Full text of Commercial and Financial Chronicle : January 28, 1954, Vol. 179, No. 5294

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/

UNIVERSITY
OF MICHIGAN

ESTABLISHED 1S39

11954

EB

The Commercial

Chronicle

Financial

Reg. U. 8. Pat. Office

New York 7,

Number 5294

Volume 179

EDITORIAL

We See It

one

dent

of his very

explaining absence of bank loan expansion in second
half of 1953, says it merely denotes return to a less

gentlemen are said to admire the Presi-,
dent's political courage, and in some cases to
concede the truth of much that he has to say on
this bedeviled issue, but memories of Mr. Tru¬
man's success in 1948 seem to chill them to the
latter

end to any ambitions they may
have had to consider agrarian issues from a broad
national point of view.

bone and put an

to

take

serious disposition
with the President's devastating

is

there

anywhere

issue

any

farm program it has not
attention—that is any inclination to

attack upon the present
to

come

our

the
analysis

dispute the arguments presented except upon

ground that action based upon such an
would cost votes. For our part, we do not under¬
how

stand

under the

deny

or

is

the

undertake to challenge the force of

rests

arguments upon which the President
his case for the necessity of change,
It

throughout

Finds increasing

our economy.

market by corporate borrowers.
Gives reasons why business and bank lending will be
maintained in immediate future, and expresses gratifica¬
tion Federal Government is abandoning its banking activ¬

use

of commercial paper

ities.

Warns, however,

we are

in

and constructive help to their borrowers over
wherever possible.

guidance

For

tough spots

have

for

absent

been

of
of
is
of

them seeds of great

the

when

President's

program

own

is

placed under analysis that doubts—to use no
stronger word — arise. It may be that what the
President would have Congress do would in time
bring some relief from the intolerable situation
by which we are at present confronted.
The
relative degrees of undesirability of the two pro¬

York Security

the American people
of stability as a gen¬

natural one, considering the times

a

We

live.

we

about in

are

position of young Abe Lincoln
when a neighbor boy offered him
part of his gingerbread.
said:

Lincoln

"I don't suppose

anybody on earth
do—

likes gingerbread better than I

many

and gets less than I do."
And I don't suppose

opportunity—an

there has been

that craved
stability more than ours—or got less
of it, from wars to depressions, from
recent

any

generation

inflation to atom bombs.

Meetings such as these help
us all to put both our problems and
our
opportunities in proper focus,
and they help us to define more
clearly our common objectives in
dealing with them.

sible jobs in industry, finance, labor
and government lived through the

Most of

passed.

—Now

come

I

should

comments

some

like
on

to begin

where

from and where

tell you,

we

with

it is desirable to have a

who

now

hold respon¬

horrified
experiJolin
McCaffrey
then, hardships created by radical changes of
prices, employment and incomes. We want to do every¬
thing in our power to prevent another disaster of that
great depression. We
by the hardships we

George Champion

were

saw

kind.

have

we now are,

us

or

enced

sailor will
log on these matters
for

on

page

/

So

•

:

talking, and more
hopeful experiments re¬
lated to the ideal of stabilization than any other gener-

as any

Continued

have

we

probably done

thinking, and undertaken

47

more

more

Continued
♦An

address

ference

of

the

by

Mr. Champion before the National Credit
Bankers Association, Chicago, HI.,

American

Con¬

on

page

56

by Mr. McCaffrey before the 346th Meeting of the Na¬
Industrial Conference Board, New York City, Jan. 22, 1954.

talk

♦A

Jan.

tional

25, 1954.

PICTURES IN THIS

DEALERS

now,

years

period of inflationary expansion,
through which we have so recently

the

one we now have and the one
President would substitute for it—may or may
Continued on page 21

grams—the

20

the

normal

more

is

interest

in which

It is important because these
times also bring with

years.

than

more

have been fascinated by the idea
This

am

that

!

eral social goal.

particularly happy to have the opportunity
discussing ''The Credit Outlook," for I can think
nothing more important or timely for all of us. It
timely because we meet today in an atmosphere
change, a return to more normal
times, with problems confronting us
I

*

,Vi

(1) strikes by labor :;
unions; (2) technological development and progress;
.
and (3) the very existence of the free market. Maintains
;?
expansion into foreign markets "helps but does not cure."

readjustment period,

a

and bankers should exercise caution and give

*

Company

preventing stability of employment:

man

main

v.

hectic pace

not completely "^opportunity of an entirely different
nature than we have experienced/iA
thumb of farm voters could possibly
the
intelligent

any

President/ International Harvester

Noting our lack of achievement of the social goal of
stability of employment, and that free market society
will never attain it 100%, Mr. McCaffrey asserts there is
still much that business can do. Cites as main factors

in

promptly aroused the opposition of sundry politi¬
cians who fear the farm vote.
Some of these

If

By JOHN L. McCAFFREY*

New York banking institution,

Executive of prominent

Copy;

a

Employment?

York
f

proposal for dealing with the agri¬
"problem." < As had been expected, it

Cents

Can We Stabilize

;

Vice-President,

Senior

The Chase National Bank, New

the world his

cultural

CHAMPION*

By GEORGE

>

first special messages, Presi¬
Eisenhower handed to the Congress and to

In

Price 40

1954

The Credit Outlook

As
'

N. Y., Thursday, January 28,

the New31 to 34.

ISSUE—Candid photos taken at the 28th Annual Dinner of
Hotel Biltmore on Jan. 22, appear on pages

Dealers Association at

State and

in

Established

U. S. Government,
State and

Municipal

ALL
ON

UNICIPAL

CALL

ONE

U. S.

HAnover 2-3700

New

Preferred and Common Stocks
★

★

★

MABON & CO.
N. Y. 5

RE 2-2820

System Teletype NY 1-2152

Net

WALL

STREET

NEW YORK

THE

To

T.L.Watson &.Co.

5, N. Y.

Teletype: NY 1-708

Active

Dealers,

Markets

Banks

N. Y.

•

NATIONAL BANK
OP THE CITY OF NEW

Fla.

•

Brokers

Puget Sound

CANADIAN
^

SHERRITT GORDON

/

BONDS & STOCKS

Power & Light

Commission Orders Executed

sugar
Members N. Y.
Raw

—

Refined

—

Liquid

Stock Exchange

CANADIAN

Exports—Imports—Futures

Established 1832




PoKuaoH Securities

BRIDGEPORT

PERTH AMBOY

MONTREAL AND TORONTO

Goodbody &
NEW

115 BROADWAY
NEW YORK

Analysis

upon

request

DEPARTMENT

Teletype N Y 1-2270

MEMBERS

DIgby 4-2727

On AH

Regular Rates

American Stock Exchange
DIRECT WIRES TO

Co.

COMMON

50 BROADWAY
Canadian Exchanges at

YORK

Geneva, Switzerland
Amsterdam, Holland

Hollywood,

Maintained

and

MINES, LTD.
NEW YORK 4, N. Y.

CHASE

Bldg.

Detroit • Pittsburgh
Miami Beach • Coral Gables

Chicago

Bond Dept.

Bond Department

Exchanges

NEW YORK 4,

OF NEW YORK

Exchanges

LAMB0RN & CO., Inc.
99

other

N. Y. Cotton Exchange

Sixty Years of Brokerage Service

Bell

Trade

THE NATIONAL CITY BANK

Members n. y. and Amer. Stock

115 Broadway,

of

Cotton Exchange

Orleans
and

Inc.

Exchange,

Board

Chicago

Exchange

Cotton

York

New

& Foreign Bonds

I;
')

Exchange

Stock

American

S

State and Revenue Bonds

BANK & TRUST

COMPANY

Bonds

Exchange

Stock

York

Commodity

BOND DEPARTMENT

Municipal

H. Hentz & Co.
New

Government—Municipal,

All Corporate

Chemical

1856

Members

Complete Brokerage Service

Securities
telephone:

MARKETS

Co.

YORK STOCK EXCHANGE

I NORTH LA SALLE ST.

CHICAGO

Corporation
40 Exchange Place,

New York 3, N. Y«

IRA HAUPT & CO.
York Stock Exchange
0\ther Principal Exchanges

Members New
and

111 Broadway,
WOrth 4-6000

Teletype NY l-702-3i

WHltehall 4-8161

Boston

N. Y. 6

Teletype NY 1-270S

Telephone:

Enterprise 1820

:

<1

'

v

^A*v»'
%

10
H

(450)

*

J

1

'

We pdeition

t

I

The

and trade in

.Northern Indiana Public Service*

Security I Like Best

participate and give their

reasons

Rights & Common

they to be regarded,

are

offer

as an

WILLIAM P. O'CONNOR, JR.

Rights

Aztec Oil & Gas,

W. I.

Rohm &

New

York

Stoek

Exchange

Haas

This ultra quality creative chem¬

producer is in position for a
further period of most dramatic

Utility

growth, the benefits of which will
definitely get
through to

Kerr-McGee Oil

Western Light & Telephone

New York Hanseatic

Corporation

of

5

Rohm

i t

p

specialists in

Rights & Scrip
Since 1917

Members
Stock

Exchange

Stock

Exchange

120 BROADWAY, NEW YORK 8
Tel.

REctor

2-7815

Trading Interest In

American Furniture

Camp Manufacturing
Commonwealth Natural Gas
Dan River Mills

Life Insurance Co. of Va.

Lynchburg, Va.
LD 39

TWX LY 77

of about

RICHMOND, VIRGINIA
Bell System

Teletype: RH 83 & 84
Telephone 3-9137

I

I. G. FARBEN
And Successor

a compound growth
nearly 14% a year.
Rohm & Haas is an important
producer, having total assets of
some
$80 million and sales run¬

the

at

million

$120

Growth

rate.

annual

emphasis

is

on

acrylic
type
plastics
(PLEXIGLAS), Plasticisers, water disper¬
sion acrylic paint bases, and ion
.exchange resins (AMBERLITE).

Ion

exchange,
speaking broadly, is the segrega¬
tion

of

removal

or

impurities
chemical

and

solutions

in

The most

manner.

minerals

from

means

ern

a

by

precise

very

common

appli¬

technology there

are many op¬

erations which require production
of a chemical or metal in ex¬

tremely

form.

pure

be

continued

products

growth

Because

this

mechanically ion
employed either to

is

the desired material

or

to

impurities. Rohm & Haas
is the leader in this field.
remove

Aside from the Plexiglas domes
for automobiles, one of the most

interesting

level

at

which

is hard to

&

Haas

is

is
ex¬

Rohm

&

Kidder,

some

find

stock

a

covered

picture at the end of

above

status.

mits

B.

at

can

Exchange.

WILLIAMS

Peabody

New

York

&

of

sales

General

Co.,

Just in

case

eral

the

Package,"

prior to the

cellop h

not

as

yet

"Gen¬

name

this

sale

company,

last

May of its

is

for

accompanies
for

The

sists

of

manufacture
possible to price acrylic

burden

& I Haas
of

excess

1953.

Bought—Sold—Quoted

The

about

proximate
share.

(9#penheiirWt &.
Exchange

25 Broad St., New York 4, N. Y.
Tele. NY 1-3222




net

heavy

profits taxes

excess

was

a

profits

$5.

sale

molded
box

earnings

of

Addition of the full

profits saving to profits is
sonable expectation.
This

$7
a

area.

most

$5

make
to
of

the

half
year.

an

the

amount

capital

equal

budget
Depreciation and

An up¬

in

And

under

such

COMPANIES
BANKS

UTILITIES

RAILROADS
•

MUNICIPALITIES

de¬

if

the

PUBLIC

REVENUE

AUTHORITIES

conditions,
waste

important

most

raw

qAllen & Company
ESTABLISHED

1954

would

share in 1953.

1922

the

The

rate.

and

set

values

will

indicate

a

yields

its

company

sales

it

is

rate

on

believed

Report for 1953
forma annual

pro

their

4, NEW

YORK

our

value

share,
$22

and

of

close

net

a

to

stated

$30

equity

of

share in net current

per

as¬

sets.

Japan
or

write

current

publications

Japanese securities

YAMAICHI
SECURITIES CO., ltd.

per
over

Opportunities

Established
Home

Office

Brokers

&

Tokyo

1897

—

48

Branches

Investment

Bankers

111 Broadway, N.Y.6 CO rtlandt7-5$84

It

is

somewhat

comforting

to

note that current cash items prob¬

Earnings

for

the

Sept. 30,

$3.62

nine

1953

e9ch

on

months

equal

were

of

shares

common

similar

the

481,045

outstanding,

as

1952

period.

Profits

for the full year of 1953 may ap¬

high

as

including

$4.50

as

net

a

gains profit of about $1

ably
of

are

about twice the amount

outstanding

senior

per

capital

per

share

$2.0 million in long term debt and

share

per

figures

cellophane

for

for

1952.

1952

include

the

remaining

larger than

the

packaging division,

earningswise

appears,

Since

least,

"part"

is

the "whole."

was

outlook

at

it

for

1954

and

yond is highly constructive.

agement

is

able

and

the

put

ample ^ash

and

be¬

aggressive,

sale

property

in

the

last

approximately

a

per

Hence,

the

Company has the ability to retire
or

all of its senior obligations
determines

management

some

part of the cash

unneeded for

opment

that

hand is

on

business devel¬

new

and

operating

require¬

ments.
This

stock

an

at

around

32

is

fa¬

demanding

extremely active market—sole

listing

is

on

the

Midwest

Stock

Over-the-Counter

Quotation Services
for 40 Years

Exchange. An eight-to-one price-

May. earnings

treasury

$41

121,000 shares of

stock).

vored for. accounts not

Man¬

convertible

(convertible at

share into about

if

vs.

of

Common

part

division,

million of 4Vfc%

price

lophane

packaging

capitaliza¬

tion—consisting of approximately

resulting from the sale of the cel¬

The

for

invest¬

conservatively

a

book

of $20

excess

million.

-

Call

on

behind

offers

moderately in

$3.06

in

ments, General Package Common

but

Annual

Investment

tidy 6%.

a

The

revealed

the

total

ex¬

For those who like generous as¬

products.

that

YORK

regular

latter

something better than

this .activity,

the

year-end

R. B. Williams

hasn't

NEW

BROAD STREET

Such earnings
a

supplementing

$2.00

of

molded

paper

30

earn¬

pivot around

certain

other

ratio

seems

quite

rea¬

sonable, considering the favorable

for any expansion or acquisitions

1954 outlook, the recession-resist¬

that

ant

million

available

about

per

This retention of al¬
in cash would

man.

decline

tra,

rea¬

means

earnings for 1954 in the $12

share

a

excess

PUBLIC

cheapest

do the quoted levels for

per

cartons

d

a n

i

ap¬

and

packaging

so

per

leaving

is

the

to

board

-

e.g.g

in

tax

the

downturn

a

might well lead to

manufacture
and

that

carried

it

operating earnings of around $3.50

the

proximate

it

adverse,

CORPORATIONS

INSURANCE

$4.00 per share, as compared with

busi¬

share,

of

business

A reasonable estimate for

poration.

a

ease

Dealers

111.,

selling price of egg cartons tends

ings in

Shellmar

as

and

The

Distributors

INDUSTRIAL

beefsteak.

preferred stock

paints with good
covering

offices

sales characteristically

$4.8

power.

egg

present

—

of

one

the

lated with hard
water, no colloid
-is needed to maintain
suspension,
ability to take a high pigment load

branch

reassuring to note that this

"Chemical Week" these
paints can
over "hot"
plaster, wet
walls, will cover cinder
blocks,

dry -fast enough for two coats
day.- From the point of view of
the .paint manufacturer
acrylics
are a dream; no
special equipment
is needed, paints can
be formu¬

molded

9

turn

compared with $2.06 per share for

be applied

our

Underwriters

material.

a n,
known

to

bases

should

turn in egg

tinental C
w a s

catching

on—Montgomery
introducing a line of

to

vision to Con¬

seem

paint

trend

paper—the

a n e

packaging di¬

developments for

new

in¬

than

general

the

case

proteins known to

Exchange
Exchange

are

wires

per¬

in Morris,

Palmer, Mass.

In

mand

you

with

in

other

located

are

medium

Package Corp.

familiar

Mobile, Ala.
Direct

There may also be some

cartons.

and

NY 1-1557

the

the

as

expansion

products

St., New York 4, N. Y.

HAnover 2-0700

New Orleans, La. Birmingham, Ala.

likely

from

equipment

new

Exchange
Exchange

considerable

Some

Company supplies

City

and American Stock

1953

change

is anticipated

growth

stallation

ex¬

,

stock

the financial

that

so

reflected Tittle

is listed

common

retained

capital

subsequent

penditures,

confidence.

more

Depre¬

and

York

American Stock

25 Broad

peo¬

Members New York Stoek

ended

be

$2.6 million.

allowances

earnings since that time probably

rather

RICHARD

com¬

to

ities of only

ciation

paper

the New York Stock

done

share

Hum: HAoorer 2-9756

tax

ness now con¬

abuse.

paints competitively.

INTERNAL SECURITIES

Stock

profits

excess

permit quite a bulge
Inasmuch as the market

knocks and

Rohm

York

large

Products Cor¬

means

Companies

GERMAN

New

per

gross

acrylates are their relative color
stability,
crystaline
appearance
and .ability to stand up under hard

makes

Members

sales

acrylic-based paints. According to

CRAIGIE&CO.
■

of

will

Rohm

12 times probable
This is practically

rate of

Ward

■F. W.-

of

$1.60

price the future of which

pany's acrylic
MUNICIPAL BONDS

in

plant investment,
a high figure for the chemi¬
industry. Although the growth
rate might be retarded by a year

Rohm & Haas is the way the

CAROLINA

year

quite

O'Connor, Jr.

impossible to find where the com¬
pany enjoys the reputation of pro¬
viding the highest quality in every
field where
they compete, and

recover

NORTH and SOUTH

a

New

Members

cal

on

only about

exchange

Since 1932 Specialists in

about

be predicted with
Wm. P.

Steiner, Rouse &€o.

been

The company nas been ob¬

dollar

any

1954 earnings.

cannot

VIRGINIA—WEST VIRGINIA

has

plants

cation is water softening. In mod¬

STRADER,TAYLOR & CO., Inr!

growth
above 13%

expansion westward

The.ad vantages of Rohm & Haas

Bassett Furniture Industries

of

at 152 the stock is still selling

ning

Co., New York City. (Page 2)

that it

has achieved

McDonnell &fo.

B. Williams, Kidder, Peabody &

equity

on

Corp.—Richard

Package

ple to hesitate, but all will agree

quarter of last
,at

General

Haas sells might cause

fourth

year,

sales.

The

points in

the

$10 mil¬

In
of ad¬

e

vance

rate

taining

&

passed.

20

York

McDonnell &

Co., New York City. (Page 2)

unsur-

Hass is

s

American

Louisiana Securities

Members

The

strong,
pected.

risk of

loss,

Teletype NY 1-583

return

this year.
for
the
company's

capital

ous

Exchange

the

rate,

burden

without seri-

1920

Member

Broadway, New York

Alabama &

capital is high at 13%.

usually

It imate

u

enhancement

Stock

Week's

Participants and

Jr., Partner,

nor,

recession, that is not a serious
risk and the abatement of the un¬

From the

point of view
of

Established

nor

of

the stockhold¬
ers.

provide another

somewhat

ical

Citizens Utilities

Associate

be,

to

Even with taxes at (tie maxi¬

mum

New York City

Central Indiana Gas

New

i\Thursday,.' January 28. 1954

Their Selections

sell the securities discussed.)

to

profits

Arizona Public Service

Public

This
Forum

particular security.

a

intended

not

are

lion.

Partner, McDonnell & Co.,
request

on

Members

120

.

Bought—Sold—Quoted

Southern Union Gas*

B A relay 7-5660

Financial Chronicle

Rohn & Haas—William P. O'Con¬

Rights & 4V4/64, W.I.

Prospectuses

for favoring

(The articles contained in this forum

Otter Tail Power*

American

The Commercial and

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

Rights & 3VJ69, W.I.

Central

*H

}

■

Detroit Edison*

*

'

National Quotation Bureau
~

may

seem

desirable.

On

nature

of

the

business,

Incorporated

the

Established 1913

Aug. 31. 1953, cash items totaled

large asset values and the chances

$14.4

million

and

for

$18.2

million,

vs.

.current

current

assets

liabil¬

some

dividend increase in the

46 Front Street
CHICAGO

comparatively

near

future.

New
SAN

Yort4, N.Y.
FRANCISCO

Volume 179

Number

5294

The Commercial and

...

Financial Chronicle

(451)

INDEX

Salesmen—Key to

«»

By L. L. COLBERT*

,

B. S.

Articles and News

Nation's Business Health!
t

The

Credit

page

Outlook—George Champion

Cover

Can We

Stabilize

Employment?—John L. McCaffrey

"KIND SIR"

Cover

1

basic

a

them, executive of

-

tkm

r

sense,

markets

large auto producer holds health of

a

business depends to great extent

s

what people make

are

Salesmen—Key to Nation's Business Health!—L. L. Colbert-

"1954—Recession—Depression—Recovery?",

.

source" for

desires to live better.
This

can

time

a

much

get.

food
to

is

as

when

all

of

information

us

as

we

We need it not only

for

thought

but

as

as

guide

a

and flexible

that

of

them.

action. The

alone

of fore¬

cerns

season

eight

trucks,

warehouses,

on

new

ment

market
the

the

^on

—

it were

of

L.

L.

Colbert

a
tide or a tornado.
This is true, in part. In our free

•economy, the massive forces
the market are generated

of

by the

independent business decisions of
merchants, bankers, and indus¬

trialists, and by the decisions of
people generally as to when and
how they will spend their
money
for the goods and services
pro¬
vided by business.
No one can
know in advance what these mil¬
lions
of
separate decisions are
be.

Even

if

he

did,

would take better electronic

puters than

we

feel

it

there

than

more

phe¬
and

—

beyond

the

ability

of

is

human

about the vast and complex
nomena
of the
market

people

to

anything about.

In

basic sense,

a

kets

what

are

them.

They

forts,

by

however,

mar¬

the

people make
made by our ef¬

are

our

decisions,

by

in

ourselves

and

confidence

our

in

country—and most important
•of all, by the dimensions of our
dreams and

desires.

our

Confidence

Certainly the

of

panorama

the

spread

inspire confidence. In

the

National

.American

been growing
size and ver¬

in

year

It is
an

plant
higher

and

equip¬
than

now

-

Jjt

sis

Company

Y"

Federal Electric

1

16

Products

,

ijS

big

address
Credit

Bankers

and

by

powerful

Mr.

Colbert

Conferences

Association,

Foremost Dairies
5

(Statements of businessmen and bankers
nomic

it

outlook which could

not

be

on

the 1954

of

at

the

"

Liberty Products
Bought

our

January 21)

—

Sold

BURNHAM AND COMPANY

James Muir Urges Dollar Area to
Reduce Trade Barriers—

12

Members New York Stock
Exchange

the

of

means

also

workers

have

the

Liberalization of "5% Philosophy"
Needed,

operate

the

and

clerical

office

machinery.

of

1953.

$200

over

and

our

salaries.:

remember the

It

(Editorial)

Canadian

of

Coming

last

of

63

Reserve
four

Board

out

with

of

no

Events

in

Investment

Selevision

8

Field

Investment

Recommendations

Southern Union Gas

8

Einzig—"Britain's Commonwealth Investments"—

10

Indications of Current Business Activity..

the

r

|

♦

ten

every

debts

NSTA

Notes

L

8

at

,

News About Banks and Bankers
.Observations—A.

accounts and United States

bonds,
exceeding
the
total
of
their
debts!
Secretary Humphrey re¬
ported a few weeks ago that thq
United

to buy

American

duce

what

Our Reporter

-

20

Public

savings

People have
what they need.

business

can

on

Wilfred May

1

.

5

Governments

big

Utility Securities

American

buy

people

as

57

Security

the

Salesman's

The Market

.

.

.

and

much

Corner

The

all others that needs to be

Belle Isle Corp.-

discussed at the present time. And
in my remarks here this morning

page

Hiller

Helicopters

5

Reeves Soundcraft Corp.

64

xj

*No Canadian article

Cinerama Inc.

2

Washington and You

62

Canadian Superior Oil

16

State of Trade and Industry

this week.

Rohr Aircraft
Published Twice Weekly

have specialized in

PREFERRED STOCKS

WILLIAM

•

-

Manchester, N. H.




Boston
•

•

TELETYPE N. Y. 1-5

.

Chicago

*

Nashville

DANA

**7

,

•

•

Glens Falls

Schenectady

•

Worcester

25,

as

1942,

possessions,

SEIBERT, President

the

post

office

at

New

In

United

Territories

States,

and

TJ.

WM V. FRANKEL & CO.

B.

Members

of

Union, $48.00 per year; in
Dominion
of
Canada,
$51.00
per
year.
Other Countries, $55.00 per year.

INCORPORATED

39

BROADWAY

NEW

state

and

Other

city news, etc.),

Offices:

Chicago 3,

bank clearings,

HI.

135

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and

Quotation

Salle

St.,
(Telephone STate 2-0613);

Record

—

Monthly,

$33:00 per year. (Foreign postage extra.)
•

Note—On

account of

t^e rate of exchange,

La

6

& 4041

Other Publicationa

"
Bank

.

YORK

WHitehall 3-3960

Teletype NY 1-4040
Every Thursday (general news and advertising issue) and every Monday (complete statistical -issue <—> market quotation
news,

.

second-class matter Febru-

at

Pan-American

Thursday, January 28, 1954

corporation

Corp.

Eng-

Subscription Rate*
Subscriptions

SEIBERT, Editor ft Publisher

'

records,
•

C.,

r°rk' N*Y" under the Act of March 8»l879-

Place, New York 7, N. Y.

WILLIAM DANA

E.

Company

COMPANY, Publishers

REctor 2-9570 to 9576

HERBERT D.

ST., NEW YORK 4, N. Y.
•

London,
c/0 Awards & smith.

Copyright 1954 by William B. Dana

Stock Exchange

TELEPHONE HAnover 2-4300
Albany

B.

25 Park
,

BROAD

Iand>

Gardens,

Reentered

-«

Spencer Trask & Co,

Drapers'

Reg. U. S. Patent Office

"

25

i

The COMMERCIAL and
FINANCIAL CHRONICLE

Members New York

5

1-1820

19

You—By Wallace Streete

above

on

NY

1

59

The Security I Like Best

as

Continued

&

3

Prospective Security Offerings

much as they can
afford to buy? It is this question

Chicago,

Exchange PI., N. Y.

1-1825

pro¬

is—will

want

40

51

48

they need—and want.

question

HA 2-0270

Teletype NY

Securities Now in Registration

Do People Want to Buy More?

The

Singer, Bean
& MACKIE, Inc.

63

Railroad Securities

,

-

22

Our Reporter's Report

the highest of

since 1946.

means

And

States

was

"Rights"

50

which

outstanding
debts;
and
liquid assets, in savings and bank

1953

'

Corporation

of

in

Southern Union Gas

■

61

Mutual Funds

i\

Corporation

17

From Washington Ahead of the
News—Carlisle Bargeron

all;
holdings nearly nine times the to¬

of

Company

'

*

you.

by

year

Aztec Oil & Gas

22

Securities

Dealer-Broker

national

All

Teletype
NY 1-3370 !

Cover

Stocks.

Business Man's Bookshelf

.

tal

See

are

rate

Street, New York 5

Telephone

18

num¬

study of consumer1

made

showed

We

Bank and Insurance

production; and they have been
saving a substantial part of their

Federal

15 Broad

billion.

their contribution to

finances

Indicates 1

Regular Features
As

the

they

annual

Manager

Trading Dept.

Dlgby 4-1680

People have been paid well for

wages

Message

people
use

Unlisted

12

_

Billion in Fiscal 1955

lathes

The

And

an

JOHN F. REILLY,

☆

ber of people at work is close to
all-time high reached in the

being paid at

Amott

Budget

Deficit of $2.9

the

spring

R.

Eisenhower's

perform
people of all

who

Harry

says

people who

who have learned how to
new

4

☆

delivering the

machinery

secretaries

111., Jan. 25, 1954.

For many years we

'!

10

and presses and transfer machines
—from
top level executives to

and

*

eco¬

accommodated in

Annual Review and Outlook Issue of

effectively. I mean
kinds, from plant managers to the

every

county of America we
of a vast produc¬

tive plant that has

♦From

*

1954, is

see^vital parts

alter

14

Randall Commission Says "Dollar Problem"
Can Be Solved

any year

American economy I that is
•out before us in
January,

satility.

J.

"Business and Finance Speaks After the Turn
of the Year"

of

early postwar years,

productive

the

year

Cross

Consumer Buying by 10%!

throughout
racing to build

sale

and

Popovic__ 12

industrial firms

bonds

Situation, One to Inspire

to

the

consumers

■our

state

rate

know how to make the American

now

sometimes

■something

one

the

com¬

have to pre¬
dict the result in terms of market
•conditions.
So
it
is no wonder
we

Cedar Point Field

11'

6

We

na¬

to

Contraction!

—

Interest Rate Rise

goods in tremendous volume.

ture—like

going

Resist

l_

built

vast

a

WALL STREET, NEW YORK
Telephone: WHitehall 4-6551

production to compete in the
easy markets ahead. We have

up

big

if

as

imp ersonal
force

*

And

the country were

we

goods

produce

in

even

in

when

for

that

is

was

we

talk about the

do

tools.

investment

busi¬

ness.

Often

99

/

i

John J. McCloy and Percy J. Ebbott Hail
Moderate

pipelines,

earth-movers

.

.

the

Can

on

machine

r's

:

9

*

s&

billion

for

y e a

Situation

Obsolete Securities Dept.

7

'.'1

Cobleigh

1

whole range of capital goods from
electronic computers to automatic

with

r-

con¬

spent $177

past.
The
time has come

getting

4

...

Progress of the Hotel Industry—Ernest Henderson

years

business

American
have

factories,

and

o v e r

last

Business

*

'

•

—Arno H. Johnson

people's
in anticipation

or

the

'

—George B. Roberts

We Can Increase

made

was

stuck with obsoletes!

'

casting in 1954
is

In

Present

to

response

needs and wants

'

,

The Investment Policy for the
Future—Milan D.

because it

in

way

'

Hits and Missiles—Ira U.

t

*

*

•

,

i__v

Cities—Roger W. Babson.l

•

'•

provided the appetite of the people for a high and rising
standard of living is encouraged. Contends few
people are
living better than they would like to, and almost every one

need

j__

Future

and growing productive
potential,

immense

our

guy

("Depression") and W. S, Woytingky

("Recovery")

as much as they
Urges business men create increasingly attractive
goods and services, and sell them aggressively and confidently.
Points to rapidly increasing population as a
"priceless re¬

„

We're kind, sir, to the

,

—Colin Clark

afford.

can

3

na-

of salesmen

on success

in persuading people to live well and to buy

T

licrasTEin
AND COMPANY

1

.

President, Chrysler Corporation

Asserting, in

3

the fluctuations In

remittances for forelgn subscriptions and advertisement! must
he made is New York funds

Direct Wire to

PLEDGER

&

COMPANY

LOS ANGELES

*

INC.,

4

The Commercial and Financial Chronicle...

(452)
i

.

i

'

i

Thursday, January 28, 1954

•

,

.

'

'

•

'

.

'

.

,

"1954—Recession—Depression—Recover y ? "
bound

"DEPRESSION"

of

a
as

high

as

downturn:

(1)

Lists

1949.

Excessive inventories;

(2)

money;

scarce

Excessively
mathe-

pictured

measurements

whether you find them in Moscow

Paris, have just been counting

prdict business cycle. Emphasizes complex interre¬
lationship of economic factors, particularly presence of dynamic
recuperative forces. Predicts while current adjustments have

waiting

not

to

ian

course.

month, along

approaching

am

in

disinterested

quite

a

have

I

grind.

manner.

preconceived

no

is quite

It

I hope,

you,

but I shouldn't

There

was

patients,
it.

fellow
isn t

rely on
a

I

wisher

the

on a

pin and it

this

as

a

well-

hospitable

very

millions of Americans
work, American business¬

worried
by
falling
sales,
mounting losses. In that respect
differ

Europeans.

are

possible

from

There

a

of

number

are,

no

doubt

Out of

medi¬

my

go wrong

jumbo

cine.

You

modern

for

rely

offering
of

is

you

some

very

entitled to go to a

are

druggist

you

on

want to

.

am

get

and

some

expensive prescriptions made

very
up

I

package

won't say anything more about
them except to say it is my firm¬

I

country,

but
for

alternatively

or

healing.

faith

you

don't

I

imply faith healing never

♦Embodying

the

contributions of Dr.
Woytinsky be¬

Colin Clark and Professor

fore

a

tional
York

table

round

Industrial

session

Conference

of

Na¬

the

Board, New

City, Jan. 21, 1954.

in

been reduced almost to the marS/n of error inherent in projecNovember, tions of this type. The very busi¬

effects

else

are

a

has to

now

carry

United
a

sponsibility for what

"Manchester Guardian."

goes

of

I

not

am

talking

responsible

as

are

now of

ized

men

that the United

is

the

effect

their

the "new

time when

one

look"

in

of the

economic

most

ener¬

getic bureau chiefs in Washington
was
reported to have given his
personnel manager the following

ma¬

States depression

reminder of the time

Keynesian ideas character¬

thinking in the United States; the

And

any

vivid

a

when

ev¬

erywhere else in the world.

His arti¬

ommended and the generous dos¬
age
of the medicine prescribed

re¬

on

wau

controversy
back to its starting point. His eco¬
nomic philosophy, the cure rec¬

States

share

forecasting

cles have brought the

me

the

economic

becoming dull when Mr. Clark'*
discovery — or rediscovery — of
danger signs was published in the

going to be everywhere

because

of

ness

ask you to
moment what the

let

?

bearish forecasts ha*

slump in
which Colin

States,

announced

and if the

est wish to be

from

United

properly treated, I
needn't remind you of the suffer¬
ing it will cause in your own
consider

and

*

The danger signs of a
the

Clark

and

is going to have on the minds and
on the opposite side
opinions of men in every conti¬
point of view.
The nent. And
strange as it may seem,
simple medicine, and there is no point of view which has been very and we all know the
facts, there
reason why you should take it if widely expressed in Europe is in¬
are
particularly in Asia and South
herently that of the Marxists. America
millions, possibly hun¬
you think it is the wrong medi¬
Marxist is a wide phrase. It cov¬
dreds of millions of men whose

cine bag all

a

bullish

is

what

sickness

it, a great number of Euro¬ terial distress that
may be caused
peans, European writers and econ¬ in other
countries. It may not be
omists, politicians, whose dearest in fact
very serious.
wish is to see a first-class depres¬
What I do ask you to consider

sion brgak out in the United States.

opponent said.

just

ways

of

things do

about

Colin Clark

Controversy

Old

discussing in the friend¬

degree

If

I

seeing

do

The

for it.

men

I

any

disease is not

hope I come
to

of

It is like

just
what is the right medicine to take

country. I do not like the prospect
out

foolish and

as

error.

an

that position.

liest

feel.

of

United States
go wrong. I

capable of going wrong
capable of being put right
again. I think any sane man must
We

real;

punctures my skin,
dislike what I fancy

And

never

and

take

faith healer
Deal,
who said pain

When I sit

I

can

error

ization,

named
A

opposite

other humanly constructed organ¬
It does for some

what my

true

the

saying that the

dangerous

works.

to

axe

of overall

On the other hand,

think that is almost

taxes.

as

I think the Marx¬

can

into

fall

economy

with drastic reduction in excise and similar
consumer

I

per

I

as

state

me

been

completed, there will be no precipitous contraction
activity; and economy is now close to lowest point
of its "recession de luxe," with late 1954 industrial
production
to rise 10%.
Rejects Dr. Clark's anti-recession remedies;
warning against energetic measures "too early and in wrong
direction"; and instead advocates pinning faith on economy's
dynamism and flexibility.

preconception

Let

erroneous.

don't
of

budget deficits amounting to $2 billion

their

true.

preconception is entirely false

and

To check the depression, Dr. Clark advocates

creation of huge

for

come

clearly

embodying his "Model Building" system of tracing the econ¬

omy's

Clark to

tinsky pointed out, they have had
to count quite a number of years,

his original "flow chart"

on

Woytinsky, calling attention to forecasting errors
by "hysterical" prophets of doom since end of War, cites
alleged falacies of mathematical equations as used by Dr.

No Marxist

the years, and as Professor Woy¬

|
{

(3) Surplus of fixed plant and equipment; and (4)

University

Professor

And the holders of this doctrine,

or

j

high construction costs—with substantiation through
matical

I

chief factors contributing to^ \

as

By W. S. WOYTINSKY*
Professor of Economics, Johns Hopkins

industry.

*

predicts U. S. business depression

"fairly serious decline," with unemployment

amounting to
about

"RECOVERY

class, according
doctrine, never has

enough money to buy the products

University of Oxford, England

Prominent Oxford economist

*5

unemployment,

create

Marxist

to

'

COLIN CLARK*

By

to

the working

and

"In view of the imminent

order:

depression, hire 40 economists of

S. Woytinsky

W.

the Keynesian

1953,

first

were

discovered

by

does not tell

us

school!" The story
whether the slump-

some
American
economists
ap- was avoided thanks to this order,
proximately a decade earlier, in or for other reasons.
1943-44, when World War II was
Before I discuss the theoretical
approaching its end. At that time background of all these gloomy
they predicted that from 8 to 15 forecasts and
present
my
own

million persons would become un-

views

employed either immediately after
the end of hostilities, or 6 to 12
months later. When nothing hap-

opments, I would comment briefly
on
ciark>s program of action,

current

on

economic devel-

.

.

pened, the prophets of doom postColin Clark s Program of Action
trembling in balance.
poned
the fulfillment of
their
Mr. Clark offers two alternative
fairly well (I don't
prophecy first to 1947, then to programs for checking the slumpi
Marxists, but they all know
Latin-America). And it is
share what seems to me the in¬
1948. The readjustments in 1949, To cut taxes, beginning on July 1*
really alarming to see how many
tolerable error of an entirely ma¬
which marked the liquidation of by about $20 billion per annum
of the younger educated men, or
terialistic interpretation
the last vestiges of the war econ- (without reducing
of his¬
government
perhaps it would be fairer to call
tory. And Marxists of all brands, them
omy, brought forth a revival of spending), or as "the only other
half-educated, are trying
including the moderate Marxists, and toying with Marxist and Com¬ gloomy forecasts: the slump was feasible proposal," to extend longhave convinced themselves that munist ideas, grossly misinformed confidently set for 1950. When an term, low-interest, or no-interestas
they often are. But it will re¬ unprecedented boom developed bearing loans of similar .amount
the United States free enterprise
instead of the long-heralded de- to countries willing to spend the
quire only the semblance of a
system cannot work, that it is
depression in the United States to pression, many economists were: proceeds immediately on buying
give the Communist propagandists inclined to describe it as a tern- American products,
>
all over the world exactly the im¬ porary war prosperity based on
blood and mud. In 1952 the danDoubting the Tax Remedy,
plement they want to impress
To secure an immediate effect
their ideas on the minds of sus¬ ger sighs appeared again in the
than Communists.

ers more

are

number

a

brands

of

There

non-Communist

minds
I

are

Asia

know

of

,,.

_

.

Canadian Securtiies

ceptible and half-informed people.
So please don't take
any chances.

BONDS
GOVERNMENT,

PROVINCIAL,

MUNICIPAL

Please

Executed

on

Canadian

history,

Exchanges at regular commission rates

Burns Bros. & Denton, inc.
Wires

to:

Toronto

•

Montreal

•

Ottawa

•

ori

*

concerned.

are
a

certain

We

number

all
of

of

to

be

my own

Winnipeg'

country and I

am

i STOCK

by Prospectus Ottfy

-

.

I

their
than

"'T

Bldg., Houston 2, Texas

I

I

I
I

Glenn

hold

on

iMAkCOMPONj
TODAY*#1

Senators

and




fore„

from Dullness

first of all, these
Their retail

However,

?.En3iJ,od.yins:,
a

tional
York

groups

of good*.

prices will go down,

round

table

Industrial

one

has to

drink

Conference

_____

„

Board, New

Continued

on

page

voting against his party, and

so

the

which

I

J

SECURITY ANALYST

find
parliament. It always pleases me
on principle to see a
Congressman
you

worst

and dangers
other parlia¬
mentary systems are subject..
;
I

think

were

errors

so-many

your

founding fathers

REGISTERED REPRESENTATIVE
Seeks

position with progressive

constructively.
men.

Has

serviced

on

page

member firm.

large

staff

Writes

of customers'

'

Growing clientele.

Box J-128,

"Commercial & Financial Chronicle,"

25 Park Place,

New York 7, N. Y.

extremely wise in separating
Continued

bar-

contr*tunions of Dr. reis 0f excise-free beer before he
session of the NaSaves enough excise pennies tO

City, Jan. 21, 1954.

Con¬

to

£>-••••

cfc-j 21

■

,

th«

Indeed, the range of disagree- leaving additional purchasing
between
the majority
of power in the hands of consumer*.

much less rigid
in any European

of

I

,

to

that

ment

very

long as you have a real balance of
independent opinion among your
legislators, you will avoid some

I
I

NAME

"pessimistic"

Keynesian Rescue

fore

I

McCarthy Prospectus

began

Colin Clark and Professor Woytinsky be-

I

me «

and

recommends

because, although you have,
understand, two political parties,

gressmen is

B. V. CHRISTIE & CO. Underwriter

attitude

sober

Clark

tunate

Aj&cir

Please send

timistic"

^

point out is that
American political system
you are in many ways very for¬

GIennMcCarthy,lnc.

First National Bank

rnore

prevail, and the gap between "op-

trying

be nonpartisan here.

