities. The
bond market has been upset by
conditions in the money market
brought about by the government
decision to let short-term rates
rise.
Hence bond money
,black
market
significant in relation to total dis¬
be politically expedient
tion
plus the
'30's
dreary
that
1946
in
severe
.
In the
attempts to restrict bank
bear market while business
(Continued
on page
prices under OPAc
to
usual
that the
suppose
would
results
not
be seen?
There
would be extensive black markets.
There .would be
ducers
] the urge for pro¬
to *turn
away
from the
making of controlled products tc
3
others
which";
Then, the
uncontrolled'
were
price
controller, would
f
| feel that controls would have tc
be
extended
to prevent this la~t
unchecked, 3the3 expectation
would eventually be for a virtu-
If
•
j ally fully-controlled
Controls
do
economy.
increase
not
produc-
lion—they disrupt it and supply is
.
restricted
further
against ! the
off
be
.
by hoarding
when controls
time
would
come
official
or
Controls do
raised.
prices
not really
...
strike at the cost problem; in fact
;
the disruption they
increase costs.
.
cause
\
.
tends tc
J3
.
Rationing without price control
or
allocations would probably
sult in
and
.
is
.
less vicious black
less
re¬
market:
disruption. Of course, it
that allocations could
possible
be so skillfully handled as to be
helpful and not disruptive.
Bui
:
the
administrative
of
record
Statement of Condition
the
last 15 years does not suggest any
such ability to be so skillful; and
.
the intentions
even
•
quarters.
some
of
view
idea
.
From
perhaps
of
are
having
the
.
not
speculators
on
really significant,
speculators do not
>
are
because
cause or
control
basic price movements, but merely
take
.
daily
>
advantage of them (espeeasy with the government's
clumsy mass buying practices) and
perhaps intensify fluctuation.
,
;
December 31, 1947
•
•
The provisions
feeding of stock
ried
.
out
require
v
most
as
Executive Vice-President
Resources
to seeing that
animals
is
car-
$145,414,557.95
U. S. Government Securities
State and
-
Municipal Securities
Loans and Discounts
;
-
•
-
on
Letters of Credit
\
-
-
>
-
has
'.
animal
and
other
discovered."
foods
Moreover,
restriction is not the real
when
;
of
been
answer
niore, not less, is needed.
•
«
Other
•
■
proposed
are
and
897,551.16
Chicago
STANLEY G. HARRIS
Chairman of Executive Committee
$545,810,368.46
john l. McCaffrey
Athwart
the; entire matter of efefctive fi¬
nancial
able
or
controls
.
—
whether
not—stands
the
Capital
-
$
8,000.000.00
Surplus
-
>■
12,000,000.00
Undivided Profitsr*
General Contingency
JOHN McKINLAY
Chicago
FRANK McNAIR
l:
-
-
.v
6,106.681.98
$ 26,106,681.98
Reserve
Reserve for Taxes, Interest, Etc.
7,013,329.09
-
Payable January 2, 1948
240,000.00
Acceptances and Letters of Credit
desir¬
Demand Deposits
Director, Fairbanks, Morse & Co.
■
PAUL S. RUSSELL
45,495,998.03
-
508,355,777.74
;
Total
United
more
at
real
reason
the
$545,810,368.46
powers
ed;^No,teethe .-heavy^supporf^
iig3oL3governmfeht'"bb
WILLIAM P. SIDLEY
Sidley, Austin, Burgess & Harper
Vice-Chairman of Board, Swift & Co.
States Government Obligations and Other Securities carried
$40,742,709.00
are
pledged
to secure
and for other purposes as
Public and Trust Deposits
required
or
permuted by law.
have not been
fully exercised by
the authorities and are unlikely to
be, even though somewhat ex-
.;
HAROLD H. SWIFT
and
present
Vice-Prejident
$462,859,779.71
govern¬
is
Telephone Co.
CHARLES H. MORSE
President
Time Deposits
borrowing cheap and
easy
for itself, even though ii;
wants borrowing for others dearer
This
H. MELLINGER
Director, Illinois Bell
897,551.16
tion to keep
why
Chicago
A.
3,197,028.49
ment's understandable determina¬
difficult.
F. B. McCONNELL
President, Sears,. Roebuck & Co.
GUY E. REED
restrictions
financial.
r
3,
ALBERT W. HARRIS
...
.
controls
Company
President, International Harvester Co.
Dividend
Financial Controls
'
v; ••
ARTHUR B. HALL
Liabilities
price
vv.
FRED C. CURLEY
Santa Fe Railway
2,118,262.53
•'
re-
' r,"
Hall & Ellis
3
Total
^
<-
President, Atchison, Topeka &
Acceptances and
-
Chicago
Chicago
i
600,000.00
anything but
stricting the feeding of wheat ex¬
cept a high price relative to the
,
167,470,844.50
-
said, "No effective device for
•
4
HOWARD W. FENTON
12,262,675.02
•
Accrued Interest and Other Resources
•
FRANK R. ELLIOTT
186,677,129.95
30,369,347.35
demonstrated in the past. Besides
as
a
recent National City letter
;
*
....
Federal Reserve Bank Stock
Customers' Liability
;
-
Other Bonds and Securities r.,33
efficiently would
superhuman
skill which has been
•
THOMAS DREVF.R
President, American Steel Foundries
Cash and Due from Banks
almost
an
JAMES M. BARKER
MARK A. BROWN
?
.
V
^
Chairman, Allstate Insurance Company
voluntary alloca¬
tions through anti-trust law relax¬
ation is the most practicable.
Restrictions
Directors
suspect in
this point
Republican
STUART J. TEMPLETON
Wilson & Mcllvaine
FRANK H. WOODS
Chairman,
Addressograph-Multigraph Corp.
Member
over-regu¬
nomics.
the
partial price controls
put in effect. Is there any
•reason
-
demonstra¬
lated, highly-margined stock marT
ket is so thin that we can have a
Suppose
were
an
prices should be lower and
higher wages would be nice, but it
has nothing to do with sound eco¬
to say
the. operating difficulties oi
business then were fantastic.- *; - -
3
The lack of
carried over from the
confidence
posable income.
It may
companies).
And
;
is more
difficult to obtain (even from in¬
surance
litically encouraged clamor against
high prices. However,1 many re¬
tail prices have not yet surpassed
.
by conditions
in the security
by restrictions will hardly be very
store charge
prewar
credit would be held down
59
there is a hazard even
than refusal to face the
lending,
greater
—seems
to have been too easily
Torgntten -in thef po{5ular and po-
.
,
credit
finance
to
cause.
when
t
needed
chases.
which
the milder, the less likely to cause
;serious trouble.
.
is
transactions
inflationary.
proposal to compel
banks to hold government secu¬
in turn would probably enhance
rities as required (up to a certain
some
inflationary
forces.
The
degree) can probably be dismissed
'more
stringent the control, the from discussion as
too unlikely of
more likely severe maladjustment;
realization in view of the wide¬
intensify
new
It
with
high
levels in dollars, that more money
Continued
ligh government spending is also
inflationary.
\
always
proportions.
income at
business and
plain
fact is that when
general, the controls and
strictions
The
have. which
us!
to
concern.
looking at
is only natural and necessary
(Continued from page 57)
so
of
one
(359)
CHRONICLE
FINANCIAL
&
oj Federal Deposit Insurance Corporation
'■
63)
<50
cifficulties remain at
fact that
oil; (2) equipment capable of installation
inaccessible spots and of being readily moved
one location to another and (3)
equipment that
cut drilling costs and well maintenance to make
of additional
from
marginal wells economically productive.
The refining capacity of the oil industry is also
Chairman of the Board,
.
more
being
enlarged to meet the expanding market for gasoline and
other end products.
Refineries are being modernized to
turn out the same high quality product produced by the
housewives
the next three or four years.
•
-
Because we
#?§8F
increases can be avoided or held to
minimum, we expect to maintain
our present volume of business with
I some increase in 1948; ,«.
v O
However, this volume can be af¬
fected by unemployment, strikes and
L
Jgr
V
■
.
p
•• -
for gas heating will create addi¬
pipelines for gas manufacturers. It must be
in mind that wherever oil and gas are produced,,
a
borne
is a market for Dres¬
products; and day by day the world is becoming
more dependent on gas and oil. "The result has been a
considerable increase in our foreign business. With the
full knowledge and approval of our government, we have
been shipping equipment" to the British Empire, China,
Mexico, Russia, Poland,-Arabia. France, Venezuela and
We
1 000
ser
foreign business is done on a cash
dollars; and is ex¬
continue at a high level, unless an embargo
on the shipment of oil and gas equipment to
payments in American
with
basis,
pected to
is placed
countries
various foreign
will cooperate
in which case, of course, we
—
to the limit With our
either expressed or
government policy,
implied.'c-r'
:
;
look forward to 1948, is the
situation. Although it may remain critical for the
half of 1948, we are hopeful that it will improve
Cur chief concern, as we-
steel
first
as
' : ;
; ;
;
:
than markets as our major
are considering our ;own particular
the year progresses.
' "
.
viewing steel rather
In
1948
problem, we
to those of busi-;
' • ////.••
It may well be that in 1948, supply in various indus¬
tries may catch up with. and. pass, the accumulated de¬
mand engendered by wartime .shortages. There are va¬
rious indications today that this may happen in the com¬
paratively near future in a variety of manufacturing
fields.
V.
There are as of today, however, no indications of any
such immediate possibility in connection with the .oil
and gas industries. Both oil and gas are in short supply
prospects and potentialities by contrast
ncss
and industry as a whole. %•
.
,
that situation for some time
and bid fair to continue in
to come.
war
They
consumer
are
still far behind in catching up to post¬
S.
their peak
demand.-
If, therefore, in 1948 some industries pass
of supply with respect to accumulated demand, it may
actually mean that more steel will be available to the
oil industry, to the gas industry, and to D/esser Indus¬
tries—enabling Dresser therbby, to attain a peak of bus¬
iness in 1948 even bevoncl today's expectations.
ROYCE G. MARTIN
The
Though production of
155%
over
Auto-Lite
Electric
Company
?
automobiles in 1947 was up
new
drive
purchased before the war, thus bringing about con¬
tinued great demand for replacement parts,
cars
This demand is expected to con¬
through 1948 and we at The
f
tinue
Auto-Lite
Electric
Company
spent
considerable time and money during
1947
preparing
our
production facili¬
ties to meet this continued
1947
business.
peak year with sales
estimated $185,000 000, a
record for the company. We ex¬
reaching
new
our
was
an
Royce G. Martin
our
new
plants
were
,
All this is
bringing benefits to all its participants and making a real
contribution to the welfare of our nation. Unless handi¬
capped too greatly by materials shortages, government
interference or unlooked for labor, problems, I, am con?
•
a
i,
President,
one
If,
is the tremendous increase in
Some estimates run as
tion.
10,000,000
should
mean
for
poulahigh as
their homes/depression de¬
spite the high cost of living and the
,1 see little chance of
George W. Mason
which make some people
predict one. There were widespread predictions of a
back for the last half of 1947. They were answered
dangers
by
new
ones
set¬
in¬
industrial production.- Some of
prophesying a depression are the same
peaks in
the people now
predicted a reconversion slump
unemployed. Of course events
who during the war
to
10
12
million
and shortages is more
production. I feel sure that if all
us
cooperate in working toward that end, we can
maintain uninterrupted a high level of prosperity.
The best
cure
and
for high prices
more
of
the optimistic side.
The wage earner seems to be well assured of holding
his job. Employment is greater than it has ever been
before and the need for workers is increasing.
The
output of automobiles and the other things people want
most should be greater during
1948 and the average
family is almost certain to benefit.
I am confident we're in for a long period of expansion.
There may be ups and downs along the road, but gen¬
erally 1 think our economy will have an upward trend.
I think most
A.
signs for 1948 are on
those
of
any
previous
,
In
spite of a nation-wide car
that
speed with which it is
Company
supplying replacement parts to more than
€0,000 dealers and service stations throughout the world.
are
We
looking forward to 1948 as a good year pro¬
heightened by the fact
backlog
orders for Maytag wash¬
still have a sizable
of unfilled
:
only
washers
set
has
a
our
new
symbolized by the 5,000,000th May¬
tag
line
which rolled ..off the assembly
in October, but our output of
Dutch Oven Gas ranges
Home
cent
:
Freezers,
additions to
and Maytag
comparatively re¬
our line of appli¬
has steadily increased. These
products are doing much to help bal¬
ance our dealers'
lines of merchan¬
dise. And we still have in the back¬
ances,
Fred
Maytag
II
ground
our
automatic
washer
and
impetus to business when the tremen¬
dous voluntary demand for our conventional washers has
been fairly well satisfied.
We have completed the task of rebuilding our wardrier to give new
railroads
want
to
improve
plants and services to keep pace
with
transportation
requirements,
and* have
already authorized
the
A.
T. Mercier
expenditure of hundreds of
production of
all-time record,
The
freight
their
while most of the home laundry
appliance industry has already en¬
tered the buyers market.
ers,
Not
carried.
although Southern Pa¬
load was the largest
in any peacetime year, net earnings
were a third less than the 6%
con¬
sidered a fair minimum for industry
in
general.
This was due to the
long-existing inadequacy of railroad
fares and freight rates, a matter1 of
deepening gravity in these'times of
spiraling prices of railroad supplies,
high taxes and mounting wages.- I ;
However,
cific's
naturally I am optimistic
of The Maytag Company. This
we
shortage, Southern Pacific
carried its largest peacetime freight load in
1947.
In doing so, Southern Pacific set an all-time
record for efficiency as measured by gross ton-miles per
train-hour—a factor which takes into
account both the train load and the
year,
optimism is
MERCIER
T.
Company
Having just experienced a year of record production
in which total sales of Maytag products nearly doubled
about the business outlook
:.
President, Southern Pacific Company
FRED MAYTAG II
President, The Maytag
Melville
shoe consump¬
tion in 1947 was, in fact, the lowest in 11 years, includ¬
ing the war and rationing years.v Although consumers
undoubtedly got more wear-value per pair than in the
war years, the per capita trend is one which shoe retail/
ers would
like to see reversed in 1948. Whether it will
"be or not depends entirely upon the course of hide and
leather prices.
A continuation of the present level of
hide and leather prices would mean that the American
people would buy fewer shoes per person in a "pros¬
perous" year of high employment such as 1948 promises
to be than in the comparatively depressed year of 1938.
From the viewpoint of the retailer, acting as purchasing
agent for his customers, there is something wrong with
that picture.
We hope for a downward adjustment of
hide and leather prices in 1948, and believe that such
an adjustment is justified on the basis of historic
price
relationships even if there should be no substantial
change in the general price level.
as
things needed to support
stead
Ward
capita of about 2.9 pairs in 1947,
compared with 3.15 in 1940. Per capita
per
and all of the
products, for-homes
about 416
sold in 1940, when there
10,000,000 fewer civilian cus¬
tomers
(and when about 7,000,000
workers were unemployed). Thus, a
were
family units during
These new families
greater demand tor
new
plant at Hazelton, Pa.
expansion has been done to meet the ever¬
We also
•
pairs of shoes were
about 420 million
the last ten years.
All of this
marine engines.
; y j
million pairs
long-term expansion of our economy
Division in the
growing demands of our customers. At the present time
are
supplying original equipment, to 73 manufac¬
turers
of
automobiles,
trucks, tractors, aircraft and
Shoe i Corporation /.•
most
as
...sold. .This compared with
and
in -the future growth
stability of business in general.
An
encouraging
indication
industry
us an
we
Melville
•
be
,
We also are constructing another wire
;
year can
This certainly
Wright Aero¬
This will give
[and will end the congestion at our Lamp
are
improved standards of living..
.• *
:
.
j.
an example of dynamic capitalism at work,
and
increasing
of rec¬
demonstrates our
confidence along with the rest of the
war.
Additional 4,000,000 square feet of manufacturing space
•"
the needs of hundreds of thousands ol
contributing to their happiness
ucts are meeting
American housewives and
-
jsoon be constructed at Los Angeles, Calif.
The latter
[plant should be in production before the end of 1948.
and cable
than ever before in our history and prosperous
thousands 6f retail dealers. Our prod¬
.
a very short time, we will have another battery
[plant in operation at Owosso, Mich., and a new plant will
area.-
wages
quarterly
regular
.
for several years.
Cincinnati
dividends, to. the several
thousand stockholders whose investment in our company
makes its operation possible. A profitable operation also
insures sustained employment for more workers at higher
instituted
i
j5 In
nautical plant at Lockland, Ohio.
have
profitable year and, as a result,
a
■
[at five Auto-Lite plants which have been in operation
Auto-Lite recently purchased the former
' '•'
V
We have had
production.
placed in
operation by Auto-Lite in 1947.
A
new battery plant was constructed at
Vincennes, Ind., and a new bumper
plant was opened at Sharonville,
Ohio.
In addition, enlargement of
production facilities was carried on
Two
the average
observers/anticipate;^ national income in
-1948 is maintained at o
somewhat above the previous
•*///;/
' of uncertainty and changing trends,
year's level, .shoe sales ^in^dollarsrwill probably be at
wc feel that., we have
more reasons 'to '.be -optimistic
or slightly above the 1947 total:- Alert retail merchants
than .otherwise and look forward tp a reasonably good
/ will not regard this as satisfactory,
'
year for our company.
1
" 1 * * 1
however, if pairs are not substanti- . / j
ally above the 1947: level.'- The de- •
.•-V; GEORGE W. MASON
cline of unit sales in the year just
President, Nash-Kelvinator Corporation .
past was a danger signal to retailers.
Industry in general is showing its faith in the future
Greatly increased hide. and leather
by spending billions of dollars for new plants, equipment
prices during 1947; forced higher
and to put new models on the market.
't//' manufactured shoe prices ahd higher
retail prices, with a subsequent drop
In the case of Nash-Kelvinator, by the close of our
in unit sales for the industry as a
1948 fiscal year, we will have spent
whole.
/:'./ 'V
for such modernization and expan¬
In
sion better than $40 million since the
1947, with full employment, \
pect the year 1948 to exceed this voiume as we will be in position to in¬
crease
ognized quality.
While an election
M. Lee Marshall
efficiency
1946 many persons still were forced to
as
birth rate; of 26 per
because it means an
proved them to be wrong.
Chairman of the Board of Directors,
on
,
demand for bakery products
with
V President and
are.
present high
transported, refined and sold, there
^he Argentine. This
they should occur.
naturally pleased with the;
wheat shortages if
new
Maytag products
less
increase for the washer
price rises
Since 1941 our prices have gone up
business for our
hope that further price
[
■
.
Consumer preference
tional
to
changing
not
are
cheaper brands.:
oil companies.
Pipeline construction for natural gas, crude oil and
gasoline is proceeding at a record rate, taxing the pipe
manufacturing capacity of the entire steel industry for
k
than
I
have held
much
as
industry.
rather substantial increase
still recognize established
food bargain.
prices are sLill 50% lower
the cost of other foods and
_
we
minimum.
a
than half
spite of necessary and
in bread prices, consumers
brands as their number one
Bread
catalytic cracking plants
the major
to
Continental Baking Company
In
built during the war, and
utilizing the newest refining techniques. A tremendous
budget of expenditures has already been announced by
newer
MARSHALL
LEE
M.
in hitherto
will
depleted distributing organization from a nucleus kept
intact while we were in war work.. We are proud of the
vided, of course, that materials are available and labor
a minimum in all industries.
58)
.1948
Speaks Alter Ihe XUm dflfiheiiirear
Business and Finance
(Continued from page
Thursday, January 22,
FINANCIAL CHRONICLE
&
THE COMMERCIAL
(360)
of dollars on
earning
postwar improvement programs.
power
investors
are
millions
But rail
must be raised to a fair level if new
be encouraged to make available the
to
betterment of rail properties. Other-*
to suffer; \ «»■_
,
Depending upon the fairness of the American public
to support the appeal for adequate rail earnings, South-,
ern Pacific has ordered or authorized
more than $152/»
000,000 worth of new freight and passenger equipment
since the end of the war. Those orders include 20,580
freight train cars; an additional 5,000 refrigerator cars
for Pacific Fruit Express Company, of which Southern
money
for continued
wise the
Pacific
48
quality of rail service is sure
is
half
owner;
107 streamlined passenger cars,
main-line use and 43
switch engines.
Shortages of materials and construction difficulties in
Diesel-electric locomotives for
additional Diesel-electric
Volume
167
:
■
THE
Number 4666
COMMERCIAL
&
FINANCIAL " CHRONICLE
(361)
61,
Business sand Finance Speaks Alter the Turn of the Year
railroad equipment builders' plants have held back de¬
liveries of new rolling stock so urgently needed to
replace wornout
This
and
cars
unavoidable
included
its post-war improvement program for the
period expenditures or commitments totaling
$225,000,000.
This includes provision for greatly ex¬
panded utilization of modern Diesel motive power, a
large fleet of the latest streamlined passenger cars, thou¬
ord for
sands of
the overall supply.
augment
in
channels.
shipments was also established in 1947. This
possible through the excellent cooperation of
employees.
777.;
1945-1948
coming at a time of un¬
precedented peacetime traffic, created an acute freight
car shortage throughout the country during a great part
of 1947.
However, the railroads, with the help of ship¬
pers and receivers of freight actually moved more car¬
loads than in the peak year of the war.
We are carrying on as best we can with the equip¬
ment now available to the railroads, and we are glad
to report that new freight cars are now reaching us
from hard-pressed builders at a rate faster than old,
war-weary cars are being retired. We are hopeful that
new equipment will be turned out'in increasing volume
handicap,
and
new
improved freight
improvements in roadway and facilities.
CARL
that
'
,
outlook for 1948 should be very br.ght
continuation of the inflationary spiral slows up
stops
forward progress.
labor and management in both
or
the year ahead, I believe that Southern
passenger traffic in 1948 will equal the good
enjoyed in 1947.
Freight traffic gives promise
increase of about 5% in 1948.
Looking to
-V,
,
W"'
>
■
and higher prices, and expect
a
stable economy in ihis
country.
■■■4■
•
»
1
•-«v x
v •
It
years the trend of gross earnings
of the railroads of the country has been closely related
national income.
\/.-7
•
-
level
„
.
which
through
the
national 'income
While
promises
a
ers.
1948,
which
serious
must
viewed
be
with
Carl
1 ,7/ \\>
concern.
large
a
and
important
whole
our
economy, are to be pre¬
a sound, healthy condition,
it is essential that they should not be
served in
;
restricted to
the
volume for
starvation diet.
a
The railroads
backbone
indispensable
are
the
of
nation's
trans¬
Gustav Metzman
which
vestors
will
a
be
vast
The
outlay of capital
only if in¬
a
fair return
their investment.
upon
Given
as
an
equal
of
out
can
of modernization, embracing
nological developments in
the
country
tech¬
never
before
equaled
of
every
that
steel
production
in
steel
our
plant in Pueblo,
Colorado,
an
the
new
will
year
month
through December, 1947.
are
of
the
levels.
the
crea-.
company's
1947
\
During the past 12-month period,
Royal's all-out effort to increase pro¬
duction and hold down
strengthened with
pansion
a
the
cost was
nationwide
ex¬
which
provided
|v- enlarged space facilities for type¬
writer and Roytype supplies manu¬
program
facture and for the central executive
offices
branch
and
sales
organiza¬
tions.
About a month ago, the Hartford
factory leased another 50,000 square
feet of floor space to be used foi;
storage and light manufacturing to
;
taxed
ease
conditions
the
at
main
plant.
Royal
During the autumn months,
expanded carbon paper and
ribbon production by opening a
three-floor, 75,000 square
foot plant in West Hartford, Conn.
Ro,yaI improved and enlarged its home offices ai
estab¬
lished in September, 1947, and exceeded each-successive
Central, with faith iri the future, has
ahead
run
record
all-time
was
Circumstances
The Royal Typewriter
Company looks forward to con-r
tinuing top volume for many months ahead.
Encour¬
aging signs indicate that production and sales during
Maxwell
shipment of iron and steel products
ahead
MAXWELL V. MILLER
will
1948
years
President, Royal Typewriter Company, Inc.
to
way
is
men."
quality are available, and if present capacity
capacity that will be installed during the year
record for
and
prepare it for the eventualities of the future.
The New York
tures
large order back¬
in
Research
result many new
a
creature of circumstances.
be operated without interruption.
At
directions, that will give
many
transportation
industry is cooperating
fields.
As
remember—in the words of Disraeli "Man»is not the
we
exceed the output of last year if raw materials
or
and new
program
can
long at the expense of oth¬
can
be kept strong—
manufactured items such as railroad
industrial
machinery,
automobiles,
farm
chemical products, building materials, and
believed
proper
in other industries—the railroads are prepared to carry
vast
other basic
many
steel
generally
adequate return on the capital invested in
the industry—a return comparable with that prevailing
a
and
produce maximum tonnage. Steel output in 1947 was the
largest ever recorded in peacetime, a total of 62 million
tons of finished and semifinished steel products.
It is
available
be attracted by the prospect of
can
•
America
needs and now have
war
equipment,
equipment,
otiiers.
completely modernized.
This calls for
well
as
Following the se¬
vere strain imposed upon them during the war years, it is imperative
that they be
*■
single group
manner.
logs for civilian requirements. The products of mines,
forests, oil wells, farms and ranches are in great demand,
as
portation system.
7
Meyers
distributed
products of
attractive design and greater
utility* will attract new,
markets and help sustain volume. New types of indus¬
tries have already been started.
•■7t'-'-;:;77:
7'
The year 1948 can b« a year of forward progress if
economy,
of
segment
W.
no
cooperative
tronics
demonstrated through
that
are
my
of its prewar stride.
best interests of all groups in our
through greater faith, tolerance, humor and
understanding.
;The continued demand for a wide variety of durable
goods is reassuring. Many industries produced in large
If. the railroads, which constitute
.;7
years
products
Many technological advances were made during the,
war period in
chemistry, metallurgy, agriculture, elec¬
high levels of production and busi¬
ness
activity can be maintained in
1948 if there is unity of thought and
action. Our economic program must
be worked out unselfishly for the
net earnings of the
railroads have been in a diminishing
ratio
has been
prosper
high
continue
to
and
We cannot go
have
to
President, New York Central System
the level of
encountered.
inflating the balloon with higher
on
long period of
since the close of the war has been maintained at
be
and
wages,
<v.
,
•
to¬
may
later
*
:
work
gether to avoid the pitfalls that
GUSTAV METZMAN
to
situation
economic
volume
a
when
come
producing and consuming
industries, the government, and other
groups must reappraise the present
Pacific's
Over
The time has
our
in 1948.
of an
4-v It is
business
a
steel
effort to see
through proper
every
market
President, The Colorado Fuel & Iron Corporation
The
its
industry is continuing
attempted gray,
operations.
\U/,:7. 7'//:../
:/
belief that each individual corporal on cam
do a great deal to insure continuous and
high produc-,.
tion in this
country by recognizing its obligation to thet
customer who buys its
products, and by upholding the
standards of good
citizenship in the community in which
its operations
are
located.
To
successfully function,labor and management must also
jointly assume their
responsibilities and work out their problems in a fair
|
•
unless
steel
C. F. & I. has written to its customers and'
asked their cooperation in
bringing to light any instances
that might come to their attention of
w
-
W. MEYERS
our
'X.
The
and substantial
cars
was
made
V.
Miller
An all-time yearly rec¬
(Continued
on page
62)
CHICAGO TITLE AND TRUST
<
•
•.
ii'-,;:
•
/•
'
•
m.
U
Cash
Municipal and Other Bonds
568,237.95
^
vC.'v
United
Real
and Discounts 7
Estate
Real
•
1,894,002.57
Federal
•
and
Estate
Loans
-
Loans
218,587.88
:*GJ. Mortgage Loans-•
■
^
.
<■ Insured
71 '
or
•••.<•
Bank Real Estate
Slock, in
Bank
,?
.'"777-.
'
-
'•
Government
»•
Letters
•
of
•
•
•
-
Liability
Other
■
1.00
60,000.00
.
•
•
•
•
•
Tax, Etc.,
-
'
232,856.61
Deposits
• • •
Credit-......
•
•
*
102,034,743.11 7;,.: 7'-.7 7
•
■;
,7 .77'
\
'
$105,218,848.24
and Insurance
•
>
*
•
•
•
•
>
%
;,j:7
•
50,855.00
10,208.24
,
TOTAL
$108,248,240.31
Surplus
$
.
•
State
-
Government
Member
.
$ 4,778,032
$ 4,548,208
.
.
.
.
,
33,930,504
38,751,045
;
853,269
7
-
7/
7r
713,520
1,407,616
1,492,607
713,578
.
679,845
7,000,000
.
1,500,000
.
.......
$50,182,999
7
;
4,250,000
1,500,000 7:77
;
$51,935,225
After Reserve Provisions
Profits
•
•
•
•
•
•
777
r:7~ 77 77477 ;-77-:4
165,128.11
Under
TOTAL
Federal
and
Chicago Clearing House Supervision
Insurance Corporation
Deposit
Member Federal Reserve System
$20,654,590
.
2,090,349
1,960,468
360,000.
,
1,101,900
1,849,171
'
Employees Pension
ir
>
-
2,799,892
Surplus
2,527,559
12,000,000
.
Stock
12,000,000
8,000,000
.
Undivided Profits
50,855.00
360,000 777;
1,712,992
Reserves
Letters
of Credit
$20,592,936
Trust
Capital
Liability
.
Indemnity against
.......
Provision for
600,121.09
•
Cash Deposits as
Accounts Payable, Taxes and
Accruals
1,000,000.00
• • • • <•••••
Undivided
Trust and Escrow Cash Balances
Dividend Payable
1,000,000.00
Total Liabilities
.
.
.
...
.
.
.
.
.
.
8,000,000
3,237,922
2,870,445
550,182,999
$51,935,225
$108,248,240.31
♦
Under
.
Specific Title Guarantee Risks
213,287.87
•
Capital
•
2,765,249.20
•
1946
,
.-;7
255,156.99
Under
Other Resources
SHEET
.
.
.
Companies
Total Assets
^
Contingent Reserve
-
.
Title Records and Indexes
'
Secu•
.
Chicago Title and Trust Building
Corporation
890,766.71
••••■
United
States
Customers'
•
Reserve for Taxes, Interest
1
Reserve
on
7i
•
•
•
.
LIABILITIES
593,743.73
y •
•
rities
I
•.»•'
Lease y
Federal
•
Accrued Interest
.
•
-
7>77;7r7'7.7
by a Federal Agency.
Building
All
"474';;T:I'y.
14,931,379.43
Bank
Loan
•
1,084.005.32
•••
Guaranteed.
Chicago
Stocks of Associated Title
7;-
Deposits
3,098,501.59
•••>.•
*R.F!C. Participation
,
•
,;77 77
Housing Admin¬
istration
.
Investments*
,77';:-V7;7':.'7:t/ 7
Commercial
^Federal Housing Adminis1 tration
Mortgage Loans < *7 1,372,525.30
.
War
Account
2,060,481.81
.-
Govern¬
7,263,756.77
......
•
Loans—
Conventional
Industrial
•
-
•
Mortgages, Real Estate and other
$
States
ment
$92,346,895.92
Loans
•
BALANCE
Accounts and Notes Receivable*
Public Funds
'/>
'
1947
.
Marketable Securities*
DEPOSITS:
U' ,7 '7'
U. S. Government Securities 67,760,808.39
1
•
of December 31
ASSETS
CONDITION
31, 1947
$24,017,849.58
• •.......... .
'
v.;-,."'1"
As
LIABILITIES
hand and in Other
on
COMPANY
/■ '.7',
CONDENSED
RESOURCES
Banks
V
Trust Company
and
of
December
Cash
i ••
SIXTY-THIRD
AT
STATEMENT
•
1J.1 West Washington Street
nSV
Chicago City Bank
HALSTED
•
•
Assets in the
pledged
and
to
escrow
amounts
provided by statutes of Illinois have been
qualify the Company
cash balances.
to
do business and
to secure trust
,
Speaks Aiter the Turn ef the Year
business and Finance
(Continued from page
New York City,
leasing of an additional
Avenue,
Park
the
with
floor
in the interest
space
61)
also during the fall,
20,000 square feet of
efficiency ]
of bettering the
headquarters operations. Moreover, in up and
uties throughout the nation the company has
lew branch sales offices to give more complete
;
customers.
the
coming
opened
service
'
_
.
.
of many hundreds in Royal personnel
introduction of much fine new machinery de¬
signed and built exclusively for Royal have contributed,.,
immeasurably to Royal's production operation.
Further•more
Royal has readied and will launch in 1948 a comaddition
The
the
land
[prehensive
[against
Ito
the
program aimed
sales training
softening of high quality
any
customer.
[prices
in the
[price
or
typewriter service
i;a,j
has been fighting to hold
the battle against rising
considered
brought
is a difficult one since prices must be
light of spiraling costs which have already
other companies in the industry.
year, it is likely that Royal/will
increases by
During the new
duce
at guarding
.
to prices, Royal
Ithem in line..' In many ways,
'With regard
intro¬
products which will supplement
these established Royal products which are
replace
wide distribution.
into consideration, Royal feels there
to be optimistic about business conditions
currently enjoying
'
Taking all things
is
good reason
in 1948.
'
'
MITCHELL
WILLIAM R. K.
President, Provident
?/'•■//
--///'/•//;.;
Trust Company of
Philadelphia
the factors which exercised an important .
influence on operating earnings of commercial banks in
1947 will probably continue to operate in the current
year
The Treasury Department has indicated that its
,,
'
estimated substantial cash surplus in
the first few months of 1948 will be
s
Many
ing. Since most of the parts going into cars
creasing in cost, with labor costs and freight
of
commercial bank hold¬
government securities and
used to retire
ing assets...
able funds
age
.
think¬
were in¬
costs also
except'uprfor the price
of the finished product to go.
We had a year in whichautomobile prices necessarily increased.
Right now the price picture is nowhere near so easy/
to analyze as it was a year ago. I feel safe in speaking for
the industry as a whole that nobody wants lower auto¬
mobile price more than we manufacturers.
We clearly
recognize the danger of pricing cars out of the mass
market
which the American
on
pends.
.
.
train
are
come
there is
a
makers
are
a
soon
be
1
a
:
famous
throughout
meet
the
nation
their
for
neatness
and*;,
other scheduled passenger runs to
the travel demands of Katy's growing territory.
comfort, for
use
on
■
-
~
_
p eSs
reeard
f
to
° 1
that
in the territory will continue unabated in 1948. The Katy
sounder and healthier dollar, I am
auto
i£ iaying jts pians accordingly.
v.
^
/ :
first to come / • .
?
in its current /
GLENN K. MORRIS
I can foresee-; Presidclltj Natjona, Bank #f Germantown and Trust Co.
the margin of
tant
problems for the banks of the country. Supervisory
authorities, both State and National, issued- a warningconcerning the expansion of risk assets; a proposal tor
substantially increase the legal re-:;v/v •
; >
V'f' ';H'serve
requirements as a means of j|
200,000 vehicles—an increase of 75 % over 1947—and
our employment schedule calls for a paraUel increase
from 7,800 to 12,000. Even With this program we do not
expect to equal the demand for our utility vehicles,
passenger
or
vehicles.
.
..
curbing inflationary factors was laid
before a Committee of Congress by
the Chairman of the Board of Gov-,
ernors of
the Federal Reserve Sys-'
;
through-:
think this situation will prevail
the automobile industry in 1948.
In general, I
tern; and finally in the last week of
,
R.
Chairman
with
.,
-
V
-
the Federal Reserve System,
the
consent
of
the
Treasury
Department, drastically altered the
price structure of U. S. Government
securities, thereby causing confusion
MissourLKansas^Texas
Company
Railroad
might, however, be fully
the year
J. MORFA
Board,
the
of
closing months of 1947 brought into focus impor¬
The
profit has been allowed to exceed the industry's tradi¬
tionally small one. '■/. '7//-/' /?•???■"
At Willys-Overland we are looking ahead to 1948 with
sufficient confidence that we plan to produce more than
This decline in employ¬
will
industries."-Until? ;V -Puf. P^a"s+I°r4947 were exceptionally successful, and
automobile
?xt.^ore+hU x d I!1 i-ever+L
" A*ter
their nrmes : % r '; ??;•//caieful study of the Southwest we believeThat expansion
prices will be among the
down.
However, if our currency remains
devalued state the only price reductions
will be a scattering among models where
out
Antonio,
wide variety of
helnless in
.
,
.
trucks
San
general trend towards lower costs
It 1948 brings us a
sure
to
passengers the utmost in service, safety, comfort and •/
time-saving schedules.
;»
-•
^Inauguration of this train will release certain luxury *
equipment, such as Katy lounge and dining -cars, already.
automobile business de¬
factor is full volume of
from
Louis
All equipment on'this train 7--./
will be of the latest and most modern design, offering •; ;
rently limiied by the
vehicle
St.
new
diesel-powered streamliner.
production, cur*
material shortages mentioned pre- ■
viously. The other factor is the price structure of our <
entire economy, for the component parts of a motor
One
factors.
from
into its share of
come
The Texas Special, Katy's crack
equipment during 1948.
.,
prices
-Passenger service, too, will
-
\ •■ "
<'••••■
inextricably dependent upon two
1
But these
of
this, of course, will have the effect
'of reducing bank deposits and earn- .
ings
ment, both installed and ordered, to bring the total mile- /
under block system to nearly 1,200 miles; new heav¬
ier rail and ties laid; short-wave radio communicaton
equipment now in use in yard service. New freght car
equipment, built or building under this comprehensive
program, included 300 box cars, 200 open and 100 covered
hoppers, 200 gondola cars and many other facility im¬
provements/-. <■
*. •' .-/
:
price-
there was no way
increasing,
^
more new
or
one
Plan
Newburyport
the
as
reduction announcements.
>f
to
and short-lived
'
?
The facts of the situation prevailed over wishful
such
Thursday, January 22, 1948
CHRONICLE
FINANCIAL
&
THE COMMERCIAL
1362)
12
,
and unsettlement in the entire se¬
South¬
curities market.
*
western railroad.
With terminals in such cities as St.
of gold imports at the present high? Louis, Kansas City, Galveston, Houston and San Antonio,? ■/;? These recent happenings and the
rate of business activity will have
it serves a Southwestern corridor which is today teeming
level..
their effect on banking in 1948:V K
i
with the traffic of agriculture and
?
.■/••■
There has been no indication as
Morris
industry.
Any prognostications fo?r/
yet
that prices and wages have
of activity, which.'is confidently explected Jby.rnost ex-"* "J
the future made by Katy manage¬
reached their peaks, and a; further
ment are naturally made chiefly for
perts;' a* further increase in bank loans seems inevitable? ,
'
rise in bank operating costs appears
There lis no evidence to date that the increase in bank?
the
territory which
the railroad
likely. On the other hand, it is evi¬
Wm. R. K. Mitchell
v? credit has been for other than productive purposes.
It*
serves,
and are based on constant
dent that the long sustained down¬
is believedthat banks will confine their ^credit extension
and intelligent surveys of that terri¬
ward trend of money rates has been
//■to productive loans in 1948. ? Increased prices for raw? 7"
tory.
: /'??. /?."•//
v\>;?
reversed, and it seems likely that loan interest rates,
In Katy territory, we look forward/,
which to date have lagged behind the upward curve of
to 1948 being one of the most prom-,/??tb;'nq(^;n^rmaL5 terfts?ib£
Hail}:/
yields on corporate and municipal securities, will con¬
ising years since the railroad entered
tinue to harden, reflecting the tremendous demand for
Indian
Territory (now?Oklahoma)?
." r should; continue /to1; be The /source: m'eet: that *' * ?
new capital to finance current production and distribu¬
more
than three quarters of a cen¬
; /nee<l/1/ Such loan« iare^b^.result/^pf increased jprices /and
tion, and the expansion of facilities. ■: On the whole, we
tury ago. Prospects for a continua¬
Sj- higher livihg/costs- and ;notHhe,;cause oT them:
believe that net operating earnings of commercial banks?]
tion of the rapid industrial develop¬
>"'not be a ?
for the year 1948 might be expected to approximate
ment of the Southwest are excellent, /
} 1 cause for alarm: Tf the U. S: Government'debt is reducedthose reported for the past year.
•
and improved agricultural methods
$7 billions in the first .six months of 1948, as has been
In view of the attention which has been focused on
Raymond J. Morfa
and crop diversification promise in-/
predicted, the money supply will be decreased as the*;
the expansion of bank loans which has occurred in the
increase in private credit is not expected to approach
creasing yields of farm and livestock/?'.H//?/
past year, it might be appropriate to express our opinion
that figure. The increase in bank loans will be an im¬
products. Because of the bright prospects for the South¬
that, in a major sense, this has been a result instead
west, and our faith in the future of this section of the
portant addition to the income of the banking" system. .
of a cause of
inflation,/ inasmuch as manufacturers,
country, our railroad has laid wide plans for improveBanks, generally are riot unmindful of the increased
wholesalers and retailers in many instances have been
ments in facilities and equipment-—improvements which
hazards in credit extension in a period of high prices
obliged by the prevailing high prices to secure additional
will cost millions of dollars, but which will, we feel,
;• and. capacity operations.
Rates of interest on loans must
\yorking capital to finance a given physical volume of
furnish a fast-growing industrial and agricultural area
increase to compensate for the increased risk. The trend /
business. To the extent that these loans have assisted
with the streamlined freight and passenger railroad
in that direction which started in late 1947 must be
in the productive and distributive process, they have
service it deserves.
accelerated in 1948.
;
;
.
'
.'
promoted the ultimate solution qf the problem, which
Total deposits will probably not increase and may well.
Through a system of efficient, long-term planning,
is to bring the supply of goods into balance with the
decrease during 1948,.
The amount of U. S.-Government
Katy met the ever-increasing demands of peak war pro¬
demand. We believe that the present situation calls for
duction and postwar expansion with a completely reha¬
debt reduction which is not offset by private debt ex-'.'/ ?
the pursuit of a conservative loan policy, and the dis¬
bilitated railroad.
During 1947 expansion continued,
pansion will reduce deposits of the banking system. The
couragement of speculative loans of all types. Not only <
and 1948 calls for acceleration, rather than slowing downaccelerated program' to sell U. S. bonds to individuals *
/
is this desirable to avoid further expansion of our money
of this improvement schedule.
?
/ - '
will likewise reduce totals.
High living costs and availsupply, but also to minimize the losses which are in¬
Modern industry and agriculture, with their shipping,,
ability of more• consumer durable goods will tend to re-,
evitable in the aftermath of inflation.
The
the effect of further expan¬
sion of loans, and the maintenance
offset by
Missouri-Kansas-Texas Railroad Co. is a
/
.
~
.
-
'
,,
.
,
.
>
!
.
,
'
,
JAMES D.
President and Chairman of the Board,
Motors, Inc.
Willys-Overland
is destined to be another big one in the
automobile industry. It cannot be otherwise in view of
The year 1948
the great
unfilled need for automobiles and trucks
in the
believe
the steel companies are doing the
best they can for our industry while
maintaining a sound program. We
are tooled and mechanized to exceed
the
in
*
seems
so
key
On
confident that
James
I publicly
prediction in the face of
^
,
,
,
a
yards
and
..
-,
portfolio of Government, State, Mu-.;
■...-Bills and the.increase in the rate on one-year Certifiqates / "v/rV
? of Indebtedness is now in the: process of-finding'a new-,? ;// ■ ;
areas,'
Diesel
D.
Mooney
experiments
radio control from the yard
the main line
■
switchers
/
ated by two-way
inevitable that
made this unpoplar
o
investment
,
improved
100% dieselized, and at Dallas these switchers are
million
Mounting costs made this
The
planned which will equal or excel the St. Louis
are
Worth
the automobile price trend would be
upwards.
Other facilities, in other cities, have been
...
vehicles of 1947.
was
will undoubtedly draw upon ac-
throughout, offers shippers the f nest of terminal fapili-
a
previous automobile production
I
returns
yards and; speeded on their way to destinations on the.r.?i^i,?rt
main line./ In order to give/ better
peak of 1929. Limitations of material,
however, can be expected to prevent
the industry from producing a much
One year ago
interest
nicipal and Corporate securities wilf continue to be the
largest asset of the banking system. /. Investment; prob?
lems will probably be much different than in recent'
years> The pattern of interest rates which appeared to be '
about adjusted to the defrosting of the rate for UuS.H
iacilmes
of large volume.'I
greater volume than the five
1 Hive
(jumulated savings of bank depositors.
or
governing factor in over--
taking this demand will be the avail-l
ability of necessary materials, of
which sheet steel is the most critical
in terms
improved many of its freightkey cities. In St. Louis, for example, a huge, two-floor freight house, with covered
team tracks and loading docks, tractor-trailer handling
from floor to floor by use of ramps, and one-way traffic
the Katy has renewed or
saving accounts. -The large capital requirements of
industry which mus( be raised by offering more attrac- •
handling facilities in
ties.
United States and abroad.
The main
duce
importing, exporting and distribution problems, demand
the acme of freight service.
In order to provide this,
MOONEY
Powers- and will flhd it. essential to
th?
lev?Jf throughout
oper-rl^l?^^®
th<^ wp^r«^.P A?a^SX
office./«/:ve£,?
heavy rail and new ties and ballast
permit operation of heavy-duty freight trains at safe,
high speeds. Second morning delivery from St: Louis
or Kansas
City to San Antonio or gulf port cities such
as
Houston and Galveston is accomplished by use of
4,500-horsepower diesel freight locomotives. In this con-"
nection, the Katy just announced the purchase of an
additional 44 diesel units of 1,500-horsepower, each for,
use in main
line freight service. Other improvements
include the installation of new block signalling equip-
main-.'
market for other investments should soon establish a
level
vestors.
Those banks which have maintained
maturity schedule
a
spaced}
in their investment accounts should
have
opportunities to invest at
been
better return than has
possible for several years.
a
—
Profits from sales of securities and
sets
new'
providing opportunities for increased income to in¬
recoveries
on
as¬
previously charged off are not expected to be an
(Continued
on page
64)
.
?
,
i':?-
Volume
167
Number 4666
Anti-lnilaitoit Risks
*
THE COMMERCIAL
i
(Continued from page 59)
;vi:<'>:■•*«
^ ni corpox^te
•
*•*''
eariiings improv^ to
splendid 'heights, h&ye (resulted! in
conditions that make
equity
money
-dif'icult to obtain also.
>
Hence; if bank credit is to be
■.? niade dUffcuIt
too, expansion and
-
FINANCIAL
CHRONICLE
(363)
The
t:"%r'/Vv*.■'.
.>
y;
••
Articles of
Agreement of the International Monetary Fund
Bank for Reconstruction and
Development
were signed on Jan.
14 by Dr. K. T. Jutila, .Minister of Finland, on
behalf of the Republic of Finland.- Finland's application for admis¬
sion to membership was approved
the
and
International
Holds Taxation Is
restricted.
would
be
severely
Both increased
at the Second Annual
the
(Continued from page 6)
Meeting of
Fred Stone, Jr.
Boards of Governors in Lon¬
don in
September, 1947. Finland's
quota in the International Mone¬
of costs
are
recommended by some
p2opie who (perhaps
the old principle of the; left
hand not knowing about the
right.)
want to cut down credit for the-e
'•cn
The
•purooms.
•
tration
<
tax
adminis-
present
policy,' which
•excessive taxes
the
by
higher incomes
discourages .capital accumulation
.'
on
fust when capital needs
is
a
are great,
further unfavo-rabl# factor,
380 shares of
a
v; 7
000,000.
-
countries
bership
in
having
the
and
Bank
mem-;
of
>;/.
gov¬
•
Governmental, PoHcy
;'at'^ross-f H
Purposes'
f asf f6cphotnict
Company,
broad
ais
F
quire
be
recognized "that the
I eaiises of" "ir flation.7 are tremen¬
dously broad, factors and that the
Stone
symptoms than, wi'h
thermore, thg authorities
not
are
only often at cross-purposes, but
goyenjmental; policy mpre/'pfteh
than not deliberately would block
roadg of possibly impfovetoent.
Fred
D.
.500
—Picturing
•
12
Cycli-Graph
dramatic
disruption.
Certainly,
has
encouraging signs. Increacinj?
pr.ce
further
The
moves.
investors
in
will
induce
market.
Here
fundamental
shows monthly price
ranges,
With the Marine Trust
•
Nuveen's
Mr.
Stone
re¬
and- train
personnel
in. invest¬
cost
source
New
York
will
have
W.
office.
E.
why revision of the tax laws is so
urgent.
Taxation which
under¬
mines
saving
prevents
needed
capital formation and puts a brake
on
economic progress."
„
Curb 5 & 20 Dinner
The
Five
and
Twenty
charge
lold
its
this
evening,
annual
beefsteak
Jan.
22,
dinner
at
Cav-
anagh's Restaurant, 258 West 23rd
Street.
ing
The annual business meet¬
and
election
of
officers
precede the dinner.
ESTABLISHED
1886
MEMBERS
New
York
Stock
cn
Exchange
Cincinnati
York
Curb
Stock Exchange
New
"
Baltimore Stock Exchange
Chicago
Stock
Exchange
t,
Philadelphia Stock Exchange
Exchange
Chicago
Board
of
Trade
pro¬
«56
runaway
tendency
UNDERWRITERS
of
BROKERS
•
DEALERS
'
other prices to gain on farm prices
at least represents correction
of
maladjustment.
a
And
time itself
is favorable, in that sooner
(and
or
later
NEW
Philadelphia,
of
Adler, Coleman & Co.
concept of changed levels
dollar purchasing power and
of
economic activity as compared
Dayton, Ohio
But
if
Members New
disruptive
restrictions
Lexington* Ky.
Boston,
Easton* Pa.
Mass.
Portland, Me.
be
bring about
with
Exchange
•
are
ments would
trend
York Curb
and
controls
clamped on, dis¬
tressing alternatives are possible.
One is that existing
maladjust¬
a
intensified
so
15 Broad
Street, New York 5
HAnover 2-9780
as
change in cyclical
resulting bard times.
This
could be either because of
the severity of maladjustment it¬
Reynolds & Co.
self,.or ;,because public apprehen¬
Underwriters
sion beeame
so great that psychoiogfcal attitudes would exist that
would result
I- would
Deal dream of
a
.completely
.
superior
same1
now
Members
resources
REORGANIZATION A "WHEN-ISSUED"
us for
inajpoytarit ^c(feomic
V''
v :
>t
,
,1
.
7
,,
/
,
t
Exchange
Exchange
•
:
.
'
t.'*
'
7
\
.
.I
New York Curb Exchange
Philadelphia Stock Exchange
Chicago Board of Trade
Commodity Exchange, Inc.
v77
'
7:V
a';;"7 7
V7v,v7;^
Broadway ;
RIGHTS & SCRIP
and eveh ho-
be
Empire State Building
NEW YORK CITY
In
either1 case, we would scarcely
SI
Chicago Stock Exchange
120
aid, :while
litical freedoms might be lost.
.
SECURITIES
permit—to the
the nations
'
t
New York Cotton
totalitarian)
as
-
New York Stock
i closely
parlous state
Appealing to
Y
con-.
peacetime! This could be expected
to 7bi?ing } us---as^
Distributors
—
The other
similarly.
hp that the extremist New
trolled^ (virtually
^'$eoriqm^
v
Md.
Baltimore,
Members New York Slock Exchange
with prewar.
•v
CINCINNATI
Pa.
the
of
to
YORK
especially
when issues are
less stirred up politically)
there
should come a general acceptance
able to
give aid abroad
as we can
pbint which, the proponents
now, a
rPt :the: •necessity for foreign
.
General Unlisted Bonds and Stocks
V,-'
i'/rC,' ^
'
'
\ "•
enthusiastic
not,
welcomers
think, just
side
of
pleasant
the
angels, with
consequences
on
no
New
York
y
\
/
n,,.«
\
v
^
••
,*'
;*
:
^
"
\
1
*
' ;'»•' »*' -7.
k
.
f-'«'
r/
' J*'
"
Stock
Exchange
New
PHILADELPHIA, PA.
MORRISTOWN, N. J.
SYRACUSE, N. Y.
EAST ORANGE, N. J.
ALLENTOWN, PA.
LANCASTER, PA.
YORK, PA.
-
POTTSVILLE, PA.
BRIDGETON, N. J.
'
York
Curb
Exchange
Commodity Exchange, Inc.
•
120 Broadway, New York 5, N. Y.
REctor 2-5000
7 V
Bell System Teletype NY 1-319
Direct
WALSTON,
19 Congress St., Boston 9, Mass.
un¬
involved.
-V:
v, \
Chicago Board of Trade
Lafayette
3-4620
Direct
Bell
Telephone
.
-•
>,
('
the
Instead, it may be playing with
fire.
«,*
V
MEMBERS
of
pleasant matter of being
*
/
Joscptohal & Co.
as
such programs seem to
a
j
SCRANTON, PA.
Thus,' sponsoring controls and
restrictions often hastily and in¬
some
4
aid
might well bear in mind.(;
effectually considered, is
;
•
.To
to
Boston
System
and Private
Wire
Correspondents in Principal Cities
San
Teletype BS
System
360
of
he New York Curb Exchange will
of
.ions of his department.
v
Club
HUTTON & CO.
Company
market municipal opera
leneral
.
is
reasons
ice in J946 he has been Manager
of
vol¬
has
making of funds
the
the
to
Wholesale Department
market* swings (1936-48) in 501
leading listed stocks—each chart
duction and supply of goods should
lead to normal competition that
prevent
recruit
banking and that the
chance to do <=o if not imnortantlv
interfered with. In fact, there are
should
rec¬
better
much
a
of
one
the
and
available
to
sufficient
Since his return from Naval Serv¬
years'
—
record .it
ment
to
of funds obtained from this
John
ment and
Three-Trend
earnings, dividends—folio
Left to. -itself, the American pri¬
CFC-112
$4.00 — Securities Re¬
vate economy system
may
well search
Corporation,
141
Milk
work out of its problems and mal¬
Street, Boston 9, Mass.
adjustments w'thout anv nearby
the
Stone, Jr.
was
umes,
severe
saving
be
Manager of their Trading Depart¬
Fur¬
causes.
to
Nuveen & Company, in
Chicago as
with
more
time
additional
Mr.
I
with
supoo^ed corrective measures pro-
•posed mostlv deal much
'many
years
:
.
o r
done, but it should be
ognized that* tp da this 'will
,
.
be
120
Broadway;
itself f and -many
considerations
could
be
(brought m.
But it ought to be
to
the individual investor market. It
land :Trust
other
ajole
Mid¬
can
subject'; is almost
Yields
sources.
reopen this source
capital funds. If further expan¬
sion of bank credit is
kept under
restrictive
control,
however, it
may become necessary to reopen
the
at
substantially
higher than the level which
prevailed in recent years on funds
obtainable from institutional
of
-
The
i
wide investor coverage which will
be necessary to
partment with
offices
underwriting and distri¬
machinery was geared to
of
activity with its
type
consequence, this machinery
today is not equipped to do the
type of personal solicitation and
and
will of necessity be
have
smaller man-power
requirements.
As a
curities De¬
m
"The
bution
Municipal Se¬
;
ried out.
this
York
Marine
'
of
their
channeling
refunding outstand¬
ing issues of securities was car¬
ap-
Stone,
as
the
ernment
Reconstruction
Development to 46.
the
and
the process of
Trust Company of
announced
funds
quantities of corporate obli¬
gations into institutional hands as
representative
International
for
has
New
Monetary Fund and the Interna¬
tional
Marine
oointment
signing of the Articles of.
Agreement by Finland brings the
of
Mgr.
capital
vast
Fred D.
77, Jr.,
The
total
The
Buffalo
value of $38,-
par
of
Of Marine Tr, Branch
output
an 1
tary Fund is $3S,000,000, and its
more
efficient
production,
holding down costs, are obviously subscription to the capital stock
of the International Bank for Re¬
i prime
inflation offsets.
Indeed,
ircreaced production and lowering construction and Development is
>of the very
Undermining
Capital Formation
'
improvement
63
is fe Finland Joins World Bank and Fund
'
*
••
&
Private
Wire
HOFFMAN
&
to
GOODWIN
Francisco—Los Angeles
will
64
THE COMMERCIAL
(364)
operating statements of banks this
year. Income from current operations, the real life blood
of the banking system, will be of increased importance.
A realistic approach to rates of interest on bank loans
and the opportunities to reinvest funds resulting from
maturing securities should provide sufficient income to
offset increased salaries and other costs of operations
and result in net earnings in 1948 which will compare
Joy
President,
television
conditions
control.
ventory
,
,
V'V'"'-':
.
distribution of animal and plant
The
,
'
health products
to
service
this
for
meet
two
and
a
our
AM-FM
shall
we
what it is on a
minerals
world scale and the
demand for all types
consequent
machinery,
mining
of
shortage
the
radio
*
of
render
distributors of such
ment have
\
in'1948.
equip-
good year ahead of
a
~
them
\?V'" V' ' r
bulk
in
-C;T *•'t
A. Morrow
D.
W. C.
MULLENDORE
The
Southern
grave
many
California Edison Company Ltd.
maladjustments throughout the eco¬
caution in predicting for 1948.
that a more or less prolonged period
of readjustment is ahead of us but no one can accurately
foresee the precise character nor the
timing of that adjustment period.
"With those qualifying facts before
It
we
can
year, we may
out"
the
of
boom
'Wt4
industry, including the rail¬
of Canada.
; ^
:
This condition has been recognized
and adjusted to some extent in al¬
most every
country of the world
f !*■
While
be
and
Mullendore
capital investment; ■,
(6) The margin between income and outgo will tend
to decrease not only because of the increased capital
of the continuing increase in
operating costs.
I repeat the warning that we are in the latter portion
of one of the most serious inflationary booms which we
have ever suffered in the United States, and in view of
the many maladjustments in the past 14 years, accentu¬
ated as they have been py the destruction of the great¬
est war in history, it is foolhardy to suppose that we
can avoid a very considerable period of readjustment.
reaching
than
for
positions.
favorable
in
be
they felt was the best
Quality, rather than bargain, was the
obtainable.
watch¬
word.
or
can
levels
of
the
as
cheaply
or
V:?r
■
effect
not
arrive
have
to
be priced as low as an
on
our
it is bound to
national economy.
there now are more than 135 television
either operating, under construction, or with
Altogether,
stat ons
applications pending before the Federal Communications'
Commission. By the end of this year television should
be available to areas which include more than 40% of
the industry has achieved
enviable record of keeping prices
products,
proportionally lower
other commodities. I look
of this successful
continuation
;
advertisers,
and
the
public are
television.
wholesale druggists, which
to be felt last year/ have
*
persons
property with¬
survive; The
Canadian Pacific, as a great transportation system, is
unquestionably one of the important factors in dealing
quality of security as to person and
civilization cannot hope to
that
which
out
with the tasks Canada is
largely corrected.
>
times the number turned out last year..
will find
a
which
on
world
the
1948, I honestly believe, as a year
can,
L.
Chairman, Board
It
the
television
During
a
entered
,
handles,
the South Plains, of Texas
of New Mexico
and the Pecos Valley
the size of
/
Pennsylvania and Rhode
Island—every
*
<
approximating
territory roughly
—a
indication
yV;
continued expansion,
points
;; ,-j :
;j
to
,
,
y
Southwestern's current fiscal year
commenced
been
and
that
usual
September
date
running
about
budget
overnight
gross
28%
15%
H.
L.
Nichols
,
it
have
last year
the original
estimates. * While this un¬
growth can hardly be
rate of
appears
through 1948,
that the increase in the
Company's business will be the
It is significant that the in¬
substantially uniform as to the various
greatest witnessed to date.
has been
1,- 1947 and
revnues
over
over
expected to continue
crease
uninterrupted tele¬
by Southwest¬
Pan¬
In the areas served
ern—the Texas and Oklahoma
These receivers
trail.
■
.
since
quarter of a century of
,
,
seems
'
with a marked
degree of success. Television has evolved from many
years of expensive research by a relatively small group,
and the knowledge and experience acquired during these
years is reflected in the products of those who blazed
be
Southwestern Public
almost certain that increased demand for
electric energy experienced throughout the nation in
1947 will continue throughout the new year and that
1948 will witness the largest national power consump; '
v
tion yet recorded.
1 :
V
ready market.
can
NICHOLS
of Directors,
Service Company,
will, of course, become highly competitive,
just as radio has been throughout the years since its
commercial introduction.
Television, however, is not a
that
and indeed must, move
Men of goodwill working
life.:;yyy;
Television
field
facing.
in
steadily
towards better things.
in faith
and sincerity have down the ages striven for and at¬
tained all that is good and clean and decent in our way
look
can
clamoring for
.
of moving
in their programme
to Canada by means of a fine ship
specially converted for that purpose.
Canada is lending of her power and production and
financial
strength in the basic struggle : to heal the
wounds of war, and through the common sense applica¬
tion of known sound principles to restore to the world
displaced
which is being
the industry
1948
freight
fast
ities to the Government
plans to produce between
600,000 and 750,000 television receivers — nearly four
During
continued
py
restored through
nation's
casters,
Shortages of merchandise distrib¬
r ;
freight service on the Atlantic
construction and purchase of
ships for the famous Beaver line; its passenger services
between Canada and Europe have been partially re¬
stored
the 20,000-ton liner Empress of
Canada, and will be further augmented. It is expected
that very shortly we will be able to offer further facilf
company's
population. Television networks are being
expanded rapidly and within two or three more years
will connect the major cities from coast to coast. Broad¬
the
Neal
M.
W.
na-
;y' - \v
Increases in costs to the railways which were laid
before tbe Board at the beginning of 1947 have been
.of
-
replace anything else, and
stimulating effect
a
the
upon
clear.
its way to becoming the
nation's next great industry. Its tremendous possibilities
are equalled by no other new
or potential industry on
the business horizon. It is a new industry which does
past year.
Easing of the supply situation will call for an intensi¬
fication of the competitive effort required to maintain
the volume necessary to profitable operation:- This be¬
came apparent early last year with the shift of emphasis
from a sellers to a buyers market. The utmost efficiency
in all departments will be required to meet the sales
challenge of 1948. The selection and training of the sales
be built
not
that tbeir necessity,
certain
business, has been made very
Television already is well on
Despite higher costs in the manu¬
facture
and
distribution
of
drug
Most items,
except paper products, are at pres¬
ent in good supply, including cosmetics, which represent
a
growing volume.
Proprietary remedies and pharma¬
ceutical products, including the new war-born drugs,
such as penicillin, are now available in normal volume.
very
ordinary radio.
slightly exceed the record
..
encouraging sign for the industry,
production will be devoted
FM sets and television receivers, which of necessity
a
much of this year's
because
to
its
tion's
A We
is
This
equal
will
in order to obtain the instrument
.
been
a
rather
tribunal, the Board of
believe
I
and
.
has been
established long-range
the easy, immediate
',:
"
Last
month's
heavy
Christmas
shopping volume
offered additional proof that there is a continuing de¬
mand for high quality phonograph-radios. An increasing
number of discriminating shoppers were prepared and
willing to pay from several hundred dollars upward
of disposable national in¬
ahead.
the industry
product manufacturers who have
.goals
.'dollar
which has been shown to be closely related to sales
ef drug store merchandise, forecasts another good year
for the wholesale drug business in 1948. Barring unforeseen events and the possible effect
that sharply rising food prices may
have
on
the
family budget, sales
volume in the drug industry should
Jr.
phono¬
more
no
l'"y
hands
railways' needs has been long drawn
out,
The
in
some
were
the
the Canadian Pacific meanwhile is carrying on
vigorously its programme so well advanced during 1947
to effect replacements in motive power and rolling stock
and to rehabilitate its important steamship services.
AM.
as
adopted
come,
Wm. J. Murray,
and
in
now
rates,
than six months ago,
E. A. Nicholas
pessimistic outlook for tne
future.
True,. there was a noticeable slump in busi¬
ness last summer, but the temporary decline was caused
to a great extent by an overabundance of inferior mer¬
chandise and liquidations.
Although more liquidations
are
certain to follow in, the months ahead, the endwho,
President, McKesson & Robbins, Inc.
effort in the year
well
There
WILLIAM J. MURRAY, JR.
by
radios
is
matter
possibly meet under present revenue conditions.
While urging the immediate necessity of higher
production
as
Win. C.
,
uted
1348 is
graph-radios which incorporate Eivl
restored in the utility industry as a
*
/
•
V (5) Capital charges, taxes, depreciation and mainte¬
nance all will increase because of the greatly increased
a
in
merchandise and to
of television
quality
receivers
pacity will not be
to
output
increased
whole before 1950;
than many
unit
r
The
aggravated since that time, and further such increases
in sight. Demands for payroll increases which are
excessive, and which if acceded to would add over
6U millions of dollars to the annual expense bill of the
Canadian Pacific, are before us.y That, I can assure you,
is an added expenditure which the company could not
should be.higher. This will
to greater concentration on
due
high
The plant expansion program
is under way will of course
continue during 1948 and 1949. The
desirable reserve of operating ca¬
world.
are
expected to match that of 1947,
dollar volume of the in¬
dustry
and
to the consumer
just
the- total
(4)
an
the recordbreaking year
our
industry
and
the
Canada, a nation which :
has enjoyed the low- :
freight
carriage rates ; in the
est
industry
history.
not
v
in
except
Corporation
television
surpass
which
:;"
for many years
of the proper
sold
more ~ radios,
phoncgraph-radios
and
television
receivers than in any other year in
which
continuing high level
to
in
produced*
possible that the peak demand
of the first half of the year will not
be exceeded in the last half;
The
1948
concluded
it is
charges but also because
in
lished
'
experience a "topping
inflationary
and
'.i
- <
-
Transport Commissioners for Canada,
and while tne examination
of the
today is even more encouraging than it was a year ago
at this time. New marks of achievement should be estao-
A
make these predictions:
(1) During the first quarter of
1948, the demand for utility service
certainly will continue to expand;
(2) During the second quarter it
is likely to continue to expand;
(3) During the latter half of the
us,
radio
the
for
outlook
The
inevitable*and vU
of ?.the
ways
:.
President, Farnsworth Television & Radio
is very certain
Railway Co,
hopefully but also
every
E. A. NICHOLAS
nomic structure dictate
1948
<
upon
take in respect to raw materials.
may
President,
extent
enters
uncontrollable increases of operating
However, this is conditioned to a
what action the Government
be anticipated.
considerable
years,,
many
as
may
Pacific
realizing that its most immediate problem is the widen¬
improvement in recent months following the recession
which occurred last year. A volume more near to normal
J.
as
•
President, Canadian Pacific
Canadian
well
as
.
ing gap between revenues and expenses. Rigid control
of transport revenue has taken little or no account for
foreign markets, particularly South and Central America.
Sales of liquor products at
wholesale have shown
■
%
M. NEAL
W.
Chairman and
in¬
chemicals to
shortages in basic materials are overcome.
The export situation, still clouded by the economic
dislocations caused by the war, is improving materially
with indications pointing to substantially larger sales in
ising
turers and
service
distribution
a
phonograph
.
among
dustrial and agricultural consumers, appear more prom¬
manufac¬
the
automatic
and
television.
The
cities the
television
in
introduce
console-combination receivers which provide
serving farm areas throughout the country.
With
in
shipment of the Farnsworth table
being stepped up steadily in an effort
large backlog of orders, and within the next
months
first of
retailers
While this
specialized activity is still in the development stage it
promises to enlarge the scope of the wholesale druggist,
open heretofore untapped markets and contribute to the
stability which the industry traditionally enjoys.
Opportunities for wholesale druggists equipped to
demand
growing
placed
model video sets is
through retail drug stores, as an adjunct of the whole¬
sale drug business, should show an encouraging increase
in 1948. Experience over the past few years nas indicated
a
taking place.
Production
support the anticipated volume
market
Manufacturing Company
were
Our table model television
production late in 1947, and
we
now
are
expanding our manufacutring facilities to
enable increased production of all types of television
receivers during 1948.
i'-"-f.TXi':.
be expected to
may
now
receivers
remain large
of business, present
re-emphasize the importance of in¬
inventories
While
to
engineering at Farnsworth, we have
enthusiastically to the rapid growth of
forward
looked
during the coming year.
MORROW
A.
vision research and
retail levels, is becom¬
Greater efficiency in the
handling of merchandise must also be achieved. I am
confident that the wholesale drug industry is in a strong
position to render effective service to its customers
ing of paramount importance.
important item in the
D.
Thursday, January 22, 1948
CHRONICLE
force at both the wholesale and
(Continued from page 62)
J.
-
Speaks After the Turn of the Year
Business and Finance
favorably with the year 1947.
FINANCIAL
&
(Continued
on
page
66)
Volume.167
Number 4666
THE COMMERCIAL
-
&
FINANCIAL
CHRONICLE
(365)
Ihe Short
(Continued from page 2)
maladjustments
have
Range Economic Outlook
into
crept
our
economy which have laid
foundation for a serious
depres¬
sion sometime in the
future, when
the pent-up demand for all kinds
of goods from home and abroad
will have been met and we will
have to live on the current de¬
mand and when competition from
the rest of the world is bound to
be greater.
It is indeed strange
that the United
States, which has
gained a world-wide reputation
.
for
its
.industrial
management,
should have managed its national
affairs in such a poor manner.
Despite
all
the
warnings
made
during the
war about the danger
inflation and its consequences,
of
the
moment
all
over
and
the
emergency
controls
was
repealed
were
permitted the forces of
; inflation- to
gather momentum. It
we
will not be at all surprising if the
future historian, when considering
year of lost
opportunities."'
It is quite evident that the spiral
of wages and prices will soon be
accelerated. - Already,
wages
in
industries
creased
while
have
been
demands
for
in¬
new
increases in the near future have
been made by powerful unions in
the be sic; industries/ The; anti-in¬
flationary measures so far passed
by the Congress are unadulterated
political eyewash and cannot in
any
stem
prices
way
between
the
cause
the
rising
and
wages.
forces
pronounced
so
spiral
Be¬
inflation
of
the
and
are
demand
for all kinds of commodities is
so
great there seems to be an almost
unanimous belief that 1948 will
be
of great prosperity. The
predictions made for 1948 are in
a
year
off.
At least to
be
at. all
finally
In
outlook
which
views
in
many
would
of
forces
at
outlook
occurred
in
1948.
J.
and
billion
goods
The
ucts
at
demand
and
great
for
home and
pessimist
we
faced
are
prices
for
with
spring.
even
higher
While
dollar
sales
may have been maintained
this year, the number of units sold
have
down
gone
in
they wanted
the
cannot afford to buy
things they want
The
index
of
the
and
need.
of
living
cost
at the present time.
165
over
What is per¬
haps of greater importance is that
the index for food during the same
period
from 139.3 to
rose
203.
over
Under these
were
struction
manufactured.
costs
have
increase in
visable
Con¬
to
not
be
predict
during the present
assets
of
ratio
capital
The
not
ad¬
rapid
in¬
such
resources
banks
careful
more
is
the
of
assets
of
the
will
therefore
the
extension
in
be
devoted
for
particularly
where
by
there
Even
earner.
groups, has to
food. This is felt
those
is
only
the
families
one
item
wage
of
rent,
which had remained
stationary for
a
long time, is beginning to in¬
crease.
The index for rent rose
from 109.2 in June,
1947 to 110 in
July, 111.2 in August, 113.6 in Sep¬
tember, and
114.9
in
October.
Further
pected
increases
in
Thus,
the
after
food
is
to
be
immediate
the
and
are
family
for
left with
rent
ex¬
future.
has
paid
relatively
which
to
pur¬
chase other commodities.
As
result
a
food
of
the
constant
in¬
particular,
the
demand
and
in
tightening
of
strictive
have
later
to
their
The
on.
lend
rates
credit
the
taken
authorities
re¬
too,
ability of the banks
has been reduced
since
corporate
has created
bonds.
some
This
uncer¬
bid so
recklessly for securities as
they have been in the past.. This,
bound
business
on
and
turn
tainty in the money and capital
markets and underwriters of se¬
curities may not be so willing to
has
by ' the
are
effects
in
moderate
money,
measures
monetary
bonds
and
money
A
and
already set in
to
the
markets.
that
means
tions
will
not
(Continued
a
types
many
other
many
well, will be
of
soft
goods
consumer
even
and
articles
on
page 67)
Dealers and Brokers in
as
smaller
during
1948 than
during 1947, primarily
Railroad, Public Utility & Industrial
because many families will
not be
buy them.
Second:
in
Bonds & Stocks
Even with the Marshall
operation,
exports from
States cannot be held
level of 1947.'
the United
at
the
first ten months of
During the
last year ex¬
ports from this country exceeded
imports by $7.5 billion. It is
highly
Ingalls & Snyder
doubtful,
even
if
the
Marshall
is adopted in the form
pre¬
sented by the President
to the
Members New
Plan
.
Congress, that such a large excess
of exports can be
maintained much
York Stock Exchange
Mcikbers New York Curb Exchange
100 BROADWAY
COrtlandt 7-6800
■
NEW YORK 5, N. Y.
—
longer.
Bell
Many countries have
adopted rigid restrictions on im¬
ports
from
the
United
States
which
are
not
likely to be
System Teletype NY 1-1459
eased
dqring^Lhe coming
year. A good
Europe, which is possible,
will
automatically reduce the de¬
crop in
mand for American farm
products.
Underwriters and Distributors
Third: High prices stimulate the
introduction
of
new
machinery
:
work
RAILROAD
'?■ ■ WMM ^51 III!!
1
•»
PUBLIC UTILITY
i1
•,
t
v
.
)
'
i/
Investment Securities
INDUSTRIAL
prod¬
greatest
BOND
decline
a
:;i'vv;;>7;;77v
railway equip¬
ment andautomobiles is also very
large. Since farm income is the
highest on record and wages of
increased
Union Securities Corporation
Vilas & Hickey
65
Members New York Stock
Exchange
Members New York Curb
Exchange
ma¬
terially, many farmers are mechanizing their production. The favorable situdtiofi 'in thfe automobile
r- and
railway* equipment industries
49 Wall Street
:
7:
New York
Telephone:
•
is well known..i Construction
STOCK
BROKERS
The de¬
year.
and
Broadway, New York 6
Telephone: HAnover 2-4800
5, N. Y.
BOSTON
HAnover 2-7900
BUFFALO
HARTFORD
CLEVELAND
PHILADELPHIA
SYRACUSE
Teletype: NY 1-911
con¬
already awarded promise
a
high leyel^^
J thus creating '
a big V 'deihknd Tor
materials and- labor. Some form of
Marshall vPlan
■>
-
will
•
be
adopted,
and this in turn will maintain
UNDERWRITERS
ex-
Underwriters'
DISTRIBUTORS
Dealers
^r^^n ailngh l^yel4I)uring 1948
DEALERS
states will pay out bonuses
some
to
theVVeterhns'
and
this
will
Wholesale Distributors
BROKERS
in-
;
crease
,
Mf
Moreover,'4948 being an election
year,, it may. be taken for granted
that
Corporate and Municipal Securities
expanding the purchasing
taxes
inflation^, is
benefits
during
a
V
re¬
nobody will not be
who
large
many
sus
our
large
are
out
economy,
money
savings
at
Advisory Service
.
>
Ih'Jx'f-i''
.
Public Utility
,
^
•
>'VS;1 ,'VrVv »V
to
V
Railroad
Industrial Bonds and Stocks
•
Municipal Bonds
Shields & Company
make
New York Stock
Exchange, New York Curb Exchange
Chicago Stock Exchange, Chicago Board of Trade
;
because of
disposal
people, the general
ESTABLISHED 1890
Members:
supply and the
the
/'V'.
*' '
con¬
Because of these forces in oper¬
the
Research and
;
%'f
period
undesirable, and
friends and influence people.
ation in
*'
a
by the Congressmen and
Senators
'f'-\
Special and Secondary Offerings
power
of the people. " The fact that
duction of
sidered
-4-
reduction in individual
some
taxes will take place, thus further
of
,uM'
of
41 WALL
New
York
Cotton
STREET
Telephone: Wllitehall 3-3300
Exchange
NEW YORK 5, N. Y.
Telephone
J-G-White 6 Company
HAnover V
INCORPORATED
NY
37
WALL
STREET
.
NEW
YORK
5
Teletypes: NY 1-1052, NY 1-1412, NY 1-1680
consen¬
is that the short-range outlook
for business in the United States
.
j
chicago
•
boston
Bell
DIRECT
ROBERT
PRIVATE
GARRETT
&
WIRE
System
Teletype
2-9300
TO
SONS, BALTIMORE
.
many-;, corpora^
able to obtain "
be
There is little doubt in
mind that the demand for
my
in prices in
general, and of
in
finance
capital
possible."
Plan
mand for farm and
labor, have
the
is very
the
even
could
these
abroad
the
banks.
of low ef¬
risk
because
in
crease
increased
sharply, partly because
essen¬
an
orderly readjustment
prices be brought about item
by item, whenever and wherever
and
income
needed. It is
or
stores.
of
able to
lower
most
tial that
circumstances, a large
portion of the family income, par¬
ticularly of those in the medium
in the demand for these products
farm
has been
that, during 1947 about
of producers' durable
the
for
oil.
considerable number of. banks are
lent up to the limit and a furtherJ
time
D.
rrfjany people
1948 an
for business. The
year
increasing
same
General
This means that
many customers
have not been able to
buy all that
heavy goods in¬
dustries is good.
This applies to
such items as steel, iron, coal and
tracts
estimated
$18
promise to make
excellent
*;
not
Mr.
solid facts, and there
on
thus
but at the
nent
place, it should not
be overlooked that the cost of liv¬
ing has increased to a point where
the
on
based
are
number
a
it
the first
crease
instances
are
me
surprising if the read¬
justment predicted since V-J Day
little
optimistic
department stores during 1947 were
during 1946. A promi¬
department store executive,
lower than
equipment,
production
reducing the demand. It
65
ficiency of labor and partly be¬
of loans and marginal concerns
Runkle, Vice-President cause of bottle-necks and
high
Manager of Crow¬ costs in building materials. This will find it much more difficult
flation, the other side of the pic¬ ley, Milner and Co., of
to
obtain
bank
accommodation
Detroit, in will undoubtedly retard the con¬
ture
must
also
be
considered. discussing the outlook for
than was the case up to a few
1948, struction of large buildings all
There are other forces at work in made the
months ago.
following pertinent re¬ over the country even
7V7'..:, f''
'■
though it
our economy which
could lead to marks:
The past few months have wit¬
"Many commodities are may not affect the erection of
the conclusion that while the innessed a rather serious break in
already priced considerably above small homes.
llationary forces may continue for the level which will
prices of Government obligations,
Fourth: Important
produce ready
changes have
a while
longer the end is not far acceptance by
customers, and yet Daken place in the area of public high-grade state and municipal
tors, which cannot be denied, will
help accelerate the forces of in¬
the
1948
year.
The Other Side of the Picture *
for
beginning of last year, when
the
great majority
of business
analysts predicted that 1947 would
be a year of readjustment.
for certain types of soft
goods has
tended to decline. This is
clearly
shown by the fact that unit sales in
While the above-mentioned fac¬
sharp contrast to- those voiced at
The
during the present
128.9 in October 1945 to
Where Do We Go From Ilere?
some
ment
compiled by the Bureau of Labor
1947, should term it "the Statistics (1935-39=100) rose from
the year
<
is very good and that there is no
likelihood of a serious readjust¬
and
1-1815
G6
and communities served
areas
V,"
ice-
this
meet
to
'■
•
.
■
Southwestern has been in a posi¬
increasing demand. Additional
It is fortunate that
tion
and has also been experi¬
residential, commercial and industrial serv¬
with
enced
ever
generating equipment scheduled for installation byMarch, 1943 will provide capacity sufficient to meet the
summerilpeak demands caused by irrigation, refrigera¬
tion and- air-conditioning loads, and leave an ample
reserve. This reserve power will be sold to meet power
'
in some of the adjoin¬
ing areas served by other systems.
With cheap and
plentiful natural gas fuel, relatively favorable labor
conditions, and mild climate, the continued expansion
by cites, counties and states are in great aen.a.id a.iu
we believe will continue to expand in volume next year,
Southwest
seems assured for some time to come.
Industrial expan¬
sion in varied lines is providing a higher factor of diver¬
sification and the increasing use of irrigation is resultin
ng
the steel supply.
on
JOHN
President, Northrop
The national policy of decentralization of
to the unsettled conditions abroad may
the
previous year.
it
as
Service
Company is
regards the important element of
natural gas for fuel in all of the ten
as
uses
dustry in the world,
two
favorably
fuel costs
base load
respective plants as a weighting
factor, is between five
conclusion, despite the
of
H.
a
already caught up with deferred de¬
normal replacement market will be in effect.
and FM radios and other
specialty appliances will continue in unusual demand.
Taken as a whole we expect our appliance business will
increase in the neighborhood of 25%.
,
Hhe
Construction Materials—The
sion
of
rural,
communication lines has built up
very
passenger
proportion of airline accidents in the past have been
through collision with the ground in flight'. War¬
radar and radar-type altimeters can almost com¬
pletely prevent this type accident, and most major air¬
lines will have their transports so equipped in the com¬
ing
year.
Lighting
the passengers
and
demand which will
to the
Lamps—In addition
and
buildings of all kinds, the relighting of
-stores, factories, hotels schools, etc., will help lighting
volume
on
the rise for several years.
1
-
in the safest surface vehicles.
ERNEST E.
President,
With
Equipment
new
A reduction of about 75% in air accidents may
result, making air passengers safer than
be expected to
available.
'lighting of
so
many
Southern
"if's"
now
'
NORRIS
Railway System
beclouding the future, a
cracked crystal ball could
in
1948.
;
.
.
'
;
! /
AA '
Industrial Electrical Equipment—While we have seen
a
number of predictions that
ditures for production
ings for 1948,
own
business of any
We feel that
Parts
new
factory build¬
have not seen any indication in our
we
ing.
Piece
there will be lower expen¬
equipment and
substantial drop in this kind of buy¬
1948 volume will be close to 1947.
our
of
Other
Products—Electrical
motors,
switches, connectors and many other items in this cate¬
gory
depend
and other
on
the volume of appliances, machinery
cial
products being made.
the balance look
Signaling
Volume possibilities
on
demand
and
industrial
inter¬
volume to
systems, alarm systems, etc., are in ex¬
and
should
1947. V'.v'l
the
"land
of
.
produce at least
an
equal
Any
must
requirements, spe¬
credit-limitations, a
In
are
now
years
we
15
of
of
profit margin, both in banks and industry. A relatively
small drop in sales then would mean operating losses
to industry and loan losses to banks. The resulting con¬
traction of deposits would in turn peril the narrowed
operating margin of the banks and perhaps produce an 1
operating deficit as well as loan losses..;... :1;
. •
To combat inflation, it is axiomatic that purchasing
without a corresponding decrease
available goods increased without,
a
corresponding increase in purchasing power. An in¬
crease in
production is not enough;, there mustr be an
increase per man hour, or per dollar of wage, and the
goods or their equivalent made available iri this coun¬
try. Even then we might have continued inflation if the
consumer reduced his rate of savings, or spent that pre¬
viously saved.
•••A.
"•
\
'■ A. .-V.
1 Efforts to' control inflation
by means which do not
recognize these basic principles are merely attempts to
hide the effects, and are doomed to failure.
It is surprising that no one has sponsored a plan of
pavings through the enforced purchase of governmentsecurities, thus drawing off excess purchasing power
and at the same time gradually transferring the national
debt to private ownership. Enforced savings is distaste¬
ful to our democratic thinking, but it would be less so
if accompanied by an equal reduction in taxes.
The
power
-
must be reduced
in available goods,
E.
Norris
our
strong railroad transportation
of the future of banking.
effort to foretell such actions
necessarily be a guess. •
respect to general economic
sively higher wages, higher price levels, expanded loans
and deposit growth. It will also mean a narrowing of the
..v.
Ernest
is essential to the well-
further vio¬
feeling the
Hiland B. Noyes
inflationary
pressure, instituted first to combat
a depression and later in an all-out war
effort. Both;
ueriocis produced goods of types other than those which:
would absorb the earnings- of the labor thaU created;
them. The resulting pressure of accumulated purchasing
power and the scarcity of consumers goods is now being;
felt in the high lev.el of costs.
Continuation, of this trend constitutes a serious threat;
to the economy in general and, of course, to the pros-perity of banks. Growth of inflation will mean succes¬
opportu¬
prerequisite to the preservation
private enterprise system—
because
efficient, physically-
policy of mar¬
changes
conditions,
birthrights of future generations of
people.
Because privately-owned railroads
and
imponder¬
permit an intelligent fore¬
Passage of laws
appraisal
and whether freedom
and
liberty will continue to be priceless
of
^
in interest rates—any
of these could upset the most careful
nity,"
are
cellent
be
,
either area.
reserves,
lent
our
good.
Lines—Commercial
communication
to
..
whole.
far too manv
support resulting in
ket
that we have entered a his-:
tory-making year. What is done in
1948, and not done—by government;
by business, by labor, and by the
general public—individually and col¬
lectively—will
determine whether
our country will continue to prosper
and progress under our free enter¬
prise system, whether it will con¬
tinue
,
affecting reserve
ever,
i
to
in
cast
cross-eyed soothsayer with a
probably forecast, as accurately as anyone, what's ahead
It must be clear to everyone, how-
-
in increasing air¬
safety during the coming year. ' A large
time
much unless *both scarce materials and labor be¬
more
ables
as
are
effect
pickup and delivery service at the end of the
Production cannot be expanded
(last throughout 1948.
come
a
power
There
revls'on of the current
caused
deferred exten¬
telephone
railroad and
city,
period, is
of the few pleasant
Great strides can and will be made
case.
Outside
1
a
line
Construction Materials—These
thousands of items of wire, cable, conduit, fittings and•all the electrical items used in building construction,
'maintenance and product usage, will continue in great
demand. Substantial increases will be realized if scarce
materials do not limit production which may well be
Inside
and
business
the local
'
,
to specif>c laws r nt
affecting the banking
downward spirals to be found in
prices today.
*
/
* 1 '
Some new airplanes which could be put into service
in the near future are capable of carrying freight over
substantial distances at a cost of 5 cents a ton-mile or
less.
This operating cost includes the first cost and all
operating expenses associated with the use of the cargo
airplane, but does not include the business overhead in¬
volved in the actual securing of the,freight business or
Major appliances, television
Wiring
bv gen¬
its own
sphere of activity. Hence any comments regard ng the;,
outlook for banking must necessarily be confined , to
or
one
Appliances—Small radios and some traffic
National Bank of Chicago1
business is one influenced rrrre
eral economic conditions than by those within
The banking
generalities
regulations
human endeavor in the U. S. during the same
have
appliances
mand and
-
increase in do¬
freight, which last year totaled 100,000,000 tonat a revenue of nearly $20,000,000. This growth in
transportation has touched^ off a downward
spiral in freight rates, which have decreased from over
$1 to about 25 cents a ton-mile. This reduction, effected
in the face of rising costs of operation in almost every
'
"
%
B. NOYES
President, Upper Avenue
miles
electrical distribution is for
the
IIILAND
,
air freight
total volume of business quite similar to the
unusually high volume done in 1947. However, increas¬
ing expenses are constantly raising the break-even point
and net profit will probably be
■
Specifically, the outlook for various lines looks about
''
*
past two years there has been a 60-fold
high
with
pace
mestic air
President, Graybar Electric Company, Inc.
follows:
experienced
that rapid expansion can be
so
keep
low level of operation it
general the outlook is bright in aviation. ' Domestic
foreign trade has been greatly accelerated.
In the
In
NICOLL
The general outlook for
Electrical
transportation demand the
continuing industrialization is creating, the Southern is
adding to its plant and equipment, and improving serv¬
ices in every way possible.
During 1947, for example, we
placed in service and had on order, December 1,
motive power and rolling stock costing approximately'
$63 million. This equipment includes 4,500 box cars,
1,150 hopper cars, 600 gondolas, 250 ballast cars, 206 units,
of Diesel motive power, and 101 modern lightweight,
streamlined passenger train cars.
To
j
a
future conflict.
a
and
Service Company.
A.
A'
/
cast for the future.
accomplished. It
will prevent the present industry from collapsing and
disbanding, which would be a fatal mistake in the event
nucleus
six years.
Southwestern Public
as
>
some
Although this sounds like
,
'
turning out 100,-
will be sufficient to maintain the necessary
problems facing it, the new
year should be one of expansion for the electric utility
industry as a whole, although increased net income may
be difficult to achieve in many cases.
Due to its ex¬
ceptional growth factor and fuel cost protection it ap¬
pears that the new year should be a profitable one for
,a
being built by the scores
others are in the
blueprint stage, and innumerable established industriesare
expanding or are planning to expand. Leaders in;
all lines of activity are confident that the industrializa¬
tion will proceed unabated for many years, and there is
ample evidence on all sides to justify an optimistic fore¬
along the lines of the Southern; many
by'$100,000,000:during the past
years.
Such a collapse cannot
wartime peak.
continuation of
New factories still are
years.
present rale of aircraft production is not in¬
part of the industry must.close its doors.
But if Congress appropriates funds of sufficient magni¬
tude to maintain an adequate air force the airframe in¬
dustry will be sustained at an average of about 5% of its
expectancy. The weighted average unexpired life
contracts, using the kilowatt hour output of the
In
has
the
If
creased
of these
and
dled
upon
phenomenal industrial growth and .activity which.
characterized this section of the country in recent
the
airplanes a year and employing
Since V-E Day the aircraft
rutput has dropped to about 100 mili¬
planes a month. " The aircraft
inaustry's working capital has dwin¬
Northrop
K.
John
plants in its fully interconnected system. Gas is being
purchased at an average price of 6V2C per mcf for 1000
btu's under contracts with producers in fields with long
life
cent.
Throughout the South, there, will be a
millions.
tary
oUcourse,
per
pand on short notice to whatever
proportions may be needed.
,
Within two years after Pearl Har¬
bor aviation became the largest in¬
000
to handle in 1948 will depend,
upon
and
ob¬
be withstood for long.
Public
Southwestern
situated
called
the
volume of industrial production. In the first quarter of
the year, according to estimates just compiled by the 13'
Shippers Advisory Boards, freight cat loadings are ex¬
pected to be 3.5 per cent above those in the same period'
last year.
In the Southeast, estimated loadings will be
1,010,054 cars, compared with actual loadings of 960,444
for the corresponding 1947 period, or an increase of 5.2
freight traffic the railroads will be
How much
that we must now have an adequate "insurance
Ypolicy" as a safeguard to our future.
Congressional action to insure ade¬
quate air power for this country will
preserve the aircraft industry in the
United States on a sound footing, not
on
the tremendous''scope of World
War II, but healthy and able to ex¬
in the North.
Next to the paramount job of providing the equipment
necessary to meet the increasing demand for electricity
the control of operating expenses is to be the principal
problem confronting the industry as the new year be¬
gins. In 1947 the increased revenues derived by the elec¬
tric utility industry from growth in.-the demand for
power were offset in many cases by higher operating
expenses, particularly fuel
costs. Also, a number of
hydro-electric operations had a water flow less than
normal, requiring production by steam units at a sub¬
stantial increase in cost.
Therefore, the industry as a
whole maintained its net income at about the same level
securities.
railroad
vious
region from more vulnerable locations
as
Aircraft, Inc.
depends largely on the disposition
foresight of the people of the United States. It seems
urably to the growth of the Southwestern area by
stimulating the transfer of industrial enterprises to that
1
freight rate increase to 20 per cent.
it reflects an awareness of
for greater railroad revenues. I hope-*
fully expect that this awareness soon will find expres¬
sion in a permanent increase adequate to provide the
the pressing need
industry in 1948, and in the
to follow,
industry due
has
quantity and quality of service the nation must have,
and to pay a fair and regular return to investors in
years
contribute meas¬
connection, the outlook for the railroads
this
This is encouraging because
K. NORTHROP
The future of the aviation
and promote
interim emergency
; '•
-
,
.
preserve
brightened immeasurably by the promptness of the'
Interstate Commerce Commission recently in raising the
close in total volume to
believe 1948 should be very
1947.
areas.
\
In
to
of the railroads.
been
labor scarcities worse than
we
financial health
the
is held down by material and
those which existed in 1947,
production
unless
and
of the agricultural
development
States take the necessary steps
goods in the hands of wholesalers, dealers, contractors
and ultimate users are high, demand continues strong
and commercial activity in the
intensified
an
(
\
i :
"
'
In conclusion, while an increasing number of items are
becoming available each month and stocks of electrical
depending
shortages which have developed
of industrial
being, progress and security of our country—it is im¬
perative that,
during 1948, the Interstate Commerce
Commission and the railroad commissions of the 48'
Traffic Signals—These lines used
Street Lighting and
64)
page
1948
Thursday, January 22,
CHRONICLE
Speaksa Alter She Turn 0af the Year
Business and Finance
(Continued from
FINANCIAL
&
THE COMMERCIAL
(366)
I
.
v
>
or
(Continued
on
page
68)
Volume
167
Number 4666
THE COMMERCIAL
&
FINANCIAL
CHRONICLE
The Short Range Economic Outlook
(Continued from page 65)
capital
easily
as
increase
in
predicted,
before.
as
money, rates
The
and
tne
uncertainty prevailing in the bond
will undoubtedly make it
market
difficult for states
more
and
mu¬
nicipalities to borrow in the
open
market, and this will delay the
starting of public works. It may
therefore be expected that
some¬
time
during 1948 a reduction in
capital
expenditures
will
take
,
Should
place.
decline in
a
have
this
coincide
construction it could
serious effect
a
activity.
The
business
on
ernment
ment
be
the
at
public
of
the
Gov¬
present time is to
debt.
It
has
been
estimated that the budget
surplus
for the fiscal year 1947-1948
may
to $5 to $7 billion.
This
surplus, according to statements
made by leading officials in the
Treasury and the Federal Reserve
Board, will be utilized for the
amount
immediate
crease, when the decline
is bound to be
ous
the Federal Reserve
A reduction of the volume
government
securities
commercial
held
banks
by
will
re¬
duce the volume Of bank
deposits
while a decline in the
holdings of
government securities of the Fed¬
eral Reserve Banks will reduce
balances
reserve
and
more,
longer duration.
hand,
prices
If,
and
will
before, it
serious or of
While the read¬
be
very
be painful to
may
while
some
and
on
of
thus
policy
Morgan
and
the
the
readjustment
should
be
the
of
ization,
of
as
the
new
The board of directors in addi¬
tion
war
what
enterprise
clude Leland A. Walters, of Vercoe
& Co.; Harris H. Wood, of
Paine, Webber, Jackson & Curtis;
Ray M. O'Connor, of Otis & Co.,
the
private
inflation
the
was
external
today
need
to
enemies
is
good business.
ing the
the
in
rectify
readjustment, if it takes place
1948, will not be very serious.
A
number
of
factors
In
the
such
not
to
first
place, there are
floors under prices of
many farm
products which in all probability
will be
extended
1948.
A
prices
does
not
possibility
not
be
the
on
into
our
other hand,
readjustment
does
take
place, if wages continue
prices and the volume of
race
continues
handle
the
likely.
to
seem
If,
maladjust¬
crept
to
expand,
then
when the readjustment does come,
it will be much more difficult to
beyond the end
therefore
the
have
early
an
loans
sharp decline in farm
is
that
economy.
indicate
of
some
ments
that if the readjustment is not
long delayed it will not go very
far.
If it occurs during
readjustment will tend to
a
than
visualized
be
can
at
present time.
reducing
hourly
wage rates. Activity in the heavy
goods industries is likely to con¬
tinue at a high level.
The Mar¬
shall Plan, if adopted, will main¬
ties.
tain
quillity
lation
of
inventories
and
to
labor
present
will
of
Being
tran¬
the
January
Columbus
the
Charles
.
Bishop,
S.
President
lieve that 1948 will be the
year of
readjustment and that therefore
of
the
s
banking
profession
1927, has become associated
Blyth & Co., Inc., 14 Wall
Street, New York City, as an in¬
with
stitutional
Bolumbus Stock & Bond
is
Blub Elects Officers
Lazard
sales
announced.
viously had been associated with
in
COLUMBUS, OHIO —Ralph G.
Freres
&
Cleveland.
tend
ductivity of labor and equipment,
the Columbus Stock & Bond
Club,
had
been
by John S. Al-
Co.
and
of
business
management can also have
im¬
an
substantial
losses
into
to
the
while a moderate decline in
prices
of commodities will convert
many
weaken the position of the United
potential demands into actual de¬
States
mands.
tions.
Although
about
49%
country
of
as
in
whole
a
the
eyes
of
and
will
many
na¬
it
was
of
Sweney,
announced
ities
Cartwright &
bin, of The Ohio Company, who
Co.
since
in
New
Jersey,
with
Pittsburgh
Prior
to
Smith,
Guaranty
the
a
highly risky affair. The break¬
point is high and prices are
constantly rising. Hence, any de¬
of
Company
New York.
loans
has
increased
inherent contradictions and there¬
even
materially, savings
are
still very
fore
cline
a
living
a
creased
in
the
business
income
gross
could
concern
of
lead to
people
have
consumer
substantial
of
in net. in¬
problem confronting
many businesses therefore, brief¬
ly, is this: whether to gamble
in
that
United
talistic
States
tained
and
the
a
standard
people
level
has
of
of
in¬
the
inflation
another
Will
year
or
take the chance of
profits,
but
continue
and
more
hope
that
the
making larger
of
sustaining
also
system
the short
1948?
inevitably
in
I
leads
bust.
to
periods
A
sharp
activity in
business
de¬
Underwriters
the
of
private
enterprise
—
Distributors
Dealers
of
people in many parts of western
range
personally
readjustment
and
long main¬
suffering from
is
States, accompanied
by
large-scale
unemployment,
will
not only shatter the belief in the
unprecedented
Conclusion
for
have
it
United
history of the country.
What, .then, is
system
that
boom
cline
The
come.
for
the
the
many
to
outlook
much greater decrease
of
savings and the volume
no
Europe but
will
United
may
States
PUBLIC UTILITY, RAILROAD
also create in the
many
new
adher¬
and INDUSTRIAL SECURITIES
substantial losses when the forces
of inflation come to an
end,
to
adopt
make
cautious
a
smaller
attitude
profits
or
should
of inflation continue much
longer
but
also
avoid
i
large losses when the
;
inflation is halted.
greater
| doing
risks
business,
j decline
in
commodity
facturer
;
•
may
process
for
his
not to stock inventories.
tition of what
year
on
take
much
scale
this
larger
and
scale.
then
and
participated
financing of Connecticut industrial, bank,
W. C.
PUTNAM
Members
1-
of
the
New
&
York
CO.
Stock
115
on
6 CENTRAL
'
.
Branch
Offices:
New
Britain
BOSTON
NEW
Enterprise 1540
CAnal
and
Middletown
YORK
PHILADELPHIA
6-1255
a
Bell
Teletype: Hartford
Enterprise 6042
Established 18S6
564
II.
re¬
inability
or
Because of
has
unwillingness
IIENTZ & CO.
NEW
YORK
COTTON
EXCHANGE BUM.,
«0 BEAVEB STREET, NEW YORK 4. N. Y.
.
the
New York 6, N. Y.
Tel. BArclay 7-8800
ROW, HARTFORD 4, CONN.
ensuing
unemployment will hasten the
further incur
Broadway
Exchange
Associate Members of the New York Curb
Exchange
adjustment because it will reduce
the demand for goods.
Langley & Co.
Members New York Stock Exchange
Enterprise 6250
but
The
initiated
Telephone 5-0151
may
year,
have
we
repe-
happened early last
small
place
a
manu¬
A
years
in
,
plants
40
insurance, and public utility companies.
given
a
induce the
close
of
substantial
any
over
in
incurring
involved
demand
to
For
Because of the
now
Coverage
the
process
,
Connecticut
and
to
■_
v'V.v".
V-. -.-.V/v."
Uptown Office: 781 Fifth Avenue
v
...
.
Yv".'
(Slierry-Nct herland Hotel)
•
indebtedness, which
increased
materially
during
the last two years,
many concerns
postpone
may
their
this
too
could
-stop
or
expansion
entirely
contribute
materi¬
ally to the creation of unemploy¬
ment,
thus
demand
further
STOCKS
reducing
qAllen
&
Company
the
Established 1922
for commodities.
the
forces
of
MEMBERS OF:
,
and
carry
business
levels,
the
there
are very
are
much
a
New York Cotton
Exchange
New York Curb Exchange
New Orleans Cotton Exchange
New York 4, N. Y.
Sugar Exchange, Inc.
Commodity Exchange Inc.
may
New York Produce
higher
number
New York Cocoa
of
Exchange
Exchange, Inc.
Boston Stock Exchange
weaknesses in the structure which
sooner
or
later, and probably
expectedly, will
come
to the
general
Economic
rule
do
events
not
un¬
Chicago
•
Pittsburgh
•
Roca Raton
as
happen
Chicago Stock Exchange
Chicago Board of Trade
Chicago Mercantile Exchange
Winnipeg Grain Exchange
Canadian Commodity Exchange, Inc.
Detroit Stock Exchange
Liverpool Co.tton Association, Ltd.
fore,
thereby breaking the forces of in¬
flation.
Exchange
Wool Associates of N. Y. Cotton Ex., Inc.
N. Y. Coffee 6?
momentum
to
New York Stock
inflation
operating in the economy
great
| BONDS
COMMODITIES
It is therefore apparent that al¬
though
•
and
programs,
a
as
±
Detroit
•
•
Geneva, Switzerland
Hollywood, Ela.
that
Barney
The opponents of the capi¬
portant effect on business activ¬
ity. Doing business has become
1941,
charge of the company's activ¬
and
cause
representative, it
Bishop pre¬
Mr.
Elam,
to
of
since
inflation.
Co., has been elected President of
pro¬
Club
investment
this country will not have to suf¬
fer the dire consequences of seri¬
inflationary bubble bursts it will
increase
former
a
Bond
New Jersey and a member of the
labor unrest, and when finally the
will
converted
were
meeting
Country
Blylh & Go. Slaff
country as a whole.
optimist by nature, I be¬
employment
be
in¬
Shades Bishop Joins
the
an
officers
New
at
will
Club.
immediate interests for the bene¬
fit
Albin.
at
officers
new
seen
con¬
siderable speculation in commodi¬
The
It remains to be
whether, at least for a short while,
the various economic groups will
be willing to
submerge their own
ous
If the spiral between wages and
prices continues throughout 1948,
it may lead to the
largo accumu¬
any
of
war.
the
chosen
held
threatened the United States dur¬
1948,
at about the present
increase only moderately,
to
and
de¬
which
level
or
Fred B. Paisley, of
Paisley, Inc., is the
Secretary-Treasurer.
&
people can achieve
The need to fight
free
great
and
Freeman
develop¬
dem¬
of
forces
as
period
dent of the financial men's organ¬
under pressure.
feat
prolonged
of
C. Penn, of HaydenCo., is new Vice-Presi¬
&
have
during
system
lowed
a
political
management
onstrated
of short duration and then be fol¬
by
and
ments in the United States. Amer¬
ican
ingenuity
and
American
business
many,
Miller
member
the
further
country.
The
year ago.
not
profits of corporations; it
a
far-reaching effect on
ties,
stabilize
served as Secretary
of the
organization since its formation a
merely have an
bearing
on
business
economic
nesses,
because of the pent-up
demand for all kinds of commodi¬
the other
on
wages
1948
67
has
What, therefore, will take place
in
particularly
some
of the newcomers, may be
forced
to
liquidate their busi¬
seri¬
more
planned
a
exports at
a
high level.
Above all, a moderate decrease in
tighten the credit structure of the
Fifth:
justment
readjustment so much
difficult and of so much
There
and
banks
much
so
I indicated
as
duration.
and
it
comes
is
in
will have
1948,
the.1 long
If
and the
banks
the
future,
than
sooner
important
should not
spiral between wages and prices
accelerated, if prices and the
cost of production continue to in¬
of
of
de¬
is
of retiring maturing ob¬
ligations held by the commercial
purpose
Banks.
will
what happens
on
much
belief
'
of
The
..
place
the
generally expected. If such a re¬
adjustment comes in the middle
readjust¬
comes?
question
primarily
the
the
it
this
"planned.", take
as
will
when
to
answer
pend
in
nor even
serious
to
economy.
themselves
»
fiscal* policy
retire
with
How
ents
(367)
he
&
of
68
THE COMMERCIAL
(368)
from
servicing 4V2 million new customers were' installed. It
required 33 years, the first half of the industry's history,
to attain customers totaling this number.
66)
page
privilege of purchasing a non-marketable bond with
some portion of funds otherwise payable as income taxes
would be an effective anti-inflationary move. The Treas¬
IRVING
would receive its collections in full, would auto¬
matically fund its maturities into the hands of individ¬
uals, and still be in full control of the money market.
Industry would not suffer as, theoretically, only excess
purchasing power would be removed. > , ;
1947,
more
1944.
and
1943
and
expansion
additions
next
S, OGSBURY
outlook for
1948
particular
our
fusing, due to the fact that the plans of
con¬
a
[little
•perimental
are
do
In
meantime
the
forward
the
on
of
velopments not
now
S.
James
its
Ogsbury
CHARLES
volume
[>
E.
try's
war
an
on
extensive
to
realization
E.
balance
as
quickly
and
to
THOMAS I. PARKINSON
na¬
have increased throughout 1947 and
believe
this
tremendous
junction
electrification cf in¬
By
of
the
demand
will
1947
close of
per
tinue
favorably throughout 1948, and
the years following, with some slow¬
ing down in the recorcl-breaking
in
population,
and
homes,
new
of
industrial and commercial establish¬
nevertheless continue to
substantial annual rise in
ments, will
create
Charles E. Oakes
the
a
total
About
of
number
95%
the
of
electric
occupied
recent
industrial
billion
billion expansion
industry's $6
the
homes
expansion
for
program
Some
figure.
;
-
however, of popular attitude toward
government ownership may be reflected by the trend
which has been in evidence the oast few years against
public ownership
of electric
power
systems.
In
1947
a
.smaller percentage of elections favored municipal own¬
ership than in any year since 1933.. Localities which
■favored public ownership contained only 1% of the total
population of the areas in which the question was voted
upon in the first 11 months of the year.
This was less
than half the percentage favoring public ownership in
1946 and less than one-twelfth of those supporting it in
2933. ::,
.1
r
■.
■;;..., ■ •;;;.>;7u-
Construction
for 1947
expenditures
of
the electric
companies
pected to total
expenditures
approximately $1,200,000,000 and are ex¬
more than $1,750,000,000 in 1948.
These
cover
not
only
generating
stations
but
transmission lines and distribution facilities to serve the
record
number of customers being
added.
riod had sharply limited line .extensions,
Luge
demand
for
service.
In
The
war pe¬
damming
2Mj .,years,
up
a
facilities for
Insurance
than
more
publication
of
Association
a
year
ago,
circumstance of the
and
ment's
was
the
state¬
referred to a
committee which substituted for it a
criticism
watered-down
of
T.
Parkinson
I.
infla¬
tionary trends.
Tne
original
statement, -striking at the heart of the
condemned the Government's low in¬
inflation problem,
policy and the creation of a large supply of
money to maintain those rates.
It called upon the Fed¬
eral Reserve authorities to make use of their existing
terest rate
powers to prevent
augmenting peak load supplies.
and
to find
a
way
further increases in the money supply
to get rid of as much of it as might
watching
be termed excessive.
possible introduction of natural gas into
their areas where many stand ready to use it in com¬
bination with manufactured gas.
The Federal Power
the Government, life
Manufactured gas
Commission has
companies in the East
are
Because
Inc. for
forced down to present
It is difficult to
predict just when natural gas may be
purchasing value of the dollar in which their con¬
are payable.
Normally, one would expect some
concrete suggestion from the bankers to restore and pre¬
serve the soundness of the currency but our bankers have
the
primarily because of the shortage
tracts
Brooklyn Union, if it secures a supply of
natural gas. proposes to mix natural gas with its own
manufactured gas. With natural gas there should be sub¬
stantial savings in operating costs which in turn may
pipe.
ultimate savings to the consumer.
Although
for
most
low levels.
in the fight on inflation can be expected
banking circles, and managers Of life insurance in¬
stitutions must recognize their responsibility to preserve
Little help
from
available in New York,
to
This $5Q0 millions
the difference between the. actual
earnings on the American people's life insurance1 Savings
and what would be earned if interest rates had not been
ceedings.
service
dictated bys
insurance owners as a class afe los¬
represents
annually
authority to construct a new pipeline from Texas to New
York.
The Brooklyn Union Gas Company as well as
others has intervened as an interested party in the pro¬
of steel
of the artificial low interest rate
ing as much as $500 millions a year.
opened hearings on the application of
the Trans-Continental Gas Pipe Line Company,
mean
were
unpopular though
Although a statement ex¬
disapproval of the fiscal
Life
time
with interest the
!
4
*
evidence,
the
America
production.
New catalytic cracking and oil gas
are examples of new methods that are being
for
But
values
policies of the Government was ap¬
proved by the Board of Directors of
capacities to meet peak loads in the manufac¬
tured gas industry were increased an estimated 20%
above the previous year.
Part of the increase resulted
from the installation of liquefied petroleum gas plants
country
to make
dangers.
Plant
during the next few years. Here is an industry compris¬
ing approximately 10% of the industrial capitalization
of the country that is already well along with a con¬
struction program that equals ,12% of the total of Mr.
.Truman's
its
power,
proposals on existing inflation
pressing
watched with interest.
program
the
of
billions.
$191
insurance executives seem to
sound
to facilities,
beginning to see
technical experiments
in gas
some
about
dollar-purchasing
Life
is
results
is
1947
be afraid
processes
President Truman in
a plea for a $50
1947.
from
industry
approximately $117 bil¬
in
Be¬
actual
to Congress made
message
other vital materials.
in 1940.
will be less than seven years ago.
sides building additions
have electricity
full stride during
got into
his
steel and
Paige
customers.
available and 92% are
taking the service. For 1948, the electric companies esti¬
mate a 7.2% growth of load average for the country,
with some areas estimating double that percentage.
The
E.
Clifford
was
01
there were
To. meet the needs of the public
the
industry is pushing expansion
plans vigorously.
The program has
been tempered only by shortages of
rate of increase in customers. Growth
lead in the
lions and the total in force at the end
teresting to recall, too, that 1946 had
surpassed all previous consumption
records in the gas industry.v
use
1940
of
continue
These factors are expected to con¬
average
Society
Assurance
S.
actually has less insurance protection than he did
Total insurance in force at the end
21,590,000 customers of American gas
utility companies,
an
increase of
3.2% from the,end of 1946.
It is in¬
ris'ng
U.
fight against inflation, in 1948. Though more insurance is
in force now than ever before, the average American
con¬
sharply
residential
the
the
The life insurance industry should take the
pacity will be the chief activity of the gas utility indus¬
Sales of gas to all classes of consumers,
domestic, commercial and industrial,
emphasized by the
and
Life
Equitable
The
of
throughout 1948.
of
favor
President,
try during 1948.
industrial
customer.
X
high
facilities to meet a record pub¬
a safe margin of reserve ca¬
This last factor is
now
solve, acceptance of gas and gas appliances is in
with the public and the prospects for the
industry are, we think, exceptionally sound.
lems to
restore
we
processes
further rate increase.
PAIGE
electricity's paramount contribu¬
tion to industry and modern living.
acceleration
a
1
Continued expansion of
lic demand
of
dustrial
requested by the company,
Although we enter 1948 with difficult operating prob¬
as
acceptance
and
for
President, The Brooklyn Union Gas Company
Institute
activity, the heavy increase in customers, and the
of America
the rate increase previously
United States Steel alone has
brought into
be
may
of New York
increase in rates. Although the Com¬
July 28, 1947, on a temporary basis,
continually rising materials cos s have forced the com¬
pany to petition for further relief.
The company has
completed hearings before the Commission on its request
designed to enable it to supply customers
quantities and improved qualities of
the end that supply and demand for many steel
steel
Company
the high level of
tionwide
engaged
CLIFFORD
Light
&
Electric
are
is
now
an
mission authorized
increased
products
possible.
contributing to the electric indus¬
satisfactory record of production and growth
very
since the end of the
looking toward
program
OAKES
Power
President, Edison
industry
with
Government
of
The principal factors
■
steel
productive capacity.
tion
apparent, will be kept reasonably
Pennsylvania
the Public Service Commission of the State
engaged to spend more than $500,000,000 on a construc¬
•busy throughout most of 1948.
President,
Early in 1947 the company initiated proceedings before
Europe may restrict the amount of steel which
of expansion and modernization of its facilities,
which will add at least 3,000,000 tons of steel a year to
[business, that our organization, barring unforeseen de¬
I-
meet increased costs.
to
The
reasonable
a
and
the company has increased labor costs
program
[hope that through these products and
[with accelerated activity on commercial business and a
(continuation
The inflationary spiral which has beset the country
is available for home uses.
in reserve which
not yet ready for production. We
are
to
production to the extent of 18,000,000 tons.
less of steel
others
with
ucts,
sorlt
consumers.
labor
front
some new
Olds
may
accomplish this goal there must be freedom from
It will be remembered that
difficulties since V-J Day have caused an industry
prod¬
commercial
witli several old and
We plan to get back into this field as soon as
conditions permit.
Despite increased revenues from sales of gas the rise
in labor and materials costs has reduced our net income.
heating.
and the prices of
all major production materials, chiefly oil and coal.
We
have been unable to increase rates rapidly enough to
To
pressing
are
we
S.
Public Serv¬
authority, the restriction oh new space
strikes and work stoppages.
ex-
,
,
Irving
,
for all uses has made it
for the company to continue, with
ice Commission
quantities of steel products of every
increased
Aid
^
of
-,
domestic
land will be well cleared up
[30, 1948.
desired additional
scrap in the months
affect the ful¬
fillment of the industry's determination to supply in 1948
development work
by June
and
The sustained demand for gas
necessary
the
forth
Other factors
more
largely
cont'nue to be strong in 1948.
general public will be needed to
ahead.
of the Government orders
hand, which
on
during
been particu¬
Customers of the gas industry have
pliances. Brooklyn Union sold more than $5,000,000 of
new appliances during 1947 to homes and industry.
We
believe that consumer interest in new appliances will
Scrap steel has not been
quantities
except to keep things in readi-
care
mow
1947.
larly interested in the automatic features of postwar ap¬
a
bring
iness for future business, while tak-
jing
number
availability
sufficient supply of suitable raw
the
' We are endeavoring in every
| possible way to keep in a position to
fmeet
anticipated
government
re¬
can
dependent, however,
of outside factors,
is
of this program
completed in 1948.
Public interest in gas appliances has been keen
ing recent months. Full cooperation
between Government, industry and
state of
to many
|Day.
quirements.
However, until
idefinite plans are known we
The major portion
will be
available in adequate quantities dur¬
Election
and
now
a
output
higher
of
largest single
our
[transition and will undoubtedly be subject
between
is
field
^customer, the U. S. Government, are still in
changes
year
a
chief ameng which is the
materials.
in
construction
program. This program includes substan¬
to our production, transmission and dis¬
spending approximately $25 000,000 on a
tribution facilities.
of
•
satisfy demand for gas service in our territory, we
tial
Achievement
$31,361,000
The number of
1946 to 824,281
V-V-;
in 1947.
To
in 1948.
owner¬
[President, Fairchild Camera & Instrument Corporation
The
in 1947, an increase of 9.73% over 1946.
active meters increased from 816,983 for
greater total amount of steel
even
trends in our business.
territory for 1947 were 33,216,000,feet, and this represents an increase of 11.09%
are
an
the company,
in 1948 will serve
1946. Revenues from the sale of gas were
over
that
certain
am
to the situation
point up the major
Sales of gas in our
be made by all
members of the industry to produce
upon
t
I
will
effort
every
ship would do much to sustain purchasing power during
a period that otherwise would be a depression.
J.
to
of the manufac-
VV'
•'
the 1947 operations of
forward look
a
000 cubic
A reduction caused
that such private
OLDS
steel was produced by the American
than in any previous peacetime year. The
nation's total production of more than 84,000 000 tons of
steel was exceeded only in the three war years of 1942,
In
by gradually transferring the debt to individuals would
be much better than a sudden one brought on by a
It could develop
S.
"."'7
utilities.
A brief review of
steel industry
Any anti-inflationary program, if effective, will reduce
just as surely as it was inflation that
depression.
tured gas
Chairman, Board of Directors, United States Steel Corp.
total bank deposits
brought them to their current levels.
indicative of the problems of many
is
with
ury
1948
Speaks After > the Turn of fthe Year
Business and Finance
(Continued
Thursday, January 22,
CHRONICLE
FINANCIAL
&
expansion
new
of
facilities
and
extension
customers constitute the broad
utilities,
tional problems to
the industry has
meet in 1948.
had
;
of
program
challenging opera¬
The experience of The
Brooklyn Union Gas Company, although it reflects spe¬
cific conditions in the boroughs of Brookyn and
Queens,
so
large
a
participation in what is going on and are
themselves contributing so much to the maintenance and
increase of the large money supply that little is to be ex¬
pected and certainly Utile has come from
this source.
present satisfactory state of life insurance has pro¬
duced a tendency to overlook current burdens stemming
from inflationary policies.. We in the life insurance in¬
dustry are too frequently unmindful of the ultimate conThe
A;:;
-
~
:c,-.