What I would

Offered

prophets became almost hysIn the last quarter of 4953

terical.

po¬

our own, but I try
nonpartisan economist in

a

in your

on AND GAS

some

a

litical ideas of

to

•

cuts in taxes be concentrated on
excise and other consumption
taxes. Since our taxes of this type
are
mainly levied on alcoholic
beverages, tobacco, motor vehicle
products, and certain luxury articles, their remission will affect,

By the middle of 1953

_

have

us

TWX: NY 1-1467

37 Wall Street, New York 5

effect

an

not

Mr.

forecasters.

I am also, I hope, completely
casts narrowed.
impartial so far as United States

politics

Tel: DIgby 4-3870

what

merely on
United States history, any serious
economic depression might have.

STOCKS
Orders

realize

world

CORPORATION—EXTERNAL and INTERNAL

columns and circulars of business

52

<C

53

i

Volume 179

Number 5294... The Commercial and Financial Chronicle

(453)

/

}

.

5

tjf

i

Bankers Hail Moderate
Steel Production

The

Interest Rate Rise

Electric Output

Observations.

Carloadings
Retail

State of, Trade

Trade

Food Price

and

Chase

Commodity Price Index

eral years have been

Business Failures

No significant variation occurred in over-all industrial out¬
put for the country as a whole last week from that of the previous
period, but a comparison with the similar week a year ago reflects

slight contraction in volume.

For

the

about 55% above the level of

earlier.

Lay-offs spread
throughout a number of industries, including railroads, machine
shops, consumer durables producers and farm equipment makers.
year

Last week it was further reported that additional
lay-offs were
scheduled for the television receiver
manufacturing field. General
Electric

Co.

stated

1,800 workers at its Electronics Park division
at Syracuse, N. Y., and 350 at its
parts plant in nearby Auburn
would be furloughed for a
week, starting Feb. 1. The Columbia

Broadcasting System announced

400

employees

would

be

idled

temporarily

on Monday of this week at its Hytron Division's tele¬
vision and radio tube plants in Dan
vers, Newburyport and

Salem,

Mass.

There is little chance that steel business
will perk up as fast
as
producers had expected.
The ingot rate has settled into a
mid-70 groove from which it is not
expected to deviate more than
a few points
during the next several

weeks, "The Iron Age,"

tional

metalworking weekly, states the

But

steel

current week.

holders

for

the

1953,

year

John

J.

McCloy, Chairman, and Percy

Ebbott, President of the Chase

National.* Bank

of

New

York,

pointed to higher interest yields
factor in the Bank's increased

as a

:"A

special

about the

word

be

may

during 1953, since they

all

not

of

it

the

were

well-informed.

interest

rate

come

some

on

firms

this

they
originally been anticipated.
March, it reports.

magazine.

trade

obtained

by inventory conscious customers, notes

At current level of

operations, major producers are still doing
fairly well, but nonintegrated and smaller producers are
badly in
need of

orders.

There

investments

by

Chase

to 1.82% from 1.55%.

are

on

advanced

At year end

growing indications that some products are due
pickup. Settlement of the can company strike has
helped
tinplate producers, although some of them are still loaded with
accumulated

during the strike.-

-One

been

raised

"This
ward

quality

from

stood

3%

relatively

in

at

April,

movement

moderate

of

experienced

was

banks

up¬

interest

by

of capac¬

Oil country goods and structurals
in the

are

some

rates

almost

the

result

Steel

producers

ated.

Current

agreements

a

will

new

with

be

reluctant

to

make

any

wage contract has been negoti¬
most companies expire June 30

of this year.

Steel

business
were

there

all

of

nation.

the

well cleaned
In

the

distress

up,

material

is

believed

have

to

been

pretty

this trade authority concludes.

automotive

It

normal

the

strong demand

industry, production last week rose to
114,148 cars assembled the week

before last and the 112,955 units put together in the
corresponding
week a year ago, according to "Ward's Automotive

heavy

financing. The

interest

rates

recipients

of

gov¬

level

new

brought

interest

well-deserved

many

income

a

sharp increase in General Motors

a

return,.

"The fact that interest rates for

abnormally low,

many years were

today

even

not

has the

appreciated;

effect

bank

ture

moderately

are

widely

of

degree

with

on

these

page

ity,
in

while

low

rate

It should be noted

that

which

tially

this

lower

rates in

in

newed

but

—

ability,

rather

firm

as.

if

not

*

January 22, 1954

;

•

Member: National Association of Securities
Dealers, Inc

costs-—embraces

the

common

conclusion

a

Broadway




Dlgby 4-2735

New York 4

May

without

fallacy of selecting those elements
objectively citing the offsetting *

Again, Clark's anticipation of U. S. depression, whose sug¬
remedying is to cost us $20 billion in deficit financing
(via tax cuts, expenditures and IOU's), persistently overlooks the

gested

interrelationship of economic data, particularly in¬
series, and does not take, into account the uncertainty
of the human psychological factors
prompting the behavior of
the
150,000,000 people so importantly shaping our economy's
dexes and

There

is

whether armed

no

way

with

49

for Dr. Clark

slide rule

or

other forecaster,

any

not, to know in advance how

or

-

the

inflation.

sDr. Clark
error

so,

seems

also to have committed the forecaster's

of subsequently

changing

com¬

prediction to accord with
ensuing events—akin to the stock market forecaster's keeping of a
weather eye on the ticker.
In his famed Manchester Guardian
a

articles of Nov. 19 and 26, last, that caused such

ago, he had stated
would

that the United States

depression
be

of* 1929-33

was

dimensions

stir two months

a

the

on

whose

brink of

were

'round-the-world.

heard

Now, after this horrendous
shifts his position to speaking
of a mere recession of the 1949 type, with a fall to $330 billion in
the output of goods and services; but no major economic slump.

Continued

-

on

page

h)

2%

e

common

is

rate

substan¬

comparable

OUR ANNUAL

countries—the rate

earnings

of

with other banks.

as

in

even

increase

an

the

1953

Chase

bank

low

in

Chase

REVIEW

Thus,

with

the

1953

7.1%

Yet

The New Year opens

other

in the

for

after

might

taxes.

This

properly

an

average

for

taxes

group

of

be

latest
are

date

your

•

Available, and

somewhat

lower

a

profits

A selection of favored

1,800

For your copy

fig-

JUNCTION,

F. ^Maffey

is

period ahead

industries

of

year

than

NEW

Colo.

LEADING

—

associated

Vz Main

1656

H.HENTZ & CO.

Financial Chronicle)

with Ferrell & Ferrell, 411

Street.

on

of the Annual Review write Manager,

MEMBERS

The

formulate

Research Dept.

With Ferrell and Ferrell

Robert

business in the

Probable effect

•

FOUNDED

(Special .to

you

Today's underlying economic trends

•

which

help

investment program for this year. Included are

repre¬

a

difficult decisions to make

coming months.

of

return

atmosphere of uncertainty.

analyses of:

7.1%
com¬

about

for

an

some

Our current Annual Review should

of year

as

in

The investor will have

14.4% before taxes,

was

after

FORECAST

were

return

capital funds

AND

the

National

earnings

comparison

on

in

a

repercussions

prospect has not materialized, he

nor

of

Bank,

GRAND

52

Willred

futility, of all economic forecasting.
Professor Clark, in basing his grim forebodings
on four
factors—allegedly scarce money, high inventories, surplus
of fixed plant and
equipment, and excessively high construction

1053."

HUNTER SECURITIES CORPORATION

A.

re¬

3*4%

in

.ures

of

the

complete

"Higher interest yields in 1953

—the

-

from

rates

of

rate

than

other

sentative

.

results

For example,

manufacturing companies in 1952
our

skenti^m

own

authoritative revelation of the vulner¬

Canada, for example, is 41/2%.

12.3%

has retired from

pre¬

billing

prior to the decade of the thirties.

pared with

WELLINGTON HUNTER

our

highest qual¬

the

above

6%

to

return

MR.

advance

1949, is far below the rates of

4%

and

Regret

the

of

been sufficiently

The

for business loans of

end

We Announce With

the

correlated

was

bearishness

of

rather

earnings and the struc¬

of banking

industries.

Continued

relaxed

more

has nothing to do with the particular conclu¬
sions
promulgated — whetner "ouliisu"
or

drastic

increase in

Reports."

authority notes

the
last

of pessimism.

mon

business expansion and
ernment

period of

a

resulted

118,592 units, topping both the

This trade

by

Board

of

reflected

loanable funds in

Moreover,

warehouses appear to have passed their low
point and
expected to pick up moderately.
Some warehouses

This

the

at

as

is

particularly hard hit during December and January.
And
has been some price nicking to get inventories in better

balance.

The

and

for

understood.

customers, this trade weekly notes, are winning addi¬
tional concessions on freight and extra
charges. And premium
prices have practically melted away. Yet regular mill base prices
firm.

city.

working of the market for credit

on

still the strongest props

Steel

remain

afforded dur¬

fair

public would actually use the surplus purchasing power
pumped out to them; or even how they would react to the prospect

users

market, it adds.

major price changes until

the

course.

throughout

the

was

is

Hurry-up orders indicate that
might have carried their inventory correction too far.

was

our

factors.

large producer

while.

well

as

dictions—or

highest

the

Also, it continues, stainless steel business is staging a
strong
comeback and producers are convinced the worst is
behind them
a

Conference

listening public, its interest

with

of

3.25%, the level to which it had

and

least for

in

As is constantly characteristic of the reading
and

fitting

ity, observes "The Iron Age."

—at

Industrial

Thursday,

charged for business loans

a

inventories

held

staged; in twin hotel ballrooms

the rate

of

believes tinplate output for the
year may average 80%

sessions

fundamental

scrutinizing all operations to improve their
efficiency and customer service.
One of the things they have
learned is that they can
book, make and deliver steel a great deal
faster than they thought they could. The
faster service is being
and

larly the average rate earned

A

are

demanded

3.14% in the previous year. Simi¬

later than had

time in

boree

National

The-

earned

3.38%, compared with

was

bull

much-publicized Australian prophet-of-doom,
Professor Colin Clark, imported for the occa¬
sion, was head-man at the prediction jam¬

"bearish"

in 1953

forecasting

ing the past week through the instrumentality of two top-flight
fullest-dress "Outlook"

said

subject of considerable comment,

average

altogether splendid "New Look" at

the current status—or lack of it—of

of the Committee for Constitu¬
tional Government the following evening.

of interest rates

course

Persistently Sad Status of Forecasting

proceedings

earnings, remarking:—

1953.

people haven't given up on their market,
still expect an upturn in
business, although

look for it to

That would be
Steel

na¬

sales

number of them

for

In their Annual Report to stock¬

loans by the Chase National Bank

Living costs declined 0.1% in the month to
mid-December,
according to the Bureau of Labor statistics of the United States
Department of Labor. This brought the Bureau's consumer
price
index to 114.9% of the 1947-49
average. At this level it was 0.7%
higher than a year earlier. The dip in the latest period was caused
by lower transportation and clothing costs. Prices in all other
categories were unchanged or slightly higher, with food
up 0.3%.

now

The

A most authoritative and

-

J.

:

a

By A. WILFRED MAY

sev¬

abnormally

only moderate.

latest

reporting week ended Jan. 9, it is noted that
total claims for unemployment insurance benefits rose 14% and
were

officials

low, and recent rise has been

J
some

Bank

point oat interest rates for

Index

Auto Production

Industry

National

60

BEAVER

781

FIFTH

THICAGO

.

STREET.
AVE..

DETROIT

HOLLYWOOD, FLA

•

N.

.

NEW

Y..

YORK

STOCK

YORK

STOCK

AND

4.

N.

EXCHANGE

COMMODITY

V

.

BOwling

<Sherry-Netherland

PITTSBURGH

.

GENEVA, SWITZERLAND

Hoteli.

BEACH

MIAMI
.

.

AND

OTHER

EXCHANGES

green

9-842®

PLaza

1-2220

COR AL GABLES

AMSTERDAM, HOLLAND

55

Chronicle

The Commercial and Financial

€

Thursday, January 28, 1954

...

(454)
'

•

f

.

•

•

'

'

.

Speaks Alter the Turn ol the Year

Business and Finance

buildings, and in businesses serving the insurance

office

ADAIR

HERBERT J.

sold, in our opinion,

rugs

now

In

less.

but dollar sales value

The outlook for oil in 1954

tight

produced which may
less cost.
connection
with
plant
and

Inventories

generally

seem
budgeted

reduction

in

overall

One

the

of

share

of

to

$26.38

1953, and during a com¬

week in April,

per

mills received $70.53 per week.

figure is

an

per

and

week in fringe benefits which are entirely

Since

rate

annual
mean

23

the foreign

to

have

generally

producer

American
a

the

likely

will

definitely

"

v

whole, looking at 1954, it is felt that the year

the

approximate

should

industry

carpet

same

This factor,

ANDERSON

J.

the

The

it,

1954 with a good year
and with expanding and

inventories

low

The outlook is favorable but the

modernized facilities.

keynote is

one

8

is

recession

modest

forecast

in

to

field

the

the

industry has experienced
Court

recent Supreme

The

years.

price of gas added tremendous con¬

will

and

scene,

obtaining

the

make

of

general, 1954 is

triguing possibilities

as

level

will

stantially

the

tail

dollar

can

in

the re¬
of

terms

sub¬

of

amount

same

The

dollars.

consumer

industry's

be

brewing

1954 outlook

Since

i.

Edwin

businesses

this

means

are

ground for
as

intense competition nationally

more

as

moderate

breweries

size

have

also

well

I

would,

sales,

therefore,

advertising

Breweries

who

on

a

forecast substantial increases in
promotional efforts
in
1954.

these

sales

tools

most

effectively

that

forecast

our

and

is

it

characteristics

to understand these when eval¬

neces¬

Greater Hartford
has three principal factors in its eco¬
nomic makeup — mercantile, insur¬
ance

national scale.

and

use

for

customers

our

uating forecasts.

expanded

The
regional breweries are also girding for action to main¬
tain their sales against there potential inroads.

ready to challenge the leaders

basis

the

of

sary

modernized their facilities in the past year and are

and

close and intimate

surveys

liar

in California.

Many

Our

good in 1954.
Each region of course has its pecu¬

by relieving
It provides the back¬

shipments.

serves,

business in the Hartford area will be

for their huge midwest and eastern markets
the burden of western

in

utility keeps

also

capacitv

it

industries

and

contact with its customers and their

be

additional

is

by the very nature of things, a

plans.

K.

P.

Applegate

metal

and

fabrication

indus¬

Within each of these principal

tries.
groups

there is considerable diversi¬

fication.

The

accent

is therefore

on

stability, combined with a steady, but not spectacular
growth. Historically, economic swings in this area have
smaller ranges in magnitude and longer intervals

had

be successful in 1954 but the rate of
casualties will increase among the less efficient.
The

than in most industrialized areas.

overall effect of this

spectacular growth since the war.

will,

sult

as

in

always,

increased

more

beer

industry-wise.




aggressive selling should

consumption

and

a

gcod

re¬

year

The

insurance

business

has

with the result that

rail carriers are well

in

employment,

While most of the

along with their postwar modern¬

expenditures for additions
expenditures have averaged

cut back their

to

These

betterments.

dollars

billion

better

than

World

War

II.

freight

cars,

the conversion to Diesel

a

Itf is

year

a

through the

since the end of

acquisition of new

operation, and the

methods of maintenance that the
been able to hold their operating ratios

of modern

adoption

normal levels in spite of

near

they find it

it will be unfortunate if

ization programs,
necessary

Atkinson

maintenance and improvement

have to be curtailed.

programs may

K.

Arthur

will be squeezed even

investment in the last few years,
more,

rising costs during the

postwar years.
While

many

in the

a

almost

steady,

This promises to
The result is

building of

a

face

dangers

our

1954, there are also bright

are

so

con¬

marked

new

home

industry as we head

prospects for long over¬

in the regulatory law and in the tax

hopeful that the measure known as

picture.

the "Time

Congress will be approved
transportation rates

that the machinery for adjusting
be

can

tional

and

geared closer to the

The

economy.

effect

the

to

also be met by

changing level of the na¬

challenge to give

National

of fair

tion

portation

Policy may

Congressional action to require the regu¬

and

establish a condi¬

unhampered competition in the trans¬

industry.

I am also looking forward to the

repeal of the emergency war taxes on the
of persons

real meaning

Transportation

latory agencies of the government to

transportation

and property which have served to divert a

substantial volume of passengers as well as freight from
the

common

new

carriers.

1954 the railroads will

In

continue their research for

devices and better methods.

ciency can

It is only through these

their speed, safety, dependability, and

efforts that

effi¬

be further improved.

In spite of

the serious problems facing the railroads for
confidence that like the nation,

the future I have every
we

have grown stronger

find
come

shown

tinue into the foreseeable future.

growth

vacations, and

fringe benefits.
Railroad profits, which have been
fraction over 4% on net property

other

Lag Bill" now pending before

Greater Hartford

a

practically
completed by late spring.
In effect

Anderson

Electric Light Co.

Hartford

for business in

and

the labor unions

for higher pay, longer

We

of large

of that consumer
only be increased by more

will

APPLEGATE

utility is tied to the area it serves by
investments in fixed plant facilities, its
business is dependent, both short and long range, on the
good.

reason

share

California

P.

President, The
The

aggressive selling in relation to the
efforts of industry as a whole.
The expansion of the facilities of
national breweries with new plants
in

dented demands by

due changes

K.

approximately the same

tion for brand preference at

have

into

This indicates the competi¬

1953.

as

diminishing traffic, the railroads
been presented with unprece¬

of

key to the future.

a

trend which began

In addition to the problem

in 1946.

to view with caution in the

a year

industry, yet it is certainly one that has some in¬

though savings are at an alltime high and disposable income is
as

is continuing the

to

In

1954

estimated

Simi¬

at

larly, passenger traffic, down nearly
8% during 1953 compared with 1952,

railroads have

difficult.

activity, even

lower

continue

to

Federal Power Commission regula¬

additional gas supplies even more

oil

of competition.
A

on

fusion

brewing industry enters

behind

trunk lines, are already slowing

expansion the ps

last

problems than any which have faced them
War II.
With freight volume de¬

the

and
the fabulous

tions

President, Goebel Brewing Co.

is

of rapid expansion

competitive level with other fuels.

new

Railroad Co.

be confronted by more diffi¬

level for the first half of 1954.

expected

a

the field prices of gas are starting to

decision threatening

EDWIN

ATKINSON

K.

pending upon the level of general business
a
minor slackening of pace can re¬
sult in the serious shrinking of rev¬
enues.
.The
trend
of carloadings,
which has been off more than 10%
in the last several weeks of 1953, is

over¬

plus the difficulty of obtaining the vast re¬

needed for

serves

been

generally speaking, is good; how¬

that the period

more

a

factor that has

a

people in the industry.

over, as

toward

rise

during

1953.

as

is

speaking, it

believe

I

ever,

the,

of

share

his

increase

market.

strengthening of tanker charter rates would

A

The outlook for gas,

and to protect the high

importing

normal charter

more

a

profound influence on our domestic supply, and

a

looked by many

Tariffs to offset the low wages

workman

aggravated the over sup¬

possible under

be

would

structure.

each

If the present tariff remains as it is, the for¬

request.

On

for

paid to the American workman are a reasonable

wages

eign

than

the tariff has been cut from 60% to the

years

present 25% ad valorem.
paid

year

per

appreciably in 1954.

rates, which has permitted far more extensive

the carpet industry.

production employee in
In

weeks

all factors whose

are

rapidly, if total demand

taper off

to

A condition that has further

imports

foreign

The

1%.

of

three

about

of

loss

a

one-half

of

tend

ply position has been the general decline in world tanker

per

and domestic output here decreased at an average

year,

in

28%

averaged

carpets

and

rugs

in imports and

rate of growth

1946 the annual

machine-made

will

increases

paid for by the industry.

railroads

dieselization of

the

effects

cjefense) plus the

rapid expansion of natural gas

loss of markets due to the

additional labor cost to American industry

of $8.64

in the interests of national

(largely

in the American carpet
Added to the American

parable period, the employees

effect

The

sales exceeded

World

before

since

Robert O. A.iderson

1953

approximately 5.2%.

cult financial

present trend has been

cus¬

is that our company's sales

whereas

5.8%,

approximately

The railroads in 1954 will

but optimistic, there are
economic forces that cannot be overlooked.
the industry has felt from over-expansion

anything
powerful

carpet and rug mills amounted

of workers in the British

the

While

earnings

The average

market.

American

the

industrial

1954 will be a slightly better

President, Wabash

eral years to come.

increasing

other

1954 are forecast to exceed 1953

ARTHUR

probably establish a definite
trend in petroleum supply and mar¬
kets that will set the pattern for sev¬

the present tariff in enabling

manufacturer to take a constantly

the foreign

f

will

difficulties that the carpet manu¬

many

facturer is under today is

of the whole is that

1952 by

1954 will be an extremely
significant year for the industry, and

high

softening in their lines, the con¬

some

The result of all the above

by

very

sub-contractors in the area.

company's

our

in its franchised area for

will be

be at a

to

The effect of this is pronounced

than 1953.

ly'that

struction, at the most, a moderate reduction.

of

some

report

sensus

year

crude

1953 totals in residential con¬

change, if any, from the

promises

company

employment.

the company's many

tomers

shortage of supplies in either
or products, I feel very strong¬

any

this

While

While I find it

difficult to believe that there

models of military planes will

Certainly, in 1954, and undoubtedly for a longer

level of

to expe¬

important, it has been indicated that sev¬
carry this en¬

more

period,

on

estimates.

present

There seems to be little

production.

manufacturing field, the situation is strongly
by the activities of Pratt & Whitney Division

new

gine.

cold

fairly

a

strong, the total demand for products
in 1954 would probably far exceed

planned to be reduced

are

and

Herbert J. Adair

1953.

is anticipated in the major industries for an over¬

age

all

the

approximately 5%, and the same percent¬

amount of

an

complexities.

is one of many

winter during
remaining months until spring,
our
national economy remain

rience

it would

lower than

5%

1954 about

for

eral

one.

If the United, States were

be blended with wool at a

that most expenditures are

Even

Inc.

viewpoint is certainly not a comfortable
several factors that could shift our
oversupply of petroleum toward a relatively

present

that have been

equipment; outlays,

the

of United Aircraft Corporation.
It has been announced
that this company has received substantial contracts for
its J57 jet engine.

yet there are

one,

1954.

the outlook is for some bettering of 1953

years,

In

The short range

probability, there will be lower
prices in expensive wool carpets
because of the new type of fibres

in

year

figures, overall.

O. ANDERSON

ROBERT

President, Malco Refineries,

<all

In

in
EDITOR.

appear
—

good

a

colored

finding a mass market, which per¬
haps may mean in yardage that the
total volume in yardage will equal
1953,

statements
this page.

unpublished

today's issue, starting on

cheaper cot¬

larger quantity of

a

vious

remaining

rugs

ton

While it is not thought
the pre¬

that retail sales will show the growth of some of

and

sales may decline as much
as
15 to 20%
in 1954 below 1953,
because of the fact that there will
be

and the service trades are fore¬

casting

not be

volume of carpets

the total dollar

floor coverings,

In

LikeWise, mercantile

prepared for the CHRONICLE could
accommodated in our ANNUAL REVIEW
OUTLOOK ISSUE of Thursday, Jan. 21. The

forecasts

whole

for 1954.

and

promises to be a continuation

Nineteen fifty-four

of 1953's progress.

of the 1954 business

For various reasons some

to make an esti¬

is now attempting

probable changes in the economy as a

mate of the

FORECASTS

MORE BUSINESS

Carpet Co., Inc.

President, Artloom
Almost everyone

field.

the way to
them

so

with maturity, and that we will

not only meet them

that

we

transportation service to the general
ican

squarely but over¬

will be able to render even better

public and to Amer¬

industry in the years to come.

Continued,

on

page

23

Volume 179

Number 5294

The Commercial and Financial Chronicle

...

It would also relieve
now on the public

employees.

Future Cities

some

By ROGER W. BABSON

t

schools

instruction.
the

Asserting "revolution will take
place in factory locations," Mr.

the

Thus

New

factories, because of the park¬
problem and heavy fire
losses. Says factories can receive

better trainees from rural schools,,
and more autos are available to
rural

employees. Concludes large
and surrounding small

cities

towns should cooperate more

for

factories

country.

Cities

are

the

roads

development
of

good

Crooks,

in

great shopping centers. This means

McKinnon, has

chants

should

and

and

the

favor

their

good

—

space,

mer¬

in

stores

way

Chair¬

as

since

every

1941

Chairman

roads,

was

low taxes,

and
in

elected

reelected

friendly people. Public schools

48-year

firm

the

that

we

be

not

Chronicle)

the

increased

automobiles,

decentralization

the

so

unsolved

as

today

as

the

M.

O'Toole

have

been
was

old

In

1950.

that

will be

&

office

in

to

The

Financial

of

has

Aim,

Chronicle)

111.—Paul

been

added

to

Kane, Rogers

La

Salle

dependent

afford to

upon

taxes could well

and again
In

train the students to be

better cities and better towns.

only
dirt

roads.

may

only

a

Roger W. Bali son

is

answer

into

the

This

•(Special

he

to

The

Financial

With Founders Mutual

Chronicle)

was

CLEVELAND, Ohio—Albert L.

1952

Rosen has been added to the staff

1951,

in 1953.

(Special to

The Financial

DENVER,

Colo.

—

Chronicle)

William F.

'

following

Chairman, nine Governors of the

announcement

Exchange.

Grant

Street.

'

is not

an

ojjer to sell

or a

solicitation of

an

offer to buy these securities. The offering is made only by the Prospectus.

be

tem¬

NEW ISSUE

January 27, 1954

rural

cities

moving

sections

take

in

$60,000,000

and

these

suburbs.

tremendously

heavy and costly today.
and

are

great

business

helps;

Such

money.

Fire,

Gas Divisional Lien

these

insurance

-

>

•
■

which bonds, as

cost

protects
.

i

•

our

explained below, will become

.

Northern Illinois Gas

accomplished

only through more
boxes, more sprinkler
better construction and

fire-alarm

"housekeeping."
these

What

must

we

with

finally

to

Employment Problems

Every

year

up-to-date

more

manufacturers

are

operating
schools for training employees. To
compensate
meet

be

must

for

increased

competition

of

best

investments

wages

employees

better trained.

cost

The

first

such

training seems high
to old-time employers; but it
pays
by reducing turnover. One of the
ration

can

make

which

a

corpo¬

is in the

finding
training of seriously-minded

and

First Mortgage Bonds, P/2% Series due January 1, 1979

all

resort

The bonds to be purchased by the Underwriters will be Gas Divisional Lien
Bonds, 3J^% Series due January
1,1979,of Commonwealth Edison Company ("Edison Company"). Such bonds will be issued and sold by the Edison
Company to the Underwriters and the entire proceeds of sale will be received directly by the corporate trustee
under the Edison

heating properties

Company's existing mortgage. After such sale the Edison Company will transfer its gas and
to Northern Illinois Gas Company ("Gas Company"), subject (as to the gas properties) to the

lien of the Indenture

securing the Gas Divisional Lien Bonds, the Gas Company will assume such bonds, and the
Edi'son Company-will thereupon be released from all further liability thereon. The Gas Company having become'
sole obligor, the designation of the Gas Divisional Lien Bonds will be changed to "Northeni Illinois Gas
Company
First

Mortgage Bonds, 3J/2% Series due January 1, 1979," and B .md's bearing the new designation will be executed
by the Gas Company in replacement of the Gas Divisional Lien Bonds. Accordingly, the Bonds delivered by
the Underwriters pursuant to

this offering will be Bonds, bearing the

Most of the factor schools and
the college, public and private en¬

gineering schools
result,

in cities.

are

they

attract

have led

"soft"

lives and

Plus accrued interest from

As

best

schools

boys

a

be

em¬

rule, better trainees

secured

in

the

rural

surrounding

are

a city, where
trained to work and save

in the home.

January 1, 1954

not

are

likely to make ambitious

ployees.
can

designation, of the Gas Company.

Price 102%

As

mostly

"city" young people, who too often
so

new

people for its organization.

young

a

Company

decentralization.

more

and

•

own

losses; but
not against the
constantly increas¬
ing total fire loss.
This can be

systems,

t>

.

against

us

Bonds, 3V2% Series due January 1, 1979

oc¬

insurance

but

EDISON COMPANY

COMMONWEALTH

Another serious problem is loss
These are

by fires.
cupancy

The
such

These young people

Prospectus

he obtained in

may

any state

of the undersigned and other dealers

as

in which this announcement is circulated from only
may lawfully offer these securities in such state.

usually make the best workers.
Everyone Has Auto
In view of the above, I forecast
that even before a factory leaves
a

big city and

rural

section

out

moves

it

a

into

have

may

training schools in

rural

or

The First Boston Corporation
Harriman

a

Halsey, Stuart & Co. Inc.
A. C. Allyn and

Ripley & Co.

its

section, rather than in the
of a
big city where the
factory
is
now
located.
This
center

train

and

been
lack

factory to attract
young people.
this would have

impracticable
of

almost

because

of

transportation; but today
every

chanical

boy

ability

with

has

any

me¬

Union Securities

car,

he is not the kind of

boy that the school wants.
program
young

Such

a
a

would later bring better

people

into

our




Corporation

Bacon, Whipple & Co.

Merrill Lynch, Pierce, Fenner & Beane

Stone & Webster Securities Corporation
White, Weld & Co.

William Blair & Company

Dean Witter & Co.

Alex. Brown & Sons

Clark, Dodge & Co.

second¬

a

car.
In fact, if a boy has not
ingenuity enough to fix and oper¬

a

Kidder, Peabody & Co.

Smith, Barney & Co.

hand

ate

Eastman, Dillon & Co.

(Incorporated)

Goldman, Sachs & Co.

country

A few years ago

A. G. Becker & Co.
Incorporated

Central Republic Company

BIyth & Co., Inc.

sub¬

Company

Glore, Forgan & Co.

Incorporated

Incorporated

urban

would enable the

staff

Co., 39

Street.

porary solu¬

having

Beh-

&

Parking

lots

factories

E.
the

With Baxter, Williams

Vice-

1951

and

"by invitation."

rens

South

Governor

a

named

Chairman

to

part¬

Thomson

of

the guests

(Special

CHICAGO,

highway

dusty

real

In<v

Aim, Kane Firm Adds

was

had

we

The

joined1

1

Building.

problem when

tion.

)

of Baxter, Williams &
Co., Union Garrow has
joined the staff of
the retire¬ Commerce Building, members of
Founders Mutual Depositor Corp.,.
the Midwest Stock Exchange.
ment of Emil Schram in May, Mr.
courteous under all conditions..
of factories will
First National Bank Building.
Crooks acted as President, in ad¬
follow the in¬
How
a
combination
of
cities
dition to his duties as Chairman,
With Scherck, Riehter
creased
nui¬
and rural sections will be brought
sance of parkabout I do not know; but it seems until Keith Funston took over as
(Special to The Financial Chronicle)
With Hamilton Managem't
i n g.
All
large cities and President in September, 1951.
Parking inevitable.
ST. LOUIS, Mo.—Leonard Zel(Special to The Financial Chronicle)
facilities are their
surrounding
small
towns
The Nominating Committee of linger
is with Scherck, Riehter
DENVER, Colo. — J. Edward
as
have their usefulness. They should
inadequate
the Exchange will submit to the Company, 320 North Fourth
is
now
with
St., Dillard
Hamilton
and the parkcooperate more for the joint good
i n g
problem of all. By so doing we will have membership a slate of officers for members of the Midwest Stock Management
Corporation,
445

followed

operation

of

Mr.

intended to be

ner

plenty of parking
As

the

into

out

move

would

Jerome

ST. LOUIS, Mo.—On
Thursday,
ApriL 29, and Friday, April 30,
1954,
the
St.
Louis
Municipal
his decision1 known in a letter to
Dealers Group has made
arrange¬
the Nominating Committee of the
ments to hold its- "Annual
Outing"
Exchange.
in St. Louis. As before

helps the city. It may,
therefore, help cities to have cer¬

tain

he

Financial

the staff of Trusteed Funds,
Park

Crooks, whose term as
Chairman ends on May 17, made

city ulti¬

a

Municipal
Dealers Plan Outing

has

The

Mr.

man.

mately

reasonable

the joint good of all.

for

problem

'Exchange,

available for reelection

Anything which helps solve the
parking

Stock

that

announced
Benefits the City

of

ing

York

to

WORCESTER, Mass. — Patricia
A. Casey, John T. O'Leary
and,

Sfr Louis

the

ple would all benefit.

(Special

May 10.
1

7

Join Trusteed Funds

April 12, Mem¬

on
on

>'

Richard M. Crooks, Chairman of
Board of Governors of. the

country and its young peo¬

Babson foresees decentralization

Gratuity Fund,
bers will vote

For NYSE Reelection

and

cities

surrounding

the

factories,

rural

mechanical

giving

Exchange and two Trustees of the

Crooks Not Candidate

pressure

trade

(455)

cities

as

Hemphill, Noyes & Co.
Lee

Higginson Corporation

Hornblower & Weeks
Paine, Webber, Jackson & Curtis

The Illinois Company
Wertheim & Co.

1954

Chronicle.,.Thursday, January 28,

The Commercial and Financial
8

(456)

International Harvester Company

1

York 5, N.

will be pleased
interested parties the following literature:

Street, New York 4, N. Y.
Resources—Booklet

Area

the

on

'
Utah-Idaho-Wyoming-Colo¬

K, Utah Power & Light Co., P. O. Box
City 10, Utah.

rado area—Dept.

Salt Lake
Bank

Earnings, 1953—Bulletin—A. M. Kidder &

Stock

Street New York

Wall

899,

Sterling

Co., 1

208 South La Salle Street,

5, N. Y.

Companies of New

Trust

and

letin on, the Bond

Utah

Market.

Stocks—Suggested

Pine Street, New

30

ited, 132 St. James Street, West,

at the Sheraton

111.)

Chicago 43rd
at the Mid-Day

of

Club

Bond

meeting

annual

<

Plaza HoteL

11, 1954 (Chicago,

Feb.

Club.

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

Ventures,

York 5, N. Y.

Malvern

brochure—Blyth

Company—Analytical

Light

&

—

Co., Inc., 14 Wall Street, New York 5,

&

portfolio—Stanley Heller & Co.,
Also available is a sug¬
gested list of "Business Man's Risks."
Dividend Income Tax Exemption Beneficiaries—List of pos¬
sible stocks to benefit from such tax exemption—Sutro Bros.

Common

Power

sociation 30th annual
ner

Memorandum

Aswinter din¬

Securities Traders

Boston

—

at

(Boston, Mass.)

11, 1954

Feb.

115 Broadway, New York 6, N. Y.

Hill & Co., Inc.,

meeting

Hotel.

Chicago 4, 111.

County Water Authority

Suffolk

York—Comparative fig¬
ures as of Dec.
31, 1953—New York Hanseatic Corporation,
120 Broadway, New York 5, N. Y.
Also available is a bul¬

Banks

Philadelphia an¬
the Warwick

Club of

Bond
nual

Inc.—Memorandum—David A. Noyes & Co.,

Drug,

(Philadelphia, Pa>)

29, 1954

Jan.

6, N. Y.

Baltimore Hotel.

at the Lord.

ner

Light—Review—Ira Haupt & Co., Ill

Street, New York 4, N. Y.

Broad

Md.)

Traders As¬
sociation Annual Mid-Winter Din¬

Corp.—Bulletin—Oppenheimer & Co., 25

Halske

&

Field

1954 (Baltimore,

Jan. 29,

Co., 10 Post Office Square, Boston 9, Mass. ~

Lerner &

Siemens

Street, New

Company—Analysis—ask for report T-31—

Riverside Cement

j|l

Investment

bonds—Bul-

Co.—Memorandum—Richard E. Kohn & Co.,

Broadway, New York

their probable effect on business

ing economic trends and

In

Street, Newark 2, N. J.

Puget Sound Power &

—Manager, Research Department, H. Hentz & Co., 60 Beaver

EVENTS

Baltimore Security

Phillips Packing

Forecast—Current discussion of underly¬

and

COMING

Y.

20 Clinton
Annual Review

Van Alstyne,
*

Pennsylvania Railroad Company—Analysis of the
letin No. 152—Smith, Barney & Co., 14 Wall

understood that the firms mentioned
send

—

Corp.—Memorandum—Granbery, Marache &
Co., 67 Wall Street, New York 6, N. Y.
;
Loew's Inc.—Memorandum—F. L. Rossmann & Co., 120 Broad¬
way, New York 5, N. Y.

Recommendations & Literature
to

Analysis

Liberty Products

Dealer-Broker Investment
It is

—

Wall Street, New York 5, N. Y.

Noel & Co., 52

D.

(Washington,

1954

15-17,

Feb.

Montreal, Que., Canada.

C.)

Board of Governors

of Associa¬

Firms

Exchange

Stock

of

tion

meeting.

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

&

Ltd.,

of Philadelphia

Tokyo,

Chiyoda-ku,

Marunouchi,

1-chome,

4,

Notes

NSTA

Japan.
Income Record of Personal

Investments for 1954—Special form

annual midwinter
Franklin HoteL

dinner at the Ben

Apr.

compiling tax returns—also contains list of com¬
Ontario Taxes—Ross, Knowles

to assist in

Traders Association

Investment

—

Co.,

(Philadelphia, Pa. )

Feb. 26, 1954

Earnings & Dividend Payments of major Japanese companies
In current issue of "Stock Bulletin" — Nikko Securities

(St. Louis, Mo.)

29-30, 1954

Dealers

Municipal

Louis

St.

mission rates and Province of

annual outing.

Group

Co., 330 Bay Street, Toronto 1, Ont., Canada.

&

Japan—Circular—Yamaichl Secu¬
New York 7. N. Y.

Investment Opportunities in

1954

Metals:

York 5,
New

Brochure

—

Security Traders Association of
New York annual dinner at the

New

Bache & Co., 36 Wall Street,

—

Waldorf-Astoria.

N. Y.

York

Banks—Comparative analysis as of Dec. 31,

City

May 12-14, 1954 (Boston,

Street,

Board of Governors of

1953—Paine,

Jackson

Webber,

New York 4,

Curtis, 25

&

Broad

N. Y.

1953—First

Stocks—Comparative figures at Dec. 31,
Corporation, 100 Broadway, New York

Boston

May

Stocks

Bank

City

York

comparison

Year-end

—

17 bank stocks—Laird, Bissell &
Broadway, New York 5, N/ Y.
V
>

analysis

of

.

an

market performance over
Quotation Bureau, Inc., 46
York 4, New York.
and

National

—

Bulletin

Cone Mills Corp.,

of

Sons—H.

with

Hentz &

Jr.

Patten

lowing

new

vSecretary: David W. J. Paden,
& Beane.

Cannon-Mills,

tion.

Co.; 60 Broad Street; New York 4, NY.

Bulletin

—

—

Thomson & McKinnon, 11: Wall

*

American

Gas

and

*

Electric

*

*

'

Hotel Claridge.

W.

i

Jones,

National Securities Corpora-

r

Providence—Data—Vilas & Hickey, 49 Wall Street,

New York 5,

Also available is data

N. Y.

on

Western Mary¬

tion
'■

'

-

■

of

Stock

OF NEW YORK

Nov. 28-Dec.

Traders

Points

Team:

land.

Bean

Central of Georgia
Co

Railroad—Analysis—Varnedoe, Chisholm &

Inc., Savannah Bank & Trust Building, Savannah, Ga.

,

Chesapeake Industries

—

Memorandum

—

Gottron, Russell &

Corporation—Analysis—G. H. Walker & Co.,

1 Wall

Street, New York 5, N. Y.
Dominion

A.
Fire

Tar

Chemical

&

Company,

(Capt.), Rogers, Gold, Krumholz, Gersten
(Capt.), Pollack,

Limited—Analysis—R.

Leone

(Capt.), Nieman, Gannon, Tisch,

(Capt.), Hunt, Werkmeister,

Meyer

(Capt.), M.

Hunter

Burian

Association of Philadelphia

Manson

Table of related prices

—

(Capt.), Gavin, Clemence, Montanye,

(Capt.), Jacobs, Topol, Weissman, H.
200

McCarthy, Inc.—Prospectus—B. V. Christie & Co., First

National

Bank

Building, Houston 2, Tex.

Point

John

Demaye

Hank

,

Meyer, Frankel, Wechsler, King

(Capt.), Boggs, Siegel, Voccolli, Lienhardt

Geyer & Co. Incorporated, 63 Wall Street, New York 5, N. Y.
Glenn

Swenson, Ghegan

(Capt.), Brown, Reid, Farrell, Barker

Growney

3, 1954

Serlen

152%

(Hollywood,

Fla.)
Investment Bankers Association

Convention

at

Hollywood

Beach

Hotel.

: 46

45

Whiting
Frankel

44

41
38

37
36
32^
31V2
29

mm

Mote,

i Money Spent

5 Point Club

Club
_____

Firms-

44^

Greenberg

(Capt.), Craig, Gronick, Bies, Demaye

Donadio

Daly & Co., 44 King Street, West, Toronto 1, Ont., Canada.
—

Cohen, Smith, Strauss

(Capt.), Bass, Valentine, Eiger, Bradley

Kaiser

Co., Inc., Union Commerce Building, Cleveland 14, Ohio.
Chicago

(Capt.), Fredericks, Murphy, Weseman, Huff

Krisam

Exchange

meeting.

Association of New York, Inc.. :(STANY)
Bowling League standing as of Jan. 21, 1954 is as follows:

Serlen

>

(Minneapolis',

Board of Governors of Associa¬

o

Boston &

v

-

Merrill Lynch, Pierce; Fenner- *SepL 523-25,; 1954
Minn.)

Howard
■

Klein

City)

Traders Asso¬

ciation Annual Convention at the-.

>

■

Security

System—Financial and

Company

perating information—American Gas & Electric Company,
50 Church Street, New York 7, N. Y.
1

Blyth & Co., Inc.

SECURITY TRADERS ASSOCIATION

Street, New York 5; N. Y.

Sept. 22-26, 1954 (Atlantic

'

..

.

Treasurer:

'

Annual Convention at

Canada

Jasper Park Lodge.

fol¬

Kenneth Easter, Dean Witter & Co.

Vice-President: F.
,

Howard W. Jones

National Security

President: William T. Patten, Jr.,

No. 25"

*

.

officers for 1954:

.1

Turnpike Bonds

F. Kenneth Easter

>

i

Security Traddrs Association has elected the

The Seattle

13-year period—
Front Street, New

special reference to

T.

W.

a

J. P. Stevens & Co., and M. Lowenstein &

(Canada)

Investment Dealers' Association

—Troster, Singer, & Co.; 74 Trinity Place, New York 6, N. Y.
Textiles

of, Finan¬

Federation

June 9-12, 1954

up-to-date com¬

Chips—Over-the-Counter—"Highlights

Blue

Popular

(Chicago, IlL)

16-20, 1954

Analysts Societies Conven¬
tion at the Palmer House.

parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocka
used in the National Quotation Bureau Averages, both as to

yield

Firms

cial

Meeds, 120
."">%»• •

Weissenborn, Inc., 24 Commerce Street, Newark 2, N. J.
Over-the-Counter Index—Folder showing

Associa¬

Exchange

Stock

National

and

Banks—Comparative report—Parker and

Northern New Jersey

Mass.)

meeting.

5, N. Y.
New

of

tion

City Bank

New York

City)

May 7, 1954 (New York

ASSOCIATION

TRADERS

SECURITY

SEATTLE

rities Co.. Ltd., Ill Broadway,

212

\

W

"Duke" Hunter

203

4

200

Hoy Meyer

We

make*good markets in

g THAN EVER BEFORE g

385

purchase 100 shares of class B
common stock at $150 up to and

to
•

Public Utility
•

\

Natural

Stroud Group

1

Gas and
•

Ritter Finance Debs.

Industrial Stocks

orders & inquiries invited

Ask for

our:

&

Co., Inc., and asso¬
ciates are offering $1,000,000
Ritter Finance Co., Inc. 12-year
5%% subordinated sinking fund
Stroud

your

"Popular Blue Chips"

debentures

Troster, Singer & Co.
HA 2-

2400

Members:

74

N.

Y.

Security

Dealers

Association

Trinity Place, New York 6, N. Y.




Offers

with class

B

stock purchase warrants
Due
NY 1-

376,

Jan.

1,

common

attached.

1966, the debentures

31, 1959 and at
shares thereafter
up to and including Dec. 31, 1965.
Net proceeds from the sale of
the debentures will be added to
the company's general funds.
Ritter
Finance
Co.,
Inc. and
including

$175

per

Dec.

100

subsidiary companies are
in

the

loans

engaged

making small
individuals under the

business of
to

Pennsylvania
priced at 100% and accrued
interest.
The
warrants
entitle and New Jersey, in which states
each holder of a $1,000 debenture they maintain offices.
are

Small Loans laws of

Join the

MARCH
OF

DIMES
January 2 to 31
/

Volume 179

Number 5294... The Commercial and Financial Chronicle

(457) T,9
and

Hits and Missiles
By

IRA

Author of

budget

of

split-up,
handicappers.

COBLEIGH

of the air

program

set forth in the

as

.r

,

the

,

XT

w

budget message
toward 40,000 words

mng

run-

few

have examined it

closely; but fortunately, the meat of it has been
quite

effec-

tively supplied by press
commentators.

From

their

competent
compres-

sions

of

the
1

—

somewhat arid

statistical pro-

jections,
tain

are

distilled,

First,

our

gional

na-

secur-

involving

ity,

(r« U. Cobleigh

cer-

facts

here

68%

some
ie

of

the budget toio-

tal,
.

has

that

in

icent
'

is!

The

rising

ac-

military thinking

our

not

now

heavy upward bias—

a

aircraft

is

foot

on

soldiers, but on
: delivery
of,
-and defense against, same.
Two

-

fission,
words

and -aerial

stand

in

out

.—retaliation

strategy
repulsion.
Re¬

and

our

,

beginning

it,

in

mo-

ments

bomb

may

come

our

For

way.

this, we need, and as taxpayers
■are staking ourselves to, the finest
intercontinental

bombers

ored

yet de-

.

Aviation,

data

about

fabricators

It earned

some-

around

Bell

of

as

/ion

miiijnn

ranks

as

iac+

to

thought that either

toward

demise of EPT

or

liberal attitude

more

aircraft

profitability, net
incomes might expand.
You'may
the recent flurry in the

feel that

aircraft

list

counted

these

event,

our

has

somewhat

factors.

dis-

In

any

vast aerial capacity to

hit, and to throw missiles, alluded
to here, is
world at

a

our

best

for

assurance

peace.

well

vpq,

leading

a

The

somewhat

a

dividend

1949

(3)

because of the

is
an
energetic
which has been moving

^
Bell

not

hope

1954

and

ses-

(about

impressively in the past
four years, bringing its net sales
na„f

has

gives

from $12 million in

dis-

Martin

$51

Aircraft

consistent an earning
record as some of the others but

(Glenn)

N.Y.S.E.

around

ahead

-

played

recent

earnings)
a
higher

company

,,

dicate, possibly, some direction to
the
inquiry and some relevant

in

times

than the $3.50 last year. BA fits
into the defense program. Who
knows, it might fit into your own
stock list.

lit-

a

$3.25 a share in
1953 after giving up $2 in EPT.
It has a reputation for good man-

notes will be offered to in-

some

for

sions, and at
4

room

perhaps

is popular.

where

complete answers to
queries will be provided here, but

Toppers Organization

manu-

facturer of helicopters and, of its
present $500 million backlog of

Elects New Officers

its B61 Matador is quite a sensational guided missile—jet pro- orders, 40% is in the helicopter
Let's start by saying 1954 should Peded, and operating with lethal department.
The increased
be a g00(j year wj£h saies total in electronic accuracy toward a tar- breadth of use of these altitudinthe neighborhood of the $9 billion get (ground), which it is capable ous "clothes reels," both for millin 1953
hut Drobablv somewhat of annihilating by virtue of an tary and civilian assignments,

following

fewer than the 12,000 war planes
F?
turned out last year (more bigger

men^ntheNew Skara-

on

of

power

the wing.

an(j

heavier models). Noteworthy
at the outset
also
is the stepped

demand for interceptors. Much
new
engineering has been done

up

on
this type.
The Douglas F4D
skyray is a Navy entry, while the

Consolidated

F102

with

its

vanced delta

tain

design is quite
important in
imp

be

to

program.

Lockheed

1

American

have

units

and

adcer-

the

North

capable

of

adaptation to interceptors.
For

rather

of the whole

complete

coverage

its

output

of

planes, 'copters,
and engines.
Its 1953 per
i

j

-it

i

i

«

share net should work out aroiind
a

at°mi,c warhead There item
are
whn feel that this

,

mav

column.

model.

•

.

,

gine

packer

and

deliverer

to

$3 indicated dividend,

tallic dust.

Bell also supplies ennacelles to Consolidated

stock sells around 48 and has paid

'uninterrupted .dividends

for

18
'

years.

,

Another standard quality entry
is Douglas which has just matched

aggressors, anywhere in Vultee and Boeing.
the world.
While the B-47 has
Qn the financial side, Bell has
the Present major assignment as definitely upgraded, paying its
atom bomb carrier, the B-52 Tnio
may
dividend ($2) in 1953—this
Hnn
cnnnooH
In
course succeea n.
This after a 2 for 1 stock split in Febmodel is an eight jet job, capable ruary 1952. The present indicated
0/ deploying the 150 ton frame yield on Bell, about 8% at 24»/2,
^rough space probably around p[us the unique position of this
in

r»Ai l

roo

it

_

600 M.P.H. Actual production
exPected on thls for 1954.

111

is

pj

r»

_

h

producer in

j

our

i._

i*j

•

*

•

■

Jan.

on

elected

were

n .t.

aviation industry,

suggest elements of attractiveness

•

Ui"

new
-

.

20

as

4

1

'

the

com¬

Top-:

membership "of

™emDersnip °J

y

+

Chairman:

First of

4>

invading craft between here and
Mars, and to reduce same to me-

tonium

-

meeting

jf_

Boeing Airplane appears in a
Bell, in addition, is an- imporpretty favored position.
1953 was tant contractor for development
its best earning year, and 1954 and production in guided missiles
looks quite promising. The Boeing and rockets—militronic'gadgets
B-47 is the No. 1 Retaliator calculated to draw beads on any
(might be a good official name for
it), a six jet bomber in steady
production, and the official plu-

:

•

a

organization

coroinoc

purpose

■

mittee heads for 1954 of the

some augurs well for Bell's future For
fho
thf»re'c the WTT.<5 fer
the services there's the HTLS for '
the Marines, YH12 for Air Force,
H13 for Army, XHSL, an anti-sub-1
job; and there's the 47D-1 general

new

w^° fee* that this new item may
Pr°Pel Martin common (listed
N.Y.S.E. and now selling around
hack into the dividend paying

*'

--

At

fieldr^"me'anal'yste would-be

have favored United Aircraft with

$7.50 with

literally,

.

,

No

props

Sf Lh L L lf S
•

board

among

the

rumors

agement, and its F100 model appears in
line for an important
thesevplace in Air ]?orce procurement,

"

With

a

23)

message;

altitude.
xtt'-lu

above

tie lower in market price (around

beaming its sights toward certain
companies seemingly in a position to maintain high financial

•

hops

North American

"Winning in Wall Street"

An investors eye view
recent

U.

enthusiastic

90 level have set in motion

loot

Paul

area.

L.;

*

.

SippifJr.;

Michigan Corporation;

>

Secretary: William C. Bertram;
Harriman Ripley & Co., Inc. ; >
Treasurer:

William

TorgerChas. E. Weigold & Co;, Inc.

sen,

.Following is a list of the 1954
Toppers committee:
r

r»;nipv

,n

o.

b 2]

o

r

Knuitahlp

g<?ne

E

"Wo™™;***'

.portram

rn

•

Harrington'

Henrv

Securities

Kelly

tWIa

*

Dnnaia

Torn

Goodbodv

•

&

Fu-

Co"

William Kondratuk, Reynolds &
Co.; Joseph Meyers, R. L. Day &
Co.; Frank Noonan, Bear, Stearns
&
Co.; Charles O'Keefe, Smith,
7
Barney & Co.; Paul L. Sipp, Jr.;
First of
Michigan Corp.; Fred
Sloan, Coffin & Burr, Inc.; William Stilz, F. P. Lang & Co.; and
William R. Torgersen, Charles E.
Weigold & Co., Inc.
^

-i;.

M

*n BLL.

Boeing should keep pretty busy

veioped'by"us^Earth Peopled they its regular quarterly

$1 dividend for the next few yearsj Its backsupply the "hits" in today's title). w*th a $1.50 extra.
It is racking log today must be ^around $1.7
And to repulse possible bellicose
UP earnings at the rate of about billion, the share book value
■bombing by belligerent Bolshe- $15 a yearMa«y have flvored around $49, 1953 earnings around
viks we are stressing two major this one for its extra sound finan- $11, with 1954 projections being
item's—interceptors and missiles cial Position, its generous divi- made as high as $14. Financial

Today's

piece

has

Bache Adds to Staff

obviously

•

-

•

•

(end of title reference). This new
slant, and implementation, to our
is both

defense

rent to any

and

populace that

our

be
•

or

powerful deter-

a

trigger-happy

considerable

a

sitting

ducks

enemy,

assurance

we

are

the

on

not

to

dend Ph"??- and

representation

in

its important condition is excellent-no long
both

and commercial craft.

now

at about $34

|

.

This advertisement is not

an

coun-

The

To
be
specific,
the
1954/55
budget calls for $8.3 billions (al¬

0f

to

over

8%

ceptors

years;

and

increased

an

lot

a

aerial

h

offer to sell
.

or a

.

offering

is

»

allocation

solicitation oj
,

,

.

'

an

and sets

ers,

sales

has

ine locai omc,e 01 ivierriii l^yncn,

offer to buy these securities.

made only by the Prospectus.

Colorado Oil and Gas Corporation
Common Stock
($3.00 Par Value)

entirely different
industry than

an

for this

curve

been forecast for

lines

in

have

1954.

talked

many

Statistical
of

a

5%

other

savants

to

Price $12.50 per Share

10%

general dip in gross product but
this

lowered

does

not

we

altitude
definitely
apply to the enterprises

propose

90%

of

all

h:

to sketch today. About
American aircraft

product is headed for the military
displays a glob¬
al meekness presently
unthink¬
able, we'll continue to stress
stratosphere in our strategy for
and unless Russia

some

time to

Thus,

Copies of the Prospectus
others

as

are

may

qualified to act

be obtained from the undersigned and
as

dealers in securities in this State.

come.

the

investor

today

ap¬

proaches the aeronautic manufac¬

turing

trade

assurance

demand.

with

considerable

about

solidity of sales
main inquiry, there¬

His

Union Securities

fore, is into which companies best
produce the most^ needed types,
which have

the

be turned out

design
which

and
can

stable

models

(without heavy

tooling

do the best

costs),
job of

to
re¬

and
con¬

verting gross sales into dividendprone net income.




January 26,1954

formerly

commodity department of

to

projected upping of total air force
personnel to 970,000.
All of this
adds up to continued high volume
production among major aircraft-

John T.

Baltimore

was

currently); (2) Sustained demand; Pierce, Fenner & Beane.

-

•

1000

1,000,000 Shares

security strategy is found in the
recent approval of a West Point

—

p

of the Air to cost $150 million; and

-

Co.,

of inter-

Further, recognition of the
magnitude of aviation within our

-

&

automatons;

helicopters.

•

Bache

Avenue. Mr. Burton

New Issue

of military outlay) for
aircraft. It envisions some 10,000
of jets to be delivered in the

plus

-

6

Chronicle)

Burton has been added to the staff

20%

three

(from

Financial

CITY, Mo.

to

lacking the capacity to throw

next

.

Yield

to The

KANSAS

—

a

,

(1)

Pretty PePPy in recent markets, The stock has been rather clam-

ter attack

most

share.

a

1

group of equities and to suggest
their desirability on grounds of

military term debt, and net working capital
It's been right

(Special

defense

nuclear leather if incited to

t

been swift and sketchy—I sort of
hedge-hopped over the field, and
probably missed some deserving
entries.
The main idea, however,
was to stress aircrafts as a worthy

,

R.

Corporation

.

,10

that

include the cost of getting them through Con¬

mitted they should
1

From

Washington

Ahead

of the News
BARGERON

By CARLISLE

grounds for wondering these

writers around the country

countless editorial

they

typewriters

they have in mind.

have really thought through on the subject
Take, for example, the recent steady chant that
must "assert" himself.

didn't

become

to

seemed

chant

The

There

saying to the President: Come to
President

him

had

they've gotten together.

Frankly,

just so long

himself on the
long debated St. Lawrence "seaway" legislation

I

trade

in other countries.

the approval by the Interior Department of a

However, the two
Senators from Arizona have always favored the "seaway," but
the other eight have always been against it, and at least two of
them told inquirers frankly the reason they were switching was
because of the Colorado project.

the

eve

tions Committee

of the voting, Senator Wiley's Foreign Rela¬

promptly approved

report of its sub-committee,

a

which had been hastily called together, recommending an appro¬

consist

relatively free markets, rather

than

through

trade

In

the

report to the President and

a

Congress by
Foreign •

on

Economic Pol-

icy, which

aid
'

by<

Congress

on

Aug.

Chairmanship

Inland

hope

I

no

am

misunderstands

one

shocked

or

even

thinks

and

me

for

a

have

our

worldwide multilat¬

to

77

mows'

this
topic

to

During

r}

gifts
and

services

perhaps

more

am

just wondering if

to the country and seek to build up a popular heat.
isn't good at screaming, arguing and he

go

Mr.

But

doesn't

our

have

a

"Cross

of

Gold"

oratorical

And

appeal that is

likely

transferred
i?
tfnnHc

with Presidents

possessing these qualities they are
more likely to rely on the more
practical and sure fire methods
I have outlined above, by
way of asserting themselves. * Senators
are frequently
dickering for patronage or projects for their dis¬
tricts and

one

the worth

of their best

of their

of forcing the President to see

means

enterprise is to

him

oppose

something he

on

wants.

mil*-

of

usive

ourth ot

Am

a

,^o
r-

so

over

a

period

necessary

to maintain drastic re-

strictions

on

-trade- and

payment,

directed

particularly against this
country, indicates strikingly the
gravity of the world's dollar
-

assertion
that

if

are

the

severely circumscribed.

very

St.

legislative branch,

Lawrence

legislation

through Presidential assertion

we

-

His

limitations

on

It is this writer's guess

finally

the

-passes

wiil find the

House
em¬

barked upon a spending program that would make
the New Deal¬
ers' mouths water.

I have

estimates of costs for these

and

significant fluctuations as well
as a declining trend.*" In 1947; helore the Marshall Plan began, the
deficit reached

always thought, in fact, that when the

highly controversial projects

sub-

are

a
a

1C0cnCU

lion

government

which

one-half

most

first

WV.CMY

wx

U11-

reduced

in

the

by

al-

first

two

the Marshall Plan.

of

years

peak of $11 bil-

was

impact of

the

The

Korean

War

greatly to reduce the deficit,
more than $1
billion
in 1950, owirig largely to our heavy

was

to somewhat

buving of

goods

HIDE and SEEK!

the
.

Well,

we

pick

materials and other

services

1951

other

the

felt

as

the

s

National Bank of Pine Bluff, for instance.

order recently from
155 shares — no more,

a man

prices

raw

mate¬

compared with the

as

no

the raw
materials, exporting countries, once
the buying rush had subsided, felt

—

in Little Rock who wanted

to

less:

the effects of the shrinkage in the
volume and value of their exports.

Well, quite frankly,
seemed

Still,

to

we

weren't

too

know very much about it.

hopeful.

Around here,

'«

no

one
•

•

work, flashed the word along 65,000
mijes of pri¬
vate wire to 111
offices, alerted more than 1,100 account executives—•
and came up with a seller in
Memphis just a couple of hours later.
ue

went

to

Moral?
When it
nearest

the

In

Merrill

to

hide and seek

stocks—just find

again

been-a

ment.

For the first time

since

vour

way to

the

the

foreign tiade, exclusive of

military exports, has come into
balance; and foreign gold and dolreserves

have

increased

that

is

well

over

at

a

$2 billion per year.

Of

Merrill Lynch, Pierce, Fenner
70 PINE STREET

Beane

NEW YORK 5, N. Y.
'

major

disposition
conclude

currently running at
importance

controls

of

gap

some

were

in

the economic
recession here
deterioration in Western Euchange

a

situation, such as
or a

a

effectively apthrough the Or-

widening
trade

cf

tion, by increasing their essential

payment,

imports and by absorbing re¬

the

and

area

areas-

dence in itg conciusion that genuine oroSress has been made toin

establishing

the

conditions

multil|teral

which

trade

and

payment may be made worldwide,
the

and

dollar

deficit

removed,
a

market

b* acclpnLed

remains t0

r'Hpn7nHa hi "nnTnnrahil

before

a

Je£f"X?*1Jl,?™ nr2hWi
h?
ac^ed d°"ar Problem can bt
r3n

In

interpreting the current im-

nrovement, account must be taken
of

number of facts.

a

It has been

accompanied

by a favorable
change for Western Europe in the
"terms of trade"—a decline of im-

Prices

p0.rt

relative

to

in

that

some

the

quarters

world's

dollar

conclusion

gains plausibility*

from the fact that, with some

im-

expanding their

be
ex¬

ports.
Surveying the postwar experi¬
ence as a whole, the Commission
believes,

already

as

remains

much

achieve

to

It

balance.

tional

done

to

interna¬

dependable

a

that

stated,
be

believes

that

the

problem must be attacked on
many fronts and that too much
dependence should not be placed
on any one line of attack.
There
is no single or simple solution.
liyj

The final solution WiU pr°bably

dePend even more uPon the ef~
forts _of othpr countries than upon
our own.

continuing
achieve

fa'will involve their
internal efforts to
and strong econo¬

sound

mies and their external efforts to
correct their

international imbal¬

ance.

This

however, is priwith the steps

Report,

marily

concerned

export

that this country can take towards

due largely to the decline

Prices

solving the world s dollar prob—
lem, steps that will foe consistent

?. raw materials prices from the

highJeveL(seated by the outbreak with our own political, economic
®
+rCjn ^ar*
Europe s and security interests. Or, to emi?:wG worsened Pl°y the language of the statute
I f
Tv!ngi under which this Commission was
basically, to the large growth of organized, this Report must deal
^

+

world industrial output

since pre-

with the enlargement of interna-

Sm£"1

countries

the
to

primary

needed

and

di¬

of

ing

a

the

main

ways

of achiev¬

of

"trad^'imbalanceTT'suggests aiso that for a iong time to
come the terms of trade may conlems

one

On Retirement
Thomas

and
prove

solution of the problem

tinue to be

T. S. Evans Honored

by the continu¬

ing
industrial
expansion;
though in the end this may
one

^

*

producing

industrialize

versify their economies. Looking
to the future, there will be a ma¬
jor problem of developing the raw
materials

consist-

a manner
omy

of

urge

of the chief prob-

Here, clearly, is

by

S.

Evans

dinner given

a

and

friends

different

35

associates

dealer

honored

was

by

firms

of his

from
and

25

banks

his retirement from active
business in New York. Mr. Evans
bad been associated with Lee
Higginson Corporation for 37
upon

for the past 26 as Manager
the trading deoartment. He is

an area of
international policy which should

years,

command

a

our

most

serious atten-

ports,

dollar

the

potential

goods

and

demand

services,

for

in

a
free market and with convertible

currencies, could substantially exthe
present "restricted de

ceed

mand.

member of the Security Traders
of
New
York, the
Corporate Bond Traders AssociaAssociation

tion.

to

otherwise

would

that

sources

available for

for

problem has at length been solved.
This

dollar

concealed

a

relaxed and,

this
"Other uncertainties arise from
report is the interpretation of this the fact that, owing to the direct
current improvement. There is
a~festriction abroad of dollar im-

Trading Department




years

rate

Lynch office.

Offices in i06 Cities

there has
marked improve-

past two

.war our

lar
comes

or

abroad

the European
impact of the

previous great rise of
rial

reserves
which is running at a rate of over
$2 billion per year. There is thus

pendulum swung

way,

countries

trom

pre-Korean level, while

an

up

to

.

have, lots of times.

Take Simmon
We got

.

raw

and

But in

Ever played it with some little known bank
stock?
Tried
find buyers or sellers on some issue
nobody ever heard of?

and

multilateral

•-

of $4 billion a year covers up large

himself with the

Against this total should be
credited the current increase of
year.

more

tiveJ

of government the President can't call out
the Army and the. Navy
assert

internal

been

the rest of the world still finds it

The average world dollar deficit

to

direct

has

assistance n0t Primarily through trade relaand
payment restrictions but in

long

form

our

has " much

inflation

of
ol assistance,

m'oeram
piogiam

ou

problem.-

The editorial writers should keep in mind that under

trade

exc

one-

T
a

tarM
laige

so

carried

even

countries

Finally,

$33 billion of goods ward

tary items. This total was equal
than

$5

of

as

running at
billion per

which would be increased if there

w"b its overseas trading

Eisenhower

to stir people.

outside

the(period-,9*3 through

editorial writers realize just what con¬
stitutes a President's asserting himself.
Oh, he could scream at
the Senators, argue with
them, or on a more important issue,

■

forWestern

prewar;

both within Western Europe and

re

1953, the United States

critical about such goings-on.

;

.

^ef ot
and loans

I

B. Randall

Clarence

trade, was given prominence.

"

was

of

rate

the

about

1953,

ary" expenditures abroad are connected with our defense effort,
ganization for European Economic and that the Western European
Cooperation, significant headway countries' own defense programs
has been made toward
liberalizing affect adversely their trade posi-

econ¬

and

omy

of

end

$2 billion to $3 billion annually,

and

been

plied.

it

as

to

the total of

rope's terms of trade. On the other
again with some exceptions, gen- hand, it should be recognized that
eral monetary and fiscal controls major parts of our "extraordin-

dollar

relates

also included,

is

extraordinary expenditures,

prewar;

the

of

checked;

Steel

national

our

financial situation in

have been removed

Co.,
Chicago,
111., the post¬
war

most

improved

the

of

eral

Now,

,

Randall, Pres¬
ident

above

much

world, is also much above

of Clarence B.

by

and civilian establish¬
abroad, off-shore procure¬

Their industrial production foreign gold and dollar

now

the internal

t he)

r

e

Western
have been

eign trade, both within
.Europe and with the

1953,

7,

d

n

tion for the

$3,000,000 survey switched the two Maine Senators
from opposition to support of the "seaway" project. One of them,
Mrs. Margaret Chase Smith, had been saying very frankly for a
long time that she was interested in such a deal.

--is

was

the

countries

making substantial economic prog-

*

'

exceptions,

European

'■■■■■■■III -fess.

constituted

problem,

new

portant

the Commission

disbursements

of

ment, and stockpiling. If economic

and

the

priation of $3,000,000 for a survey of the electric power potential¬
ities of Passamaquoddy Bay. This is the old harnessing of the tides
proposition which even Roosevelt the Great gave up after an ex¬
penditure .of several hundred million dollars. The recommenda¬

moment that I

of

rate

ments

payments restrictions.

only two voted against the St. Lawrence bill.

on

As of the end

running at an
about $3 billion.

were

-military

to

itself. Sev¬
the excellent

$597,700,000 start on a Colorado River reclamation and irrigation
project. It is my understanding the completed project will cost
about $3 billion. But the New York "Times" reports that of the
10 Senators from the five states to be benefited by this project

Also,

annual

conditions in which multilateral trade and payments may be
made worldwide, and the dollar deficit
removed, are by return

in connection with the
Senate passage of this bill.
They have ex¬
pressed admiration, .in fact. There was nothing
Carlisle Bargeron
amateurish about it at all; it was as effective
as if the President, new in the field of politics,
had become a master. One of the first things the Administration
to turn up

1953 these

of
>

White House spadework

was

ex¬

still

are

being made by the United States

Commission, headed by Clarence B. Randall, concludes that

the
least $600,700,000 without regard to

the cost of the St. Lawrence project

did

military

These extraordinary expenditures

passed. And appar¬

eral editors have remarked upon

balanced
(apart from

parent

hope

;

ports), in that large "extraordin¬

ently such assertion of himself is to cost
country at

ele¬

an

present ap¬
position of our

-

Foreign Economic Policy Commission
Says "Dollar Problem" Can Be Solved

Well, the President did assert

which the Senate recently

furthermore,

is,

ment of illusion in the

me, come to me."

breakfast.

for

up

very

ary" dollar expenditures

care

question he should "assert" himself
as
he followed their advice.
*
•

"He's

of

this country.

to

V;;

widespread

so

the impression the editorial writ¬
particularly on what side of a

that you get

.

:

Eisenhower

President

ers

days if when our
sit down to

level

that our imports
sensitive to our level of
national
income, and that, any
contraction here has a multiplied
effect in reducing foreign exports
are

The last 5% portrayed him as being worried about the
defense angle.
An old timer sitting in the gallery,

project.

observed:

high

has shown

ence

very

national
A fellow has

recent

.

imports, relative to
earlier
years,
has been closely
linked with the high level of our
.gross
national product.
Experi¬

strong speech for Taft at the Chicago convention. The day
before the St. Lawrence voting, he got-up and made quite a speech,
the first 95% of which was an eloquent argument against the

a

the

American

Very seldom is the cost confined to the particular project.
Getting back to the St. Lawrence vote the case of Senator
Dirksen, of Illinois, should give you a laugh. He has been long
opposed to the project and at the same time he has long felt that
the Eisenhower Administration was ignoring him, 'he having made
gress.

■

This

Thursday, January 28, 1954

The Commercial and Financial Chronicle...

(458)

There is the further fact

tion, and the Bond Club of New
York,
At the dinner he
with
"To

Wall
1954.'

was

presented

a,Hamilton watch inscribed
Thomas
Street

S.

Evans

friends,"

from
-

his

January

Volume 179

5294

Number

The Commercial and Financial Chronicle

.,.

(459)
that

penditures next

downturn, Mr. Roberts finds that thus far there

during

past two months, I
your patience in being
i 11 i

w

listen

n

t

g

to
talk

the

subject,

department

on

country, has

This is partic-

ularly

t

3

rue

In

the

construction

activity

i

enough

14% ahead of the
before.

year

what is

est

pen.

expenditures

All

that

ilar

tain is that

we

the

slackened

wholesale buying,

of

pace

and in

For

industrial

all

no

We

surprise.

the

suspected

pace

investment

general

wool

in

business

that of
course^
ation in tiying
outlook m your

is

likely.

And

mOVP

.

later

or

have

The

been

•

-

only

when

would occur, how far it might go,
and how long it might last.
Factors in Predictions
.

of

-

a

ction

-

The factors which have precipitated this long-predicted downr
turn

-

i

are

clear enough to everyone,

'

You

us

:\,1

know

how

in

tends-to

a

peak and begun to be cut back,

production. 7

saIs for

in

fu*ther

industries

aiuwmuxment

the

Meantime,

than

most

pect,

any

maybe

Third,

the

ultimate-consumer

ing

plied

economy

particular

things,, so
that his wants, if not wholly satisfied, are at least less pressing.
With personal incomes

increasing, and with
er

borrowing via

instalment

rieht

alsoXkenld salefatreSl
to
fag In the

tended

have

case

of

heavy-weight clothing "sales dur-

taTtte fafl LalTeVfpartlcul

larly

handicapped

weather
mu

by

the

warm

£

4.u

Thus far there

•

is

*

.

no

more

,

proof that

than

an

-at

the

retail

-

;

■

'

address,by Mr. Roberts before the

some

ever-widening
until business

City, Jan. 20, 1954.

v, -

~




7 *

«

will

Down-Swing

a

be

All

this

constitutes, I submit,
impressive array of actual and
potential supports against a spi-

;

an

Despite the large sums poured
into plant and equipment since

raling

these facilities have been

down-swing in
And

omy.

there

are,

our

I

•*

•

*

thorities have been trying to main¬
tain honest money by
putting the

growth, decentralization, modern¬
ization, cost reduction, and tech¬
nical change.
Such planning is
not

likely to be altered in

The vast
on

amount

research is

new

products

business

of

brakes

on
inflationary credit ex¬
pansion, they are very much con¬
cerned in avoiding
touching off
positive deflation. That they are

hurry.

a

money

spent

constantly creating
and

new

standing

methods;

must

concerns

keep up-

on

this

alert

ease

taken

the

apprehensive

and

score was

measures

to-date to remain in the swim.

indicated by the
last

summer

another- active year,
even
though it does not measure up
fully to 1953. - True, the acute

is neither

offer

an

to

sell

nor a

solicitation of

money

ernment securities and the lower¬

ing of bank

reserve

requirements.

Continued

on

page

an

offer

to

buy

any

offer is made only by the Prospectus. /

of these

V

Company, Inc.

$1,000,000
Twelve-Year
Dated

5%% Subordinated Sinking Fund Debentures

January I, 1954

Due January 1, 1966
AND

Twelve-Year
^

Warrants

,

-

to

purchase 100,000 Shares of Class B Common Stock

100 shares
per

to and

up

at

including December 31, 1959 and

100 shares thereafter

up to

Debenture and

a

$150 per
at

$175.

and including December 31, 1965,

Offered in Units, each consisting
Warrant

to

of

one

$1,000

purchase 100 shares.

Price 100% and accrued interest

Copies of the Prospectus

±

Now, it is perfectly true 'bat a
downward reaction, once started,
does tend to snowball in this
ftshion- But the Plain £act is that
no such chain of aetion and reaction 15 inevitable We know from,
oxperience that all recessions, do

may

be obtained from

any

of the undersigned:

.

therG

have

beGn

be n

manv

other

y other.

\

.

.

l*1 biy judgment,; there are
elements of support in the present,;
-

tion.
-

First,

.

7

take

Incorporated

HALLOWELL, SULZBERGER & CO.

BLAIR, ROLLINS & CO.
Incorporated

depressions. The

latest recession of 1948-49 did not,
d

STROUD & COMPANY
BOENNING & CO.

„

*

BATTLES & COMPANY
.

SUPLEE, YEATMAN & COMPANY

Inc.

BOOKER BROTHERS

RAMBO, CLOSE & KERNER
Incorporated

•

THAYER, BAKER & CO.

,

.

government

...

spend-;

Presj?

dent's State of the Union message-

January 28, 1954.

BIOREN & CO.

Inc.

-

PAUL S LYNCH
i

.

THOMAS & COMPANY

Inc.

.

.

.

J. S. HOPE & CO.
*

.-

•

-

to

market through
Federal Reserve purchases of gov¬

Likewise, in the field of hous¬
ing, there is good reason to look

Ritter Finance

dou-

*i

econ¬

believe,

descending spiral
generally is flat on.

the

.

here

Other Supports Against

ex¬

NEW ISSUE

;;

situation that will resist contrac-

level,
-•.*

*An

decline

now

;

theory, the whole
becomes involved in an

ventory adjustment and return to

.

businessmen

the

in-

more, normal competitive
conditions is in prospect.
Distribution

generally

even

not develop

'

anything much

to

longer

no

new consum-

ing and modernization, I find it
difficult indeed to get
very bear¬
ish over the housing construction

bHng up of families. Thus, accord-..

himself has been pretty well
sup¬

with

is

year, and the ambitious
program
which the government
has afoot to stimulate home-build¬

outlook.

moderate.

unem-'

tories into closer line with current

defi¬
mar¬

this

a

ployment cuts buying power;and

there

defense.

ket

unless the slump in
general business goes a lot further

circle.>

requirements.

ability to get goods; and, scanning
somewhat cloudy skies, they'
are naturally tending
to shorten
fcommitments
and
bring inventhe

to

the past.

J >

"

dustries get involved. Many concerns, seeing their sales falling off
and • profits shrinking, begin to
wonder about their plans for
building new plants and installing
new machinery.
People who are
thrown out of work think twice
about buying that new home, and

wholesalers, and retailers are
longer concerned about their

particularly

related

higher level than in

Adding to these factors the
nite easing of the
mortgage

However,

Debentures. The

er ^oods generally,
At - some point even theconstruction and capital goods in- *

no

and

been

.

»

reduces demands for automobiles,;
spphBnces, clothing ^and consum-

*;ers,

some

,he for
tax

jointly by

,

This

Second, the expansion of productive capacity and outpouring

-

'

seeing

been

'

of goods have, eliminated scarcities, filled the business pipelines,
and build up inventories to topheavy proportions.
Manufactur-

~

of

a

has

well continue

the

round

go

in

possibility

business" plant

outlays,

"

to

necessary to

POOfis

reasoning
goes.
Once the process of inven- >
tory-cutting begins in one area,v
it

equipment

at

up and may

.

real

a

stepped

•.

falling orders,
modest invert-

will' land

in

First; the huge rise in govern- Other industries find r they too
ment spending
brought about by must reduce purchases. and trim;.

'national rearmament has reached

I

that

depression.

>

Downturn

-

„

"dines- in various categories ; of
"demand, will set off a chain reac-

- - -: :

^

even

to

money

tory adjustments and modest de-

reaction

^

whether

is

starting with

questions

the

..

a Chain Reaction.
The big question for 1954, how-

down to something less hectic was ' ever,

inevitable.

_

own

Auctions, agreed upon

,

"Will There Be

a

settling

a

their

{h

industry.

own

the

decline

the war,

least, if

°Jhe™Ln maf be'neceLry

swift to be maintained indefinite-

ly, and that sooner
breathing
spell and

of

is to first.consider-; Youehave
a appraise the

too

concede

expen-

Expiration at the same
-tlme of the excess profits tax removes .a roahblock to corporate
e*P1ansi?n ai?d modernization. It
^ soften the impact of any de¬
-cllae ™ Pretax earnings aP°n net,
?
?
w JPore fl.exit)ility for

industry.
retail distribution

as

part of the country

Perhaps most impor¬

tant of all, the general
prosperity
and wider distribution of incomes

compromise may be worked out,
particularly if business continues

an easing in the

sPend-

vou

no

have

was

to

capital goods,
very deep decline in total employmeto, purchasing power, and

of

let-up in the rate at which
have been traveling certainly
as

the

one

another.

homes

more

1

*•

important

of

long

as

3nd

This
we

quarter

high and the economy
^ wen supported by construction

unemployment.

comes

is

and from

,

continues

in the de-

the moderate rise

this

gentlemen

clining trend of industrial production

first

outlays in 1953.

All

are
going through some kind of
readjustment.
This is shown in

and

in the

this—

■

wv?

of this year are 5% ahead of sim-

we

cer-

the

....

{i*j

business
andi equipment

plant

to

liberalized depreci¬
ation allowances and reduction of
double taxation on dividends." In
as

-

government surveys,

for

population from cities to suburbs

investment

worked hard; most industrialists
uauy, increased,
still other factors of
strength in
Let's not forget, either, that actually welcome some easing of the situation.
/while government expenditures pressure as giving a chance for
One of the things we can count
are being cut, back, so also are needed repairs and improvements. on
is that there will be no mone¬
taxes. The drop of 10% in per- To a large extent these capital
tary deflation enforced on the
sonal income taxes on January 1st outlays represent long-range
economy. While the monetary au¬
will enable individuals to keep planning
based
on
population

were

According to the lat-

plans

know for

remember

They include such im¬
portant stimulants to business and

the
con-

dixies oi oui states and munici-

such

period the

same

$67

sum,

materials suppiy capitai

industries,
given

ing the fourth quarter of 1953

going to hap-

George B. Roberts

has

war

accurately
us

year

strong underpinning to the postboom, contracts awarded dur-

nobody's
crystal ball is

tell

a

And

quirements, and

whose

that

to

ahead of

run

the

over

-ago

when you and
I
both
know

clear

sales

store

around

huge

epori^°usly swollen Federal
bud|e^ We all know the crying
?ee<1.,f®r new highways, schools,
hospitals, water systems, and sewer
^tems brought about by our risirJg population and development
® nexY^ residential areas. With a
huge backlog of unsatisfied re-

somewhat,

total of December 1952, but postChristmas trade, as measured by

o

any

more

down

is

Moreover, while Federal spend¬
ing, is being reduced, state and to slip.
municipal spending is increasing.
Construction and Housing Outlook
At $26 billion last year these out¬
lays came to about a third of
Turning from the public to the
private sector, one must, I believe,
°u^

has continued high. Overall retail
sales in December apparently fell
somewhat short of the record high

the

wonder at

slowed

Treasury and the House Ways general
shortage of housing caused
by the war and the preceding de¬
posals are part of a long-range
pression no longer exists. But the
program of tax refoim designed to
population is still growing rapidly,
reduce inequities and
encourage and there is a great
shifting of
incentives.
and Means Committee. These
pro¬

government

like.

"boom and bust."

though

the

expenditures, addition, there are the reductions have
created a desire for better
unlike
private expenditures, do scheduled under present law for
homes.
People
are
no
longer
not tend to spiral downward in a
April 1st in the regular corporate satisfied to
live in the older obso¬
recession.
They are more likely income tax and in certain excise
lete houses, with their inconven¬
to increase, due to greater out¬ taxes.
While the administration
iences and
unsuitability to modern
lays for unemployment insurance, has opposed allowing these reduc¬
conditions.
In short, replacement
farm
price
supports,
and
the tions to become effective, some demand for

still high level of housing and industrial
plant outlays. Concludes, situation does not bear usual hall¬

After the torrent of forecasts to
which we have all been exposed

This

economy.

no

a

a

a

that

is

ernment spending; (2) offsets in reduction in Federal
outlays
from increased state and municipal
spending; (3) tax reduc¬

marks of

antici¬

spending of which will be a
'tinuing strong prop under

proof that there has been anything much more than an inven¬
tory adjustment and return to more normal competitive condi¬
tions. Claims there is not likely to be a chain reaction
produc¬
ing a depression, because of: (1) continued high rate of gov¬

and (4)

year

billion.

'

After reviewing factors which have led to predictions of busi¬

tions;

Administration

reduction of about $5 bil¬

This,
however, will still leave total ex¬

Vice-President, National City Bank of New York

ness

a

lion in Federal outlays for the fis¬
cal year starting next July 1.

Can Resist Contraction!
By GEORGE B. ROBERTS*

the

pates

Present Business Situation

11

S. K. CUNNINGHAM & CO.
Inc.

55

^.uvrum

12

The Commercial and Financial Chronicle...

(460)

'f

•.ur

and

Policy

The Investment

self

Foi the Fntnie
■i

'

-

'

,

■

political structure calls for new investment policy embodying
the following basic points:
(1) no fear of major business

and where

we

going.

are

There

is

no

-

that

doubt

political

our

economic

and

has

structure

been

ing

chang¬

for

time

some

and

now

indications

that

are

new

a

eliminate

the

ments which

undertook

...

clearly

.

lined.

Being

state, it

in

is

out¬

indefinite

that

best be discussed

can

as

direct.

to

country, and is

The

change

It still has to

theoretically formulated and

in

this

words,

and

has to be given a name.

even

simple

On

but hopeful note,

intangible

we

base

can

our

confidence that

there is good reason to be

istic

future

the

on

of

optim¬

our

be
on

level

It will just
relatively high

of

a

The

tuations.

smaller fluc¬
well-being of in¬

according to

to_ all
With

this

the

econ¬

policy for the future,
necessary to cease thinking

is

as

statistician

a

and

even

effect

try to be

economist

and

philosopher'and
historian, at least for this purpose.
a

permanent

could have

we

boom

the

of

prevalent in 1929 and in

type

more re¬

cent years.

possible to attract and hold such
accounts.