(Continued ory-page*7Q)->$• ^
Volume 167
Number 4666
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
crease
Sources of Funds for Business Expansion
(Continued from page 3)
tary authorities
to create
during the second half
firmer
a
and
and to this
and
can
of the year,
be added the gross
money
market
by selling securi¬
ties to the
public, retiring debt
held
by
the
Federal
Reserve
proceeds from the sales of savings
bonds.
It seems safe to assume
that for the year as a whole the
banks,
and
Treasury will have about $10 bil¬
raising
the
rates
on
lion
from
short-term Government securities.
While savings
by individuals have
which could be used
declined
or
sharply
wartime
vide
conclusive
a
to
as
of
quacy
the
current
overall
flow
the
ade¬
of
in¬
Personally, I
am
current
convinced
pro¬
to
answer
the
vestment funds.
of
inflated
,
levels, this does not
question
not
from
that
the
shortage
has
savings
reached
great proportions.
sav¬
ings institutions, that is, the
insurance companies, mutual
ings
life
sav¬
banks,
savings-departments
commercial banks and savings
of
loan associations, have been
increasing at a rate of nearly $7
billion annually,
although the rate
and
of
increase
savings
accumulated
are
deposits
individuals
invest
Furthermore,
substantial
their
amounts
directly in
mortgages, or ir
homes, or in unincor¬
and
own
porated
businesses.
Even
if
for
tional
measure
investment
the
through
securities
to
be
used
available
funds,
better
in
order
securities
at
Government
market
use
credit,
temporarily
in
support
given
to
the
in the long run may have
s.erious consequences on our econ¬
omy.
Business is forced to rely
banks
to
further
I venture the
loans
too much
its
opinion
there
will be another sub¬
stantial reduction in the Govern¬
I
security holdings of banks
1948, possibly enough to offset
in
effects
of
the loan
have
the
ment
to
borrowed money for
expressed the view that
Government
stabilize the
maintain
expansion
on
requirements.
deposits.
the
would
bond
21/fc% rate
continued
on
continue
market
page
on
and
long-
71)
per¬
Even
market
of
the
in
by the Fed¬
eral has not resulted
in
a
net in-
Meod,Youno,Weir & Company
LIMITED
Dual Transfer
Members of The Investment Dealers Association of Canada
Agency Services
Corporations, their stockholders
in
NEW
YORK
and
as
well
brokers
as
DEALERS
and underwriters find
We invite
institu¬
by
funds is being channeled
through
the United States
Treasury, a part
can be and is made avail¬
able to the capital and
money
of which
refer
not
making
which
banks,
our
transfer agency
NEW JERSEY
services
IN ALL
CANADIAN
SECURITIES
advantageous
ac¬
savers,
it
would not be a complete
picture
of the situation. A large volume of
do
funds
neces¬
be
the past two months
securities
the
the
of Fed¬
periods
readjustment.
in
can
Government
by
business with
equity capital. There is no
denying the fact that there is a
real
shortage of equity capital,
the
can
except
market
Ih 1947, for
example, the life in¬
surance companies sold about $l1//2
of
bond
Reserve
haps
rates, if the demand exists.
billion
Government
retire
held
freeing
use
that
on
As long as the Treasury
these
eral
other
for
supply.
has
to
to business.
the
supported without the
securities
in
business
market, the remainder
used
obligations
ket and do not increase the
money
Government
invest
of
and
can
finance
support given to Government
securities. Investors will sell their
to
form
expansion, if the demand is strong
enough. Purchases by the Treas¬
ury simply represent a return of
tax and other receipts to the mar¬
Treasury
your
individual
I
in
will
will be available to the investment
markets in part at
least,
provide
sary
and economical.
could
we
and
markets.
thereby
investors
Government
It would be unrealistic to
ignore
this volume of funds in apprais
ng
the demand and
supply situation
in the investment
markets.
The
funds corralled by the
curately the supply of funds avail¬
able
purchase
debt.
demand
as
securities
rious
ment
Capital Is Major Problem
major problem in the in¬
vestment field, as I see it, is to
If the Treasury's available funds
not all needed
by the Divest¬
be
69
The
are
in estate
accounts, pension and
other funds, and some
savings ac¬
cumulate
to
investments.
savings deposits
declining. Additional
trust
and
marketable
Equity
securities have more than
offset the purchases of bonds.
supported.- What this means is
that the liquid assets held by va¬
sources
in
to be
seems
various
holdings because
of ; short-
retirements
term
purchased corporate securities
other
in Federal
and
That process can
go on as long
as
Government bond prices are
the
The assets of the principal
;
retire
these
sales
(369)
to
Fed¬
eral Reserve
credit, but to funds
collected through sales of savings
bonds, social security taxes, and
an
Private wire connection to New York and Montreal
opportunity to discuss
transfer problems with
you.
Head Office
Metropolitan Building, Toronto, Canada
^Registrar anh (Transfer (6n.
Branch Offices in
ESTABLISHED 1899
2
RECTOR
Montreal
STREET
Quebec
Ottawa
15 EXCHANGE PLACE
NEW YORK 6, N. Y.
JERSEY CITY 2, N. J.
WHitehall 3-1404
Hamilton
London
New York
BErgen 4-8525
Correspondents in London, England
CCEXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXIJ4
other taxes.
The
net
sales
of
United
Stales
savings bonds, in excess of re¬
demptions, aggregated $1.6 billion
in 1947 and, with the
campaign,
may
well
than that in
more
We Invite
sales
new
aggregate
1948.
Merchants in Investments for
Forty^One Years
The
cur¬
rent annual accumulation of funds
WE UNDERWRITE AND DISTRIBUTE
from Dealers and Brokers:
in Government trust accounts and
agencies is something over $3 bil¬
lion. These are the funds which
accumulate
in
the
Federal
Old-
Service
Life
are
funds
for
investment, just as
those collected by private life in¬
surance
companies,
they
"vf
i
•
Common Stocks
cash
the
Treasury
receipts
expenditures.
that,,
the
on
rates,
the
Treasury
Cooperation of Brokers and Dealers solicited
basis
cash
in
excess
of
of
present
receipts
tax
of
115
BROADWAY
will
the
be
Treasury's
after
depends
the
on
middle
the
tax
We
of
1948
the level of prices. While
disproportionately large
new
underivritings and in avail¬
tax receipts and net pro¬
from the sales of savings
CLASSES
r
PUBLIC
New York 5, N. Y.
Teletype NY I -2660
6, N. Y.
TIX11XYYTTYTYYXTXXTXXXXXXXXXXXXYYXYTYYYYYTYYTT^
a
%
'
OF
'
BONDS
AND
STOCKS
including
CfJlnrJtyuiJb QxxfLisruyuL StocA
UTILITY—RAILROAD—INDUSTRIAL
FOREIGN—MUNICIPAL
bonds is concentrated in the first
quarter of the year, wise manage¬
ment should be able to
keep the
Offer
Broadway
in-
ALL
propor¬
tion of
We Are
Particularly Adapted
'!
to Service Firms
With Retail Distribution
120 BROADWAY
Tel. WOrth
2-4230
•
•
NEW YORK 5, N. Y..
Bell Teletype
N.Y. 1-1227
Treasury in possession of substan¬
Your
tial amounts of funds throughout
the year.
can
be held
down and relatively large Treas¬
ury
balances in
forward
the year.
billion
Inquiries Solicited
Debt retirements in the
early part of the year
carried
war
for
loan accounts
use:
later
in
In addition perhaps $1V2
will
•
offerings.
AND
,
ceeds
under writings,
DEALER SERVICE
measures
expenditures, the volume of busi¬
ness, and
corporate
COMPREHENSIVE INVESTMENT
position
adopted, the level of government
a
less
sell Blocks of Stock,
Tel. REctor 2-2020
MT
outlays
What
1907
NEW YORK
the
after allowing for in¬
for foreign aid.
even
creased
120
INCORPORATED
ESTABLISHED
It is estimated
ceipts of the trust accounts and
agencies mentioned above, but not
including net receipts from sales
of savings bonds), will be about
$7% billion
in
excess
of
cash
outgo,
not
than $1,000,000,
Mill, Thompson & Co., Inc.
EWBrwksS^7.
has
during
the
first
six
1948 (including the re¬
months of
to
more
securities.
addition,
other
preferably
(4) desiring to participate in
u
cash
Purchase price should involve
.
planning the origination of
Treasury Has Funds
In
.
wishing
able Block
always invested in U. S.
are
Government
.
(3)
Debentures
•
Preferred Stocks
that
except
be purchased.
than $300,006
(2)
Bonds
Insurance
Fund, and others. They
available
can
of medium-sized industrial corporations
Age Insurance Fund, the Unem¬
ployment Trust Fund, the Na¬
tional
(1) in touch with corporations where 100% of the
capital stock
Whole issues of securities
.
Inquiries
be
provided by
ernment trust funds and
gov¬
agencies
P. F FOX & CO.
120
BROADWAY, NEW YORK 5, N. Y.
Telephone
REctor 2-7760
Teletypes
-J
;
*
NY 1-944 & NY 1-945
OVER-THE-COUNTER
SECURITIES
•.
badly needed by Secretary of
"cold" war against totalitarianism.
as
if those inflationary policies are allowed to
Although our life insurance contracts call for
sequences
continue.
'
.
E. PATTERSON
ALEXANDER
Life Insurance Company
•^f-of New York h '
" ; ' ^'
The Mutual
President,
•'
objectives of society, as it moves into 1948,
are peace
in the world and higher standards of living
for all people.
These objectives, simply, will require
further recognition of the dignity of man and his right
to earn, learn, worship and speak
freely and provide for his family
and himself, entirely independent of
groups or government.
This latter
objective
is
dependent upon in¬
creased thrift and savings and higher
production
This
vital
worker.
has recognized the
higher standards of
per
country
for
need
of
Act
1946.
elections.
within
countries, and among countries.
A high and ris¬
holding four aces doesn't yell for a new deal."
The issue is crystal clear, but the problems that will
be confronted are seemingly almost overwhelming. And
.
would indeed help to magnify the problems if
faith in our American way
we
did not have unswerving
we
ability to find the proper formula in
raising living standards over the world.
At the risk of oversimplifying the problems, it must
undoubtedly appear to all thinking people that the only
of
living and in
way
our
living standards can be raised—or ever
raised—is by producing more per worker.
by which
have
been
This
.)
is, basically, the only possible answer. For you
cannot eat wheat that hasn't been grown, or ride in a
car
that hasn't come off the
assembly line, or be
educated in
a
that hasn't been built.
school
problem of raising living standards is generally
The
assumed to be
ment and
that requires the
one
industry.
attention of govern¬
Certainly, industry and government
But the individual public also
vitally important part.
Increased production and savings, then, are the keys
in which
industry and government can provide the
provide the leadership.
plays
a
living standards. Savings by the
public should be encouraged by an aggressive govern¬
ment and industry policy to prevent inflation.
These
large
savings, accordingly, will meet the need for a
of investments necessary to assure in¬
production per worker. VThere is now, for in¬
amount
creased
trouble
labor
breaking
and
change.
Due to various economic
anti-inflation factors the trend
of
and
loan
is
rates
interest
applications
siderably^
than they
were
the "soundness"
the
the
The facts
believed,
trouble.
clearly demonstrate that savings
than
ever
their work
is
more
On the other hand, mortgage loan rates,
with the pattern set by F. H: A. and the G, I. Bill of
prohibitive.
Rights
are
too
is
one
of
these
groups
and
as
tions
a
consequence
got
vast
material
to
Omni-directional radio range equip¬
being installed
the airways will constitute en route and airport ap-.
on
valuable aid for
both
:j
.
sibility of profits despite steadily growing passengercargo traffic.
In the case of United Air Lines, a strict
economy program which resulted in a saving of $5 mil¬
lion
an
on
annual basis still could not halt losses.
,
>
airlines were selling a
product at less than the cost of its production. It also
It
became
was
obvious
that
that
apparent
air
the
mail
during
established
rates
the
abnormal wartime period were
entirely out of line. Accordingly, the airlines increased passenger fares and,
at the same time, petitioned for increased mail pay.
>
Higher fares and more mail pay cannot in themselves '
the airline earnings dilemma.
The real solution-
solve
l:es in the 1948 objective—dependable, regular, safe air
quest on that this goal can
concerted efforts not cnly of >
aircraft manufacturers but also with the
transportation. There is
be attained through the
the airlines and
constructive
with
help
of
no
agencies concerned
governmental
aviation.
>
W.
PIPER
T.
becoming
more
and more wary.
This poses a
Chairman of the Board & President,
Piper Aircraft Corp. '
problem to builders and buyers
The outlook for the private aircraft industry in 1948.
is such that no one can make anything but a wild guess
gradual curtailment of the
about what
are
alike and may result in
building program.
Incidentally, it is our opinion that the government
policy of insuring mortgage loans at today's inflated
prices is more truly inflationary than are many of the
factors upon which curbs are being placed.
There is a
hue and cry, for instance, to increase bank reserves to
be carried in short term government bonds. This move,
thinly disguised as anti-inflationary, seems a queer
partner for the indiscriminate guarantee of inflated
mortgage loans. It smacks, frankly, of a reach for power
will happen.
At the end of the war there
for all kinds of planes,,
nothing had been made for over four •
accumulated
an
was
demand
years,' and those in use had been
given; hard service. To meet this de¬
mand
manufacturers
all
their
output, which
since
the
industry
easy
was
never
-
increased
had
to do
been
large and most plants had been en¬
larged to fill government orders. The
Many bankers
share my view that the present government policies
pertaining to loan guarantees and interest rates are
time
30,000
badly in need of overhauling if serious consequences are
avoided.
>
were
sold.
25,000 licensed before the war made
on
the
small
part of certain government groups.
In the face of these
conditions it will not be an easy
loan requirements of all
a
instances, in fact, where caution will impose temporary
hardships, but the final results should be generally
beneficial. At least such will be the aim.
To summarize, it appears that the coming year will
be characterized by great production, high prices, full
employment and increasing bank deposits. Profits and
savings, however, are less certain.
They will almost
certainly be limited to the thrifty in the case of savings
and to the economical in the case of profits.
W. T.
able.
Piper
makers made around
year and at the same
surplus
military planes
added to the
These planes
hangars
number
There may be
one
total of 90.000 planes, and airports
and
matter for bankers to meet the
credit-worthy individuals and businesses.
plane
35,000 in
to be
the
of
for
housing
aircraft
were
this
not
large >
avail¬
Probably more than one-half
planes are tied out on
licensed
fields whereas they are so expensive
so
the
weather.
When the airplane was
port
5,000
airports
miles.
invented there was not an air¬
hangar in the United States. We now have over '
or
which
is
only one to every 600 square
pilots to get near the places
This does not permit
Considering the shortage of fields and hangars,
is badly overloaded with airplanes.
This •
situation will improve as more fields and hangars are V
the
United Air
Lines, Inc.
Dependable, regular operations with safety must be
the major objective of the airline industry in 1948. Withoi-.i i+c "ochznt'on. the airlines
cannot expect any real
and
lasting improvement of what admittedly was an
unsatisfactory condition both from
•^the standpoint of public
m'
airline
service and
the
job. They have the planes,
experienced personnel, many of
the
1948
the
flying aids and reasonably good
ground facilities. There still is much
room for improvement in the devel¬
opment of airport and airway facili¬
ties, but meanwhile, the nation's air
carriers are in a position to begin
delivering the kind of product which
their patrons have a right to expect.
Once they do this, they will enjoy
all the business they can handle.
In past years, it was impossible
to offer improved regularity and de-
new
W. A.
in
Patterson
r«onHah1
oon/TP
""+>>-
compromising safety—and this the airlines could not
do
Today, thanks to improved equipment aloft and on
tne ground, tnere can and must be more reliability of
airline schedules along with a corresponding increase
out
country
built, but it takes time to build these facilities and it now v
as
if 1948 will see a number of companies quit 1
looks
producing. Sales for the past six months have been small
and nothing in sight offers encouragement for improve-(f
ment.
There always has been a period of small sales; •
each winter so every one hopes that sales will pick up i
with the approach
earnings in 1947.
The airlines have the tools for
important in 1948
■
V
of planes.
W. A. PATTERSON
President,
>
carefully built that they should be protected from >
and
they wish to go and to a great extent lessens the utility
of
General Marshall needed and
win the "hot" war against the
help but recognize that
to fit today's conditions. Buyers
not attracted by such offerings
banks and other lending institu¬
low
of unfavorable weather.,
areas
of commercial paper are
before.
efforts
Due to in¬
prices the required down payments on • homes,
new and existing, are so high as to be in most cases
In short,
encouraging savings
will do much toward helping to solve domestic prob¬
lems. And in the field of international politics, savings
will strengthen American foreign policy.
We cannot
The
have forced real estate and
veritable no-man's-land.
a
capital weakens American foreign policy.
that
analyzed
may prove
higher living standards. To the life insurance
field underwriter, the savings banker, the building and
loan association and all other stimulators of savings,
means
con¬
and
the keys to
this
Patterson
during the boom war years. Not only
"purpose" of loans will be
of capital in American industry not only
American standard of 'living, but it also
ability to aid the rest of the world.
dearth of
K.
studied in an effort to direct loanable
funds
away
from non-essential and into productive
channels. This caution on the part of banks, it is hoped
questioned
around
Meanwhile, continued rising costs precluded any posB.
but also the
The shortage
our
will be
critically
more
totaling $71,000,000,000 would be needed.
curtails
slightly upward
or
the year.
and
depression.
restrains
strong
during 1947 and there seem* no rea¬
son
to
believe
this condition will
192,9
in
was
(
During 1947, progress was made in prepar'ng for the
day of improved schedule regularity w.th safety. As the
months ran out, however, it became apparent that the
much proclaimed "age of flight',' had not arrived.
De¬
liveries of new planes were tardy, airline accidents had ,
♦their effect on airline patronage, new aids to airlineoperations could not be adopted in1 regular operations:'
until pilot personnel had been throughly trained in the'r;
use,-inexperienced personnel had to be weeded out of!
airline ranks,
and the voluntary grounding of DC-6
planes by several operators proved a climactic blow of
production with attendant
demand for loans
out,
proach operations.
prices, bank deposits seem likely
during the coming year.
The
day
anti-icing has virtually eliminated ice as a hazard. •
Such proven aids as ILS (Instrument Landing System)
ana
radar
surveillance equipment now make possible.
operations into and out of a rports under restricted,
another
increase
to
and
Heat
ment now
record-
prevent
can
in
high
plus their pressurized cabins, can be
range
over
day
has planes which, with their
now
weather conditions.
high employment. Thus, despite the
continuing struggle between wages
or
1940, due to the ravages of war and
To restore it to the 1940 level, it would
require an investment of $43,000,000,000, and to reach the
amount called for on a long term trend, investments
was
new
backlog of unfilled orders ever carried
over.
It appears, therefore, that only
a
shortage of materials or serious
capital in industry per worker than there
stance, less
into the
go
with perhaps the largest
in raising
leadership
while blurred, is at least somewhat
1947.
industries
Local
year
•
both
living
ing standard of living, to state the issue clearly, is the
greatest enemy of communism and all other forms of
discontent and disturbance. In other words, "the fellow
yet,
clearer than
flated
Alex,. E. Patterson
i.' Higher
a
picture which,
a
construction into
standards for all
peoples is likewise the formally stated objective of the
major international organizations to which most nations,
including the United States, adhere. It is, in fact, a
primary consideration in the Marshall Plan.
•Accordingly, it is beyond question that this objective
of society will form the .basis of policy next year in
national and international politics.
For it is indeed
recognized that higher standards of living are regarded
as necessary to lessen the risks of political disintegration
?
in
Labor and material costs
platforms
political parties for the 1948
of both
speed and
Bend, Ind.
the
from
operations
of the year.
seasons
industry
operated
future
It will no
doubt be stated also in the
and Trust Co.,
sufficient to curb the tendency
to over-expand plants and inventories.
If this can be
accomplished the bankers may well take a bow as hav¬
ing played an important part in preventing serious
people of the United
States, through
its Congress, has
formerly stated the objective for
,higher living standards in the Em¬
ployment
The
safe
and
through all
perspective of a banker operating
medium-sized industrial city, the year 1948 presents
and
The
living.
South
Viewed
.
The major
Bank
in safety.
Technological progress at last has caught up
and is ready to cope with many obstacles which hereto-.
fore were insurmountable from the standpoint of both
dependable
PATTERSON
Joseph
St.
President,
,
in the fight against
inflation, the American people can count on a good busi¬
ness year in 1943.
The capital equipment of this coun¬
try's enterprise now needs much renovation and expan¬
sion if we are to maintain and increase our capacity to
produce in great volume. An essential element in achiev¬
ing this goal is to see to it that conditions are maintained
which will continue to encourage saving.
;;:v::
is jusjt
State Marshall in the
a
ously threatened,
If some real leadership is shown
h" '
K.
B.
specified number of dollars, it does not
follow that we should have no interest in doing what we
can to preserve the value of those payments.
The obli¬
gation is implied and the institution of life insurance
should no longer continue its attitude of relative indif¬
ference while the welfare of polkyhoMers is So ^
payment of
Thursday, January 22,' 1948
CHRONICLE
(of food and machinery)
totalitarians; material
/ (Continued from page 68)
..
FINANCIAL
Speaks Afler the Turn of the Year
Business and Finance
,
&
THE COMMERCIAL
(370)
70
of spring and longer days.:,;-.
v
>
Being an industry with limited output, we must expect,1
only a small number of manufacturers to make the va'St ;
majority of the planes. The whole industry was so ex¬
panded for waf that the commercial demand can bnly:5
use
a
small part of the plants and equipment.
Unless'1
the government buys large numbers of airplanes there '
will only be a few makers of the large planes, a small :>t
group
and
a
making what
can
be called the "tailored planes" '
"private planes." This1 •
are
going to fade out of the 7
to be the year when this may
few makers of the so-called
that
means
nicture
and
of
some
1948
us
seems
happen.
Many people have been prophesying a tremendous de- '
mand
for
private planes but they always add the con- -
dition—that
plane
manufacturers
furnish
more
useful
They do not say what will make a plane have
more utility and they forget that all our way of living
has developed as it has because man could only make
planes.
(Continued
on
page
72)
Volume
*
167
Number 4666
THE COMMERCIAL
&
productive
Sources of Funds for
Business Expansion
has
FINANCIAL
The
iplan of
a
' volun-
tary
action on the part of the
nation's banks to avoid excessive
or
inflationary increases
credit.
in
bank
'
(Continued from page 69)
bonds, and would
such
pose
edit
ci
strenuous
controls
essential
stopped. The
:control
;in
interest
conditions
of
use
rates
past
has
that
not
rise
present
too
hazard¬
experience
boom
been
experience
too
is
be
big
a
under
be
of
credit
severe
controls under
tions
flow
would
and
would
Our
ous.
such
the
credit
measures
im-
quantitative
that
bank
not
with
condi¬
happy. If
criterion,
any
credit controls under
present con-
editions
would be really effective
only when they become so drastic
that they reduce production and
"employment
tionary
ized
and
create
movement.
bond
straints
defla¬
a
A
disorgan¬
and rigid re¬
market
essential credits might
on
seriously interfere with the
and
and dislocate the whole
vocated
ties will
and
the
assume
for bringing
on
deflation.
I
do
monetary authori¬
responsibility
business decline
a
,
Inflation Not Due to Bank Lending
The
present inflation in prices
is not
due
in
important
any
gree to current bank
cies.
While the
increase
loans
in
been
substantial, its
the past
influence
gerated.
has
state
of
tures
the
more
than
great
result
increase
business
not
is
of
has
the
the
that
been
inflation
With
cause.
in
the
volume
prices,
bank
increased
these
greatly exag¬
inflated
at
wonder
bank
inflationary
increase
primary
a
in
loans
of
the
have
faster.
even
At
prices business needs
more
for inventories and other
money
working capital purposes.
This
credit helps to maintain and in¬
crease
production.
'
,
Furthermore, loans
relative-
are
ly low compared with the total
volume of business today. Our national income is now 135% higher
than in 1929,- but total bank loans
only 7
are
cent higher. Total
per
bank loans today equal only about
19% of the national income, com-
in
with 38%
pared
1920, 41%
the
Elects Kuhn and Blaine
pri¬
the
R.
Parker
Boston
Kuhn
of
Corporation
Chairman
and
the
elected
was
Walter
First
F.
Blaine
his
according to
doubt
expendi¬
increased
an¬
be
or more
our
foreign aid
gram
is
world
conditions and
essential
under
large part of the world at
time, when
our
in excess of
too
demands
own
but
sions
have
even
serious
on
and
are
Col. R. Parker Kuhn
cannot
of
econ¬
Goldman,
Walter
Sachs
&
F.
Blaine
of
payments, agricultural
price supports, excessive liberal¬
ity in Government guaranteed
lation
of
restrict
the
Dealers,
Jan.
Inc.
at
its
meeting
on
15, 1948.
Atkinson Ch. of Bd. of
equity
SAN
-
The objections to the adoption
credit
controls,
jankers themresponsibility. We
should
be
taken
to
in
real
estate
loans
appraisals, especially in the
of Government
guaranteed
such
Gross,^of Stone
Arthur
Mejia,
and
bers
case
CALIF.
—
R.
were
of
&
ary
ipansion
the
current
small.
are
loan
The
the
of
elected
as
creased 13% in
'1946,
1945
and
Board
for
only 2%% in 1947,
a major cause of
rose
?price
rise
of
in
16%
that
Dean
Witter
&
and Earl T.
Parrish, of Earl T. Parrish & Co.
Elected to the
will
nominating
mittee
to
year were:
A.
for
serve
Wm. R.
the
com¬
volume
of
business.
Tornga
are
partners
organization.
new
Edward
are
both
with
meeting to be
E. W. Mundo Vice-Pres.
Of Carver & Co., Inc.
__
was
with the
Government
secur¬
Bank.
.
Vice-President.
Mr.
formerly head of his
ment
gold.
in
firm, E. W. Mundo & Co., in
Underwriters and Distributors
Railroad, Public Utility, Industrial and Municipal
Security Issues
Bacon, Joseph
non-
E
Maintaining Active Trading Positions in
Trust
Obligations
Public Utility Stocks
Underlying Railroad Bonds
Public Utility Bonds
Pennsylvania and General Market Municipal Bonds
PHILADELPHIA 9, PA.
123 S. Broad Street
NEW YORK 5, N. Y.
120
PEnnypacker 5-7330
The "Blizzard Service" known
for
Teletypes—PH 296 & PH
N. Y.-Phila. Private Wires—REctor 2-6528
over
25 years is
&
2-6529
improving
Philadelphia Bonds."
fact,
by the inflow
%
123
of
New
by
are
factors,
a
deficit
financing.
;
York
or
So.
Broad
St.,
Philadelphia
Philadelphia clearances
thru
9,
Pa.
Montgomery, Scott
&
Co.
however,
which
d6nci6s
At
..
the. end of
the
Wash-
war,
ingtop economists predicted
riod
deflation
of
At
should
the
of
have
same
tration has
time,
able
been
SECURITIES
.
Jersey and General
.and
a pe¬
the
adopted.
Adminis¬
expenditures
approaching
peacetime
level.
a
probably several hundred thous-
•
•
Municipal Bonds
•
^uucd/men/
Electronic
Guaranteed and Leased
!■■■
Equipment Trust Obligations
Bank and Insurance Stocks
Charles A. Taggart & Co.
I
INCORPORATED
W.
L.
1928
Morgan & Co.
National Distributors
INCORPORATED
Members
to
are
Market
Television Securities
Line Stocks
-
Philadelphia Stock Exchange
Investment Securities
reason¬
There
.....
Utility—Railroad—Industrial
j
resisted the reduction
Government
anything
Public
]
and
great ^un¬
employment,) Consequently,
an
inflationary wage policy was de¬
liberately embarked upon at., a
time when anti-inflationary meas¬
ures
1
New
*
i ^VELLINGTON^ )
FUND^
n
number of important.
greatly
; accentuate these inflationary ten,
2-6528
297
"Semi-Annual Valuation of Railroad & Industrial
Equipment Certificates,"
"Public
Utility
Price-Earnings
Ratios"
and
"Appraisal
of
City
of
We pufj'ACTION*' into inactive
Markets
the
emphasis on;credit expan¬
war,
Broadway
REctbr
the
rent inflation. The basic cause, of
course, I is
the huge supply
of
money created before and during
the
was
invest¬
INCORPORATED
sion tends to draw attention
away
'from the real causes of the cur¬
There
own
STROUD & COMPANY
Bell System
"
-
.The
Mundo
Boston.
the increase in the money supply
in 1947 was about equal to the ex¬
pansion caused
DeYoung-
BOSTON, MASS.—E. W. Mundo
Corporation, speak on "The Fedhag become associated with Carver
eral Reserve System and the Bond
c,
,
Market"
Mr. Piser in the past & Co., Inc., 75 Federal Street, as
Harold
W.
Lutich,
Victor T. Maxwell and
Harold B.
Williams.
Getting back into the Swing o' Things
year.
In
Young
Johnson,
—
normal annual rate of increase in
;the
luncheon
current
HERBERT H. BLIZZARD & CO.
cer-
less than
was
de
Co.,
~
The rate of increase in the
money
supply in 1947
Neil
years
•
in¬
)tainly not.
its
mem¬
two
=
ex-
7.5%
the
Cook
today at the Lawyers Club,
Municipal Bond Club will
Davies ■>&
new
money
supply of the country, which
in
duties, the firm
new
Equipment
inflation¬
net
Tornga
Herman
Guaranteed & Leased Line Stocks
.been largely offset by a reduction
in bank holdings of Government
and
effects of
his
Herman
and
Mun. Bond Club to Hear
Youngberg, and
Mejia,
'cSt'e^MiSi^n'bank'ibanl his
securities,
now
from
Tornga Co.
were:
to elimior
cities
West Coast.
Wm. H. Agnew, of Shuman.
Agnew & Co.; Charles H. Clay, of
be made is always present in a
period of rising prices. The banks
are cooperating with supervisory
authorities in the effort
22
Members retiring from the Board
loans.
loans
exchanges,
offices in
ber of the Board of
Governors for
term of two years.
Richard P
While there is not much evidence of any substantial amount
of loans for speculative purposes,
the danger that
Thorson, ol
a
scruitiny. More caution is
needed
FRANCISCO,
Walston, of Walston, Hoffman &
Goodwin, was reelected as a mem¬
minimize any credit
expansion
which might increase
buying pow¬
er without
increasing production.
Consumer loans should be
given
severe
Reuben
meeting Douglas G. Atkinson, of ities
section of the Board of Gov¬
Dean Witter &
Co., was elected as
ernors
of
the
Federal
Reserve
Chairman of the Board.
V.
C
are
iri highly dangerous infla¬
tionary situation and every pos¬
precaution
and
hear Le Roy M. Piser, Assistant
Vice-President of the First Boston
The San Francisco
Stock Exchange
announced
that
at
the
annual
how¬
ever^ lmposeTiipon
sevles a great
sible
J
L. Larson, who was partner in the
represented, for the first
time, by a resident partner on the predecessor firm, and Charles E.
the
San Francisco Exch.
than credit control.
severe
James
be
At
-
.
assumes
held
accumu¬
capital. Clearly,
the main battles
against inflation
must
be fought in fields other
of
Neil DeYoung
Hammond,
and
Securities
housing credits, and confiscatory
which
E.
LaCroix
to
will
was
Vice-Chairman of the Dis¬
trict No. 13
Committee of the Na¬
tional
Association
relief
taxes
Edmond
F.
coast, all interconnected
by direct wire. When Mr. Forres)
Co.,
elected
25
coast
omy.
Other current inflationary
influences are: veterans' bonuses
and
Tornga has been changed to De¬
Young-Tornga Co.
partners
who
attended
included:
Albert
P.
commodity
have
repercus¬
miracle
our
in
Chronicle
Paine, Webber, Jackson & Cur¬
tis, members of the principal stock
a
productive capac¬
trying to do too much
quickly, and the strain
dinner
Financial
dinner
O'Brien
our
are
part¬
The
Chicago.
we are try*ing to meet the needs and demands
a
with
to
soon
am¬
plyJustified;- However;
of
joined
testimonial
a
Special
GRAND RAPIDS, MICH. — The
firm name of DeYoung, Larson &
Minot, of Boston; Lloyd W.Mason,
of
New
York, and Michael J
pro¬
be
indus¬
fory Los Angeles, where he
will be resident partner in
charge
of the firm's West Coast
offices.
Morris
present
can
banks,
and
Paine, Webber, Jackson &
at
Everets,
per year,
local
Changed to
DeYoung-Tornga Co.
Springfield, Mass., for George M.
F.orrest, former co-manager of the
Springfield office, who is leaving
the
estimates.
some
71
Firm Name
MASS.—Prom¬
of
companies
concerns
of
Curtis
Other
Government
would
No
in
trial
ners
to Congress on the
union
should
be
nate loans for speculative
in
in
out
executives
insurance
NASD District No. 13
economy
President
other $10 billion
six months has
been
This
de¬
lending poli¬
by
adopted,
help
responsibilities.
ought to be
recent message
plated lightly, especially in view
of present world conditions and
world
our
industry producing goods in
order to help overcome the exist¬
ing shortages. If the proposals ad¬
ity. We
our
on
vate
economy.
The
consequences
of
such a course cannot be contem¬
not believe the
drain
a
who
nor¬
mal flow of funds into productive
processes
non-essential workers on the
Government pay rolls today who
Dinner
For Geo. M. Forrest
inent
and
constitute
f Testimonial
SPRINGFIELD,
'
term
(371)
A.B.A.
purposes.
announced
CHRONICLE
1500 Walnut
Street,
Teletype
—
PH (177
Dime
1420 WALNUT STREET
Philadelphia 2, Pa.
Building,
Allentown
KIngsley
5-1716
PHILADELPHIA 2
-
Vrz'^zy
.i.L,,:,
P
I
If
72
1
r
(
^.-
(Continued
furnishes a way to make long
trips easily and rapidly but we are not ready for it.
The private planes of today are excellent ones, de¬
pendable and safe. It takes two things to use a plane
successfully—leisure time to make the long trip and
money to pay the cost.
Young people as a class have
neither but they will be old all too soon and then flyingwill come into its own.
1948 looks like a rough year
in the aircraft industry. It's suffering from acute over¬
production but many of the companies have seen hard
The airplane
short trips.
times before
and can take
is
There
accumulated capital,
July, showed a
prosperous year.
labor demands
and gets a further increase in pay,
it may result in an increase in costs
to such an extent that purchasers
'.
will
1
will
'
will
.
if
refuse
-
=
„., „
Congress and the Administration w^h to do so, they can create';
further, inflation • by increased ex-:
.
can curb inflation
extent by regulation.
V
'
penditures,
'
to
,
v
some
Banks
and
also
and businessmen can
influence the
inflation by
of
course
political year. Leaders will un¬
doubtedly attempt a conservative policy. The pressure
of inflaton will be severe, however, and I do not expect
much effective legislation to curb it.
^
1.
iand
Nineteen
but it
must end
or
hundred
is inevitable
sometime.
ends, depends on
mentioned.
-
^
possible
at
1948
have
Corporation
labor necessary
expanded production sched¬
ules,- the volume of sales in 1948
should exceed the record-breaking
in
1947.
upward
materials,
supplies, freight, and services, no re¬
ductions in farm machinery prices
are
yet visible. However, in terms
of income-producing crops, the farmer
buys a tractor or other farm imple¬
ment today for approximately 25%
less than he paid for the same piece
Because
trend
of
in
of the continuing
costs
of
labor,
equipment in 1940.
Regarding
possible intact of
the so-called "Marshall Plan" on the
machinery supply,
Oliver's domestic sales auring me
coming vear will be directly subiect
American
Alva
W.
Phelps
best protection is to include ample pro¬
for contingencies in our planning.
As bankers,
vision
of
one
our
important functions is the overall administra¬
credit needs to assure sustained full
tion of the country's
employment and high
farm
into
«.
volume of loans
EDWARD
President,
Lehn
&
PLAUT
Fink Products
Corporation
terrific growth since
1941V The growth has been so rapid that it is quite evi¬
dent it cannot be maintained. It is my opinion that the
business for the coming year will be entirely satisfactory
looked at from the basis of what would be a normal
annual increase over the 1941 period but will be slightly
under the peak of 1945-46. Costs have gone up consider¬
ably but basically there have been few or no changes in
The cosmetic business
has had a
the
outstanding is more
a
result of the infla¬
we
will
assisting
have
a most important service in
both at home and abroad,
performed
our cause
EDMUND
Solar
President,
T.
PRICE
Aircraft Company
Since the close of the war
with Japan almost all com¬
panies have experienced a difficult period of reorganiza¬
tion.
Although the larger number of these difficulties
have been overcome, the aircraft industry, as a whole,
still feels the effects of the adjust¬
ments and the small orders for air¬
hostilities.
However, the increasing influence of
jet and gas turbines may affect the
planning of military and commercial
planes since
the close of
aviation authorities. In such a
devel¬
will be
profoundly affected. It is probable
tco, that rockets and guided miss'les
capable of speeds exceeding 3,C00
opment, the aircraft industry
produced
quantity. There are projects of
this nature well along in the devel¬
miles
an
hour will soon be
in
opment stages.
In
Des
T.
Edmund
Price
our
own
Moines
company,
is
actively
the plant at
engaged in
manufacturing ring and tube assem¬
blies,
exhaust
units,
combustion
assemblies and other related parts
for two jet engine types. In addition to exhaust mani¬
fold manufacture at San Diego, the plant is producing
chambers, aft frame
tailpipes,
exhaust cones, fuel
and other items for
manifolds, outer casings
additional types of jet engines.
interest of various governmental
services, Solar is also performing advanced technical
and
developmental work on several projects which
clearly illustrated trend throughout the industry. One
of these-is a new type of rocket engine of sheet steel.
As
a
result of the
" . v.
1948, in my
in'our,, monetary
,
borrowings to
carrying and;
necessary
of industrial products at
movement
present price levels.
■O;Federal
Government fiscal policy;
effect upon;
prevailing in banking,
the financial markets.
Federal
have
will
important
an
the conditions
and
management, in my opinion,;
major responsibility
debt
will constitute a
during;'
Government
Federal
the
of
1948.
requirements of industry for
from the commercial banks
The
credit
during this period of rising prices
and expanding production and dis¬
tribution will require a marked de¬
Frank C. Rathje
between the commercial banking
authorities. Orderly money mar¬
ket conditions are highly desirable. Such orderliness will
to a large degree be maintained by sound fiscal policies
of the Treasury and the Federal Reserve Systm. This in
turn will do much to govern the loaning policies of the
of cooperation
gree
system and the Federal
Commercial Banking System.
deposits
Total
in
be well maintained
the year should compare
should
banks
during 1948, and earnings for
favorably with 1947.
PUTNAM
CARLETON
bust. It is es¬
primary cause. There is every indication that
1948 will be a crucial year and if we, as bankers, can
contribute to the economic stability of the United States,
.
in the
contribut¬
tion than a
in Oliver's Mod¬
ernization and Rehabilitation Plan under which $13,000,000, has been expended for tooling, improvement, reno¬
vation, and replacement of plant, buildings, and equip¬
ment since Nov. 1, 1944.
Achievement of this all-im¬
portant program is necessary to maintenance of all
company's competitive position
its main¬
ing in which provision has not been made for unforeseen
developments. Our responsibilities cannot be avoided,
but the fact should not be overlooked that the current
been continuing progress
the
States repre¬
industrial
and
finance
lending policies be directed toward the
discouragement of non-productive loans or any financ¬
critically short products to Marshall Plan
countries. However, Oliver does not look to revival of
government controls for the solution of this problem,
and seriously questions the advisability of any such con¬
phases of
industry.
'
unhealthy boom and subsequent
an
"
:i\v
further expansion in commerr
some
rial
sential that our
ports of these
There has
production.
income of the United
ing to economic and political stability. We cannot, there¬
fore, afford to allow our present prosperity to develop
to secure sufficient additional raw materials
whatever extent government calls for increased ex¬
trols.
in the
Recognizing the limitations
the bus'ness cycle.
to its ability
to
the psychological element
sents, perhaps two-fifths of the world's total,
tenance is obviously a most significant factor
procurement of materials and
total
contend with
to
Since the national
continued demand for our
to meet
a
1 swings of
company's
during 1948 which would again be greater than
production. Notwithstanding foreseeable diffi¬
culties in
luxury
■;// v.'Y-V
1; in this field, the
forty-eight could be a good year,
that the present spiral of inflation
President, The Oliver
products
of
ALVA W. PHELPS
There will be a
resist¬
quarters the chief concern is with the possi¬
ruinous inflation, while in others there is fear
a poss ble depression later this year.
Forecasting is
best highly uncertain and we have not, as yet, learned
\ how
continue to press its de¬
greatest danger. .
Whether it continues through
many factors, some of which I
'
I
.
prices. Increasing consumer
by the declining demand for
expensive non-durable goods.
"'Uny'
some
bility of
opinion, labor will
my
more
In
Congress is facing a
In
opinion, will see further; adjustments
evidenced
is
C, RATHJE
of banking and finance during
The field
the result of higher
ance
companies that
to be one of the
President, Chicago City Bank & Trust Company
H
in industrial construction, machin¬
ery and equipment, housing and automobiles.
On the
other hand, the savings of the country are declining and
certain sections of the economy are being p nched as
policy in 1948.
mands, and herein lies our
Labor
present particularly
lending, extension of
As usual these rewards will go .to those
FRANK
it is
;
•
\.
resourceful, an$ many will find 1948
best years they have ever .enjoyed/^
are
production this' year,
'' .V" ;;V
,;•
As ;, in -all periods of prosperity,,
areas of uncertainty and maladjust¬
ment become manifest.
There is no
: V
reason to believe, however, that these
■
Frederic A, Potts
areas
have spread; in fact, the in- -;vV\"; V
dustries involved seem to have adjusted themselves sat¬
isfactorily. The same basic factors which were respon¬
sible for the demands which existed last year are still
credit, and capital
expenditures.
•.
..A.T
~
; 'v.;
. •''/V
A major war would disrupt all predictions.
,
•:
> ,
It is my opinion we will not have a major war in 1948.
I believe banks and businessmen are thoroughly aware:
of the dangers of inflation and will adopt a conservative
their policies of
predict, too, that large quantities of :jet engines will
produced during 1948, bringing a measure of pros¬
perity to the aircraft industry well above prewafr levels.
unlikely that there will be
relatively !. large, increases, in total
purchase, producers,
to
unemployment.
no
,
quantity production for the requirements of the
armed forces and civilian needs is reached.; I venture
until
be
output, r.o doubt, could be increased
and'facilities are being expanded,;
but
If
■;.
C. Persons
virtually
v
producing, . and builders
quit building, resulting in wide¬
stop
spread unemployment.
John
V
ready the principle has been developed to the extent
that it can readily be adapted to a turbo-jet eng.ne of
any type or size.
Among still other projects underway,
are
low horse-power gas turbines.' These experimental
projects appear to indicate the pattern of production
work a few months or a few years hencel'.
: •
t
The year 1948 should see many new developments of
this nature further advanced and broadened in scope
to
up-to-date
that output during
December was even slightly higher
than the 192 of November.
There
is good evidence, moreover, that our
physical plant is being used at near
capacity and we know that there is
suggest
figures
•
which may prevent a.;
example,
Though
namely,
decline to 176. Less
comprehensive but more
,
■
For
manufacturing process, while the weight reduction gives
the rocket a greater explosive carrying capacity.
An¬
other project is represented by the principle of ^ after¬
burning. This new device, adding tremendous thrust to
an engine,
is expected to furnish the additional power
necessary to push airplanes powered by turbo-jet en¬
gines beyond the supersonic flight speed barrier.Al¬
with the Federal Reserve
Index at 189 in January
conditions in this country
economy
high plateau
a
and 192 in November.
remaining largely within this area, one month,
Birmingham
through 1948.
On the other hand,
there also exist certain
threats to
our
engine weight by 500 pounds and speed up the
level of business activity
on
continued
the
alloys reduce the
temperature
developed
former
Philadelphia National Bank
general
1947
high
Newly
FREDERIC A. POTTS
President, The
demand for goods, and enough projected con¬
private and public homes and facilities to
generally prosperous
will be smaller and
intense this coming year.
and that profits
competition will be more
struction of
create
cosmetic business
believe that the
I
whole,
the
On
will be satisfactory
PERSONS
enough
existing
now
of foods.
cost
During
First National Bank of
President, The
result of the increase in the
sale of cosmetics as a
the
it.
JOHN C.
After the Turn of the Tear
prices.- Considerable resistance is being met
at the present time by retailers on some products due
to the 20% tax. The public no longer feels that this tax
should be collected.
From all reports that I have re¬
ceived, it seems that there has been a terrific decline in
the selling
70)
page
on
Thursday, January 22, 1948'
FINANCIAL CHRONICLE
Finance Speaks
Business and
enough
COMMERCIAL &
THE
(372)
President, Chicago and Southern
Airlines
throughout 1947 continued
handicapped by procedural delays in the setting
mail rates by the Civil Aeronautics Board. Very
The air transport industry
to
be
of air
permanent rates have as yet been set, and
few
dustry's
with
"losses"
must
this in mind.
law
The
is
clear
'.
that,
'
the in¬
viewed
be
.
provided
economical
and
efficient
management is shown, the govern¬
ment shall pay the carriers, through,
the mail rate/ sufficient money to
assure that
they shall not only be
able to maintain, but also continue
the development of, air transporta¬
honest,
Consequently until hearings
and permanent rates
tion.
have been held
fixed, no losses of any kind are final,
and estimates of the current finan¬
position of the industry based
cial
on
face values are
without founda¬
tion.
Indeed, unless the law
and the change
is changed
made retroactive
Carleton
Putnam
(a
development which is highly unlikely) there seems little
reason why the great majority of the carriers should not
show reasonable profits for the year when the final
accounting is rendered.
public and the Congress need feel no concern
return of the industry to normal, peacetime
The surprising thing is that anyone
should have supposed the feverish, ^congested traffic
conditions of wartime, which alone made wartime mail
The
the
over
levels of mail pay.
rates
rates
possible, could be continued, or the corresponding
made permanent. As a matter of record, the air
industry has received less aid and has paid
government's investment out faster than any other
form of transportation in history.
On balance, on the
basis of added costs both to the Post Office Department
and for the maintenance of air ways, the American tax¬
transport
the
has gained about $128,000,000 cash as a result of
air lines, let alone having acquired
air transport network on earth.
With such a record, Congress is not likely to starve
the air lines now. Far from being a matured industry.,
payer
his investment in the
the
finest
(Continued on page 74)
Volume
167
Number 4666
THE COMMERCIAL
.
other
same
of the
period in 1946 by 23%.
Accounts receivable averaged 20% more in November than a
year previous, while inventories of wholesale hardware distributors,
as of Nov.
30, 1947, were 37% higher than the same date in 1946
and
2.%
above
STEEL
those
of
Oct.
same
PEAK
only slightly
than
in
above the
when
in
one
FOR
steel supplies
as
the magazine notes there will be
government
the steel
or
steel
mill
books.
run
a
Canada
market
78,407
in
U.
1,814 trucks in Canada.
sible, the
for
three
by
overs
market, which is an offshoot of a black steel
during the OPA days, only greatly expanded, is kept alive
by customers' actions, not by those of the steel producer, the maga¬
zine observes.
Under present conditions some steel users obtaining
they find they actually need
and
Willys
,
-
,
-
*
.
forthcoming voluntary steel
Freight
tain,
dustrial
week
tomers
steel
adds, many. cus¬
going to receive less
they are getting now
paper
are
than
after the
so-called essential
Loadings
Reflect
for-the
Post-
ending
the
above
the *
?
the\5I which
comparable
%
occurred
week " of
in
1947.
More businesses failed than in the
1947
however, fail¬
one-fourth
week's
decline
1947
in the late 1920's and early
as
1930's.
Price
Food
Advances
Index
New AU-Time
to
Concluding, ' "The
Following the mild decline re¬
a
week ago, the Dun &
wholesale food price
Bradstreet
the
to
level
same
as
in
index
Wholesalers failing, down
14 to 4, were even less
than
In all
a
year
of
ago.
geographic regions except
East
North
Central, failures
preceding
week.
Only half
North
eral
States
from
Age"
states that with the exception of
the Philadelphia
district, where
the price of No. 1 heavy melting
steel is up
this
week,
pear
to have won
the
in
Iron
steel
a
ton
The
this
vious
10
Further advances in grains and
foods
other
pushed the Dun &
daily wholesale com¬
modity price index to new high
Bradstreet
where
levels since this index was started
to
After
in 1932.
sive high
new
a
fractional
registering
points
succes¬
Thursday and
on
Saturday of last week, the index
continued to rise sharply to reach
317 commercial and
month,
record
increase
peak of 307.18 em
Tuesday, Jan. 13. This represented
in the pre¬ a gain of 1.1% over the 303373
brought the recorded a week previous" and
This
-
failures for
total number of
1947
y
.
(Continued
on page
75)
oc¬
involving liabil-
These Men
-7
'
announced
week ago, 86.6%
month ago and 92.5% one year
'
New York Curb
Exchange
'
1
r,
current
is
rate
1
;
1
•
BUILD
1
Retail
Minneapolis Grain Exchange
Kansas City Board of Trade
Exchange
and
based
on
other
-Looming ahead on the American horizon is a
important undertaking to be accomplished in 1948.
supplying millions of dollars of capital,*
essential to the growth and
stability of American Industry,
through the sale of new securities to the investing public.
Chicago Mercantile Exchange
principal
vast
Exchanges.
PARTNERS
E.
F.
Thompson
M.
W.
G.
E.
Booth
A.
W.
C.
Karlson
E. F.
Washburn
J. F. Wade
W. Lindeke
H.
J.
Mathews
.
Thompson, Jr.
W.
A.
Retail
141 W. Jackson Blvd.
.
42 Broadway
Chicago 4, III.
WABash 2400
,
New York 4, N. Y.
.
1,723,200 tons last week, 1,617,900
tons
one
year
and 1,281,210
week in 1940,
ago
tons for the average
the
highest
the
by
electric
light
Electric
highest
tained
Institute.
weekly
in
This
output
was
the nation's
participate in the ownership of the industries
them.
and,
to promote
most
further
of
new
the expansion of established indus¬
importantly,
nation's Retail
to
help
create
production and
machine and the world's
the
PACIFIC
COAST
TRADING
MARKETS
to
:
'
ALL
people.
.
in
ACTIVE
prosperous
Security Dealers organizations who have participated with us in new security offerings for American
Industry*'.'"
■».
;
It will be
at¬
most
appreciation, we gratefully acknowledge
cooperation of an ever-increasing number of country¬
wide Retail
SECONDARY MARKET DISTRIBUTION
history of the in¬
dustry, and exceeded the previous
link
With sincerest
UNDERWRITERS
MIDDLEWEST
a
to
accomplish and the realization
of that will. Their
accomplishments have perpetuated our
system of corporate public financing—the best yet devised
—which has made
possible the world's largest production
WHOLESALE DISTRIBUTORS
the
Security Dealers have been
between America's will
the
ever
are
men in our
economy have done more to
national progress, to make
possible the birth
The
CARTER H. CORBREY & CO.
and power
industry for the week
ended Jan. 17, 1948 was 5,370,112,000 kwh., according to the Edison
do so,
employment.
:
The amount of electrical energy
to
serve
industries,
tries
FOR
distributed
to
No other
our
Electric Production Tops Previous
-
Americans
BOwling Green 9-0633
prewar year.
High Record
capably discharged this vital economic
Security Dealers who have made it possible for
which
week's
operating rate is
equivalent to 1,732,200 tons of steel
ingots and
castings as
against
who have
men
function, and who will continue
1, 1948 with 10%
operations equaling* 1,802,476 net
tons of weekly output.
yy
This
The
Neubauer
Jan.
of
as
and
It is the task of
the revised capacity for the indus¬
try
AMERICA
Security Dealers
Chicago Board of Trade
Exchange Associate
New York Cotton
the
one
*
,
Commodities
-
Monday
on
operating rate
having 94% of
the steel-making capacity of the
industry (revised) will be 96.1%
of capacity for the week begin¬
ning Jan. 19, 1948. This compares
95.6%
1
A Tribute to the Nation's
Steel
and
1874
f^
Chicago Stock Exchange
Iron
Help
Co.
&
our
privilege to join with these fine institutions
1948 in again offering the investing
public opportunities
share in this
country's greater future.
ISSUES
high figure reached for the week
ended
Dec.
20,
kwh.,
and
was
more
than
Jan.
was
1947
cess
10,
in
1948.
1947
b,y
2,488,000
92,432,000
the
The
kwh.
week
Jan.
ended
17
of
production
was
5,000,000,000 kwh.
corresponding week
in
Teletype CG 99
In the
D. CERF COMPANY
Exclusively Wholesale
-
Underwriters and Distributors of Investment Securities
BRANCH
13,
ex¬
of last year,
FLOYD
Street, Chicago 3, III.
6502
week
the 10th week since Sept.
that
135 South La Salle
Telephone STATE
650
South
OFFICE i
120: SOUTH
LA SALLE STREET
Spring Street, Los Angeles 14, Calif.
Telephone Michigan 4181
Teletype LA 255
■
—
i
j
the
'
from the 313 reported
MEMBERS
New York Stock
week
The
■*"
Bonds
-
buyers ap¬
the third round
of steel companies
ago.'
'
•
is
American
Institute
one
v
price battle. "The
scrap price composite
week
with
Stocks
mill
$41.83 a gross ton
tip $1.25 from last week due to the
change at Philadelphia.
'
of
Established
K
scrap
Age"
this
of $4
an average
Lamson Bros.
at
Registers Further Sharp Gains
industrial failures in the month of
a-
prices
Wholesale Commodity Price Index
from the 1947 level.
were
food
of
trend
wholesale level.
13; this
region also had the most increase
There
the
States
Central
rose
index
of
chief function is to show the gen¬
reported
the largest number of failures this
week, but a marked decline ap¬
peared in this region also, with
concerns failing down from 26 to
18.
The only
exception to the
prevailing decline occurred in the
failures
on
represents the sum
price per pound o£
foods in general use, and its
31
in the
Pacific States,
11
against 20, and in the New Eng¬
land
States, 5 against 10.
The
Atlantic
$7.28
total
as many concerns
failed
Middle
stand at
The
lower than, ill the
were
1% from $7.21 on Jan.
rose
a new all-time high
Jan. 13. This repre¬
sented a gain of 16.9% over the
corresponding 1947 figure of $6.23.
6 to
users
Iron
1%
Peak
week.
such
as railroad car
builders, the
petroleum industry and the farm
implement makers have their in¬
ning at Washington.
aa
Only about one-eighth
corresponding week of any of the
last four years;
compared with
prewar 1939, however, they were
only one-sixth as numerous.
the
£1*
the number of businesses failed in
ex¬
of, manufacturers
-
of
as
imme¬
corded
numerous
■
only
were
down
Jan.
curred in failures
ended
in
in
three times
comparison with
numerous.
year ago.
the
In
ures
the
in
Concerns failing
a
during
number
failing numbered 61, down from
87 in the preceding Week but December,
All
week
declined
15,
Dun
&
Bradstreet, Inc. reports. Concerns
$££& Holiday Activity
the
Loadings
failures
of
failures
East
.
over
pointed out.
agency
Although continuing above last
level, commercial and in¬
are
allocations.- One thing seems cer¬
at
respon¬
year's
„
tomers still in .the^"anxious seat"
were
Week
afraid to ask*
the steel producer for a reduction in their quota.
The customer
feels that if he does this it will adversely affect future deliveries
at a time when a real
emergency may exist.
,4
'
The fact that the highjacker has.entered the picture more aggres¬
sively within the past' several mohth&is symbolic of the> place excess
steel now takes:.in the national
picturo,];"The .Iron Age" states.r T,. 1 :
li Steel sales managers report new^-r "
business as.tight as ever, with cus¬ 4.856,890,CLOO Arkwh.
were
turned
.
changeGeneral Motors
Business Failures Decline for
gray
than
model
divisions and labor difficulties
market
material
comprised
S.
Shutdowns
$5,000
17
failures
many
1946,
were
diate prewar years,
failing, off from 35 to 16, turned
preceding
and 25,276 trucks built
and 2,681 cars and
cars
the
naturally includes, duplications—few Cus¬
million, which also includes duplications because customers will
order from as many places as possible in an attempt to obtain supplies.
more
and
total
week's
at IV2
current
in
the
Last
1947
trade accounted for the decrease
and
week.
industry does.
This
cars
the
under
to
as
Small
liability class slightly
1947.
in
12
just ended.
from
units
of
year
since 1942. There
Manufacturing and wholesale
States
of
United
losses
from
ceeded those
1946.
in
with
in this
past week amounted
111,276
matter what the
no
output
the
the
Hudson
The
week
week
reported.
73
3,476, the highest for any
to
more numerous
same
were
increased
108,178 units, "Ward's Auto¬
motive Reports" states. This com¬
pared with a revised figure of
far below total steel demand,
gray
in
tomers buy from only one source if they can
help it.
This estimate only includes direct mill sales and not customers
on steel warehouse order books.
Warehouse customers are estimated
;
failures
to
Congressional admonitions that the steel industry must get rid
of the gray market indicate a woeful lack of
simple facts on the
number of steel industry customers, the trade
paper points out, since
a
conservative estimate shows at leasty60,000 individual customers
on
week
same
the
39
The
trucks
highways, according to'"The Iron Age," national metalworking
As long
the
Estimated
the
country is more anxious to see the elimination
small but strong and active gray market than the steel pro¬
ducer.
But he has no more chance of controlling this situation than
he has of stopping the occasional
highjacking of steel shipments on
weekly.
an
Output Cut by Shut¬
downs for Model Changeovers
of the
the
was
Automotive
CURRENT WEEK
No
This
preceding week, which
included the New Year holiday.
It also represented an increase of
494 cars, or 0.1% above the cor¬
responding week in 1947, and an
increase of 58,559 cars, or 7.6%
above
31, 1947.