"Another matter which

t h

requires
consideration
is
Regulation T of the Federal Re¬
serve Board, which now
prohibits
the acceptance of securities
not
traded

e

issues,

of

that

far

the

amendment to

have

we

scious

ot

roads.

been

One

jthe old

only

explicitly

con¬

alternative
going back to

two

was

principles

of capitalism,

With their dependency

upon free
play of "natural" economic forces

which

Obviously did not work as
as
they should.
The other

well

that of

was

socialism, which is

a

bit vague and entirely theoretical.
Attempts at its application in its
various

forms, such as Commu¬
Nazism, Fascism and Fabianism, did not as yet resolve
into anything practical and
ac¬
ceptable and in keeping with the

nism,
;

R.

time.

regressions rather

be

to

far have

On

Our

It is thought that unknowingly,

by trial and error, we have been

developing

a

could

us

new

way

forward.

which
This

have

Amott

such

with

confused
conditions.

the

on

more

temporary

be

just

that

two

alternative

claim

can

Smith
are
is

social

■

:

either

Adam

Marx's

interpretations
applicable to this life, which
s

or

built

In

that

on

and

particular, the improved

exist in their time.

and

is

economic

evidenced

economic

factors

in
as

and

social

wel¬

laws

and, most im¬
portantly, the great dynamic urge
to

progress

new

conquests

through science.
Underlying Strength

Translating
into

there

that

strength
day

these

intangibles

investment policy for the
future leads to the opinion

an

near

com-

and,

Just

as

writ¬

(economic
and

to

is

the

an

underlying
of this
individual

economy

while

the

pass,

lu I
that

munications started another

ail

.




sharp

•

u

PreCeding maj°r

as

long

since

all

we

agree

considering this
meetings of our

Governors,

a

as

collateral for

that

on

Speaking

these topics,

ter

and

our

in

a

members,

been

expressed

category of Over-the-Coun¬
securities

with

particular
qualifications could be set up, and

pound;

changing

Practically

this suggests

a

in

grant

collateral

be

should

be

stability of the
and there is, in addition,
problem of sterling area ex¬
change reserves which, though
are

by

abroad to lend wisdom to an im¬
mediate
dash
for
freedom.
On
both counts, it is the dollar coun¬

time is

ripe to reduce tariffs,
formalities, and other
tape now hampering interk
national trade.

tries

red

doubtless

on

converti¬

bility

McCleary Co.,
New NYSE Corporation

of

cur¬

a

requisite

t

o

healthy inter¬
to

appears

the
New
York
Stock Exchange. Officers will be
George M. McCleary, President;

time since the

of

Jr.,

Mr.

wartime

is *

any

-

of
ex¬

change control

member 'of

McCleary

at

imposition

;

T h

the Exchange, Vice-President; apd
Treasurer.

roughout

most

James Muir
course,

of

his

remarks

the

of

world.

a

partner in the Florida Securities

will

be

nomic

In

Mr.

the

Muir

said: "Since the end of the war
a member of the Phila¬
delphia-Baltimore Stock Ex¬ the world's hopes for convertibil¬
ity have waxed and waned with
change.
Britain's

exchange

with

day

lions and

Joseph McManus Co.
Expands Wire System

tain

can

,

able

as

and

reserves.

at $2,520

reserves

To¬
mil¬

steadily improving, Bri¬
afford

once

more

to

con¬

.,

•:

■

an

eco¬

Elects Officers
PHILADELPHIA, Pa.
mond E. Groff of Brown

&
Co.,. was
elected
President of the Philadelphia Se¬
curities Association at the annual

meeting and election of the

asso¬

ciation. Mr. Groff succeeds Wil¬
liam A. Lacock of E. W. Clark &
Co. whose term
expired.
Other

officerselected

were:

Vice-President, James T. Gies
Smith, Barney
Lewis

P.

Baker &
E.

of

&

Co.; Treasurer,.
Jacoby, Jr. of Thayer,
Co. and Secretary, Robt.

Daffron, Jr. of Harrison & C«K
The

following

elected

were

to

three

"I think
and

pound

we can

say

that Britain

here partners in the sterling

area, as

well

as

most of her NATO

not

election of

only

accepted

desirable

convertibility

in

Governors to

The annual dinner of the
ciation

as

of

serve

year terms ending in
1956: Spencer D.
Wright, 3rd, of
Wright, Wood & Co.; Francis M.
Brooke, Jr. of Brooke & Co.;
Mr. Jacoby and Mr. Gies.

partners in western Europe, have

of

—
Ray¬
Brothers,

Harriman

Board

was

held

new

asso¬

following

officers and

the

mem¬

bers of the Board of Governors.

and

coast.

Wellington Hunter
Withdraws from Firm

"I believe the time has come for

the
of

Paul

Brown

dollar

good

area

faith

to

by

show evidence

reducing trade

Wellington Hunter has retired
from Hunter Securities Corp., 52

duties and in the form of customs

Broadway, New York City, effec¬
tive Jan. 22, 1954.

formalities and red tape. The dol¬
lar area must in addition show

With Paul Brown & Co.

with

as

a

r-

the

the

Portland,
principle,
but
Blanchett, Hinton & have in fact subjected themselves
to the discipline in their domestic
Jones, Inc. of Seattle, Washington.
With these additions, the firm's monetary and fiscal policy which
Correspondent Wire System ex¬ is one of the prerequisites to con¬
tends to 25 cities from coast to vertibility.

Ore.;

move

as

Phila. Sees. Assn.

for

freeing

strength rather than weakness.

change and other exchanges, an¬
nounce
the
expansion of their
Private Wire System to J. W. Tindall & Co. of Atlanta, Ga.; Zilka,
Inc.

removed,

freedom."

sterling

bers of the New York Stock Ex¬

Co.

to

well

with the great advantage that now
she will move from a position of

sider

Joseph McManus
&
Co.,
39
Broadway, New York City, mem¬

&

are

political body
towards the twin goals of welfare

Co.; he is

Smither

fears

given a continuation of the
present rate of progress in dollarshort countries, the two great eco¬
nomic blocs in the western world

be

Central Avenue, as a new member

,

the,
fears of

national trade,

Mc¬

than

Knapp,

overcome

and

closer today

Arthur

can

pre¬

rency,

Cleary & Co., Inc. will be formed
as of Feb. 4,
with offices at 556
corporation

considered

well-founded,

"Once these

i

stated

that

To Form

that

still

informed opinion

friends abroad.

our

dent

—

to

stant threat to the

appreciation

ST. PETERSBURG, Fla.

privilege

insufficient

ers

and

based

T

Bank of Canada tells sharehold¬

common

cautious

a

Regulation

securities."

customs

should

the

with

improving,

The selection of individual
It

to

with

Board

James Muir, President, of Royal

speaking,

stocks only.

(3)

amending

such

Reduce Trade Barriers

fulb placement of

funds

discussed

Reserve

view

will be destructive to fixed value
securities.

matter

Federal

the

which

values

money

the

Urges Dollar Area lo

Fusz Schmelzle Adds

barriers both in the form of tariff

system will approach, ^. ST.
LOUIS, Mo.—Elmer J. Giethe breaking point the
selman
has
become
associated

depressions'"

printing were
cornerstones of progress, the ap¬
plication of electronics to com*

This

labor

and then

word

social

parts of it may be subject to un¬
such greatly changed pleasant adjustments, it does not
physical background. necessarily follow that the entire

munications, both physical and of
ideas, is a force which did not
ten

of

insurance

ment

are

roads—those of capitalism and so¬
cialism.
No unprejudiced student

many

agricultural price controls, social
security and pensions, unemploy¬

boom

there

control

we

In

recent

thought has

in

physical phenomena,
beginning to direct a

visible

This opinion is based

conviction
than

to

to

that

of

the

different ,Ronald A. Beaton,. Secretary and

way

in

Counter securities

and

elements.

to

not

same

learned

are

structure which may grow into a
better economic and political lifej

nature,

vastly

strength and more so
greater resiliency and con¬
adaptability to new con¬

ditions. -In the

fare,

permanent

is

inner

scious

country is in the process of long
range building of a new economic

of

chemi¬

constructive

economy

number

Our New Economic Structure

un¬

(steel, rubber

now

side, we
disagree with those who make a
parallel of 1929 with the present.

we

lead

the

natural

than progress.

to

has

sure

general meeting of

to

atmos¬

war

merchandising,
cals, etc.).

its

so

favorable

motors,

its

cultural

efforts at the solution

proved

the

abated up

in

and

return

phere of operations continued

m

and

plishment
our

where

accom-

scientific

.

general

a

time

am

against.

matter

Board

Harry

to

the

more difficult profit making.
In
fact, we believe that a number of
companies may give us a shock
by the steepness of the declines
in their profits in 1954.
This par¬
ticularly applies to the groups

social conscience
In fact, all of such

!

of

cently with

I

Reserve Board, which would per¬
mit
the inclusion
of
Over-theloans.

use

was

-

ated

T

of the Federal

'

realistic.

past half century, there

there

ever

Over-the-Counter issues
comparable to issues traded on ex¬
changes should not be discrimin¬

that the basic
Addressing
the
58th
Annual
We agree with the pessimists play of the forces will be both
was
ample evidence to indicate
that we
are
at
least for now constructive and destructive, de¬ meeting of the shareholders of the
that the world was working itself
Royal Bank of Canada in Mon¬
headed toward a period of slower pending on the status of the in¬
into an impasse and was at some
treal recently, James Muir, the
dividual company or industry in
kind
of crossroads.
New paths expansion and not as great busi¬
bank's
Presi¬
ness activity as was prevailing re¬
the overall scheme of things.
had to be blazed and cleared. So
In

that

passed.

an

Regulation

exchanges, for
If

jus¬
tification for such broad
prohibi¬
tion against all
Over-the-Counter

Dealers, along
with

on

collateral.

Philoso¬

sociation

be¬

we

lieve

that which may be caused Mr. Amott stated:
unpredictable and uncontrol¬
"We think that the NASD might
lable catastrophes, which is out¬
give consideration to liberalization
side the sphere of this review.
of the '5% Philosophy,' particu¬
(2)
Common stocks are the larly insofar as the small investor
logical
medium
of investment, is concerned. As you know, the
both because they give high re¬
turn and also because they pro¬
vide the means for participation

by

stocks

The Pessimistic Side

of

accounts

more

than

a

So,

with

thought would be
though this is an

in

Jan. 28. Harry

Securities

V (1) There should be no fear of
major business depression other

it

lost.

main

Association

on

phy" of the

posed investment policy must in¬
clude the following basic points:

investment

the

and

facts would

and

cause

City

National As¬

pro¬

timists who think

confuse

omy.

as

servicing and maintaining
is
proportionately
costly, and it should be made

small

liberaliza¬

"5%

their need.

background,

securities

cost of

York

Associa¬

tion

activity with much

investment

of statistics

only

Dealers

New

11 of

m o

the

prosperous.
a

attempt to develop an up to date

tion

presenta¬

the

&

growth and development of
the
country,
apart
from
the

because

of

tion, called for

when

times

other

be

Shedding the philosopher's
cap and returning to the practi¬
cal, this means that one should
be in the middle, between pes¬
simists who expect a replay of
1932-1933 depression and the op¬

abstraction

an

Over-the-Counter

Amott, Baker
Co., Inc.,

pros¬

a

least in this

product of doers

a

and not of thinkers.

explained

yet

move¬

caused by inert

were

is already upon us, at

been

but

such condi¬

not understood and which

already
as

economic

of forces which were
nobody

acceptance

be

not

R. A

called

be

Dinner

New York

This force is giving all of dividuals will continue
to
be
us
an
increasingly clearer con¬ equalized and standardized. Para¬
ception of our place in the scheme doxically, through taxation, we
of things and our inter-relation¬
shall
be approaching the
com¬
ship and dependence upon each munistic idea of getting from
other.
This understanding, when
each up to his ability and giving
broadly scattered,
should help

has

laid

not

of

use

his address at the 28th An¬

Security

re¬

edge.

pattern

Milan D. Popovic

In
nual

it will

will

knowl¬

permit

President of

not

human

accumulated

of

to

because it is a contradic¬
tion of terms; it impljes that there

utilization

mass

added

Philosophy" Needed

collateral for loans.

perous

1
by

should

tions

be

climb upward

the

for

The economy under

selection of individual issues

should be cautious and realistic.

the season, it is
thought that this is a singularly
appropriate time for some contem¬
plation of the state in which we
are at present
from

Apart

amended

sponsibilities of the state.

stocks, because of their high yield,
participation in country's growth, and changing money values,
constitute logical investment medium and warrant full use
funds, and (3)

economic

our

by

needed

funds

depression; (2) common

of investible

actions

Thursday, January 28, 1954

Harry R, Amott, President of New York Security Dealers
Association, also urges that Federal Reserve Regulation T be

broader gov¬
which will in¬

state directive.
In
turn, because of human frailty
and political expediency, this will
lead to declining money values as
indirect capital taxation to raise

■

,

Liberalization of "5%

and

more

potential

country's changed economic and

maintains

executive

Fund

maintain-1

of

utilization of

volve

Economist, Blue Ridge Mutual Fund, Inc.

Vice-President and

into

ernment

POPOVIC

By MILAN D.

responsibility

,

ing the prosperity by any means.
In practice, this will resolve it¬

v

&

Co., Paul
Brown Building, members of the

undertake certain
;
(Special to The Financial Chronicl*)
sPec*al investment element New York and Midwest Stock Ex¬ responsibilities in the interna¬
BELLEVILLE, 111. — Oliver J.
tional monetary field.
'
Ruhmann has become associated
changes. Mr. Gieselman for mainy
willingness

to

.

•

®veral! Picture is the fact

both political

of us,

parties, in fact years was with Friedman, Brokaw ! i' "There is the problem of the with Fusz-Schmelzle & Co., of Stt
have accepted the need & Co. and. its predecessor firms.
sterling balances with their con¬ Louis.
~

-

Volume 179

Number 5294.. .The Commercial and Financial Chronicle

(461)

"^-making

nGRMT U"S

Detroit,Mid,
°fstandard

fh *+t v i( '/'A, if I ("V i

stcel
of

Where bottle

cars

mix

a

srm

A,«

CORP

;

wturoN srm
comp,

dJ?r.SUpP''er

and

products

applications

in

i^u"nrf

«■S"'w;Va-

takes

a

STRAN-STEEL DIVISION

help

InTE^'CkandTerreH »ute
QuonseTbu-|f?CtUrer °'

molten cocktail

IRON ORE
co

^mous

Cleveland, 6hi0.

especially

one

as

big

to
as

hold a steel plant,
Great Lakes Steel,

division of National Steel. Here materials

Lined with firebrick, these
somewhat like

must

keep their loads in

frequently be moved over considerable distances,
one
part of the plant to another. This calls
speed and

all the
are

to

a

ingenious

molten

state

cars operate

bottle, and

vacuum

for

many

accuracy in material handling if
carefully meshed steel-making operations
be kept in balance.

these bottle
iron from

four

a

cars

needed

are

single tapping of

to

Prod

from extensiv

the Great
Lake

can

the pig
of Great Lakes'

transport

one

'«

hours.

The magnitude of this
steel-making operation is
emphasized by the fact that three and one-half of

from
for

gigantic

a

ore

"P

lot of
space

lv-Ws

°r'«hp«,znmwr?c

!ro"

It

structure

J* WNNA
New

FURNRCE

Buffalo,
"ace

of

giant blast furnaces.

y0rk

division

van„r

m

CORP

'

*

^,,r"

f

;P:

/pes ot

p,g

Jron

An

example is the giant bottle cars used on
Great Lakes'own
private railroad. Holding more
than 100 tons of molten
pig iron in a single load,
cars such as the artist has
pictured here transport
the "hot metal"

over

two

Here,
Steel

ment to

in all its far-flung operations, National
the

most

produce

modern methods and

more

equip¬

and better steel. Completely

integrated and entirely independent, National

miles from blast fur¬

Steel continues

to

open hearth furnaces where it is com¬
bined with other materials and made'into steel.
naces

as

uses

to

go

forward in the vanguard

of steel progress. *'

r

BR

FIONA! STEEl

"ouston,

PRODUCTS CO

Yexas

IV

l

aaassfi*

NATIONAL STEEL

CORPORATION

GRANT BUILDING

PITTSBURGH, PA.

,

•

NATIONAL
STEEL

AN

INDEPENDENT




COMPANY

OWNED

BY

MORE

THAN

19>000

STOCKHOLDERS

13

and Financial Chronicle

The Commercial

14

Thursday, January 28, 1954 *

...

(462)

of

production

We Can Increase Consumer

One-Third

Purchasing power is created by

New York

economist, contending that by increasing
can have a prosperous 1954-55, with

agency

demand

we

improved government finances under lowered tax rates and

factors pointing to
the

In

increased sales opportunities, and

"intensified selling is needed in

cludes

how

right

selling
a
higher stand¬
ard
of living
to

Ameri-

our

c a

popula-

n

tion

that

so

decreased

tional

i

i

h

1,

n-

con-

s u m e r

base

pur-

We

s.

do

not

need

to

have

Johnson

inflation

our

abated

because

less

these

been

favorable

are

factors

" leV6'S °'

prosperity

Actually the key to
fense and
in

because

or

have

unfavorable

than

both.

Ex¬

endanger

na¬
serv¬

increased

markets

for

heavy

growth

healthy dynamic

a

with

line

in

rapidly

our

is not

impossible but

neither is it inevitable.

of business manage-

Hesitancy

ment in carrying out plans for
aggressive marketing, unnecesof credit,

restriction

sflry

£oods

budget lies

p™* for

ex3£j~

Third Higher

Standard

.

nression

ard'of Uving^iffo

Our stand-

far above

"he

of

Living Possible in Five Years

could be deferred for some time
at the will of the consumer with¬
out
real
hardship.
This could
happen in spite of record high

instead of contracting standard of

have the opportunity to keep our

power—for

liv^'

growing.
The magic of consumption offers
an
opportunity for utilizing our
increased
productive
ability in

0my

for

a

the

and

we

dynamic

economy

and

positive form
standard of living.
Instead of the

depression

of

better

a

widely predicted
of

our

productive ability and
purchasing
power

present

sales

over

yond

the

immediate

10%

In terms
lars

points to just the opposite—to an
immediate opportunity for a 10%

increased

sales

of

consumer

services and thus in
standard of living in 1954-55.
and

goods
our

in

And

this

could have

services

effect

con-

goods

and

to

provide

rates;

and on industrial mar-,
through stimulating needs for
further improvement in productive facilities

the

Federal

Budget

and Lower Tax Rates

Federal

revenues

are

depend-

almost

ent

entirely on the curlevels of
personal income

rent

corporate profits and certain

con-

purchases. An increase of
only 10% in total consumer pur¬
sumer

chases

of

1954-55

billion

the
we

goods

from
in

and

the

1953

various

ulation
Gross

in

our

in

could

level

would

bases

services
so

for

of

in

$230

broaden

taxes

popu-

could

1953

But^h^anlil^siVwUl^owThat

the

EL

next

bevond

living approximately one-third
higher than at present.
,

,

f

.

nanae

thr LmedlaL

amount

offset defense drops

to

necessaly t0 otlset detense dlops'
Factors Pointing to Increased
Sales Opportunities in 1954-55
Here

point

are

to

some

an

increase of

increased

sales

,,

.

the

;

levels

,

_

reached

1953 will

Q)

p

t

t

uoint

to

.

,

l954-1955

a

1953. This would mean about $276

tax

rates.

Eliminate

profits taxes.

corporate profit
rate from 52% to 47%.

'An

address

tax

Johnson before
<the Standard & Poor's Corporation
Ad¬
vertising
in
Action
Conference,
New
York
City, Jan. 14,
.954.
by

Mr.




94%

1940 and
1953. Real

above
above

10%

purchasing
power
continued to
increase right to the end of 1953
when
the
index of wages and
salaries was 5% above the same
period of 1952 while consumer
prices were less than 1% higher.
(5) Early in 1953 there were

(con¬
with in¬

5Vz times as many families

units)

spending

sumer

there were
1941. The 31.9 million with in¬
$3,000

over

comes

represented

the
54
million
total
in 1941 the 5.7 million

of

whereas

only

represented
39.3 million

141/2%

of

the

total.

spending
power which reached a level of
$138 billion in 1953 was. over five
times as great as the $26.5 billion
Discretionary

(6)

in 1940. That is the

surplus spend¬

and above what
would
be required to supply a
per capita standard of living for
ing power

over

basic necessities of food,

clothing,

equivalent to the 1940
of living after

and shelter

standard

actual

(9)

ment

after taxes—enough to inconsumption by over 10%
above the 1953 (average) level of

present level of consumer credit
worries some—it is over 3 times
the

billion

$8

has

power

credit

a

1940 and well over the 19d3 rate
billion to $18 bil-

level of

discretionary

consumer,

five-fold.

the

by

expand

1940. But
spending

increased more than
ratio of consumer
discretionary
income

The

to

now

is only

31%

in

18% compared with

1940.

.

Total consumer debt is low
in relation to disposablel income
vand accumulated savings. At $89
(8)

billion, at the start of 1953, total
consumer
debt
(including farm

lion).

only

mortgages) represented

and home

1953

1st

Quarter Prices

War

Prewar

' iconomy

Postwar

Peak

Low

Defense

Op

portunity
1958

1940

Gross

national

Defense

_

Nondurable goods
Services
_

(millions)

142.3

14.4

48.9

40.0

_

____

_

_

25.7

15.5

49.1

159.5

193.6

9.6

43.7

28.6

21.2

6.4

80.9

consumption
Durable goods

G.N.P. per capita-

$400.0

16.0

Personal

Population

$348.0

140.6

investment

_

1952

$278.3

31.0

government expense

Private

1947

$323.7

4.8

__

1944

$202.1

product

Liquid assets of consumers
not including cor¬

four times

40.0

290.0

25.5

26.6

34.0

97.1

107.9

118.8

163.0

52.8

60.2

72.7

93.0

132.1

138.4

144.1

157.0

171.0

$1,530

$2,340

$1,930

$2,215

$2,340

now

level

of

total

1940

bonds,

or

the

with

double the real purchasing power.
The increase alone of $143 billion
in

liquid

consumer

from

assets

$50 billion in 1900 to $193 billion
1953

in

IV3 times the present

was

value

all

of

listed

stocks

corporate

the

on

New

Exchange—yet,

in

York

spite

Stock

of

this

vast

purchasing power, only 7%
corporate stock.
(10) Liquid assets of business

own

any

also

is

with

four

times

level

1940

the

the

double

purchasing
power.
The net working capital
of corporations, after taking into
account the

liabilities

in

increase

short-term

or

debt, is

over

three

times the level of 1940.

corporate debt,
of 45%
our national production in 1929
and 43% in 1940, now is at a low
level of under 20%
of a year's
Long-term

which represented a ratio
of

national

production—long-term

debt could double be¬
reaching 1940 relationships to

corporate
fore

production.

Corporate earnings, before
in the third quarter of

taxes,

1953,

at an all time high
billion—an increase of

were

rate of $46

24%

the

over

1952

with

—

or

of $5

taxes,

taxes, at

four times the 1939
billion. This net, after

$21 billion
level

of

period

same

net, after

50% higher than the
in 1946, the year of
dip, and was
higher than the $17V2 bil¬
was

$14

billion

the

stock

19%

market

net

Also,

corporate
the

double

are

1952.
earnings

third quarter of

in the

lion

ratio

prewar

to

corporate debt (in
1940 the ratio was 15%; in 1953

net

long-term

the ratio
All

that

was

indicate

factors

relatively small increase in

a

purchases would more
any threatened cut in

consumer

than

30%).

these

of

offset

expenditures,

government

that the level of

and

purchasing power

is

high enough to warrant more
aggressive marketing.
And

consumers

continue to re¬

In spite of
predictions of what
happen after the Korean

spond to selling effort.
the

gloomy

might

trade of De¬

the Christmas

truce

cember,'

1953, reached an all time
peak with volume exceeding the
"boom" peak of December, 1952.

of

Living

and

Over

Next

Few

Standard

In

Expansion

for

Pressures

Hidden

Production

Years
are

seven

powerful, but

largely hidden, internal pressures
for

expansion building up in our
In some the pressure is

economy.

explosive strength.
All
a strong influence dur¬
ing the next few years, both cul¬
turally and spiritually as well as

nearfng
will

in

have

material

the

sense.

These hidden pressures are:

(1) Change in the discretionary
power of
the mass of
population — now over five
as great as in 1940.
Discretionary
spending power

spending
the

times

(the amount of income
what

above

would

and

ings

44%

of disposable

In

1929

debt

come.

doubly high ratio of

stood

in¬

at the

is

and shelter)

great

as

72% of sav¬

how

is

in

with incomes
over $5,000 owe
57% of this debt
but hold also 56% of the liquid
strong hands. Those

assets

income.' The

rent

group

1

53% of cur¬
middle income

and represent

of $2,000-$3,000

with 41%

the

use

with

35%

population

this

new

pre¬

learns

purchasing

the standard of living can

production.
Change in

our

65%

debt

consumer

five times as

over

expand into increased markets for

1940 standards.
Total

to

power

up

.

over and
needed to

in 1940 and represents
disposable income after

As

war.

total debt now could
expand one-third before reaching
This

ings.

be

supply the 1940 per capita level of
such necessities as food, clothing,

of the $250 billion of 55% of
savings and 36% of taxes compared

35%

disposable income after taxes. In
1940 the ratio was 49%
of sav¬

30.0

52.4
218.1

■

have

but

'

of between $17

Consumption—In

of

income

assets.

porate stocks

There

Consumer credit — instal¬
sales, charge accounts, etc.

debt

consumer

of liquid

taking into account present prices.
This could reach $160 billion in
1954-55 or
6 times the
prewar
(7)

31%

at $193 billion,

as

$3,000

over

comes

crease

(Billions)

Other
excess

Reduce

purchasing power, after ad¬
justment for present prices and
taxes, was at the highest level in
history and was 75% greater than
the
best
prewar
year
1940. In
1954-55
real
purchasing power

low

accumulated
Production and

even

lower

pur¬

real

come

Expanding

yield at the

purchases.

consumer

75% without
,
becoming overextended in rela¬
1evel tion to discretionary income. The

LSnftJ, J LtJ
° $387 billion of total production

.

m

mean

that

provide a surplus from the
$75 billion such a level of busi¬

13%

hold

under $2,000, owe only 7%

the

At the 3rd quarter of 1953,

—could

Pr°duction level actually reached $230 billion up to $256 billion and
per caPi*a }n 1944 when our tools still allow a high level of over $20
Producti°n were far less ade- billion in personal savings (over
Quate. Only 1% per year increase five times the level of personal
in our per capita
productivity s^Y*ngs ,of $?;7 billi®n
PYew?r

Balance the Federal budget—

would

oppor-

tunities*

pne-third_in the standard of liv- billion of disposable personal in*ng by 1^58 should be considered
a minimum opportunity because it
would require only reaching the

first quarter of

of

advertising.

(4)

of the facts that

'level of productivity neces- 0r an increase of 4% over the
sai;y to provlde for a. continued level reached in the middle of

over

of

36% of the

owe

and

The

assets.

group,

level.

could:

ness

the

over

for expansion far

years

necessary

standard

a

exists

opportunity

the

of

Th

government

declining

to

tures

$400

of

provide

for

a

of

terms

power

pop-

mean

Product
in

1958

and

by

171 million

1958

National

billion

dol-

capita pro-

per

strong defense and

10% Increase in Our Standard
of Living
in
1954-55
Could
Balance

divided

A similar

ductivity for

1953

productivity
$1,530 in 1940 to
(Real Gross Na-

Product

lation).

five

.

purchases. Our standard of living

constant

1944

purchasing

kets

A

in

dollars,

defense;

within

capita

from

on

strong

a

$2,340

of

per

fi-

government

on

ability

in

truly magi-

a

and lowered tax

nances
our

for

demand

eumer

cal

increase

10%

our

tional

S°vei*ument and defense, expendi-

1954-55

third

a

standard of living
years—by 1958.

consumer

increase

higher

in

have the broader real

for

...

..

op-

opportunity

increase

..

....

.

That 1S ™hy distribution, with
its aggressive selling and advertisin£> must Play a critically imP°rtant Part .lr} our economy during tbe transition from expanding

the next few .years. Be-

portunity

analysis

my

an
expanding econsubstantially greater

with

level

chasing power now is
consumers'
purchases

59%

pro-

ductive ability and in purchasing

This analysis will show that the

exists—both in

the

in

opportunity

production—now, through
magic of consumption, we

in

Yet

bil¬

cut of $10

a

government

lion

purchasing

acle of

the mir-

experienced

to offset

than

the

have

the 1953 level of $230

over

billion

more

v

power and
many
strong pressures for an expanding

We

in consumer pur¬

increase

chases

less than

it would take

now

5%

a

recognized

generally

not

is

It

that

be

bare subsistencecurrentthat a large
level purchases
proportion of

perity Instead of Depression—
A

our

over

level of 1940 to 1947.

ft7rf HownZd cycTe-laree

conCedCng dXse §

higher standard of living for
the American people.

38%

advanced by
prewar
highest

living

of

could

.

a

ex¬

total real

cut feared now. Yet our

gerated fears of effects of cuts in

^^^0^ beTe^^sfanj P^hSogtoL Wecouldtalkonl
uals
oe tne quickest ana *'
*
a

defense

in

cut

a

penditures the equal of $128 bil¬
lion in present prices—or over 12
times the maximum of $10 billion

and

Recession

and services, increased profits for
corporations and increased -em-

^afbudgeTand

peak of 1944
low of 1947 we

war

postwar

survived

unem¬

capability.

contrast, encouragement of
higher standard of living with

its

of

the

such that
could be
growing ability.; That means a
expanded much more than this
higher standard of living based
5% through aggressive marketing
on
our proven higher productive

Raising of tax rates, or add¬
ing new taxes, could defeat its
purpose
through lowering con¬
sumption and production.
a

ro

both production and consump¬

tion

are

strong de- Peace Can Bring Increased Pros-

a

balanced

a

in

economy

pressures

—

rather

are

stead

through

essential

or

of re-

I A/ hnf

ployment, share the wealth pan¬
or mature economy—but in¬

In

iust
defense needs

security

"7

I

v-» Avu-vi ry

the

Between

and

acea

expenses

There

in

"

to

normals

vious

ices.

any

downswing in
Arno

con¬

forms of tax

taxes.

could

+A

MM 1

stagnation, not regression to pre¬

taxes

inherent

cuts

million higher than

19

about

standard

of

much

too

talked

"normal."
What we
really want is not stabilization or

have received

new

or

saies

dangers
treme

creased

c

increase

as

rcliases

p u
w

such

merit

govern

for

attention—(1) cut

(2)

,

turning

strong defense.

higher rates

of set

can

we

4-1

Only two methods of balancing

or

one-third

living

"stabilizing" our economy

tax rates by

billion

$50

the Federal budget
much

have

We

Provide

give our people a

of

higher than at present.

10%; and:
tinued

have the purchas¬

can

we

standard

-

of

that

1944

ing power to

con¬

1954-55 to energize

Reduce personal
*

for

—

in

magic of consumption."

continued and
increasing prosperity in 1954-55
the
nation
faces
a
major task
building

add to

If we
utilize our productive ability only
up to the point proved possible
our

Lists

dynamic growth in both production and consumption.

can continue to
real purchasing power.

capita

per

expanded productive facilities, looks for a higher standard of
living by one-third within five years.
Holds what is really
wanted is not "stabilization" or "stagnation," but a healthy
ten

was

for

the

Vice-President and Director of Research,

consumer

liquid

debt

consumer

prewar average of 36,140,000
production.
Our increased pro¬
in 1939. Unemployment, in Octo¬
ductivity has made possible an
advance in our real standard of ber, 1953, was at a postwar low of
living—even after adjustment for 1,162,000.
(3) The possible maximum cut
inflation and
in spite of many
of $10 billion in defense expendi¬
crippling restrictions on produc¬
tures would be small in relation
tion and incentive. Further utili¬
to the drastic cuts we experienced
zation
of our productive ability
after the end of World War II.

By ARNO II. JOHNSON*

Advertising

ofj current income

this season of year at
62,242,000 and the non-agricul¬
tural
employment at
55,082,000

More?

Buying by 10%!
Walter Thompson Company,

Post Korea employment, in

(2)

October, 1953, reached an all time

hgh

Can We Consume

J.

billion

$400

over

annually by 1958.

(2)

of

than

our
more

in

the age make¬
population—with over
children under five

1940—and

continqed

the

of population.
huge increase in the num¬

rapid growth
This

ber

of

children

public outcry

soon

against

Continued,

will

cause

inadequate

on

page

'51

Volume 179

Number 5294

...

The Covtmercial and Financial Chronicle

Only STEEL

can

(463)

!».'

do so many jobs so well

World's Largest Double

Swing-Span Bridge.

The George P. Coleman Memorial Bridge

the deep swift York River between historic Yorktown and Gloucester Point, Va. Two
500-foot swing spans, each weighing 1,300 tons, pivot horizontally on piers 44 feet in diameter,
swinging open simultaneously to provide a 450-foot freeway that can accommodate the passage

spans

of

Ready to Roll.
they
a

carry

premium

even

the

largest vessel: This 3,750-foot-long bridge

was

fabricated and erected by U, S. Steel.

Trains move faster today than ever before,

cover longer distances.-This pUts
durability and safety ih the" wheels they roll on.
making wrought steel wheels for railroads

heavier loads, they
on

U. S. Steel has been
for 47 years,

has helped to bring the art of wheel-making to its

present high level.
Wheels

shipment.




Here

you see some

U-S-S Wrought Steel'

being carefully checked for essential dimensions before
"

,

r

Business-like Beauty. That's

a

short descrip¬

tion of stainless steel and the young

Steel

Stainless

is

certainly

lady. U-S-S

beautiful with

its

Landing at Sea.
his

plane

lems is

the

hardware of these window

and

door knob "escutcheon"

jalousies and for the

on

the front door.

SEE the United States Steel Hour. It's

information

on any

OIL WELL SUPPLY..TENNESSEE COAL & IRON

the

galvanized wire cables, mounted

brackets, that stretch
The

so

across

on

a

hook

one

of

spring

the carrier's deck.

resiliency of the cable, plus the action of
bracket, helps the plane to stop promptly

safely. Only steel

can

do

so

many

jobs

well.

a

Consult

full-hour TV program presented every
your

local

newspaper

product mentioned in this advertisement, write United States Steel, 525 William Penn Place,

other
for time and station.

Pittsburgh, Pa.

FENCE..COLUMBIA-GENEVA STEEL..CONSOLIDATED WESTERN STEEL..GERRARD STEEL STRAPPING..NATIONAL TUBE

..UNITED STATES STEEL PRODUCTS.. UNITED STATES STEEL SUPPLY.. D/V,«o« o/ UNITED

UNITED STATES STEEL HOMES. INC. ♦ UNION

of his biggest prob¬

UNITED STATES STEEL
week by United States, Steel.

For further

fighter pilot lands

a

one

attached

ties combine to make it the ideal metal for the

AMERICAN BRIDGE..AMERICAN STEEL & WIRE ond CYCLONE

When

flattop,

stopping the plane. To help him,
near the plane's tail engages

bright, silvery, modern look. But it is also excep¬
tionally practical and business-like in its strength,
corrosion-resistance and general all-around use¬
fulness. Here, its beauty and its practical quali¬

This trade-mark is your guide to quality steei

on a

SUPPLY COMPANY

•

STATES STEEL CORPORATION, PITTSBURGH

UNITED STATES STEEL EXPORT COMPANY • UNIVERSAL ATLAS CEMENT COMPANY

4-290-c

4

i

The Commercial and

16 ; (464) ;

the

highs while the other
packing shares, far from
toying with their top prices,
actually are within far easier

Progress of the Hotel Industry
\

prepared vorites, including Texas Co.,
to test the previous high of a Socony-Vacuum, Ohio Oil and
year ago but the most that Pan American Petroleum,
was
proved in this week's have made the week's new
trading was that it is up to highs listing which is the first
the same group of blue chips time in many months that oils
to carry on the assault. Issues in force have been prominent
of the caliber of General Elec¬

tric,

Douglas

International

and

Aircraft

Ma¬

Business

chines, which carried the in¬
dustrial

market

peak last

the bull

to

average

year, are

ing all the work again.
if

if

Rails
Rail
the

Lagging

issues,

bravely, were
lagging again and at the best
new

On

year

levels reached this week had

tra

would

have

to

wise back

issue

recorded before

price-

best recovery so

same

the

in

range

split

a

only sets some-

1951. It not

f

a

do

air^arlv

pypppHpH

new

the end of the

era

when air-

suppliers, or in some in¬
even employees.
1920, following the end of
World War I, my brother and my¬
ers,

stances,

can

make

thing new in the way of
brevity for bear markets will
have

been

posted.

the

held

into the

if

if

has

there

soon

been "put the
improvements, and

always

into

money

will

both

be

been the best

the

to the soundness of this

growth,
the expansion

the

nor-

concentrated

are

that goal.

possible testimonial
policy, for

capital
has
hotel chain valued
original

of

$1,000

,

and the progress that would

energies

im¬

the

launched the organization that

into a
$100,000,000.
That was largely in the U. S. A.

grown

at

over

But
that today
country of unlim¬
ited opportunity and prosperity.
I hope the members of your or-

during the past 30-odd years.
let

me

remind

is

Canada

you

the

P-etime^^ded of the Canadian hotel Prosperity
however, in peacetime the which lies before you.
nowever,
tne
in

0pini0n that if the list objectives

In conclusion, I would like ta
period might be the auto fajters at this stage all of the struction; better earnings, better say that we can all be proud of
makers.
They are in disfavor «?•
-11
r„nv values and better jobs, rather than the contributions our industry has
partlv because of their dwin*fi
1
'a
bi
larger enemy casualty lists!
made towaid improving internaparuy uetdube 01 ineii uwin,
and lt Wlll take conslderable
tional understanding.
prosperity, not de-

are

war

j

if

our

bonuses

provements and the money back„
too!" Today, Sheraton Hotels have

c a n

we

build

them;
mem;

~ *

babies ol tbn r>nlrl
the cold

war

next ten years
Henderson

Ernest

on

babioc

Wnr

war

business with

national

and

motto

bear
crafts, above all others, were
in +V.0+
During wartime, miracles of
market has been underway
The majority feeling IS t at
production, transportation and orthe prime war babies to be
since confirming signals were
the industrials can and will ganization
were
achieved.
Asavoided in postwar years.
given last September. And if
post a new high but that the -suredly the same miracles in
if
if
%
the market does become offi¬
rails will blunt the implicaReplacing them to a degree
aiso'a rather wide- we have the wil1 to accomPlish
cially a bull one again, some¬
00

in

started

state

amounting to less than $1,000. The

a

as

self

that

bined

^ -^931

In

industry
efficient, so
respected and
so
dynamic

««««J
^

even

cocktail

so

.peed record ,.r

.

any¬

we

to

have

owners

new

this

far this year
in half

there

thing

projects.

by enlisting the help of custom¬

in the U. S. A.

Is

finance

lounges,
added facilities, parking lots, new
rooms, or whatever was needed!

speaking, than

Utilities, without fanw

hotels

Form

relatives.

or

to

hotel

Many

financed

play an even
greater role
relatively

it

basis,

friends,

syndicates

of all

I believe here in Can¬
ada

js the best level onl

2-for-l

a

such action but also illustrates

be

numbers employed,

in

industries.

Go to

the seventh in size

payment and good earn-

which landed the

in

swing since technically

as

again was a story of the rails
Aircrafts continue to show
holding back the industrials.
above-average action, the ex- »pjle senjor jncjex could plunge

considerably farther to go to
"confirm" a new bull swing. thing oi
It

technical

a

and

ranks

*

*

*

U. S. A. the hotel busi¬

In the
ness

are

through the January 1953
do¬ ings of Douglas Aircraft conhigh convincingly on a n y
tributmg in no small measure show of strength i„ the rails
to the group s power.
Doug- but th
have something like
las itself in a few sessions ran
a
dozen points to go to
its gain past a dbzen points
achieye a similar leveL Their

started

which

stock dividend is not co-

that roster.

on

Recommends further improve¬
industry, and stresses role of hotel industry in
promoting international understanding. >: -

in the

ment

incidental, particularly since
a couple of the other packers

in arrears on their preferred stock in addition,

^

ranks seventh in the U. S.

now

meat packers paying a common

:

hotel chain points out progress and
achievements of hotel industry, which, in numbers employed,

longer. That Swift is the
only one of the '."Big Four"

The stock market

;

;

Executive of prominent

or
v«- !K.y+ *v:

By ERNEST HENDERSON*

President, Sheraton Corporation of America^

reach of their lows for a year

STREETE

By WALLACE

-

new

meat

AND YOU

Financial Chronicle... Thursday, January 28/1954

4.

How

can

^

do

we

„nl

^

this?

all

By

dling share of defense work time to build up a new adFortunately our industry is doN.Y. Central, after trading
and largely because of fears
tu&vpssaures
vancing phase. The rail drag,
discontent from flourishing. Hotel
routinely for the first two over the
rugged selling prob- conseqUently
js considered erated pace of wartime. A declaweeks of the year, took over
ration oT hosdlitie/shouid not
~
« »d
lems they face this year.
De- ominous. v»
the No. 1 spot in activity last
the sole key to industrial activity,
mand for General Motors
carnada°UManagements have'beer,
si!
-Jt
ifi
high wages and super profits. Why
week and continued high on
^ua£f?ientl ef?ective in both
following announcement of its
not enlarge the scope of peacethe list since.
The interest
countries f0 make possible a risa
The New Installment Plan
billion dollar expansion plan
time activities to a point where
* *.
stems from new attemots of
wages at a pace which has coritnese beneiits will accrue
part
This week marked the in- thpsp benefit*: will aeerue as nart
had pretty well run its course,
giderabiv m0re than equalled the
railroadman Robert R. Young
of a constructive rather than a de-:
and the enthusiastic reception auguration of a radically new
structive program.
rise in the cost of living. Greater

SAzaamAx

■

n

as

.