OPERATORS AT PEACETIME
were
increase of 149,409 cars, or 21.9%
period in 1946, "Hardware Age" reports in its everysummary. Volume for the first 11 months of
that
ities of $5,000 or more. Declining
from 75 to 44, failures of this size
American Railroads.
Industry
Thursday market
last year exceeded
(373)
1948, totaled 831,447 cars,
according to the Association of
(Continued from page 5)
'
r
CHRONICLE
Jan. 10,
The State of Trade and
with the
FINANCIAL
&
.VJV.O
•
CHICAGO
y
74
THE COMMERCIAL
(374)
automatic water heating will
(Continued from page 72)
to profit commer¬
cially by any of the technological gains of the war, and
of course during the war development was arrested com¬
pletely. No truly post war airplane is yet in service on
air lines. Blind landings are just beginning to be ex¬
plored. The whole future of really profitable commer¬
cial operations without government aid, which will de¬
velop from more efficient aircraft and more dependable
and safer service, looms ahead on the horizon, and the
price to be paid to get there is relatively negligible.
The public has a vital interest in air transport, both
from the standpoint of national defense and of peace¬
time commerce and the general welfare.
The restrictionists should be given short shrift, in whatever guise
they appear. They were found in too many places in
1947, but I believe their number in 1948 will be con¬
it is my opinion that in the two fields
in which we are an important factor, the year 1948 will
be a most satisfactory one and should be as good as 1947,
i
'
.
•
.
new
pears
favorable.
Indications for 1948 are encourag¬
ing, particularly for the first
the
in
some
should be a continuation
there
eral
half of
we foresee a
industries, in gen¬
Although
year.
decline
business.
The chemical
might well anticipate a
heavy demand for its products in
selected consumer goods fields.
There is still an urgent need for.
of
good
a
industry
chemical items abroad, but
dollar reserves
have
a sharp decline in sales to
foreign countries. If dollar credits
have
been
reestablished
through
some form of American aid, export
many
,depleted
brought
William M. Rand
sales
In
is considerable
there
and
uses
new
and
continue
should
the field of
room
expanded
capacity
i\ew pi
for
UaUbvJ
established
products are continuously opening new markets. The
diversity of these commodities should, to a large extent,
compensate for
any
drop in sales of a limited number
of items.
While insecticides, fungicides, and
herbicides, for ex¬
ample, are seasonal in demand, they, like certain plastics
and coatings, are less sensitive to business fluctuations
than are most consumer goods.
:
,
/
.
the chemical industry has not been charac-terized by phenomenal price increases, except for prod¬
ucts derived from vegetable sources. The chemical in¬
So
far,
dustries, like others, has felt the impact of higher con¬
struction
increased
costs,
demands
from
labor,
and
mounting prices for raw materials. Unless their upward
trend is halted, chemical products may be subject to
substantial price revisions. Equally vital to any price
forecast is the single item of
In the last year
transportation costs.
there have been substantial increases
rates for chemical commodities. In a seller's
market such added costs can be absorbed and passed
in freight
along. As supply and demand come into better balance,
profitable trading areas become smaller in size.
Although confident of the future, the chemical indusi
indices of business conEconomic weather vanes
try should keep the time-tested
) ditions under close scrutiny.
? of commercial bank loans, business failures, and other
advisability of ad¬
justments in inventories and production quotas when
the present high consumer demand moves into more
proved barometers may indicate the
;
conditions.
normal
increasingly
The chemical industry is becoming
susceptible to the fluctuation
RICHARD
air
outlook
This
ceiling and
any
will
certainly
to
a
*
passengers
questioning
eliminated;
A passenger on one
also is certified
Lines
(Approximately 98 air¬
' li'''
High Frequency
Orleans
New
Board
tics
which provides
service
Mo.;
to extend
its present route from
to Mexico City.
The company
has pending before the Civil Aeronau¬
applications for authorizations to extend its
Memphis to Kansas City via Springfield,
from
operate its present Miami-San Antonio
to
Tampa; to extend its route from
via
Louis northward through 15 Iowa,
flights
Evansville and St.
Illinois and Minnesota
points to Minneapolis and St. Paul; to extend its opera-t
tions from San Antonio to Los Angeles and San Fran¬
states with their
extend its route
Washington to Chicago via Charleston, W. Va. and
(a) Cincinnati and Indianapolis and (b) Columbus fO.),
Dayton, Ft. Wayne and South Bend; to include Pitts¬
burgh, and Youngstown on its Detroit-Miami route; to
extend its Miami-Louisville route to Cleveland, via Cincinnati/Covington, Dayton, Springfield, Columbus, Mar¬
ion,
Mansfield/Ashland and Akron/Canton, and
to
extend that route also into Detroit via Cincinnati/CovT>*vto~
Sr»rinpf»eld. Columbus, Lima, Findlay
and
Toledo; also to operate between Evansville and
cisco
first
thereby providing the southern
transcontinental air service; to
from
Chicago via Terre Haute.
Now operating 86 multi-engined airliners, the largesf
aircraft fleet in its history, Eastern Air Lines is flying
a
total of 6,000,000; scheduled seat miles per day.
In
addition,' the company is carrying large shipments of
air mail, express and freight.
Eastern Air Lines employs 7,660 persons, an increase
of 16.06% over the 6,600 employed a year ago, and an
increase of 80.36% over the total of 4,247 listed on the
scheduled air lines this
year of the positive Terrain Clearance Indicator, a radar
technique which measures electronically the altitude of
plane over ground or water, will prove most important.
when used in conjunction with a pressure
has an additional useful applica¬
tion in spotting low pressure or bad weather areas when
flying over water.
V
(7) Extensive studies now being made in "finger¬
printing" the weather, especially at altitudes ranging
from 17,000 to 21,000 feet where more and more longrange, high-speed operations are being carried out, will
assure a high degree of accuracy in forecasting meterological conditions.
•
" " v.':* 1$
Such technical developments together with the larger,
This device,
company's payrolls on V-J
altimeter (barometer),
A.
S.
Day.
RODGERS
.
President, White
transport types introduced into
duction
lighting and electronic
stuffs.
a
and put
tion and complete
•
or
airways traffic conges¬
or
3%
schedules.
apart. Washington
New York City and
Boston are less than an hour
hours
from
New
Orleans.
are four hours from Miami.
from New York City. Atlanta,
Chicago
Houston is 5V2
Jacksonville and
by New-Type Constellations while
four-engined DC-4's link these points as well as Phila¬
delphia, Richmond, Raleigh-Durham, Charlotte, Column
hours
as
Tampa also are served
*The
-
Internationale
Federation Aeronautique
on
Dec. 17 officially
recognized 14 inter-city speed records including an
to-Coast
mark of 6 hours 24 minutes and 00.8
New-Type
into
Constellations of the
service
in
1947.
company
•
whole
all-time, Coast-
seconds set by
during their introduction
during
the year.
was
the .industry as
unable to make any¬
thing like the production gains dur"
ing
1947
that were * registered by
appliance groups such as
other home
washing machines, vacuum cleaners,
ranges, and even refrigerators. The
first three of those industries greatly
exceeded their past peak
,
years
came
flying time between Detroit and Cleveland is now
minulfei. New York City-Newark and Washington,
D. C.
is
conditions
The
40
a
60-passenger
favorable weather
sales
waiting lists at all sales
still remain very impressive
For various reasons
equip¬
public,
Constellations* acquired
by Eastern Air Lines at a cost of $16,000,000, are aver¬
aging a cruising speed of more than 300 miles per hour
on
non-stop and express terminal-to-terminal flights;
and through the use of pressurized cabins, are operating
at altitudes up to 24,000 feet where they can avoid un¬
the 14 New-Type,
Corporation
very
and in general,
new inquiries are'
probably exceeding the current rate
of production.
into wide use.
Illustrating what the newly-introduced flying
ment means to the industry and the traveling
foreign
levels
developments now available, are
installed
and
a
Customer
reality just as soon as these
thinking, will become:
Sewing Machine
high degree of optimism
can be applied to the outlook for the household electric
sewing machinery industry in 1948. Only a severe and
now wholly unexepected collapse of the national econ¬
omy could prevent the industry from
making an all-time record in pro¬
Nothing other than
operations by Eastern Air Lines and other companies
this year will provide the 1948 traveler with an entirely
new
conception of luxury and dependable, "on time"
travel.
"All-weather flying," long a subject of wishful
the United
require many
of
schedules that can be operated,
faster, more modern air
automatic water
R. S. Rheem
heaters for gas, electricity and oil
fuels, space heating for gas, oil and '
electricity, central heating equipment for gas and oil.
There seems to be little question bu,t what there will
be a continued high rate of new home building through¬
out the year 1948 which will require a great number of
home appliances, and the replacement requirements for
simply board their plane. Much of the
and "paper work" have been
but
ports.
1
"
(-3) The universal use by the
this will be in addi¬
continuing domestic re¬
such
and
procedures. Passengers traveling without baggage are
no longer required to check in at the field ticket counter
(5) The experimental tests in radar conducted in 1947
undoubtedly will lead to practical navigation and traffic
control applications by the air lines in 1948. For ex¬
ample, Microwave Early Warning (MEW) developed
during the war for detecting the approach of enemy
planes, shows great promise of affecting better control
•and separation of airways traffic in the vicinity of air¬
the year
utilities,
under
one-mile visibility.
the number of
1948 we look forward
t<j> a continued high demand in the
home building field for household
In
now
reception and eliminates inter¬
static. East¬
ern
in nearly all
of its ground stations and is completing installations on
all of its new type Constellations, DC-4's and DC-3's.
(4) Greater progress will be made on Automatic Con¬
trol Methods for separating and segregating air traffic
automatically in the heavily congested areas thus per¬
mitting a closer spacing and better utilization of exist¬
ing airports and enabling flights to operate from point
to point on schedule.
The establishment of two addi¬
tional airways between Boston and Richmond during
the past .summer, for example, has greatly speeded up
quirement.
-
the ac¬
distant radio transmitters and
Air Lines has installed 70-channel VHF
steel containers;
tion
on
ference from
aid that will be given by
States
based
ports now have ILS.)
,
(3) The universal air line use of Very
(VHF) two-way radio communication
for 1948 in the steel container industry
because
Operations
-
to be excellent. The demand should continue
strong for. steel containers in the packaging of
increase
Being Expanded
Eastern flight, planning connections
with another Eastern plane, simply deplanes and trans¬
fers without checking in. The paging of passengers, with!
fl.ght delays frequently resulting, has been abolished.
single obstacle to "all-weather" fly¬
Flights are no longer delayed for tardy passengers.
:
ing.
Capt. E. Rickenbacker
Eastern Air Lines inaugurated service during 1947 into
(2) The increasing use bf Instru¬
Hartford, Conn.; Pensacola, Fla.; Anderson, S. C.; Danment Landing Systems
(ILS) or Ground-Controlled
ville, Va. and-Charleston, W. Va, The company will be¬
Approach (GCA) radar sets which, together with the
gin serving Atlantic City, N. J., within 60 days and in
use of Adequate High Intensity Approach and Runway
1948 probably will add to its air routes. New Haven,
Lighting, eventually will permit a pilot to land when
Conn.; Bowling Green, Owensboro, Ky.; Huntington, W;
he has only a 100-foot ceiling
and one-quarter mile
visibility or less, in contrast to the scheduled air lines' ;*! Va.;. Ashland, Ky.; Florence, S. C.; Augusta, Waycross,
Rome, Ga.; and Lafayette-New Iberia, La. Eastern Air
present basic low frequency range minimum of 400-foot
by
may
is
forecast
following develop¬
way or planned:
(1) The nationwide installation of
High-Intensity Approach and Run¬
way
Lighting will assure the air
traveler of reaching his destination
under weather conditions which now
prohibit landing.
Accorded No. 1
priority by all civil and military
agencies, the installation and opera¬
tion
of
adequate
High - Intensity
Lighting will remove the greatest
the various users. It is very
improbable that there will be a les¬
sening of demand during 1948 and
it is conceivable that the demand
it
"all-weather" flying in 1948.
lines, and on the
Company
petroleum products, paints, chemicals and food
During the year 1947 the steel con¬
tainer industry was not able to fully
meet the requirements placed upon
i
quisition during the past year of
larger and more modern airl'ners by
Eastern Air Lines and the other air
appears
very
;
lines
long-sought goal of
their
S. RHEEM
Manufacturing
Rheem
President,
The
of general
^
business.
- •
flight crews with clear
strong.
organic chemistry,
for optimism.
••
•
Eastern Air Lines, Inc.
records for
present a favorable picture for
The long range view, although
tainties and the
•.
.
of the United States will
dependable, "on-time" trans¬
portation and will make great advances toward atta.ning
scheduled
The
establish
RAND
the chemical industry
the immediate future.
revealing some uncer¬
possibility of mi^or recessions, also ap¬
~
Facilities
being expanded. A $3,000,Maintenance Base and a $200,000!
completed at Miami early in
1947.
A
new
passenger terminal
has recently been
opened at Newark
(N. J.) Airport; a large, modern
hangar is nearing completion on Chicago (111.) Municipal
Airport, and the company has announced plans for erect¬
ing, a $1,000,000 line maintenance hangar at Miami.
'
Personalized service and courtesy to the air traveler
on
the telephone and at the ticket counter are being
emphasized by Eastern Air Lines in systemwide train ng
courses designed to expedite and speed up the handling,
of passengers.
The company has introduced a newlydeveloped "one-call-does-it-all' simplified reservations
system which requires a passenger to make but one tele¬
phone call to obtain confirmation of a seat on the par¬
ticular flight of his choice.
'
" *' 1
>
'
To make it easier for the air passenger to travel, East¬
ern
Air Lines has "streamlined" its passenger-loading
EDDIE RICKENBACKER
CAPTAIN
President and General Manager,
market conditions for
General
.
the sys-
,
,
Passenger Terminal were
Chemical Company
Monsanto
...
Ground facilities also are
000
ments
WILLIAM M.
■■
Ground
slightly improved.
spicuously fewer.
President,
tem.
summary,
if not
Indianapolis. DC-3's
provide frequent inter-city service throughout
.
.
In
(S. C.), Orlando, Louisville and
bia
continue at a satisfactory
rate.
transport has not yet been able
air
1948
FinanceSpeaks JUtei^ the
Business and
•
Thursday, January 22,
CHRONICLE
FINANCIAL
&
1.941 record year
While
for
production
A. S. Rodgera
in 1947 and even refrigerators
much closer to equalling the
than did the sewing machine industry.
increases in production are likely
substantial
all of the
relatively few manufacturers in this line
during 1948, it now appears that household sewing ma¬
chines will not be readily available in the market until
late in the year. Recent checks on customer wait¬
lists prove that unprecendented interest in new
machines is being sustained surprisingly well in spite
very
ing
of
long
awaited
deliveries.
Of course that is not too
surprising after all in view of the present and still in¬
creasing interest in home sewing as evidenced by neW
sales records in piece goods and patterns. Just as an
(Continued on page 76)
Volume/167
-
Number 4666
THE COMMERCIAL
&
FINANCIAL
CHRONICLE
volume occurred in the week with
State of Trade and Industry
the
responding date
/.V"
f
Grain prices
the
.
.....
week,
the
on
a .year*
•
;}4 the
cor¬
•
moved
higher for
particularly in the'
year,.
Late Strength in" wheat also
flected
re¬
active
buying and short
resulting from the re¬
covering
entry of the PMA
market.
All
into
deliveries
the
of
flour
wheat
futures except March reached
high levels for the season.
new
ported to have increased in
influenced
largely
parel
staple
and
with
net
a
gain of 2% cents per
Demand
was
reported
pound.
principally
from
manufacturers.
-
leading
soap
was
hosiery,-- shoes
footwear
were
in
and•
with
This
year.
decrease of 7%
a
compared
(revised)
the
preceding
weeks
year to
For
week.
ended
increased
Jan.
7%
10,
and
the
1948,
for
the
date rose bv 9&.
large
partments
was
sportswear
woolen
wool shirts
and
with
floor
coverings
purchased with
hardware
steadily
and
to
obtain.
of
diffi¬
Hog markets were stronger de¬
spite fairly large receipts. Steers
were slightly
higher for the week,
though lambs showed a moderate
decline.
Butter
prices
sharp
increase
in
trade
week
volume
in
New
for
of
early
merchandise.
r
H. M.
approximated \
the
preceding
Spring orders
pressing
Bonds
Stocks
in¬
9%.
here
are
delivery
Byllesby and Company
Incorporated
near-
ing completion and retailers
135 So. La Salle
are
of
St., Chicago 3, 111.
Telephone
Teletype
State 8711
,
sup¬
CG 273
According to the Federal Re¬
plies and accessories of all types
were sought.
A
Municipal
13% and for the year
by
week.
sales
1948,
last
York
branded
Automobile
Industrial
For the four weeks
Jan-
Retail
the
major appliances remained
Railroad
''<■>'v'.'.^Vv
This compared
year.
to date increased by
and
volume
■/ -
increase of 9% in the pre-
ce(jing week.
electrical appliances were in
large
demand and nationally advertised
cult
an
en<*ed
and'
staple housewares large.
Small
last
creased
were
the
of
with
in
accessories'
furniture
fv.-/j1
10, 1948,
riod
selling well,
quality
.
increased by 8% from the like pe¬
Men':.-
sweaters
•
the Federal Reserve Board's index
for the week ended Jan.
de¬
Interest
;
•"%•!
Department store sales on a
country-wide basis, as taken from
demand.
favorable.
overcoats
sought
High
brisk.
was
Public Utility
though high prices in¬
among some buy¬
Deliveries
generally con¬
caution
tinued to be prompt.
rubber
Buying at main floor blouse
by
buying of flour remained
comparatively slow. Lard prices
moved
steadily upward, closing
ers.
purchasing of ap¬
generally confined to
items.
W omen's
house
dresses and winter coats sold well
was
mestic
voked
Consumer
The
reports of
very small stocks of those
grains
held on farms as Jan.
1, 1948. Do¬
sales
chandise,
some
;V
areas.
1
also registered marked
gains.
rise in both corn and
oats
riod ^last
in
■
and requests for credit were re-'
were
Corn prices
advanced
despite
larger country offerings, and oats
four
pared very favorably with that of
1947, Dun & Bradstreet,
the corresponding week a year
Inc., reports..
rv:"••'/;:■ ■■■>;■,
ago.
Retailers were eager to ob¬
Resistance to high prices grew
tain practically all types of mer¬
age*.
uffer
eafch wheat
and
other
grains freely. after the turn of
the weekly period to Jan.
10, 1948,
increased 7% above the same pe¬
75
of
weeK
latter part of the
periwig spurred
by the reluctance of farmers to
»'.■
of
number
buyers registered
in wholesale centers rising con¬
siderably.
Order
volume
com¬
(Continued from page 73)
compared with 240.37
/:;;r
(375)
1
-
serve-Board's
wholesale
store sales: in;
index,
New York
department
Philadelphia
Pittsburgh
Minneapolis
New York' City for
STRAUS A BLOSSER
dropped
sharply for the period but stage?,
a^ moderate recovery at the close.
Cheese prices edged
upward, but
eggs fell
sharply under heavier
Offerings.
Issues Underwritten
MEMBERS
-
1947
NE# YOftK STOCK EXCHANGE
CHICAGO
STOCK EXCHANGE
NEW YORK CURB EXCHANGE
FRONTIER POWER COMPANY
(ASSOCIATE)
119,000 Shares Common Stock
Following
a rather weak start,
gradual strengthening of prices in leading cotton
markets during the
week, with
there
,
135 SOUTH IA SALLC STREET
was a
closing values showing
net gain for the
a
CHICAGO 3,
STANDARD FACTORS CORPORATION
ILLINOIS
$250,000 Convertible Debentures, VIi% due 1960
60,0(10 Shares Common
slight
JAHN AND OLLIER ENGRAVING COMPANY
Trading activity increased in
anticipation
of
renewed
export
.buying in the near future. Other
Direct Private Wires Coast to Coast
DETROIT
KANSAS
CITY
MILWAUKEE
102,000 Shares Common Stock
GRAND
RAPIDS
LIBERTY LOAN CORPORATION
bullish influences included
reports
that leading domestic cotton
90,000 Shares Convertible Prelerred
mills
committed
were
Stock
Telephone ANDOVER 5700
period.
heavily
'
through
the first half of the
year and the
prospects of continued farm price
supports by the government.
There
was
Sills, Minton
and
Retail Distribution in
on
a
market last
WAUSAU, WIS.
week
MADISON, WIS.
Contracting for the
1948 clip was
active in Texas.
.reported more
•United States buyers
*ney
were
leading bidders
wool
auctions
at the
which
LA
said to
CROSSE, WIS.
EAU
Syd-
CLAIRE, WIS.
FOND DU
opened
Jan. 12* Prices showed an up¬
ward trend
from
closing 1947
LAC, WIS.
von
and
tends
Securities
Wholesale Trade Ex¬
Gains for
Week
and
Year Ago.
HOLLEY,
January white sales and
seasonal
Members
Chicago
DAYTON
Stock
Exchange
and
clearances continued to stimulate
consumer
ume
Investment
ROSWELL, N. MEX.
quotations.
Retail
Chicago 4, Illinois
con¬
steady but quiet basis
in the Boston
be the
Chicago Stock Exchange
209 South La Salle Street
MINNEAPOLIS
Business in domestic wools
tinued
I
Member
better grades for forward de¬
livery.
.
& Company
INCORPORATED
slight increase re¬
ported in mill buying with de¬
mand principally for the medium
a
interest with retail vol¬
105
SOOTH
last week
slightly above that
k>i the preceding week and mod¬
erately above the corresponding
LA
SALLE
&
GERNON
Chicago
Board
of
Trade
Public
STREET
Utility
CHICAGO 3
Industrial
Rail road
Underwriters and Distributors
Lwted and Unlisted Stocks and Bonds
General Distributors
—
—
Municipal
Municipal Bonds
Fidelity Fund, Inc.-
Pant H.Davis
Established
Members principal Stock
10 South La Salle
Trading Department
Tele. CG-405
INDIANAPOLIS
?•
a.c.allyn™company
Incorporated
1916
Exchanges
Street, Chicago
Syndicate and Municipal Dept.
Tele.
New York
Chicago
CG-934
Milwaukee
ROCKFORD
Waterloo
•
v.o'
—r
wuW
of
?
;.i
vi:
Boston
Minneapolis
a
I
Philadelphia
Kansas City
Peoria
Omaha
Flint
JC
?6
t.\.
the
'• *•';
(Continued from page 74)
..
promise to exceed that record. Women do
terns unless they actually sew at home.
curities
period of mild recession it is
unlikely that
a
machine sales opportunities would dwindle to
any great extent.
For under belt-tightening conditions
the sewing machine really comes into its own and proves
its economic worth as a greater helper in the mainte¬
accounted
ments and
demand will keep industry
territory are that consumer
'operating at high level and that retailers will be busy
filling customers' requirements.
There will be full employment until
there is
surplus of goods, which in
a
probable
most lines does not appear
.
•Up
the present, increasing
to
eration,
to
one
creases,
Russell
Herman
gross
•L
tions for the next six months and
consistent >leveling
off
of
during the last half of the
not
look
tion,
for
but
any
and
fearful of
am
-up
slowing
a
Inflation
is
a
opinion, much
my
feel
a
to
curb credit and to do
so
Lytle
L.
and, you might
say,
judg¬
just good horse sense.
glad to see the support of Government
Bonds above par withdrawn, but I am definitely of the
I
am
very
opinion that all Government Bonds should be definitely
supported at all times at par. After all, that is the back¬
bone and the credit of our great nation.
PAUL
RUSSELL
S.
President, Harris Trust &
/
clear
bear
the
addition,
than
it
was
of
close
banker
uncertainties
as
watching.
is
mindful
the
course
of
of
markets, federal debt re¬
policies and the possibility
of credit restrictions, any of which
have an important bearing upon
operations and earnings. Neverthe¬
less, all things considered, the out¬
look at this time appears to warrant
may
Russell
at least as
of optimism.'
standpoint of earnings it
moderate degree
From
S.
a
banks, especially
those in the large cities, may make
favorable a showing this year as in 1947. On
now
appears
are
expected
expansions by existing industries now
announced are completed and new indus¬
as
under way or
tries
new
planning to locate here, materialize. Thousands of
are being built and a recent survey indicates
homes
that future
activity in this field is expected to be even
greater., /
that
In
■-
to
order
*
V
production.
this
goods
Henry L'. Schenk
which
as
at
and
are
New York { during the next
two or three years.
Thermoid's
•
agencies in bringing about a rise in
inaugurating pol¬
icies that will tend to narrow the base of our credit
Federal monetary
the
short
term
structure.
It is
tration
interest rates and in
hoped that Congress and the Adminis¬
will, within a short time, find other means to
potential.
;
•
attractiveness of the better return from short
reduce the inflationary
'
The
term
lative
with a contraction of
banks from making specu¬
Government bonds together
the credit base should divert
loans,
and'1
may
prevent
banks from becoming
is
1948
for
outlook
probably
more
en¬
competitive standpoint than it has
been in years.
Everybody is conscious of the infla¬
tionary spiral in which we find ourselves because of the
theory and practice in Washington
that you could raise wages and hold
prices down. When the spiral will
recede,
or
when the "bust" will
couraging
from
a
we
come,
With
a
do not know.
diversification of products
reaching the Automotive, Industrial,
Textile
and
.Oil
Field
industries,
certainly
take
an
we
at Thermoid should
optimistic view of business
possibilities for 1948.
-
addition
[n
nal
to supplying as
'
; |
origi¬
equipment brake linings, clutch
facings, fan belts, radiator hose and
carpet to most of the car manufac¬
turers where
gives
promise of steady activity in our basic industries but
unfortunately prevents proper price stabilization. The
only effective steps taken thus far to put some brake
on the inflationary process has
been the action of our
Company
President, Thcrmoid
durables,
condition
SCHLUTER
E.
FREDERIC
That point may be
year
in some lines,
This
they
as
its gener¬
ating plants, constructing new substations, adding new
holder capacity, and generally expanding and strength¬
ening its electric and gas distribution systems.
This
program will cost the company many millions of dollars
in demand abroad as well
home.
demands
develop, the company is building additions to
1948 is good.
consumers'
increased
meet* these
probably in apparel and other soft
goods. It is not quite so clear when
the goal of price stabilization will
be attained in the realm of capital
In
the money
Paul
for another busy year.
troubles, resulting in greater
reached
a
tirement
a
the Gas & Electric Company is preparing
Greater demands for its services
In Baltimore,
w
ultimately become competitve, lies
in the continuation of a high volume
Business activity continues
at very high levels, but there are
various danger signals on the horizon
such
Schell
closed without satisfying the wide¬
spread demand for the products of American industry.
The high volume of production, the rate of employment,
the amount of Government spending seem to give assur¬
ance
that economic prosperity will
continue well into
1948.
However
cheerful the outlook, it would be far
better for our general welfare if the
factors leading to inflation could be
curbed, and if we could reach the
point of price stabilization.
Our one
hope that prices may
year ago.
will
prob¬
expansions in the face of rising
money costs and the difficulty of securing new risk cap¬
ital in adequate amounts.
Regulatorv authorities can
aid in solving the financial needs of utilities by allowing
them to earn a return on their investment adequdate
to attract new capital at reasonable cost.
The year 1947 has
creditably, and they now look forward to another vear
in which the outlook is, if anything,
which
H.
Herbert
President, Trade Bank and Trust Company,
year
less
that they will recognize the concurrent
of financing these
lem
Labor-Management rela¬
much better
Savings Bank, Chicago
somewhat
significant that regulatory authorities are aware
great expansion in plant facilities and
it is hoped
the provisions of the Taft-Hartley Bill give them
protectiqn which they have long since needed. This ?
1947 was not an easy one for the banking
business, for it was a period characterized by adjustments
and uncertainties. However, banks acquitted themselves
T The
is
It
above
in
earnings.
,
rates, fuel prices, and other
have already forced
many
of the need for a
inflation
result
Schmidt, Jr.
ating costs continue to rise.
practical to attempt to stop
through government
it
rate only
costs of
utilities,
particularly in the manufactured gas field, to seek
authorization to increase rates and to establish fuel
rate adjustments to automatically compensate for the
rising costs of coal, coke, and oil.
Many more requests
for rate increases by utilities can be anticipated if oper¬
HENRY L. SCHENK
will be chosen to
someone
lead this nation who has and will exercise sound
ment
the
William
needed at a
if they are al¬
money
new
Higher wage
doing
business
industries must follow.
Salsbury
anything regardless of high prices. In short, we are too
■j far away from the old school, I sincerely hope that when
over
of
is on the upgrade and
utilities will be able
lowed adequate
This will
increase pattern
Therefore, the business outlook for
:
is
wage
in
^be brought to realize the very seripus danger of a practice when almost anybody can buy
■the national election
a
get the
reasonable
production/
The chief potential disturbing factor on the horizon is-'
the possibility of government again imposing war time
restrictions. Although it will be much discussed, I do
not believe Congress will support such a program.
/ >
that the general public will
way
the sale of
from
come
...
nite steps should be taken nationswide
to
basic indus¬
tions and in turn less labor
defi¬
more
to
follows that
it
points to infla¬
tion rather than deflation. I do not
All
should
;
the inflation in the near future.
In
have
will
.
other
the
believe that certain powers
5 Will bring the necessary influence to
I jstop
which
that
,,and. I
'
Co, Inc.
business outlook for 1948
,
production
with demands:
a defi¬
much;t earlier.
serious thing.; today,
required to carry on this huge con¬
struction
program
must be raised
through the sale of securities and a
substantial amount
of this money
black markets.
The only cure is production and more
production. Increased production on a world-wide level
is the only defense against inflation. 1
1 ; '
" • ,"
It is evident that the rank and file of labor realizes
business'
-1 do interrup¬
down
for m e e ti n g the
demands are requiring the
expenditure of large sums of money
for new plant and distribution facili¬
ties.
A large portion of the funds
Preparations
controls. Government controls create
jpossibly in the early 50's and
nite
services
these
of
use
greater
coal and steel, and even
as
in
this
real depression
a
ord-breaking
in 1947.
production.
result
do visualize
I
gradually catching
1948
will demand higher wages.
year.
sudden
expanding.
Demands for electric and gas service in
are expected to exceed the rec-1
is
automobiles, will remain strong.
(3) Unions of the basic industries
continuation of present condi¬
a
continuing growth.
Application of these services to
new
uses is developing and usage in established fields
cost of money
(2) Demand in the
i, In my opinion, as an overall picture, I believe that
11948 will be a very good year financially and businesswise. However, f do not think there will be the money
jnade by industry in 1948 that was made in 1947. I look
for
and gas industries is one
The outlook for the electric
bright. My only fear is that there will be an oVerdose
welcome suggestion of defla¬
tion.
All
the fundamentals exist for good
business
tries such
President, The Marine National Bank of Erie, Pa.
?
JR.
Gas Electric Light and Power
Company of Baltimore
equity securities if a sound capital
structure is to be maintained.
The
still confident that the
am
our
SALSBURY
v
.
.
of
(1) There will be substantial Eu¬
ropean aid under the Marshall Plan,
regardless of the method. This Dol¬
lar Credit will all be used in the
American market in competition for
"
L.
SCHMIDT,
WILLIAM
-
Consolidated
President,
II. H. SCHELL
through 1948.
Reduction of government expendi^ures, coupled with tax reduction, is necessary in the
Writer's opinion, if this nation is to escape; the evils of
•Wide inflation and collapse of national economy.
LYTLE
:
of inflation rather than a
tries where this is the case.
,
'•
involving undue risks.
is
without asking for in¬
of the very few indus¬
"get by"
loan
a
increases in
living costs.
continue to be present in some
President, Sidney Blumenthal &
I
coupled with efficient op¬
has enabled the companies
revenue,
less stable income. This was
personnel readjustments and
the extent that an
?|
their financial stability.^
maintain
to
the greater attractiveness of Government short
term obligations will reduce the temptation to grasp at
cycle.
Indications are that there
will be another spiral of wage de¬
mands,
with
still ' further
rising
prices—all of which spells further
inflation.- This spiral will make it
necessary for most electric and gas
companies to increase rates in order
this year.
some
rates in offsetting the rise in
at least it will help to bring
degree of stability in bank earnings. At any
uncertain,
rate,
parts from the artificial
both gas and electricity will continue
during the year. Indications in this
increase
the
about
increase in loaning rates de¬
situation which has existed and
permits a more realistic appraisal of the risk factors,
I believe the trend to be a healthy one.
Even so, the
demand for loans is likely to be great, and rates are by
no
means
the only consideration.
I believe that the
banking community must continue to scan its loans care¬
fully not only for quality but also with a broader view
to determining whether or not they may be prejudicial
to the economy as a whole at this stage of the business
To
is
overhead
ing to stabilize it.
Board, Rochester Gas and Electric Corp.
combating inflation. Insofar as the bank in*
is concerned,
the better interest rate
While the general ef-f
of
of increased interest
feet
that the expense
the completion of readjust¬
increase in personnel efficiency are help¬
an
greater degree of con*
thus to one potent
should be of material assistance.
is flattening and that
curve
a
account
come
retirement
bank-held
there are indications
in 1948,
measure
The demand for
on
f
part by
While these factors may
RUSSELL
HERMAN
Chairman of the
a more or
in
for
expansion following the war as well as by
salaries and wages to meet the higher
standards.
living
good
against
expenses
When living costs in
general as well as taxes are high, and the squeeze on
average incomes is serious, the worried homemaker can
assist herself mightily by making and making over much
of the family's clothing and house furnishings. The sew¬
ing machine is her only creative home appliance.
of
means
While
commercial and financial loans.
on
lead to
can
servatism in bank lending policies and
government securities, I believe that the net effect upon
income may be favorable.
On the other hand, banks in recent years have been
faced with the troublesome problem of rising operating
sewing
nance
and
portion of these gains may be offset by
during the year of some of the longer-term
a
not buy pat¬
Even in
hand, they have not yet realized the full bene¬
rates on short-term government se¬
one
It
over-extended.
fits of the increased
example, unit sales of the latter zoomed to a new high
of more than 120 millions in 1947 and sales this year
the Year
Speaks After Ike Turn of
Business and Finance
.
Thursday, January 22, 1948
FINANCIAL CHRONICLE
&
THE COMMERCIAL
(376)
duction
Frederic
E.
Schluter
distributors
and
Thousands of
of parts.
seem
is
products,
through
dealers
cars
now
in
a
for
use
greatly increased pro¬
all of these
anticipated,
except carpet, are sold
world-wide network of
the
replacement; market.
will require replacement
As the price of new cars remains high, people
run their older models that much
determined to
60% of the cars on
jobs.
Our industrial rubber products will find increased
usage in factories, construction and mining and in the
oilfields. Hard rubber products and plastics manufac¬
tured in our Canadian factory and asbestos textiles pro*
Recent surveys showed over
highway needed brake re-lining
longer.
the
(Continued on page 78)
Volume
THE COMMERCIAL
Number 4666
167
&
FINANCIAL
State transfer taxes (for
prices, having made a
all the scarecrows and the over¬ major
peak in the summer of
hanging of equity financing pre-, 1946 and projecting towards a
elude in my opinion any real bull long term major bottom towards
market
during
security
combination of
a
first
the
1948.
the
Now
why
months for
We have
the
pick
it
summer
major turning point?
cyclical reason which
a
is this particular
cycle
a
as
The
being
and
" The
primary.
world
opinion
been low in
risk capital
has
fiscal confidence
.
.
.
forecast
ahead
has
for
some
still.
dence that
we
wild curpency
timing
inflation
of
I
What
1948,
Earlier in this
trends
can
weak
this
in
politically between
ling
all
during
,..
ible,
June
now and
penses
going to miss the boat.
almost
of
equal
Washing¬
ton
political sources of excellent
quality believe at the moment Mr.
Truman could not possibly carry
more
than
states
outside
maximum
a
of
the
and that the third
.
.
party incurs1 on
gains.
by June or July the
Winning chances of the Republi¬
t
Suppose
nominee
can
are
as
certain
those of Roosevelt in 1932?
the
(Special
SAN
to
was
partner
Lynch Adds
The
Financial
the
has
Ji\
staff
Kenower
Co.,
of
been
Merrill
of
to
Pierce, Fenner & Beane
Jones B. Shannon..
is
the
ing.
V
'' \V
Fred
and
tary
new
MacFar-
lane
Diego Trust & Savings Build¬
A.
is Secre-
Blackwell,
Director.
/
is deduct¬
publication!
are
Cer¬
necessary
OVER-THE-COUNTER
ex¬
do
no
SECURITIES
Pine
E, Pollock &
Street, New York City, deal¬
States Government,
Out
This
on
municipal, housing author¬
ity, and corporate securities, an¬
nouncedthat Conrad; W, Rapp has
*
>;<
to
supposed
was
them
with
associated
become
in
department. Mr. Rapp
formerly with Blyth & Co.,
SWIFT, HENKE & CO.
di¬
end
rectly above. Your Editor,
ever,
•
Limb Again
a
in United
state,
the
:|<
.
Co., Inc., 20
ef¬
could
harm.
Wm. E, Pollock & Go.
Wm.
this
letters to
few
T'
how¬
had different ideas: "Noth¬
MEMBERS
SOUTH
135
-
LA
CHICAGO
STOCK
SALLE
EXCHANGE
CHICAGO 3
STREET,
Telephone: FINancial 2800
'
ing doing, Loshar," he said, "The
'Chronicle'
is
in
interested
not
sales
was
the conditions of your
stick
you
Inc.
Benjamin
out."
it
correct
neck. Let's
Was
S.
M.
telling
in
R. R. Kershaw Withdraws
Kershaw will retire
partnership in Hawkes
& Co., 14 Wall Street, New York
City, members of the New York
Stock Exchange, on Jan. 31.
Ralph
from
R.
readers
our
will
leap
"stocks
that;
this year?"
All
the
right here goes.
If there is any
market
Shillinglaw, Bolger & Co.
move¬
ment of real importance
it will
be
caused by
MEMBERS
(or, as Dow theo-
CHICAGO
STOCK
EXCHANGE
CHICAGO
as
BOARD
OF
TRADE
Could
market
begin its ad¬
discounting No¬
vember events? If the important
stock
towards
vance
Michigan and General Market
thinks there is a good
chance, it will come in. It is al¬
ways the big capital which starts
every bull market, and it is the
money
little
in
money
which
comes
in
later
a
UNDERWRITERS and DISTRIBUTORS
Securities
volume
mass
at
Municipal and Corporate
date
Private
Wire
to
Detroit
and New
INVESTMENT SECURITIES
York
when the underlying facts become
more
visible
to
the
Bull
Political
naked
Market
eye.
firtST OF^ficiiiGAx Corporation
Ahead
MEMBER DETROIT STOCK EXCHANGE
Looking into the crystal ball in
this fashion and dovetailing it into
pattern of cycles, everything
seems to point to a real bull mar¬
120 SOUTH LA SALLE
South La Salle Street
135
the
CHICAGO
3,
ILL.
Teletype CG
STREET, CHICAGO 3
Teletype CG 1070
Telephone State 5850
Telephone Randolph 5287
ket, starting sometime in the sum¬
mer
months and running along
for at least a year, and maybe two
949
NEW
DETROIT
YORK
years.
Having rationalized in
my own
why the market should not
go down or up more than 5% to
10% during the next five months,
and then, broadly speaking, rise
for the next year or two
al¬
low me to dwell for a paragraph
or
two on our .cyclical studies
Way
.
.
The Wisconsin Company
.
Member
KETCHAM & NONGARD
Investment Securities
of Chicago Stock Exchange
Much] work
many,
has been done by
and recently several books
'TELEPHONE
DALY
105 West Adams St.,
0525
Chicago 3, Illinois
published. Anyone can prepare a
TELETYPE
cycle study . .
it depends upon
where you start it. We have been
MILW.
291
.
MILWAUKEE
V
\
active in this field for many years
prior to its popularity, and have
tried most if not all of them. Our
h-
pattern, combin¬
ing a relationship of nine years
periodicity with 41 months in¬
/■*-!
V
;;v V
;
.
V;;
:V
.•
Underwriters and Dealers
•
most, successful
duced
us
Underwriters and Distributors
of
BONDS
Investment Securities
to issue bulletins in the
MUNICIPAL BONDS
Spring ; of
1946
anticipating a
sharp break in security prices be¬
tween
the
summer
1946 and the
followed
1948
and
and
fall
of
spring of 1947 to be
by
recoveries
Branch
Offices:
MADISON
OSHKOSH
According to this cycle pattern,
have
been and
are
still in
uod
;
a
j
long term major down swing of
REVENUE BONDS
Teletype:
Telephone:
WAUSAU
Dearborn
we
•
Specialists in Securities of Wisconsin Corporations
during
1949.
STOCKS
•
;
i'll>$
orii
CG
6363
i
>
im'.i.r
O M
&
Presi-
firm. Donald
D.
San
a
in
Miller,
Chronicle!
DIEGO, CALIF.—Thomas
Cunningham,
-
Shannon,
invest¬
an
i
Mr.
.
into Oregon, Washington and Cali¬
fornia is most favorable for Re¬
publican
r
business.
travel¬
fect to your Congressmen
five
of
South
Conrad Rapp Wilh
ers
importance. One does not have to
be particularly astute to divine
the reason for Mr. Truman trying
to out-left Mr. Wallace.
u
c
e
ties
will,
who
of producing taxable in¬
A
come.
Obviously the .strength of the
Republican nominee, whoever he
may be, will be of prime impor¬
tance.
The strength or defection
of the third party movement un¬
is
s
limb
Lynch,
a
as
to
in the
you
if
(eg, dividends), should be
as deductions from
in-#
come
engage
I'm
my
on
or,
Buhl
Building,
allowed
believe may lay the ground for a
definite market turning point?
'
Wallace
this
to
sions, which
to create the conditions which we
der
out
go
bears,
tainly, then, brokerage commis¬
early strength will mean that
you are
downward,
offices
the
is the cost of a subscrip¬
as
tion
fear
year
that
etc.,
expenses,
are
ex¬
such
examples
ment counselor's fee
at the same time there
need be little or no reason to
should happen
or
purchases
obvious
salesman's out-of-pocket
spells during the next five
months
the importance
stressed
political
attractive
income,
incurred for the produc¬
tion of taxable income. Besides
should be
to
the
country
in
added
penses
the cycle pat¬
or
Company
with
major change is
be
Merrill
M.
legitimate
as
from
deductions
accurate.
so
the
allows,
ernment
Shannon&
formerly
As I understand it the gov¬
this.
the
Be¬
bear behind.
a
government
approve the policy of deducting
brokerage commissions from in¬
come. There is nothing radical in
believe in the political
tern, or both, securities
stupid
or
not be
need
rationalization,
not
confi¬
be
swings,
broad
with
this
any
to
forced
this
in
Chronicle)
Financial
suggestion,
My
that
is
that
likely
worth while saving
traders.
then,
late, but when we are
or
with
So if you
not headed for
are
business deflation.
article
will
There must
tive
some
years,
previous
dealing
good
weather
element of cer¬
prices
security
tainty,
stand
back
conditions
might be available to many ac¬
.
and if for the first time in 20 years
the
go
The
bad one, and because internal
a
transfer
handled in
be
this way, a
1948
Spring of
June
or
and in both major
and minor turning points have a
tendency to be several months
been onerously handicapped
by heavy taxation
"big busi¬
ness baiting" has been a popular
political' sport.
Stocks rise and
fall on hope and expectations
.
May
studies
The
fifty odd
has
.
in
could
taxes
State
and
missions
up
international rela¬
economics.
to
DETROIT,. MICH. — Jones B.
Shannon
has
formed Jones
B.
major change in the
foreign situation is likely to be
brokerage com¬
If, however,
change,
any
such
months.
are
home
cause
capital gain tax reduction.
a
as
approaching
summer
turning points
down again in the
1950.
.
.
.
sometime
financial
the
near
exact
handle
to
our
or
(Special
believe,
us
major
a
tions
this way, merely letting
them ride along with commissions
phase of the
should be
we
we
is secondary, and a political rea¬
son which has all the elements of
trouble
the
take
have
either in
them in
of this
cycle
type is interrupted by a sizable
minor contrary upward cycle, and
Point?
Turning
don't
would
foreshadow)
many
traders,
because of the
relatively small amounts involved,
How¬
1950.
of
major
every
ever,
Summer
months
latter
the
of
half
deducted
be
can
rists
example)
from income,
i
Forms Own Detroit Go.
(Continued from page 5)
(Continued from page 4)
Ergo,
7T
Jones B. Shannon
Loshar's Slate for 1S43
Looking Into the Crystal Ball
market.
(377)
CHRONICLE
385
78
(Continued from page 76)
.
in Charlotte, N. C., are
Southern Division
duced at our
in
increasing demand.
It was with confidence in
,
deep personal satisfaction at the protection
the families of insured men and women
*
;
.
and
enterprise that we
plant in Utah. This
dollars. It should
result in quicker service for our customers in the west*
ern
states, as well as those in the eastern and south¬
eastern portions of the country by relieving our Trenton
factory and our insufficient labor situation here.
manufacturers, we are faced with
conditions and problems that greatly affect our overall
planning. Continuing shortages in vital materials—
spiralling costs of raw materials—burdensome taxes—
the effect of the Marshall plan on the supply of required
raw materials—all
add up to the many problems that
must be taken into consideration in forward planning.
We see no possible labor trouble ahead for 1948 for
Thermoid. We think this is a unique statement.
Nineteen forty-eight will be a Presidential year and
there will be a great deal of politics played between the
President and Congress in the first four or five months.
How much this will influence business, or the public
attitude, and the state of confidence is very conjectural.
In our form of state socialism, Washington events affect
business conditions and thus deserve mention.
•
Thermoid anticipates better business for 1948. No one
should predict beyond a year in an er.a of changing
other
-
large
>
world conditions.
;
■
.
.
A Thanks to "The Chronicle"
fyish our friends
for this opportunity
in the Industry
to
happiness and health
1948.
in
The Columbian National
of the Board,
'
Insurance
Life
Company
year ahead will be a very
The problem that had worried
us most of all in
1946 was that of strikes in essential
industries, but the passage of the Taft-Hartleycleared up that situation greatly with
tremendous protection for the public
generally, and for the betterement of
I
feel
strongly that the
satisfactory one for us.
-
"
the long run.
Employment is the highest and the
'highest paid in our peacetime his¬
labor itself in
people are living better
than they ever did before in spite of
the high cost of living.
The partial failure
of our corn
crop, the terribly severe winter in
the British Isles and the dreadful
drought
in
all
Western Europe
changed for the time being our hopes
for decreasing this cost, since in com¬
mon humanity we have had to give
great help out of our comparative
abundance to the people of Europe;
their needs will be met in part by
tory,
Francis P. Sears
"
and
which should guarantee the prosperity
of the farmers here, and prosperity among our farmers
is the foundation of general prosperity for us.
^
,
y Without any real
evidence to guide us,/we were in¬
clined a year ago to expect that there might be some
recession in the later part of 1947 as there was about
two years after the first World War, but thus far there
is absolutely no evidence of depression and the main
a
get out of hand and cause
magnitude. The best way to avoid
worker shall do his utmost to increase
that prices may
buyers' strike of
this is that every
production.
■
The indications of a great
mean
a
/
population
willing to work. Only
increase in our
prosperity for all who are
short time before
the second
•'
^
World War people were
position, had crossed
and must reconcile
ourselves to almost no increase in population and no
opportunities for new ventures. These people have been
proved utterly wrong since the immense increase in
marriages and births in the last two or three years
guarantees a great increase in population, and the tre¬
saying we had reached a finished
our
last boundaries of expansion
demands now for money to finance new indus¬
tries and to build up the old ones indicate a great future
for US.
/"T"'
:'Vv:.'r
In the field of Life Insurance, we rather expected that
Government
the program.,,. If the
of
part
as
it
is to rush
headlong into markets not able to supply present domes¬
further disruption of these markets will take
tic demand,
Exchange
particularly
place.
■' v.v....y%;
~
••*•>
•
v
v'.•*
gets -V The handling of policies, affecting increased production,
but
curtailment of advancing prices and the ERP prografn,
every, individual in this country is in- ^ therefore,; are the important factors which will deterjpine
can be no mistake about this.
The pay
business results for 1948. For the present,- caution irv
making commitments appears necessary,
about tax revision as Congress
The subjedt may appear threadbare*
Much is being said
under
way.
of
welfare
the
There
volved.
envelopes of
worker and the
every
sv; •. The present momentum, should carry the retail t>usi-;
y-U ness forwards atvits present level for the first half of
; >
the coming year, hut/what happens in the- latter part
of 1948, will be dependent;on the degree of economic
family depend upon
maintenance of a dynamic econ¬
income of every
the
' */
omy.
continue to have such
must encourage a
If we are to
an
economy
greater flow
.
v
we
stabilization which can be introduced during the months
immediately ahead;
of equity capital from
That is one of the
most vital responsibities which Con¬
gress now faces.
Without such a
flow of private capital, the Govern¬
private sources.
ment will take over
financing
of
^
That would
s?.
step in the nation¬
during the
and
Government
took
when the
the role
war
over
Emil
been put
upon
of the excessive tax load
the shoulders of those who
provided such funds.
There never was a
time in our nistory when capital was so necessary, and
there never was a greater shortage of capital from indi¬
vidual sources.
It is the urgent responsibility of Con¬
the tax burden to permit a greater volume
The nation needs to develop and
expand the incentive system of private enterprise and it
can best do this by a scientific revision of the tax struc¬
ture to foster deserving business enterprise.
We are not concerned merely with, the problem of
reducing our taxes;
What really confronts us is the
necessity of developing incentives which make for. a
gress
to reduce
of private
investment.
terms of jobs, at good wages.
prosperous national life, in
Our standard of living will
take
the
steps that
inevitably decline unless we
essential to the; freeflow of
are
capital.
'
'
,
1
'
Capital and technical know-how have teamed up in
this country to produce the highest standard of living
the world has ever known.
This team-work must con¬
tinue to maintain and
improve our economy.
That
economy
through the generations to
has been built up
point where it is buttressing much of the rest of the
But if we falter, there is no one in all the. world
a
;
:
that the state is based
economy, supplemented
■'./.' "A • / / :
Deposits. will, not. continue
upon
Bank
increase
to
private investors were traditionally accumstomed
to take.
This is not tolerable in peacetime.
c
We have seen the source of private investment funds
has
-
lowing trends, bearing in mind
Schram
which
which
/
an agricultural
;'V materially by the oil industry:
-
gradually drying up because
-
yresideni^ The Liberty, Rational Bank, Oklahoma City i
^ largely
capital was displaced be¬
Private
/
SEWELL
A
:v /The .outlook in the field of banking in Oklahoma in
v
1948, as it appears to me, will be featured by" the fol-
alization of industry.
fore
:
.
FRANK
the responsibility
business.
be the first major
:
as
they have
in recent
may even show some
small decline because of the agricul¬
and
years,
tural and livestock prospects at
time.
tion
this
The drouth in the wheat sec¬
during the past fall has made
that of
prospects considerably below
The loss of fall and winter
pasture from wheat fields has ad¬
versely affected the livestock indus¬
try in this area. As a matter of fact,
the poor wheat pasture together with
the
high cost of feed has caused
last year.
marketing
considerable
of
animals
prematurely and, in numerous cases,
these animals are not replaced
by
It should be said here,
however, that prices of farm products
Frank
A.
Sewell
the growers.
will continue to',
high and may go even higher, especially on meats,/
because of the promised shortage. The tremendous do-,
be
with the present intention of,
the Marshall program or some other
plan, should maintain at least for some time farmers';
prices at or near the present level. These prices will
serve
to offset prospective decreased production and,
if prices should increase materially, they-may more than
mestic
demand,
coupled
aiding Europe under
offset and even boost bank deposits.--Con-r:
siderable wheat is still in the hands of farmers. Most
serve as an
retail establishments and most manufacturers, bid fair
to come to our aid.
Americans must depend on them-/ to continue at or near present levels,
selves.
We have it within our power to do this—to help
Bank Loans will increase in 1948 in spite of a more
ourselves and remain strong if we follow sound practical
conservative loan policy on the part of bankers generally.
world.
The cash reserves
economic policies
up
the Marshall Plan,
fear now is
,
Recovery Program,
relates to consumer items which are to be sent abroad as
customarily
FRANCIS P. SEARS
Chairman
President, New York Stock
_l?
*
,
European
the
of
furnished to
through the
. *. '
1
SCHRAM
EMIL
our
Like
claims.
payment of insurance
the future of Thermoid
competitive system of free
built another modern manufacturing
investment will total three million
in
^rn of the Year
Speaks After the
Business and Finance
,
Thursday, January 22, 1948
CHRONICLE
FINANCIAL
&
THE COMMERCIAL
(378)
HARRY
President,
SCHWARTZ
H.
National Department Stores
the
Corporation
has gotten off to a good
with the problems ahead.
Retailing during the past year
start in
readying itself to cope
its inventories, took measures to
improve and restore those operating efficiencies which
had fallen into disuse during the war
and oiled up its merchandising and
promotional machinery in prepara¬
tion for the intensified competitive
condition already set in, but by no
means having reached its full force.
This competitive condition while
generally applicable to retailers does
not apply to manufacturers, and re¬
tailers are therefore in the anomalous
position of buying in a sellers' mar¬
ket
and
selling many items in a
It
wisely
cleaned
up
be
and to
conceivable outlay calls for more,
cannot come
loans seems
loans arid on
Harry H. Schwartz
operating
nigh impossible.
well
bonds.
for
in 1948, both on bank
There is little doubt in
the minds
this score. Even our Federal Treasury
Department through, its "pegging" policy on U. S. Gov¬
ernment securities ha$ acknowledged the fact.
of
anyone
on
Profits in the
the banker
nomic
well-mauaged bank in Oklahoma where
&ell and properly informed of eco¬
himself
conditions
what they were
~
period
mistakes were
Such every¬
day occurrences as overbuying, over¬
spending for advertising, overpricing,
overstaffing, poor selections
were
ordinary
mendous
Rates will be higher
Interest
dollars, all of which
out of current earnings. So the demand
to be definitely on the increase.
as*
fhey. develop, should approximate
1^47.
in
WILLIAM J. SLIRODER
President, The Peoples Bank &
war
institutions have built
operate a business, to.make repairs and improvements,
build new platfts or additions. Just about every
to
.
buyers' market.
During the five-year
theft people and
in the recent lush years are now being used up with
consequent result that more mank borrowings will
a necessity,
it costs more than ever before to farm,/
The banking business,
Savings Co., Cincinnati
in my opinion, will have to com¬
promise-between perfbrming 100% of its duties as the
basic credit machinery of the country and the necessity
of
applying brakes t'o the current, inflationary
when liberal credit
trends.
There are times
to sound institutions, f aggressive in
off in the demand for insur¬
practically non-existent.
v. vy
"// their attitude toward the future, is
1947 after the tremendous increase 1
The present period and the period immediately ahead
sp.ufld banking practice. It might be
in life insurance production in 1946, but we have done
witness the return of these usual run of the mill probjust as well as in 1946, and with the realization by our
lems of the department
store business ,and calls -foF' *equally sound in times such as
clientele (which is almost the entire population of the
realerting organizations for resumption of prewar watchbut might now be to be offered the
The banks seem
country) that on account of probably permanent higher
fulness to keep these errors at a minimum.
choice between refusing sound loans
cost of living, more life insurance is needed to protect
Of major concern to retailing and to business generally
with inflationary tendencies or sub¬
the family, it is likely that more will be written in
are advancing prices.
The danger of a.continuance of
mitting to enlarged supervisory con¬
the future. Strong evidence of this is the fact that the
the present trend is too well known to need comment.
trol through the expansion of the
average size of life insurance policies had been increas¬
With the new round of wage increases in major indusauthority of the Federal Reserve
ing for several years and increased very materially
tries alraa^y planned, will inevitably come fresh price
;
in 1947.
/ advances with its headlong rush to hasten the "boom System..Banks will also be in the unen¬
We had some worry about interest rates, since the
and bust."
Non-political government leadership in the
viable position of attempting to con¬
Life Insurance companies patriotically invested most of
direction of more work for more pay, with perhaps a
trol their clients' inventories
and
their premium receipts all through the war in U. S.
temporary suspension of those provisions of the wage
expansion programs in anticipation
Government Bonds upon which the yield is not satis¬
William J. Shroder
and hour bill relating to overtime pay while full employ¬
of possible
deflation.
All of this
factory, but the tremendous demand that is developing
ment continues, would possibly result in the breathing
spells a difficult time for bankers
for new capital investment is improving interest rates
spell necessary to balance production off with demand,
which might or might not reflect itself in the profits of
now, so that I feel we shall not have to worry about x
and without increasing costs. Once full supply is attained
their operations. •
that point during 1948.
.
prices would soon find a proper level. t Maintenance of
Banks will assist materially in the deflationary project
It seems evident, therefore, that we may look ahead
high spending power with insufficient merchandise to
of inducting the purchase by individuals of Government,
With great confidence to successful business in the year
satisfy the demand can only aggravate and postpone the
there
ance
would be a falling
.
during the year
ill-advised,
to come.
We are very
proud of our profession and con¬
the miracle
and with
tinually look with delighted astonishment at
of building an estate through life insurance,
bonds.
inevitable.
Retailers
also have
a
huge stake in the
functioning
*
these,
..
Deposits should not show
much change; interest
rates
Volume
167
Number 4666
'■rrV'V';'
THE'COMMERCIAL
and Finances
inclined
are
to
firm; expenses are unquestionably in¬
creasing. Banks as a whole will probably show a smaller
net profit, but I do not think the decline will be
such as
.to justify any concern.
c.
President, W. A. Sheaffer
During the
fountain
a
1948
year
will,
we
industry,
pen
well
as
I
believe,
In
modest
the year
that
process
in evidence
were
during
1947, particularly the latter
>
;
•
'part.
1
The
war
immediately following. brought into.,
the fountain pen
industry many new¬
comers, a large majority of whom
gained entrance through a door that
.
was
'
able
Others
lured
were
attractiveness
of
field
that
^temporarily lacking in the keen
h-; I cannot
ness
'
be in
C. R. Sheaffer
brands.vPublic
attempt
store
.
many
years
to
I
ac-
our
strict
goods, with
com-
to
seems
an
think
assistance
•
it very
to
inflation
that
be
and
course,
well.
as
What the year
one's
any
but
guess,
rates
1948 will bring is, of
there
is
good
and
to
reason
rendered
faced
Europe
will
and
make
Islip Stadium Stock
E. P. Frazee &
Co., Inc., of New
offering
is making a public
today (Jan. 21) of 75,000 shares of
$l-par
common stock of
Islip Sta¬
dium Corp., operator of a
midget
auto
racing and sports stadium in
of Islip, Long Island.
priced at $2 per share.
The corporation, formed Dec. 17,
the
Town
The stock is
1946 for the purpose of construct¬
ing
and operating a sports sta¬
dium, completed the all-steel sta¬
dium
July, 1947 at a cost of
$100,000. It began oper¬
Aug. 2 last with the pre¬
ation
sentation
of
midget
The stadium seats
Proceeds from
auto
8,152
the
racing.
sale
of
struction
the
land
costs
purchase
due
of
and
this
con¬
payable,
26.552
acres
of
now i
occupied under lease,
and working; capital.
For the period Aug.
31, 1947, the
net
and
2, 1947-Oct.
company
reports
George P. Shotwell
should
news¬
likewise
oppose
the
re-estab-
with
loan
the
problem
rates.
We
of
should
increasing
welcome
service
this
as
a
charges
further
R.
interest
Perry
I
Shorts
a
well managed bank must earn
would
wealth
recommend
give
budget for 1948.
Government
that the
on
of the
their
to
Advertising will be
(Continued
profit.
a
banks
consideration
serious
page
a
Common¬
advertising
potent force not
80)
f
George
W.
Beaver, who has
charge of the New York
municipal
bond
department of
PHILADELPHIA, PA.
O.
Barnes
has
with Kennedy
become
—
Joseph
associated
& Co., Land
Title
Schoellkopf, Hutton & Pomeroy,
vice-president of
the firm, it is announced.
The
has been elected
company
also
announces
the elec¬
THE
tions of Herbert C.
Stearns, Jr., as
assistant
vice-president in the
Buffalo office, and John P. Gahan
as
assistant
secretary
BANKERS BOND
S
INCORPORATED
1st FLOOR, KENTUCKY HOME LIFE BLDG.
in
New York.
Mr.
of
Beaver has been in
the
LOUISVILLE 2, KENTUCKY
charge
firm's municipal bond de¬
partment in New York since 1946.
Mr^ Stearns has
been
associated
with the company for many years
persons.
financing will be used for
Bankers
to his
state
Joseph 0. Barnes With
Kennedy & Co., Phila.
been in
in
than
more
in
loans during the coming year
also on high-grade bonds—including
Elects New Officers
to
opportunity to employ intelligent public relations. Prop¬
erly handled, I believe there will be little resentment
by our depositors and borrowers. They will appreciate
on
Schoellkopf, Hutton
York
increase
so
obligations.
E. P. Frazee Offers
credit
policies.
However, to be constantly on the defensive is highly
We must develop as
promptly as possible not
only a better understanding of banks but an enthusiastic
support of our banking system.
It will not be easy, for
with higher operating costs more banks will soon be
that
an
of
unsound.
: ■;'
'.'
proposed
the
Marshall Plan
for
flow
normal
their investment
difficult, if not impossible, to
look
the
papers.
effect.
I
always
that must
lishment of further regulations which would create more
centralization of power over banks and particularly over
re-
right to expect.
,v
7;';.
The calendar year 1947 has been a good one for our
'company and, I assume, for the other leaders in the
;
and
are
proposals
every
re-
value, the quality and the
dependability thai the customer demands and has every;
;
there
many
banker should
prices for Gov¬
early step in an
•'
also
be
opposed
by bankers. The con¬
stant, untiring efforts to further re¬
^
reduce the general price structure of
American goods while this plan is in
industry
banking to offset the propaganda
However,
economy to a more normal
under the
.
to cOme if the manufacturers
'
depositors convinced of the value
of
for nationalization of banks
by a few
zealots.
con¬
promptly criticized. The accusation
that banks have been responsible for
the inflation is nonsense and
of that product will offer the
'
of
marked checking of American busi¬
of
check
on
banking must be vigorously and
basis.
as a supplementary and necwriting tool will, I predict, continue throughout
for
support
again be
soon
trial for its existence. When that
time arrives, we must have millions
the present produc¬
of the country.
I do
facilities
policy, for he realizes
may
a
of
excess
ducing
ceptance of this instrument
and
any
banking
will
& Trust Co. of
the general demand for
as
ernment bonds is
jam sure, remain in considerable demand, in spite of the
1948
shorts
of the Federal Reserve Board in
.
essary
that
feel, however, that the recent action
'
'
see
in 1948
tion
^ f
returns of these leaders to: their
prewar, positions of
"prominence, competition will continue to eliminate at
'
least some of; the newer and less experienced firms,
v; Ball point writing instruments of top quality will, I
:
tient with this
Saginaw
r'paratively few exceptions,
r
some
perry
r
the
thought has been given to promulgating and promoting
better opinion of banking
by the public. The young
banker of today is
becoming impa¬
and of the world.
President, Second National Bank
.
.disappointing performance of
industry, to enjoy the utmost respect and
■
,was4;
petition that had always character-; ized this industry—a lack, or short- L
; age, that was caused by the absence
of the
industry's leaders who were
'-■
preoccupied with war work and,
later, with reconversion problems.
It is to be expected
that, with the
•
the
shotwell
past, bankers have placed too much emphasis
opposition to new laws and new ideas and not enough
on
the 1948 outlook for busi¬
on
be
com-
'
#
opinion
welfare of this country
extreme v
the
by
a
an
fidence of the markets of this country and of the world
arid to make an outstanding contribution to the economic
by the introduction of
point writing instrument. -*■)
ball
expressing
p.
President, Pennsylvania Bankers Association
In
earnings, will, at the same time, produce a
compensating factor—a greater stability that should en¬
o
opened
the
profit figure considerably
they found at the end of
a
one
over-all
and the year or so
years
the
of the Year
george
in the fountain pen field, one thing is certain:
competition will be keener than it has been in any pre¬
vious year,. As a result, the "weeding out" and "shak¬
ing down" processes I mentioned earlier will be hastened
materially and the industry as a whole will go through
a period of
readjustment that, while producing smaller
continuation of the "weeding out" process and of the
'"shaking down"
than
just ended.
a
profit of $5,157 before taxes
depreciation of $1,885. ■ At¬
as
manager
of corporate trading
in the Buffalo office.
Mr.
Gahan
INVESTMENT
became manager of the corporate
trading
department
in
the
New
York office in 1946.
The
firm's main
office is at
70
DEPT.
INVESTMENT
DEPT.
Joseph O. Barnes
THOMAS
Building,
H.
members of the Phila¬
delphia Stock Exchange, as man¬
of the trading department.
was
formerly trading
Niagara Street, Buffalo. The New
for
York
GRAHAM,
\V.
E.
J.
WOOD HANNAH, Asst.
Manager
BOHNERT
WILLARD
ager
He
C.
M.
P.
CHARLES
McNAIR
w
LEWIS
P.
M.
HOWARD
FETTER
C.
Mgr.
KING
CONWAY
D.
LOUDEN
ROBERT H. JOHNSTON, JR.
manager
Crouter & Bodine.>
office is
at
63
Wall
Street.
de
Haven
&
Townsend,
tendance at the 16
Wednesday and
Saturday night meets was 64,280.
The company is
exploring the fea¬
sibility of presenting professional
wrestling, boxing,., and football
during the evenings that the sta¬
.
.
dium is not
auto
i
Prior
to
VIRGINIA-WEST VIRGINIA
MEAD, MILLER & CO.
occupied with midget
racing.
.:
the
present
offering,
Members
NORTH and SOUTH CAROLINA
New
were
Stock Exchange
Exchange (Associate)
MUNICIPAL BONDS
Active Markets in Local Issues
Trading Mgr. for
Gorbrey in Los Angeles
<|LOS ANGELES, CALIF.—Cecil
J.i Downs
York
Curb
outstanding.
Downs
:
York
Baltimore Stock Exchange
100,000 shares of the $l-par com¬
stock, of
which
17,797 V2
shares
New
.
the company's capital consisted of
mon
has
become
associated
F. W.
Netv York
Correspondent
CARL M. LOEB, RIIOADES & CO.
CRAIGIE&CO.
DEALERS IN
with
Carter
H.
Corbrey
&
Co.,
^
650 South
-
.
ager
Mr.
of
Spring Street, as man-
the
Downs
trading
was
STATE and MUNICIPAL BONDS
department.
formerly
616
with
EAST
richmond
•
FIRST
MAIN STREET
NATIONAL
BALTIMORE
15, virginia
Tel.
Lynch, Pierce, Fenner &
Telephone 3-9137
Bell
Beane.
BUILDING
New York: WHitehall 34000
Bell Teletype:
Teletype RH 83 & 84
.....
.
BANK
2, MARYLAND
Lexington 0210
Flynn & Levitt, Fewel & Co. and
Merrill
79
President, Williamsport National Bank
ness
in the
industries,
see
other
Speaks Alter ihe Turn
will find at the end of 1948
Company
in
as
(379)
material
the year
Pen.
CHRONICLE
an ample supply, with
increasing labor
costs, , and with a more discerning and
quality-minded buying public, most pen manufacturers
and
sheaffer
r
FINANCIAL
expect that, with
more
;
&
".In.i
C.-
BA 270
'
'
'
'
'
80
It is
(Continued from page 79)
:
:
is
hnly in bringing new business into our banks during
1948, but in further educating the public to the value
of our present banking system.
Liberal advertising appropriations, an awareness of
centage
ness.
qualified to advise other leather manu¬
facturers or to predict whether there will be a depression
or recession in
1948.
There are two favorable factors
in the leather business today.
First, finished leather
inventories are below normal; secondly, the public gen¬
I do not feel
erally wants shoes made of leather and is not receptive
to substitutes although recently there has been a resump¬
tion in the use of some substitutes, particularly those
which have been greatly improved in quality.
On the other hand, prices of hides, skins and leather
and, in A few
higher than 1919. '
,
•
.
*
'
The production of leather is high and raw material
supplies are sufficient to meet the requirements of the
shoe industry except in a few isolated cases. As for our
own
principal raw material, goatskins, the indications
are that supplies will be greater in 1948 than in
1947
cases,
.
production.
due to high shoe prices and the
and close to prewar
the" meantime,
higher than 1939. ^ Ccfhipetition, therefore, is increasing
in the shoe and leather business.
The time when con¬
would buy almost anything at
almost any price
y.Y.A
economists now predict, that we
are
on a
new plateau
of prices and business activity
and, therefore, that there is nothing to be concerned
about for 1948.
Our company, however, intends to main¬
tain a cautious inventory policy while present prices
prevail. We have set up reserves which we believe will
be sufficient to meet most contingencies.
I, for one, do
It may
be,
as some
not find it easy to
forget 1919, 1929 or 1937.
WILLIAM
B.
SKELTON
Chairman of the Board, Central
Maine
"As
goes,
goes
so
Maine Power Company
the Nation" has become a
legendary slogan but, fortunately or unfortunately
pending upon one's viewpoint), this slogan has not
(de¬
been
growth
Main
Central
and
Company
Power
ness
is
and
has
the
been
cooperate everywhere in
its territory in movements to preserve and expand exist¬
ing industries and to encourage the establishment of new
ones.
'
the years to
.
believes that the character and reliability
of its service plus the cooperative effort of its officials
The company
and
employees has
been
a
contributing factor of real
importance in Maine's industrial growth.
Basically, the types of industry found in the part of
Maine served by the company include the following
Pulp and paper; textiles; shipbuilding; metal trades;
lumber and woodworking, boots and shoes.
{
In
last
the
10
years
as
evidenced from its sales of
each of these groups have shown a steady in¬
production.
The gain in the last 10 years in
of amounts of power furnished is interesting and-
power,
crease
terms
in
shows the following for those groups.
Sales
to Important
V;
Shipbuilding
Metal
Trades
Lumber
and
Shoes.-
11,302,175
8,444,946
<
8,396,644
-
•/»*,;
continue
Total
at
posi-Y
a
E.
SMITH
United States Rubber Company |
products of the rubber industry will
1948, according to present
YYY;yY.
r.';
high level in
production of the industry for
1940. the
the coming year
record year.
with an all-time
approximately $2.7 billion
prewar
This will compare
high
of
in 1947.
/ ;
A total of
905,000 long tons of
nat¬
synthetic rubber is expected
1948, against the alltime high consumption of 1,110,000
long tons forecast for 1947.
Although production of most rub¬
ber products in 1948 will equal or
exceed that of 1947, tire production
ural and
to
the_
be
used in
probably recede from the allhigh of just under 100 million
casings in 1947 to a total of 83,000,000
Herbert E. Smith
casings in 1948.
Output of rubber footwear will be
further increased in 1948 although production in 1947
will
time
;
.
,<
v
further and at once.
Y
have taken to improve our
expected to reach $2.5 billion or
more than 2%
times the volume of
are
•
confident that with a
is
"
industry cannot impair the long-range
As all connected
am
future to look back
of great stabilization and progress.
as a year
indications.
Re¬
the Studio but
high grosses of 1945 and 1946 cannot continue. We can
longer afford to pay stupendous amoupts for story
;
we
HERBERT
no
with the exception of shipbuilding were?/
properties.
little affected by the war.
They have continued at high
level since that time.
1948
President,
phases of our business both at home and abroad.
Expenditures which heretofore had been .based on the
13,695,518
2,905,531-
associates, I
will find it possible in the
we
upon
•/
trenchment is being practiced not only at
These groups
array
concrete steps
tion,
in all
22,140,464
working
Boots and
our
the
dur¬
long as we
and accept
our full responsibility for the quality and content of our
output, there can be no cause for economic alarm.
The immediate body blows we have felt require heroic
steps to restore the equilibrium between costs and return.
The costs of current pictures are already coming down.
Wood¬
Y
continuing sense of high responsibility to the public,
to our stockholders and to the world at large, and with
earning
These costs must come down
-
over
that animates my
at capacity,
can
our
adjunct of
viewy
with
high entertainment value. *
] - >'
Surveying the whole industry and knowing the spirit
strength¬
*
government and an
for the business year, especially so in
of films of the type combining realism
prospects
of
ability of the business of film making. • As
of the industry apply business statesmanship
39,156,497
42,406,626
8.305,531
15,429,814
262,605,926 223,449,429
127,849,453
85,442,827
10,533,431
2,227,900
28,704,952
13,275,138
Pulp and paper
Textiles
;
spurring all connected with it toward a more
afflicted
Gain
our
civic causes.
the 1948 product of the 20th CenturyFox, much of which is ready for the screens, I believe
I can say that it constitutes a tribute to the public's
demand for entertainment of high quality.
For this "
reason I am not
discouraged about our own company's
Looking
question the acceptance of the motion picture
as a standard form of entertainment for the public.
The
film has become so much a part of the life of the average
citizen that even the unusual conditions which recently
Industries in Kwh.
1937
is
None
■
of
arm
humanitarian and
the
realistic effort.
•
All of these things are superimposed
the peculiar obligations we carry due to the nature
business under which we are in some ways an
unofficial
growth go
major prob¬
economies and
readjustments now being effected by
Spyros P. Skouras
the
whole
industry constitute
an
encouraging factor. Throughout the
industry there is a very alert and determined drive to
turn out better pictures at lower cost. YYV ylY/'Y/Y.'!
Without making unduly optimistic predictions it should
be said that the adversity now besetting the film busi¬
remaining
lems
—12 Months Ended November—
1947
constitute
steadily being
While there
ened.
ness
principal groups:
which
are
power
formerly on the income
our
The demand for*
elements
William B. Skelton
policy over
Maine Power Company's
of
picture making is attaining every day
a sounder basis as a business.
Those
Central
We cannot rely as
general business.
upon
industry and its position, I feel the
assertion is warranted that motion
ing important effect upon the utility
company's own operations. It, there¬
fore,
of
SKOURAS
Therefore, looking broadly at
"
American
being shown were produced many months ago
production costs had mounted to their highest
peak
Moreover, this return to normalcy at the boxoffice has been out of line with the relative prosperity
extraordinary measures to overcome
an extraordinary conjunction of ad¬
verse circumstances.
•'
conditions have
industrial
and
75% ad valorem tax upon
a
'
when
emphatically, that all
concerned have been aware of this
fact for some time and have initated
long been recognized as factors hav¬
imposing
,
British Govern¬
rently
to add at once,
par¬
our
foreign markets.
!
But this depletion of foreign income also has coincided
with the return of our domestic grosses from high war¬
time levels to more normal figures, while pictures cur¬
Films
In discussing the outlook for the motion picture indus¬
try in 1948, it is necessary at the outset to be pitilessly
frank in recognizing the fact that our business has met
with difficult times and is undergoing a revolutionary
upheaval. But it is necessary also
that of business
and industry within its area.
Busi¬
familiar with
the
from
President, Twentieth Century-Fox
allels fairly closely
past
other factors.
ness.
development of
for all this is obvious to all
films, our foreign income will be substantially cut. This
setting is worstened by restrictions imposed by various
other countries as a result of wartime dislocations and
taking place in some of its
shown by
it would
seem
that Maine's industrial future was indeed bright.
This being so, a reiteration of the slogan, "As Maine goes
so goes the power business," provides the answer to the
Central Maine Power Company's future outlook for busi¬
business."
;
production has been on the basis of
market, while we have depended upon
domestic market to return at least the bulk of our
the
ment in
industries, with greater interest being
out-of-State industrialists than ever before,
rearrangement of the slo¬
reason
negative and over-all distribution costs.
Mainly because of the action of the
,
P.
is
company
international
the
basic
however,
The
In
an
the company must anticipate
SPYROS
major
Every
process
problems—the falling off of foreign revenue, lower
domestic returns and high production costs.
with substantial expansion
would provide one
which, from the standpoint of the
power companies in Maine, would
be not only infallible, but a definite
guide to future development, to wit:
"As Maine goes, so goes the power
gan,
The
/
tinued growth in the years to come.
With a large part of its industry operating
in
is
our
demands
for energy ahead of their actual occurrence.
Here, again,
the future of business and industry in its territory be¬
comes a most important factor in determining develop¬
ment policy.
;
;;Y/\;YXY
Yy-. Y;Y- v/YyY
While past history indicates that the progress of busi¬
ness and industry does not follow a "straight line" pro¬
jection, it is fair to assume that Maine's record of indus¬
trial growth is based upon factors that are both sound
and continuing, hence a reasonable assurance of con¬
•
increased.
be
this and
Motion Picture Association.
industry has been
development and load
further
hand in hand, for
infallible.
A slight
of
must
of readjusting its out¬
look. All the major companies also have joined in. im¬
proving the public relations of the industry through the
^
Studies
our
higher
of
aware
These have also shown good progress.
late in the Fall of 1948.
of
rentals
for electric
commercial
establishments.
Central Maine Power Company has
endeavored over the years to adequately meet the re¬
quirements for electric service in its area.
While the company's generating - facilities are pre¬
dominantly hydro, it also maintains six steam plants to
supplement and back up its hydro production.
Twentytwo years ago the total capacity of the company's system
was
91,334 kw. while today it stands at 270,967 ' kw.
During this period, 13 hydro plants were built or ac¬
quired which include its largest development, Wyman
Station (72,000 kw.), built in 1930, and its second largest
development, Gulf Island (19,200 kw.), built in 1926.
Also; during this period an addition steam capacity of
71,000 kw. was constructed or acquired including its
largest plant at Wiscasset, built in 1942, where a second
20,000 kw. unit was recently added and put in operation
this Fall. Work is now underway for a hydro redevelop¬
ment at Union Falls on the Saco River.
This will add
16,800 kw. of hydro capacity and should be available
greater absorption of consumer income by the inflated
prices for food, the public is buying fewer shoes than
last year.
The consuming public may want more meat
than in prewar days, but that situation does not, apply
to shoes today.
The per capita purchase of shoes is no
is ended.
industries as far as the State was
important is the fact that these new
increasing over the years so also has that
service in the home, on the farm and in
.
use
reliance upon more modest prod¬
quality. We cannot be lavish in any
respect. Every picture we project must be be measured
against the changed conditions confronting us.
Film
highly diversified,
While needs for electric service by
BENJAMIN SIMONS
sumers
Most
are
must
ucts
for diversification of
industry is the backlog of continued prosperity.
Other important branches of Maine business and in¬
dustry include its agriculture and its recreational busi¬
industries
democracy.
fully two to three times prewar prices
We
new
were
concerned.
We must make pic¬
make better pictures.
ingenuity and resourcefulness to the
of recent years.
costs, and we must
fullest in putting our
1946 and
years
It
tures at lower
1947, approximately 119 new
industries came into existence in Maine.
While some
of these were offshoots of existing industry, a high per¬
the
In
extraordinary kind are indeed being put
is no longer possible to produce films
an
the cost levels
at
in the matter
market, but Maine's relative position
of labor peace has created the demand/
1
public relations
programs by Pennsylvania banks will be tremendous
factors in offsetting antagonism towards banking and
apathy in its defense.
;
The Pennsylvania Bankers Association is doing its part
in publicity and public relations, and I highly recom¬
mend to every banker that he vigorously and aggres¬
sively promote by speech and the written wcTrd a better
understanding of banking and the part it plays in our
In
a
of
effect.
into
good industrial location.
toward decentralization has created
being given to Maine as
the
President, Allied Kid Company
omies
attention
interesting to note that more and more
Doubtless the trend
publicity and sound overfall
the value of
Thursday, January 1, 1948
CHRONICLE
FINANCIAL
Speaks After the Turn of the Year
Business and Finance
are
&
THE COMMERCIAL
(380)
.
YY
with motion pictures are aware, econ-
was substantially greater than prewar.
The reintroduction of style and color
;
.
has been a strong
expected to continue.
clothing and coated
fabrics will continue.
/■' vYY/Y^'/V
Foam rubber, firmly established as cushioning in all;
transportation fields,', will be increasingly available
through 1948 for domestic furniture and mattresses. New
plant capacity and the increased supplies of natural rub¬
ber will help this rapidly growing industry.
With the return to natural rubber achieved, output
of Lastex yarn in 1948 is expected to surpass prewar':
levels.
Facilities have been increased to meet broad
expansion in the use of this yarn.
'
i / \
Industrial rubber products will be made in large vol¬
ume.
Most items will be in ample supply but conveyor
belts will be short for several months.
J-YY':'Y'Y
influence in footwear, and this is
The active demand for rubber
Production
sundries
of
golf balls, bathing caps and druggist
facilitated by the return of natural
has been
will be in ample supply
at a high level.
During 1947 consumption of natural rubber exceeded
synthetic for the first time since 1943. The return to
natural rubber will be further advanced in 1948 as 550,000 long tons of natural is expected to be used with
355,000 long tons of synthetic, according to present esti¬
mates.
About 61% of all rubber used in 1948 will be
natural.
In 1942, 96% of all rubber was natural, while
rubber, and this merchandise
although the demand will continue
Volume 167
Number 4666
THE COMMERCIAL
&
FINANCIAL
CHRONICLE
(381)
81
Pusiness and Finance Speaks Alter the Turn of the Year
in
1945
the
of
use
natural
only 13%.
rubber
V
V':
.
J. P.
reached
for
of
Other factors which lead
'
be
1948
be
can
viewed
in 1947
lasting effect
with
thoughtful
razor
that
we
are
to
maintain
expand our present economy.
is the. key to our continued
i
j
of
!
P.
Spang,
Jr.
I do feel strongly, however; that
year
had in '47.
I
razor
dilemma.
a
increased demand upon the banks for "term loans" to
finance expansion programs of essential industries.
Our basic problem today is rather
clearly indicated.
Even
most
Because
to
exists
no
time should
have
we
can
this because
tions
precedent for
Co.
associated underwriters
LOS
Inc., and
are
offer¬
ing $40,000,000 Southern Califor¬
nia Edison Co. first and
refunding
mortgage; bonds, Series A, due
1973, 3Vs%, at 102.187%, to yield
approximately 3.00%. The group
bonds
at
are
to be ap¬
plied to the company's acquisition
program
O.
made
by the substantial
growth of its business.
to
The
Financial
ANGELES,
Jordan
ciated
III
only short periods,
law
of
supply
made rules and regulations.
(Special
to
GRAND
asso¬
He
nected
W.
Smith
Quincy Cass Adds
LOS
ANGELES,
The
with
staff
of
With
(Special
Chronicle)
CAL.
been
—
John
added to
better
threat
a
to
the
American
way
of life.
Our
instead
can
solve
challenge of
of
an
our
•
-
expansion in
production, which
problem and enable
our new
us
to meet the
international position.
(Continued
on
page
82)
Financial
Chronicle)
RAPIDS, MICH.—Wil¬
J.
Vander
con¬
Moere
Underwriters
the
Quincy Cass Associates,
523 "West Sixth Street.
to
Financial
FLORIDA MUNICIPALS
Chronicle)
Inquiries Invited
CLEVELAND,
OHIO — Fred¬
Leustig is now with FinCo.,
Union
Commerce
Building. He was formerly con¬
nected with Bache & Company.
erick F.
ley
Dealers
CORPORATE BONDS & STOCKS
Finley & Co.
The
Distributors
&
officer of King, Wulf & Co.
P. Engels has
alone
by man- Accordingly, current official
Co., Peoples National Bank Build¬
ing.
In the past he was with
Straus Securities Co. and was an
was
formerly withj Livingstone & Co.
(Special to The Financial
and
traction
Walter
liam H. Van Loo has become
become
California Bank,
Spring Street.
as
and
a
purchasing
With J. Vander Moere Co.
Chronicle)
CAL.—James
has
With the
625 South
com¬
petitive bidding Jan. 20 on its bid
of 102.02599%. The
proceeds from
the sale of the bonds
inexorable
With, California Bank
(Special
Calif, Edison Bonds
•/*. Halsey, Stuart &
then for
the
bring about
inflationary and price problems cannot be solved by
endeavoring to. counteract the effects of exporting good®
in short supply through
putting new restrictions on bank
credit or possibly
re-enacting certain wartime controls
with their withering effects on business incentive.
Suck
measures during
peacetime, risk, bringing about a con¬
objective.
demand cannot be overcome
reach the maximum efficiency
Monopolistic practices, featherbedding and arbi¬
trary restrictions which reduce the production of work¬
ers are serious
inflationary forces under existing condi¬
their
and
em¬
to
power.
are extremely fluid
control, even by harsh
regulatory methods, has been only
moderately successful in the past,
good
as
made
balance between goods produced and current
Money and credit
and
be
of production per man-hour so as to
unnecessary bor¬
sound
witlf full employment and capacity production in
many goods are still in short supply relative
lines,
current
purchasing power, a condition which drives
prices higher and higher. Obviously, every effort at this
inflationary trend
endeavoring to restrict bank
and
raise interest rates in
the accomplishment of this
upon bank credit.
Current high prices
commercial banking accommodation,
stagnation existing in the capital markets has
increased
the
and
current
discourage
added strain
require
The aims of such a
policy
obviously contradictory, and
there
Approximately
say
Halsey Stuart Offers
construction
an
SMITH
bonds.
are
ployment is still at a maximum and in almost all lines
plant expansion is underway.
necessary
W.
.
v
and
of
rowing without disturbing the basic
2V2% rate on long-term Government
Selling, I firmly believe,
high in
with
order to
and
a
the
type
are
credit
J.
were sold and used.
Whether that
figure will be exceeded in 1948 is a
prediction I hesitate
to make, since fulfilment is
dependent on so many na¬
tional and international factors.
'
'
awarded
the
they
3,000,000,000 blades
was
and
been
thorities
and
States.,
we
intelligence
nation the world leader in
banking situation continues to be dominated, as it
for a number of years, by the
policies of the
Reserve Board and the Treasury Department.
The previously established pattern of low interest rates
is now presenting
thefmonetary au¬
.The year just, ended saw an
aU-tiirie
blade consumption in the United
as
tie
our
Federal
prosperity.
in '48
Legitimate business is find¬
ing its access to the capital markets seriously restricted
by multiple controls which, instead of accomplishing the
prevention of certain abuses, are handicapping the sound
functioning of the market itself.
This factor, together
with high income taxes, has reduced the flow of invest¬
ment capital into new enterprises to a
point where equity
capital is almost unobtainable.
This situation is placing
The
has
once
if
with
WALTER
again we must use
hard-driving competitive selling
methods
met
are
is
desirable lines of endeavor.
President, First National Bank in St. Louis
|
blade industry.
It is equally true, I
believe, in other industries.
This
means
problems
|
is
This is true in the
be for decreasing the availability of bank
through requiring "special reserves" for banks,
danger that this plan may instead reduce the
production of needed goods, rather than limit credit to
may
there
Considering these factors realistically and weighing
against the events and problems we know will
arise in 1948, I feel certain that the razor blade
industry
need not expect any marked setback if these events and
j
gaining on demand, that this year will see considerable inroads made on the sellers'
market.
tives
for nearly
them
!
I
political events—
tax revision,
European aid, the Presidential election—it must be
realized
production
habit
production and business methods.
In addition to the
that
promise of success, as long as shortages exist and
purchasing power is redundant.
Desirable as the objec¬
I
on
through monetary policies, offer
credit
a
handling that has made
national economy.
our
efforts to curb inflation
little
any,
12,000,000 young men;
largest enrollment in colleges and schools in history;
high wages and generally good economic conditions.
I
make the most of these
potentials in
the face of
complex political events
which may have a
to believe that there will
me
which created
Company
optimism by the American businessman who
faces the
current year with a
down-to-earth, realistic attitude. All
the factors
responsible for the high level of production
and employment set in
this country
are present
today.
It is the
job of all American businessmen to
little, if
falling off in the razor blade business
are
these: continuing population, shifts from farms to
cities; the daily shave requirements of the armed forces
SPANG, JR.
President, Gillette Safety Razor
The outlook
low
a
-
Florida
&
on
Corporate Issues and
Local Securities
Southern California Edison Co.
provides
mated
electricity
population
central
and
to
of
an
esti¬
southern
California.
Among the larger cities served
Long Beach, Santa Monica
San
Bernardino.
55%
of
the
are
Trust Officers and others
write
us
about
produced
the
by
Inquiries receive the
of
the
largest
company in
the first nine
months of 1947 was in
hydro-elec¬
tric plants owned
largely
•
fastest
growing
Dividend
Resources
the
first
nine
months
of
an
Exceed
OF
1947, the company reported gross
operating revenues of $63,014,000
ST.
Association
t
ST.
was
ACTIVE
PETERSBURG, FLA.
its
•'
5
a
t
..V.
SOUTHERN
'.t
'
TEXTILE
/'"tv
■-JL
El
McCormick
&
Co.
nation-wide syndicate of¬
MARKETS
Central
&
Central
'
■
Pfd.
Paso Electric Co., Cdmmon.'.
.Kirby Lumber Corp.
Sommers Drug Stores, Com. & Pfd.
South
West
Power
&
Corp.
Light Co.,
4%
Pfd.
SECURITIES
Retail Distributors
Market
Kebbon;
and
PROPERTIES
Texas
Municipal Bonds
fering 343,000 common shares, $1
par,
of Glass Fibers,. Inc. at a
price of $10 per share.
Glass
Fibers, Inc., located in
Ohio,
manufactures
Waterville,
continuous
glass fiber yarns and
glass fiber bonded mat. Proceeds
of the financing will be used
prin¬
cipally for construction of new
plant facilities and for retirement
of
an
outstanding term loan and
working capital.
additional
89
.
„•••.,
heads
TRADING
Houston Natural Gas, Com. & Pfd.
Lone Star Brewing Co., Com. & Pfd.
Muehlebach Brewing Co., Com. &
•
on
PBG
Longhorn Portland Cement Co.
1910;
Placed
ST
TEXAS SECURITIES
continuously since
Glass Fibers Stock
TELETYPE:
ASSOCIATION
PETERSBURG
•
on
1, FLORIDA
D-32
SAVINGS AND LOAN
incorporated in
1909 and has paid dividends
Common Stock
L
$16,500,000.00
require $4,098,750. Southern California Edi¬
Company
7-5131
214%
RALEIGH W. GREENE, President
•
Incorporated
FLORIDA NATIONAL BANK BUILDING
ST. PETERSBURG
TELEPHONE:
for nine months will
son
Not
601
on
FIRST FEDERAL BUILDING
-
Florida Securities Company
executive officer
Federal
Rate
FIRST FEDERAL
taxes, de¬
preciation, et cetera, of $12,772,000; interestJ charges on bonds
outstanding and presently issued
.
and
steam
and net income after all
S
attention of
prompt
Current
or
generated. About
25% of its total power was pro¬
duced at Hoover Dam.
? '
For
handling fiduciary funds are invited to
originating in or pertaining to this area.
Florida's West Coast.
leased by the
remainder
being
the
company,
matters
and
Approximately
power
INQUIRIES INVITED
2,300,000 in
(Established
& Gompany
Russ
A. M. LAW & COMPANY
\
1892)
Alamo
SPARTANBURG, S. C.
INCORPORATED
National
Building;
SAN ANTONIO 5
»!.
Long Distance
51
...
Bell
Teletype SPBG 17
Bell
Teletype SA 23 & 53
Direct
and Connecting
v
-•
■
Telephone Fannin 4324
Wires to:
Dallas, Houston, NeWvYork & Xos Angeles
THE COMMERCIAL
FINANCIAL
&
(382)
82
industry. Furthermore,
I believe that the temporary removal of the four-cent
tariff should be made "permanent in the interests of the
outlook of the brass and copper
81)
GEORGE SPATTA
President,
business:
(1) automotive; (2) industrial
handling trucks; (3) street railway trucks;
(4) cutting tools.
-
material
the
In
first,
or
automotive, divi¬
transmis¬
sions, wheels and brakes for motor
trucks and motor buses. The outlook
>
it
possible for
were
particular field is very prom¬
1948. Millions of motor
trucks on our highways are worn
out and need replacing, and because
moving goods by highway truck is a
fundamental method in the transpor¬
tation system of this country, I can
see no letup in the demand for these
with
In the
industrial handling
manufacture a complete
is
division
line of
as well as the gas-electric drive.
Because
materials in the proces of manufacturing
of the total manu¬
of this handling in
the past has been done by hand labor, there is great
activity ahead in the manufacture of material handling
equipment. We estimate that our volume in this field
goods is a very good proportion
facturing cost, and because much
present level.
next activity is the manufacture of
I see considerable activity ahead in
should continue at its
street rail
this field.
Although buses are taking the place of street cars in
many cities, yet there remain some 15 cities on the North
American Continent in which street cars play the most
Our
•
trucks.
important role in the mass transportation of people
going to and from their work in these cities. The present
old-style street cars are largely worn out and the new
streamlined, standardized cars
for which we supply
these
great need in this field. There is consid¬
erable activity in replacing the old street cars, and I
believe 1948 will see this activity continued.
Our next activity is the manufacture of cutting tools
trucks fill
such
a
For us this
total business,
this particular
our company.
In fact, I believe the capacity
manufacture drills during the war will not
drills and reamers.
drills and twist
as
only a very small percentage of our
and I do not expect any great activity in
is
division of
created
to
full extent for
be used to its
volume for this
Total
slightly over $61,000,000.
in 1948, both in dollar value
this
of
Company
forecasts
an
interesting if in
connection with such
analysis would also be
made of the previous
year's forecasts to see how nearly
right the judgment of different
people turned out to be.
For
over
20
years,
while he was
living, Col. Leonard P. Ayres, of the
Cleveland Trust Company, used to
make an annual forecast early in
to what he
each year as
he always reviewed
what he had predicted the year be¬
fore and pointed out where he had
been wrong and why, and where he
had been right.
This was a valuable
service to the businessmen of Cleve'
y
the
While the issues may be clearly drawn in
the minds of some people, in a campaign year the appeal
made to classes in order to obtain votes certainly clouds
cooperation.
the issues.
is
It
'
'V V.- - /'y'y'y
outlook for the copper
President,
..
y!'
■
:•
rather violent inventory adjustment on the
part of brass and copper users during the last half
of 1947 apparently is pretty well over and the need for
purchasing brass, bronze and copper strip, rod, wire and
tube is again on a current basis.
i
(3) The great demand for copper, both here and
abroad, is maintaining the price at the 21V2-cent level
and there is no apparent lessening of this demand in
(2) The
sight for at least the first quarter or the first half of 1948.
means these products will continue to be highly
This
priced
and
substitutions will be made wherever pos¬
y.
sible.
Based
on
the
above factors, I
have the opinion that
furnishes brass, bronze and copper
what steel is made, will
have a high level of activity during the first half of 1948
an# that there is a good chance it will continue through
our
industry, which
materials
in
similar forms to
the balance of the year.
An
—-
;
its price
would be a very
.
and a reduction in
good thing for the long-range
easing of the 'coppSTsituation
Company
trying to talk about the outlook for the life insur¬
business in 1948, our only basis for making fore¬
is to look at the barometer of economic trends. In¬
naturally, participates in the effects of
Conditions. But there are- >
- - '<< ■
other factors such as the state of the •
nation's
charted
general
'
extra matching pieces
available this year.
policy of The International Silver Company in
holding the prices of its nationally-advertised sterling
and plated lines to approximately prewar levels was a
ing the war will become
The
major influence in broadening the silverware market,
during 1947.
"
Consumers realized they could get more for their dol¬
silverware than was possible in many other house7
lar in
Another important factor was: the
in which consumers greeted the
introduction of our first postwar patterns like "Northern5
Lights" in sterling and "Remembrance" in silverplate. J
Sales of The International Silver Company for 1947
will be substantially in excess of the 1946 total oi'
$42,000,000 and are expected to set an all-time high in
hold
commodities.
enthusiastic
last
two
President,
Inventories
a
John
A.
Stevenson
new
and buyer will
rather in¬
we refer to as
nearly approach the
-
is
in which prod¬
one
and
not
startling machine innova¬
any
As
new demands
model is the Underwood
with the
fall
re¬
the
thin
"layer" when
insurance
reach, in 1948, the end of the
period granted by special act of Congress for the enact¬
ment of State legislation to regulate insurance practices
which would otherwise be subject to anti-trust legisla¬
L.
C.
Stowell
.)
by business. Our latest
Electric Typewriter which
received enthusiastically by users. J;
there will be many new problems
■'' *
to solve
and new challenges to meet.
Essentially we expect the
return of more normal selling conditions with a large
sales organization to take care of our ever-expanding
In
spread over the entire life insurance portfolio.
Following the Supreme Court decisions that
1948
--f-V-. -"-v*:""
:
unprecedented demand for office equipment
all types, we have concentrated on producing as much
possible in an effort to take care of urgent needs
market.
With the
of
as
.
'
have ridden out the
crest of postwar necessities we will have better oppor¬
tunities to take advantage of our long-range planning
program, - I do not believe that any one wants to actu¬
ally return to the conditions of the 1930's.
If we think
back carefully, we will remember that those years left
much to be desired, and while prices have increased so
has the ability of the consumer to pay these prices.
It serves no useful purpose for us to commiserate with
ourselves about high prices. All of them, including our
own, have risen, but so have the earnings of our em¬
ployees, and of our users. The price of our office equip¬
ment as we go into 1948 has increased substantially less
than durable goods in general and very much less than
^perishable items.
,yy
f
We wage a constant campaign to continually improve
the quality of our product and its relative usefulness in
of
users.
We
can
<
'
-
expect that when
we
.
the hands of the
is interstate commerce, we
tion.
filling large backlogs but w4
with a substantial backlog still
proceed • ■ '
However, as we
ceptable to buyers. With this more
healthy sales outlook, the relation-
has been
will continue in 1948. Ob¬
very
days
through 1948, deliveries will be made
on
a
basis which will be more ac¬
pace
investments made since the curve
in
the
product improvements are
they are in¬
corporated in our equipment and
made immediately available.
From
time
to time,
we
will have new
models as our creative ability keeps
viously, this improvement would not be immediately
flected in lowered net costs.
The slight increase in
results
o
business machines as we
before 1941 are nonexistent.
developed and proved,
purchases.
Since life insurance is on a long-range basis, no guess
work is involved in figuring whether prices to con¬
sumers will rise or fall in '48.
Premium rates, on life
insurance purchases made in 1948 will, in most cases,
follow the new pattern created in connection withriihe
recent adoption of a new mortality table reflecting mod¬
ern experience.
However, in mutual companies, actual
mortality experience, expense ratios and interest earn¬
ings are the actual determinants of net costs.
It does not seem improbable that the slight improve¬
ment in interest rates, which followed the relaxation of
upward
to be filled.
tions.
life insurance
turned
in
them
Underwood Corporation
completed
entered the New Year
plan
the
years.
But if the cost of living continues to
will have its effect on the dollars available for
interest yields on new
of
STOWELL
C.
L.
improvement is of a gradual
continuing nature where we do
prosperity, it would seem easy to
Federal controls last summer,
/'
company's history.
the
uct
decade preceding
But if the present
general business
manner
Our business
the
continues, outstand¬
pieces during 1948. Additional
which had to be discontinued dur¬
flatware and hollowware
normal.
be
II.
Stevens
C.
Evarts
tangible y: condition
effect on life insurance
company operations.
Before the depression of the '30s,
it
was
usually taken for granted
that in spite of ups and downs in
the
business curve, life
insurance
War
People
getting away from using un¬
matched pieces.
Enlarged production facilities will
enable us to offer a wider range of
are
more
powerful
during
broadened
past year.
complete silverware service.
Ship between seller
which cannot be
in advance but which have a
health,
rise this
-
The Penn Mutual Life Insurance
predict that new paid-for life insurance would not
below the level of over 20 billion reached during
Some of these
it.
silverware was
permanently during the
Today there is a defnite trend among
American families to possess a more
Gains have been made in
business
of
H. W. Steinkraus
continued
•'
STEVENSON
A
survey
plated
knew
JOHN A.
'48, doubling the amount in force at the end of 1935.
With the economic barometer indicating a continuance
strong demand for automobiles,
houses, model kitchens, better plumbing and lighting.
All have a favorable effect on the use of copper and
brass.
could
that the present
high rate of business volume could recede in the latter
part of 1948.
What may happen in the banking field
depends very largely on what happens to business gener¬
ally, and much of what happens to both depends on the
attitude of government and the use of its powers.
rate of increase
follows:
(1) A
belief that the psychological factors
ing life insurance will cross the two
hundred billion mark by the end of
,
for 1948, there are
several major factors which will affect
as
my
easily tip the balance to such a degree
World
and brass industry
are
pressure
backlog
hollowware.
disclosed that invent
tories
of, dealers
throughout the
country still are inadequate to meet
the increased demand.
:
•
♦
The market for both sterling and
recent
goods can soon disappear in the
of withdrawals from markets
by heavy taxation, it is equally sound
policy for those in government to insist upon economies
in government.
'•
■ ■ . * - ' ■
The issue appears to be clearly drawn between those
who advocate an all-powerful central government which
controls hot only the convenience of its constituents, but
in many cases their destinies, and those who advocate
complete freedom of action under the misnomer of free
enterprise.
Any civilization as complex as the one in
which we now live certainly needs rules and an impartial
referee if the game is to be kept in bounds.
To de¬
termine the degree of control requires great skill and
money
trend
expected to
the coming year
to
haven't caught up with our
in either flatware or
and the
depended on to follow the
historical
pattern
of
practically
doubling itself every 10 years. Fi¬
nancial conditions interrupted this
happen in that year.
However,
before he made his prediction for
As
the money supply
price resistance or fear of
While it may be sound
fiscal policy from a hard reasoning
standpoint
to
drain off potential
Steimetz
J. Wilson
could
see
land.
•
of goods and services, there
evidence that in some lines the
surance,
a
I think it would be
com¬
are.
established
highs in production and
because of
casts
great Sport in this country to forecast the futurepredict what will happen during a whole year.
It is
and to
variables
many
so
businessmen
Silver Company
sales, is confident of
continued good business during 1948.
'
Our industry's outlook for 1948 is every bit as'bright
as it was a year ago when we faced a,
tremendous backlog of orders created
by
wartime conditions.We still
all-time
instability.
In
STEINKRAUS
President, Bridgeport Brass
are
STEVENS
industry, which this year
silverware
The
face
ance
HERMAN W.
group
a
supply is catching up with demand.
is also true an apparent shortage
several years to come.
for 1947 will amount
We expect to exceed
and physical volume.
even
It
company
to
or
C.
EVARTS
President, The International
supply
ranging in lifting capacity
from 1,000 to 8,000 pounds, in vary¬
George Spatta
ing models and specifications. Our
line includes
straight gas machines, battery electric
handling
which
between
lift trucks,
machines,
*
Philadelphia
pelled to deal at this time which are
not present when they are operating
in a so-called normal period.
While there is still a large spread
products.
we
there
cause
for
ising
anyone
be little doubt
can
bring to the solution of the problems,- a sounder
knowledge of economics and greater research facilities,
STEINMETZ
prise the inventory, any conclusion
would still be of doubtful value, be¬
in this
There
can
to
inventory all of the factors which can enter into the
complicated structure which we generalize as business
and to place a value upon each of the items which com¬
If
manufacture axles,
sion we
that the problems faced' by
the life insurance business today are more complex than
those which confronted us before World War I. But we
this industry.
President, The Ninth Bank and Trust Co.,
of
lines
WILSON
J.
be said to be in
Equipment Company can
The Clark
four
long-range planning of customers of
Equipment Company
Clark
the Year
Finance Speaks After the Turn of
Business and
(Continued from page
Thursday, January 22, 1948
-rf
CHRONICLE
ultimate user.
We utilize the most
of
our
y
modern methods in the
satisfactory
>
production
do not, discard, any
methods until we are convinced that a new
(Continued on page 84)
machines for business, but we
Volume 167
Number 4666
THE COMMERCIAL
to
seems
Swollen Budget
s
&
FINANCIAL
CHRONICLE
that
me
we are entitled
to
have correct
figures without
efforts to influence public
opinion
for Administration
policies. It ap¬
pears now that there never was a
justification for vetoing the tax
a
department,
and the government
greatest
which
any
enjoyed
that is
people
has
ever
practiced.
Perhaps
danger to the
greatest
and
their
freedom
be¬
it is able to perpetuate itself
its activities and
stifle the
cause
and
voice of any
group which seeks to
cut it down or
change it.
Of course this machine
i
a
tremendous
burden
of
goods
taxes,
production
that the cost of gov¬
to come out of the
70%
who
produce.
Of
so
ernment
other
the first
Govern¬
of
means
production^both capital
and labor,
in increased prices to the con¬
sumer of the
goods which are
or
pro¬
in
or
both.
market such
as we
most
In
taxes
ing progress under liberal prin¬
ciples.
The
Republican
Party
recognizes the absolutely essential
activities
which only the
Government
demands
can
that
ness-like
and
through
and
take
can
the
be of assistance
and
localities
in
reduction
It
with
own
and
«'
ap¬
local
■
-
'
of
the
sellers'
a
have at present
are
passed
Taxes Kill Incentives
this
be¬
in
the
the
current
problems before Congress?
Parties
President
mean
has
submitted
greatest
peacetime
history.
He desires
billion
and
raise
budget
to
don't
know
just how great
burden the country can stand.
taxes
of
not
payroll
new
start
the
more
pointed
chokes pro*-
incentive
develop
terprises with more jobs.
with present taxes.
.
to
new en¬
But the
satisfied,
tax of
even
He proposes a
% of 1% to
proposed
compulsory
the
cannot
we
be
no
time to increase taxes.
President
now
balance
point
are
estimates
at .had
may
only
and
be
in
greater
believe
that
resumed
freedom
from
be
to
by
must
direct
be
from
main-
if there is
regulation
indirect govIf production is
or
increased, it must be
greater
incentive to
re-, the
done
freedom, and greater
to
men
he
is
work, and to
saye, and to put their
the tools required for
as he did last year,
surplus would be still larger,
progress' When^ the
and
this country
ernment taxation.
If
be apunderesti-
never
mating receipts
Federal Government
tained
amine the
savings into
Republican
Congress
adjourned last July, the President
and the Secretary of the Treasury
insisted that the surplus would
only be
billion, and on that
ground the
tax
President
reduction
bills.
vetoed
many
be
can
are
to
foreign proposals with
only
Now
he
and
in
domestic
expenditures
that
they should agree to any careful
screening of their requests.
The method by which the bud¬
get handles the Marshall Plan is
difficult to understand. A supple¬
mental
appropriation of
(Continued on. page
.
Members Cleveland Stock
Exchange-
Chicago Stock Exchange
estimates
$37,700,000,000
itures, therefore,
Trading Markets
the
Republican
Congress has apparently cut off
$3,300,000,000 from his demands.
is"approximately
the
Teletype CV 565
Long Distance 500
Union Commerce
sum
Building
Cleveland 14, Ohio
which has been strenuously denied
by the Democratic National Com¬
mittee.
Can Reduce Budget $4. Billion
After
a
careful; study of the
budget, I. believe that a gross re¬
duction of about $4 billion
can
be
made, providing Marshall Plan
appropriations and other foreign
field, Rickards
expenditure estimates are not re¬
garded as sacrosanct. Undoubted¬
ly, there will be
some
Go.
supplemen¬
tal
requests and it may not be
possible to make a net cut greater
than $3 billion. I think it is vital
Ohio
tially less during the next fiscal
than during the current year,
year
may
point
out
that
the
free
hand
Corporation Bonds
Re¬
publican Congress does not have
Municipals
Unlisted
a
Stocks
in
reducing expendi¬
tures. It is imposible to amend or
repeal
the
statutes
setting
up
various activities 'of the Federal
Government and establishing pol¬
CINCINNATI 2
icies, except over the veto of the
President. Up to this time he has
indicated his opposition to any
Union
,
CLEVELAND
Central Bldg.
Union
Bell Teletype—CI 150
Bell
14
Commerce BIdg.
Teletype—CV
174
reduction in the scope of the gov¬
ernment's
The
powers.
Commission
is
Hoover
studying
now
a
two
The
Repub¬
licans always predicted a surplus
of between $4 and $5
billion; but
Secretary Snyder refused to re-
progress. It estimate either the
revenues
or
by greater freedom the expense, I think for the ob¬
thought and the ability of men vious reason that such a reestimate
must be done
Of
to live their own lives and choose
their
own
occupations. It must be
restoring freedom to each
community to work out its own
done by
even
then
would
have
justified
tax cut.
Now it appears that the
Administration was more than $6
a
billion
wrong
in its estimates.
It
Another Record
Breaking Year!
The issues of securities in which Otis & Co.
Wm. J. Mericka
Co.
6-
underwriter in 1947 totalled
est
INCORPORATED
common
w
Exchange
more
than
participated
a
principal
$1,800,000,000, and included
the high¬
as
grade bonds, investment preferred stocks, and both investment and
lative
Members Cleveland Stock
>
specu»
stocks.
'
•:
"
'
"
"
-
-
'
'l
'
.
Our
underwriting business for the
year
exceeded that of all other Ohio
houses combined, both in total amount of issues
managed by us and in total
Offering
*
L-*
service
an
in
experienced
Ohio
amount of all of
our
trading and distributing
Corporation and
General
underwriting participations.
Market
Municipal Bonds, Stocks and Land Trust Certificates
tu
,•
OTIS & CO,
,c: 1, (.
(Incorporated)
Union Commerce
CLEVELAND
Building
29
14
Direct
Private
Established
YORK
to
New
CLEVELAND
6
WHitehall 4-0900
Wire
1899
Broadway
NEW
Telephone MAin 8500
$6,820,85)
ap¬
will be
spent under the authorities given.
On his own estimate of
expend¬
I
tipped
The Republican Party believes! propriated.
that the size and power of the
can
that
a
government surplus in the current
fiscal year of $7%
billion.
The
i
are
however, in domestic
items, it is essential that we ex¬
not more.
scales
We
propriations.
authority
The
,
duced.
demanded
tainly
,
the
there
before July 1. This makes his to¬
tal estimate of
expenditures ap¬
socialize
gradually
At 30%
from
.
.
which
Nevertheless,
items in the budget which
that the expenditures be substan¬
surplus would be still larger if he
not included in his expenditures about $1,600,000,000 which
against further expansion of
pro-not yet been appropriated, and
duction by private industry.
some of which
far
,
reduced. If such reductions
be ,made,
distribute dol¬
added
health insurance program, the ul¬
timate cost of which will be at
least 4% of payroll. This is cer¬
the entire country. That
certainly
is one of
the
purposes
of
the
spenders.
the
is
all
$40
have
I
he
served by private
now
and
kills
I
incentive and production, to force
the government to take over vari¬
industry,
duction,
v
President
had to sup¬
port the other 50 %, the burden
would be so great as to
discourage
fields
billion,
a
that if 50%
sure
$44
can
we
lavishly and without the most
careful scrutiny and pruning to all
the countries of the world, it is
psychologically impossible to urge
successfully upon those interested
the
in
spend
work harder and
than
ment, it
which I have always claimed, but
difference
tween
The
session
the
If
care.
New York
Chicago
Denver
Cincinnati
Columbus-
Toledo
York
it-
83
lars
billion dollars in ad-:
he
the States
does
a
in
critical
dition, mostly for foreign relief.
Now he is
asking for more than
$600 million additional to be spent
This
What
special
than
made
of that govern¬
only be done through
proximately $41 billion for which
it insists that full control and ad¬
ministration
of
these
programs
government.
the
more
be
complete reorganization such as
the Republicans will
propose if a
Republican President is elected.
During the
first session he added
nearly $2
billion of additional expenditures.
At
to
substantial
any
a
1, 1948.
the States
proach to problems of health, edu¬
cation, welfare and housing. But
remain
ending July
is
If
scope and expense
ducible amount which the
gov¬
ernment had to spend in the
year
leadership
their
which you
pay
at the grocery
store "and in the- department store,
ous
busi¬
basis.
to
out how this program
feel
activ¬
on a
economic
it
but
these
even
ities be carried
Federal
perform,
on,
and almost the entire cost of
gov¬
ernment is reflected in the prices
I
secur¬
has
eourse
thls: results either in a
liower return to those
engaged in
duced
Federal
ernment
takes 30% of the national income.
Very little of the activities of gov¬
the
the
expense
of
billion,
in
ment is
reduction in the size
a
of
recognizes that the Federal Gov¬
which with State and local
result
cost
imposes
on the
people of the country. The
President's budget now calls for
taxes of more than. $44
ernment
Of course
•
and
propaganda
government
or
its
today has the
of
power
complete reorganization of the
government.
(Continued from page 6)
pord with the plans more or less problems
according to its own
intelligent of hundreds of;
hurea$^, needs, to experiment with new
reductlohTSill.
prats.; tit has the power to
regu¬ methods,
and to
be the school
How Yhtieh' money did the Re¬
late the American
farmer, Amer¬ where men who really believe., in
ican
publicans save in 1947 on the
business, American labor and government b,y the
people shall
even the
President's estimates of expense?
American housewife. Yet learn something of the
principles The
it seeks more
power.
President'originally estimated
Every bu¬ of the American Republic.
reau
has a
$37V2 billion dollars as the irre¬
publicity
(383)
m
:.d'i
Buffalo
1
84
Speaks Alter the Turn
Business and Finance
not just newer. We have found from
that we can make no compromise with
quality, not only from the acquisition of raw materials
right through the final service inspections of our finished
products but in our service to the users.
Engineering developments and continual search for
improved methods and materials will undoubtedly bring
future changes in the manufacture of typewriters and
business machines.
I have nothing but optimism for
the future, but this optimism is tempered by the knowl¬
edge that we will have to continue to work for what
way
is better and
long experience
'
•
get.
we
HAROLD W.
President,
SWEATT
Minneapolis-Honeywell Regulator Company
automatic factory
Although the day of the completely
is still far off, there is a
lion and the trend will
i
marked movement in that direc-
accelerate in 1948.
is particularly noticeable in
This trend
the chemical
industries,
where
exact
measurements
of quantities
and temperature are imperative, and
where new processes, made possible
by
automatic controls, are . being
regularly developed. The basic met¬
als, utilities^: foods, textiles and ce¬
ramic
industries
are
other fields
petroleum
and
making increased use of
instrumentation to lower
cost
At ..the present
instrumentation
dustrial
crease
30%
Harold
W.
Sweatt
President,
'
products and
/
that atomic energy
and when atomic
and
supply
of
to
cite only two
examples, have become
Wilfred Sykes
:
i
JACK I. STRAUS
Co., Inc.
Department store sales in 1947 have again made a new
! high record. The high level of consumer income and inj
.
probable that some moderate
in sales will occur during
the first half, of 1948..
" -
seems
increase
For
turbing
downward
trend
in physical volume.
Fewer
units are being sold at higher prices.
Like
many
other types of retail
businesses, our gains in dollar vol¬
ume
are
principally the result of
higher prices, with some of the gain
due to the increased availability of
hard goods which produce a higher
average salescheck. For many lines
of
consumer
merchandise, . prices
will be higher, at least in the early
store
Jack I. Straus
months the most dis¬
feature of the department
many
trade
has been the
possible effect of gov¬
ernment plans to allocate steel to various industries.
Under the Tatt law voluntary agreements can be made
in conjunction with government departments to allocate
steel, but if pressure on the government leads to steel
being allocated in appreciable quantities to preferred
industries, then other industries will accordingly suffer.
It is my opinion that the whole problem of steel dis¬
tribution must be approached very cautiously, or chaotic
conditions will result. Any plans for allocations should
be developed only where vital national interests are in¬
volved.
Such sales gains as may be realized in the
will again come chiefly from high prices
and not increased unit sales. Such a trend is not healthy
because it is ultimately reflected in lower production of
consumer
goods,
reduced employment, and spotty
"i':-■ r
markets.
We
believe that
prices for many consumer
.
*>.
goods are
| still dangerously high. We thought so at this time last
! year, and developments of the past year have not
changed our opinion. Maintenance of high production
j requires lower prices. Another round of wage increases
will simply inflate costs and prices still) further. * The,
maintenance and the improvement of the American
standard of; living are needed for a progressive and vig¬
orous economy but it cannot be attained by the vicious
^spiral of rising costs and prices. Economic progress de¬
pends upon lower prices resulting from an increased'
•
.
RALPH
H.
.
.
TAPSCOTT
Co. of New York, Inc.
President, Consolidated Edison
gas in the territories
Consolidated Edison System companies
have been increasing at a rapid rate for the past two
years..
While this rate of increase is not expected to
continue, it is predicted that System
loads will grow from year to year,
Demands
for
electricity
and
until 1951.
at least
While
New
York, did
not
expe¬
nevertheless
in this postwar era it has entered
into a period of steady growth which
we
believe will continue to be re¬
rience
a
wartime boom,
With
ments
,
the
now
business.
completion
of develop¬
by anything short of a major change
in the nation's economic status.