.

to take

over

the road.

approach to the problem of
lagging stockholder interest
throughout the country when
the member firms of the New
York Stock Exchange began
a
Monthly 'Investment Plan
program under which investors can buy individual stocks
periodically on any scale from
of amateurs.
/ '
;
face of all manner of rumors $40 quarterly to $999 monthif
if
if
over dividend action due early. The first'day's business
Southern Railroad's extra ly next month, plus announce- under the plan was only 658
dividend declaration early ments of layoffs here and shares valued at $21,333. But
this week, which the stock there among the firm's plants, nearly 500 individual plans
hailed moderately, and a good It is of incidental note that a were established in the first
change of heart in the lately market usually generous on two days indicating that the
laggard Erie when directors mergers did virtually nothing idea could, in time, grow to
decided to put the issue on a on the Hudson-Nash confir- worthwhile proportions that

given the various new car
the suspicion is widely held
showings underway currently
that some of the activity is
did little for the group. Studeeven caused
by his group, par¬ baker's dividend
trim, despite
ticularly when bundles of as the fact that it had been conmuch as 8,000 shares in one
sidered inevitable a couple of
transaction changed hands
payments back, nevertheless
this week. Hundred-thousand-r
chilled -sentiment, v Chrysler
dollar trades aren't the work
was persistently heavy in the

,

quarterly

p a y m e n

next month's

t base at mation.

would
*

meeting, helped

*

*

bring

many newcomers

into the securities circle.

put a slightly better facade on
Oddly, the disinterest in Whether it is fortuitous that
the rail group.
But there's the motors failed to act as any the plan began at a time when
lots of work for them to do to

catch

wUh the industrials.

un

sort of brake

on

the tire mak-

the

market

was

toying with

largely because they have historic highs will have to be
One individual star has been pushed diversification force- left to the future for decision,
Northern Pacific which moves fully since the war. Goodrich,
[The views expressed in this
ahead briskly at times to stir in particular, was able to
article do not necessarily at any
up the debate anew over move ahead easily.
It raced time coincide with those of the
Chronicle. They are presented as
whether this is a reflection ahead
wildly, including 5
those of the author only.]
of budding railroad popular¬ points one
day, as soon as it
ity or the same old petroleum breached its previous high
McMaster Hutchinson
prospects.
price of 1953-54, carrying it to
❖

Good

if

if

ers,

a

level

Reception for the Oils the

Oils, generally,

still get¬
ting a good investment recep¬
tion, which is a bit surprising
in view of the

storage.

•

,

.

_.

_

In fact

it

was

are

large stocks in

A couple of the fa-




roughly double what

same

stock sold for after

split 3-for-l in 1951.
*

*

*

Admits to

CHICAGO, 111.—Gilbert E. Eg¬
has been admitted to part¬

bert

nership

Meat Packers Irregular
A
note

o

was

-fi

&

in

o

Swift &

1^conSru9us
Co., joining

McMaster Hutchinson

can

hotel

is

industry

Perhaps in

large

a

our own way we

set the pace for other indus-

tries, gain the advantages which

^mal course^! events8 by

Exchange.

of

the

Midwest

Stock

Mr. Egbert has been

with the firm for

some

time.

efficiency, better planning and
techniques have made

new

pos-

sibie this achievement without

the

sacrjfjce of profits, which in turn

the greatest incentive of all
jobs,
the added facilities of the next And while these changes have
two generations into the coming taken piace—how has the publie
decade.
the

concentrating

are

improvements, for creating new and better

I

fared?
There

informed

am

that

al-

dozens—

doubtless

are

though wages have risen mucb
novations that can be considered, faster than our respective dollars
weighed to determine that they have declined in purchasing powwe?r
ravine er_yet in spite of this extra load«
back their cost from the increased "»■»
rates and food Prices-in
hundreds of projects or in-

yeg

a*

such

revenues—that

additions

or

hotels have climbed considerably

improvements will create. What less than the rise in the general
are some of these improvements? price level. This is what competiRedecorating, air-conditioning, tion contributes to the economic
new rooms, modern kitchens, .cof- system. Profits and competition
fee

television and

shops,

hun- —two words which the Russians

a

dred other services that the

public

for. For an almost

is eager to pay

what make

do not understand, are

excel. May the man-

0ur economy

unlimited number cf further sug-

agements

gestions for additional services or

continue to reach higher

opportunities for improving

added

operations,
the
of

very,

which

much to the
ton

industry
have

—

publica-

contributed

growth of our Shera-

Company.

And how will these

improvements be financed?
your
on

that
years

the

improvements

sary go.
or

and

justification.

by

Mr.

Henderson

before the Ontario Hotel Association," Toronto, Can., Jan.

11, 1954.

so

continue to take pride in its
in

and increased value to

our

better

providing

standards of living to its

members

the public,

we can

point

achievements of the past,

their May hotel managements reach for

If neces-

other institutional lenders,

address

offer

in future

can

Go to jt is with pride that

to your insurance compa-

an

to

competition,

Industry

this

Industry
levels ot

continue

clean

even

higher goals in the

decade, for then, indeed,
be

playing

e^omic

a

role that will have

welfare

.

Civilization.

coming

they wiH

repercussions

significant
♦From

Hotel

our

and

and

leadership

banks and sell your bankers to

economic

nies

so

of

efficiency

need only turn to keen

effective trade journals

hotel

the

tions

you

Co., 105 South La Salle Street,

members

somewhat

Partnership

Our
one.

on

the

Western

Of
r

'

f

Volume 179

Number 5294...The Commercial and Financial Chronicle

(465)
British

Britain's Commonwealth

Holds

that

has

re¬

from the

emerged

able obstacle to
To

wealth

the

loss

i ntensif ica-

Ministers

tion

is

of the

effort

to

crease

British

in-

do

gold

would

the

short-term

the

Common-

involve any
currencies.

export
surplus
increase
of; Britain's

means

an

■

Sterling

indebtedness

*

Area.

All

to

that

wealth.
is

There
under¬

an

standable

sire

part

de-

the

on

of Com-

monwea

1th;

countries
have
Dr. Paul

easier

London

capi¬

tal market for

the

requirements of their de¬
velopment schemes. It is equally
understandable that British inter¬

ests should

be

anxious to

is that the counterpart of British
investment in the Sterling Area
will be

resume

increase of the sterling

an

balances

of

Sterling

Area

tries/There would be

coun¬

genuine

no

investment, merely the exchange
of a long-term loan for a shortterm credit.

the

to

access

Einzig

to

the

happens

-

Moreover, since the end of the
domestic inflation in

war

has absorbed
tion

of

too

large a
output
of

the

Britain
propor¬

capital
that delivery dates of
British firms have been far

goods,

so

many

too

long. The output has not been
financing common¬
large enough to cover the re¬
wealth capital investment
quirements of British capital in¬
the

role

of

schemes.

That

role

has

become

materially reduced since the
for

a

In

war

number of reasons.
the first place, the financial
of
British
investors

become

reduced

and

leave

sufficient

a

surplus for large-scale investment
abroad.

resources

have

vestment

as

result

a

a

taxation

which

available

for

reduced
resources

future

near

On

the

service
Mr.

an

of

in< .view

of

Austin

German

Robert

F.

result

tin

.

<

be done by the applica-/-;

I

d

n

i

substantial contracts
and

a.

to; non-British

owing

to

the

able

to

were

der

the

influence

resolutions
in

future

of

the

possible provided that the differ¬
in

ence

the

prices

quoted

Act,

Britain

Commonwealth
abstain

would

from

and

Fisher

G.

B.

to

e

1

e c

,

new

ance

of

is

industries.

Apart from

this,

payments

it

worse,

Britain's bal¬
has

not

been

for

the

has

been

not

government

possible

to

conclude

investment of any sort. It is true,

agreements
on
double
taxation
with all Commonwealth countries.
For instance the Government of

equilibrium

India

such

before
became
1953.

to

as

the

facilitate

was

crisis

restored

overseas

reached
of

1951,

once

shortly
and it
in

more

There

stantial

is, however, no sub¬
surplus
available
for

lending

abroad. It is true, this
does not provide an unsurmount-

clude

sows

no

such

willingness to

agreement,

con¬

because

the elimination of double taxation
would

deprive

revenue.

While

it

of

substantial

British

capital
which is already in India is help¬
less against being victimized, new

increase

the

Barron

...

tising
The

the

Board

public

and

officers

of

the

adver¬

new

relations

Other

firm.

members

of

the

district

committee include: John W. Pan-

are

*

coast of

coast,

Barry McMen¬

Dewar, Robertson & PanSan

Antonio;

Philip

Co.,

Mr. Brown joined the agency in
and has
been an
account

1939

Houston;

Hugh

D.

Dunlap,

Binford-Dunlap, Inc., Dallas.

exportable surpluses

this point of view possibilities are
considerable. There is
a
strong

potential

demand
for
heavy
equipment if only British indus¬
try is able to produce it at a
cost.

Unfortunately
engineering
industry and other industries con¬

wages demands in the

MANUFACTURERS OF

cerned with the

goods
cost

be

are

of

production.

It

whether

seen

equipment

can

remains

British

be offered

RELIABLE ELECTRICAL AND

to

heavy

on com¬

ELECTRONIC

COMPONENTS

petitive terms after the conclusion

EATON MANUFACTURING! COMPANY

of

the

various

which

The

the

automotive,

air¬

of

creased

disputes

wages

present in

progress

Spragu^ manufactures

pending.

determined

failure

erving

are

fundamental

which

3-

at

are

which

or

the

paper,

condition
the

new

investment

success

film

or

policy of in¬
in

the

Com¬

defroster units; leaf and coil springs; stampings;
permanent mold gray iron

spring
screw

washers,
and

snap

washer

castings; rotor

rings,

cold

not very

pumps;

steel,

assemblies, hose clamps;

unpopular

politically

impractical.

case

if

duced

so¬

jet engine

blades, tappets, hydraulic valve lifters, valve seat

tion

demand

by

this

were

and

means

of

would

reduce

Dynamatic drives, brakes and dynamo¬

printed circuits, radar pulse-form¬

any

be

high temperature magnet wire, which has wide

re-»

military applications. It is half

higher taxa¬
also

Ferroxcube

Detroit, Battle Creek, Lawton, Marshall, Saginaw,

producer of magnetic ceramic materials for tele¬
vision and

willingness of

military electronics.

Sprague maintains
most

Michigan • Kenosha, Wisconsin • London, Ontario, Canada




one

of the largest and

complete Research and Development lab¬

oratories

in

Some 175

people

a

which

ish

certain amount of
diverted

the

of

to those

prepared to give Brit¬

are

capital

fair

ment of new

Commonwealth

treatment.

the

electronic
are

components field.

employed in the develop¬

components, dielectric materials,

and related apparatus.

After

all, in spite of dollar difficulties it
has been found possible during the

Vassar,

of the

leading

•

capital will be

Cleveland, Marion, Massillon, Ohio •

a

the

Notwithstanding what has been

countries

PLANTS:

owner-

Corporation of America,

probable that

General Offices: Cleveland 10, Ohio

re¬

sistors. It is the only producer of ceramic-coated

said above it is possible and even

meters; and other similar products.

pre¬

wirewound

is

investors to take risks.

inserts;

in the electronic, elec¬

cision resistors, and power-type

amount; of capital available for
investment and the

use

filters, borocarbon resistors, wirewound

are

it

In
to

diversified line of

ing networks, radio interference suppression

encouraging. Austerity is

deservedly

drawn

dium cooled, poppet, and Free valves;

this point of view indications

capacitors for

manufactures

willingness and
ability of the British Government
to curtail domestic demand. From

cluding motor truck axles and axle parts; heater-

a

electrolytic, mica, ceramic, and plastic

trical, and automotive industries. Sprague also

monwealth is the

craft, marine and other important industries, in¬

past

year

to

invest

some

British

SPRAGUE ELECTRIC C0IRPRI1Y

capital in Canada. Where there is
a

will there

within

is

reason.

usually

NORTH
a

way

—

R.

Neuhaus, Underwood, Neuhaus &

namin.

such

supply of capital
likely to put up the

,

State of Texas.
of

man

available for early delivery to the
Commonwealth
countries.
From

reasonable

d

Securi¬

has

ment of

e

Walter S. Sorenson of Rotan,
& Cooper of Houston and

abroad
legislation.
prolonged high taxation. There has also affected the
willingness
been an outcry against the
By
far
the .most
important
of British investors to risk their
factor in the situation
inadequacy of capital even for
however, is
capital. Too large a proportion of
the extent to which it would be
essential domestic investment
the profits is taken by the Treas¬
such as the renewal of plant, mer¬
possible to reduce domestic de¬
ury to make it worth while for
mand for capital goods so as to
chant fleet, etc., and the
develop¬ investors to take risks. What

of

<:

t

District No. 6 includes the entire

:

McMennamin

W. Fisher and G.

the

have

introducing

investment

W.

Henry L.
Brown, Robert F. Carroll, Robert

Buy

>

v

committeemen

ties, Fort Worth.,
Robert

not

pronounced.
Should
United
States
repeal
the

Jacques of
Company, of

Chairman,

McCullough of
McCullough Investment

the

is

too

s

of' Austin,1

Mosle

Sydney

effort may be made
avoid this as far as

as

Barron

firms':

an

to

were

in>

lower prices they
quote. Possibly un¬

H.

Texas,

of District

partner

First" Southwest

New

yelsewhere;, were: !

awarded;'

senior

.

Dallas

tion of: the principle embodied in :,
the Buy American Act. On recent*:
occasions

Edward

—

Antonio,

succeeds James F.

-the

practice,en<joiirai^
can

Tex.
San

Hart & Parvin, San Antonio.. in¬
vestment banking firm, Mr. Aus¬

.

preference to-British goods/' ComGovernments will : in

A

■

-

;monwealth

of

icomihittee here.

•

Sydney Conference even in
absence, of granting additional;:

This

as

6 Committee of the National
Association of Securities
Dealers,
,Inc., at a recent meeting of/the

Carroll

<and y

of the
the

has

No.

Henry L. Brown

.

a

war¬

Navy,

elected Chairman

was

.

Japanese cqmpetitiOri.v >fr
ceivable however, that as

Corps.

Elects New Officers
DALLAS,

balance
of payments are not
very encour¬
¥

the

NASD District No. 6

improvement of Britain's
aging,

Marine

with

hand

moderate

substantial

a

service

account executive.

increasing

prospects

the

with

ac¬

the willing¬
ness of British
investors to take,
risks by investing its
capital in
Commonwealth countries.
\
The

de¬

news

been with Doremus since 1946

tax reduction would go some
way

towards

York

McMennamin, following

time

from

other

comparatively

American

High

the amount of financial

the

in

point of view of capital

even

the agency's New

partment.
Mr.
Fisher, formerly
Co., 120 Broadway, New
with the
"Wall Street Journal,"
York City,
has been announced
joined Doremus in 1945 as an ac¬
by William H. Long, Jr., Chaircount
executive, after wartime

mitiga¬

or

from

&

mus

change which
appreciable dif¬

an

cumulation.

corresponding

investment

make

ference

any
export
of
long-term
capital to the Sterling Area dur¬
ing a period when there is no

capital
in

not

hard

or

capital

substantial

expect

exporting capital
Sterling Area.

would

so

of

British

up

of the above mentioned ob¬
stacles. As far as British taxation
is concerned it would be idle to

But

Finance

step

return

duty in 1946. Mr. Car¬
roll, formerly with The New York
"Times," the FBI and the Air
Force, continues as director of

Election of four
vice-presidents
in the New York office of
Dore¬

tion

to countries of the

Sydney Conference of Common¬

to

since' his

Air Force

Four Vice-Presidents

whether, and to
Sydney resolu¬

the

sulting in the removal

wage

LONDON, Eng.—One of the

extent,

tion

the efforts to increase British

executive

Doremus & Co. Elects

circumstances to

investment in the Commonwealth
will be followed up by action re¬

demands in Britain make capi¬
tal goods production too
costly for export.

sults

the

The question is

capital investment in the Commonwealth countries, cites, as
difficulties, the reduced financial resources of British investors,
and Britain's continued adverse balance of
payments. Lists as
another reason, domestic demand for
capital investment has
been too large to leave a sufficient
surplus for large-scale
investment abroad.

understandably

country.

what

By PAUL EINZIG
on

is

in

enter the

Investments
Dr. Einzig, in commenting

capital

reluctant

17

ADAMS

•

MASSACHUSETTS

The Commercial and Financial

18

'fare

Dwight

President

estimate of

the

•

*

reve¬

and

nues

improv¬
system of education; for

of

text

The
the

Budget

fol¬

Message
lows:

I

am

trans¬

mitting

here-

wit h

the

Budget of

the
the fiscal year

and

stable

prosperous

quests for new appropriations and
Government expenditures. The re¬
ductions in expenditures already

divided
parts. The first part is a

statement summarizing
a number of its
most important aspects. The sec¬
ond part includes pertinent details
of my tax and legislative pro¬
grams, and of the budget.
To¬
gether the two parts comprise my
budget message.
J
When this Administration took
general
the

a

ment estimated

the Federal Gov¬
recom-

cash

budget,

1955

the

for

the

of

effect

total

and proposed legis¬

and

receipts

accomplished, together with those
now proposed, justify the tax re¬
ductions which took effect Jan. 1
and the further tax revisions I am

budget and

payments

levels

of

new

authority and of

ob¬

accu¬

balances for

reduction

74.0

.

'

As est., Jan.

Revised

9, 1953

77.9

estimate

estimate

1955

7

70.9
65.6

Proposed expenditure programs

deficit

for

1955 fall in

three

broad cate¬

gories:
Deficits

1952

(in billions)
$4.0

1953

9.4

Fiscal year:

As est., Jan. 9, 1953

Expenditures for major national
security programs—for the mili¬
tary functions of the Department

9.9

estimate—

national security, major
programs relatively uncontrollable
under existing and proposed leg¬
islation, and all other Government

programs.

1954;.

3.3
2.9

Revised

$65.4

1954:

1955

billion.

.

,

(in billions)
______

_____

1953

budget for the fiscal year

1955 is estimated to show a

of $2.9

:

Expenditures

1952

originally estimated.

Budget Totals, Fiscal Year
—The

at $65.6

V'v:v

Fiscal year:

the

in

billion

$6.4

of

deficit

cash

estimated

are

billion;.

in

receipts

over

1955

year

than $200 million, a

1954 of more

lation, is shown with

Both

of cash

excess

an

payments of $6.6 billion. Present
estimates indicate
an
excess
of

>;.'.V/:" -rvv;..'■

ernment.
The

receipts from the public was $5.3
billion.
The 1954 budget docu¬

things which

the

of doing

must be done by

expenditures
include, insofar as can b^ deter¬
This budget continues the prog¬ mined,
the estimated budgetary
ress
that has been made during results of my recommendations for
the past year in reducing both re¬ new legislation.
';

ending June 30, 1955.
The budget message is
Into two

ways

less

and

better

and to
expensive

activities

Government

under existing

of

ligational

mulated unexpended

economy.

Eisenhower

Pres.

States for

United

of

find

.menslations

tions

»

lower

...

comparable
for helping prevent the ravages figures for earlier years in the
of
floods and
soil erosion; for accompanying
table. The4 table
encouraging the expansion of ade¬ also reflects certain technical ad¬
quate health and hospital care justments for 1955 and prior years
for our people; and for other con¬
which
dp not affect the budget
structive domestic purposes de¬ surplus or deficit and
are de¬
scribed in Part II of this message.
signed to strengthen the founda¬

se¬

The

,

ing our
conserving our natural resources;

budget

lected

projected.

years.
In the revision of ther 1954
tions with the public include the
budget also benefits from receipts and payments of the So¬ budget and in the 1955 budget the
trend clearly is toward a balanced
material
savings from
the de¬ cial Security and other trust funds
;
creased costs of Federal opera¬ which are not considered part of budget.
Budget Expenditures — Total
tions resulting from our constant the budget. In 1953 the excess of
effort to improve the management cash payments to the public over budget expenditures in the fiscal

ership in the nation; for

statements.

the 1954

budget document, was $9.9 billion.
The
current
estimates
of
the

This

better housing conditions
more widespread home own¬

and

penditures for
this period,
along with

indicated in

1954,

year

budget
for that
yebr show
a
1954 and
1955 lead to
less ex¬
exclusive budgetary deficit of $3.3 billion.
penditures in these and in future
Total Government cash transac¬
paternalistic position for

the Federal Government.

moting

ex¬

several

and often

legislative recommendations
for expanding the coverage and
increasing the
benefits of our
social security system; for pro¬

expected

Federal

of

of action. In those cases
" participation
is

nerships rather than an

for

-

of

as

the effort of this Adr
ministration is to develop part¬

provisions

budget contains

The

unexpended 7
prior appropriations
June 30, 1953, of $78.7 bil¬
of

Budget Totals, Fiscal Year 1954
deficit for the lion, will be reduced to $66.5 bil¬
lion by June 30, 1954, and to $54.1
fiscal year 1953 was $9.4 billion.
billion by June 30, 1955, as now
The budget deficit for the fiscal

necessary,

ourselves and

for

accumulated

balances

—The actual budget

Federal

where

all mankind.

hower, on Jan. 21, sent to Con¬
gress his budget message for the
fiscal year 1955, in which he gave
an

life

abundant

Eisen¬

D.

to Congress,

examples

are

programs

this type

explains efforts
of Administration to move toward reduced taxes and lower
spending as rapidly as national security and wellbeing / will
permit. Estimates fiscal 1955 budget expenditures at $65.6
billion, or slightly more than $5 billion under previous year.
Renews request for increase in statutory limit on public debt
President Eisenhower, in message

i

'

Thursday, January 28, 1954

...

The

small cash surplus for

a

the fiscal year 1955.

-provided by the Inland Water¬
ways Corporation; certain agricul¬
tural activities; and some aspects
of our health, education, and wel-

Budget Message Indicates Deficit
Oi $2.9 Billion in Fiscal 1955

show

to

Corporation; the services

Finance

V

Chronicle

(466)

of

Defense, the- mutual military
program,
atomic energy, and
presently estimated deficit stockpiling of strategic materials
greater efficiency and economy in for the 1955 fiscal year is in sharp —dominate the budget and are
meeting the nation's security re¬ contrast to a deficit forecast made estimated at $44.9 billion in the
quirements and the necessary and by the Bureau of the Budget prior fiscal year 1955.
This compares
valid functions of
the Govern¬ to transmission to the Congress of with a presently estimated $48.7

Budget Policy — This
Administration
is
dedicated
to

estimate

1955

General

The

*

1954 budget document.
This billion in 1954 and $50.3 billion
projection of the programs in ex¬ in 1953. These amounts are about
will
encourage
continued high 1954 budget show that the re¬ istence and contemplated in the the same percentage of total
capital investment and consumer quests
for
new
appropriations 1954 budget document, under the budget expenditures in each of
purchases. Despite the substantial were reduced about $12.5 billion, tax laws as they then existed, in¬ the three years.
loss of revenue caused by these new obligational authority was re¬ dicated a deficit for the 1955 fiscal
Closely related to these ntajor
office on Jan. 20 of last year one
tax reductions,
we have moved duced more than $11 billion, and year about five times greater than security programs are other ac¬
of its first concerns was the budget
closer to a balanced budget.
the deficit now estimated.
tivities for national security in¬
expenditures were reduced $7 bil¬
for the 1954 fiscal year, which had
One of the first problems of this lion below the totals estimated in
Budget receipts and expendi¬ cluded elsewhere in the budget.
been sent to the Congress on Jan.
Administration was to bring *the the 1954 budget document of the tures for the fiscal year 1955 are Our foreign economic assistance
9, 1953, by the previous Admin¬ budget under better control. That
and information programs are par¬
estimated as follows:
previous Administration.
,
istration. With the cooperation of
was substantially accomplished in
Similar reductions continue in
Rcpls. Expend. ticularly essential to deter aggres¬
the Congress that budget prompt¬
the revision of the original budget the
sion
and
(111 billions)
strengthen the world
budget recommended for the Under
ly: was revised and reduced. This document for the fiscal year 1954.
forces for peace.
fiscal
year
1955. Recommended
Existing legislation_$61.5 $64.5
new
budget is the first prepared Now an amount approximately
new obligational authority is $4.4
•Proposed reductions in major
Proposed legislation
1.2
1.1
entirely by this Administration.
national security expenditures in
equal to the savings made in this billion less than the current esti¬
it provides adequately, in my new budget is being returned to
1955 represent the largest single
Total
$62.7 $65.6
mate for the fiscal year 1954. $15.5
judgment, for the national defense the public in tax reductions and billion less than recommended for
element
of
reduction
from
the
Budget receipts allow for an es¬ current
and the international responsibili¬ tax revisions.
This amount sub¬ that year in the 1954 budget docu¬
year's level of expendi¬
timated loss of revenue, totaling
ties of the nation—responsibilities
stantially exceeds the estimated ment, and $23.9 billion less than
tures. I emphasize, however, that
nearly $5 billion, from the tax these
which we must undertake as a budget deficit.
in 1953.
Estimated expenditures
savings result from revisions
reduction which took effect Jan. 1
leader of the free world. On the
in programs, from shifts in em¬
In
preparing this budget the for the fiscal year 1955 are $5.3
and from the cost of recommended
.success of this leadership depends
Administration
has
directed its billion less than the current esti¬
phasis, from better balanced pro¬
tax revisions, insofar as these will
our national security and prosper¬
curement, and from improved
attention to essential activities and mate for the fiscal year 1954, $12.3
ity.
The
budget also provides programs rather than to those billion less than recommended in apply to the 1955 fiscal year. On management and operations. Our
adequately for the current needs which some might consider desir¬ the 1954 budget document, and a full-year basis the revenue loss security is being strengthened—
will approach $6 billion.
of the Government and for con¬
not weakened. Further, while ex¬
able and appropriate, at this time, $8.4 billion less than in 1953.
structive forward steps in our do¬
The total cash transactions of
for the
Federal Government to
penditures for some programs in
Thus, new obligational author¬
mestic
the government with the public this
responsibilities and pro¬ undertake. It assumes fairly stable
category
will
be
reduced,
ity has been reduced $15.5 billion
show an estimated excess of re¬ others will be increased.
grams.
conditions, internally and exter¬ and estimated expenditures have
The recommended budget con¬ nally, during the period it covers. been reduced $12.3 billion since ceipts from the public over pay¬
Of the four major national se¬
ments to the public of more than
tinues the strengthening of our It allows for the continuing heavy
this Administration took office.
curity programs, proposed 1955

military posture;
the development

our progress

in

demands of

the

ment.

recommending. These lower taxes

the fiscal year

friendly nations; and programs for

payers

gency

and

the

emer¬

an

most

desirable

in

terms

work

on

This

the

ning of

budget marks the
a

movement

to

reductions,

tax

in

surplus was

$100

1955.

a

savings

adopt

of

of the nation as a whole,

tire economy, I believed it
a course

ergy

toward
budget is the result

record

balanced

of

progress

and

determined

a

*

wonders of nu¬
be turned gradu¬

priately and

Authority—

Obligational

New

best to

My recommendations for new ap¬
propriations and other new obli¬

leading toward the

goals of a balanced budget gational authority for . the fiscal
and tax reductions.
year 1955 amount to $56.3 billion,
The reductions in 1954 expendi- a further reduction from
the
'

tures

,

were

devoted

to

reducing amounts

;

"1954 estimated *

Budget

i

1950
.

.

to

...

authority
Kaceipts:

incur

Under existing
Under

„

1953

1955

Cur-1

actual actual actual actual merit

mated

$49.3

$82.9

$91.4

$80.2

$71.8

$60.7

61.4

64.6

68.0

67.4

New

1.2

67.6

Together

62.7

36.5

47.5

61.4

64.6

63.0

will
.

<•

total

We

these

tax reductions
billion.

4

will still have

a

< in billions)
.

Total

Surplus

legislation™,

proposed

39.6

or

♦References

at
to

end
1954

75.6

of

of

1.1

to

the

65.4

74.0

77.9

70.9

-4.0

-9.4

-9.9

—3.3

1

J50.3

68.8

78.7

1954 budget document of Jan. 9

CUMent'J

are

not

available.

.

tui,

67.4

66.5

'

cash

54.1

revenue

from the tax reduc¬

tions and revisions,
1953

thai

as

presented

$S3oP mhilon

transactions
*

of

with the public are

be

War

II.

tures

for

our

continental defense

greater than in
previous year.
Expenditures for stockpiling—'
the fourth of the principal pro¬
will be

program
any

grams in

the major national secu¬

rity category—will be less than in
the fiscal year 1954, as a result of
approaching fulfillment of stock¬
pile requirements in certain cate¬

for the

obligational authority

ity of

agencies
The

to

above

incur obliga¬
are

are, by law,
nondiscretionary, and

in¬ government activities

the author¬

figures

stockpile.

Budget expenditures for certain

on

comparable basis, reflecting cer¬
adjustments in composition
this budget,

tain

and definition made in

the total cash partly to conform to congressional
Government practices, j Details are shown in
the second part of this message.
now estimated

the

on

will

.56.3

New

a

tures

recommended

as

tions.

-

of De¬
expendi¬
behalf of our airpower
the largest since World
Allocations of expendi¬

fense the fiscal year 1955

gories and of lower world market
prices for materials still required

to reduce that deficit during

Furthermore, despite the loss of

programs.

Department

60.7

certain adjustments to

the 1955 fiscal year.

65.6
—2.9

two

the

71.8

estimated.

*

*

U4.1

Detailed accounting data




44.0
f- 3.5

ap¬

year,

are

64.5

70.9
!

—3.1

(—

balances

t0

♦Estimated.

74.0

39.5

deficit

unspent

propriations

65.4

2.3

expenditures

( + )

Cumulative

44.0

legislation

$91.4

deficit of slightly less than $3 bil¬ cludes new appropriations, addi¬
lion for the fiscal year 1955, as tions to borrowing authority, and

But we will con¬
tinue determined efforts for econ-

the

est., Jan. 9, 1953

now

'

Authority

•

omy

Under

,

of

Within

will be at
the initia¬

Revised estimate—

1955,

budgetary

program

the highest levels since

80.2

As

nearly $5

Oblig.

~

1954*

-

61.5

0.2

year

'

$56.3

47.5

this

recommending in this message.

esti-

rent

dOQU-

legislation

receipts

Expenditures:
Under
existing

1952

36.5

legislation

proposed

Total

„

.

obligations.,

1951

of

last

:

1953

and are also
^reflected in the tax revisions I am
1

Jan.

In Billions)

the

during

enacted

more

-

(Fiscal Years.

military

•

the large deficit forecast in the several
years.
efficiently car¬
The ancan
ried on in that way. The lending *1954 budget document.
ally to the development of a more activities of the Reconstruction -ticipated savings in 1955 budget
Fiscal year:
expenditures already have been
1952
BUDGET TOTALS
reflected in the tax reductions of

the

proved and
clear power

Commission and for the mu¬

tual

continuous tion

financial affairs
the Government under control.

twin

uses

expenditures for the Atomic En¬

effort to bring the

passed along to the tax¬

with beneficial effects on our en¬

begin¬
shift to

of

year

i

This

'

fiscal

the

in

million

.

1955.

a

sight for

So that most of the new

could be

of

of atomic energy State and local governments and
in the earnest hope that present in¬ to private enterprise Federal ac¬
ternational relations can be im¬ tivities which can be! more appro¬
peacetime

budget

their benefits to all of the people.

advanced

'Without

taxes.

turn to other purposes which are

recommended for

Authority is
new

if

mobilization
should arise.

the

These reductions justified lower

the national security

and production programs on the budget. But as
of atomic weapons; the expansion we continue to reduce and elim¬
of our system of continental de¬ inate the less desirable or the un¬
fense; assistance in the develop¬ necessary Government expendi¬
ment of the military strength of tures, it will become possible to
rapid

of

estimates

current

The

relatively

depend largely on factors outside
the annual budgetary process.

few in number
large amount of
dollars and the budget each year
While

relatively

these represent a

has

to

For

example,

placed
to

provide
on

States

pend

-

funds for them.
the laws are

once

the statute books, grants
for many purposes de¬

upon

the

extent

to which

Number 5294

Volume 179

The Commercial and Financial Chronicle

...

(467)
States take advantage of Federal rate income tax be deferred for
grant-in-aid programs; veterans' one year; that the excise tax rates,,
pensions depend upon the number scheduled to be reduced on April 1,
of
qualified veteran applicants; including those on liquor, tobacco,

depend upon automobiles, and gasoline, be

farm price supports

tinued

the size of crops and the demand

commodities; and
the national
depend upon the amount of

for

supported

present rates; and that
adjustments in the other ex¬

any

cise taxes be such

debt

the total yield which

the rate of interest.

the debt and

In the fiscal year

receiving from this

1955 it is esti¬

Debt

are

we

now

the

American

initiative

our

used

by

a

for

genius

and

thus mul¬

u.» .r

continuing

by

A Refresher Course

em¬

phasis
in

on efficiency and economy
Government, reduced Govern¬

G.

L.

dollar is the cornerstone of financ¬

ment

ing

Admin¬

and

reduced deficit. The reduced

of

debt

of

Ludcke

expenditures, reduced taxes, bulletin

istration.

amount is about the same as pres¬

ently estimated for 1954 and al¬
most $800 million less than simi¬
1953.

elements

through
reduced

below

controllable

budget

the

process,

estimated

an

the

fiscal

are

$1.5 billion below the present
timate for 1954.

tion,

the

over

of about 25%

This is

of the Government.

es¬

debt

These activi¬

this

of

total

reductions

in

rates

support.

tributed to

well

sources, the school lunch program,
and several other programs of do¬
mestic
importance will be the

other

There

Taxes-

every

with

serious

out

of

look

to

reason

confidence

disruption
The

markets.

of

stream

credits
of

or

the

na¬

before; the financial system

ever

is

sound.

than

With

buying

power

investment
Total Government expenditures

United

reasonable

a

there is

than

States

better

no

securities of

the

Government.

high that we
The national debt is now close
must choose
our
path carefully to the legal limit of $275 billion.
between inadequate revenues on In
view of the wide swings in re¬
the one hand and repressive taxa¬
ceipts and expenditures and their
the

on

that
up

can

now so

other.

taxes

I

as

be done without

of

purpose

ministration

to

ductions

taxes

in

anxious

am

reduced

inflationary deficits.

determined

make

fast

reductions

re¬

These

in

and

year.

expenditures.

their

own

difficulties

worse as we

building
trust

grandchildren?

will

and

our

cash

balances

with

For these

reasons,

I

renew

the debt

to make

In

proposals for tax reform and

of Securities

hardships
and

I

summary,

Government

and

E. Paul Tunnell to Firm

vestment which stimulate produc¬
tion and productivity and create

which

the

and bet¬

share
is

progress

The details of these pro¬
posals are many and represent
much
cooperative work by
the

spending

II

of. my

of

the national

spent

by

the

the

general




corpo¬

of

want

us

"Safe

to

states

them

confidence)
sides

Pittsburgh

Stock

York

and

Exchanges,

on

Feb. 4 will admit E. Paul Tunnell
to limited

Mr.

Point

Go

3:

for

many

years

Resident Manager for H. M.

was

Byl-

lesby & Co., Inc.

Point.

There is
are

around

main

est,

like

the

well

as

to

Avoid

while V

man

Personalities.

or harshly.
competitors us-*/'
symathy for them.

arouses

another

Your confidence in

product, and what you are
suggesting to your prospect, is
something that comes from an
inner
conviction
and
belief..

a

When

you

have

sold

others

will

have

confidence

yourself

and what you are suggesting.^

you

Not before.

you

Point

tell

covered

and

to

the

When you

essential

Thank you,
ident
.

have •*

points

ask

of
,

G. L. Ludcke, Pres-

Putnam
...

,

Fund

Distribu-

refresher

course

XPrs' lnc" tor tnis retresner cou™

the

highlight

Stop.

the

for the order.

point, all
out

8:

and f°r writing the

of

me

this week.

column for

J. D.

DISCOUNT CORPORATION
•

EDWARD E. ANDERSON
Senior Vice-President

OF NEW YORK

Statement

of Condition

of December 31,1953

as

ASSETS

J. LUTHER CLEVELAND
V
Chairman of the Board,
Guaranty Trust Company of fywYor\

Acceptances Discounted.

$ 12,201,649.42

United States Government Securities and

S. SLOAN COLT

Security Contracts,

President, Bankers Trust Company

market

at

or

less

415,193,035.39

United States Government Securities, In'
vestment

PERCY J. EBBOTT
President, The Chase Rational Ban\
of the City of ?{ew Torf(

cost

Account,atcost

or

amortized

whichever is less

19,008,580.25

Interest Receivable Accrued

2,531,193.25

Sundry Debits

PERCY H.

JOHNSTON
Chairman of the Executive Committee,
Chemical Banl{ & Trust Company

56,143.20

Cash and Due from Banks

2,853,079.48

\

ADRIAN M. MASSIE

*

$451,843,680.99

will

the

be

and
made

sounder
over

the

income

is

left

.'.

more

years

left

a

Undivided Profits

with

HERBERT N. REPP

in¬

their
as

great share of

and

President

Loans
HOWARD C.SHEPERD,

our

Chairman

•
,

our

6,858,866.03

1

2,700,251.52
to

Banks and
406,319,425.01
10,987,924.22

Security Contracts;

Chairman of the Board,
.

Ban1{ Trust Company

Contingencies
Payable and Due

Endorsement

DUNHAM B. SHERER
:

1,858,866,03 $

Acceptances Rediscounted and Sold with

to

Corn Exchange

3,000,000.00

Customers...

-

of the Board,
*|
The Rational City Ban\ of New Tor\

*

$2,000,000.00

Reserves for Premium, Discount, Taxes

as

spend, what they
will buy, and what they will save

we

Capital........
Surplus;

Chairman of the Board

what they will

that

of the Board,
Torl{ Trust Company

DUDLEY H. MILLS

progress

largest possible share of

national

LIABILITIES

Chairman
The Njcw

24,328,156.25.

Sundry Credits

649,057.96
.,

•

'

$451,843,680.99

GEORGE WHITNEY
Chairman of the Board,

J. P. Morgan & Co. Incorporated

.

in

■

DIRECTORS

.

by

person

your

substitute.

Pick

in

attitude.

your

be

you

story,

main

the

your

Point 7: Know Your Story From

point of the buyers' inter-

as

to

of

planets revolving

sun.

(If-

diagram

a

unfairly

usally

half

to

are

Straight
a

be¬

prospect.

point, make it simple, v

a

6:

planted

than

when
no

eye."

Cover to Cover. Confidence is im-

listen

the

"Clarity" admits

others

partnership in the firm.

Tunnell

of

use

the

paper

Denunciation

case

story, "Candor" (because

both

the

the

beside

Point

as

build

of

to

of

Never criticize

because it's the natural way to tell
any

sheet

do it.)

you

Chronology, Can¬
Clarity. "Chronology,"

and

sit

and

but regardless,

guides

want

illustrate

found in the three C's," the article

Govern¬

budget message, I list and describe
important tax revisions.: i and invest. Government must play
I do not believe that the budg¬ ar vital role in
maintaining eco¬
etary . situation will permit fur¬ nomic growth and stability. But
ther reductions of taxes at this I believe that our
development,
time. Hence, I. repeat my recom¬ : since the
early days of the Repub¬
mendations of last May that the lic, has been based on the fact
in

and

investment

more

so,

Trust Building,

income

'25

reductions

is

New

as

House Ways and Means Commit¬ dividual citizens to
make
tee and its staff and the Treasury own- countless
decisions

part

stated

Possibly

members

emphasize that

ment. We are convinced that

ter jobs.

In

you

investment.

Company, Union

desirability—as the test for
expenditures, we will reduce

our

Department.

clearly
sold."

dor,

PITTSBURGH, Pa.—McKelvy &

mere

eco¬

growth. The proposals will
encourage the initiative and in¬

more

that

none

McKelvy & Co. Will Admit

rapidly
national security and wellbeing will permit.
By using necessity—rather than

nomic

bigger payrolls and

a

you

in

customer

your

put

Point 2: State the Facts. "A

♦

5: Read Sparingly.
The
the window of the mind.J

tween

places
Find
out

an

is

Never

Change

in

don't
article

as our

reducing

the tax barriers to continued

Dealers, Inc.

about

rambler.

toward reduced taxes and reduced

tax

wants

it,

The

prospect than to hear,

a

Where

and what he would want to know

Chairman of District No. 13 Com¬

limit.

much-needed improvements in our
tax system.
These proposals are
directed toward removing the

serious

Bassett

K. Bassett, W. E. Hutton
Co., has recently been elected

this budget carries out the policy
of this Administration to move

complications,

customer.

my

reductions for millions of taxpay¬
ers at this time which
represent

tax

K.

Earl
&

Improving the budgetary outlook. request to the Congress to raise

most

your

what he
Earl

will

calendar year.
In the second

way,

in reducing expenditures and

some

you.

become

largest possible share of the
half of the cal¬
that the Government has endar
year, when tax receipts are
been spending for them.
seasonally low, there will be no
The start toward tax reductions way of operating within the
pres¬
Is justified only because of suc¬ ent debt limit.

me

Point

Look

But Mr. Ludcke I

with

postpone."

-

have to

you

forward in the

move

money

That outlook permits

-

battle be-

a

do

familiar, 'I'm coming to that.' ":

eye

even

estate, setting up a
for
wife,
children,

an

or

the

you

fund

Objections.'

people. "If

concession

For what

interest.

agree

be dangerously low on several oc¬
casions in the first half of the

the

cess

are

We shall be close to the debt

limit

The objective will be to return to
the - people, to spend for them¬

selves

investment.

Welcome

ritating to

add, what
for

knowing

reminds you, "Nothing is more ir- '„

investment

have

not

1

the

to

as

in

an

a

evade

going to be moti¬
vated into listening—capital gain,
long-term accumulation, income,

building the United States Government in
It is the such a strait jacket as the present
this Ad¬ debt limit.

further

you

your own

reason

the

would

unpredictability, it is not prudent
operate the huge business of

as

rapidly as
justified by prospective revenues
and

considering
was

I

would

reason

as¬

of sound money of stable

surance

make

want to

you

had

much.)