'
In 1946 the maximum demand on
resourcefulness of the industry.
country would
shortage failed
to materialize., Without serious dif-Y
fieulty it met the greatly increased :j
'
;
suffer from a power
the
in
record
served,
tomers
half
some
it made a new:
number ^of new cus- .
for energy;
demand
a.
among
them
being '
thatY
million farms, so
about - 92% of the occupied ';!
of America are taking elec^Y
It continued to expand
now
homes
trie service.
plant and was greatly aided in
by the substantial; increase in
deliveries of material from the manits
this
ufacturers.
v
-.v,
,
\V, Y; ;y: >V;-rA' -yYY
probable that 1948 will not be
unlike 1947.
Plant expansion will
continue.
Additions to generating
It is
,
Earle
S.
Thompson
doubtless reach five
;
•
million kilowatts.
Total construction expenditures for
all'purposes during the year may reach a total of $1,750,000,000. This represents the plans for the second year
of an
expansion program which by 1952 may total
$6 billion. /
Y
,Y'v-Y--?-v-Y.. YYV
Y-Y
will
capacity
Such
a
program poses a
industry in the
very
serious problem for the
capital. Com¬
finding of the necessary
petition in the capital markets is increasing. As the year
opens the market for utility preferred stocks is a
one.
The corporate bond market has become unsettled,
and the market for equities uncertain.
It is necessary that the industry maintain earnings
if it is to be able to attract the needed funds., The out¬
limited
their
Ralph H. Tapscott
System for electricity for
r
Fears of
people that this
some
points to increased gross revenues
factories and the sales of electric
homes,
as new
where there are no longer ( available
technical short-cuts sufficient I to Voff set
increasing rise of operating costs. The rate record
are
economies
one-hour period
kilowatts.
completed
again demonstrated
the vigor and
These
the Consolidated
local distribution in
amounted to 2,130,000 kilowatts.
In
1947 this demand had risen to 2,272,000 kilowatts. In 1951
it is estimated this demand will amount to over 2,500,000
Edison
forward with a
ahead. It has just
remarkable job in 1947, and
appliances in¬
crease. It also'points to new operating costs, particularly
for wages, taxes and fuel. The full ingenuity of the in¬
dustry will be needed to show the earnings necessary
for successful financing.
In many cases the pew addi¬
tions to plant will bring economies sufficient to maintain
earnings. In )other cases that will not be enough, ,and
help must be obtained from the regulatory, authorities.
under way in transppr-
pany for service. All of these factors
point towards a continuing develop¬
ment which would not be interrupted
YYY v.Y
meet these increasing electric loads, Con¬
solidated Edison has ordered electric generating equip¬
ment sufficient to increase its capacity from a present
total of 2,538,000 kilowatts to a total of 3,011,000 kilo¬
watts at the end of 1951.
,
rather
new
tation, housing and in the expansion
of business and industry, additional
demands will be made upon our com¬
a
realization of a full year
a
Electric Company
utility industry is looking
The electric
look
flected in our
*
S. THOMPSON
EARLE
President, The West Penn
by the
served
■
next six months
that faces the steel
stringencies will be aggravated.
Another uncertain factor is the
.
part of 1948.
availability of
labor, as well as the materials re¬
quired .for construction.
,
major uncertainty
this
use of consumer credit have made
new
record possible. Recent trends in department store trade
indicate some early decline in the
recent rates of sales gains, but it
| creasing
take
industry is
the possible impact of extraordinary exports such, as
might result from the so-called Marshall Plan. If the
government directs the diversion of appreciable quanti¬
ties- of steel from our domestic market, then present !
A
j
President, R. H. Macy &
for expansion must
into consideration the
[j;
|j!
The total cost of
be
should
any program
Our company alone makes more than 7,000 different
automatic controls having more than 12,000 different
! applications. These figures dramatically reveal the prog.; ress already achieved by the industry, and are indicative
of the possibilities for further development in the years
j ahead.
/ . . , ./ •
-
:
3,000,000 tons
additional
an
is over $1,000,000,000.
understood that the
steel industry, like other industries,
is suffering from lack of labor, and
It
commonplace.
I
capacity, as well as
and coke ovens to
iron annually.
^
these programs
temperature and atmosphere control
rapidly to hospitals' where operating rooms
require the finest in controls; to such industries as tex¬
locomotives,
furnaces
blast
From the home,
tiles, where humidity - regulation and explosion-proof
jheating ate essential;vkii'd to transportation, 'where 'thd
| automatic pilot for aircraft and the journal alarms for
finishing
called to a
.
v;
additions to rolling mill
year,
per
is harnessed for
has spread
'
Company
Inland Steel
unsatisfied demands
uncertainties as to the future. The
unprecedented demand for steel, as a result of five years
of diversion from civilian to war needs, is still unsatis;
*
Tied, although the industry has in
progress programs that should ma¬
terially
help meet- the demands,
most of which will be completed in
1948. In these programs are included
2 500,000
additional tons of ingots
for its
in¬
Today, however, to meet increased home comfort re¬
quirements, more elaborate systems embodying three of
more
thermostats are being sold in increased volume.
1
characteristic of our
considered in discus¬
sions on the subject.
As a public utility, Consolidated
Edison has a responsibility, to fulfill in supplying the
public with electricity, gas and steam.: In unregulated
competitive business a producer may refuse to expand,'
if he thinks the investment at inflated prices is unjusti¬
fied because in the future a competitor will supply the
facilities at the then reduced cost. We as a public utility
cannot make this choice; we are required, to provide
these facilities at the prevailing cost of materials and
labor.
I
.
'
It is my personal belief that our System is in an admir¬
able position to take advantage of the latest develop¬
ments in technological skills and advanced management
techniques in providing our services to New York City
and at the same time earning a reasonable return on
the investments made by the owners of the business.
should be
which frequently '.is not
business
faces 1948 with
The steel industry
mankind, its utilization will be
possible only through a whole new line of automatic
devices which will permit efficient and safe use of this
vast new source of power."
".,;•1 •V'\ "
'Y'
Automatic control received its first major impetus
from the desire of the home-owner for uniform tempera¬
ture and relief from the manual labor of furnace-tending.
energy
the Con¬
Demands
Attention
comfort and health.
Looking to the future, it is apparent
is basically a control problem.
If
expansion of gas-making facilities.
for central station steam, which
ther
WILFRED SYKES
!
by 1950.
principal forces
ments for human
;
caution. High
~
American factory owner
the
|
two
has
gas
the demand for goods.
solidated Edison System sells in parts of Manhattan, have
He cannot buy against firm orders from his customers
increased in. the past year and are expected to rise.
because they do not make their purchases that way. He
Additional generating capacity is being built to meet
must use every possible sound method to hedge the risk
these requirements.
Y\';., '
;
that he must take in these uncertain times.
Our company has prepared a plan which is intended
Continuation of foreign relief is imperative to the
to provide electricity, gas and steam for the needs of
restoration, as nearly as may be, of sound international
the expanding community. For this purpose we expect
conditions after the colossal ravages of the war and the
to spend $280,000,000 in the next four years.
During
profound social unrest that is bred by hunger, misery
the war period normal additions to our facilities were
and shattered national economies. Without a sound do¬
drastically curtailed, so that in considering this sum
mestic economy, we will be unable to play the great
you must realize that a portion is earmarked to make
role that is now our higffprivilege and responsibility.
up for the years when we could not purchase muchThese critical times call for enlightened government
needed equipment.
• •V;. \
, /
and business and labor leadership and intelligent selfDuring the past several years our production costs
discipline to help correct present dangerous trends.
have risen rapidly due to the abnormally heavy wartime
Without them, we cannot be prepared to meet the great
loads which our System was required to carry.
We
problems that will come when the current replacement \
expect that now, unless we have further large increases
boom begins to wane. With them, we can view the fu¬
in wages and material charges, production costs will
ture with increased confidence. There is no simple forbegin to decline as new and highly efficient equipment
Smula for economic stability, but it is elemental that it
goes into service and we can relegate some of our older
requires a high order of business statesmanship and eco¬
equipment to standby usesA^YY Y
nomic cooperation.
'
moving
to full
automatic operation are: (1) new in¬
dustrial processes, and (2) requireThe
been increasing as
house-heating fuel. The Con¬
has already added liquefied
petroleum gas manufacturing capacity in order to meet
the larger peak demands, but these additions are not
sufficient, and the company already has begun the fur¬
must try to estimate
costs and
will
of the Year
have
in popularity as a
solidated Edison System
restricted forward buying and more stringent
controls are still the best policies for merchants. The
merchant
improve products.
...
gas
grown
turnover,
industrial
v
rate of growth, in¬
demands increased
nomic situation clearly
for
Demands
productivity per man hour. There is no other way to
preserve and enhance our standard of living and to se¬
cure reasonable economic stability.
While many basic trends continue favorable, the eco¬
(Continued from page 82)
22, 1948
Thursday, January
FINANCIAL CHRONICLE
&
THE COMMERCIAL
(384)
of
the
cases
or
industry has
been outstanding,
but with many
companies the turn is here. The industry is confident
that its problems will be sympathetically considered by
the authorities, and that it will be able to meet its needs
in the capital markets.
,
..
>. .
y Y
MERLE D.
Chairman,
In order to
If
a
we
THOMPSON
Executive Committee, Elmira
Company, Elmira, N. Y.
Bank & Trust
Plan effective, and if we give
(not poltical) answers to inflation
make the Marshall
few commonsense
(Continued on page
m
■
"■ii
Volume
Number 4666
167
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(385)
to
(Continued from page 83)
000,000 is asked in the appropri¬
ation requests plus $822 million
for food for Germany and Aus¬
The President's budget cuts the
Army and Air Corps about $500
trian civilians. Five hundred mil¬
million.
lion
dollars
the
of
$6.82 billions
is to be spent before July 1, 1948
and $4 billions in the fiscal year
1949.
This
leaves
$2,320,000,000
of the total
as
President's
estimate
not included in the
of
expendi¬
establishment
tary
modern
of
the
Ground
most
type.
day
start
a
of roles and missions among
air,
26,
those
missions.
in
budget
may
tion and
me
to ques¬
open
which should be
one
ground
July
tribution of funds proposed in the
to
to¬
duplica¬
a
and
forces
sea
without strict compliance with the
President's
Executive
Order of
on
seems
Budget
tion
compulsory uni¬
military training. The dis¬
versal
The
to indicate
1947
clearly
Strict
must
be
a
our
capacity.
burden
defining
elimination
the
duplication of missions
well save the taxpayer one-
trol
of the
air is
of supreme
superior
to
that
of
of
tainly
enough
substantial to the Air Force needs
of
cal
1949, they don't have to be
paid for that year. This seems an
duced, and others increased.
for research and
Air
extraordinary lag. If the total of
the Marshall Plan expenditures is
held to $5 billion, including food
for occupied areas in Europe, ap¬
parently not more than $3,800,000,000 would be spent in fiscal
1949 for E.R.P. and occupied coun¬
tries in Europe. This is the basis
definite
for
billion dollar
a
saving in the
It is difficult for
stand
report called for
of
the
1947
us
until
to take any
have the
we
by Section
the
to
purchase
budget, cer¬
something
add
development and
of
modern
more
defense forces. One
our
Corps report, the
compulsory
universal
Problem
We
face
of
report has not yet been received.
aerial
Furthermore,
sudden
we
have just heard
the
cost
of
a world
in. which atomic bombs and other
weapons
attack
result
may
the
on
in
Policy
States.
intend
nated
tails
for the Air
devote
crease
military business of defense. Such
a course,
however, would destroy
Plan.
The
requested
the vaguest
are based
of estimates. Many
on
as¬
sumptions have been made which
impossible to
are
prove.
of the Plan
cess
The
suc¬
amount
the
and
I required
depend as much on fu¬
ture policies of the European gov¬
ernments
themselves
the
President's
Air
Corps
cost
more
a
Air
program
which will
than
for
the
ultimately
$5 billion
a
year
Corps alone or an in¬
of $2 billion over its cur¬
rent
expenditures. If the air is as
important as this report indicates,
it
be
would
a
tures
seem
that
further cut
for
the
in
demanded
amount
become
military
freedom
(Continued
on
Govern¬
limitation of
yet proposed.
page 87)
by
we
do
Listed and Unlisted Securities
not
nation domi¬
a
the
thought of war. I
ariy nation at any
time, to be completely safe, could
that
suppose
its
freedom
entire
energy
to
KENTUCKY
the
might
expendi¬
and
burden
Municipal Bonds
the
more
of
defense
must
be
held
THE W. C. THORNBURGH CO.
MEMBER
BROKERS
of
DEALERS
and
CINCINNATI
STOCK
EXCHANGE
IS East Fourth Street
the
Secretary of State, supported
propaganda carefully organ¬
ized out of the State Department.
by
individual
as.
constitutional duty if it accepted
without the most minute considthe
is
quickly than war.
It would destroy the America we
are trying to
preserve. The total
there
the
Navy
Nevertheless,
to
they do
on American dollars. In any event,
Congress would be avoiding its
; eration
Federal
CINCINNATI
a
Commission. This Commission has
Marshall
the
United
recommended
the
of
defense
our
Marshall is
utterly indefensible. r Of course
Congress should examine the de¬
of
rection
ment is the greatest
arising out of the threat of
taken
amounts
a boy
home, his education, his
chosen occupation and force him
to serve for a
year under the di¬
problem in
forces,
Chiefs
of
Staff
to
prepare
an
overall strategic plan for the de¬
fense of the United States. This
Teletype CI 260
CINCINNATI 2
PArkway 6820
OHIO
L. D. 107
a
Sometime ago the
President ap¬
pointed a Committee on Foreign
Aid, under the Chairmanship of
Secretary
nineteen
men
included
It
Harriman.
able
who
set
up
Will iam A. Fuller & Co.
a
well qualified staff and made a
complete study of the whole prop¬
osition.
The
figures submitted
W.mUCLar Stool,
.
209
S. LA SALLE
organization are
Substantially different from those
now
insisted upon by the State
Department. The report of that
Committee
has practically
been
ignored, although it contains the
best anaylsiS of the principles in¬
volved of any statement I have
and the form of
STREET
change
COLLIN, NORTON
CHICAGO 4
•
ESTABLISHED
Tel. Dearborn 5600
Members of
York
>
•
;
•
V
I'',-,
\
(Assoc.)
J
-VV,
A
~
>
'
V.
\
'
•
'
•
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'
LISTED and UNLISTED
I
;vThe President has included in
his budget almost every domestic
spending project. He has increased
substantially over the 1948 bud¬
get, expenditures for every type
of public works, highways, air¬
Indianapolis Bond and
Share
and harbors and reclamation. All
these programs are
economists
all
508-12 Madison Ave.
MARKET ST.
INDIANAPOLIS 6, IND.
Bell
agree,
Private
however, it is that public works
ought to be cut down in times of
Harold B.
71
to:
5, N. Y.
Smith, Mgr.
Tel. COrtlandt 7-6132
Teletype: TO 190
Wire
Broadway
New York
Tel.: Adams 6131
Long Distance: LD
129 EAST
120
Toledo 4, Ohio
Corporation
extremely
desirable, but if there is one thing
which
SECURITIES
Underwriters
ports, Army and Navy installa¬
tions, R.E.A., flood control, rivers
on
" "
.
New York Curb
Cleveland Stock Exchange
Investment Dealers and
President's Budget Inflated
of
Stock Exchange
Chicago Board of Trade
seen.
f.
& CO.
1920
Teletype CG 146
New
Bell
Teletype: NY 1-2978
CHICAGO—DETROIT—NEW
YORK—CLEVELAND
general prosperity and increased
when business begins to fall off.
There is every reason to plan
public works, but the actual con¬
struction
with
not
should
pressed
be
great speed as long as we
abou£ inflation.
President- purports
to
be
concerned
are
The
Michigan and Detroit
increase in prices,
but he insists the government be¬
come" a mbre serious
competitor
against
for
any
scarce
-materials
Securities
UNLISTED SECURITIES
labor.
and
political standpoint, once
project has received the cer¬
tificate f of
necessity
from- the
President, it is extremely difficult
From a
any
to convince the advocates of that
Connections
with
all
Principal
Markets;
Sta¬
;'.«v
■'}.''.\V.('! •'.•v:-y-'*
) <'l VJ<2: -l •*' V '1V' **•"'
-
tistical Information Furnished; Orders executed
in
all
Listed
and
Unlisted
Stocks
and
GOSHIA & CO.
Bonds.
jdroject that it ought to be postWRITE, PHONE OR WIRE
The most expensive item
in the
SPECIALIZING IN TOLEDO
budget is the cost of the military
establishment
many
If
and
yet
it
is
in
respects the most important.
the
of
purpose
the
Marshall
Plan is to check the spreading of
communism and forestall any pos¬
sible
then
for
advance
a
the
by
Soviet
forces,
most.^fecjtive* instrument
same
existence
of
end
an
would
be
American
the
mili-
and NORTHWESTERN OHIO ISSUES
CHARLES A. PARCELLS & CO.
ESTABLISHED
1919
Members Detroit Stock
Exchange
639 Penobscot
Building
DETROIT 26
Telephone
MAin
2126
'517
OHIO
BUILDING"
iy'l?
^
TOLEDO 4, •OHIO' :i',t>i i Vie
yd h
Ma
' if.iifiBO rJf '
?
*'
Teletype
"Tb'297
.
Telephone—Randolph 5625
Bell System Teletype—DE 206
■7
oil
i,.—
;
wit
aa
American tradition. To take
from his
Defense
serious
a
from
Secretary
nearly $4 billion
211
Security Act of
required the Joint
1949 budget for European relief.
It seems to me that the position
by
experts
important. Compulsory universal
training is
contrary to
every
the
other
latte?
is less expensive and ten times
im¬
is
year and most
a
combat planes.
National
which
entire
the
the
annually within a few years. I berlieve the increase in the Air
Corps
At the present time we have
two
proposals for increasing the cost
fourth
ex¬
two,
think it will cost
country.
amined carefully by the Congress
believe many items can be re¬
the
cost
$2 billion
other
any *
Of
appears to present a great increase
in expense. It is admitted to
portance. I would like to see this
country have an air force clearly
I
is
It
training.
which
We, therefore, have to make a
selection of those
weapons which
are most essential.
From the point
of view of a
layman, it seems to
me that in this modern
world con¬
suggested that while
these goods will be shipped in fis¬
tures.
1
not
chokes all other progress.
the
It
cuts the Navy
only
$70 million. It adds $400 million
for
Forces.
seems
something within
It
Administration's Swollen Budget
85
vi.-'.v'-iq
brtc t*
;—;p,- ii
11 ;
V.
■
i>-ii
THE
86 ' (386)
at
a
by a scattered few.
In the coming 12 months,
and not
conclusion.
itself anticipates at least moderate
in production and sales
through 1948, and to that end we are
current engaged in expanding our
The Todd Company
increases
facilities .-both
production
of
all
throughout
tually
at
our
plant ■'and at vir¬
Rochester
main
production of payroll sys¬
sales naturally
iness—the
tems and forms—our
dep^id to a large measure upon the
general
level
of
employment
throughout
industry
in
general.
levels
present
including the
type
I
that trend would tend to
tor payroll forms.
,
business is check pro-
Private
These
factors
that
indicate
's ments.
have
figure
approximately $400 000,000
at
1947.
to
also
an
7
end
products — insured
payroll .checks,
fraud-preventing commercial and bank checks, and check
Our expansion
to meet these anticipated increases in
includes the recent establishment of two new
plants, in Dallas, Texas, and Montreal, Canada, respec¬
and
our
President,
Larger quarters
are
scheduled for
lithographing
equipment
is
Birming¬
our
Additional printing
on
order
for
all
of
most
The year 1948
Broadcasting
^Broadcasters, without further equivocation, must de¬
cide this year whether to adopt a new and revised code
of standards which they will all fol¬
was
-probably to the detriment of all.
It is still the view of the National
that an industry-wide code is the best means
of
improving our service to the
public. We were keenly disappoint¬
ed
that final action
was
on
to
in
adoption
urge
1948.
broadcasters
But if
is
not
firm code
a
We will
not taken in 1947.
tinue
code
a
of
con¬
such
a
code for all
forthcoming
in
1948jiit may be that NBC will find
it
.Niles :,Trammell
*
new
do
However,
a
expedient
set
we
of
to establish
standards,"" so
its
own
urgently
Vaughan
national defense.
not ma¬
W.
Ullman
VOGELSANG
National Bank of Buffalo
separated from the outlook for business activ¬
general. Only those factors other than general
activity, however, will be considered here in
appraising the outlook for commer¬
cial banking. Space permits the dis¬
cussion
of
only two such factors
which would seem to be the most
ity in
business
important
ones
determining the
These fac¬
in
banking outlook an 1948.
tors are:
(1)
the possible continued
interest rates and (2)
possible imposition of restric¬
tions upon the making of commer¬
cial loans.
■v_-'
' The last few weeks of 1947 wit¬
nessed a drastic decline in the price
stiffening of
the
■
Herbert J. Vogelsang
possibility that the
Federal Reserve System would not support the Govern¬
ment bond market. The role which the Federal Reserve
is likely to play has become very much confused be¬
cause of the conflicting points of view within the sys¬
tem (Board of Governors, Advisory Committee, and' in¬
dividual Reserve Bank heads). Even some of those high
in authority seem to change their points of view over a
relatively short period of time. Thus, there were rumors
that the Federal Reserve would not support the bond
market, but at about the same time, action was takeh
in the direction of supporting the market. A mord irim¬
and
rates
-
"
the
portant aspect of this issue, however,
whether the Federal Reserve support
would seem to be
will be sufficient
drastic decline In market price!
inconceivable that the system would
*;■to offset an otherwise
because
it
seems
withdraw its
-
delivered on 1947 mili¬
forces decide
produced and
the necessary funds to produce
bonds.
the result of some
stiffening in interest rates but even
more
important was the possibility
of
a
further increase in interest
aircraft production
somewhat higher than the year
it is still only
Government
This decline was
companies, by
of 1947.
...
long-term
of
equipment and organi¬
excess of its require¬
such time as the military
aircraft designs should be
appropriates
Carl
commercial banking in 1948 obviously
The outlook for
-
support.
,
.
this point is that'lt is'llkely that
there will be sorhe further stiffening of interest rates
in 1948 and perhaps a further decline in the price of
Our summary
on
long-term Government bonds. The situation,
is not likely to preach, a crisis Which will
As
Congress
to do to arrest
conflicting infla¬
the
accelerate
'
number
modern
the Federal Gov¬
ernment may attempt
cannot be
orders fell more than 4,000 short of the
military experts set as peacetime requirements and nec¬
essary to maintain a nucleus of . an aircraft industry.
indicative of the state of the industry and the military
air forces, I can cite the fact that 24 out of the 36 types
of aircraft currently m use by the .air services were
obsolete and already out of production.
The industry is making a desperate effort to hold
together until
know that a high
the money market. We
da not know what
in
The airplanes
we
HERBERT J.
tary
what
feel the need of one.
code for only the networks would
G. W.
Company
high level of in¬
President; The Niagara
one-tenth of its
rate
on
the eve of Pearl Harbor,
which proved to be disastrously be¬
low the figure needed for adequate
1946
a
is necessary to support our na¬
ment controls
While military
in their broadcasting practices,
,
that
production is desirable.
We
also know that the Federal Govern¬
VAUGHAN
that the
will stop the
rate of
large, were
close
low, or whether different elements
of broadcasting are to go different
v
some
fact
acute.
tional debt and
able to survive this
period was due, in a large measure,
to the carry-back provisions of the
Federal tax laws. On the other hand,
these carry-backs expired with the
and
they believe it
spiral is on the way.
The danger is that the small reces¬
sion
can
develop
into something
Curtiss-Wright Corporation
The
Inc.
....
It'may be that the
recession which some hope for
markets.
inflationary
ments.
Company,
will have great meaning for both radio
Broadcasting
lower
far
to affect bank
management will act. We can hope for sound political
leadership, a willingness of labor to become more" effi¬
cient and a willingness of management .to understand thi^
over-all picture. The truth is that no one can tell just
what lies ahead." " :
■ 7
7' ;,• s,;(.
end to
with plants,
and television.
ways
small
aviation
|f:
NILES TRAMMELL
National
Federal Reserve and Treas¬
officials to restrict credit is certain
loans.
It has already influenced the
Arnulf Ueland
zation
,
Youngstown, Ohio
inflationary
the
'
ULLMAN
Savings & Trust Company*
The Dollar
The recent decision of the
critical year
plants.
President,
CARL W.
President,
tionary and deflationary forces, nor
we know how sensibly labor and
industry approaches 1948 as the
in its history. Notwithstanding the
fact that the industry had enjoyed its greatest peacetime
volume in 1947, it had suffered its greatest operating
losses. This was due to the fact that
at the end of the war it was left
with a tremendous conversion job
America's
writers and signers.
tively.
played in World War II.
it
beyond the pres¬
production may
GUY W.
trend, obviously, indicates increased sales of all of our
ham, Alabama, and Boston plants.
expect an
after World War
j check-protection
demand
its survival is
I when prices
fell very sharply. Under such condi¬
tions it appears that it will be wise in 1948 to follow
a conservative policy with respect to inventories of mer¬
chandise, commitments for future purchases, and debts.
It should be a good year in which to maintain a strong
cash position, to avoid unnecessary expansion, and for
individuals to resist inflation by increasing savings and
buying United States Savings Bonds.
year
Forgers, embezzlers and check-raisers are
rapidly becoming the nation's largest crop of criminals.
Unable to escape these facts, business and the general
public are becoming more and more concerned with
finding means of protecting their bank balances. This
for
;
the
placed
presages
aircraft manufac¬
0":;'-.'V7' vT/,7' - '■ V'•'
,
is vital to .national security and
imperative, as clearly proved by the part
The aviation industry
do
spiral and result in lower prices. Tn
many respects the present situation
resembles conditions in the
third
increased demand for
virtually all of our products is the constantly increasing
public awareness of the dangers of check fraud. While,
again, no exact statistics are available, it is self-evident
that check fraud losses are at an all-tim& high—estimates
;
can
sibility of increases
ent high level of
bring
air transport industry we
industry;.-;"•*;'
turing
or
of consumer
demand.
These forces combined with the pos¬
\
.
third factor which
A
have had a good
and,
possibly hope to have a sound
cannot
come
slackening
checks
for
demand
the
We
inventory
accumulations, a
of exports and possibly
will continue to increase.; Certainly, the business world
will see no trend aw^ay from the convenience of check
transactions toward a reversion to antiquated cash pay¬
i.
general, and most banks
level
minimum-balance requirements.
without
"J accounts
Bank, Minneapolis
reached. A downturn is to
be expected in capital expenditures,
reflecting
uncertainty
incapital
markets and a shortage of risk capi¬
checking
and the growing popularity of special
comes
;
critical and without a healthy
We know
will be,
tal.
all important records
spite of conditions in the industry, 1948 will produce*
some startling military developments in airplanes.7
The situation the air transport industry faces is al?o
in
more
:
in 1947 but continuing and substantial increases
in production costs and operating expenses present a
serious problem for the future. With wholesale prices
close to an all-time high, it is prob¬
able that a peak has been, or soon
accounts, meanwhile,j similarly
number, due both to rising in-'
checking
to increase in
effectively, in 1948.
sure, more
year
;
continue
vitally important that we de¬
to us at NBC
Business, in
1
the best estimates
indicate that the number increased from something like
5 five
billion in 1935 to approximately ten billion last
year.
More and more industrial firms are turning to
check payrolls, largely because of the inconvenience
'i and dangers of transporting and handling large sums of
cash.
seems
President, Midland National
number of checks written in a year,
*
aircraft today hold
mercial
ury
ARNULF UELAND
duction, similarly a constantly expanding field. While
there are no accurate statistics available as to the total
?
come
because
are
create an even larger
largest single phase of our
The
important world
start, due to lack of adequate facilities, they
out leaders in their fields., American Com¬
poor
issues, and arouse them to thoughtful, intelligent action.
That is what we plan to do more diligently and, we
in the forseeable future—indeed,
the trend is in the opposite direction.
If continued, of
,
a
have
capital
be reduced in number
dema'nd
to
have,
velop programs that will get more persons interested in
the issues of the day, inform them about all sides of those
this type of product will
similarly maintain approximately their 1947 level.
The present large demand for payroll forms arose
•largely out of the necessity for government reports
resulting from Social Security, wage-hour and with¬
holding tax legislation. There is certainly no reason to
believe that these and similar government reports will
course,
which will treat with
program
It
anticipate that our sales of
*■
Ted
problems.
employment, we
of
gineers
report exactly what these programs will be or what form
they will take. However, one period of prime time has
been set aside for the presentation of a'j documentary
opinions of spokesmen for many in¬
dividual industries, seemingly point
to a continuation of approximately
L. Todd
George
indications,
all
Since
much restricted in past years, American en¬
by their ingenuity and resourcefulness,
the world in research and development. Always off "
been very
Company expects great
of its new Public Affairs and
Education
Department.
The six-man Public Affairs
Board Traded by Ken R. Dyke is exploring anew the
question of programming in the public service area.
We expect their forward planning to reach full fruition
in 1948 with new and provocative programs concerning
subjects ©f world and national import. It is too early to
important phase of our bus¬
one
chance, will continue to lead the world as it did
World War II. Although they have
a
in the latter part of
things in the coming year
Canada.
In
half
National
The
United
in'1948. technically American avia¬
of the world and, if given
In looking ahead
tion is far ahead of the rest
"
;
public service?
Broadcasting
And what of
branch plants
States and
our
the
v
United States.
force in the
new
through 1948—
industry point toward such
continue to be good
least, all indications in our
1
•
utensils to canoes and coffins.
! *
television will appear as a
It will, far outdistance the progress made by sound broadcasting in its early
days. By the end of next year, television will reach the Midwest, and by 1950 or perhaps earlier,, the West Goast; The income figures-for television will overshadow those •<.
for radio in a similar period.; In 1948, NBC will pass the
$1,000,000 mark in income from television—and the tele¬
vision broadcasting industry will expend for facilities
and programs at least $10,000,000.
'7; '• V ij"
Inc.
/ President, The Todd Company,
Business should
material or devotes
matter, then all must do
tion broadcasts offensive
time to commercial
GEORGE L. TODD
'
He concludes that
operators.
fenses of a few
I can see a
home,
at
taxes
to maintain
production
needs of national defense, manufacturers had been forced
to turn to the production of various miscellaneous prod¬
ucts foreign to the aviation field, ranging from kitchen
if one sta¬
too much
the same.
That's why NBC feels that in 1948 standards of prac¬
tice must be raised by all operators originating programs
period of reasonable
period of years. .If we fail in
either of the above, I see the usual historical result to
an inflationary situation allowed to proceed to the end.
and
prosperity over quite a
Year
them.- Furthermore, in an aggressive effort
staffs
and skilled
personnel vital to the
terially correct the conditions which are annoying some
listeners.
The listener condemns all radio for the of¬
84)
(Continued from page
1948
Thursday, January 22,
,
Speaks Alter the Turn of the
Business and finance
,
FINANCIAL CHRONICLE
&
COMMERCIAL
jeopardize the
however,
seriously
position of the commercial banks as a
result of their holding
7-
bonds.
..
The
second
Government
\
apart from the leyel of general
which the commercial banks must face
factor,
business activity,
during the year is the
7
large volumes of
possibility of some restraints be.r
(Continued on page 88)
Volume
167
Number
4666
THE
COMMERCIAL
Administration's Swollen Budget
(Continued from page 8,5)
It Violates
every
principle of lib¬
eral thought.; It should only be
carried through if absolutely es¬
sential to the safety of our
people,
i As
advocated in its present form
it is neither desirable
as
a
of
means
advisable
or
training
our
men
efficiently for modern warfare.
is not the best method of
It
getting
reserves, nor does it provide the
kind of reserves we
might need.
*
.
U.M.T. would provide some ten
twelve million partially trained
or
men
for
most
we
movement which is
mass
unlikely to
in any war
occur
foresee.
can
We
certainly do
not need any such number of
men
for defense against sudden attack.
If it should become
necessary to
send a mass army
abroad, it would
to provide the new
take two years
substantial tax cut.
•
The
President's
ever, has made
The
people
in
try
cannot
to
instead of the
I believe
:
serve <m a
of 1944.
war
want
we
V
smaller
a
re¬
volunteer basis, highly
/trained to carry on the technical
.activities
so
in modern
necessary
and
war
paid for the time they
have to spend,
In spite of the
propaganda for U.M.T. an aston¬
.
go
all
of
the
services do
and
powers
;• in
compulsory
military
training. Because of the Adminis¬
tration;; policy and propaganda,
they naturally remain silent.
C ;
A
that
extension
shall not be continued in time of
President Truman
peace.
indicated
even a
has
now
greater extension
in his state of the Union
message
and in the budget which he
pro¬
poses.
-
.
V..
It is obvious that under this Ad¬
we
will
never
return
war>
spending. He' demands war
powers to regulate every detail of
American life. The only real prog¬
ress, the only liberal progress, can
be made under the increase of
freedom.
We
have
fought
two;
World Wars to prevent an attack
on that freedom. Let us not
volun¬
tarily surrender it to the powers
and
propaganda of
state. '
■'
■■■
a
totalitarian
vy-V-:;:V!v/£;'■■vV ■'-'•
NYSE Quarter Century
Club Elects Grogan Pres.
In view
tensive propaganda
of
ex¬
to the im¬
as
possibility of such
the
a
I
program,
the American people will
am sure
be. surprised to learn that the Na¬
tional Guard is having no trouble
in
securing its enlistment quotas.
Its
quotas
however,
being
are
because
of
retarded,
its
lack
Floor
a
Reporter,
Treasurer.
lives
He
elected
was
in
Oscar
Lassen, head carpenter of
the Exchange, is the senior mem¬
of
the
club
in
and em¬
ployment. He is 83 years old and,
in May, will complete 53 years of
continuous
Jbhn S.1 Grogaiv employed
29
by the New. York Stock
Exchange and
dent
today
a
of
reporter
the
on
Quarter
Ceri^
tury Club of the Exchange,
ceeding
Fred
A.
Knoble,
its
suc¬
Plant
and
glad to
see
Bank, Pecos, Texas, appointed for
dollars
I
provided
current
for
Guard
budget
and
the
age
service.
He
is
At the
same
announced
rectors
held
this
evening,
building
an
reserve
on
basis, it couid
rerserve
as
course, be
the
soon
we
need.
Member
Council,
of
J.
Federal
E.
Woods,
Advisory
It
22 offices
throughout
California
!" and
military
and
with
The
Federal
Reserve
Bank
Dallas, Texas, in advices to
of
mem¬
ber banks on Jan. 2, made known
the
following
as
First California Company
appointments and
announced by the
UNDERWRITERS
Member Los
J. R.
Parten, President, Woodley
Co., * Houston, ■ Texas,
redesignated - Chairman
of
the
Private
Petroleum
Board
of
Federal
300
Reserve
Agent
Anderson, General
Manager, W. T. Waggoner Estate,
Vernon. Texas, redesignated Dep¬
Frierson,
of
for
Frierson
the
Reserve
a
San
Montgomery Street
Oakland
San Diego
San Jose
510 South
Rcdlands
A.
Teletype LA 533
-.*■
pletelydistorted ;thh
get. Probably
no
»*•> Laguna Beach
be
Reno, Nevada
an
COMPLETE COVERAGE OF
SAN
Pacific Coast Markets
FRANCISCO
STOCK
EXCHANGE
Direct Private Wires Between:
Los
BIG BOARD
San Diego
»
a
of
Philadelphia
Angeles
Chicago
'
-•
of the WEST
Members:
New York Stock Exchange
New York Curb Exchange
Philadelphia Stock Exchange
530 W. 6th St.—Los
;New York':
Los Angeles Stock Exchange
Angeles 14—TRinity 5343—TeleypeL. A.-584
Philadelphia
San
com¬
certaintly
recast
:
Pittsburgh. :
Hagerstown
Diego : Beverly Hills
we
Service
,132
pnly :;a
Banks
K;
make it effective for
national
On
save
Bowling Green 9-4900
net
Salt
.
National Companies after the close of Eastern
■
■?'
.
.
Preferred Rate of Commission
to
upon
Western Mining and Industrial stocks
Exchanges.
•'
*
Lake,, Los
Also,
••'*'
Orders
O.T.C.
''* V.
'
'
handled
surplus
estimate
even
of
on
there
the
receipts
will
direct
of
$7,800,-
000,000. This will permit the
plication of
,§$■&. billion to
ap¬
the
issues.
■*
•
;.
through
or
cation.
J. A. Hogle &Co.
1915
MEMBERS NEW YORK STOCK EXCHANGE
a
President's
'
•
Spokane
appli*
$3
be
and
Intermountain
'*•'
ESTABLISHED
basis
Angeles
private wire from New York office,
Members of Regis*
Exchanges, N. A. S. D. and Banks
the
on
Exchanges.
tered
about
on
,
this
BROADWAY
NEW YORK
Prompt service
Stock
many
.
se¬
I believe
• ••
The Nation's Market for Western Securities and also
we
military budget to
curity and defense. And
still
61
listed
tive to assist them in
restoring a
stable economy. I estimate
that
can
main -st.
generous
policy of extending to Europe as
much aid as can really be effec¬
we
Brokers
for
Salt lake city
:'V Phone—4-7781
estimate thai
..continue,. our
billion.'
Long Beach
:
it
if
the Presi¬
on
dent's huge budget. I
our
v
BUCKLEY BROTHERS
physical
My remarks jhaye beeti
recast
j
$3 Billion
rough commentary
can
Vegas, Nevada
direc¬
and
Save
Ventura
Las
Bank, for
Wish to: bring* this country 1 na¬
tional security- in a,modern world.
Can
Stockton
Pasadena
Napa
*
iefensd hudr
entirely
=;
Fresno
Beverly Hills
Santa Rosa
net increase will
required, :i but
: can,
Sacramento
Monterey
Glendale
Inc.',
Spring Street
LOS ANGELES 13
Long Beach
Santa Ana
.
Francitco, Lo» Angelen and New York
Teletype SF 4.31 and 433
Monrovia
Co.,
Frierson, La., reappointed
of
G.
1948;
Between
DISTRIBUTORS
•
Angeles Slock Exchange
SAN FRANCISCO 20
for 1948; R. B.
uty -.Chairman
Wire»
ico, reappointed Director El Paso
an ex¬
U.M.Ti has
Nevada
i
Of Reserve Bank of Dallas
The determination of the
Army
; We
three-year term beginning Jan. 1.
'1
v
of
to proceed
...
a
market
training in the high schools.
;■
Bank, Austin, Texas, appointed for
Chairman
fastest-
over
can,
supplemented by
branch, E. R. L. Wroe,
the
large
as
three-year
a
beginning Jan. 1; Director of
President, American National
colleges, and the encourage¬
■
term
Hal^Bogle, of Dexter, New Mex¬
voluntary
have
Bank, Galveston,
San Antonio
New Officials Announced
the Bronx, Was born in New York
efficient and
a
National
Texas, appointed for
Federal 'Reserve
branch,
am
in
get
Houston
three-year term beginning Jan. 1;
tension of the R.O.T.C.
system in
should
States
was
New York
adequate
be
time, Jan. 2, it
of
Kempner, President, United
Bank of Dallas has made the fol¬
at
Exchange sub¬
its fanatical interest in U.M.T. and
S
Director
R. Lee
growing
tion
National
once
go about
ment
1;
that the Board of Di¬
of
three-year term beginning Jan.
a
Antonio
the
sidiary. Mr. Grogan, who lives in
for other increases in
If the Army will
our
San
ginning Jan. 1.
reserves.
-
of
three-year term be¬
a
Whyte's Restaurant.
tor
increase in ap¬
in
propriations .is
Director
branch for
Vice-President, Security State
Covering
be
Paso
tive
ap¬
America's
,
El
Everett E. Hale, Professor of Eco¬
The; annual dinner of the club
will
of
nomics, University of Texas,
that nearly a hundred
million
armories.
Director
branch, W. H. Holcombe, Execu¬
eighth employee of the Exchange
or its affiliated companies to com¬
plete a half-century of service. V
Manager of the New York Quota¬
Company,
1948;
year
a
lowing appointments:
Baldwin,
Long Island.
ber
Board, Temple National Bank,
Temple,; Texas, appointed for the
of
equipment
.
Schumm, 47, of Hillsdale,
N. J'., was elected Secretary.
He
was
employed in 1921 and is a
Floor, Supervisor.
Lawrence
Harte, a veteran of 30 years and
of
87
three-year term beginning Jan. 1;
pointed
of 14.
Otto
t
-
trading" floo r, waS elected Presi¬
basis*
age
a
three-year term be¬
ginning Jan. 1; J. E. Wheat, of
Woodville,
Texas,
reappointed
Reserve System:
tinteer
reserve
elected Vice-President,
lives in White Plains,
employed by the Ex¬
change at the
branch for
Director of Houston branch for
Floor Super¬
47,
was
(387)
Board of Governors of the Federal
years ago,
proper
a
was
is
and
Rundt,
designations
system can
certainly be established on a •vol"
.
He
The President demands
not be-
'
lieve
'indefinitely
on
fight the World War. 3 believe
people are determined that
ishing number of. the best officers
in
coun¬
the
those
to peace.
time,, additional men could be
trained, and trained in the meth¬
ods of the war they are to fight
clear.
indicated
of the Federal Government
penses
ministration
army;
issue
1946
spending and spending and tax¬
ing and taxing. We had to extend
tremendously the power and ex¬
\yeapons and methods of
such
the
clearly their belief that this
fbr.. any
transport
During that
how¬
companies.
Arthur F.
visor,,
;
-
message,
CHRONICLE
years ago.
The Quarter
Century Club comprises 147 active
employees of the Exchange and its
most
a
FINANCIAL
City 56
affiliated
public debt and still justify
&
Sessions: 7 A. M. to 2:30 P. M.
except
7 A, M. to 11 A.
AND OTHER EXCHANGES
Saturday
OTHER
M., Pacific Standard Time.
DENVER
-
BOULDER
-K
OGDEN
OFFICES
BUTTE
-
ity,
'
,
,
,!.
'
•
RENO
-
•
-
•
V'/vf
LOS ANGELES
'
BEVERLY HILLS
-
■
SAN DIEGO
RIVERSIDE
M
.
*
;
•r,""' z.rr.rrrjs'rrrr-ua
.->}•/•>
U
-
V
SAN BERNARDINO
,
*•*
THE
ing placed upon their loaning
that the loans of commercial
•' ' •■■
86)
(Continued from page
activities. It is well-known
banks have increased in a
phenomenal way during the past year or so. In fact, the
increase is unparalleled in the recent history of banking.
The restraint on the continued expansion of loans may
take several forms. Legislation may be passed in order
of Governors to increase
permit the Board
that virtually all
potash content in
plant foods.
Demand is also increasing as a result of
the general expansion of the fertilizer market and the
use
of potash for direct application in agriculture.
Imports of potash from Europe in 1947 were minor,
amounting to only 1% of total domestic production, and ,
manufacturers
the legal
requirements of member banks. This would act
effective check on bank expansion because most
banks are not in an excess reserve position at the pres¬
ent time.
There are other ways of accomplishing the
same result but this seems to be the most likely of those
which may be imposed from the outside. In addition, of
course, there may be a self-imposed restraint which will
reserve
as
an
beginning to scrutinize more closely their existing
and their new requests for the reason that the
credit position of; most borrowers at the present time is
more
favorable than even normal conditions would
warrant/ ; /• .<
"< I "
v"V
drastic restraints
i
C
j nate the expanding loan
I
■
are
not likely to be
I i President, International
six
run
facilities
of
Minerals
&
Chemical
International
Corporation
corporation is the largest pro¬
ducer of phosphate rock and is one
of the
principal manufacturers of
plant foods and refiners of potash
It
is
also
other
such
a
potassium chlorate,
•
Louis
Ware
-
as
well
as
■
silica gel, sodium
foreign food requirements,
emergency
their
the
the
development of new fertilizer consuming areas in the
Middle and Far West which are becoming important
this company.
market factors for
Long-range
richment.
enlarged facilities at Hartsville, S. C.,
Ga., during the immediate preceding
years.
In virtually all plants, new mechanical dens and
other labor-saving equipment have been installed during
the past year to raise future output to the highest pos-r
City, Iowa, and
and East Point,
sible levels.
'
p
;
.
>
,
\
This spring will witness the opening' of the
and one of the richest phosphate mines in the
near
Bartow, Fla.,
largest
world
together with the construction of new
that- will enable the corporation
alone to produce as much phosphate as was represented
by the entire output of all companies in the Florida
phosphate fields before the late war. When the new
mine and drier equipment become fully operating, phos¬
processing facilities
will be approximately
three times its prewar level. The company now is the
largest producer in the Florida district whose output
Is almost one-half of all the phosphate mined in the
world. The present expansion program by the company
in Florida was undertaken to meet the intensifying de¬
phate
output of the
mand for
company
phosphate as a principal
the industrial chemical require¬
plant foods which use
component, as well as
ments for the mineral.
on
the increase from year
likely continue
in the future.
to year and will very
This trend is being in¬
such
the prin¬
"
Strengthening of world trade
control of inflation are
J. Watson
Thomas
statements
Nations
participate in laying plans for peace, prosperity and
happiness for all peoples. ; K ;
In the United Nations, rather than in another year of
lies our hope for the
deal of misunderstanding re¬
Ernest T. Weir*
garding the actual demand-supply
It is my hope that
;
this brief article may shed a little light on the subject'
important facts.
/ .//•'•/:/*.
everybody. It is this.
Employment and production in most lines are at or
above previous peaks and such a high rate of activity
could not be supported without a large flow of steel —
because in these days steel is essential in the manufac¬
ture of practically everything. The fact is that in 1947,
the steel industry produced more than 84,000,000 tons of
ingots. This is, by far, the industry's greatest production
by giving some of the
thing should be apparent to
One
peacetime year.
^4
steel production, how does it happen
in any
With such great
V
products are so scarce? There are a number of
of which the following are the most important,
steel is being shipped abroad than in prewar
that
More
days.
future.
increased
President, The Texas
Unless some
evident
on
that seems to
horizon manifests itself, 1948
At least,
of opinion of the
of high business activity.
be the general consensus
businessman, - and in
disposed to concur.
The
proposed European Relief
Plan, which will undoubtedly
be
adopted in some form, will serve to
increase the already heavy domestic
and .file
rank
that view I am
and dur¬
these require¬
ments, production must be carried
forward at a high level in 1948.
Another basic factor which will
demand both for consumer
able
goods.
To fulfill
peacetime products
trend of wages
1948.
account, it seems
to me that
only temporary.
present consumer demand will eventually level
aptly compared the present demand to.
situation that would be created if 40,000 persons
Someone
in, but not at the same moment. The same thing
true of the demand for products.
Everybody
will eventually get that automobile, refrigerator, or other
all get
will
W. G.
Vollmer
.
it does or not
But whether
during 1948 we may reason¬
(1) increased production in consumer and
(2) continuation of the heavy domestic
demand for these goods, augmented by the government's
requirements to carry out the proposed European Re¬
covery Plan; (3) continuation of large farm crops, with
be
article, and demand will subside to normal levels with
only a fraction of the present number of buyers in the
market for products at any given time.
r" :
thing not only for the steel industry
steel companies should expand!
facilities on the basis that the present demand for steel
would be permanent.
Yet this is being urged as the
It would be a bad
but
for
the country, if
public duty of the steel industry by some persons.: It
may be pointed out that these persons belong to the
same school of economic philosophy which maintained,
ably expect
ten years ago,
durable goods;
arid
a
level; and (4) a possible continuation in
general expansion of prices and wages, although not
high income
the
extent of 1947.
-
'
standpoint of the railroad industry, all of
these things portend a large traffic volume for 1948, but
the prospects for adequate net earnings is by no means
encouraging, because the costs of rail operations have
From
the
that the effect of some
appeared at the gates of Forbes Field and tried to pass
through the turnstiles at the same time. ■ They could
the purchasing
power of the nation, which continues to establish new
highs, will insure an expanding market for an almost
limitless variety of consumer goods as well as a contin¬
uation of our present high standards of living.
When the principal economic factors are taken into
off in
unavailable.
of these factors
Foreign demand will not continue
permanently at the present level. Before the war, the4
United States made less than 40% of the world's steel;
today it makes more than 50%.
This is due to the
destruction of much foreign steel capacity and inefficient
operation of much surviving capacity. Foreign steel
industries will not remain in their present condition.
They will make strenuous efforts to regain their former
positions in domestic and export markets.
The demand of steel for inventory purposes is, in
effect, a double demand. It will cease to exist as pipe¬
lines become filled.
And the pipe lines have already
become filled in the case of some steel products.
; ?;
is obvious
the
trade ac¬
spiraling
and prices will level
were
because
the war
The
to
ulating effect upon general
tivities and employment.
It is to be hoped that the
be rebuilt.
present consumer demand is abnormal
is the total demand that accumulated through
out.
accentuate .our expanding
economy is
the desperate housing
need.
Expansion of this important
program will inevitably have a stim¬
serve
cannot convert all the steel theyproducts immediately because war
The
is
unfavorable economic condition not now
the business
will be another year
of steel consuming manufacturers
result of the war.
depleted inventories must
It
and Pacific Railway Company
a
Most manufacturers
it
VOLLMER
as
receive into finished
when
w. G.
easily made Y
create a4
they
situation in steel.
and
of utmost im- '
to
V
are
unfortunately
The number and size
| United
blame.
an
reasons
affords an
opportunity to individuals and groups
The
is human
production.
pand
portance.
to the
'^Jhe saracj'' Situation'is': reflected in potash, of which
the company is one of the.four major producers in the
couhtryl l'Bpth potash tonsttmption and production have
been
1
planning calls for continuing our program
-
is world stabiliza¬
ciples of the Marshall Plan, with suf¬
ficient financial backing to insure its
additions to our
The, construction; of a new fertilizer plant in Somer¬
set, Ky., now under way, is the latest in a series of addi¬
tions which have included Pensacola, Fla., and Mason
future rs
success.'
it
great
continue to
stabilization is adoption of
situation
a
cases
many
Such
tion—economic and political.
A vital contributing factor to
good business,
production facilities and the
extension of, our present policy of product diversifica¬
tion. The major project of the company in this respect
during 1948 will be the construction of a million-dollar
refinery in Carlsbad, New Mexico, to produce chemical
grade muriate of potash as well as an improved grade
of sulphate of potash.
The new plant will enable the
company to enter new chemical markets and thus con¬
tribute further ; to the diversification policy.
Another
problerri ahead, involves planning for increased avail¬
ability of triple superphosphate which is necessary for
the manufacture of higher analysis; plant foods as a
result of the new trends in soil conservation and en¬
of making
of these conditions
is ex¬
pected to cause "the demand for fertilizers and
components to attain new heights. This demand in
United States will be intensified, too, as a result of
first
good for many years to come if
certain conditions are met. -Foremost
fluoride,
such
accusing finger ':
has been pom
pointed at the steel indus- '>
try.
Persons inside and outside of;:;
the government have said that the ••
steel industry should be producing
more
steel or, if tftat: is impossible
with
present facilities, should
at.
least be taking steps to greatly ex¬
In
be
defluorinated phos¬
phate, mono sodium glutamate and
many allied amino-type products.
Agriculture's increasing need for
plant foods, both through increased
prominence given to soil conserva¬
tion measures and the necessity for
highest possible level of crop production to meet the growing domestic
silico
In
and
Business prospects can
manufacturer of
products as
important
of a situation
of the available
excess
nature to look for someone to
WATSON
coming year is good. The
more than 366 days,
v
other
supply. A ).•;? ■>:
••
optimistic about 1948 business for industry of the4'
States. But I feel that it would be a mistake to
permit ourselves to be complacent
because the business outlook for the
am
in
far
sorts
Business Machines Co/
President, International
I
Corporation
automobiles, refrigerators and
only too familiar with the paintful results
which finds demand for goods of all
are
year
THOMAS J.
The
salts.
indicate that earnings for the
WEIR
Steel
products made chiefly of steel are hard to obtain. Con¬
sumers,
retailers, distributors and manufacturers are -
1948 in prospect, earnings for
in a position to reflect this
improved position of the company. .? ' . />• \;
fiscal
full
United
during 1948.
-
the new amino products
T.
National
It is not news that
favorable outlook for
the
supply and. food
result of greatly
expanding domestic consumption and foreign crop defi¬
ciencies, will continue to place a strain on all the production
ERNEST
Chairman,
months of the fiscal year ending Dec. 31, 1947 will
ahead .of the comparable period last year.
With
the
Minerals & Chemical Corp.
operating experience of
Preliminary figures
volume.
dislocation between food
throughout the world, both as a
-
in this direction will be made
San Jose, Calif., which began production of
mono sodium glutamate and allied products last spring
has shown substantial improvement in both efficiency
and rate of output.
It is anticipated that the production
rate during 1948 will increase further so as to permit
the company to supply more of the requirements of the
food industry than in the past.
*•■»■*
-
H The serious
demand
the nation's commerce.
plant at
LOUIS WARE
'
equal basis with other forms of transportation for
It is to be hoped that progress
during 1948.
an
consequence, to expand In¬
the general industrial chem¬
ical market. Other improvements in the present refining
facilities at Carlsbad are expected to provide for a.
greater efficiency in potash recoveries which will enable
the company to make substantial increases in output.
placed upon the banks from the
I outside, but that some self-imposed restraints are like;ly to occur which will cut down but not wholly elimi-
11
equity investors,; It is to be hoped that substanin this direction will be made during 1948.
To
accomplish this important objective requires a
change in our national transportation policy to the ex¬
tent that the railroads will be permitted to comnete on
ial progress
planned, as a
ternational's ability to serve
The
-*
for the
refinery was
loans
•
sound and
service, it
meet interest
to
advanced cost over domestic price
has been largely confined to the
eastern seaboard.
In addition to the consumption of
potash salts by the plant food industry, industrial uses
for potassium are likewise growing.
The new Carlsbad
are
amount the
permitted to earn a net income sufficient to.
operating costs, to replace and modernize its plant,
charges and then have something left'!
cover
their distribution
and
much greater rate than the
are
should be
that European
not appear
does
a
receiving for their services.
If the railroad industry is to continue on a
solvent basis and to render a high type of
carriers
rived, moved at an
feeling on the part of bankers that
further loan expansion is not a good credit risk or from
a desire to cooperate in curbing bank credit expansion
during an inflationary period. The latter voluntary con¬
trol is not likely to be very effective but many bankers
this point is that
increased at
production in 1948
will permit any sizable quantities to be made available
for importation to this country.
What imports have ar¬
it
result from either a
Our-summary on
are
1948
Ailer the Turn of the Year
by the fact
stepping up the
considerably
fluenced
Thursday, January 22,
FINANCIAL CHRONICLE
Finance Speaks
Business and
to
COMMERCIAL &
(388)
88
would be
in the
Of
a
of 1945 that there
great depression with millions of
unemployed
spring or summer of 1946.
practical importance,
more
that the type
not
involve
the
that the steel industry was over-expanded,
which predicted in the autumn
expansion
sources
of
it should be realized
of expansion that these people urge would
only new and enlarged steel plants but
raw
of facilities all the way back to the
materials. Such expansion icould not be
accomplished in less than three years.< and thus could
effect on the present situation, iln the mean-*
have no
Volume 167
THE
Number 4666
-
COMMERCIAL
CHRONICLE
& FINANCIAL
(389)
8»
Business and Finance Speaks Alter the Turn of the Year
time, the expansion itself would require steel which
would have to be subtracted from the present supply.
In
addition,
steel
The
—
in sufficient quantity and quality to operate
—
to
little
value
if
supply them.
With all
of
materials were
raw
mind, the companies of
carrying out programs of expan¬
sion and improvement that are in practical relation to
the existing situation. The programs started in the steel
industry at the end of the war involved total expendi¬
the steel
tures
industry
of
than
more
$1,000,000,000 and enlargement
dred
National
Steel i Corporation
is currently spending
there is
company
a
The
increased
of
a
The
Delaware, Lackawanna
Railroad Company
The
:V;
railroad
industry
gone
1949.
I have pot mentioned previously two of ; the most
important' factors bearing on this question of steel ex¬
pansion. These are the increase in population and the
vinced
Hence
improve, and they
to m?ke this possible.
.
getting
we are
a
:DAVID
:i:; V'
E.v,WILLIAMS
commodity prices
next
the
over
months
few
in
course
my
of the
judgment,
will determine in large measure the
problems in the banking field during
1948.
'
Further
basic
increases
in
prices
of
commodities, in all probability,
William White
from the
mands and
bring about continuation
inflationary spiral.
If this
persists it wculd result, no doubt,
the
in
the
diminution
mentum
business
of
mo¬
precipitated by
further and more .vigorous credit
controls by the monetary authorities.
If cooperation is achieved and pro¬
probably
duction is
sustained, 1948 could con¬
tinue to support a high standard of
David
E. Williams
living for all and produce satisfac¬
tory results.
C.
1
President, Republic Steel Corporation
continue well above ability to pro-.
.
car¬
our
ing constantly increased wages followed by constantly
increasing prices. They can render a great public service
and a service to their members by withholding demands
for further increases in wages and giving business a
breathing spell to increase production, with improved
be lowered and, thus, prices
and prices
must stop at some point, and we find that businessmen
generally are anxious to decrease prices if only there is
a surcease from constantly increasing wages.
It must be
efficiency,
for most
the
,
r ^
fj
an
recognized that in the final analysis there is only one
cost and that is the cost of labor.
We talk of material
C.
M.
White
equitable distribution of the scrap,
be unable to produce their
will
possibility of
shortages resulting from severe cold spells of any
duration this winter and river freezings could prove
gas
serious to coal.
Any
one
or
more
of these could
keep steel production well .below capacity in Republic's
JOHN
E.
WILSON, JR.
President, Wilson Refrigeration, Inc.
ciative of the railroad situation; and they
ing the full freight-rate increase re¬
1948
a
year
am
social factors
are
combining to
of healthy possibilities for the home
>
making
in
1947.
It
was
no
or
attempting
any
what is occurring in Europe and
particularly in England.
We are
aware of the implications of govern¬
ment ownership. If we are to con¬
tinue our American way of life, we
must have modern and well-equip¬
ped railroads under private owner¬
Robert E. Woodruffship and management. Transporta¬
tion systems are always the first to: :
v
be taken over by any socialistic or dictator nation. We*
are optimistic that the decision of the Commission will'
he favorable and the rate increase adequate.
roads
at
the
tail-end
stepped
absorb in recent years.
and payroll taxes have
For example, since 1939, wages
increased 75%; the cost of mate-:
rials and supplies is up 88%, while freight charges have
risen only 38% and passenger fares 20%. Railroads are;
at the end of a spiral of rising living costs and cannot
in
any sense be held accountable for starting a new
spiral.
■■r ■ '■ '■ <' '
If, now, the U. S. Government, which caused this in¬
flation, can be persuaded to (1) make money more
somewhere
third
their
officeholders
to
a
status; and (2) give
only if' it will encourage
production, then perhaps
countries
increase
to
Federal
prewar
near
foreign
to
money
them
a
civilian
reduce
and
scarce
point
own
ppiral of wage increases can be held in abeyance
until sortie of the producers can
catch up with demand
will start to level off.
While the Government alone could halt inflation, yet
if all concerned will take a broadminded and intelligent
position it will help stabilize conditions to the advan¬
tage of everyone.
basic
and
commodity
prices
KNIGHT
v
WOOLLEY
Partner, Brown Brothers Harriman & Co.
,
Commercial bankers
have
just completed one of the
The momentum of
the economy gives promise of continuing to tax the
capacity of both business and the banks throughout at
least a portion of 1948.
A combination of high level busi¬
ness
activity,
rising
commodity
prices and a relatively unreceptive
market for new equity securities re¬
active
most
in
in their history.
years
important
an
demand
the
in
increase
commercial
for
loans
which is expected to carry over into
Conscious
bilities
in
the
bankers
straint
responsi¬
deference
wishes
and banking
their
of
present- inflationary
in
and
expressed
of
the
to
the
monetary
authorities, commercial
are, however, exercising re¬
in making loans.
With the
demand
for
purposes
funds
for
probably
investment
outrunning' the
supply
Knight Woolley
up
savings, the commercial
placed in the particularly
;
responsible position of ensuring that loans of an unes¬
sential character are riot permitted to add to the upward
pressure on
was
an
ef¬
-
>
; •
mildly rising trend of interest rates that begar*
some time ago has recently gathered momentum.
Pro¬
spective Federal debt retirement, together with the
recent
practical step in that direc¬
They discovered the home
home freezer
prices.
The
by the
the
of
banker is
can
fective
time,
The rail—',
of the
price-increase spiral.
Two substantial wage increases have been granted to
employees and the railroads are just now trying to catch
up
with increased prices through the medium
of
an adequate increase in
freight rates to cover., increases
in both wages and materials, which they have had t<*
are
situation
necessity for family heads to find a
way to meet the food crisis.
They
freezer saved
consider-,
In the hearings which have been
concluded, leaders of industry have
taken a broad statesman-like posi¬
tion. They want strong railroads be¬
cause
they know that America's
prosperity depends upon efficient
transportation. The people of this
country are greatly concerned about
1948.
prophecies
found
tion.
are
quested.
sulted
Many economic and
do, their education as to
its functions certainly was hastened
normal output.
.
Another threat to steel production is the
very
a
can
and cannot
1948 production. - The scrap situation shows
no signs of relaxing and there is no reason to think that
any large amounts of scrap are available in this country
at the present time, Certainly today's high prices would
have brought them out by now if this were true. Unless
scrap is returned promptly from manufacturing plants
Steel facilities
that costs
industry is encouraged for the coming
The Interstate Commerce Commission, by granting
20% interim rate increase, has shown that it is appre¬
The inflationary spiral of wages
not know what the home freezer
other
threats to
some
The railroad
year.
.
items ' through the second quarter,;
and in. many items through the year. (,
Several situations provide potential
and unless there is
so
decreased.
important role in 1948 than it dici in
1947 in helping American families
combat the problem *of increasing
food scarcities and spiralling prices.
;
The home freezer had its first real
important emergence this year. While "
there are many millions yet who do
isi expected ! that demand
for* alloy ^steels will increase; steadily
orders
that those who make the policy of
labor organizations have seen the futility of demand¬
We sincerely hope
borne freezer will play an even more
dustry ;.it
will1 take "no
that benefit by subsidies
public purse either directly or indirectly. There¬
ahead, and we must go ahead.
While I
bon bars.^rtyjth prospects^
i' year;' ahead, in sthe•; automobile. in¬
,
beingfper-
fair return, and to
audits qf future trends there seems
.
abundant evidence at hand that the,
avail^ilit^are^ stainleSs^jsteehboth'
present/ easy availability will tighten
up.; f The company does not expect to
solicit: business except in the stainless? and; cold-drawn bar lines and
deal and
a
petition from other forms of trans¬
freezer industry.'
The only
the' next few ihonths;and
square
the prompt response of the
Commission in its prompt action
last October, and again at the end of the year, granting
authority for increased freight rates to. meet the con¬
stantly increasing cost of wages and material. From such
portents as are available, we expect 1948 volume of busi¬
ness to be equal, or nearly sb, to that of 1947, and there¬
fore we look forward to this year with more optimism.
make
itemsa which appear to be in. normal
rdver
the
of cost.
Steel pipe
sheet sand bar, and cold-drawn
upon
American
Interstate Commerce
Nearly all steel items produced by Republic Steel
Corp. will remain tight through 1948, according to recent
surveys made by the company.
Sheet and strip will be
most in demand, and it is certain that this demand will
duce throughout the year,
is the next .tightest, item.
the
prices, but'in the transportation and conversion of raw
materials into finished goods labor is the only element
WHITE
M.
of
fore we go
would accentuate increased wage de¬
of
dependent
fairness
We have been heartened by
Company, Philadelphia
The action of
President, Erie Railroad Company
.
un¬
insist upon eventually correcting the
portation
President, Corn Exchange National Bank and Trust
people
situation that results in unequal com¬
v
,
American
the
mitted to earn
can be counted on to see that
provide all the steel necessary
steel industry will
the
people to insist Upon the railroads
The leaders of the steel industry believe just as firmly
as ever that the United States will continue to progress
the
that
essential
.
and
from
der private ownership.
..
.
emerged
want their railroads to continue
-
,
,
just
Western
ahead committing the railroads to the expenditure
of vast sums of money for equipment
and facilities to improve its service
to the American people.
This is not
done by pessimists; therefore rail¬
road management must be classed as
optimists. This because we are con¬
increased per capita consumption of steel or,, to state
it* another way, the .growth of our country and the
constantly improving living standards of the American
people. In these, the managements of steel companies,
have always had great faith, as is proved by the fact
that at every period in our country's history, the steel
industry has built capacity in advance of demand, •.
:
has
&
E. WOODRUFF
R
open
paradox of two years of tremendous volume of business
with very little earnings. Yet railroad management has
con¬
plants for the large scale production of
be used in furnace operations. The entire
to
in the
WILLIAM WHITE
President,
of
program will be Completed in
oxygen
.
Lakes^' Steel Corp., Detroit, Mich., including the
oxygen
of
use
family.
Distributor-dealer expansion is further evidence that
a decided trend on the part of'the consumer
toward the home freezers and that appliance dealers and
others are becoming acutely aware of it.
blast
.
struction
a
resulting increases in tonnage and the adop¬
furnaces to high-pressure blowing are
typical of Improvements being made which affect output.
One major project begun during 1947 is expected to be
in Operation this year.
This is the new pipe mill in
Gadsden, Ala., for the production of large-diameter steel
pipe, an item for which there is a tremendous demand
at the present time.
of
bring about economies and conveni¬
herself
can
that will make daily life much, easier for
large amount
tion
major contributor
to this total industry program.
Our current program,
when completed, will have cost approximately $100,000,000. A.s one result, our ingot capacity will be in¬
creased by 800,000 tons or slightly over 20 %. Under
this program, new facilities are being added at the
plants of Weiirton Steel Co., Weirton, W. Va., and Great
is
home freezer
hearth with
program of expansion and improvements is the largest
in the history of.the industry..
J
in the
ences
materials.
are
of the original programs has added several hun¬
millions of dollars more.
It happens that this
some
plant
steel
plants in the best possible condition to
high rate of production. Much of the money
being spent is aimed toward increasing output from
existing facilities and providing a steady flow of raw
>
< V
factors in
these
other
every
and her
continue
available
not
almost
put Republic
present facilities at capacity. Additional facilities would
have
in
of money for plant improvements.
More than $108,000,000 has been appropriated since the end of the war to
companies find it impossible to
principally coal, and scrap iron
Secure raw materials
and steel
plants and
country.
John E. Wilson, Jr.
and food for them, that they
could store food bought at lower prices in season for
future use when prices would be higher. This word-ofmouth story in behalf of the home freezer gained real
momentum this year.
It will speed up next year with
the outlook not too good as to food, supplies and prices.
money
The freezer industry is building for the future and
they have hn opportunity now to establish the industry
on a firm foundation in addition to
performing a real
public service by informing the housewife on how the
increase
rates, points to
in
a
Federal
Reserve
Bank
rediscount
further stiffening of bank lending rates.
factor — for interest
rise in interest rates isf
beneficial in the present inflationary situation as a
warning that excesses are appearing which if uncor¬
rected may be followed by general business reverses.
To the larger metropolitan banks located on the sea¬
board with heavy interests in overseas business, the
year 1947 was one of marked contrasts. The number of
export credits opened began rising in the second half of
1946 and reached a peak, far above the. 1940 .level, in the
Although
unimportant
rates
still
\
are
,
very
as
a
cost
low—the
(Continued
on
page
90)f
'
*
.
;
^
\
90
THE COMMERCIAL
(390)
Business and Finance
(Continued
89)
from page
.
_
uations
winter of 1947.
reflecting
Subsequently,
sharp decline occurred,
a
depletion of free dollar
the rapid
sumer's
tude, the movement tended to coincide with the trend
of exports from the United States.
<
financing by American banks in 1948 will
probably be considerably less than last year. Without
income taxes
taining
Export
failure in this country could
the Marshall
Plan, exports have been estimated at twothirds of the approximately $14.5 billion volume reached
the level
of last
may
world
which in time
goods.
This
a
will
field.
At
,
President,
of
The outlook in the
it will be
The
there
that
lines
better
Howard L. Wynegar
in demand.
price
the
and
high
of
well
as
our
to
concern
In
the
need
grade
and
been
caution
from
to
extending
have
classifications.
nomic
Keener
competition
situation
in
number
a
eco¬
in-
of
a weakening of
This will place heavier re¬
working
concerns
which
may
Bankers will have to work
maintain
new
additional
need
harder
than
before
liquidity and meet the reasonable demands for
I It
The problems affecting personnel and control of oper¬
inflationary spiral such
tial rise in the
of
cost
Further increase in
higher
as
and
wages
a
to
may
the
uncer-
(Continued from
of
members
are
club
of whom 61
persons,
11
the
are men
The
women.
number
oldest
72
and
mem¬
ber, in point of service, is Richard
W.
Roberts, a teller at the Com¬
pany's main office, whose service
record goes back to Aug. 1, 1900.
George V. McLaughlin, President
of the company, was the principal
speaker at the meeting, and George
A.
Barnewali,
Executive
VicePresident, presented insignia and
gifts.
,
'
'
At the annual organization of
the Board of Trustees of Brooklyn
Trust
of
Co.
the
on
Jan.
company
15, all officers
The
*
re-elected
*
following changes in the of¬
Savings Bank of Chicago
tors
on
tant
were an¬
by the ^oard of Direc¬
Jan. 14, 1948:
Rufus R.
Jeffris, formerly Assis¬
Vice-President
respectively,
elected Assistant Vice-Presi¬
torily,"
Chalkley J. Hambleton, Jr. and
H.
elected
Vondenbosch
were
Assistant
Secretaries;
Henry S. Kahn was elected Assis¬
tant Cashier, Norman Karow was
elected Pro-Cashier; Horace Moderwell was elected Pro-Secretary.
William S. Morrison and Henry
was
Vice-President;, William
elected
H. Froembgen and Douglas S. .Seator,
formerly Assistant Secretary and
taught long ago, but which may have
somewhat, if not overshadowed, by the
the
irom
of
face
for
to
that
quarters
satisfac¬
"while
some
^
"-'v
•
v
-
*!*
,•",.
y..
The election of J. Howard Fer¬
guson
Presidency
the
to
United
States
National
of
Bank
the
of
but
few
a
the
on
Chairman of the Board.
educated in
of the
alert
indications
and
Born and
Nebraska, Mr. Fergu¬
son
graduation
tions in New York City, and was
he
of which in January 1947
elected
the Jan¬
uary
meeting
Manager, Foreign Department.
of
At
the
annual
stockholders
made
in
meeting
changes
no
the
of
Board
of
the
were
Directors
of
At
.
has
been
in
was
Vice-President.
Executive
credit
the
Mr:
Dines
Directors.
the
the
and
1936,
is well known throughout the
bank's
S;
U.
has
National
direc¬
civic affairs.
be
Fenton
and
Dines
to
A.
the
active
in
meeting of Chicago Title and Trust
Co. of Chicago, held on Jan. 12,
the Board. Mr.
re¬
Dines had for¬
Vice-President'
Wil¬
merly held the
Trust
annual
following
directors
were
elected for three-year terms:
David Le'vinger,
Amos C. Miller, Kenneth E. Rice
and Hugo Sonnenschein.
Holman
D.
Pettibone, President, reports
liam Scott Bond,
Chairman
positions
President
been
of
since
of
and
since
J.
Howard
Ferguson
f
Chairman
o
the Board.
Henry Swan, formerly
the
bank
of the Board.
man
position of
the
President of
He will continue to
the
stockholders'
At
been
Rocky Mountain region in bank¬
ing, in the oil business and in
the
meeting,
Rocky
Thomas
W.
region.
Mountain
out
tors re-elected
Howard
of
Board
except for the resignation, previ¬
ously announced of Albert W.
Frank H. Woods.
charge
operations affairs at the bank,
and has traveled widely through¬
same
and,
Gribble, Vice-Presi¬
dents; Munro L. Lyeth, Trust Of¬
ficer and Assistant Manager of the
Trust
department.
Stanley
W..
Stephenson and John R. Starkey,
Assistant Cashiersjv and James. S.
Holme, Public Relations Officer;;
George
of the United States National Bank
Sales Managers, Bond Department
and Ralph A. Heinsen, Assistant
the
M.: Petersen
Francis
erts,
A.
All other officers and directors of
and
ing
bankers
to
the bank were re-elected.
He
made
Nation's
the
Yprk at the time he came to Den¬
ver in Sept. 1945 as Vice-President
Jan. 13 follow¬
were
that
prepared
are
National Bank & Trust Co. of New
Denver, Colo., was announced on
Michels
the
pro¬
contribute their
strength in preserving the American way of life.
are
Vice-President; was named Vice-
Assistant
W.
broader advertising
and
and the Nation, are also subjects which seem
receiving considerably ■ more thought. These are
be
Vice-President of the Commercial
accomplished without structural
changes in the building."
in
liquidity
and
solvency
telling the people what banking is really doing
our
necessitate
or
of
them
changing the location
of the units, this can be
to
business
creased
of
new
very
standpoint
declining values,
spent 20 years following his
at the University of
Nebraska in various banking posi¬
now
time
some
consumer
the
seem adequate for
come,
should in¬
adding
enlarging
dents.
Albert
been
good
through which we are passing. Our attention is
alr®?^v bemi? focused on the ratios of capital to deposits,
and if deposits are to remain in corresponding relation
to the National debt we shall likely be seeing another
tide of capital increases. More cautious analysis of credits,
the
ficial staff of the Harris Trust and
nounced
company's
working out
re¬
times
Harris,
were
for the ensuing year.
*
were
the
"are
tremendous
world, t This
the
were
shaded
thousands of ordinary time
of many durable goods
on
to
Prerequisites .to the maintenance of a sound structure?
to be embraced in the same conservative rules:
we
such class of paper redound
restrictions
quarters
15)
Cashier,
page
Assistant
;
grams,
some
and
seem
be added that even if Congress does legislate
that
Paynter, Clarence W. Bonner
and Joseph M. O'Neill.
Charter
Nation
the
much in need
are
solution of the problems which
service, will;undqubtedly be met and;
discharged creditably in the face of any trials that;
banking system may meet, !;v
I
to
on
Sam D. Young
main
for statesmanlike
1941
sales paper outstanding on Dec. 31,
the
sponsibility, with the corresponding greater opportunities'
For example, auto-,
years.
of
arise.
the
to
relation
prewar
one
Perhaps there is little, if any; doubt in our own minds;
banking has fully measured up to expec¬
tations, nor is there any doubt that the present system;
is the best, the soundest and the most serviceable' ever
known. However, it is the task of bankers to keep the
majority of our people convinced that these-things are
true.
Scientific analysis of public opinion shows that
&
considerable minority of our* people already, favor
nationalization of banking and, in the light of this fact
the importance of preserving the present sound state
of banking affairs certainly can not be overemphasized.;
It is important not only to the individual banker; but
continuing to the present
to disposable ^national
and
with
the
comprised
that American
in
1947
less
in
reimpose
News About Banks and Bankers
L.
processed in big smelters
in
the
territory;
toward assuring a sound
credit, we
still believe that our company, as well as other well
established finance companies, will continue to find their
resources
fairly well employed in taking care of the
substan¬
living, together with the
the
commonly
yield in the rich El Paso
than perhaps anywhere else
world; Cattle, which have
the
may
our
resources.
credit in their communities,
ating costs will remain acute.
y~; / •
>
great
-
of
cycle, and that perhaps now is the time for bankers to
their energies and rededicate
their talents
today that they cannot purchase on a cash basis. It is
hardly equitable that these much needed goods should
be available only to the fortunate buyer who has cash
to
'
:■
much
buyers who
financing.
ever
and
revitalize
oan
services
will continue to be
money
to the disadvantage of many
capital positions.
sponsibilities both on banking and the management of
those
We
i;;.;!!;; i'-
•
Moreover, restrictions
stances have caused
4
a
$1,942,000,000; while exact figures are not
now available,
it is not likely that the outstandings of
such paper at the present time are more than 50% of the
outstandings at the end of 1941, and this amount of
credit is fairly insignificant as compared to the many
other elements that contribute to the inflation picture.
careful
changes in the general
our
be
of current instalment sales credit that has
than
amounted
of them
some
from
reasonably conclude that
during
mobile retail
new
already
require
prevent
is
income
a
slipping into doubtful and loss
and the
Frederic E. Worden
in
that
will
made
prevailed
time
is
to
and credit
practically all
money
business endeavor.
of
Administration
amount
The
great
there
account
Loans
watching
doubt
no
bankers.
many
loan
for
credits.
and
continue
will
members of Congress, to
some
government securities, have brought
problems
1941.
Washington, as well as by:
reestablish these restric¬
tions in some form on the general theory that such action';
will have some salutary effect upon the present inflation
trend.
In my judgment such reasoning is not sound.
present
as money
municipal
and
always
•
.•
>. ■ y y-:y:v'-r.:
which provided wartime credit re¬
strictions on consumer credit, including instalment credit,
of course, was discontinued Nov. 1, 1947 by Congres¬
sional action.
There has been some agitation by the
which have affected inter¬
rates,
bonds,
in
'
;
-
socialism
resources
are
"
one
order
of
^
it
for
industries; and Climate, which brings
a
big tourist trade. Needless to say, our people have
been enjoying, along with the nation, the greatest pros-,
perity over recorded in history. *
"V ;y'/ y.'
Some of us feel, however, that we may be well along
towards the end of the prosperity wave in this business
"W,"
"Regulation
one.
changes
corporate securities known
new
previous to
heavy demand for
to look forward
earnings standpoint
a
fundamental
economy
est
even
If
better
a
Looking to 1948, there is evidence
are many reasons
to 1948 with the hope that from the
tities
in
funds
banking field for 1948 is confused
not-!
economics
.
by the four "C's
Copper,;;along with other metals,
which are produced in great quan¬
years plus the fact that
be used in our;
operations, which may be considered
as
our
"inventory," is considerably
higher than the average cost of our
Auburn
of
characterized-
the cost of money to
Generally speaking 1947 could be termed
good year and there
a
in
spread
here in the land
Southwest
prewar
and
and uncertain.
structure.
house
cummunism.
Out
it
valley
accommodation
Bank
field
Cotton, and other crops, which bear
WORDEN
National
The
its
the
in
confronting the United States at the beginning of 1948.
Bank
and:; refineries
burdensome foreign. problem are the major challenges
E.
keeping
of 1941.} The profit from our
operations will be reasonablysatisfactory notwithstanding a much
higher operating cost than prevailed
In the for¬
eign field the Marshall Plan is not yet assured, but that
a prosperous and stable Western Europe is vital to this
country is winning increased recognition.
An infla¬
tionary boom at home and a costly yet not overly
FREDERIC
the
1947
not being ignored.
'
itself and probably;
year
warning signals have been
country is on notice that the dangers in
are
in
even
big job ahead
banking seems to be
fighting
and
available,
presently
that the total volume of gross receivables
home,
inflationary boom
not
of repeating
the
of
L. WYNEGAR
are
based
YOUNG
El Paso National
way
economic
does,; then
purchased by our company in the year just closed will
amount to approximately one billion and a half dollars.:
This represents an increase of about
50 % over the previous high volume
>
;
,
figures
would appear
presumably be spent for
bring some additional
banks.
final
politically stable and economically self-sup-
erected and the
an
American
unforeseen difficulties we can
some
conclusion is
This
withstanding central government ^controls and social!
planning, which are comparatively new factors in the;
President, Commercial Credit Company
While
«porting Western Europe is the most urgent issue in the
foreign
on our
in
The inflationary boom is undoubtedly the number one
domestic economic problem, and the question of helping
build
Barring
arise.
HOWARD
should
export credit business to American
to
drastic effect
a
History has a
will do so again
-
crop;
American
Although American banks may not participate in
financing exports that arise directly out of the Marshall
Plan, some benefit may still accrue to them. In so far
as money appropriated under the Marshall Plan is spent
abroad, American' dollars will be scattered throughout
American
serious
a
hope that 1948 will be a reasonably good year for all.
will be less.
the
have
or
r
We must have a strong courage and a
renewed faith to meet squarely all the problems which
but the need for bank financing
year
SAM D.
President,
whole economy.
With the Marshall Plan, exports may approach
in 1947.
high level of business for the year,
a
'A crisis in the international field
..
as
considered favorable factors in main¬
are
services.
the fact that Regulation "W" was in effect,
to November of last year and our volume of business,
indicated above, was not unduly affected.
V-
up
of demand
backlog
the
finance
in part upon
for con¬
goods and the probable reduction of personal
employment,
for
demand
domestic political sit¬
for the
in the outlook
factors
year.
Full
In timing, although not in ampli¬
by foreign countries.
unfavorable
are
coming
resources
Thursday, January 22, 1948
SpeaksAlter ike Turn of ike Year
.tainties of the international and
,
CHRONICLF
FINANCIAL
&
and
Chair¬
Mr. Swan has
Vice-President
1923
as
of the
bank
prior to that was
the
of
Bankers
Co., which was merged with
U.
S.
Other
National
new
Bank in
1923.
officers named at the
Board meeting were:
Neil F. Rob¬
On Dec.
31, at
a
;
.
,;C
.
special meet¬
ing of the Board of Directors of
The
of
National Bank of Commerce*
Houston,
the
Tex.,
^
following
promotions were made:^- J>
Charles W. Hamilton, now Vice-':
President and Trust Officer, from;
Trust
Officer; F. L. Pry or, now
Vice-Presidents , from-
Assistant
Assistant
Young,
ident,
Leon
Cashier;
M.
Armerr
Cashier;
-
Assistant
Fred
Cashier,
dell
"
now
from
Vice-President,
W.
Leighton
F.¬
Assistant Vice-Pres¬
from
Assistant
Cashier;
now
Suitor
Assistant
Hayward,
Cashier,
Hueter,
from
Assistant
from
now
Teller;
Moursund,
now
now
Teller;
Assistant
M.
Wad-
Assistant
Cashier; from New Business De¬
partment.
Volume
167
Number 4666
THE COMMERCIAL
&
FINANCIAL
CHRONICLE
(391)
Indications of Current Business
>91
Activity
The
following statistical tabulations cover production !and other
figures for the latest week or month available (dates
-shown in first column are either for
the week or month ended on that date,
or, in cases of quotations, are as of that
date):
AMERICAN IRON AND STEEL INSTITUTE:
'percent of
capacity).
Equivalent'
Steel
ingots and castings produced
AMERICAN
"
PETROLEUM
Crude oil
Crude
output—daily
runs
to
Gas
Jan. 25
and
tons)_
Jan. 25
(bbls. of
average
42
gallons each).
Gas
oil
(bbls.)
_
(bbls.)__
-
Residual
fuel
oil
CIVIL
(bbls.)
oil
—
,(bbls.)
at
at
VL-
and
——Jan. 10
>
Bituminous
..Jan. 10.
ENGINEERING
and
_:
8,580,000
7,805,000
96,698,000
94,099,000
87,608,000
95,000,000
14,536,000
15,983,000.
18,127,000
STORE
♦49,934,000
55,032,000
.(tons)
i
(tons)
:
53,318,000
AGE
(per
(per
831,447
682,038
854,159
830,953
675,434
544,621
729,416
Based
on
Scrap steel
(per
PRICES
$83,284,000
32,201,000
$85,675,000
34,834,000
18;468,000
$130,139,000
69,218,000
Electrolytic
60,921,000
Total
Export
v,
Straits
32,424,000
123,200
'
RESERVE
28,497,000
1,763,000
•
13,566,000
,784,000
1,198,000
All
140,900
'■
Lead
(New
&
•
,
205
232
5,370,112
5,277,680
61
87
51
3.18925c
3.18925c
2.87255c
$40.08
$39.58
$36.96
$30.14
Jan.13
$40.58
$40.00
1B39.75
$31.00
Lead
-•
*St.
Zinc
r
Louis)
(East
MOODY'S
St.
at
BOND
21.575c
21.200c
New
Middle
80.000c
DAILY
13.000c
York
OUTPUT
100.69
101.86
Bituminous
110.83
111.07
117.40
Month
116.22
116.22
116.22
122.09
114.27
114.08
114.46
120.22
110.15
109.79
110.15
117.40
103.97
103.80
103.97
105.34
105.34
112.75
115.24
-
113.12
112.56
112.93
115.24
of
;
COMMODITY
ITY
BY
$289,856,524
$148,031,510
OF
34,383,467
35,168,491
255,473,057
112,863,019
52,350,000
43,877,000
4,863,000
and
60,794,688
247,290,752
4,613,000
5,065,000
580,000
*544,600
395,700
MINES)—
lignite
anthracite
(net
(net
tons)—
tons)—Month
(net
tons)—Month
of
Dec
CONSUMERS PRICE INDEX FOR MODERATE
INCOME
FAMILIES
IN
1935-1939—100—As
of
LARGE
CITIES
November
15:
items
164.9
163.8
202.7
201.6
187.7
167.9
160.3
Meats
2.37
3.12
3.11-
2.78
"4
•
2.84
2.84
2:94
2:95
2;93
140.6
227.0
235.5
203.6
3.16
2.78
=
2.55
3.52
3.51
3.13
3.43 V
3.43
3.43
3.03
3.01
2.21
.2.91
2,89
2,61
v
2.87
455;4
456.9
ASSOCIATION—WHOLESALE
-
;
198.4
—
vegetables
Beverages
Fats and
201.6
184.5
194.7
190.8
167.8
190.0
244.4
181.8
170.5
171.0
190.2
electricity
Gas
and
and
fuels and ice
125.2
114.8
92.5
—-
114.9
126.9
ice
electricity—
189.0
115.2
.___^
______—
92.2
91.8
157.4
137.2
160.5
———
Housefurnishings
COMMOD¬
188.9
i
,
.
187.8
171.0 o
141.8
132.5
3,583,155
3,106,691
2,674,588
2,256,672
1,091,202
1,756,915
1,426,011
Miscellaneous
•
198.5
>
183.2
:
—
Rent
371.5
232.7
196.6
196.4
^
—
oils
Sugar and sweets
Clothing
152.2
190.1
224.7
199.6
■-
and
~
Fuel,
449.5
products
—
Fruits
3.00
3.02
"
•
Dairy
Eggs
2.64
3.18
.3.51
Jan. 20
GROUP—1985-39—100:
25,688,002
Cereals and bakery products
2.45
3.16'
Jan. 20
f
INDEX—
FERTILIZER
INDEX
59,971,425
December
coke
Other
■NATIONAL
3,684,647
62,546,025
December
Beehive
120.84
3.111
.Jan. 20
v
MOODY'S
16,550,895
7,878,602
6,753,971
55,368,000
(BUREAU
coal
of
Pennsylvania
118.80
114.85
-
2.45
•
'
18,958,112
110.70
105.34
Jan. 20
________
;
;;;
24,419,091
35,193,383
City
111.17
Jan. 20
i.
i
'
/'•
14,086,430
56,969,115
All foods
^..Public Utilities Group
•
$6,732,105
48.991,738
29,790,487
5,308,082
Total United States
100.69
2.84
'v' •
63,686,465
$308,085,440
New
—«lan. 20
Industrials Group
$18,533,566
&
Outside of New York
City.
.Jan. 20
.__
54
16,528,716
DUN
—
:
12.800c
Jan. 20
Railroad Group
CO
*65
___-
10.500c
Jan. 20
„
*68
CITIES
^
_____u_■
10.500c
Aa
„
60
36,996,411
14.800c
AVERAGES:
Bonds
'£
35
56,116,492
15.000c
COAL
Average corporate
Baa
8
149
70
Central
10.500c
All
Govt.
*16
203
Central
14.800c
Jan.20
S.
15
65
28,408,783
15.000c
Jan.20
U.
18
21
85,237,545
14.800c
Jan. 20
57
28
*36
December:
10.500c
Jan. 20
130
32
$16,943,386
VALUATION
INC.—215
15.000c
Jan. 20
„
16
28
Atlantic
Jan. 20
,'J
18
18
70.000c
AVERAGES:
5
~~50
100
Atlantic
Jan. 20
YIELD .DAILY
*
135
Jan. 14
'
at
51
.23
16
water—
Mountain
94.000c
7
*50
60
Pacific
94.000c
10
~~50
Central.
Jan.20
BOND
and
of
19.925c
Jan. 14
;
194
5
England
19.225c
21.425c
85
*285
50
—_
PERMIT
Jan.20
MOODY'S
other_J
Jan. 14
at__
PRICES
21.200c
21.550c
Jan. 14
;
Louis)
21.200c
Jan. 14
50
121
Geographical Division—
West
Jan. 14
HO
25
j_
building repairs
BUILDING
East
QUOTATIONS):
166
59
246
Farm
91
296
135
*96
107
—
*290
93
15
building (nonfarm)
Nonresidential building (nonfarm)^
4,856,890
905
60
■
Residential
5,367,624
Month
at
287
(nonfarm)
Conservation and development—
All other public
South
York)
320
utilities
Sewer
570
3.18925c
i
♦5G5
134
BRADSTREET,
at
711
560
(nonfarm)
building
—
All
'
251
.Jan. 13
J.
*1,001
-
BRAD-
ton)__
$1,054
*1,286
*
Nonresidential building (except
military
and naval facilities)
Industrial
>.
117,700
.__Jan. 13
M.
'$1,489
(in millions):
.'
construction
Residential building
Minor
INDUSTRIAL)—DUN
$227,177,000
OF
Public
PRICES:
at
York)
of December
DEPT.
construction
Public
V,.
.Jan.17
AND
S.
other
Farm
1,215,000
>*127,900
$245,152,000
969
CONSTRUCTION—U.
Commercial
13,750,000
■
110,000
6,757,000
between
Industrial
$110,241,000
'11,470,000
3,050,000
1,215
shipped
9,403,000
$1,400
and
.2,850,000
10,861,000
stored
countries
Military and naval facilities
Highways
:___Jan. 10
—
ton)
refinery
(New
29,216,000
11,331,000
17,709,000
construction
15,657,000
V12.094.000
1,100,000
lb.)
&
reiinery
tin
15,695,000
_i
construction
New
17,420,000
-
copper—
Domestic
.
15,210,000
:
$261,269,000
'92,821,000
50,841,000
38,747,000
51,083,000
.32,615,000
13,690,000
Jan. 15
gross
(E.
9,626,000
OF
Total
South
METAL
$162,054,000
60,838,000
BANK
■;
goods
foreign
664,281
Jan. 10
SALES INDEX—FEDERAL
AVKRAGE^loo.
gross
Iron
$146,540,000
9,757,000
warehouse .credits
LABOR—Month
Jan. 10
„
j;
COMPOSITE
steel
Pig
$103,900,000
63,323,000
exchange
50,789,000
__Jan. 10
:.
—
Finished
$92,921,000,
—$159,268,000
Dollar
55,617,000
♦51,426,000
Jan. 15
(In 000 kwh.)
INC
$118,384,000
shipments,.-
Domestic
15,959,000
Jan. 15
..
Jan. 15
(COMMERCIAL
STREET,
JRON
9,392,000
Ago
OUT¬
_i
Domestic
ELECTRIC INSTITUTE:
FAILURES
...
8,776,000
Year
Month
s
(in thousands)
construction
Residential building
..Jan. 15
_
(tons)..
Electric output
:•
5,587,000
NEWS
,
lignite
SYSTEM—iy:;5-8:>
CDISON
1,971,000
6,337,000
Previous
OF
SYSTEM—
ACCEPTANCES
Nonresidential
;______
anthracite
Beehive coke
2,485,000
7,405,000
51,935,000
Jan. 10
_
December
Imports
Exports
S. BUREAU OF MINES):
coal
DEPARTMENT
14,694,000
2,346,000
,<
46,785,000
Jan. 15
(U.
4,708,000
7,471,000
10
RESERVE
DbLLAR
BUILDING
municipal
Pennsylvania
-
Jan.
—
GOVERNORS
—
FED. RESERVE
NEW YORK—As of Dec. 31—
4,530,900
5,104,000
15,705,000
li^es—
Federal
COAL OUTPUT
>
5,252,739
17,163,000
16,289,000
2,290,000
Jan.10
CONSTRUCTION,
construction
State
FEDERAL
Month of
1,617,900
RAILROADS:
Total U. S. construction.Private construction
*"•'
DEBITS—BOARD OF
Private
ENGINEERING
Public
Jan. 10
Jan. 10
—
_
AMERICAN
BANK
STANDING
5,291,237
Jan. 10
RECORD:
...
92.5
1,515,400
5,637,000 ;•
—Jan. 10
Revenue freight loaded (number of
cars)
Revenue freight ree'd from connections
(number of cars)
1
86.6
1,723,200
5,313,137
_.
at
distillate fuel
ASSOCIATION OF
1,732,200
5,289,000
—Jan. 10
._
output
(bbls.)
output
(bbls.)
,
Latest
Month
....
♦95.6
Jan.10
-
distillate fuel oil
and
96.1
■
Ago
"
—Jan. 10
(bbls.)
average
Stocks at refineries, at bulk
terminals, in transit and in pipe
Finished and unfinished
gasoline (bbls.) at
Kerosine
Year
Ago
BANKERS
(bbls.)
oil
Month
Week"-;'.
1 HE
(net
_
oil
Residual fuel
.
Previous
INSTITUTE:
stills—daily
Gasoline output
Kerosine output
Latest
Week
Indicated aieel,Operations
1,515,017
1,035,479
,
143.0
•
-
Foods
t< Fats
..
and
Jan. 17_
.
;.
;
;—
_.
and
•
drugs__
NATIONAL
Orders
-A'.
OIL,
PAINT
AND
WHOLESALE
REPORTER
TRICES—U.
S.
DEPT.
Fuel
and
Mc-tal
LABOR—1926—100:
•
Chemicals
•/:,
leather
Raw
l!;.'
products
142.4
141.8
141.8
133.
134.5
134.5
129.3
120.
226.6
226.0
220.0
189.
137.7
137.5
125.8
and
allied
185,437
187,093
162,012
177,964
136,219
183,345
171,420
178,043
99
78
100
102
459,989
452,124
444,685
580,026
151.2
150.6
150.1
150.5
164.5
164.4
161.4
140.0
197.0
199.2
196.2
165.8
182.1
181.3
179.0
158.1
Stocks
(pounds)
Produced
Stocks
31
109,368,000
Aug.
Aug.
Dec.
(pounds)
(tons)
1
Hulls—
Stocks-
(tons)
Produced
Shipped
Dec.
(tons)
Dec.
Produced
31
fiber
Stocks
151.5
158.1
Jan. 10
189.7
189.4
Jan. 10
139.0
135.0
Jan. 10
Jan. 10
74,035
to
1
Dec.
1
135.1
126.8
136.7
135.3
135.2
121,4
122.1
121.8
119.8
109.0
687,549
31
Dec.
188,851
bales)
-
404,818
334,404
170,509
■:
100,401
527,276
560,737
593,116
436,511
495,390
1,888
to
...
—
31-
1
96,339
j:
702,223
——
to Dec. 31
1
383,472
346,787
h
Dec.
Dec.
31_
1,856
1,352
9,338
6,770
9,934
7,751
;—
1
5,215
9,085
bales) —
31—
1
15,378
yn,i3i
23,355
17,456
20,822
17,857
12,591
11,421
$220,961,000
Aug.
$20,300,000
16.011
to
Dec.
31
—
Shipped Aug. 1 to Dec. 31——
TREASURY
RECT
OF
U.
MARKET
AND
S.
TRANSACTIONS
GUARANTEED
A.—Month
Net
purchases
of
184.5
180.9
153.1
157.9
157.0
135.9
Month
156.6
153.7
135.4
Production
156.6
153.7
134.41
146.4
143.5
125:0
Shipments (number of units)
Shipments (value in dollars)
farm
products
Jan. 10
157.3
products and foods
Jan. 10
146.9
SECURITIES
1
157.3
larm
DI¬
December:
182.9
than
IN
sales
158.4
commodities other than
120,182
776,103
:•
72,493
510,877
475,034
-
to
10
All
figure.
756,316
71,651
31—.
Dec. 31
:
Jan. 10
Jan.
commodities
other
780,965
1,015,813
to Dec.
to
Jan. 10
articles
170,112,000
429,341,000
71,590
1,042,907
31
31—
Aug. 1
1
Aug.
Net
products
384,620,000
135.5
188.4
133,196,000
544,257,000
to Dec. 31
Shipped Aug. 1 to Dec. 31_,
Motes, grabbots, etc. (500-lb.
Produced
98.0
546,354,000
519,991,000
31—
Aug.
(500-lb.
Dec.
Produced
171.2
120.2
97,569,000
515,206.000
463,456,000
152,916,000
1
31
Aug.
Shipped Aug.
133.2
128.5
112,684,000
639,650,000
646,464,000
31
31
Aug. 1 to Dec. 31
Aug.
(tons)
204.9
152.0
Dec.
•
146.3
130.0
to
to Dec.
1
Aug.
Dec.
(tons)
(tons)
202.2
152.8
COM¬
Cake and Meal—
147.5
10
OF
Oil—
200.3
All
♦Revised
Refined
Dec.
(pounds)
(pounds)
145.8
groups—
Semi-manufactured
PRODUCTS—DEPT.
(pounds)
Shipped
Stocks
10
Jan.
commodities
—•
Oil—
Stocks
Produced
Hull
V»
•>"
Jan. 10
products
COMMERCE
MERCE—
Crude
Jan. 10
materials
Manufactured
COTTON SEED
Jan. 10
.'
Housefurnisliings goods
Special
153.3
138.5
Jan. 10
metal
Miscellaneous
156.4
Jan. 10
products
materials
Building
154.5
Jan. 17
Jan.
lighting materials
and
155.3
(tons)
Stocks
•
products
and
OF
(tons) Aug. 1 to Dec. 31—
Aug. 1 to Dec. 31
Dec. 31
Linters—running bales—
1
Textile
142.4
216.8
.Jan.16
products
Hides
159.3
236.7
PRICE
AVERAGE=10(L__
Foods
t
161.0
236.2
Jan. 10
commodities
Farm
161.3
233.2
Jan. 10
o
All
152.5
213.6
Jan. 10
DRUG
INDEX—1926-36
157.6
179:2
226.2
Jan. 10
at
DEPT.
—
(tons)
Shipped
(tons)
(tons)
SEED
Produced
(tons)
.orders
198.2
178.8
220.4
ASSOCIATION:
percentage of activity
Unfilled
216.0
.
Jan. 17
•
combined
PAPERBOARD
Production
;.
216.0
Jan. 17
i
received
226.4
Jan. 17
:
v.
263.6
Jan. 17
.
_
■
270.1
COTTON
199.0
26G.8
Jan. 17
materials
groups
•
312.7
<
.Jan. 17
'
machinery
All
336.7'
310.8
180.7
—
Farm
Stock
337.1
323.4
220.2
j...
___________
materials
Fertilizers
296.6
337.8
Jan. 17
Metals
.
Crushed
_Jan. 17
a..
Fertilizer
Received at mills
226.
Jan. 17
Miscellaneous commodities
Textiles
Chemicals
262.6
275.8
Jan. 17
.____•
Livestock
Fuels
V". Building
266.0
279.6
Jan. 17
Grains
'
214.5
289.2
279.9
-
Jan. 17
._
•
236.8
300.5
17
Cotton
]
244.0
Jan. 17
oils
(Farm products
244.6
TRUCK
TRAILERS
of
♦Revised
$696,391,000
(DEPT. OF COMMERCE)—
October:
(number
figure.
of
units)
3,962
n.t;
»3,15a
4,605
._.
'♦3,948
$11,952,284
*$10,469,130
8,731 ?S\
8,374
$17,960,242
'92
f
s
2,
common.
«nd
writing. 3 Price—$100 a
rolling mill, equipment
notification) $100,000 3% 2-year subordinated promissory notes, dated February 1948, and
2,000 shares of common stock (par lc). Underwriter—
,Seasongood & Haas, New York. To "be offered in units
of $5,000 notes and 50 shares of stock at $5,000.25 per
unit. Pay operating expenses and working capital*.
i
'
„
(letter of
16
Jan.
Inc.,
Industries,
American
All
Jan.
7/ :^.
New York
;
stock.
>
: ;
new
one
(James B.)
Beam
working
3.
-
Jan.: 14
For
3'.
common
,
•
(letter of notification) 52,250 shares ($1"par)
common, to be offered pro rata to stockholders.
UnderWriting—None. For working capital and -financing. 7
Jan.
<
3
Bendix Aviation
(1/27-28)
Corp., Detroit
•
<
f.acturing aviation, radio, marine
v
...
Oct.
f
*
'
;
($25 par); $4,000,000 of 3y2% certificates of in-.
cumulative; and $1,000,000 of 1V2% loan
certificates cumulative. No underwriting, Offering—To
Underwriter—None.
Price—$25
a
'
working capital.
Francisco
stock (par $10).
(1/26-30) '
"
"
ft
notification) 101,000 shares of common
fctock (par $1), of which 85,000 shares will be sold to
the public; 8,500 shares will be issued to underwriters
«s-additional underwriting consideration and 7,500 shares
will be issued to American Die & Tool Co. for invest-
: /
i
?
i
»
$15,000 open account for
*nent in return for cancelling
.
I machine tools. Price—$2 per share? Under wirter—R. A..;
Keppler & Co., Inc., New York. To provide operating
*
Washington, D. C.
Jan. 8 (letter of notification) 66 shares of preferred at
$5 each and $50,000 of second-trust notes. Underwriting
—None. To improve building and reduce indebtedness.
Dec. 23 filed 238.829 shares
-
Central
writing none. Offering—Stock
Corp.,
Hagerstown,
Md.
will be offered direct to
public through directors and officers. Price, par. Proceeds
—Erect and operate mill for manufacture of newsprint,
the sale
pine. Company also contemplates
$16,000,000 4% 1st mortgage bonds.
from Southern
of
three
•
pany;
5,000 shares of
Maine
Power Co.
($10 par) common. Underwriting—To be determined Y>y-competitive bidding. On
Dec. 3 only one bid, that of Blyth & Co., Inc. and
Nov. 10 filed 160,000 shares
/.
submitted and was rejected
by the company.
They bid $13.75, less $1.75 under¬
writing commission. Offering—To be offered to 6% pre•>' f erred and common stockholders for subscription on the
basis of one-half share of new common for each pre3 ferred share and one-tenth share of new common for
each common share, held.
Price by. amendment. Pro¬
ceeds—For construction and repayment of bank loans.
Kidder, Peabody & Co. was
•
•
Central Power & Light
Nov.
21 filed
ers
capital
Corporate and
cumulative pre-
(par $5). Price—$30 per share. Underwriters—
Offering—4,000 shares to be offered to stockhold¬
of record Jan. 13 in ratio of two new shares for each
shares
expire Febi 20.
Working
Lynchburg, Va.
corporation;
(letter of notification) 6,168%
Price—$48 per share. To be
9
common.
shares (no par)
offered for sub¬
basis of one new share for
Underwriter—Scott, Horner & Mason,
scription by stockholders on
each 7 shs. held.
Inc., Lynchburg.
•
Crosbie
Co.
To pay bank loans.:
of
Washington,
Jan.
-
•
Chicago and other cities
Pittsburgh
& Co., Los Angeles.: To
build
\
>•-.
shares of capital stock (par $25).
Underwriter—The First Boston Corp. 3 Offering—The
stock will be offered for subscription by stockholders
of record Jan. 27. Rights will expire. Feb; 10. Proceeds—3
Jan.
14 filed 2,269,050
augment corporation's
working capital position and
provide funds for acquisition and development of addi¬
tional production and the expansion of refining, trans¬
portation and marketing
facilities.*
3
.
■
Guyana Mines, Ltd., Toronto, Canada 3
Nov. 26 filed 303,587 shares ($1 par) common. Under¬
writing—None. Price—50 cents a share. Proceeds—For
3
Hall
(W. F.)
capital.
.3./?3
,
.
\
.
Printing Co., Chicago
Jan. 13 (letter of notification) 147 shares ($5./par) com*
stock. Price—$15 per share; Underwriting—None?
mon
Harshaw
13
Washington,
(letter of notification)
Inc.,
1,000 shares ($100 par)
Underwriting—None. To
Cup Machine Service Corp.,
Wilmington. Del.
notification) 2,890 shares ($50 par)
preferred and 28,900 shares (10c par) common. To be
offered pro rata to stockholders.
Underwriting, none.:
For expansion, bank loans and working capital. :
Jan.
10
(letter of
Dayton
•
Jan.
5
filed
(Ohio)
Power & Light Co.
Tf
170,000 shares
Dependable Appliance Parts Co., Canton,
14
Ohio
par)
(letter of notification) 2,000 shares ($25
and 500 shares $6 cumulative preferred
par). Price—$25 for common and $95 for
Underwriting, none. To ourchase steel,
machinery.
..
\ ;.
,
..."•
c,;
33
per
Cleveland.; O.
(1/28)
Underwrit¬
Cleveland. Offering—Shares are
shares ($10 par) common.
by stockholders of record Jan.
for each four shares held at $32.50
fo rsubscription
share.
shares
Co.,
Chemical
Dec. 26 filed 58,612
Rights expire 2:30 p.m. Jan. 27. Unsubscribed
be offered publicly.
Proceeds — To repay3
indebtedness and working capital. 3
will
short-term bank
•
Horseshoe
Basin
Mining? &
Development Co.,
Inc., Bremerton,: Wash#? . .#w>,r
Jan. 9 (letter of notification) 200,000 shares (250 par)
common.
Price—400 per share.
Underwriting—None.
D. C.
preferred stock. Price—Par.
increase scope of operations.
common
New York
Nevada 3y
33v:;?•
14 at rate of one new
($7 par) common. Under¬
writing—The common shares will not be underwritten.
Offering—The common shares will be offered for sub¬
scription by stockholders on the basis of one share for
each nine shares held. Price—To be supplied b,y amend¬
ment. Proceeds—To finance construction program.
FIRST BOSTON
Deep Mines Co. of
(Nev.)
ers—McDonald & Co.,
Craddock-Terry Shoe Corp.,
Jan.
Public Financing
The
|5.
Co.,
14
offered
Dec.
Boston?" l>'
Eights
held.
capital.
•
Co.
40,000 shares ($100 par)
$1). Under-
None.
•
Central
Cement
& %3.GuW Oil Corp.
•
stock
officers and employees. . Offering —To company
3 stockholders, employees and customers. Price—At par.
lProceeds^-To retire indebtedness and for working capital.
Co., Inc., Cayuga, N. Y.
(letter of. notification)
13
Jan.
Dec. 29 filed 254,682 shares ($10 par) non cumulative 6%
F-tock and 70,643 shares ($10 par) non-voting common
Class B stock. Underwriters—To be sold through com¬
3
}
stockholders who will receive' pro-
equipment and working
Cowles
Chemical
^
$50). Under¬
of common (par
(•
•
amendme.qtv_,l.S.,>.;3
Co?, Denver, and Morgan
a mill to refine ore.
r-
-
3
??
,
Inc./New .York.?? Proceeds—Stock
Will
Co.
Coosa River Newsprint
tfunds, etc.
:
only by patrons and
Cooperators' Properties, Inc.,
•
N
(letter of notification), 200,000 shares of (5c par) 3
common.
Price.r-r At 25c. vUnderwriters — Boettcher &
Price—At face amount. Proceeds-r-For acqui¬
sition of additional office;and plant facilities.
;-c;? -3.i/-?.
* ';••• •'? ,?•
■. ••
J
3. Jy -yy ? _,-v
Dec. 29 (letter of
v
Common rhay be bought
*
<
who will re¬
shares of common (par
& Co.,
Goidfield
Jan.
members.
share. Proceeds—For
' * \
' 3,
Corp.
Cameron Aero Engine
3
'
the public.
J--''- V J*'-07
Nov. 28 filed 99,700 shares of common
.4
•
debtedne$s
and automotive parts.
"•
J3? •"
non-cumulative common
$i,000,000 4%
filed
16
stock
California Union Insurance Co., San
??'
■
Cooperative Assoc.* Kansas City,
Missouri
filed
'
Philadelphia, Pa. 3
Jan.; 12 filed 564,906 shaires: ($ 1 pair) commofi and £82;- ;
453 common stock purchase warrants? Underwriters—
Craigmyle, Pinney & Co., New York; Winslow, Douglas,
& McEvay, New York, anif Jenks, Kirkland & Co.; Phil-?
adelphia. Offering3-To stocklioldiifs on basis Of two
shares of stock and one warrant fpr each share of com J
mon stock held? Price by amendnifentj; Proceeds—To de-i?
velop a plant and facilities for the company's subsidiary,
Carolina Giant Cement Co., Harleyville, S. C.',
ington,- D; C.
399,990, shares ($5 par) common. Under> writer—Morgan Stanley & Co."""Price by amendment.
Stock owned by General Motors Corp. Business—Manu-.;
2
Jan.
•
t'
Mich.1
Instrument Corp.
Portland
Giant
Jan. 16 (letter of notification(/$68,000 of 6% debenture
bonds.; Underwriter—Emory S. Warren & Co., Wash¬
Consumer*
investment."
being sold by .14 Stockholders
'
3.. v'3;
'
.ceeds.._Price by
;
Md. ;
Mount Rainier,
Co.,
?'/ ;';%>? •?
3*'f?
:.,??.? Yi
filed
being sold by four
par)
To
3.3:'??'
Finance
Commercial
•
Co., Atlanta, Ga.
?;?. '?
supply capital.
3 ?3 3 y./
—
Nov. 14 filed 150,000
(letter of notification) 5,000 shares, ($10
stock? Price—$30.. Underwriting,: none.
: •••.'3
Products Co., Detroit,
General
"
V
"V4V.
\
ceive proceeds.
.
Canton, S. D.-- -3
Eidridge Gold: Mines,
Belle
O
■■
21
writers
shares are
,
,
States Life Insurance
Coastal
•
par)
stockholders of;
common
.
v
100,000 shares ($1 par) common.
Under¬
Campbell, McCarty & Coj and Keane & Co.,
Detroit.
Price—$5.25- per share: ; Proceeds—The
Oct.
shares
.••
A
Inc.,
Proceeds—For
Fraser
Proceeds—To finance construction.
210,000
lnc., N. Y.
Seattle,?Wash./ / <
filed 103,089 shares of common. Underwriters—•
Northwest Co.* Seattle? Price based on market j
w riter—Burr
record Deb. 22. Rights expire
20.°
Feb.
i
to
Offered
capital.
prices.
Industries, Inc*
(la.)
filed
15
St. Louis?
Distilling Co.y Chicago
(letter of notification) 150,000 shares ($2
common.
Price—$2 a share. 3 No underwriting.
29
Philip Blum & Co. Inc.'of
Pacific
shares ($8.50 par) common. No un¬
Offering—Common stockholders of record
Clinton
Dec.
•
Dec.
29
Dec.
/
($1 par) capital stock.
Underwriting—None. Offering—Shares are to be offered
in exchange for 300,000 shares of Obear-Nester Glass Co.,
Long Beach, Calif. Jan. 13 (letter of notification) $90,000 of a $100,000 lim¬
ited partnership to be offered at $1,000 per unit.
To
; acquire and develop mining property.
33?
:tr"
"-.•",3 '?.
Equity Fund,
both
(Ray Carl)
Avons,
(»
Postponed indefinitely.
etc.
given the right to subscribe on the basis of
share for each 10 shares held at $22 per share.
Rights expire Feb. 2.
,t
:
Inc., Chicago
are
?33.
For corporate purposes.
•—None.
15
Jan.
personnel. Price—
did not state how
^
;
x
Sterlizing Co.,
Steam
Electric
Class A Common.
Sept. 22 (letter of notification) 65,000 shares of common
stock, (par 100).
Price—65 cents per share..; Under-/
writer—Reich & Co.? New York. ^Purchase of, invohtoiT, >
Dec. 1 filed 204,000
-
■z
Underwriting, none. To
Cincinnati Gas & Electric Co.
derwriting.
Col.
Jan. 13 (letter of notification) 300,000 shares ($1 par)
hon-assessable stock. Price—$1 per share. Underwriting
American-Eagle Products, Ltd., Denver,
-
non-assessable common stock
V'3'";-;,
Vr--:. •';■
333
Offering—To be offered to em¬
ployees; executives and management
$3.49 a share. ; Proceeds —Company
proceeds will be used. 3 v
v; '
general corporate purposes.
'
150,000 shares ($1 par)
filed
Underwriters—None. '
(letter of notification) 10,000 shares of class A
Price—$10 per share. Underwriting—None. For
9
Jan.
\ funendment. Proceeds—To pay off indebtedness incurred
i tn the acquisition of the capital stock of A; D. Cook, Inc., *
Dawrenceburg, Ind3 j
:
,
•
shares of
29
Dec.
Billings, Mont.
" Christian Life & Times,
•
Oct. 30 filed 100,000 shares ($1 par) common (name to>
"be changed to American Steel & Pump Corp.) Underwriter—Herrick, Waddell & Co., New York.
Price by
;
i>0,000
14,
par) common. No under¬
($10 par). Price $10 per share.
purchase property.
''f-; 313y'
3
•3;; :
share. Proceeds—To purchase
and for working capital.
Hot Springs,
Chico
•
\
3
,' - A V '' *';: ■'J'*'r «
/ Domestic Credit Corp., - Chicago
Hollydale, Calif.
4,000 shares ($100
Nov. 10 filed
New York
Corp.,
Conditoner
Airezone
0
!
filed
22
ity of Ontario.
Century Steel Corp.,
•
"
1,000,000 shares ($1 par) capital stock.
Underwriter—Tellier & Co. Price—40tf per sharej Pro¬
ceeds—To develop mining properties in Flint Lake local¬
Oct.
additions and expenses.
capital.
unci for working
Ltd., Toronto
Dogpaw Gold Mines
determined by competitive
bidding?! No bids received at competitive bidding Dec.
15,3 Sale may be negotiated.
Proceeds—For property
(letter of notification) -40,000 shares ($5 par)
Price—$5 a share. Underwriter—Dean W. Titus
Co., Ann Arbor. To build factory, pay obligations
Dec.
Underwriting to be
ferred.
Ann Arbor, Mich.
Corp.,
Broach
Acme
'
ISSUE
SINCE PREVIOUS
INDICATES ADDITIONS
•
Registration
in
Now
Securities
Thursday, January 22, 1948
FINANCIAL v CHRONICLE
&
THE COMMERCIAL
(392)
(no
the preferred.
inventory and
For
mining development.
lllinois-Rockford Corp.,
r.r-,33
Chicago
July 24 filed 120,000 shares ($1 par) common.
writers—Brailsford & Co., and Straus & Blosser,
'
7 !
Under¬
Chicago.
Volume 167
THE COMMERCIAL
Number 4666
&
FINANCIAL
CHRONICLE
McClanahan Oil Co.,
Grand Rapids, Mich.
shares ($1 par) capital stock. Un-^
derwriters:—None. Offering—Shares will be exchanged
for $1 par stock of Great Lakes Chemical Corp. on the
Dec. 30 filed 260,000
NEW ISSUE CALENDAR
January 26,
>
basis of
1948
Noon
15,1948.
Equip. Trust Ctfs.
(EST).....
Cameron Aero Engine Corp...—
Kaiser-Frazer Corp
...Common
.
Common
will
January 27, 1948
a
Corp..
l
—.Common
New York Telephone Co., 11 a.m. (EST)____Bonds
Stern & Stern Textiles, Inc..—
.Common
;Bendix Aviation
Co
Iowa Power &
Chesapeake & Ohio RR.
(EST)
......Equip. Trust Ctfs.
Dec.
Corp
^
March
Tel.
Pacific
&
Tel.
Counties
Gas
California
Southern
retire
common
bank
'
;;
Basket,
/
Bonds
Mass.
;
Bonds
Co.
$13.75. Pro¬
Business—Finance
Price
—
Jan. 9 (letter of
Mid-Continent
Airlines, Inc., Kansas City, Mo.
notification) 30,601 shares ($1 par) com¬
mon
stock.
Price—$6 per share. Underwriting—None.
For working capital and equipment.
6
Jan.
Credit
Jan.
10,925 shares of class A
share.
Underwriting—None.!:
Price—$10
common.
per
working capital.
Department Stores, Inc.
Oct. 30 filed $5,000,000 15-year sinking fund debentures.
Underwriter—Lehman Brothers, New York.
Price to
be filed by amendment.... Proceeds—To repay bank loans
and for general corporate purposes including the financing of new stores.
Temporarily postponed.
Power &
Iowa
.
Light Co.
?
1973.