4:

tween two

prospect was

your

first, about

offered."

you

this

to

tion's savings is huge, larger than

1952.

have

know
.

our

cial house in better order without

existing
esti¬

are

more

five

in

sat where

sitting, what would

of

conference instead of

are people like the rest
If places were reversed and

you

himself out

he

The interested prospect asks ques;
tions. Your interview becomes a

they

us.

too

Point

Some

so.

talked

because

habit

talk

us

Some have plodding minds.

of

mittee of the National Association

is

less

But

NASD District 13

country's ability to put its finan¬

1954 receipts; $1.9 billion less than

billion

lengthened

In

maturities

some

who

orders

when the prospect wanted to
buy \
and he kept on
rambling. Most of

1:

keen.

length¬

investors.

bit contained therein that
known to all good sales¬

a

learned,

are

holder's

nine times.
forward

proposed legislation

tion

E. K. Bassett Heads

obtaining a wider dis¬
individuals and
operations,

of

nervous

Change Places With
Your Customer. Putting it in their
words. "Some of your customers

21, 1954.

among

debt

salesman

en¬

probably

Point

the

years

Distributors,

men,

by Federal Re¬
These policies con¬

nonbank

1953

mated to be $62.7 billion in the
fiscal year 1955. This is $4.9 bil¬
lion less than presently estimated

to

Jan.

State

a review of some of these
fundamentals is always helpful.

objectives.

DWIGHT. D. EISENHOWER.

cheapening the dollar.

as

tribution

history.

Receipts and
receipts under

are

same

ening the maturities of the debt,

were

and taxes

five

the

A start has been made in

as

1953, and $1.3

is well

maintained

serve

Authority, urban development
and redevelopment, college hous¬
ing loans, the National Science
Foundation, fish and wildlife re¬

Budget

quite

financing over a period
of years too largely by short-term
issues at artificially low interest

many other departments. On the
other hand,
estimated
expendi¬
tures for the
Tennessee
Valley

and

budgets I shall recommend in the
future will be directed toward the

Too large a proportion is.
in the hands of banks. This is the

will result from a
lessened postal deficit and man¬
agement and program savings in

Budget

St., Boston 9, Mass.,

option.

is

budget

category

our

50

year ago ma¬

than

redeemable at

a

your security, and don't be car¬
by ried off into diversions.
There
Inc., isn't time for it. (I once knew a

titled "The Art of
Selling Securi¬
ties." Although there is

result of

substantial

largest in

a

within less

is

or

us

ority promises further that, bar¬
ring unforeseen circumstances, the

cooperation

of

sent

prepared

request for new obligational auth¬

inflation

three-quarters
inherited

we

tures

>A:

expenditures.
Some

involved

amount

one-tenth

close

means

Nearly

operations

jority of the items in the budget,
although the

either

to

was

Fund

administer the money supply, with
these same objectives in view.

ties cover, in number, a large ma¬

about

one

with the Federal Reserve System,
whose duty it is under the law to

two fiscals years,
in the cost of these

day-to-day

numerous

contribute

This

reduc¬

a

only

that

has

Putnam

a

deflation.

or

and

1953

year

not

billion

$2.2

not

nomic situation and adapting fi¬
nancing plans to it, so that as far
as
possible debt management does

expenditures for other
Government activities, which con¬
Budget

more

problem

is

offering securities for cash or re¬
funding which the market will
take, but of appraising the eco¬

lar expenditures in the fiscal year

tain

The

management

this

|.1H

By JOHN DUTTON

$14.1 billion will be required to
support these programs.
This

under

ft

\

Securities Salesman's Corner

mated that budget expenditures of

policy

}"> t

productivity.

fostered

be

sound

A

—

be

with

This budget proposes that such
progressive economic growth will

source.

Management

ulated

to

people

a will to
Their actions have stim¬

venture.

tiplied

to maintain

as

income

creative

con¬

at

interest payments on

national

provident

19

OFFICES: FIFTY-EIGHT PINE STREET

~

.-

■

20

terse narrative
of photos and

mon

cers.

capital stock from $5,000,000
$6,000,000 by a stock dividend

effective

News About Banks
NEW BRANCHES
NEW OFFICERS,
REVISED

Hanover

received

Bank,

Jan.

York

New

the

21

approval
of the Banking Department of the
on

$325,000, consisting of 6,500 shares
of the same par value.

capital stock from $24,-

•common

-000,000 to $27,000,000. The stock¬
holders on Jan. 20 approved the
increase and

now

makes possible

TThe

proposed increase was given
in the November 19, issue of the

^Chronicle"

on
«

■

1957.

page

Plains,
Y., voted a 5% stock dividend
the annual meeting on Jan. 20,

Trust
N.

at

Company, White

an announcement by
Wilson, Chairman of the

according to

Bank

Trust

&

Com¬

payable to

stockholders of record

of Jan.

as

20, on the basies of one new share
for

9

*

The dividend will be

Stockholders

held.

20

each

fractional

to

receive scrip

shares

Vice-President, and Walter J.
Smith from Assistant Comptroller
to Assistant Cashier, at a recent
meeting of directors of First Na¬
tional Bank, Mobile, Ala.

will

certificates and ar¬
will be announced

9*

Company,

B.

Assist¬

Fisher

Miss

and

Nickerson

Bank

2.

and

thus

Trust

&

Jan.

Mrs.

&

Trust

the

The

Company effective

former

two

main

branches

office

formerly

Trust

family, Mr.

Company in Jackson will be

operated

pointed out.

branches

as

by

Deposit

Guaranty Bank & Trust Company.

Miss

Atkinson, joined the First
National Bank in 1952, after 14
years
in Wall Street, and was

if

*

build¬
The official
opening of the new quarters was
attended by E. C. Sammons, Pres¬
ident, and other officers from the
ing during January.

bank's head office in Portland.

During the past five years, new
have been com¬

branch buildings

pleted at Ontario, Athena, Sheri¬

Two

jects

branch
at

and branches

Portland

in

Bend,

Citizens

included

have

City,

Oregon

Burns,

Salem and The Dalles.
U.
S.
National's
Vale

Redmond,
The
branch
D.

E.

Verl

W.

in

established

was

is

Masterson

1947.

and

manager

Dowers

Assistant

is

>

Manager.
9

9

9

9

Vice-President

new

Remodeling pro¬

dan and Madras.

H.

T.

were

named in the

named head of the women's bank¬

Portland,

Oregon, moved into a new

Com¬

operated by Commercial Bank &

distaff members

bank's official

the

of

bank.

Atkinson

the

of

Cashiers

ant

Helen

Mrs.

Bank

pany, Jackson, Miss., merged un¬
der the title of Deposit Guaranty

Fisher

and Miss Jane Atkinson as

Jackson, Miss., and

Commercial

Nickerson, also announced
that the Board of Directors has
Mr.

appointed

branch of the United

States National Bank of

if

Deposit Guaranty Bank & Trust

by the Board of Directors
its Jan. 20 meeting.

action

became the first

Board of Directors.

entitled
Chemical

■

County

The

Assist¬

ant

President, and James H. Meister,
Assistant
Cashier,
to
Assistant
Vice-President.
Both
appoint¬
ments became effective following
at

if

of

Stockholders

the 12%% stock dividend declared- Andrew

by its Board, payable Feb. 15 to
stockholders of record Jan. 22.

9

%>

State of New York to increase its

promoted

was

from Assistant Cashier to

Assistant Vice-President, to Vice-

CAPITALIZATIONS

Pettiss

Cameron

Jersey City, N. J., has announced
the advancement of Alfred J. Lill,

Bankers

and

ETC.

15.
The Vale

Kingsbury S. Nickerson, Presi¬
dent of the First National Bank of

CONSOLIDATIONS

Jan.

*

if

present offi-

renamed all

rectors

to

reproductions

and

sketches.

*

The

Thursday, January 28, 1954

The Commercial and Financial Chronicle...

(468)

headquarters office
America, San Fran¬

General Man¬
ager, of The Royal Bank of Can¬
ada since 1949, has been elected
Vice-President of the bank, it was
Atkinson,

ing division at the Bergen'Square

of

rangements
whereby the scrip may be sold for
board of its 100 Park Avenue at>
cash or used to acquire additional
41st
Street
Office,
it was an¬ stock.
nounced on Jan. 25 by N. Baxter,

office.

cisco, Calif. Edwin Mclnnis of the announced on Jan. 14. Mr. Atkin¬
trust department, and J. Hayden son will continue in his
capacity
Hull of bond investment depart¬ as General
Manager.

Jackson, Chairman.

Company,

New York has elected Er¬
Strobeck to the advisory

pany,

C.

nest

Mr. Jackson

.

Jan.

22

that

also announced

Douglas

M.

Doubleday

President,

&

on

Black,

Com-;

Inc., and Harold W. Com<ort, Executive Vice-President of
The
Borden
Company,
have
been elected to advisory board of
pany,

46th

Street

Madison

at

Avenue

if

be in¬
creased from
200,125 to 210,250
with a corresponding increase in

if

364,000.

has announced the

ap¬

pointment of Mr. Donald J. Carl¬
Assistant Treasurer.

Carlson has

Savings
since

been

except for

three years,

Poughkeepsie

when he

the

of

in the

Meeting

Director.

*

.

if

Trustee

The

of

by

DeCoursey

R.

.Executive
been

par

000,000

by

By

to

$5,000,000

$6,-

*

*

capital

common

State

of

New

York

approval

to

of

Name
Trust and

Jan.

on

18

Certificate of
from Madison
Deposit

Co.,

Oneida, N. Y. to Madison County
Trust

Oneida,

Co.,

of

Y.

N.

capital

and

stock

to

from

stock of the par value

common

$12.50

share, to $150,000,
consisting of 12,000 shares of com¬
mon stock of the same par value.
per

*

Mr. Raymond Tj
dent

of

from

post in

Bank,

Jan.

$750,000

authorized.

was

dividend

is

was

given

on

Jan. 21

President

Bank,

Bush-

Banking Department of the State

Brooklyn,

of

of New York to change its name
to The Peoples Bank of Hamburg,

Fackenthal,

President

of

the

*

*

public service

activities.-

1

Hamburg, N. Y.

bank since 1952, who is resigning
this office to devote himself to

The

*

S;5

common

I

capital

stock

Of

The Canal National Bank of Port¬

will

owned)

1954,
Jan.

for

to

each

101

payable

be

shareholders

50

has retired.

of

today,

.

illustrated

aerial
town

appointment

of Walter L.

Tindle, formerly Assistant Secre¬
tary,

to

Vice-President

of

on

Jan. 22 by Edward A.

Nash, President of the bank.
9

Bank
N.

Jan;

Y,,
19

9

if

of

Babylon, Babylon,
given approval on
by the Banking Depart¬

was

ment of the State of New York to
1

increase its

common

capital stock
from $225,000, of 4,500 shares with
a par value of
$50 per share, to




section

area

east

showing

with
the

the

and

an

down¬

industrial

the

Pequonnock

The centennial booklet tells the

story not only of the changes and
development through which the
original "City bank" has emerged
as

11, 1951.
Mr.,1 Stockmeyer
bank

in

1941.

He

on

joined'- the

California

Trust

I

'

Company,

affiliate of Cali¬
Bank, completes his 20th
of service on Jan. 29.

1

9

B.

E.

9

made"an

was

the

Assistant

Vice-President

1951".

;

'

Detroit
Mr.

Bank

in

1922.

McPherson

*

•

started

The Detroit Bank in 1915.

(

with

the

Century.
the

mid-19th

to

mid-20th

The Bridgeport of 1854

presented

Bridgeport of 1954 are
side by side—the gap

between

in

years

dramatized

in

manager

*

Bank Executor and Trustee Com¬

Limited, London, Eng.

pany

also

Directors

The

elected

was

has

resigned

boards of the

bank and

C.S.I.,

G.C.V.O.,
from the

Bank

Midland'

the

of

Frank

West

Virginia Turnpike
Open in Summer

To

West

"The

will
value

Virginia

the

to

\

Turnpike

inestimable

almost

of

be

West Vir¬

of

State

ginia when it is opened for traffic
this summer,"
*

GovernorWilMar-

C.

he
full

27

uary

as

pledged
support

Secretary,
Schmidt, President an¬

H.

for

the express
toll

highway

"

Mr. Brownell joined the staff of
California
vanced

1923

from

He

1921.

Assistant

to

and

with

in

Bank

Cashier

1926

to

1946

which

in

Corporation, former
Bank, in
various executive capacities in¬
cluding that of President and Di¬
of

He

rector.

elected

1946

bank

the

officer

trust

and

move

of

in

Cali¬

fornia Trust company three years
ago.

William

Oscar
The

T.

9

and

Merchants

of

Na¬

rich

the

and

has

celebrated

his

44th

an¬

bank

pointed

for

to

20

years,

Assistant

were

ap¬

Cashiers.

production areas of
Marland

Governor

said,

"We

proud of the progress made to
the

Turnpike where the
construction engineers have com¬
pleted
more
than 90%
of the
on

tional Bank of Los Angeles, Calif., grading.
announced
that Alfred Holgate, 1 pushing
who

the

industrial

C. Marland

the South.

date

Lawler, President

Farmers

seri¬

Great Lakes

are
9

re¬

a

between

*

*

ins

t

congestion

ous

Assistant

of

Vice-President

a

will

m o u n

California

was

the

and

was

Group

affiliate

cuts

through

ad¬

Incidentally, the task of
traffic artery through
our West Virginia mountains has
been an amazing and outstanding
engineering accomplishment and
West Virginia is justly proud of
what

a

will

Gerald F. Willmont and Walter R.

beautiful

Holland, who have been with the

be

of

one

the

most

States.

tively, were elevated to Assistant

Michigan National Bank,
Lansing, Midfi., increased its com¬

Executor

Limited.

and Trustee Company

nounced.

Officers.

Trust
man,
was

Theodore

Weis-

Southern California attorney
elected member of the board

"If the

directors

Coates.
board

to

replace Mr. F. S.

All other members of the

were

re-elected and the di-

turnpikes in the United
experience of other toll

roads, which have opened in the
past five

set a precedent,

years,

the conservative estimates of rev¬
enues

will
of

The

ad¬

to

vancing years, Colonel The Right
Hon. Lord Wigram, P.C., G.C.B.,

Assistant

the

if

announce

owing

that,

regret

—wholly-owned affiliate of Cali¬
fornia Bank
and K. C. Prange

of

promoted to open
the then new GratiotWestphalia office.

board

land said Jan¬

bank for 26 and 27 years respec¬

was

§

of their

of the Midland

Company, Los Angeles, Calif.,

was

from

In 1925 he

member

liam

He

and manage

braneh

C.M.G., M.C., has been

a

the board

of

was recently elected VicePresident
of* California
Trust

the

Twelfth-Clairmount office in 1921.

named

G.C.V.O.,
and

officer,

,

My. Abbott staarted with The

an¬

Right Hon. Sir

9

Brownell, formerly trust

seph Mautner, who has been with

an

January,

Eng., have

elected

Wilton M. Adams, Secretary

niversary with the bank and Jo¬

in

that The

Frederick Lascelles, G.C.B.,

Alan

of

Assistant Cashier in March, 1946

Bridgeport-City Trus;t
Company, but also presents a ka»leidoscopic view of the City df
Bridgeport, as it has progressed

and

charge

Office, marks his
anniversary in Jan¬

and

of

River.

the

hong Island Trust Company, Gar¬
den
City, New York, was an¬
nounced

view

London,

nounced

—

meeting

and

years,

in

Pedro

service

year

■j

land, Maine, was increase from Jan. 19, 1954.
'
been elected $1,000,000 to 1,125,000 by a stock
George R. Berkaw, Jr., Bond
Comptroller, dividend, effective Jan. 15.
Investment Department; Burt R.
Charles E. Bosomworth, Treasurer,
*
if
*
Shurly, Jr. and C. Boyd Stbckhas been elected Secretary and
Marking its 100th birthday the meyer, Commercial Loan Depart¬
Treasurer, and Richard Wagner,
Bridgeport-City Trust Company, ment from Assistant Vice-Presi¬
Manager of the Life Insurance
to
Vice-Presidents.i
C.
Bridegport, Conn., has issued an dents
Department, has been elected As¬
anniversary brochure in which it Leonard Abbott, Commercial Ac¬
sistant Secretary and Manager of
shares its centennial honors with count Department, and Harold B.
the Life Insurance Department.
four other Bridgeport non-bank¬ McPherson, manager of GratiotMr. Dorman who has been Ex¬
ing corporations with lifespans of Outer Drive office to Assistant
ecutive Vice-President of Bush- a
Cashiers.
;
century or more.
'
'i
wich Savings Bank since Septem¬
Mr. Berkaw
started : with the
Bound in a special cover, the
bank in January, 1935.
ber, 1952, was formerly. Deputy brochure opens with statistical
He was
Superintendent of Banks of the data on the industrial city of made Assistant Cashier in Sep¬
State of New York, in charge of
Bridgeport as it was in 1854 and tember, 1939 and Assistant VicePresident Jan. 15, 1946*
savings banks.
an 1857 view of the city from old
Mr. Shurly was elected an As¬
Louis C.
Rub, Vice-President, Mill Hill. The booklet closes with
Vice-President
on
who has been with the bank for a contrasting summary of the city sistant
Sept.
than

Angeles,

Los

recently completed by

Vice-President

19, 1954.

Page 2274.
Mr. Perring also announced the
following appointments made at

with

fornia

5,

"Chronicle"

service

wholly-owned

shares*

proposed
increase
was
given in the Dec. 10 issue of the

Bank,

were

San

of

record

years

9

9

*

The Directors of Midland Bank

with

9

the

The.

the' Board of Directors

if

ant

30th
uary.

Feb.

of

,•

ier, of the bank's Sixth and Grand
Office. Claude M. Sebring, Assist¬

consisting of 825,000 shares.
share

1928,

George E. Jones, Assistant Cash¬

the

has

Vice-President

f

Calif.,

When

issued

time, Daniel Russo,

same

Comptroller,

The

California

capital stock will total $8,250,000-

full

in

investment depart¬

bond

Forty-five

The stock dividend of 10% (one

*

San

the

Office

De¬

19,

stock

of

Bank

in

teller

a

Main

if

1954 a 10% stock
dividend was approved, and the
necessary
increase of 75,000
shares of stock amounting to
the

with

Canada, Ltd.

Limited,

California.

began

of

ment.

troit, Mich., reported that at the
Annual Meeting of Shareholders
held

the
the
business activi¬

assigned to the analysis and
Research department in 1932, and
three years
later took his first

Perring, Presi¬

Detroit

The

of

rank

was

9

if

the

held

new

as

Francisco

increased

stock

Hull

America

$100,000 to $200,000.

*

the

served

northern

ties in

effective
National

Ohio

London,

The Banking Department of the

Dorman, formerly to The People's Bank of Ham¬
e-President, has burgh, Hamburg, N. Y. by the

Savings

more

department's
Mr.

dividend
Central

The

of
the
law
firm
of
Phillips,
Bloomfield, Vineberg and Good¬
man, E. C. Wood, President and a
Director of Imperial Tobacco Co.

recently

if

stock

a

Phillips, O. B. E., Q. C., founder

a

partment since 1932 and in
past decade has supervised

stock dividend.

a

bank

have

than

the

lnnis has been with the trust de¬

increased its
stock effective

Morrow, President of Na¬

quarter century and

men

of

Assistant Vice-President. Mr. Mc¬

of

Bank

C. J

F.

tional Sea Products, Ltd., Lazarus

more

C.,

if

its

Vic

elected

At the

same

value.

of

New York. He succeeds Dr. Frank
X).

from

15,

Carl

by

The following men were elected
Royal Bank Directors:

bank.

have

National
D.

made

was

President

Both

if

if

capital

common

of

Approval

wick,

Wente,

*99
if

9

1

Washington,

;

motions

a

was

bank's corporate ex¬

Riggs

Bank

stock of the

common

of

was

The

of

as

Fales,

after

of

Announcement of the two pro¬

i

14,

President.
Gerald

consisting of

in

22

Bank

ment.

Trust

an.'

Hospital

He

day of the

Jan.

Sav¬

Bank for

ings in the City of New York
announced

York

$100,000, consisting of 8,000 shares

Election of C. McKimi Norton

a

New

•

,

63 years old.
His death occurred on the last

par value of $5 per share to
$300,000, consisting of 60,000 shares

increase

9

of

15, to increase its capital

County

a

given

was

the

held
on
Jan.
20,
1954, Earl Harkness, President of
The
Greenwich
Savings
Bank,

Stockholders

State

the

Change

elected

Y.,

J

on

Hill

•

50,000 shares of common stock of

gave

Annual

died

brief illness.

Jan.

Jan.

of

was

Company,

Trust

stock from $250,000,

period of

was

Philadelphia

North

Chestnut

"

President of

McN'elis,

istence.

*

N.

Poughkeepsie,

Company

a

forces.

•armed

At

with

connected

Trust

Banks

1936

Mr.

the

F.

*

*

*

John

*

on

son as an

*

*

if

August Ihlefeld, President
Savings Banks Trust Company,

New York,

value from $3,202,000 to $3,-

par

ment

Mr.
of

will

shares

approval by the Banking Depart¬

Office of the bank.
I

Wilson said the number of

Mr.

outstanding

.

sults
its

so

fall

and

way.

realm of

far
short

made
of

it will

undoubtedly
actual re¬

the

more

than pay

is not without the
possibility that revenues
It

•Volume

179

Number 5294... The Commercial and Financial Chronicle

•

(469)
current

expectations,

and the

Turnpike authorities then

will be

able

to

route

Continued from first page

and

necessary.

the

two-lane

*f

else

%

«

As We See It

extensions

not be

;

progressive

matter of

a

tion of the schemes

to

seems

devel¬

-

as

the subject is

proposed, and in

any event

the pro¬

as
yet. Accordingly, we
question by for the time being for what

shall pass this

to be

us

a

much

vital issue.

more

opment."

Concedes Too

•'

.

is not outlined in full detail

gram

to town.

come

1

Facts to the

importance, but

some

* :

their acres and

*

'

,*

bounties to farm operators, oi

pay

they would leave

>

intricate one, much would
depend upon the administra¬

an

Governor's

this

'

must

we

'

"Heads of the larger bus and
truck companies who will
patron¬
ize the Turnpike are
solidly be¬
hind it and I am
glad to pledge
the
support
of
the
in

.

i

which additional traffic will
make

Staff

,

producers)

proceed with the

dualizing of the original
express

r

,

will exceed

Much

~

Yet, what
are

hardly lacking products

easily

Contrary

the facts?

are

%

Well,

as

*) '

I j

wci

things stand

of the farm, as
any one may

;

from the mountains of
potatoes that some years
ago were burned in oil to
get them off the market; from
the vast
oversupplies of butter which today we are
trying •
to peddle somewhere
abroad, quite possibly 'to Russia; I
from the vast
quantities of wheat
bursting the bins and
the elevators of the
country, and from the all but universal surpluses of farm
products of almost all kinds. How
see

■

The President

Bagley Appointed
By J, A. Hogle Go.
James

CITY, UtahHogle, ^Managing Part¬

ner, J. A. Hogle & Co., 132 South
Main Street, members of the
New
York Stock

apply. Somehow, sometime
begin thinking rationally and realistically about
place of agriculture in the scheme of human economic
activity. The sooner we do so^—whether it be in an elec¬

appointment

Salt Lake Of-

Once

head¬

with

offices in New
and

come

turies.
Edw.

cities.

Bagley,

native

a

been

of

with

ation

-

City, has

since

of the

gradu¬

from

War II, when he served

of the

Bagley has been
Manager of Hogle's Investment
Securities
Department
in
Salt
civic

circles.

He

dent of the Utah
ers

is

Kiwanis

Legion,

Aviation

and -Reserve

and

of

Utah

carried

Association.

of

36

who

years

joined

ago," will

master.

the

of

change

Average

j

century

have

the 325 is

ment

in

length

the

of

service

are

mutual

and

ladies

who have

seen

the

much smaller

a

them themselves.

Ex¬

of
.

years.

ing

quantity of their

engraved

are
25

to

gold

years

Walsh

maintenance

and

or

more

revenue

country

of

The town affords

the

or

what is

a

market for

over

is

sched¬

retire from active

service

Sept.

as

surplus

and above

in

years

ing

of

the

inhabitants

of

the

the

town,

.

He

was

Securities
The

Dealers

firm

Turner

of

all

and

of

Firm's

the

He

has

Trading De¬

identified

shares

over-the-counter
preferred stocks, in

of

investment

to

The

Financial

Washington Street

*

Chicago

BALANCE

SHEET

oj December 31, 1953

ASSETS

Cash
Marketable Securities
U.

S.

$3,501,873
<at cost)

Government

Slate

Obligations
Municipal Bonds

and

Other

Bonds

and

Preferred

$21,735,949
13,541,350

Stocks..

4,171,985

i........

Common Stocks

4,447,083
103,082

Mortgages

now

that farm

(or

a

Real

Estate

one

is

considers such

Title

operations had become for

falling into

a

to

>

43,999,449*
5,202,938 38,796,511

reserve)

927,079

544,248

depreciation)

100,438

'••Market

and

1,339,782
5,500,000

Indexes

1,500,000

Assets

Value

$52,209,931

$46,781,868

LIABILITIES
Trust and Escrow Cash Balances
Cash

Deposits

Guarantee

as

$17,669,658

Indemnity against Specific Title

Risks

2,729,526

Payable
Payable

103,418

Accrued Taxes
for

Losses

1,762,169

and

Contingencies

4,341,868

Capital Funds

some

reason

so

Less:

Cost

of

us

10.000,000
8,386

4,004,009
Shares

held

in

Treasury**

400,417
25,603.292

un¬

Total

was

$12,000,000

Undivided Profits

One would suppose

no one

keep

Capital Stock
Surplus

so peren¬

preached in political quarters about agriculture

farmer, and that in order

(less

Records

Total

simple, elemental truths

staggered by the folly that is

One might imagine that

< less

Stocks of Associated Title
Companies (at cost)...
Chicago Title and Trust Building Corporation....

Accounts

."

Receivable

Sundry Loans and Investments

more

it affords to those of the

popular that the food supply of the world

danger.

Reserve for Market Fluctuation....

Accounts

in serious

longer wished to
all from starving

state of abject dependence upon foreign

*eTo

be

to

Liabilities

exchanged for stock of DuPage Title Co.

Assets in

$52,209,931
under

merger

plan.

the amounts provided by statutes of Illinois have been
pledged
qualify the Company to do business and to secure trust and escrow

cash

balances.

.

N. C.—Darrell
W. Shope is with Reynolds & Co.

COMPANY

As

mu¬

Chronicle)

GREENVILLE,

CHICAGO TITLE AND TRUST

CONDENSED

com¬

With Reynolds & Co.,

for many

111 West

of

secu¬

orders in

and
and

(Special

Company in New York.

been

municipal

panies and in corporate and
nicipal bonds.- : i
>

partment, was formerly with A. T.
Geyer and Company and Graham,
Parsons &

distributors

and

listed

common

Sitzenstatter, Man¬

the

complete in¬
business. Un¬

rities, the firm executes

er's Fort Worth offices.

ager

Association.

a

banking

derwriters

McCarthy is District Man¬
of Eppler, Guerin & Turn¬
J.

York.

Eppler, Guerin &

conducts

vestment

G. L.

Norman

New

ration Bond Traders Club in New
York and member of the Dallas

firm.

ager

in

Secretary of the Corpo¬

corporate

Reserves
one

;

leading security Trad¬

Departments

appointment of G. L. McCarthy
and
Norman J. Sitzenstatter as
Assistant Vice-Presidents of the

the

The greater the number

and its role in modern economic life.

be




.

these that

nially

51 years.

1

prepare

cultivators, and it is there that the

is the market which

It is when

this year—after being
with the Exchange for more than
on

labour, than

those

among

Exchange longer than

Mr.

own

exchange it for something else

an

employee is Thomas
technician on the trad¬

floor.

uled

not be too smart politi¬

we may

DALLAS, Texas
John W.
Turner, President of the invest¬
ment
banking firm of Eppler,
Guerin &
Turner, Fidelity Union
Life Building, has announced the

country purchase of the town

them.

com¬

of

other
a

<

President,

Eppler, Guerin Firm
Appoints Yice-Prs.

First

which is in demand
among

gift

vision.

Walsh,

and

part of the

inhabitants of the country

Oper¬
ator, and Miss Ruth Marks, Man¬
ager of the Quotation Service Di¬
With the

a

employ¬

of service: Miss Elizabeth
Glende,
Assistant Chief Telephone

any

which repre¬

greater quantity of manufactured goods, with the pro¬

extensive

Two

more

cally, but we are quite certain that there is
something
radically wrong with this whole current attitude toward
agriculture.

reciprocal, and the division of

watch.

j

!
"

keeps

by the in¬

or

is

years

Exchange

with

appropriately

supply by sending back

produce of the country,

approximately 30

at

immediately,

they must have employed had they attempted to

1953

been with the

Completion of 25
memorated

more

the land to
produce less and less of the

on

Like the

;

•

Upon what;

which

It consists in the exchange of food for

country.

both

duce of

40 years.

over

more

policy be defended

between the inhabitants of the town and those

"The inhabitants of the
a

currently active employees of the
Exchange a n,d
affiliated
com¬
panies. More than 100 completed
while 25

on

Is there

of these farm operators to
do, which
to the benefit of us all?

good things of life?

into which it is subdivided.

The quarter
century group rep¬
almost
one-third
of
all

quarter

things is forthcoming anyhow?
some

,

.

resents

their

can a

at work

men

advantageous to all
employed in the various occupations

toast-

as

basis

labor is in this, as in all other
cases,
the different persons

Mr.

Exchange

act

pro¬

sanely and aptly described

production of substances, may very properly be said to
gain its whole wealth and subsistance from the country..
We must not, however,
upon this account, imagine that
the gain of the town is the loss of the
country. The gains

ston, President of the Exchange,
M. Crooks, Chairman of
the Board, and Edward C.
Gray,
Gray,

would redound

manufactured produce to the inhabitants of the
country.
town, in which there neither is nor can be any re¬

Richard

President.

needed of these

nothing else for

The

will include Keith Fun-

-

the

The town repays this

28.
The dinner, an annual
event,
will be held at The Towers Hotel.

Vice

more

that production of these

all?

money.
The country supplies the town with the
means of subsistence and -the materials of
manufacture.

quarter century or more of
a dinner
Thursday, Jan.

moment

supplies is to be encouraged in the interest of,
How can bounties be
paid upon the production of
these
things without encouraging the growth of such sur- *
pluses, and why the bounties in any event if all that
is

us

sents

service at

Executive

been

tervention of money, or some sort of
paper

The New York Stock
Exchange
be
host to
325
employees

Guests

than the remainder

place of agriculture—and of the urban

never

manufactured produce, either

will

a

country what

by Adam Smith; and all the nonsense of the day to
contrary, nothing has happened since to render inap¬
plicable the burden of what he has to say.
"The great
commerce of
every civilized society," says Smith, "is that

Exchange Dinner for
25-Year Employees
with

own

the

American

Club

Officers

his

than

member of

International

more

the

on

us

ducer—has

Vice-Presi¬
a

not

are

stand

a

cen-

it is

country regards as being in accord with the value
products and services; that agriculture is indispen¬

The real

Securities Deal¬

Association, and

prices which

said

adding that

physiocratic
special category, and
must be kept
happy and at work on his acres by bribery
and largesse.
•
'
' /
/

1950.

financial

orator

no

strive to put out of our heads the
notion that the farmer is in some

rank of Lt. Colonel.

in

hear

for

anyone say

excess

—

Let

Officer
in
the
European
Theater where he attained the

active

still

we

;

can

are

sable to national welfare.

Artil-1

as

lery

and

But

it needs at
Lake

firm

Utah State
Agricul¬
College in 1933, except for
military
service
during
World

Lake

we

precisely because the farmer is able to
feet, and produce for the remainder of

Bagley

-

Salt

the

N.

tural

Since

more

commonplace for decades—we had almost

16

Mountain and
Pacific
Coast
Mr.

shall succeed

sooner we

being regaled with oratory about
the fundamental
importance of agriculture. Once again
the importance of the farmer in our economic
scheme of
things is shouted from the housetops.
All this has be¬

quarters
of
the
39-year
firm

year—the

relieving ourselves of a frightful burden of waste and
misapplication of labor, capital and natural resources.

Bagley as
Manager of

York

must

tion year or some other
in

Edward N.

old

to concede—as all

the

announced the

fice

or

nomic and social life do not

we

Exchange, has

of

assume

politicians of the day assume or concede
agriculture is a thing apart, a "way of
life" as some
dispenser of soothing syrup once described
farm existence, a domain where
ordinary rules of eco¬

LAKE

E.

to

too
many of the
—that somehow

,

SALT

seems

U

The Commercial and

(470)

Financial Chronicle

Thursdays January 28, 1954

...

___

MYSE

Appoints
Our

Muller Vice-Pros.

Reporter

George F. Muller, 39-year ex-ecutive
of
the
Stock
Clearing/
Vice -President

a

Y

o r

the

of

•

New

t

d

o

F

■

extending maturities because there is both the desire and the need
to obtain income. Commercial banks continue to be the principal

assign¬
will

methods

'New highs in certain of the longest and higher coupon

functions

apparently

and

;

services of
the

its
d

attitude toward

com¬

a

t

e

panies.
of
of

the

sellers.

the

Ex¬

sirable

the

of

subsidiary

Ex¬

change.

lack

Muller

Mr.

joined

in

1941

been

Government

certain

not

has made for

issues

generally beneficial either

a

However, in
have had
full

the

to

December

amount

kind

some

returned to the Stock Ex¬
change in 1946 as Assistant Sec¬
He

of

totals

instances securities that have been offered

but it does not go

in

governments

ravorabie as far as the market

Stock Clearing Corp.,
named Vice-President of that
of

to

55,416,000
53,398,000

74,127,000

54,660,000
60,064,000
68,206,000

784,953,000

731,405,000

65.129,000

903,400,000

Total

upward during most of the year with
all but two months of 1953 exceeding the comparable

on

The

very

primarily the result

large loss total in August was

fire at the General Motors transmission plant
at Livonia, Mich.
Complete destruction of the plant made the
loss the largest in a single plant in the history of the country.

Swings in
always been
is concerned since it allows buyers

get in at prices they consider to be desirable.

particularly heavy in

the $40,000,000

of

too long usually without

directions

both

in

periods of the previous year. Losses were
March, August and December.

fairly important reaction taking place.

a

of

quotations

56,403,000
52,220,000

as

pulled because prices looked higher and buyers
through the nose for them and yet still not get
they were after. This is most certainly a bull

market symptom

62,965,000
58,744,000

The trend of losses was

many

pay

67,380,000
62,354,000
58,585,000
61,675,000
56,462,000
58,949,000
63,958,000

58,551,000
68,064.000
83,440,000

October

for sale have been

Aviation, also in Brooklyn,

was

in

is

—

November

needed obligations.

Corp., Erie Basin Di¬
vision, Brooklyn, N. Y.
In 1944
he became Assistant Controller of
the
Marine Division
of Bendix

retary

offerings

69,136,000
71,507,000

74,938,000
107,713,000
68,613,000

September

far the tech¬
position of the market is concerned. To be sure there has
more
of a tendency to step-up 'prices in order to acquire

nical

the University

Shipyards

y

of

thinness which

after graduating
of Louisville
in 1940.
He left in 1942 to be¬
come
Chief Accountant of Todd

change
from

August

This usually makes for conditions which are not too de¬
far as either investors or traders are concerned.
The

69,925,000
73,254,000

67,644,000

June

as

$68,686,000

67,362,000
64,239,000

May
July

Corpora¬

Clearing

Stock

a

$74,155,000

83,471,000

;

April

issues;

The Government market is again acting pretty much true to
form—-that is, when prices are going up there are very few if any

Secretary

and

Vice-President

tion,

February
March

1951

1952

1953

Thin Market

A

his title

retain

following tabulation.

$76,659,000
72,706,000

January

George F, Muller

will

He

obliga- ;

about* issues that might be

the market for Treasury

5

,

monthly basis and totals for the last

a

FIRE LOSSES

maturity range and the effect it could have
This seems to be indicative of the

same

Insurance Stocks

1951.

on

three years are shown in the

,

buyers of Government securities are

concerned

losses

Estimated

prices of these securities.

constructive

affili-

much

not too

offered in the
on

Exchange

and

the fact that

tions attest to

and

of

estimate

the

than

The inter- /;
in too much favor recently v.

of'impending developments which could have a tempoinfluence upon the market action of these issues.

rary

for the

means

■ •

because

be

develop
improved
to

—

total in 1953. According;
Fire Underwriters, fire
■damaged or destroyed $903,400,000 worth of property in the
"United States last year. This was 15.1% above the total of $784,-,
953,000 reached in 1952, the previous record and 23.5% higher

getting most of the attention at this time.

mediate term obligations have not been

This Week

.

buyers of Government securities with the shortest and the longest
maturities

r

-Destruction by fire reached a record
to estimates of the National Board .of

f

.

Mr. Muller's
new

very

Accordingly; buyers of Government obligations are

deterioration.

a n'

nounced.

ment

ease

u n-

n't,

e

greater

even

Presi-

n,

still

markets will continue and

kj Stock

Keith

strong that the ease in the money
prospects are good, that there will be >
if the economy should show evidence of further r;

-The opinions are

Exchange,
s

•:

By H. E. JOHNSON

By JOHN T. CHIPPENDALE, JR.

been appointed

Corporation, has

Bank and Insurance Stocks

Governments

on

has

in

losses

Also

December were particularly

heavy increasing

by 22.6% over the November total. They were 12.6%
in December, 1952, which was close to the highest

At the same time

higher than

total of any
organization in 1947 and Vicealso beneficial as far as the action of the market is concerned.
month in that year.
To some extent this reflected seasonal con¬
President and General Manager in
siderations as December and January are normally the periods
1950.
when losses, because of the heating season, are higher.
Treasury in Driver's Seat
:*\i Lawrence J. Cassidy, a Stock
There is also evident over the past several years the rising
The fact that offerings have been very limited in size from
Exchange employee
since 1920,
trend of fire losses. While fire protective organizations have been
tirpe to time, and this applies to all sections of the list, means that
was appointed Assistant Secretary
the powers that be can readily dictate whatever terms they want
expanded and have improved their efficiency, loss totals have con¬
in Charge of Operations of Stock
to in the refunding operation.
tinued to increase. A combination of greatly increased amounts
There is nonetheless a certain
Clearing Corporation.
amount of risk in such a course of action because a market that
of property constructed in the postwar period as well as rising
advances too rapidly and too sharply can be very vulnerable to
property values has meant the exposure to fire in terms of dollar
values has been much larger. Thus, in spite of the large losses,
changes in economic conditions.
"
Cashiers' Division
the physical destruction by fire relative to property values and
;
v At the moment the money markets are reflecting to a certain
Elects New 'Officers
population has not been so great as the totals might indicate.
degree at least the belief that the rolling readjustment in business
James J. Duddy, of Carlisle &
As an indication of this, it can be pointed out that fire un¬
which was interrupted by the Korean conflict is being resumed.
Jacquelin, was elected President
;:This means that competition will be more intense in many indus¬
derwriting operations have been generally quite profitable, pt
of the Cashiers'- Division of the
tries, unemployment w/ill rise, and the economy will be going ' .; course this profitability was in past based upon the structure
Association
of
Stock Exchange
of premium rates but the profitability of the fire lines indicated
through the so-called "cleansing-process." Easy money rates is the :
•Firms following the annual meet-;
Sedative.that.is usually given /under such conditions and this leads
; that losses relative to volume were not excessively large.
ing.
Mr. - Duddy - succeeds
D; money market/specialists to look for more and easier credit in the
;
In the past year, however, there have, been a number of de¬
^Lionel- Howedel,of Jas. *
;
future.,?.
' •'/"!
!
velopments which indicate thai the margin on straight fire busi¬
phant & Co/.
;j;v,
:
business picture shpuld worsen more than is expected, ^ ness is declining. Fire losses have continued to rise, and accord¬
-I Other officers^elected^included: \
; quicker action would no doubt be taken along monetary lines in "
ing to some at a faster rate than -property additions. At vthe
T. i Alvah
Cowen,
of .Peter P;
Order; to-ease "the pain. There is no question but what this kind '.
same, time, premium rates reflecting the profitability of earlier
McDermott & Co., Vice-President;
of monetary policy is bullish; arid will mean higher Government ; '
periods have-been reduced by many states.
George J; Miller, of Hallgarten &
bond prices. This is in spite of the sharp and rapid rise which has'
-vit may take gome time for these trends to be reflected fully
Co., second Vice-President;; Myr-:
already taken place in quotations of these obligations. ; The talk
Cin underwriting operations.
However'the implication is clear-—
van P. Burns, of Bear,,Stearns &
about the 3 Y4S selling above 110 and the.long-term 2%s going back
' underwriting profit may be squeezed < between rising losses and
Cq., Treasurer, and William. ,R.
to 100 would not be
the sellers of these securities become

prospective buyers which is

'

-

!

>

■■

-

v

^

-

.

.

v

.

"

just

Other Side

-i

r

»

if

>

r.A"'?1, i

of the Coin

*

On the other hand, what, will happen to the

t
|

much idle talk under such conditions.

so

the Congress

decides to

embark-upon

:

-

markets

money

spending

a

.

program

*

inflationary fears?

Would there still

p. S. TREASURE

be the

same

easy

money

ties act

order

as

_

to

combat

questions that

and

who

the forces

believe

MUNICIPAL

inflation?

of

These

are

of

some

no

being asked in the financial district by those
might be a /revival of Government spending
deflationary forces can be retarded.

tendency, to back

in
*

that

maturity

range.

away

from them

pension
V2% bonds.

despite the

funds
.

have

been

also
.

..

.

(Special

Fischer of Merrill

Lynch Giving Course
sessions
course

the

AtTBHET G. LANSTON

Mr.

IKCORPORATED

ST., NEW YORK 5

WHitehall 5-1200
St..::: .^Milk St.

!

ST 2.9490

1

«

.

"
.

...

r.;■'

."

BOSTON#,:

..

-.HA 6-6463
.

•




'

Z

Leonard

Fischer's

"Investments" begins in

School

of

General

Studies

at

Davison

326 Walnut Street,
members of the New York and
Cincinnati Stock Exchanges. Mr.
Louden was formerly an officer

•-

course

Holton,

Company

Farra

in

give, arrangements have been
made for outstanding specialists
Instead

of

using

will

cover

text

College, 69th Street and

Park Avenue, on Feb. 1, 3, 4
from 6 to 9 p.m.

stock market trading, investment-:
planning, types of securities and1 Feb. 16.

&

Barney

in the

39

Co.,

Mr. Wilson

South La Salle Street.

past was local manager for
Company
and

Milwaukee

the

thereto
Co.

•<

OUR

ANNUAL

COMPARISON

&

ANALYSIS of

was

Glore,

with

NATIONAL BANK
;

of INDIA. LIMITED

17 N. Y.

City

Bankers

Bank Stocks
Available

and 5

Qlass will begin

on

to

Burma,

In

<

YORK 5, N. T.
BArciay 7-3500
e
Teletype—NY 1-1248-49

120 BROADWAY, NEW

Telephone:

Dept.)
Specialists in Bank Stocks \

(L. A. Gibbs, Manager Trading

Pakistan,

Ceylon,

Protectorate.

.

.

.

_£4,562,500
Capital
£2,281,250
Fund-—_—__£3,675,000

Authorised Capital

Members New York Stock

BeU

India,

Kenya, Tanganyika,
Zanzibar, and Somali-

land

<

26,

Aden,

Uganda,

Exehango
Members American Stock Exchange

Uganda

Bishopsgate,
London, E. C. 2

Office:

Branches

Request

Laird, BisseH & Meeds

the Government in

Kenya Colony and
Head

16, Direc¬

at Hunter

associated

become

Smith,

Forgan &

speakers.

academic

with

of prior

Lexington.

will

the field to be guest

has

Wilson

R.

Charles

—

/

that

addition to the lectures which he

in

111.

CHICAGO,

'

Chronicle)

Financial

(Special to The

Financial Chronicle)

Company,

announces.-

leaders, housewives and peo-;
pie. in all walks of life have en¬

rolled in it. "The
■-

'

Fischer, explained

books, those attending the course
will be-provided with investment
Mr.
Fischer
of
Merrill, Lynch,.1 material actually being used weekPierce, Fenner & Beane has been, by-week in the financial industry.
teaching this course for several
Registration for this course and
years past at Htinter. Many bugi-j the other 450 courses will be held
Edward

ness

$31 So. La Salle

CHICAGO 4

of

;

Tuesday evening

Hunter College on Feb.

tor

& Co.

on

information,"

Professor Davison said.

f

The first of 15

of financial

to The

.CINCINNATI, Ohio — Howard
D. Louden is with Westheimer &

of
sources

year.

Smith, Barney & Co.

Westheimer & Co.
.,

that;future refunding issues could fall

Private

active in the most distant 2

how¬

C. R. Wilson With

Howard Louden Joins

are

rising prices and the belief

SECURITIES

!

'

the

Commercial banks continue to be attracted to the
longer-term

2V2S and show

|

"

tively modest. Because of the importance of the fire lines
ever, the figures will be watched with unusual interest this

there

order that the

in

15 BROAD

*...

factors may be

policy which has been

some months now?
Would the monetary authori¬
they did in the early part of 1953, and tighten credit in

I

i

These

in evidence for

STATE

f

.

evident in the annual reports of th«
various companies to be issued in the coming weeks.
Present
indications are that the impact on 1953 •• operations was rela,

.

in

order: to combat the forces of deflation? 'What will take
place if
such a development should again kindle The

;

rates.

declining

Pont &

Muller, of Francis I. du
Co., Secretary.

v-Paid-up
..Reserve

The Bank conducts every

banking

and

description o!

exchange

business.- "

Trusteeships and Executorships
also undertaken

Number 5294.. .The Commercial and Financial Chronicle

Volume 179

Business and Finance

Bowling is still growing, and the

most

BRUCE

Interest rates, after staging one of history's
spectacular advances last spring, have softened
probably will continue soft. The present 3 xk % rate
prime names will not hold throughout the year. We

able

and

BAIRD

for

President, National Savings & Trust Co.,

have

Washington 5, D. C.
The matter of interest rates is

taining stability in

of genuine impor¬

one

speculation of late as to whether the levels which
current will continue firm

or

soften.

our
like to admit the fact—nevertheless the national govern¬

sharp rise in government bond
interest during the early part of 1953
with Treasury
bills yielding more
their

twice

This

seemed

former

indicate

to

ing increase in commercial mortgage
interest

the

but

bill

rate

has

sub¬

stantially declined since the middle

tial

Within these two fields alone rest

munities.

of the year

and the question is now
posed as to the position of interest
rates generally.
We believe that this question, as
most questions in the banking busi¬
ness, can be answered and only an¬
swered by the operation of the law
of supply and demand.
Escape from
this
law
is
only
made
possible
through the intervention of artificial
restraints

controls from

and

emerging.

interest level at
Hence

the

a

1954

future that

be

problems in

ness

would

be

longer pegged and
The

belief

is

readjustment

interest

of

rates

as

On the other

activity

demand for money and

and enterprise
competition for

a

that

the

situation rests

freed from
Much
gance
of

people and

we

ing

railroad

does

eliminate waste and extrava¬
Number One business, the administration

our

far-flung Federal

this business that

activities.

government

consumes

tax dollar.

our

It

our

is

not

is

prevail

divisions,

in

mounting

Given

of government

cost

as

quite

about

employment of risk capital.

tion

all factors

business

present

all

and

to

expect
of

continue

defense

new

limes,

to

affected by
produce a

business.

relief

no

from

be

born

reached

to

In

figure
all

develop there.

jjjjjjk

capital

see

probably

$1.5 billion.

In

First,

being

and

chemical
out

wears

more

other

George

industries;

efficient

B.

Beitzel

faster

and

processes

second,

are

new

continually

developed. Each of these requires a systematic
of capital improvements for companies to

program

I be¬

ways

many

products

to

I do not expect

reasons.

equipment
equipment in

than

for

drop

greater cutback than this

any

two

years,

$1.6 billion

expenditures

will

process

one.

after sampling

represents

manufacturers'

industry's

1954,

purpose

for

Nor do I, in the slightest, regret that this is so.
Frankly, I have always felt that depressions are born
in the mind, and usually fester and

Taking into considera¬
the feeling

this
of

level of about

a

1953.

this
4

optimist, and I suspect that I will always

an

about equal to
billion estimated for 1953.

chemical

around

was

be

highs in each of the last three
Eugene C. Bauer

President, The Franklin Life Insurance Co.
I

to

investment program, which set new

w

*

in

the

1952, fell short 6f the level achieved

over

expect chemical industry

1954

10%

The

of

do look ahead with

we

BEITZEL

indicating the sizable part
chemicals play in the National
picture.

condition

same

B.

sales,

satisfac¬

throughout all

I

in

Incidentally,

our

CHARLES E. BECKER

through suffocation of the incentive for initiative and
the

we

volume

gain

a

1950.

the $20.4

a

hope and confidence.

already stifling tax
diminishing returns

our

burden will advance to the point of

two

our

respects, 1953 was the peak year for the
industry. Both sales and capital expenditures
highest in history. Profits, however, while

the

sales

Economy in

activity; rather by transfer of workers to the de¬
velopment of productive enterprise the result would be
to reduce the need for taxes, at the same time increas¬
of taxation.

the part of educators,

many

showing

to

as

important bear¬

an

business

In

chemical

government operation certainly should not depress busi-

sources

out"

sizable

were

reluctant

general business

as

ness

ing the

"stretch

GEORGE

think.

people

we are

tory, and while this

managed economy.

a

future.

President, Pennsylvania Salt Manufacturing Co.

as1

what lies ahead. Presently

on

are

is being done to

in

our

the

with

very

oncoming

prognostications

any

future

the

some

hand,

whole will have

If

they should retreat, retrench and curtail ex¬
pansion the reverse would apply.
The wholesome fact
is

make

that

period will not be

pronounced

question

the

a

its

Our company is currently engaged in certain
vitaj de¬
fense work and even
though we have been
the

President, Poor & Company

continue

there will be

about

continuous

EUGENE C. BAUER
fortunately

are

we

to

loans.

something else and probably not

on

growth in the entire school field for

busi¬

problems

optimistic

namely, school furniture and gymnasium equipment,

growing America

without

but

most

are

continue its forward progress.
I might say we look for¬
ward with great confidence to a
rapid and

During

interesting.

are no

business

substan¬

be faced with confidence. There

1954

we

Bruce Baird

with the determination of the people at the grass¬
roots of our economic system.
Should they as a whole
normal

can

and

The Horn division of our
company which, through ap¬
proximately 70 agents, manufactures and merchandises
gymnasium equipment (folding bleachers, folding par¬
titions, folding stages, and wardrobes) is expected to

by company. Sound
a

leisure time avail¬

more

can

acceptance

rather

rests

with

there will be company

as

more

with education from coast to coast.

industry by industry there will be trials and

will

only to moderate the
economy, not to hold the

the

to

answer

a

decline.

business

severe

a

means a

pre-determined rate.

a

against

management, the will to work and

seeks

free

in

tribulations

which

Government issues

the Federal Reserve Board

peaks and valleys of

cushion

the

architects, school superintendents, and of those connected

pledged to the maintenance
of economic stability. We know that our highway sys¬
tem "is 20 or 25 years behind actual needs. We know that
the physical plant for teaching our great crop of young¬
sters is not adequate, is in fact antiquated in most com¬

returns.

workers

Our line which implies "comfort in modern
design" has
received outstanding

theless the Administration is

continu¬

a

business

yet been tried in the field and they may not be as effec¬
tive in actual application as they are in theory. Never¬

the

than

broad powers available to cushion a business
It is true that some of these weapons have not

decline.

seen

the

Our company has recently entered the school furniture

ment has

are

We have

largely dominated by
pledged to a program of main¬
economy.
We old timers do not

businessmen

to

they be expected to
enjoy this, the largest of participant sporting activities.
Naturally, the bowling business is affected by employ¬
ment, but with high employment and high wages plus
perhaps shorter working hours we look for a continued
growth in the bowling field.

Administration

national

a

successful

tance to borrower and lender and there has been much

23

Speaks Alter the Turn of the Year

greatly.

Continued from page 6

now

(471)

remain competitive.

the country we would say
that the outlook for the future economic soundness and

lieve that the horrible

have happened.

Profits have been squeezed by rising costs and higher

prosperity

The nation developed a mass neuro¬

taxes. One profit-depressing factor during the next few

sis; we thought things were bad, or
ought to be
and thinking made

will be the use of accelerated depreciation.
companies who have availed themselves of this c$$hsaving opportunity will
show smaller book profits,

among

of

men

over

country

our

warrants

the 30's

optimistic

an

approach.

need

never

.

M.

R. BATY

them

Vice-President, Hackley Union National
Bank of Muskegon, Muskegon, Mich.

As

we

enter 1954

look back

we

1953

of

World

II

War

Charles

taking

what
a

orders

orders

and

would

then

was

deciding

or

ness

since

1939

have
do

entered

not.

busi¬

Those

Baty

natural

phase of business—at least
those born prior to 1900 learned it.
a

The

current

for those

year

who

hard will not be unsatisfactory.

adjustment.
omy

is in

We

excess
our

of demand

at

economy are

as

factory prices—they

may be

a

and

tinue with

overall decline of

an

expand but

its

decline

after taxes

will

billion.

Personal
of




our

we

what

should
We

let

we

then.

were

this

happen
bigger

immensely

are

We have grown

We have

example of
to find

cre¬

And

we

still have

.

many

From
to

can

stimulate

our

in

our

business

Salesmanship
men

to

as

many

be

decline

to

around

we

sell

as

they possibly

must

savings

now

been
own

German

busy

from foreign

and

pro¬

chemical

British

satisfying the accumulated

geographic

areas.

But, in the future

they will be looking further afield for potential business.
This

means

United

the

States.

impetus
emphasis

attempt

for
on

This

the

to

find

situation

domestic

a

will

market

within

provide

producers

to

the

additional

place

greater

selling in 1954 than they have in the recent

must

past. Additional marketing mechanisms, such as adver¬

pros¬

tising and technical sales-service, will aid the industry

We

potential

material,

the

econ¬

sales

job

each single working day.

aids, and the prestige

as easy as

With team work in

however,

can

to say that we have
in 1954 than the

our

be in

a

am

happy

a

we

believe that there is

produced in 1953.
no

reason

why

legal

this

plateau is higher than it has ever been

On the securities marketplace,

of investor opinion,

B.

Billiards
*

and

backbone of

our

proportionate

bowling, which

at the

moment

prospects of chemicals.

is the

business, should continue to enjoy its

share

of

the

recreation

supreme

industries. This demonstrates

the confidence the investing public places in the growth

E. BENSINGER

President, The Brunswick-Balke-Collender Co.

billion

which is the

chemical equities have been

commanding higher prices in relation to earnings than
have stocks of many other

running at about

being accumulated

economic factors together, we may

period not unlike that of 1949 which we can call

that

court

reserve

should not likewise enjoy peak prosperity.

Disposable

disposable income will not change

a

before.

And I sincerely

every

concerted effort to increase intelligent con¬

leveling out, but it is comforting for the outlook of

1954

better production

staggering million-dollars-of-paid-busi-

ness-a-day which

a

demand for chemical products.

Considering all

builders, to

organization (and I

it) I anticipate

making

sumer

possible.

con¬
company

in

And

provide them with the tools, the promotional

make their

$240

have

competition

the

as

place between 7%

moderate.

industry for which

I expect the American chemical industry

Heretofore,

industries

always demands
work.

means

see

branch of the

one

stronger

demand of their

Our defense spending will not
will

on,

can

success

field

now

face .much

ducers.

.

We

stimulating segment is plastics, which seem
every day. On the other hand, agricul¬

uses

the future holds uncertainties.

a peak.
Savings banks
institutions are bulging.
Life

loan

a

new

tural chemicals is

judgment 1954 will be just as good
make it excellent, we can make
(I don't think, even with our worst efforts
make it bad.)

make it.

salesmanship.

Those who apply

with personal consumption expenditures

about ,7%%

industry is one of the components of
integrated economy, I expect it to react in some¬
the same general manner.
However, due to this
industry's diverse nature, any such adjustment'will
merely be the resultant of many oft-counter forces. An

distribution system was out

decade ago.

a

and

Spectacular

The gross national

some

we

we

period of
our

declining phase and probably will

and 10% at the year end.

at

in

the moment;

great.

lower.

a

$222

hard

than

predictions of a decline, or at
leveling off of the Nation's business in 1954, and

a

since the chemical

.

it mediocre.

diligently in 1954 will find buyers at satis¬

product is in

income

are

building

pects

Supply in nearly all segments of

the needs of

themselves

work

business

.

In my deliberate

who

in

problems confronting business when
supply was slightly or greatly in
excess of demand.
A comfortable phase in business is
to have supply
moderately less than demand. That is
not

Why
again?

Becker

.

business prior to that time
had to be salesmen.
They knew the
were

M. R.

who

.

insurance is rising to a stature in public esteem, here¬
tofore unknown
this in spite of the fact that sales
in the recent past have outstripped our wildest dreams.

nothing,
buyers' mar¬

Those

E.

undreamed of

and

too many in business know
from experience, of a

ket.

develop

to

least

Our employment is at almost

service is involved. All

a

There have been many

skilled

its

unfilled needs, demands and dreams.

Now

sellers' market prevails whether a

product

able

and

in global importance.

almost

filled.

be

nation

ated needs, and wants and services which did not exist
then. We have just reached a height in prosperity which

without exception, has been a matter
of

our

though their working capital will be increased.

great

were

products and services

of kilter.

Since the end

business,

were

but

we have entered into a buyers' mar¬
ket in nearly every business. A buy¬
ers' market is a new phase to many

in the business world.

this

people

as

there

while

which

having been
a most satisfactory year, in
general, for business in spite
of almost unanimous forecasts a year ago that it would
be a year of depression. It is true that since mid 1953
on

the

needs for the
*

years

.

so.

All

Executive

.

depression of

dollar

in

1954.

I believe these

Over the medium and long term

expectations shall most certainly be ful-

'

filled.

Continued

on

page

24

The Commercial and Financial Chronicle..

-

24

(472)

Continued

JOSEPH

from page 23
The

Co.
Mutual Fire Insurance Co.

Liberty Mutual Insurance

Liberty

The next 12 months will mark a return

We

Korean

field

First-off came the

fore,

in the

era

Such

;

.

the

in

operate

national average.

Chicago

labor moved

another step forward when the com¬
established the most liberal non-contributory pen¬
sion plan in the industry, amounting to $137.50 a month
pany

on

'

retirement.

program

tion
15

passed

were

projects

in 1953. Twelve major construc¬
completed, and work was started on

were

others.

■

Division, which
well

L. Block

Joseph

Paper

Writing

Corp.

■

t.

More

;

than

ever

before

perhaps

is

changes

to

believe

conditions,

that under these changing

adaptability

I

full line of implements as

a

*

sales

exceeded

$625,000.000—more

than six times the total of 1952. Some of Ford's defense

be

concluded during the year.

were

concluded

in

1954.

Still

wili

others

Others will

continue

for

an

indefinite period.
We

grateful

are

for

the

highly favorable public
anniversary observance.
We attempted
to tell the story of how a distinctly
American institution has moved steadily forward on the
response

BLODGETT

offers

now

product

programs

turally, I have enough confidence in our own organiza¬
tion to hope that we may, in turn, even exceed the rate
prevailing in the midwestern area.
*

American

r

,

the Ford tractor.

as

Defense

post-war era has been
phenomenal, and should account for
higher rate in this territory. Na¬

Chairman,

■.

.

on

the

H.

'

The company entered the agricultural machinery field
a
greater scale with formation of the Ford Tractor

area

at better than the
The growth of steel

THOMAS

%

Several milestones in the company's postwar expansion

consuming industries in the Miawesi

during

/

~

1

should

substantial expansion in

•

Company employment in the United States reached an
all-time peak of 195,817 on Aug. 18, 1953, and the average
monthly employment throughout the year was 185,000
persons. Ford payrolls reached an all-time peak of al¬
most $1 billion a year. Relations between
management
and

rate

a

appraise the New Year.

,

mills

automobile insurance

to

events of the 50th

American Road. The public saw, heard and read this
story with heartening enthusiasm. The refurbished Ford"
Rotunda, showplace of the automotive industry, attracted
more than
1,000,000 visitQrs during the year. The Ford

50th

anniversary television program was witnessed by
than 55,000,000 persons, and press
coverage of an¬
niversary events was the most extensive in the history

more

the chief factor in

attaining business

of the

during

success

formity

tions,

changing

oncoming

not only

With

1 9 5 4.

these

to

the

1

prove

accident frequency rates, reflecting
the recruitment of untrained people and the speed-up
crease

competitive

80% of the current ca¬
would be 120% of the 1939

The

volume at a time when the cov¬
erage was being written at premium rates ..hat did not
reflect the serious inflation in cost per claim settlement.
The interplay of these forces raised a host of pioblems
in the business for which sound solutions can be found
only in a period of relative economic stability.
It now
looks as though 1954 will be a year of adjustment, and a
time
in
which real progress can be made towards
strengthening basic operations in the industry.
At the end of 1952, Workman's Compensation pre¬
miums written by all companies had increased by onethird over the 1950 level, and a further gain is indicated
for 1953.
The premiums for this line of insurance reflect
the Composite of industrial payrolls, the incidence of
work accidents and the level ot benefits provided by
law for injured workers.
The sharp upturn in industrial
employment in 1950 and 1951 resulted in a serious in¬
in

a

even

pacity
figure.

inflation in prop¬

employment, marked simultaneously
by a serious upsurge in industrial
accident
frequency
rates.
At the
same time there was a large increase

Black

in the midst of

operations should be most satis¬
factory. Capacity of the industry has
increased 50% since 1939, and, there¬

values which created so great
expansion in the market for prop¬
erty insurance cover as to strain the
capacity of the companies.
Accom¬
panying this situation, the casualty
business had to meet demands cre¬
a

our

of

an

by

now

are

ingot capacity this year.

erty

ated

industry and for

is good.

throughout 1954.
In my opinion, the industry will
operate at about 80% to 85% of rated

The

emergency

themselves in the
operating problems faced
by the
Casualty - Fire
insurance industry.

'

Bruce

together,, they are symptoms of good health at
Ford, and justification for an optimistic outlook as we

*

>

industry for the first time in almost 14 years. These
conditions will probably prevail

opments reflected

S.

Company

steel

to more normal

created a renewal
of the upward spiral of wage-price
relationships which began during the
World War II period.
These devel^

the

of

the steel

for

outlook

1954

company

operations in the Mutual Casualty-Fire insurance
than have been witnessed over the past four years.
outbreak

Steel

Inland

BRUCE BLACK

S.

prestige-and good will.

Taken

President,

President,

associated with such qualities as

BLOCK

L.

Thursday, January-28, 1964

.

year

con¬

condi¬

should

interesting but

new
Research and. Engineering Center at Dear¬
which was dedicated by President Eisenhower,
symbolized our progress toward the continuing goal of
improved products for the future.

born,

These

H.

highlights of 1953 at Ford Motor Com¬

some

We look to 1954 with confidence.

profitable to industry.
Thomas

are

pany.

in industrial

Blodgett

V

f

'

.

production. This was accompanied by soaring medi¬
cal and hospital costs for the treatment and rehabilita¬
tion of injured workers, and there were also sharp up¬
ward adjustments in the level of weekly indemnity pay¬
ments provided by the Workmen's Compensation laws.
The experience of the carriers, resultant from these fac¬
tors, proved that premium rate levels were grossly inade¬
quate. Progress towards correction through upward pre¬
mium rate revisions was made in 19'52 and 1953 and there
has also been an encouraging improvement in accident

industry.

The

'

•*

in

frequency rates.

work in

Exec.

1954, reflecting

Ford Motor Company

the

shift

Although this forecasts some re¬
which will cause premium
volume to shrink, it is thought that the improvement in
loss experience will more than offset whatever reduction
in premiums occurs within the next 12 months.

inhibited

frequency.

rates have

been

now

brought to levels which generally reflect current levels
of incurred losses per accident reported.
Therefore, if
automobile accident frequency rates, which have tended
to show improvement since 1951, continue to be held in
check, the outlook is for a more favorable experience in
1954 than the

extremely adverse results suffered in 1951
and the generally unprofitable experience of 1952.
An
improved outlook experience-wise will, without doubt,
be met by a resurgence of very competitive conditions
in the automobile insurance market.
As a result, it is
thought that the only companies that will be able to show
gains on the automobile lines in 1954 will be those which

offer a superior * claims and
policyholders.
The

sharp increase in

new

service

coverage

to

their

residence

and

other

con¬

the total fire insurance premium volume written

companies to show
off by

an

by all

increase of substantially three-fold

This growth was

already beginning to taper
1953, and there is nothing presently in the outlook

to indicate any

substantial expansion

for 1954.

In all likelihood

return

more

to

the fire insurance field will

competitive conditions than

witnessed during recent years.

have

believed

'*

been

that

the

Casualty-

substantially
during recent
ments will

more

be

able

to

operate under

conditions than

have

existed

If this forecast is
correct, improve¬
possible in internal company operations

years.

be

and there will be

markets.

stable

a

return to stronger
competition in the

Meanwhile, insurance buyers will

become

more

conscious of the protection
they receive from their pre¬
mium
expenditures.
The gains made
by Mutual insur¬
ance have
always had their greatest momentum

during

periods of economic
stability. Therefore, those engaged
in the work
Mutual carriers do for
policyholders have
good reason to be more
optimistic for solid gains than

Jv^orld

War

^11 dUfing the inflationary




aftermath of

is

some

proof

adequacy and effectivenesss
at Ford
for just

of

of prep¬

nally

and trucks produced in 1953 were made in
months. Heavy overtime schedules, which "

production possible, are expected to continue *
quarter of 1954, and probably for

least the first

time thereafter..

But even more

of

our

significant in 1953 Was the sales record
on public

dealer organization, which capitalized

of Ford Motor Company products to set a 1
during the year.
At the end of 1952, Ford products represented 22.8.%
of. the total domestic passenger car market. By the end •
acceptance

of

pace

1953, this share rose to an estimated 24.9%—an in¬
of almost one percentage point over the postwar

crease

peak share of 24.0% in 1950.
Thus in 1953, when 6,150,000 cars were produced by
the industry,
senger
war

car

year,

Ford Motor Company's share of the pas¬

market was greater than in the best post¬
1950, when 6,666,000 cars were produced by

the industry.
While "share of the market" is a
progress,

future

it

is not

a

is concerned.

be determined, not

positive

controlling figure

as

measure

of

Our total production in

by what we sold in 1950 or

1954 will
1953, but

of facts i contained in cur¬
dealers. In our facilities
planning, we have estimated the market as far ahead as
the next five years, with allowances for expectation
a

reasonable increase in our share.

There
ance

in

a

year

forth sharply in

country

factor
as

and
and

out¬

whole,

a

conditions, and fi¬

carry-over

effects

of

an

Figures

on

reduced

Milton

Brown

production,
are

particu-

Exceptions to this general pattern in¬

larly impressive.
clude

agricultural

income

and

a

in

decline

construction.
It

seems

probable

that

the

readjustments

economic

which have been under way for

several months will con¬
Under such conditions it is likely

tinue well into 1954.

will

business

premium
sound

will

be

business

become

placed

able

financial

and

conservative,

more-

on

and

merchandising

policies.

There

a

and

appears*

however, to be no reason why the passing from a boom
to a normal economic situation should produce any un¬
due tension on the economy.

On the other hand, there
indication that the economy should
stabilize at a satisfactory level, only moderately below
the current rate.
While agricultural prospects have
been improved with better rainfall during recent months*
additional moisture will be needed in many areas to
overcome the effects of the long drouth.
The level of
livestock prices and the accumulated surpluses df farm
products and resulting acreage controls place a premium
upon efficient and.flexible farm management practices.
It is heartening to report that 1953 results were more
favorable than were expected earlier and exceeded pro¬

would appear every

duction

in

1952.

Over the long term the

conservation
supply continues to deserve the
thoughtful consideration of both agriculture and
industry.
Moreover, proper crop and soil management
practices are of great importance to the well being of
agriculture and will contribute toward improved water
and utilization of water

most

'

resources.

A

measure

of

reassurance

be

can

derived

from

the

strong position of the banking system.
Not only do the
banks have liquid resources sufficient to provide for
fluctuations in deposits but to take care of new advances
of

a

constructive nature

monetary authorities

are

as

well.

It

seems

clear that the

alerted to the adjustment which

has been going on in the economy and will move to make
fiancial

the

statistical records, others are intangibles

ployment.

reasons

by

activity

distribution and income

for this gratifying perform¬
of change and challenge. Some are set

were many

growth

a

the

proportions.

far as the

by schedules set on the basis
rent field reports from our

of

and

measured

that

trend of cutting back on output in the second
half of the year. More than 55% of the company's pas¬

some -

1953

Government

defense,
the plans

most
indexes,
in the Southwest
for 1953 will be of record-breaking

?

for at

is

the

As

dustry

made this

fields

economic

'

six

year

extended drouth.

accomplished by reversing the traditional in¬

cars

of

fiscal,

uncertain weather

1,870,000 cars and trucks was close to the postwar record
of 1,903,000 units, established in 1950. More impressive
is the fact that passenger car production of 1,550,000
units in 1953 almost equaled the 1950 total of 1,557,000

last

the

stripping

the

Despite controls on materials and
E. R. Breech
production for part of the year,
and despite several strikes in vital plants during the first
half of the year, Ford Motor Company's production of

the

the

.

unit

senger

extent

in

also,

area,

such a
situation ever since the end of World
War II. This performance is recorded
in - the
industry's most conclusive
terms—vehicles produced and sold.

units.

The fact that

case.

of

note

a

intentions of business and the buying
public; peculiar to the southwest

arations

new

It is

Intensified competition will be
accompanied by a further
upward movement in the ratio of losses to
premiums..
To Summarize: It is
thought that in 1954 the
Fire insurance business will

1953

in

ance

and

actions

remedial

believe

I

present levels

over

welcome
economy

and governmental

war

usually the
on

scope

a

an

—

from

is

than

adjustment pre¬
sents a variable factor quite difficult
to analyze.
Added to this is the

competition.
the company's perform¬

free

-

This was

struction since the end of World War
II, coupled with the
inflation in the values of existing
structures, has caused

since 1945.

by

shift

—

BROWN

Forecasting the economic future is always difficult.
The elements of uncertainty involved in
making projec¬
tions for the year 1954 seem more difficult to evaluate
ended

a

controls, to art economy sparked by
the return
of full production and

duction in industrial payrolls

Automobile insurance premium

the

Ford

at

of Ford goes into automo¬

turning point for
and for the industry.

as

company

marked

It

operating conditions in industry, and that this will lead
to still further improvement in Workmen's Compensation
accident

history

F.

President, Mercantile National Bank at Dallas, Tex.

Motor Co.

closed out 1953 in the strongest

The 50th anniversary year

tive

normal

more

V.-P., Ford

position in its half-century of existence, posting record
gains in production and sales.

We believe that there will be a reduc¬

tion in overtime

'

MILTON

K. BREECH

ERNEST

maintenance

weather
of

a

as

high

favorable

level

of

as possible for the
production and em¬

*

Volume 179

Number 5294

The \ Commercial and Financial Chronicle ;

...

(473)

25

.
\

R.

BRUBACHER

R.

tary expenditures.

- Tax reductions in prospect will give
relief to individuals and business and provide some
additional purchasing power, small though it might be.

-

Loan & Trust

Co., Sioux City, Iowa

^

Sioux City is

located primarily in an agricultural com- »
Consequently, when agriculture prospers, so
the community prosper.
*
•!"

Epunity.
Our

territory

enjoyed

good

in

crops

1953.

Corn

tie.

bringing about changes
costs in line."

v

going to the feed lots
during the fall of 1953 were pur-")
chased at substantially lower prices and the hog market has been good, t
While

it

is

true

and

growers

on

ditions

cattle

favorable

are

for

operations.
the

on

much of

belief

base

that

this

the

i

R. Brubacher

resulting

in satisfactory
cattle, hogs, and grain.

*

~

business

activity in the territory,

deficit

it. is

In
as

summing

good a

as

some

feel it will be

we

satisfactory.

F.

in

in

in

was

to

part

the

been

a

in

expressed

However,
~

views

Since

in

oil

activity.

the

end

new

last

year

The

with

>\

.

V

■

.

•

>

F.

E.

Capital

a

volume for the year

.

.

.

should

of

area

in

be

|
'

that

to

be

growing at

limit

no

of

to

its

a

petrochemicals.

It

is

petrochemicals,

petroleum
keystone

industry,

as

in

The list of

The

will

-

about

research

as

a

of

the

develop¬

No

will

line

strengthen the

a

successful future.

I

am

optimis¬

tic, not only about 1954, but about the entire foreseeable
future.

There

will

of

be

see

some

nothing to stop the industry's

JOHN

surface

minor

problems

progress.

activity

as

that

of

1953.

It

seems

appears

at particular

to point down¬

that

we

are

going

and it might result in some dislocations

points due mostly to the reduction of mili¬




the

offset

antici¬

sales of standard

During 1953 construction of new
larger lithium mining and re¬
fining facilities dominated the news
and

Foote
are

Mineral

account

for

Co.

These

operating,

now

and

of

an¬

most

the

lithium
industry
was
supply all of the demands
lithium products during the past

for

have

year,,

capacity.

The principal uses for lithium chemi¬
lubricating grease, glass, enamel, and other
ceramics, certain types of storage batteries,
welding Of aluminum, and in several other fields.
Our Company expects to continue its construction and
cals

are

types

in

of

•

over

$40,000,000

the

growing fleet of

expansion program during 1954.

C.
President,

the

utilized

used

Aircoach

lower
to

a

CONRAD
Gas

Electric

&

Co.

General.

The level of business in western Illinois and
eastern Iowa is directly dependent on the income of the
farmers.
At present, the outlook is for stabilization of
agricultural prices in 1954 at approximately their pres¬
ent levels.
r»»?i

'f

e_ w

ing

power

This

Farm

The

means

in

recent

Implement

years.

Manufacturing,

leading industry of the princi¬

pal metropolitan

-^-Davenport,

Be¬

that the buy¬

of retail customers will be

lower than

the scheduled air¬

normally

who

P.

Iowa-Illinois

'

luxury Con¬

1948, has contributed to this growth.

travel

"

and, there¬
fore, the market in 1954 should absorb most of our in¬

creased

shown sub-

previous year, or a 134%
increase during the past five years.
A factor in this growth has been
the aggressive merphandising of Cap¬

travelers

Gordon H. Chambera-

The

ume.

unable to

and

East

Moline

of this district

area

Rock
—

Island, Moline
farm implement

manufacturing, has established
duction schedules for 1954

cost

lower than

degree

pro¬

materially

the schedules for recent

As 1954 opens, there is little
expectation that sales to farmer#

anticipated during its early stages of development.

first-class mail by

has indicated that the

air.

has been its carriage

can

ers

experiment in the transportation
C.

of first-class mail by air between New

York and Chicago

and between Washington and

may

will augment

It is

areas.

mail

Chicago

quite possible that this step

revenues now

earned by the airlines,

although mail revenues represent but
revenues.

Capital,

be expanded

a

fraction of

over¬

of four air carriers partici¬

one

be pushed

P.

have

kinds

Conrad

of

a

element of subsidy.

continued

industry.
senger

can

be

•

expected that 1954 will record

expansion and growth of the air transport

Revenues will be higher than in 1953 and

traffic will show gains.

business

common

pas¬

Mounting costs of doing

to all segments of business and indus¬

try, may hold net profits to their present levels despite
these gains.

•

'

to the high
Farm¬

stocking up with all
implements bought freely

out of the liberal returns from farm

production in these years.
Employment in the
implement industry is down approximately 20%.

farm-

Many
employees came to the Quad-City factories from
surrounding communities and the reduction of employ¬
of these

ment will

therefore affect all such communities.

Aluminum

Sheet

and

Plate.

The

and

general, it

up

been

Works of the Aluminum Company

In

back

levels of the years 1946-1952.

The Post Office Department

of any

through an adjustment period which might not level out
for another year

sev¬

pating in the first-class mail experiment, operates free

ward, it is my opinion that the year 1954 will not be as

good

-

increases

Another interesting development

all

J. BURKE

As the trend in business

-

years.
never

President, Metals Bank & Trust Co., Butte, Mont.
,

because

introduced

our

appeal of its low fare, often equal to rail

to include other
course

requiring adjustment, but the overall situation is good,
and I

in

fares,

industry

By its vigorous and enthusiastic nature, the petroleum

itself

scene

can pre¬

of

assures

partially

equipment. Also, the Aircoach, which Capital

of the

picture considerably.

industry

metallurgical industries will

year

dustries.

traffic

revenues.

Airlines introduced and pioneered on

coach
one

result of the industry's comprehensive

These

stellation

tremendously

a

in

during the past
years as the acceptance of the trans¬
port plane as a safe, convenient and
comfortable mode of transportation
becomes more widespread.. During

ital's

cause

now

further developments that is bound to

program.

of

products to the steel and related in¬

will

in total revenues, an increase of 12%

the

few years have broadened the indus¬

vital factor in the American economy.

come

have

pated decline in

•'

.

increase

-1953, Capital created

new

be

to

significant

try's base to the point where it is

dict the range of

branch

continue

many

moment

improved products in
metallurgical market, and these
new

should

over

stantial

■

James H. Carmichael

other

every

research

of progress.

ments of the past

,

the

and

the

facilities

Passenger traffic has

fantastic rate, and there

potential.

an

improvements in

a

products is seemingly endless.
In

We

eral

'

over

field that'has been
seems

field

at

general slackening in these in¬

a

dustries.

improved service

follow the historic pattern of yearly

the

development in the oil industry in

the

-

President, Foote Mineral Co.

slightly lower next

of

industry should largely offset
and take up part of any decline that
may occur, enabling the airlines to

daily in

The chief
1954

be

Burrus

tation

imports seriously af¬

situation

forecast

1954

•

Important that & high level of imports be maintained.
«

B.

1953. Air traffic, however,
will naturally react to any change in general economic
conditions.
Normal growth trends of the air transpor-

Bullard

producing capacity of almost 1.7 million
the United States makes it even less

reserve

discussion

sales to the steel and other
G.

capital.
i
'
1954 will require greater emphasis

has

Airlines

can handle themselves, without the
necessity of Federal.intervention. The fact that we now

barrels

the

Mineral Company expects
Susbtantially better sales volume and better profits in
1954 than in any previous year. We
anticipate that our

President, Capital Airlines

Importing companies
have

of

through

Edmonton, Alberta.

ticipated increase in 1954 sales vol¬
.

a

us

The management of Foote

about the

and above the 11% increase that occurred in 1953.
believe the importing companies should take positive
action to limit their imports of crude and products, as

is

consumption

GORDON H. CHAMBERS

v';.:., J. H. CARMICHAEL

I

This

greater

consideration.

.

will

over

domestic production.

of

the pipeline from

considerable

is

business

of

customer..

.

fect

.

tprs, together with those mentioned briefly above, should
develop a feeling of strong confidence in our own area.

availability
of
be greater

to

challenge in

to the

slightly downward trend.

the point where

in

Selection and'training of personnel, and

active wildcatting

have reached

the

northeastern

together with wholesaling and
manufacturing, continue to be a basic part of our indus->
in and adjacent to Duluth, and these fac-

tribution

Imports will probably continue to show further gains,

we

stabilize

trial economy

aggressive advertising and sales effort, efficient dis¬
of merchandise, simplified operation, better

on

price rise that occurred
provided a much-needed
a

but

entire

I The timber industry,

competition for the consumer's dollar.
The cost of doing business is expected to continue to
increase. The accelerated Federal Income Tax payments
in the first half of 1954 will necessitate a larger amount

"

campaigns, thus arresting

of

new

number of
record high in¬

merchandise—there

on

more

of

There

larger

a

ventories—due

the part of domestic
-producers will maintain this condi¬

incentive to

of

outlets

retail

industry is basically sound
healthy, and continued aggres¬

The

the
state.

bringing in natural gas from the petroleum fields of the
West, but this development is merely in the early stages

trend toward

a

trend

of cash for working

activity

.

supply.
high,.due

of; hostilities

present

Because

have

sive

year,1 most of

first six months of last year.

The oil

tion.

the

If

for

and

help

of

our

It is felt by many that this
refinery
will perhaps double its capacity within the near
future,
and there is strong likelihood of a chemical plant
being
erected adjacent to the refinery operation.

continues, it will be difficult to equal
the record sales volume during the

months.

recent

rail-

stabilized employment.

nothing to indicate

we see

decline

that

of

r

Castle

G.

Lewis

existing items by the Manufacturers.

petroleum
industry,
view of some of the

pessimistic

more

expansion

The opening of International Re¬
fineries, Inc., at Wrenshall, which is
adjacent to Duluth, opens possibili¬

,

ample

a

introduction

not be

•

outlook

cannot

part of

the

of

Inventories reached

highly

BULLARD

optimistic

the

mining

construction

crude oil which comes to

...

demand for petroleum products
continuing its
steadily upward trend, domestic production should be
slightly higher, and the industry will
probably drill about
1,000
more
wells than in 1953, its previous rec¬
ord drilling year.
1954

the

economy

G. B. BURRUS

Merchandise

With

•especially

sults

,

to

of

program

ore.

roads, townsites, mills, docks, power
plants and many other things that '
are related to such a
project. It will
mean
steady employment, and re¬

Because

,

ap¬

development of taconite

includes

seems

be subject

perhaps

billion dollars

one

-

try in 1954.

an

It

will

of

sum

*

additional

some

Chain Drug Store
Industry.
Sales showed a small increase for "the
which came in the first six months.

Another good year is in store for the
petroleum indus¬

is

demand.

general economic changes throughout the
Nation, the Year of 1953 was one of readjustment for the

President, Stanolind Oil & Gas Co.

This

for the

change in interest

a

on

"

-

Korea, there has been
E.

based

are

which

money

proach the

of

products and the duplication of

may

of

sums

This

nevertheless

in the past,

substantial

President, Peoples Drug Stores, Inc.

for

in

years

;

^

Because

more

the situation, while 1954

up

year

in

by the investment

of

volume to seriously affect

or

Bank

Minn.

Duluth and northeastern Minnesota look forward
with
a banner year
during 1954.
We are being favored in this area

keep

cross

Duluth,

ties

growing season in 1954 is nor- r
mal, resulting in our usual average crops, then it is ouropinion that economic conditions here will not be sub¬
may occur

a

CASTLE

high anticipation to

it will not take

cases

election, year,-business, will

an

;

not be serious and if the

ject to the fluctuations which
industrialized localities.

to

financing, which would add to inflation.

political tides.

•

feel that it will

we

in order

that the government will be faced with

>

While it is quite possible there may be some let down

in

operation

experience

may

Ad¬

prices

of

With large deposits which must be kept

rates, which, of course,

ministration will continue to support
the s price
of agricultural products
R.

change in price

a

employed- banking

profitable

We

in

All corporations are pinned on

n$t earnings.

experienced

in

1953, cattle are
lower price level and con¬

a

feeding
opinion

many

feeders

substantial losses
now

that

employment, which

govern

high operating costs and in many

Cattle

*

sales will

of

will also be subject to change. Some lines of business will
be affected by price adjustments, which will necessitate

is

being sealed at something over $1.50
per bushel,
and many feeders are
sealing corn rather than feeding cat-

,

.The volume

G.