(2/2)
be determined by competitive |
Probable bidders: Blyth & Co., Inc.; The First
Boston
Corp.; Halsey, Stuart & Co., Inc.; Glore, Forgan
Co., and A. G.r Becker & Co. (jointly); Harriman
Hipley & Co.; Kidder, Peabody & Co., and White, Weld
&. Co. and Shields & Co. (jointly); Salomon Bros. &
Hutzler; Lehman Brothers. Price—By amendment. Pro¬
ceeds—Construction. Bids—Expected about Feb. 2.
&
Nov.
Bronze Co.,
filed
10
per
share.
(no
par)
Underwriting—
Monsanto
Chemical Co., St. Louis
250,000 shares (no par) $4 dividend cumu¬
lative preference stock, series B.
Underwriter—Smith,
Barney & Co., New York. ' Price to be filed by amend¬
ment.
Proceeds for general corporate purposes includ¬
ing financing new plant construction and additions to
present facilities.
Offering postponed due to market/
New Castle, Pa.
,
150,000 shares
Inc.,
Jan.
Long
(letter of notification)
12
offored
at
$333.33
each.
J.
J.
Mottell,
8.106 shares of preferred
shares of
common
Underwriting—None.
to
To
expand operations.
(par
stock
t
and Chapel,
Beach, Cal.
Mortuary
to be offered at $25 each, and 150
500).
Underwriter—Lee Higginson Corp.
Proceeds — Stock
being sold for account J. P. Flaherty, a stockholder.
ccmmon
Mottell's
©
,
New
Dec.
30
York
filed
Telephone Co. (1/27)
30-year refunding
$60,000,000
mortgage
Series E. Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Morgan Stanley & Co.
Price—To be deter¬
mined by competitive bidding.
Proceeds;—To finance
bonds,
Kaiser-Frazer
Corp.
(1/26)
Jan. 6 filed 1,500,000 shares ($1 par) common. Under¬
writers—Otis & Co., Cleveland; First California Co., San
Francisco,
Allen
and
construction program.
Co.,
New York.
Price—By
purchase machinery
and
tools to increase production of automobiles from current
&
company, room
rate of 950 per day to 1,500 per day.
Kansas Soya
®
Products Co., Inc., Emporia, Kans.
3 (letter of notification) 3,157 shares ($95 par)
preferred. Price—$95 a share. Undewriter—Kenneth Van
Sickle, Inc., Emporia. For additional working capital.
»
•
'
Kerr
'
'
7
'•
•
*
•.? •
Manufacturing Co.,
vi '
"
"*
'7'
(letter of notification) 100,000 shares ($3 par)
participating stock. Underwriter—Carr & Co.,
Detroit.
To purchase machinery and provide working
A
•
Television
Kool-Aid
North Central
Jan.
15
Texas
Inc.
20;000 shares of capital
$5) of which 3,000 issued under options at $3
and 17,000 shares issued under options at $6
Of the stock 5,400 shares are to be sold on the
Curb Exchange at $17 (approximately). Un¬
share
share.
Bottling Co., Inc., of Ohio
notification) 300,000 shares ($1 par)
common stock. Underwriter—Heronymus & Co., Sheboy¬
gan, Wis. For working capital.
New York
Legend Gold Mines, Ltd., Toronto, Canada
June 27 filed 300,000 shares ($1 par) common treasury
stock.
Underwriting — To be supplied by amendment.
Price—50 cents a share. Proceeds—To develop mining
properties.
.'7v.vv,f,7;'
Dec. 24 filed 83,333
13. (letter of
•
{ ■'
.
•'
Lock Nut
•
'■ f;•
-
Corp. of America
Oct. 6 (letter of notification) 24,000 shares of 5%
j
•.
.j
cumu¬
derwriter—Harris
writer—Ray T. Haas, Chicago.
(par $12.50). Under¬
Price—$12.50 per share.
/General corporate purposes.
•
v';
Love
Tractor,
Inc.,
Eau Claire, Mich..
Jan. 5 (letter of notification) 81,200 shares (no
mon
stock.
$8.75
Inc., Niiro, W. Va.
notification) 11,400 shares
par)/
at;
Underwriter—Doolittle, Schoellkopf &(,
stock.
To
share.
per
business re-*
of
be
offered
Co., Buffalo, N. Y.
by
five
($1
stockholders
^
.
,
^
Public Service Co.
$10,000,000 first mortgage bonds, series due
Underwriting—To be determined by competitive^
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;.
1978.
Corp.; Harriman Ripley & Co.; Blyth
Co.; W. C Langley & Co., and Glore, Forgan & Co.
(jointly). Price—By amendment. Proceeds—To be used.'
for construction.
in
Expected later part of January
February.
'•■//
,
'.V
early
or
'
■
Parkwooc!
20
®
Philadelphia
Jan.
filed
20
Electric
Co.
$25,000,000 first and refunding mortgage,
bonds, due 1978, and 150,000 shares ($100 par) preferred
stock.
Underwriter
Morgan Stanley & Co. for the~
—
stock.
Bonds
to
be
offered under competitive bidding,
Include—Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co.; Glore, Forgan & Co., and W.
Langley & Co.-(jointly); the First Boston Corp.; White,
Weld & Co.
Price by amendment. Proceeds—To
finance,
a six-year
program of electric, gas and steam facilities)
estimated to cost $235,000,000.
(
Bidders
Pittsburgh Steel Co.
Nov. 20 filed $6,500,000 of first mortgage
bonds, due 1967.
Underwriters—Kuhn, Loeb & Co.; A. G. Becker & Co.,;
Inc. and Hemphill, Noyes & Co.
Price by amendment.'
Proceeds
—
To refund
outstanding first mortgage bonds.
Temporarily deferred.
^
':
v
®
Pitney-Bowes, Inc., Stamford, Conn. '[r.
Jan. 7 (letter of notification) 7,500 shares of
stock.
•
To be offered
Planet Corp.,
mon.
Price—$2.
troit.
To pay off
®
employes at $10.19
-_r
common
share.
a
-i
Lansing, Mich.
Underwriter—Smith, Hague & Co., De-t
mortgage and apply to working capital,
Posvar
Jan.
(George W. K.) Mines, Ltd.* Denver •'
(letter of notification) 300,000 shares ($1 par)
stock. Price—Pari;
Underwriting—None.
13
non-assessable
For
•
development
purposes.
1
'
v
Public
Capital Corp., New York 7
;
Jan. 13 (letter, of notification)
2,000 units, consisting of
one 6% debenture due 1958 with
accompanying warrant
for 50 shares of common stock; 100,000 shares of com¬
stock, and option warrants.
Each unit is to
$100.50. Underwriting, none. For working capital,
mon
Public
Service
Co.
of
New
cost
Hampshire
Nov. 25 filed 139,739 shares of common
derwriters—To
be
determined
by
('par $10). Un¬
competitive bidding.
Probable Bidders—The First Boston
Corp., Kidder, Pea-r
& Co. and Blyth & Co., Inc. (jointly); Harriman
Ripley & Co. Offering—Common stock first will be ofT
body
fered for
on
subscription to present shareholders at the rate
share
one
for
each
five
held.
shares
shares and the bonds will be
Unsubscribed
offered publicly.
Proceeds
off loans and for construction purposes. 1
—To pay
Price—$3.50 per
For working capital.
•
.
Radio
Jan.
America, Inc., Denver
(letter of notification) 100,000 shares
15
par) com¬
share. Underwriting—None.
'
'
" '
:
\
Co., New York.
Working
vertible
Airlines,
preferred.
Inc., Boston, Mass.
shares (no par) $1 cumulative con¬
Underwriter—Atlas Corp., owner of
100,000 shares of the registrant's common stock, has
agreed to purchase all shares not subscribed for by other
stockholders.
Offering—The
subscription to
common
share for each six
ment.
Oct.
29
erence
common
Indiana
filed 272.694
stock.
will be offered for
on
shares held.
Proceeds—To pay off
Northern
shares
stockholders
Price by
one
amend¬
indebtedness.
Public Service
shares
the basis of
($20 par)
Underwriters—Central
Co.
obtain contracts with radio
tablish
broadcasting stations and est
working organization.
a
Raleigh Red Lake Mines, Ltd., Toronto, Can.
Jan. 7 filed 460,000 shares of common stock.
—Mark Daniels & Co., Toronto, Canada.
a
share in
Chicago; The First Boston Corp., and Blyth & Co. Inc.,
York.
Offering—For
subscription
by common
stockholders of record Jan. 19 on basis of one preferred
New
share for each eight common
shares held.
Rights expire
Canadian funds.
and development
•
Rockford
Jan.
8
•
(letter
of
Price—25 cents
Proceeds—For exploratioii
of mining property.
(Wash.)
Grain
notification)
Underwriting—None..
1
Underwriter
'
Growers,
300
'
shares
of
"'
,
Inc.
7
t
common
To maintain facilities,
f
Seal-Peal Corp.,
Jan.
Detroit
(letter of notification) 60,000 shares ($1 par;
stock.; Underwriting, none. For working cap}
14
common
ital.
•
Smith
Jan.
5Vz %
9
D.)
(C.
Drug Co., Grand Junction,
Col.
(letter of notification) 1,500 shares ($50 par;
cumulative preferred stock. Price—Par. Under¬
writer—Peters, Writer & Christensen, Inc., Denver.
working capital and bank loans.
(2/3)
cumulative pref¬
Republic Co. Inc.,
($1 par)
Underwriting;'none. To
Price—$1 per share.
common.
stock.
Northeast
,
"''♦lir.
Upham &
capital.
lative convertible preferred stock
•
(letter
common
Oil Co.,
(letter of notification)
stock (par
per
•
Nielsen
Corp., New York
(letter of notification) 6,000 shares of 6% cumu¬
lative preferred stock (par $25) and 15,000 shares of
common stock (par 25c).
Price—$26,625 per unit of one
preferred share and 2V2 common shares. Underwriting,
none/ Capital requirements for producing television sets,
etc., completion of purchase of plant.
/
per
car''*"1
Jan.
9
-
Detroit
Jan.712
class
Ohio-Apex,
Jan;
Underwriter—*
Personal and
Jan. 19
Dec.
•;>
Bids—Bids for purchase of bonds
(EST), Jan. 27 at office of
1600, 140 West Street, New York City.
will be received up to 11 a.m.
Proceeds—To
amendment.
Price—Par.
Jan. 8 (letter of notification) 50,000 shares
($1 par) com¬
Morning Post Publishing Co., Inc.,
Lafayette* La.
Jan. 12 (letter of notification) 1,000 shares ($100 par)
preferred and 1,000 shares ($100 par) common stock*
Price—Par. -Underwriting—None.
To expand publish¬
ing activities.
be
Johnson
of
Price—$10
conditions.
Underwriting—To
-
stock.
To finance expansion.
None.
•
Dec. 22 filed $6,000,000 first mortgage bonds, series due
bidding.
St. Louis, Mo.
notification) 15,000 shares
Nov. 28 filed
Interstate
1948-1973.
Co., Philadelphia.
quirements.
Shoe Corp.,
(letter
common
(letter of notification)
13
For
Cleveland
Co.,
series
&
■
Midland
•
definitely postponed.
Industrial
bonds,
Bioren
Probable
•
be merged with the regis- /
companies are Toccoa Manufacturing
Stickley Brothers, Inc., both Illinois corpo¬
rations, and the Luce Corp. and Stickley Bros. Institu¬
tional Furniture Co./ both Michigan corporations.
In¬
and
City, Md.
Underwriter
business.
trant. The merging
Ocean
near
Manufacturing Co., Philadelphia
;,r
(letter of notification) 500 shares of preferred,
stock
(par $50).
Price—Par. Underwriting, none. To.
finance purchase of inventory.
.77vV' T/777.:. :
Offering—43,383 shares will be
ceeds—Toward paying off bank loan.
of four furniture companies to
•
Jan. 9
•
offered in exchange for a like amount of outstanding old
class A shares.
Unexchanged shares and the additional
31,617 shares will be sold publicly.
track
(Joseph J.) IV, New York
(letter of notification) $150,000 5.5% sinking fund
&
.
&
($10 par) common.
No un¬
share.
Proceeds—To build
The First Boston
Worcester,
Corp.,
a
Dec. 22 filed
Calif.
75,000 shares of class A stock.
Walker
H.
—G.
Acceptance
Inc.,
O'Donohue
to
equip¬
common stock
purchase warrants issued in
Price—Two shares per warrant at $6 a share.
Jan. 20 filed
1948
Price—$9.25 a share.
Proceeds—The shares are being
sold by four stockholders and represent part of the stock
the sellers will receive in exchange for their holding!
Co.
derwriting. Price — $10
trotting and pacing race
Ohio
(50c par) common. Under¬
Offering—Shares are to be issued upon
Merchants
Racing Association,
Nov. 28 filed 34,900 shares
$4
77:'. 77;''/;/ ''77
Pasadena,
Downs
Berlin, Md.
Jan.
•
1948
Gas Co
Ocean
and
indebtedness
93;
(CST) Feb. 2. Unsubscribed shares will be of¬
publicly. Price—$18 a share. Proceeds—To im¬
its public utility system.
7 /
\
:
<
at
shares
Proceeds—For additional working capital.
Bonds
Co....
May 4,
of
prove
®
filed) 27,788 shares
July, 1945.
16, 1948
Co.__.__
April 6,
a
Southern
30
exercise
Capital Stock
—
the
and
par
:/'r;
'
writers—None.
1948
February 11,
Ga.
serial
purchase of machinery and other plant
Market
Preferred
at
Proceeds—To
ment.
Southwestern Public Service Co.......—Common
Oil
offered
finance
Service Co
Corp., Atlanta,
$500,000 5%
:
....
Northern Indiana Public
Gulf
be
each.
—Bonds
1948
February 3,
Noon
will
1948
Light Co
stock
derwriter—Kirchofer & Arnold, Inc., Raleigh, N. C. Prict
—The debentures at 102.507, while the preferred sharei
_____:__—Equip. Trust Ctfs.
-:vFebruary 2,
new
debentures, due 19491957; 12,000 shares ($25 par) 5%% cumulative converti¬
ble preferred and 85,000 shares ($1 par) common.
Un¬
Chicago Milwaukee St. Paul & Pacific
(CST)
subscribe for the
for each two shares held at $10 per
Manhattan Coil
May 20 filed
January 30, 1948
Noon
one
Rights expire Feb. 18.
Proceeds—For building
expenditures and to repay bank loan.
...—Common
...
(no par) .common. Under¬
Offering—Stockholders of record Jan. 21
given the right to
be
v\.';v
■
Co., Ltd., Montreal, Can.
share.
January 28, ,1948
.
Oil
900,000 shares
the basis of
on
Common
Wolf & Dessauer Co..
.
16 filed
Dec.
p.m.
fered
for each two
common
/'v;7.'/
writing—None.
2
common.,i Offer will expire March
McColl-Frontenac
^Wisconsin Power & Light Co..—Bonds & Preferred
Harshaw Chemical
share of McClanahan
one
shares of Great Lakes
Baltimore & Ohio RR.
(393)
South
Carolina
Electric
Dec. 2 filed 80,858 shares
&
Gas
($50 par)
ible
Foif
Co.
cumulative convert^
($4.'50 par) common
preferred and 404,293 shares
for sale, and 687,293 shares reserved for conversion ot
preferred. Underwriter—Kidder, Peabody & Co., New
•
:
,
(Continued
on page
94)^-7,
,
94
•
(Continued from page 93)
will be offered for sub->>
scription by company's common stockholders, the pre¬
ferred on a 1-for-10 basis and the common on a l-for-2
basis.
Unsubscribed shares will be offered publicly.,
York,
Offering—Shares initially
U.
To pay
J
Dec. 29 filed 657,500
Co. from the,
of South Carolina Power
Commonwealth & Southern Corp.
;
:
ing
common
,
Underwrit¬
shares of capital stock.
ers—Lord,. Abbett & Co., Inc., New York, is selling agent.
Price based on market prices.
Proceeds—For invest-
f
-
•
Jan.
Spencer Kellogg & Sons, Inc.
20
(letter of notification) 3,350
shares of capital
Sport Products, Inc., Cincinnati, Ohio
•
■+
'
For working
5
filed
first -mortgage bonds,
$7,000,000 30-year
conversion
as
floating storage plant.
a
Valcar
•
LST for
an
;
,/
Jan. 9
San Francisco
Inc.,
Enterprises,
v-
(letter of notification) 2,192 shares of capital stock,
George Carras, 508
■
program.
Public
Southwestern
Service
(2/3)
Co.
($100 par) cumulative pre¬
shares ($1 par) common. Underwrit¬
ing—Dillon, Read & Co. Inc. Offering—The preferred
will be placed privately and the common will be offered
filed
10,000
shares
ferred and 103,113
29
Dec.
•
( 1/26)
30-year first mortgage bonds,
shares ($100 par) 41/2% cumulative-
will
expire
amendment.
Price by
2.
Feb.
and for construction costs.
Wolf & Dessauer
Expected week of Jan. 26.
Co., Fort Wayne, Ind.
9 filed 75,712 shares
Jan.
($1 par) value
•
•
California
corporate purposes.
Jan. 20
stock
(letter of notification)
(par $1).
(1/27)
12,500 shares of common
Price—$8 per share.
which
year
Southern Counties Gas
25,712 shares are being sold by
company
and
(Fla.)
Proceeds—To pay
construction costs.
•
West
Jan.
15th
St.
New York
Jan. 16 (letter of notification) $75,000 10-year 3% de-'
bentures.
Price—Par. Underwriting, none. Pay for al¬
terations and remodeling of building.
206
Club,
Ex-j
Co.
(4/6)
Harriman Ripley & Co.
UNITED STATES
and provide additional working capital.
Baltimore
&
Ohio
RR.
5
GOVERNMENT,
STATE, MUNICIPAL AND
(1/26)
Inc.,
at
noon
(EST)
INC.
26 at Room
1304, 2 Wall Street, New York, for the
sale of $4,000,000 equipment trust certificates to be
dated Feb. 1, 1949. The certificates will be designated as
series X and will mature in 10 equal instalments of $400,000
NEW YORK
-
ATLANTA
Probably Bidders—Halsey,
Stuart & Co. Inc.; Salomon Bros. & Hutzler.
each,
on
Feb. 1, 1949-58.
the British Government's
U.S. Induslres In Britain
this
has
matter
so
policy in
been
far
pub¬
leeded
•
BOSTON
PHILADELPHIA
urgently,
and
the
Dr. Einzig discusses British attitude
towards proposals for establish¬
of American financed factories in England. Explains reasons
BUFFALO
•
PITTSBURGH
•
•
CHICAGO
ST.
LOUIS
I
would merely divert British labor
and material from purposes tend- \
ing to balance British exports and
factory can hope to imports in the long run. To that >
in one year.
It is extent, it would actually delay
Britain
licized in the American Press. Yet
vest
imes the amount of hard curren-
is
an
answer.
to
the
com¬
plaints of the American business¬
and it is to the interests of
men,
in
•
capital directly to that end, its acceptance
that American firms desire to in¬
there
By PAUL EINZIG
Co.
Blair
Company is inviting bids to be opened
Ex¬
pected early in February.
•
j
Prospective Offerings
Electric Co.
$6,000,000 30-year first mortgage bonds.
Underwriting—To be filed by amendment.
Price by
amendment.
authorized -the
has
CORPORATE SECURITIES
filed
24
I
ders—Blyth & Co., Inc.; Halsey, Stuart & Co. Inc.; the
First Boston Corp.;
Underwriter—C. E.
holders.
Tampa
Commission
U.
P.
■
_
struction and other corporate purposes. - Probable Bidders
Unterberg & Co., New York. Proceeds—To selling stock¬
Dec.
pay}
to sell $75,000,000 30-year debentures at com- !
petitive bidding. The money will be used to retire loans;
from American Telephone & Telegraph Co;, for con¬
Corp., Chicago. Price by amendment. Proceeds—To be
received by company, together with loans, will be used
to reimburse treasury for $382,035 of expenditures made
in
1947
and $256,000
contemplated expenditures this
Textiles, Inc., New York
plant expansion.
plans filing with the SEC late*
in February $7,000,000 in bonds, with bids to be consid-r
ered on April 6. Proceeds for extensions. Probable Bid-^
50,000 shares by Fort Wayne National Bank.
Under¬
writers—Maynard H. Murch & Co. and Lee Higginson
Stern & Stern
I
'
PacificTelephone&TelegraphCo.(3/16)
•
stock,
common
of
•
'
Jan. 16 reported company
(1/27)
To retire bank loans and for construction purposes.
Stampede Mines Inc., Fairbanks, Alaska
Jan. 5 (letter of notification) 1,500,000 shares of 100 par
common.
Underwriting—None. For working capital and
; ; r
company-
bidding terms. Probable
I
Bidders—Halsey, Stuart & Co. Inc.; Glore, Forgan & Co.
•
Southern California Gas Co. (5/4)
and Harriman Ripley & Co. (jointly); W. C. Langley &
Jan. 16 reported company plans filing with the SEC late)
Co., White, Weld & Co. and Kidder, Peabody & Co.
(jointly); Blyth & Co., Inc.; The First Boston Corp.; V in March $15,000,000 in bonds, with bids to be consid-|
ered on May 4. Proceeds for extensions." 'Probable BidShields & Co.
Offering—Bonds will be offered publicly
j,
while stock will be offered to holders of 4V2% preferred.
ders—Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; Har- i
Price by amendment. Proceeds—To pay bank indebted¬
riman, Ripley & Co.; the First Boston Corp.
ness
Proceeds—
(1/30) ?
RR.
—Morgan Stanley & Co., Halsey, Stuart & Co. Inq.
pected that bids will be openedi about March 16.
underwritten under competitive
Rights
share for each 11 shares held.
Pacific
disclosed that it plans the sale of be-j
tween *$6,000,000 and $10,000,000newfirst mortgage
to Southwestern's common stockholders of record Jan. 21
at the rate of one
&
company
Underwriters—Only the bonds will be
preferred stock.
Paul
Narragansett Electric Co.
JEan, 12
The
filed $3,000,000
Series B, and 30,000
Mil.,/ St.
bank loans and
Francisco investment brokers.
Wisconsin Power & Light Cok
Chicago,
Company will receive bids up to noon (CST) Jan. 30 at1
Chicago for the sale of $5,040,000 equipment: trust cerj^fi(?ates seriesi CC, to ;be datbd Febf 1^ 1948, ^<Lmatup-l
ipg /F> & A. -1 - from- Aug. 1, 1948 to /Feb^u l958. in-1
qluslve.: Probable Bidders — Halsey,StUart& -Co-- Inc.; \;
Salomon Bros. & Hutzler; Harris, Hall & Co. (Inc.).
i
bonds during the.,spring.- Proceeds—Will be used to
of which 624 shares are to be sold by
and Talbot, San
Probable bidders: Halsey, Stuart & Co./
Inc., Lehman Brothers and Lazard Freres& Co. (jointly);
White, Weld & Co. and Kidder, Peabody & Co. (jointly);
Blyth & Co., Inc. and Stone & Webster Securities Corp.
(jointly); Glore, Forgan & Co. and W. C. Langley & Co.
(jointly); Harriman, Ripley & Co.; Merrill Lynch, Pierce,
Fenner & Beane.
Proceeds—To finance construction,
bidding.
Dec. 24
To buy
Underwriting—To be determined at competi¬
series B.
tive
and
Underwriting—None.
Price—Par.
shares by Frank G. Short, 500 shares by Louis Janin, and.'
560 shares by Harold E. Haven, at $19;each to Hannaford
Southwestern Gas & Electric Co.
Nov.
V
120,000 shares ($1 par)
180,000 shares i ($1 par)/ common stock, ?
(letter of-notification)
preferred
•
stock.
mon
13
Jan.
►
(letter of notification) 5,000 shares ($7 par) com- *
Price—$17 per share. Underwriting—None.-"
capital.
Jan. 6
Juneau, Alaskai
United Fish & Cold Storage Co.,
•
York
share
through Trubee, Collins & Co., Buffalo, and Fahnestock
& Co., New York.
Proceeds—To selling stockholder; ; "•
(par $1). Price—Stock will be sold on New
Stock Exchange at market (estimated) $28,875 per
stock
Chesapeake & Ohio Ry.\ (2/3)
CcHhpiany; wiH rece^
Up ta"hobn/ (EST) Feb. 3 ;at>
3,400 Terminal Tower; Cleveland,' for the sale of $4,900,—].
000 equipment trust certificates,«to be dated Feb, .15, j
1948, and due annually Feb. 15,; 1949-1958. Probable Bid-«
ders- -Halsey Stuart & Co. Inb.;' Salomon Bros. & Hutzler; Harriman Ripley & Co., Harris, Hall & Co. (Inc.),
Funds, Inc., New York
Union Trusteed
Price by
other
•
Development Corp., Denver
notification) 890,000 shares of 6% pre¬
(10c par). Price—25 cents. Underwriting, none.
loans and develop holdings. v
- " '
ferred
/
amendment. Proceeds—Proceeds together with
funds will be used to purchase all of the outstand¬
Oil and
S.
16 (letter of
Jam
Thursday, January 22, 1943
CHRONICLE
FINANCIAL
&
THE COMMERCIAL
(394)
2ies that any
earn
or
save
represents
many
reconstruction
transac¬ | Britain's
effort,
apart altogether from resulting in
an
additional dollar liability in
known;
receipt of a large amount of dol¬
absurd in view of British
First of all, much of the: diffi¬ lars, it should be welcomed even the British balance 6f payments,'
of scarcity of labor and material for factory construction in Britain,
culties are due to the Govern¬ if the factory in question did not in the form of net profits earned
ment's general policy of controls produce
any
goods that would which, even if frozen for the pres¬
proposal would delay rather than aid Britain's reconstruction.
over
industrial
activity.
These earn or save dollars. This is not ent, would have to be remitted
LONDON, ENGLAND.:—From time to time publicity is given controls are exercised over all the view taken by British official sometime. Nor is the possibility
to complaints made by American industrial interests about the offi¬
firms operating in Britain, irre¬ circles. They feel that unless the" of "ap eventual liquidation of the
cial British attitude towards American proposals for the establish¬ spective of their nationality. While labor and material spent on the American investment and the re- '
ment of branch factories in Britain.
Many American businessmen,
British firms have grown used td construction of the American fac¬ suiting repatriation of this capital
being aware of
■
Government intervention and red tory justifies its existence by its overlooked.
Britain's
dol¬
to finance with the aid of their
Admittedly, the receipt of hun¬
or
dollar-earning
tape, American firms, being used dollar-saving
own dollars the import of raw ma¬
lar difficulties,
to the more liberal system pre¬ capacity, the transaction merely dreds of millions of dollars repreterials
have
submit¬
their
British
factories
vailing in the United States, are amounts to a dollar loan bearing senting the capital of hundreds of '
would need, and to
ted
to
the
agree to
a
irritated by it and resent it.
Yet a particularly; heavy interest in American branch factories, would
British
Gov¬
freezing of the dividends they
it must be admitted, much of the the form of profits which would be very helpful at present, as it
ernment plans
would earn from those factories.
to
the would cover Britain's dollar, def-,
control
that
is in
operation in have to be transferred
Not unreasonably, these Amer¬
providing for
But
Britain is a necessary evil in ex¬ United States sooner or later. The icit for a little while.
unless;,
the production
ican businessmen had expected to
British Government is anxious to the branch factories serve dollaristing conditions.
be received with open arms. They
in
Britain of
avoid thus mortgaging the future earning or dollar-saving purpose,
The
British
Government
has
were naturally disappointed when,
goods hitherto
for the sake of. obtaining immedi¬ the diversion of labor and material•;
instead of obtaining every possible elaborated a system of priorities
imported from
for their requirements would-more >
ate relief.
in
the
granting of permits for
the
United
encouragement from British offi¬
/ The basic fact of the situation is than outweigh, in the long run,/
cial quarters, they encountered all building factories. The main pur¬
States.
In do¬
that there is a scarcity-of labor the benefit derived from the im-r
kinds of difficulties.
They found pose is to reserve the limited
ing
so
they
and
materials required
for the mediate receipt of dollars?. It is :*
that the Board of Trade was any¬ amount of available labor and ma¬
were
prompt¬
construction of factories, and for to the credit of the British author-,
terials for the purpose of increas¬
ed by a desire
thing but enthusiastic about their
their operation.
The approval of ities that, instead of taking the
Of
retaining
E>r- Paul Einzi*
project; that the Treasury raised ing the production of goods that the establishment of an American
can either be exported to hard cur¬
line of the least resistance by ac¬
their
British
objections; that permit for the
branch;/" factory producing,
say,
markets and at the same time help¬ erection of factory buildings was rency countries, or can take the
cepting
immediately
available
cosmetics, would mean that there
or
refused; : that most place of essential goods at present
ing Britain in her difficulties. For delayed
would be less labor or material dollars for no matter what pur¬
from
hard
currency
the transaction would involve im¬ Government departments they had imported
countries. If the factory planned available for constructing a Brit¬ pose, they resist the temptation
mediate sales of large amounts of to deal with were out to hinder
ish factory producing, say, trac¬ and
exercise
discrimination ac¬
dollars to the British Treasury, in rather, than help. No wonder they by American interests, falls into
ment
for British opposition,
the face, may appear
need for dollars, but contends because
which, he
says,
on
Anglo-American friendly relations
that
this
answer
should
be
made
arguable that, since
tion
would
mean
the
the
immediate
,
.
return for pounds
needed for the
of constructing and run¬
ning
the
factories
in
Britain.
Moreover, once the factories are
expenses
in operation
their activity would
obviate the necessity of spending
dollars
on
the' goods
produced.
Many of the American business¬
men
concerned
were
even
pre¬
pared to go so far as to undertake
this category then its establish¬ tors.
Even
Nor were
ment is welcomed, though even
explanations given to them in
the dollars
then the plan has to take its place
the Government departments
in
ital of the
in the queue formed by British
London such as to allay their re¬
clans of the same category,
tory would
sentment. And it is characteristic
felt bitter about it all.
the
of
the
British
United
and
inefficiency
of the
costly
propaganda service in the
States
that
no
authentic
comprehensive explanation of
formed by British plans
of the same category.
the queue
On
the
attitude
pear
in
face
this
absurd.
of
it
the
respect
For
run
the
dollars
ap¬
Britain's
are
representing the cap¬ each individual scheme, related to
American branch fac¬
efforts
sufficiency.
the
general
scheme
of
pursuing *
be helpful, in the long the end of achieving equilibrium.
transaction would hinder
British
may
though the receipt of cording to the intrinsic merits of"
to
achieve
self-
Their
any
judgment
of the merits of
proposal may be open to crit¬
Unless the American icism, but the underlying principle
proposal is of
a
nature as to assist
appears
to be sound.
-
Volume
167
Number 4666
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
"95
(395)
what all this has to do with
Tomorrow's
the
Markets M
market.
Says—..^■■'■^2
and do it.
even
though initial ef¬ sidering the
worn
off.
you've something better
do, this is the time to do it,
:For
as I sit back in the chair
and look at
my typewriter all
;I
before
see
is blank space
me
and ^nly ^the
vaguest idea of
how to fill it.
-
:
/
The
is full of
news
political
high-j inks \ with U taxes the
main subject
closely followed
by the names of ^ the GOP
(pr^idential candidates; So far
there is
Dewey, Taft, Stassen
land
number
a
.sons,
including
hower.
the
of
sort
was
Ike
Which
nod
next
The
rationing
almost
I
more
by- the
Summer is
-,
an
move
sic
in
are
Sic
first.
picture has some
people frothing with frustra
.acting
One writer views Tru¬
this
anticipated
making
the
read.
second
that says
anything of in¬
terest to the trader is Gerald
$40 cut with
commen
M. Loeb's "Battle for Invest¬
increases in corporate
ment Survival."
The other
taxes as "a bribe." He draws
books I've seen
an
get so in¬
analogy between a prize
fighter who was penalized by volved in balance sheet anal¬
;the Boxing Commission for
ysis, it would take an ac¬
failure to report a bribe and
Harry
•
countant to understand
and
S.
Truman.
sumption
is
The
that
as-
Truman
should be penalized the
way.
Maybe have
bar Truman from
besides
they're
them,
pretty
dull. There may be some that
same
are
Petrillo
good, but I haven't
seen
them.
playing the
As to
probably wondering
I'm not
method, I
charts.
use
getting into
any
bick¬
ering arguments about why
my; charts
Pacific Coast
others.
The
...
,-V:-
,r Orders
,:>r^
Executed
on
.1
show
vj
get that, I
plus,
Schwabacher & Go.
NeiO
York Cttr'o
■(■■J.: S(t71
Stock
Exchange
-.
14 Wall
Street
COrtlandt
Eichange"'{Associate)
M
7-4150
Private Wires to
1
New York 5, N. Y.
Teletype NY 1-928
Principal Offices
vi.
•j; San Francisco — Santa Barbara
Monterey — Oakland
Sacramento
—
Fresno-
be¬
where
they don't
going. To
the tape, charts
use
intuition which in
essence
is based
keep
on
charts*
I
suggest
emathical caluculations.
simpler the charts
A word of
Tlie
the better.
warning:
will not make for
-
will
trast
!
with
undertak¬
where
the
underwriters sometimes worked
for
little
as
as
quarter point.
a
Bankers sponsoring the current
issue realize that it must be "sold"
—that is, that
out
and
with
they will have to
market
three
a
the
point
bonds.
edge
the
the bonds
business
Have Little
derwriters
is
on
cur¬
is
an
the other day on the occasion of
the sale by Potomac Edison Co.
of
$4,000,000
first
bonds
with
recognized
in size of the
Charts
profits and
they
take
NEW YORK 5, N. Y.
v
or
The
nine
groups
successful
going
after
All
the
a'%.%
a
But
evidently
market
(
not
was
indicated
that
the
just right.
reappraisal
and
was
the
quick
a
price
was
bids
here
02599
at
and
figuring
be¬
or
HELP
&
Raw—Refined—Liquid
issue
bit
a
•
[The
article
?V-
time
views
do
not
coincide
Chronicle.
Thursday.
in
necessarily at
with
They
are
those
of
thU
any
the
presented
those of the author
only.]
<u
slow
At
a
GREEN
BAY
Board
Five
&
Class
on
WESTERN
of
Directors
percent
"A"
Secretary.
the
fixed
and
amount
de¬
payable
Debentures
(Payment No. 52) and
percent to be payable
on
stock, out of the net earnings for
the year 1947, payable at
Room No. 3400, No.
20
Exchange Place, New York 5, N. Y., on
and
after
February
16,
1948.
The
dividend
the capital
of
a
the
on
record
Five
dividend
stock
will be
paid to stockholders of
at the close of business
February 6, 1948.
W.
New
York,
January
16,
W.
COX,
the
Box
J
Pound
CONSECUTIVE CASH
share
cents
British Income Tax
upon the issued
Net
profits
($0.15)
a
of
been declared upon the
BURROUGHS
ADDING
MACHINE
COMPANY,
March
record
10,
at
1948,
the
shareholders
to
470).
is
30, 1948.
The
made
S.F.HALL,
Secretary
Dividend absorbs
erence
payable February 29, 1948 to
stockholders of record on Feb¬
Tellier
New
&
Co.,
York
(£3,046,377).
brackets.
Cor¬
■■
Directors; have
March
on
Pound
of
current
31,
decided
1948
to
Interim
pay
Divi¬
Shilling for each
Ordinary Stock for
year
Stock,, of
the
the
issued
24,
to
to
up
1948 will be
transferees
in
the
Ordi¬
Company
British Income Tax.
Transfers received
free
Feb¬
time
receive
to
divi¬
,
above
Bearer Warrants the
dividends
will
be
paid
one
who may be
en¬
by1 virtue of Article XIII (1)
Double
Taxation
Treaty
SHOWERS
the
under
Section
States
Internal Revenue
obtain
lars
dom
the
on
V.
Secretaiy
January 9, 1948
on
One
between the United States and the
United Kingdom, to a tax credit
to
O.
42
City.
the Cumulative
1948.
ing Green 9-7946 for appoint¬
ment.
has
brokerage experience
Broadway,
have
£2,375,776
responding figures for year ended
September 30, 1946 are given in
of
Preferred Stock, 4.88%
Series,
ruary 5,
Stock
to General
forward will be
carry
£3,899,407
titled
se¬
on
of
Stockholders
Series
all-around,
Telephone BOwl-
free
(£0/1/10) for
Ordinary
totalling
paid
Dividend
Shillings
together against the deposit of
coupon only namely No. 201.
at
share
Tax
£585,000
and Interim
Two
COMPANY
good
salary $50.
taxation
two
authorized the payment of an
initial dividend of 25.42 cents
off—
for
of Excess Profits
CALIFORNIA
The Board of Directors
Saturdays
provision
up
As regards
SOUTHERN
per
after
year
dend of One
Stock 4.88%
accurate,
the
£688,000
(£3,887,000), Profits
Tax
£1,566,130 and Income Tax
£3,823,385 (£3,557,918). Pref¬
of
close of business Janu¬
Dividend No. 1
and
for
£500,000 ( £400,000)
has
stock
EDISON
STENOGRAPHER
Shilling for each One
Ordinary Stock free of
of
Reserve the
dividend of fifteen
to
1948 payment
Final Divi¬
of
(£2,177,795). After paying Final
Dividend amounting to
£1,187,888
(£ 1,187,888) and
allocating
DIVIDEND
A
de¬
meeting fixed
1948
British Income Tax
One Pound
187th
was
stockhold¬
Ordinary Stock.
119,
EXPERT
31,
Directors
it
to
February 9,
totalling
1948.
ac¬
25
annual
(£585,000)
Secretary.
the
deducting all charges and providing
£6,077,515 (£7,444,918) for tax¬
ation
are
£5,501,694 (£4,975,-
RAILROAD CO.
has
be
to
;
dend of One
dividend
No.
118
of
One
dollar
seventy-five cents
($1.75)
per
share
011
the
preferred
stock
payable
March
1,
1948,
has
been
declared
to
stockholders
of
record
at the close of business
February 5, 1948.
EGER,
of
recommend
March
on
Quarterly
The
Works
,
meeting
to
at
ers
and
clared
stock,;.
January 15, 1948
ruary
Chronicle,
American
be held
J.
be
DIVIDEND NOTICE
Reports
the
Cumulative Preferred
—alternate
Whyte
expressed
on
NOTICES
GERARD
proceeds
reoffering
INTERNATIONAL HARVESTER
COMPANY
r,
col¬
Issue
The
Water
buy
held
DIVIDEND
r
sinking fund
bonds.
The
common
cided
v.
5%
trust
to
side but moving.
Place, New York 7, N. Y.
rapid
—Walter
-
Exports—Imports—Futures
basis.
Financial
Co.
loans incurred
dends. :
commission
an
Northeastern
used to repay bank
a
for trader with
Commercial
$10,000,000
accrued
enable
curities
More next
on
;.Trader Wanted
count,
Market
on
of
Aggressive unlisted house has
opening
Park
dis¬
f
;
will
nary
Drawing
have
officials
1968, is priced at 100 and
of
figures, with
SUGAR
for
were
WANTED
clientele.
next
:;■:/
Water
assure
102% to yield 2.975%.
had this
Detfoit, Michigan
January 14, 1948
that
a
the
over
banking syndicate headed by
issue
issues, bank-
coupon the successful group
3.10%.
either
of
interest.
ary
It's
new
aggregate
offering today
differ¬
payable
At any rate there
Counties
W. C. Langley & Co. and the
First
Boston Corp. are
nat¬
a
it.
price
no
promise
A
paying the issuer'a price of 102.-
paid a
price of 100.3191 for a 3%% cou¬
pon. Reportedly the intention was
yield 3.07%.
sampling of the
the
$22,000,000
Bonds
dertakings.
syndicate
to reoffer at 101.07 to
in
months
been
market letter
that holds out such
as
of the
keen
was
the
should be suspect.'
and
ity.
Bidding for the issue
Southern
dated Jan. 1, 1948, and due
Jan. 1,
mortgage
30-year matur¬
a
to
lateral
no
move
issue
Northeastern Water
its
capital
needed to swing the larger un¬
tending to keep un¬
their toes, and there
hesitation about revising a
price if it becomes apparent that
current
their groups in order to
the
aggregation
of
though
Choice
.
.
laying plans for
closed.
for the
even
such action is needed to
issue.
bids for
$40,000,000 of first
consequence
But
The shifting nature of the
rent market is
I
go
not AAA refunders.
are
...
being forced by circum¬
stances, to expand the size of
selling group and a Vz point re¬
allowance, they don't feel badly
about
round
nine
ence
the
years
and
are
financing
V ers
years.
earlier in
Co.'s
This
this;
numerous
ings in recent
system that is automatic and
any service
STREET
Dlgby 4-2727
15
covering
100. for an indicated "spread" of
five full points. This is in con-1
;
he
place of thinking. There is
V
last
signed
was
.
LAMBORN & GO.,Inc.
WALL
the
the
re¬
Southern California Edi¬
ural
pre--]
agreement
by
good
Co.
Gas Co.
refunding bonds' sold the same
day brought out only three
bidf
ders,-" 'V/:;.v
i'
week, with the bankers paying
the company a price of 95 and
; fixing the reoffering price at
doesn't get involved in. math-
neither
99
for
The
which:drew
son
Co.
ap¬
Public
utilities, each
of
set at 100.489 for a yield basis of
expe¬
If the reader wants to
'
'•.'•'.7'. r
<
a
Larger, 'But Fewer Groups
offering.
conditions that have not, to the
recollection
of
bankers,
vvailed
inquiry
indicated
..
Francisco Stack
Exchange >
Chicago Board of Trade
xr'J.;
'
know
if
even
some
rience.
Members
York
its
>
from
with the experience
of the two Potomac
•
was
California
Meanwhile Southern California
Gas
few
$19,000,000 of Northeast-!
Water
debentures
by the
advances by American Tele¬
pay
In contrast
mors
-
funds
for this issue.
sponse
'
Telegraph
$75,000,000
This company sold its previous
issue last October and will use
sought
interest
3V6%
a
Pre-offering
sinking fund,
collateral trust bonds, due Jan.
1,
1968,
under
underwritingf
with
are
them
use
to
where I'm
me
than
chances
I
like
I've been
Pacific Coast Exchanges
New
I
cause
better
are
they're not.
Securities
for
with
&
phone & Telegraph.
investors
as
An illustration of this "nimbleness of foot" developed
only
piano.
You're
ern
I'll
ever
prevailed
decade.
of
sue
question
only book I've
looks
have
a
issue
decisions,
what
comes
issue
issues
sell
to
Utilities Commission.
aggregate of
>,
The successful
group paid 100.4509 for the lower
coupon and
planned to reoffer the issue at
100.99.
A
>
my
an
rate.
banking group was slated1
to bring to market
today an is¬
news
surate
<
be
to
investment market conditions
than
3
jpublid wil}
-
which
market-
Anticipation oF such
The
seen
definitely
the
in the shift
awa.y from the abnor-r
mal
All that remains to be
answer
market
money
though it might be the "clincher'
I'm
V But
token I'm also
and what books to
tax
man's
more
come.
cago, wsmts, to know what J
say.'
Now
certainty.
A reader, O. A. R., of Chi¬
use
corporate
first began to let short-term
rates harden last summer,
r
panies to be affected by such
get
offering of proved
mortgage, 35-
■.»
utility
Telephone
proposal
30-year
Co.'s
Six of the nine
groups bid for
the bonds to
carry a 3% cou¬
pon while the other
three
marking the end of an era and
starting upon another. There have
been
accumulating evidences of
the change ever since the
Treas¬
some
Eisen¬
will
one
a
becomes official.
body is willing to talk about
nobody has anything to
tion.
The
now;: appears
con¬
of
the
see
same
once
nine bids.-
of
-
convinced that stocks of
comT
do
but
*
greater
seed is what Ithe
interesting subject that every¬
The
ort
stage isn't
convinced it will
move.:
favorite
Power
$15,000,000 first
year bonds, drew
ury
that
wise in
;
Electric
Co.'s
Coast
more
into sight this week when
Pacific
to the attractiveness of
sized
issues,
Potomac
"Street"
<{
(
news.
...
<
orter's
Some weeks
ago I pointed
out
a
Potomac Edison 3s.
v
Attesting
V
If
to
ahead
surprising. If there is any¬
thing about it, it is that the
isn't
Two
moved
writing is saying nothing.
[ Market marking time. Wash¬
ington news dominates pic¬ weakness
ture
go
Our
some¬
For the market at
Weakness at this
■
investment trust tem¬
porarily.
I
had
you
an
1
this
By WALTER WHYTEs=
fect has
if
Well,
thing else to do, to
iWalter Why te
=
stock
warned you
come
of
131
certificates
the
rates
Income
of
the
giving
of
United
Code
can
particu¬
United
King¬
Tax
dividends
appropriate to
payable March 31st
Ordinary Stock by application
Guaranty Trust Company of
New York.
BRITISH-AMERICAN
TOBACCO
COMPANY, Limited
January 15, 1948.1:
U,'
96
Thursday, January 22, 1948
FINANCIAL CHRONICLE
&
THE COMMERCIAL
(396)
on.
from the Nation's
•
•
•
AJ
a
xJL I v\A/
■JEvCrC4'
Behind-the-Scene Interpretations
.
Hr
Capital
rent year and
twice as great as
civil public works
'
its limited program.
expenditures
*
,
a
that
bet
poor
will pass—unless
again ties up the
this legislation
Lewis
John
ties up
coal mines or somebody
steel.
„
COMING
EYE NTS
.
*
*
is
It
favored.
admission was by the Commerce Department to
Snyder of beat down bottlenecks — there is
the Treasury in a public hearing. developing evidence that the de¬
partment is stalling. If voluntary
Then, in the President's bud¬
agreements wait on the reaching
get message, it is proposed to
of a program for steel, it will be
spend $2.8 billion for civil pub¬
near
the end of the session of
lic
works, $800 million more
Congress before the department
than the estimated expenditures
has really "got going" with even
on these objects during the cur¬
This
1950.
fiscal
drawn out of Secretary
Field
Investment
In
►
\
There is considerable bewilder¬
in fiscal '47.
ment
the
action of the De¬
revolt brewing in Dixie." It is aimed at destroy¬ Hj. "The 1949 public works program
partment of Justice in plunking
dominance of left-wing ideologies in national Democratic is much larger than any regular
before a grand jury its investiga¬
party affairs. In particular it is directed against President Truman's public works program prior to the
tion
of
alleged
non-compliance
espousal of anti-lynching legislation, his attacks upon segregation, war, even though public works
with the Act relating to the regis¬
his sponsorship of
the anti-poll<5>
were being expanded at that time
for an agreed revolt candidate
tration of lobbyists.
tax idea.
to provide employment," Mr. Tru¬
could get a place on the ballot.
Under this Act, organizations
man
said in his budget message,
What again? That is the average
whose
principal activities are
Only one thing is sure—South-r in the "back of the book." With
person's reaction to such news.
directed at influencing legisla¬
ern Democrats will not allow their
military appropriations added to
The Democrats, of the South have
tion, are required to register.
heresy to go so far as to embrace the 1949 estimates, the Federal
always griped about the national
the rival political religion. No ef¬
The Department of Justice, in¬
Government would spend $3,158
Administration's stand in favor of
dustry sources report, originally
these
three things,
designed to fort will be made to swing the millions for public works. This is
South
behind: any
Republican a figure reminiscent of the Rooseagreed with this interpretation,
catch the colored vote in those
candidate
for
President.
This /eltdays..^'m- K
\41 but ducked putting' its opinion
electoral vote-laden States of Illi¬
*
"
Wdtild hot acebrd with the objec¬
to this effect in writing.: This
nois, Michigan,"OhibV Pennsylva¬
tives of the Southern group, which
viewpoint would have exempted
Republicans are cautious about
nia, and New York. Yet on Elec¬
are
from
mainly to break the grip of
registration' the
many
the $5.6 billion figure
of the
tion, Day. Southern
Democrats
the Northern left wing upon their
trade associations who perform
Knutson income tax reduction
have always come around to vote
numerous
services
for
their
for the national Democratic Candi¬ party. Also it would be futile.' ? i : bill because they don't want to,
There is a new
over
ing the
Feb.
La
:ft':'-"'- $ " • . .•
come
out with a "fringe" sur- t
President—and to support
Whether this movement will get
plus—one so close that it could ,
him.
They have to, almost, ' be¬
easily turn into a deficit. They
cause otherwise they threaten the anywhere is in the lap of the fut
plan, to the best of their ability, j,
local control of their local polit¬ ture. The intention of this group
to come out with a
sure-fire
is to throw as many electoral votes
ical machines. It would be like a
Federal surplus of $2 billion in
away from Mr.V Truman
as pos¬
bunch of Ford dealers kicking
fiscal 1919. That is why $4 bil¬
young
Henry in the face and sible. If even two solid Southern
States were to drop out of the
lion looks like a better bet than
plumping for Chevrolet.
Truman column next November,
$5.6 billion for the final amount
;•,
' v*
„Y'.'v.'
' :y '•
that would be quite an achieve¬
of the tax cut.: ;
' • ' /
;.
This time it may be different.
ment.
Louisiana and Mississippi C,;7:.r,;,!7
* - * ' ■ *
' ■'r;':l
The revolt is not designed to
are
leaning strongly toward this
Don't believe that letting Maj.
assault the front pages of the
revolt. They are negotiating with
Gen. Laurence S. Kuter have a
newspapers. In fact, only a hand¬
Texas,
Alabama,
and Virginia, $15,200 salary (versus $10,000 for
ful of people outside the confiwith other "solid South" States to
other board members) as Chair¬
dence of the Southerners have
be approached.
man
of
the
Civil
Aeronautics
any inkling as to what is going
In the net, the brewing revolt Board, was the real target of the
on.
This time the Southern boys
of Southerners looks at this dis¬ GOP blast.
Likewise it was not
are
meeting quietly and plantance like as great, if not a greater the "many generals holding high
ning carefully. They have been
potential menace to Mr. Truman's places" on the civil side of the
organizing behind doors and alreelection
than the third party Government.
It
is
taken - for
most without one line of pub¬
candidacy of Henry A. Wallace. granted here — and it may have
licity, since last November. It
1'.
' ;■:■■'
occurred to you — that this is
■ a
■' *
O^ r
is doubtful if Harry Truman is
•"
,
,
-
-
f
to
tees
-
>
of
Club
Traders
Security
1
(St. Louis, Mo.)
Feb. 6, 1948
Louis annual dinner
St.
at the Chase
Hotel.
Traders Asso¬
Boston Securities
ciation
ner
'
(Boston /Mass.)
IS, 1948
Fe b,
Annual Winter Din¬
24th
at .the Hotel
Somerset. ;
' r
-1"
(Philadelphia; Pa ")
Feb7 27v 194$
speak; oil legislation is:
Investment Traders Association
-
only incidental and
(Kansas City, Mo.)
;Bond Traders Club of Kansas
City annual dinner at the Hotel
Meuhlebach. ; ' " 7 "
.<•
1 '
;
\
which: appearing
Congressional commit¬
before
■
Bond
at the
Chicago
Salle Hotel.
Feb. 5, 1948
of
members,
date for
of
Club
Traders
■.
,•
(Chicago, 111.)
1948
3,
Mid-Winter; Dinner of the
casual.
Philadelphia
Twenty-fourth
jury
iction, the Department of Justice Annual Mid-Winter Dinner at the
vas negotiating quietly with variBenjamin Franklin Hotel.
*
*
dus
types of organizations to as¬
March 5, 1948 (New York City) L
certain Ihe extent to which they
New York Security Dealers As¬
engaged in lobbying activities and
night be subject to the lobby sociation 22nd Annual Dinner at
,
of
Until the surprising grand
registration law."
the Waldorf Astoria.
making the investigation a
ormal grand jury affair, the Deoartment of Justice has brought
to an abrupt end the voluntary
By
cooperation of industry in work¬
ing out the ins and outs of this
obscure legislation.
The Depart¬
ment also has adopted the new
March
Canada)
Annual
Bond
.
Traders
/
.
Dinner
'
:
(Toronto,
12,. 1948
Ont.,
; ;
..
of the Toronto
Association at the
King Edward Hotel,
Nov.
15-18, 1948 (Dallas, Tex.)
"
-
yet fully aware of the
tions of this situation.
implica¬
Marriner
dem¬
against whom the pinks
can
hurl their epithet, "Fascist."
Some of the most solid citizens of
the South, both in business and
political life, are behind this pro¬
ond-stringers, no cheap local
agogues
Actually some persons
sure
bet.
with
potent political voices have
to Mr. Truman that
Eccles should not again be
suggested
Mr.
Chairman. The Chairman
is scare the
Party,
in
next July,
off the party's stand in favor of
anti
lynching and anti - poll tax
legislation, and the "Civil Rights"
bill.
The plan is to hold a con¬
clave of Southern Democrats next
spring, in advance of the party's
national
convention,
to resolve
against these proposals of the
Its avowed objective
Democratic
convention assembled
national
If
the
Democratic convention
then the
next
becomes—what can the
Southern Democrats do about it?
doesn't
scare,
question
the
If
momentum of this drive
be
Democratic
convention,
complete
Increases,
rump
a
Party"
there might
then
"Southern
bands. Then
the
local organizations would
■throw all the steam into get¬
with candidates and
ting the vote out
didates, ready to
on
the
ballot
for these can¬
skip that place
for
Or, legislatures
Mr.
Truman.
of the Southern
States might call
special sessions
to fix it up some way so
electors
appointment as
unless he,
Eccles holds an
1958
until
member
Eccles,
term.
to shorten
decides
that
■■
,
Notes
on
fighting
inflation
NOW:
proposal
The
President
Truman
sponsored
by
in his annual
and cooked up by the
Council of Economic Advisers, to
message
Indiana Gas & Chemical
South Shore Oil & Dev.
Dealers
Pfd. &
New York &
Philadelphia
& Co.
"temporary" in¬
crease of 10%, to carry the roads
through ■ the
financial
strain
by the second
while the Commission was pass¬
ing
on
long-term boosts in
the
rate structure.
7-7:'7;7/%';v7
paign.
*
■l"'V.' .V'-iv'Wv
.
,
*
:;v,.v
'
'
■'
'
v,7'iv
tember until December
interim
aid, that it
7
■
*
*
New Issues
also ap¬
*
:
M. S. Wien & Co.
to approve
can
propriate for a couple of months
The
Persons close to the leadership more on a temporary basis.
of the Senate Banking Committee Congressional leadership will not
be
pushed into hasty action on
definitely believe that that leader¬
ship wants to have the Committee foreign aid on the assumption that
if they don't act on long-term aid
approve control legislation in the
next two or three months.
That by April 1 the world will fall
•:
Securities
" '.
somebody is going
to suggest that April 1 is not an
unavoidable deadline for foreigr
aid—long range, that if the U. S
could wait from the time of Ihe
Paris committee meeting in Sep¬
Pretty soon
1919
ESTABLISHED
Members N.
40
Y. Security
Dealers Ass'n
H.A. 2-8780
Exchange PI., N. Y. 5
7
Teletype N. Y. 1-1307
Trading Markets:
Ralston Steel Car
•
Oregon Portland Cement
Riverside Cement A & B
Spokane Portland Cement
LERNER & CO.
Investment
10 Fcsl Office
Securities
Square, Boston 9, Mass.
Teletype Ba ft
Telephone Hubbard 1090
Teletype—NY 1-971
HAnover 2-0050
Firm Trading
Markets
FOREIGN SECURITIES
Empire Steel Corp.
Susquehanna Mills
All Issues
Common
FOREIGN SECURITIES
Incorporated
SPECIALISTS
V
.
thru—Montgomery, Scott
ment
freight rate boost.
Their
of receiving good treat¬
from the ICC were raised
Domestic & Foreign
general smear business cam¬
a
PAUL MABKS & P.O. INC.
'
Clear
30%
hopes
Rails
if the grand jury
surprised
proceedings are not used as a
vehicle, in this election year, for
LEWIS & STOEHR
Herbert H. Blizzard & Co.
St., Philadelphia 9, Pa.
roads
what they
ask
for" in the way of a permanent
"substantially
Pitts. Steel Foundry
WHEN BIDS ARE DOWN
123 South Broad
Commission will give the
be
Reorganization
V
LOOK US UP
*
Commerce
Interstate
the
that
Old
quarterly financial statements.
Business representatives will
■
confident
■
'•
control may take the form of com¬ apart.
.y %
:
sjt
*
; V, - ' ./O " (
everybody's tax $40 as a "cost pulsory allocations, priorities, and
It's a good bet that the House of living adjustment" and soak it the like. Perhaps even rationing
in to the corporations, would re¬ These plans, however, must hurdle
Labor Committee this year will
sult in a net loss of revenues of two obstacles.
One is the diffi¬
get out legislation further curb¬
$600 million during the present culty of getting a majority vote
ing the power of the big national
fiscal year and $2.4 billion in fis¬ in the Committee.
The other is
labor leaders.
There are two
cal '49, or an aggregate of $3 bil¬
getting control legislation adopted
lion during the next 18 months.
lines of probable action. One is
by the Senate leadership. In the
The present is the time, according
to
prohibit industry-wide col¬
House the outlook is still hostile
to the chorus of Administration
lective bargaining. This is least
to compulsory legislation. /
spokesmen, when there is danger
favored. The other is to subject
of inflation. The excess profits tax
Meanwhile, despite the work¬
on
certain union activities to the
corporations, proposed by the
ing out of a technique and a pro¬
President, would not make up this
anti-trust laws. This is the most
gram for "voluntary cooperation"
deficiency for the Treasury until
H. & B. Amer. Mach.
more
'•*
*
—
cut
Catching
More and
*
*
Railroad officials are
7V7'
*
%
«
.
THE NEW LOOK
Is
Mr.
ignation as Chairman is not re¬
lated to board tenure; i. e., Mr.
-
President.
is des¬
Truman for a
4-year term, from among the
members of the Board. The des¬
by
hower for President.
Reserve System
1, but it is by no means a
Feb.
ignated
gram.
\
Federal
the
of
get
may
term as Chair¬
of the Board of Governors
man
Running this show are no sec¬
Eccles
S.
4-year
another
again without putting it
National Security Traders Asso¬
in writing — of saying that any
ciation Convention.,; k"■;
organization which in any way
part of the GOP professional pol¬ attempts to influence legislation
itician
build-up
against Eisen¬ should register, or at least file
policy
•
Hill, Thompson & Co., Inc.
Market,
Established 1926
80 Broad St.
Telephone: DIgby
New York 4
4-0985-6-7-8
59 Broad Street
AFFILIATE: CARL
New York 4, N. Y.
MARKS & CO. Inc. CHICAGO
120
and Situations
tor Dealer.
Broadway, New
Tel. REctor «-*020
York 8
Tele. NY 1-2660
@FedFRASER