President, Northern Minnesota National

-

Relatively high level of income should provide a good
sales volume, although lower than the previous year.

'

does

LEWIS

some

President, The Toy National Bank and The Farmers

*

large Davenport
of America—a sheet

plate mill—is continuing its expansion.
The most
a tapered-plate mill for the produc¬

recent addition is
tion

of

shapes for military airplane wings.
full production from this new unit
throughout 1954. The Aluminum Company of America
may initiate the construction of further additions to iis
special

Present plans are for

Davenport
Housing.

Works in

1954.

The number of new houses expected to be
Cnntiniipd

nn

nnno

26

The Commercial and Financial Chronicle

(474)

-

Continued

i

jrom

•. ] ffj'l'i
'* ! '• .■*
.. •
-> 4 I.**'."
An analysis of the negotiations now in progress
with our industrial and commercial customers indicates

that

and prospective requirements

Residential

Company has projected construction in 1954 of about $10
essentially equal to the value of construction
carried out in 1953. These are long-range projects not

million

the year

immediate prospects for lower

'The

of America

Co.

Steel

to

incoming new
May.
From the
end of the steel strike in 1952 until

downward trend as to

steel

bought

customers

May,

J

planning to reduce stocks and
lately
actively
reducing them
sharply.
There is a modest slowing
down
in the demand for finished
been

goods
that

tories

—but crop farmers have been hurt
more than livestock and
poultry pro¬
ducers. Feeding ratios have remained

generally

is continuing with its expansion program

been

with the increasing electric and gas re¬
During 1953 we placed in operation a new

The

segment of the Baking In¬

enjoy a high level of sales volume
1954, possibly exceeding that of 1953.

which

feel

we

will be

aggressive

business condi¬
confident that
business will be main¬
I

electric and gas
satisfactory level.

a

have

been

in

capital

made

for

or

in

over

confident

am

Our company is continuing to expand in
research. In addition to our large laboratory in St. Louis,

Coppers

been

modernized, furexpenditures will
continue to be made in 1954 for capital improvements. •
.-' Aggressive competition will continue to prevail in our
industry, as it has since the end of World War II.
We
believe this is a healthy condition which will cause
each company within the industry to be aggressive and
resourceful in finding ways to profitably tap a vast mar¬
ket for its products which is now present in the country.
Business as a whole should be very satisfactory in
1954.
Certainly the economic system in our country
is sound and we would be short-sighted if we were not
optimistic about the future.
should

ment

be

Any recession or readjust¬

short-lived.

feel that

I

adjustments have been made

our

once

such

re¬

country will be in a

position to enjoy a long period of healthy and sound
prosperity. The great technological advances now evi¬
dent cannot be retarded or stopped.
National
Biscuit
Company, through
organizational
training and development, research and modernization,
is prepared to compete in the buyers' markets of the
future.
I look for our company to enjoy good* sales
and profits in the year 1954.

"

CHARLES P. CRANE
President, Consolidated Gas Electric Light & Power
Company of Baltimore

are

The volume

sales of electricity and gas during 1953,
supplied by our company, were the largest
in our history.
Kilowatthour sales of electricity were
almost 8% greater than in 1952 while cubic foot sales
of gas were 16% higher than the
the

year.
sales reflect

These

months of

a

slacken¬

ing in the rising trend.
company

est records in
ice

same

12-month period

Curtica

H.

gas

load growth.

Serv¬

and

ments

were

commercial

greater

than

establish¬

for

I think the present

P.

Crane

construction,




is

cer¬

total

government

General

ex¬

President, The Charles E. Hires Co.

labor, although in some sections of
the country, notably the deep souths

million again this
will continue at a high level.

there

\

r

If

tons

I
W.

Edward

promptly.

Soft

and trucks this year.
Unit production,
Canada and for export to other markets,

should approximate 7 million cars and trucks.

drinks

it

as

shadows

recurrent

heart.

With

take

enterprise

system

eager to work

the
a

nation's

favorable

unhampered

for

responsibility rests

an

of

depression and

path

of

progress

economic

by

controls,

climate,
and

a

improved standard of living,

with

keep the'economy strong

industry and business to

and,

over

the

year,

keep

it

however,

consumer,

will

consumer

two

Soft

drinks

market

in

their

made

To the
and the

•

.

without

made

costs

judge of the merits of the

*

also
increasing quantities for the

afflicted with diabetes
the

increased

means

the final

be

containers.

it

sugar

came
use

of

into

the

persons

other ailments which preclude

or

consumption of sugar.

There has also been

a great increase in soft drink sales
through the wider use of automatic dispensers, particu¬
larly the cup dispensers.

All of these factors

of the soft drink

point toward continued expansion

industry.

The fact

lowed

the

that the Department of Agriculture has fol¬

practice as the previous administration
setting quotas on sugar for 1954 substantially below
the consumption of last year is disappointing.
The soft
same

in

drink industry and other

large

of imports, in spite of
an

no

consumers

surplus

avail.

^tk^t. faces .us today*, As -faf as

General Motors is concerned, we accept it.

of

sugar

have

By the restriction

sugar stocks in the

world,

artificial shortage is created and prices in the United

States have

been

from

Vfc

subsidizes the producers

of

cents to 2

cents per pound

In effect, this policy

sugar at

the

expense

of the

consumers.

There is talk in some

circles, notably in the heavy in¬

dustries, that salesi in 1954
soft drink

affected
riods.

industry, based

very

This

is

little
no

may

on

during
doubt

decline somewhat.

previous

due

seems

The

past experience, has been

to

its

wide-spread appeal to the consumer.

expanding.
That is the challenge

cans

for them the elimi¬

means

higher than in the world market.

across

,

in

appearance

protested this practice to

falling

are

'

cars

see

they

nation of handling the return of empty bottles.

in

industry, I estimate that the domestic mar¬
million, 300 thousand

who

if

during the year, fol¬
lowing the example of beer. Dealers

David

welcome this innovation

we

ket should absorb in the area of 6

including

loss

to return the bottles and car¬

sumer

1953, when our U. S. and Canadian
plants produced almost 3,000,000 passenger cars and
more than 500,000 trucks, and total dollar sales exceeded
by a substantial amount the nine billion dollars which I

passenger

the bottler

protects

excessive

an

returned, and at the same time
gives greater incentive to the con¬

appraisal of the over-all economic picture is
correct, then General Motors' volume of sales in physical
and dollar terms in 1954 should not be far from the high

As for the

business. r;,

trend toward

a

not

well-sustained in¬

January, 1953.

This

materials.

my

attained

relief due to

no

increasing the deposits charged for
'bottles, cases and cartons because of
the increased costs of thes£ package
from

prepared for competition.

are

or

There has also been

.

Motors

little

was

the keen competition for

high level of employment will con¬

products which

i-ri

■

During 1953 the soft drink industry has demonstrated
again its capacity for continued growth. With the re¬
moval of price controls aggressive merchandising be¬
came the order of the day.
Prices began to rise to off¬
set the higher costs of materials and

believe represent
outstanding progress and the greatest values ever of¬
fered by General Motors to its customers.
offering

are

W. DAVID

EDWARD

defense

and lower taxes.

in

We

We

upon

of 2xk million
with continued high employment, an increas¬
ing demand for meat, milk and eggs seems certain. Con¬
sequently, we approach 1954 with a feeling of optimism.

.All of these facts point to a prosperous 1954 for the
automotive industry and for business in general.
The
forces of competition will be strong.
But our industry,
as
well as American industry generally, has always
thrived on competition.

the
Charles

sales of electricity and gas in 1954
will reflect
the larger requirements occasioned
by these load increour

prosperity

present high levels as a result of

comes

reliance

estimated population increase

an

expenditures should continue substantially

Consumer

greater

a

year, and

1954.
There won't be as much over¬
time as last year, but we should have full employment
at a normal work week.
at

and

eggs

tinue throughout

people

any

year.
A substantial pro¬
portion of these contracts are for
installations still under
that

and

profits tax will make addi¬
tional funds available to industry for capital investment
in the form of modernization and expansion of facilities,

an

previous

so

milk

housing starts should exceed a

New

must

to supply new electric
installations in industrial

plants

With

a

penditures, including state and local,
will be maintained at about the cur-

year. Commercial building
Elimination of the excess

recession

contracts

iand

our

that

estimate
Harlow

Those

also achieved its high¬
new

meat,

must guard against—and that
is psychological.
If those who persist in taking a pessi¬
mistic view of the future succeed in planting fear in the
minds of the public, those seeds of fear could take root
and the result might be the very condition we seek to

level of industrial and com¬
activity throughout most of
1953, but there were indications in

During this

of

scientific formula feeds.

There is one danger we

sustained

high

our

premium quality eggs which is
industry in the South. New discov¬
eries in the fields of antibiotics, vitamins, amino acids
and minerals have resulted in more efficent production
large

a

avoid.

the

mercial

the two latter

method of producing

becoming

outlays must
given consideration.
They will
reduced very little ih 1954.
I

be

sudy the feeding

at Graceville, Fla.—to

year

the reasons why:

nevertheless,
-

area

preceding

Grey Summit, Mo., and

past

tainly not dependent on a continu¬
ance
of high defense expenditures,

forecast in
in

at

A major research unit was installed

management of hens in individual cages—which is

a

belief that the na¬
including the auto¬
motive industry, will be strong and
healthy throughout the year. These

level

?

located

are

Nashua, N. H.

and

It is my

vision.

for

well

fairly

maintained at all manufacturing plants.

are

farms

the modernization of

substantial

ther

at

automobile industry, and in

the

that

be

and

Research

tional economy,

expenditures
the last eight

Danforth

Donaid

this
I

its
its

established plants and, while the
plant of the industry as a whole has
Geo. H.

policy.
During the past year new
production plants were completed at

Research in nutrition and scientific feeding has made

particular General Motors, will find 1954 to be another
good business year.
Although they were proved wrong in 1953, we find
prophets of doubt still with us.
In
my opinion, they are mistaken about
1954
just as they were mistaken
about 1953.
No depression is in my

developing

equipment

new

plants

years
new

has

great strides.

President, General Motors Corporation

older well-known brands.

Substantial

Co.

expansion

Pacific and from Canada to the Gulf.

CURTICE

HARLOW H.

gener¬

and improving
the packing of

and

processes

Purina

aggressive

an

construction has

that good

are

our

Biscuit and Cracker Industry

products

new

Ralston

In addition,
been started on new plants at Wilson,
Gainesville, Ga. Today 42 Purina Mills check¬
erboard the country, stretching from the Atlantic to the

Although
been

The

N. C. and

try.
The

this

Spokane,, Washington, and Shreveport, La.

users.

ally maintained throughout the year
are favorable factors for our indus¬

has

blow

continued

continuing increase in population in our country
and the high level of disposable in¬
come

double

a

try.

laboratories

dustry should
the year

from

past year—low prices

continue

Cracker

The exception has
industry, which has

cattle

operation in the early part of
1956. Natural gas was brought into our area in 1950 and '
our distribution system is continually being extended to

tained at

President, National Biscuit Company
and

good.

the

suffered

This unittis scheduled for

growth of

GEORGE H. COPPERS

Biscuit

greater

a

the services of the feed

Much publicity has been given to
declining farm income.
This is true

pace

The indications for 1954

through the third quarter of 1954
W. H. Colvin
whereupon we expect demand to
expand and to again come up to current consumption
needs!

The

and

than ever

eggs

more

,

latter

safely.
We think this trend will

production
for

in

industry.

tions will prevail in this area and we are

inven¬
reduced and

steel

further

be

can

resulted

and a severe
drought in much of the ranger coun¬

trial

indi¬

which

generally
customers'

demand

has

a

adequately serve the heavily increased demands result¬
ing from sales to residential, commercial and indus¬

place exhausted stocks.
They overdid
it and
since then they have

hard

This

generating unit will have a capacity of 125,000 kilowatts.

both
i

cates

before.
efficient

words*
higher per-

other

In

producing

were

75,000-kilowatt generator, and work is now under way
on our new Herbert A. Wagner Station where the initial

and to re-

consumption

current

for

keep

quirements.

last

since

orders

The

agriculture.

centage of the nation's milk, meat and

average

Our company

business has been in a

alloy and specialty steel

the

11%.

in

concentration

large commercial operators

ap¬

the record level

and

creased

W. H. COLVIN
Crucible

President,

also

residential gas consumption in¬
figure reflects the rapidly
expanding usage of gas for house heating. Last year,
97.5% of the new homes built within reach of our service
mains installed gas for house heating.
1953

activity in

1954.

j

territory

our

real estate

and

Iowa-Illinois Gas and Electric

The

in

construction

The year just ended saw a continuation of the trend
toward

in 1953 and while builders
developers foresee some slight dip dur¬
ing 1954, new home building is expected to be not less
than 90% of last year's figure.
The average electric
consumption per residential customer increased 6% in
proached

Utilities.

affected by the

new

although

has

of employment.
Public

DONALD DANFORTH

President, Ralston Purina Co.

load

growth in 1954 will be very substantial
it may not quite measure up to thp record
breaking level of the past year.

below the starts in 1953.

project of 654 homes in Davenport

for the imme¬
diately foreseeable demand, based on the falling trend
met present

>

ments.

25

in 1954 is considerably

started

A rental housing

*

f'U.fj

u •)'!'?

t'tur

i>

page

...Thursday, January 28, 1954

readjustment

pe¬

nominal

cost

and

For this

reason

it

likely that the growth trend of the soft drink in¬

dustry will continue throughout 1954.

,.

Volume 179

Number 5294...The Commercial and Financial Chronicle

*

vital triangle of

BYRON DUNN

President, National
The

contract

Bank of Commerce,

Lincoln, Neb.

carrying television programs along the same
route, which is also connected with the United States
networks at Buffalo. A radio relay link between Mon¬

outlook in

the field of banking for 1954 is tied
other business of the country. In the mid¬
west banking is tied into
agriculture and what is done
for agriculture on a
national scale
well

as

do

about

we

will

summer

bring

that
to

will

be

carry

the

on

The

by

of

the

los^of-

in

to

agricul¬

the

This

is

country

country.

$40,000,000 of bonds earlier
1

^

in

good
well

as

needed to make

area

carrying on the manufacturing
living possible.

I

up-swing of businesses, but businesses
preparing for this decline.

am

will be maintained at close to the current
annual rate of
just over $2 billion in the fiscal year beginning April
1,
1954.
There are indications that investment
expendi¬
tures will be maintained on a
substantial scale in the

development of metals, chemicals, oil, natural gas, elec¬
tric power, telephones
and transportation equipment.
The continued rate of
family formation suggests a sus¬

and banks

tained demand for

1954

sure

will be good to
everyone who has
planned ahead and who works hard to
make it good.

CYRUS
Chaii

of the

man

S.

Such

Board, Chesapeake

& Ohio

homes.

new

combination of factors would
help sustain per¬
sonal expenditures on consumer
goods and services. Thus
the index of industrial
activity in this company's terri¬
tory might continue at about the current level of 125
in 1954.
•
"

EATON
Railway

a

Throughout its long and successful
history, the Chesa¬
and Ohio Railway has been
dedicated to the

road

President,

from

the

came

coal

to

the

GEORGE S.

*

is coal. In this

strength

and

dowed

be

as

.

be

great

the

native

to

the

assure

development cf these

of

en¬

maximum

yield to

The

(1)

I

their varied

and

economy

weaknesses

and

Crawford

think

this

is true

it

policies

for

the

development

of

profitable

ment

a

\

a

,

children.

The

ate

markets for coal.

vide

activity, employment and personal income
high levels in Canada in 1953.
On an
overall basis, we may expect the maintenance of these
conditions in 1954, although difficul¬
ties for
individual industries and
areas may be caused by the return
of more competitive conditions and
by the surplus stocks of agricultural

could

decline in business activity

on a

in

than

readjustment.

inventories

expected.

Decline

in

The Twin Coach Company operates in three

different

In

with

It is

the

greatest

and

was

A

To

thus

Quebec—was

ties

ran

plan to introduce
and
improved
products, particularly in our Kent,
Ohio, motor truck division.
These
will

We

long

distance

local

calls

amounted to
ment to

phones

|

and

use.

gine

located

toll

Thomas

dial-operated,
a ; whole ©r

a

W.

mands for

Eadie

equipment

in

1953

our

tele¬

up
-

Fageol Van high payload
truck line is also being

pacity

fined and

the opening

our

The de¬

microwave radio

relay chain, linking Montreal, Ottawa and Toronto, the




number of

a

L. J. Fageol

ca¬

re-

\

,

important improvements

ing built into these vehicles.

Vans

are

as

the

will

government

production,
in

industry,

the

we

Buffalo
as

a

in

even a

the

reduction back

early part of

of propane

use

by Twin

Coach

in

effect

some

will

be

some

segments of

noxious
transit

in

'

/

as

compared with only

as

a

motor bus fuel.

coaches

our

late

and

increased

odors

1953

efficiency

in

and

overall

STUART

forward

makes

scene

efficiency make it ideal for

M.

FINLAYSON

into

our economy

should be

our economy.

a

about

or necessary.

have

been

brought

reductions,

early

about

in

the

doubt

that

business generally

tain

areas
or
industries, it will be
impossible to match the volumes and

achieved in 1953.
Despite
conditions, there does not seem
why Canadianbusi-*-

profits

.

these
Finlayson

r.

to be any reason

• -v;

ness

and develop and it

readjust¬

be

a

good

year

should not continue to progress

is felt that, on the whole, 1954

should

for efficiently-operated business.„

-

,

depression is inevitable

by

during 1954 Cana¬
will become
increasingly complex and competi¬
tive and it may Well be that, in cer¬

dian

real decline felt in

think

business

year,
in income and other taxes,
which, in particular, stimulated con¬
siderably the demand for consumer
goods.
However, there seems to be

which tend to hold

a

to

pears

in

boosts the de¬

We should, not let

Co.

Canadian

been operating at a very high level.
In part, at least, this condition ap¬

good'year, but there

some

the

interesting picture and poses what ap¬
pear to be some decisive challenges to industry.
During 1953, the Canadian economy as a whole has

American public.

leveling off and

1954,

an

Bigger outlays by local

population

Introduced

in

use.

Looking

ment stampede us inta a-real downturn, as I do not
a

cutbacks

anticipate continuance of high
of our company.
The
whole, is constantly expanding.
division

1950, this fuel
has made possible tremendous
operating economies in
such cities as San
Antonio, Fort Wayne, Chicago and
Wichita.
Its low cost, freedom from smoke and ob¬

(a) unemployment compensation;

of savings owned by the
Nineteen fifty^four

1954

expansion

in the

power.

increase

power:

by all

The

our

schools, roads and other community facilities.

purchasing

be¬

are

sold

now

International Harvester dealers and branches.

(b) pensions;, (c):farm support prices;.(d) large backlog

higher figure-than for

the United States*

Bell teletype service continues strong.

.summer saw

the

and
helper's
seats,
thus
greatly reducing the amount of cab

S. M.

as

for
en¬

In

driver's

market in general both for consumer

(5) Other factors in

$725,000,000.. More than 80% of

now

be

little

governments

250,000

and

will

cab

this, the
between

truck

new

a

tractor-trailer

(4) Continued increase in population with the accom¬

New construction
local

include

new

*

pre¬

13.000,000

existed

panying increase in demands.

$86,000,000, bringing the total plant invest-,,

ever

are

for

Last

calls

for

either Canada
mand

now average

daily.

expenditures

of the

we

of

will naturally lead to added
purchases of new equipment.
We believe that 1954 will see considerable

George S. Ecclcs

These expenditures have been

competition

more

to

Recently many transit companies, throughout the
country, have been able to secure satisfactory fare adr
justments and show substantial gains in revenue.
This

equip¬

expendi¬
highs and a

production.

over 2,120,000.
long distance facili-?

steadily ahead

vious year.

this,

Some price reductions in durable and soft goods
to

forward

year

proximately 3,500 buses in 1954
2,532 built in 1953.

leveling /

and

releasing purchasing

(3)
due

ber in service to well
on

meet

number

a

financing.

record

The demand

new

see
a
general quickening of
competition throughout all industry.

(2) Reduction in taxes both corporate and individual

have

we

money

and mortgage

ever
experi¬
150,000 telephones
added, bringing the total num¬

enced.

belief that the

our

will

Some of the offsetting factors—

The demand for telephone service
in 1953 in the territory in which we

operate—Ontario

of these fields, we are looking
optimism and confidence.

each

1954

President, Canadian Marconi
(1) Easier

distinctly
Aircraft;

(2)

Trucks;

Motor

opinion that bus production in 1954 will be
than 1953.
Normal replacements of city type
vehicles alone should provide a ready market for
ap¬

These
new

that

(1)

(3) Buses.

It is

.

been

steadily increasing trend and
volume

industries:

would be felt.

products.

rea¬

a

L. J. FAGEOL

W|e have great faith in its future.

The

has

A

plant

expenditures.

the

to

all contingencies at

any and

greater

(4) Consumer outlays.

reached

educate their

President, The Twin Coach Co.

aircraft

u

factors, that

back in national security expenditures. This reached an
all-time high for peace time expenditures during the
second quarter of last year-end and a decline is evident.

EADIE

Industrial

again

adequately for

volume

(3) Leveling out and possible cut¬

THOMAS W.

or

policy which is now being
issued by all companies is a wonderful thing, as it pro¬
vides a fund to educate the children at a most important
age.
In the event of the death of the child, the money
which has been paid in by the father and mother is re¬
funded which protects them from any loss of benefits.
Life insurance is today's answer for a family to pro¬

While

10% decline would not be out of line.

President, The Bell Telephone Co. of Canada

estate at all

an

educational

aircraft

gen¬

-

the

tures have reached

new

I do

Van sales and advertising program will be the most ex¬
tensive that we have ever undertaken.

'

(2)

policies,

couple start¬
ing out in life could manage to cre¬

H. ElUs

Our

maladjust¬

developing into

of

rise

greater

of

forms

not see how any young

general

off is inevitable.

The C. & O. will continue to do its utmost to encourage

sound

our

Inventory

recent

the essential elements of the
industry — the operators, labor and

transportation.
f

support the

be enumerated—

may

among

Cyrus S. Eaton

in

from

Some

In fact, if it were not

and enginq compartment space and
making more of the overall truck
length available for payload.

the

uine recession.

pathway to progress lies in active,
constructive and cordial cooperation
.

these

ments

resources

resources.

of

not

business downturn.

a

•is important that
everything possible
be done to prevent the accumulation

,The industry's efforts must

united

business indexes do

weaknesses

nation

generously

year as the com¬
issuing so many dif¬
protection that al¬

anything in the world can be

provided for.

1

ECCLES

extremely high levels that have been
reached during the past year. There are
many economic

supply

to

with

of coal.

because

of evident economic

era

expansion,

isV'fortunate

Present

prediction of

industry and he

understands the problems as well
any man in America.
America's number one fuel

of

for the life insurance companies with

President, First Security Bank of Utah, Ogden, Utah

rail¬

forms

most

.

peake

young

-

prosperous
are now

ferent

■

prosperity of the coal industry. Wal¬
ter J.
Tuohy, the C. & O.'s able

"

sonable cost.

expect that the demand for both local and long
distance service will be sustained at a
high level in 1954,
and we estimate that our
outlays to expand and improve
our facilities will exceed
$100,000,000 in the year to come.
More evidence has appeared
recently to support the
view that government defense
expenditures in Canada

proc¬

a

panies

We

slight decline in activity and

been

close

company.

continuation of the Magic Circle
industrial asso¬
ciation is assured.
It will lead the
way and show the
entire United States what
can be done out here in
the
mid-west where we raise the
food to eat and the
boys
and girls who do the
work. ,
a

Canadian company.
Some 98% live in Canada,
to 10,000 are employees or
pensioners of the

any

and

The

We think there will be

the year, this financing

in

There are now 115,000 Bell Telephone
Company of
Canada shareholders, the largest number of shareholders

attack, the entire
factories distributed

esses

have

the
was

project brought the total capital of the company to over
$600,000,000—an increase of more than $420,000,000 dur¬
ing the past eight years.

If we should have an atomic
world would look towards
the small
wide

1953

Our record-breaking stock issue in the fall of 1953 was :
the largest offering ever made
by a Canadian company
to Canadian investors.
It was more than 99% subscribed
and produced $60,500,000.
Together with the sale of

for agriculture as it
furnishes good living conditions
for the
factory workers who move to this section of the

a

num¬

31,000. - Pay - increases were granted in
and as a result the payroll which

some

were

we

The life insurance business should
now

'

•

industry to the mid-west.
banking business and the entire

over

1

employees increased and

our

,

industry is being carried
men

of

though

as

$85,000,000 for 1952 has risen to about $93,000,000. Higher
productivity, however, has reduced the number of em¬
ployees per 1,000 telephones.

as

the

Winnipeg, and another to link the

Hamilton, Ontario, during 1953.

spring of

The drive put on
by Roger Babson and the Magic Cirduring the last 10 years has done

have

going to have what they want.

bers

cle Board of Directors
a
lot to
bring

on

displayed.

time v
trying to bring-,
on a
recession.
The corporations in
this country are all in good financial
shape as well as the banking insti¬
tutions.
The wage earners are all
making good money and they are

The total

grown-up industry
the opportunity

spite

generation

older

for the

and

tests in

us

majority
Byron Dunn
of this section.
The bringing in of
some commercial
industry and the location of air force
installations through the middle west
agricultural dis¬
trict is helping
keep some of the younger men on the
farms as they can work
part time in industry.
-

the latter part of the year 1953 that it looked for a

Toronto

both

given
in

on

younger

ture.

a

-•

In fact, there will be more
Everyone was so pessimistic in

confidence

The "Bell and

good
crops.
And
the
story that
trickles out of
Washington leads us
to believe agriculture is
going to be
as

1954 will be just

in 1953.

were

uses

middle west has had
good fall rains,
which,
if
continued
through
the

recognized

they

as

Lights" air raid warning system, which
telephone lines and equipment to spread instantly
preliminary and urgent warnings from civil de¬
fense control centres, was given successful first Canadian

The

and

good

Maritime provinces with central Canada, are under ac¬
tive study.

both

spring

I am of the belief that conditions for
as

*

little

phases, agriculture looks good.

ELLIS

tween

as

as

CRAWFORD H.

President, Pan-American Life Insurance Co.

treal and Quebec City is under construction. A chain be¬

tied in with the gamble on
the weather. At this
moment, know¬

ing

Canadian long distance traffic.
Under
Broadcasting Corporation we

Canadian

the

to

also

are

into every

as

27

(475)

.-

Continued

on

page

2$

28

The Commercial and Financial Chronicle

(476)

Continued
A

from

satisfactory market throughout the year seems to be
television stations will provide

continuous¬

a

ly-broadening market, geographically and otherwise, for
television

receivers.

and the

America.

Mohawk

A

"hardy

steady increase in Canada's population create

CHARLES

in

good

reporting
Valley in about the center of New
by the New York Central and
Railroads, the Barge Canal and the new
State Thruway ig a quarter of a mile

We

magnetic sound tape recorder, developed by
is proving attractive to
customers, and other new products, including RCA home
air-conditioners and RCA Estate Ranges are establishing
for

non-professional use,

the

in

South.
rug

market.

FRANK

M.

Oil Producer, Ardmore, Okla.
American merchandising reached a significant turning
point in 1953, presenting new challenges and opportuni¬
ties for the coming year—a year that can be good for
business.

The

trend

new

a

operations.
sellers'
market

business

old

year

Many

industries

are

The
is

buyers' market.-

a

ning and

hard

are

years that business
sellers' market."

a

to

1954

en¬

in

Major Steps Being Taken

I

•

Among major steps being taken to achieve this aim

rels

rate

and

of

rate

a

values of products may be enhanced for the
consumer.

(2)

increase

domestic

The

Establishment of closer teamwork between retail¬

wholesalers and manufacturers.

(4)

demands in certain

by wholesale outlets
(5)

More

assistance

be

areas can

to

nearer

to

sales staffs,

that

so

more

con¬

readily met

dealers.

dealers

in

building

effective

The

growing

dustry

in

the

importance
of

progress

convincingly in 1953.

of

the

radio-television

America

was

in¬

demonstrated

New dimensions of television and

sound, in particular, and the continuing electronic re¬
quirements of government and
military services, pro¬
vided major areas of development and
production.
The

industry reached an annual going rate estimated
nearly $8; billion and 1953 proved an excellent
year
RCA, with sales of products and services
attaining
all-time high volume, well over the
$800 million

mark.

RCA's

year-end

dollar
the

was

ceeding by

backlog of government orders at
largest in the company's history, ex¬

considerable margin that of the World War

a

black-and-white

industrial

vision,

graph

television,

TV,

instruments

compatible

transistor^,

high

color

fidelity

tele¬

phono¬

and

records, office and home
communications
systems,
radio
sets,
and
electronic
equipment for industry and military
uses, as Well as the

■older lines of communications
apparatus.

Television—Black-and-White

and

expects sales of black-and-white television
to continue in the
millions,

sets

during the orderly introduc¬
compatible color television in 1954, and
plans to

accelerate

promotional

activities

to

achieve

this.

The

importance to the public of
compatibility in television
cannot

be

grams

can

isting

overemphasized.
be

sets,

without

received

at

It

devices.

means

that

black-and-white

additional

no

added

in

cost

Color

to

sets

set
can

color

pro¬

all

on

also

ex¬

and

owners,

receive

black-and-white programs in black-and-white.
RCA commercial

tial

equipment

color

—was

than 30 stations with
necessary

broadcast

network-originated color pro¬
key cities by the end of 1953. Pilot
production

grams in
of

to

more

underway.

is

that

The

than

more

major

The

been

1954,
public

phonograph and

is

record

pected

to

sales—on

push

top of

a

12%

1954 with

increase in

recognition

is

tant

the

notable

improvements

the
in

increase
both

and their presentation to the

fidelity

sound




record

making

and

has

large gains and there is
good average vear.

a

there'

and

all its

C.

feeling that 1954 will

a

KENNETH

FULLER

President, County Bank & Trust Co., Paterson,
Since

the

is

area

outlook

almost

traditionally

essentiality,

the

in

that

facts

of

times.

our

In

entirely

brief

always be

an

era

in the orbit of the enemy.
Eastern oil in recent years are

eco¬

industry, 1953 has been
high over-all production,'

of

year

The

C.

large

area

Kenneth

tool

Fuller

employers

of

in

and

are

trades,
and

textiles

miscellaneous

airplane
television,

turers,

labor

indicating

industries

a

greatly

in
al¬

the

machine

engine manufac-^
communication

equipment, chemical, and the industrial rubber,
paper

and

can

improved

degree

of diversification.

It is axiomatic that such

never

general
area.

start the new year, therefore, at a
relatively high level even though
activity is already below the peak:
of the past year, overtime pay is,
reduced or eliminated, and unem-:
ployment has definitely increased.
:

con¬

warfare,

The textile

possible;

as

the
the

high employment, good profits, and
good volume of retail trade. We:

domestic

machine

of

of

for

Except for the depressed condition,

national

the

of

close to home

as

outlook

in the textile
a

of fuels and lubricants for such machines will

should

discussion

nomic

the

product

always be of vital importance.
sources

Banking Industry in this
dependent on the outlook for

lied

the

N. J.

the

for

industry and trade in the service area of Northern New
Jersey, our comments will be limited primarily to a

governmental rev¬
provisions of tax law, a

of

Trends toward Middle-

industry

opens

the

profit margins,

low

orders,

year

and

with

low volume

a

relatively

low

em¬

Nevertheless, with the exception of woolens,,
which seem to be experiencing special difficulties, we

in

believe

in

violation

ployment.

of

axiom.
Continuation of such trends would result
deterioration of the vast army of trained
personnel
essential to the functioning of a
strong domestic

so

will

in

Also of

importance is the harm that excessive foreign
oil is causing domestic conservation
programs.
Many
states have conservation laws
requiring domestic pro¬
ducers to produce oil not in excess of reasonable market
demand, to prevent wasteful above-ground storage. Ex¬
cessive

production

by

necessitated

and

the

a

conservation

producing states in

in

authorities

amount in

an

cutback

excess

of

tion program.
We

are

oil."

mand,
some

oil

conserva¬

Predictions
to

time

of

this

more

proved

new

since

character

1908.

have

Still,

been

at

are

an

repudiation
Basin

is

sales

are

records
of

high¬

a

one

these

prophets

all-time

area

offers

of doom.

high.

two

The

it

is

obvious

that

Our

The

some

is

of

the

must for
not

utmost

195^.

become

in

the

that

imports

year.'

National security demands that

dependent

upon

foreign oil.

continuance of these favor¬

cutbacks.

pending

industry is temporarily in a transition
further development to color sets and
exists. This condition may -con¬

an

a

number of months, although it is anticipated

improvement

is

quite

probable

the

in

second

half of the year.

a

Activity in the communication equipment field is at
high level with a favorable outlook for total volume

and employment.
The

.

the
new

a

'

Solution of this problem, therefore,

importance

part, the machine tool industry is
high level of activity with high employ¬
good profits, and with a good backlog of

unemployment

tinue for

offer the most serious threat to the domestic
oil-produc¬

ing industry in 1954.

an

a

The outlook is for

period

Williston

excessive

year

most

The television

good example of thei future potential.

conclusion,

and

contract

specific

a

the

conditions, with the possible exception of the air¬
plane engine manufacturers who are not in as favorable
a
position because of technical problems and defense

made

or

for

able

World War II, the nation has discov¬

reserves

"the

orders.

oil each year than it has consumed.

domestic

of

with'

business

productive capacity in excess of de¬
there will be negligible profits and
casualties among the less efficient.- -

ment

frequently told that the nation is "running out

time

on

of

exceed, that for 1953. This
the premise that inventories are
even

With

operating at

:

./

based

volume

however,

For

500,000 bbls.

day, which seriously threatens the entire

per

the

or may

good state of balance and that the demands of

a

chandiser.

domestic

of

is

total

the

expanding population of 160,000,000 people require the
constant flow of new production.
This doesn't neces-1
sarily mean that there will be an even distribution of
the business, but merely that there will be business for*
the low-cost, efficient producer and aggressive
mer-

imports in 1953 have supplanted domestic oil in
months

that

approach,

comment

industry in wartime.

ex¬

reproduction

special

a

1953,

of

buildings

new

made
be

share to

history of the Mid-Continent oil

public, the introduction

recording

lighting the advances.

the

of

the

of

coincidental

source

In

in

due

rise

industry volume past the $250 million

chief factors

Company is erecting

limit to the expansion of this company with

no

depletion
incentive to exploratory drilling, have
a
continued target for irresponsible attack.
In
the industry must intensify its efforts to achieve

mark.

The

industry

its

10%

a

as all peoples
coverings. The General

floor

want

diversified products.
As a general proposition the people in this part of the
state seem happy and contented. The Savings Banks have

oil-producing industry is directly related to the nation's
military security, but it is nonetheless one of the impor¬

ered

industry is expected to
in

will

later

or

Electric

com¬

Sales Potentials
record

good year for the carpet companies

a

sooner

interest, of such tax provisions.

begun.

continue its impressive
growth

high

mean

times

of

source

exceptions during

in

tremendous building of homes which is going on should

industry's health in 1954,

Nonetheless,

enues.

from

Additional

North

the

to

been very good in spite of some1
always tend to hold back produc¬

has

year

up

taxes.

of

tributed

of

Pilot production of RCA Victor
was

went

A third factor essential to the

components—including the RCA tri-color-tube

patible color receivers

farming

of

backlog of orders which will be of help in 1954/ The'

a

all-time high. This
higher than the 1952

price. In 1953, the price of
approximately 10.5%, the first such
increase since 1947, and an increase which in .no way
kept pace with increases in his production costs over
a
similar period.
Throughout 1953, costs continued to
rise. A stable price structure, maintained in fair ratio to
costs, is also a vital factor in 1954.
oil

recent

planning for color TV made substan¬
1953.
Production schedules were

in

progress

mapped to provide

past

that

Color

RCA

tion of

bit

a

Charles E. French

Locomotive Company and many other parts
by the General Electric. We understand they both have

A second factor is that of

It

ahead in such fields

are

quite

arti¬

manu¬

American

able to do sustained planning,
impossible in the current situation. Finding and devel¬
oping oil is a'long-range operation, and the producer
must be able to foresee reasonable stability.

period.
Abundant sales opportunities

with

of

is

he is to have income for expansion to meet defense goals.

crude

'
Abundant Sales Opportunities

as

encouragement.

Above all, he needs to be

Strengthening of distribution system

sumer

II

is

is not optimistic as he
He must have markets, if

1954.

section

whole

plants have been doing defense work?
which has started to slump off. Much tent cloth andf
coverings and many blankets were made in the Amster¬
dam plants. In Schenectady tanks were made by
the;

The trend in

than three

diversification

a

Most of the

producer, then,

views market outlet in

(3)

an

tion.

expanding markets. By the end of 1953, oil in¬
ventories were approximately 50,000,000 barrels higher
than a year before.
As the industry looks forward to
1954, the world is in a state of serious oversupply, and,
in addition, must anticipate the return of Iranian oil.

Streamlining of operations and selling organiza¬

This

labor troubles which

perhaps

an

more

15

our

Glovers-

and South.

Thus, in 1953, foreign oil absorbed the lion's share of the

tions.

at

day,

per

is about 10%

of importation

make

facturing

have averaged close to 1,050.000 bai>

rate

is

are

of

and

All of these cities have
manufacturing companies

firms.

cles.

imports, in 1953, when
finally compiled, will

oil

figures
Franklin

Wirt

little

offers

Johnstown

that

outlet., price and the

important, and

Northwest

the

smaller

nation's

(1) Reshaping of productive capacity to meet changed
merchandising trends and to increase efficiency so that

Tor

ing

higher than the rate of increase in domestic production.

are:

ers,

which
keep

susceptible of these factors,

1953

is

Frank

to

The

most

Foreign

tions.

ume

market

are

that of market outlet.

evaluation

Recognizing these needs, RCA
charting a positive course of ac¬
M.
Folsom
tion to maintain relatively high vol¬
production and sales during 1954.

induustry

To
are

picture.

The

by business lead¬
not only along economic lines,
in over-all strategy of
opera¬

but

cover¬

Fifteen

country.

where there are several glove
making companies and leather dress¬

in

tax

The changed market condition re¬

ers,

this

in

ville

capital which

with the nation's growing mili¬
Chief fac¬
maintaining such a return in

pace

most

quires

revolve

factors
on

expansion

an

the

pany.

miles

tary and economic needs.
tors

maintain the sales volume developed

joyed

to

enable

will

these

of

that return

essential

is

gone.

during the

All

1954.

around

14-

needed

,

of the finest floor

some

made

and the American Locomotive Com¬

Careful plan¬

work

and

Several factors, as evidenced by progressively serious
problems in recent months, will be of vital importance in
determining the industry's health in

their operations to meet the demands
of

Company

miles to the East is Schenectady with
the great General Electric Company

adjusting

now

Carpet

one

critical

oil-producing industry.

merchandising
closer approach to nor-^

represents

ings

The year 1954 promises to be an extremely
for the domestic

in

mal

Mohawk

make

FOLSOM

President, Radio Corporation of America

Amsterdam is a carpet and
center with the large plants of

the Bigelow Sanford Company. They

FRANKLIN

WIRT

is in the
York State.
West Shorfc
New York

on

served

are

the

themselves

basis for confidence in the business outlook.

a

FRENCH

E.

The section of the country I am

1

'

.

new

RCA

Factors such as these, plus the very considerable ex¬
pansion in the development of our fundamental resour¬
ces

President, Amsterdam Savings Bank, Amsterdam, N. Y.

sets—the

radio

entertainment—continued

indicated for the electronic industry and the licensing of
many new

perennial'' of home
1953 with industry
production of nearly 13 million new sets establishing an
all-time
high of 115 million radios now in use in
of

Sales

27

page

1954

.^Thursday, January 28,

It is

we

a

must

at

chemical

textile

presently

large,

the

expanding.

manufacturers

will

industry

of

are

dependent

volume and profits,
the industry is very

reduced

rest

who

probably continue

to

or*

operate
but by and
active and

Volume 179

Number 5294... The Commercial and Financial Chronicle

Activity for the rubber goods manufacturers is spotty
the new equipment field but holding well on re¬
placements.
'

road-block to

With the settlement of the long strike in the can
industry, and with volume in the metal container field
likely to show some improvement in 1954, operations
.

be in full volume for

period of time.

some

The paper industry seems to be
flourishing predicated
as
it
is largely
on
consumer
goods demands.
With
-

several

large projects under

outlook

for

construction

in

•

and in the offing, the
area
is excellent even

way

the

though home building almost certainly will

in

be

*

and

•

should

Antiquated income tax regulations, fixing unrealistic
inadequate depreciation allowances, have been a

'

.

in

(477)

more

time to

some

an
outlook for industrial activity,
retail trade should hold relatively well

the

The

of

start

GEROULD

gotten by the elder executives, or by those
with them.
'

of

with

favorable

a

inventory
advantage

position,

merchants

and

the

new

is

year

inventory the past and project

should

,

,

A

*

'

'

Chairman
We
for

and

not

are

1954 and

at

President, Gamble-Skogmo, Inc.

all pessimistic

sales

can

show

fall months,

adopted
and

tlnue*Huring the Spring
as a

demand,

may

result of

be
a

a more

we

of

some

are

the

heavy

.

if

supply and

lines that will continue

many

keeping with the continuing higher stand¬
living.

Business volume should continue at

sales

on

but

this

could

be

In

is

to

a challenge
to retailers to offer
values, which will encourage them to re¬
high rate of savings and increase their

our

there will

country, both in sav¬
regular high rate of income

consumers'

fye plenty of business,

of

in

great

degree

businessmen

basic

any

for

feel, for those

we

in

weakness

in

merchants who go after their share.

V.

laying the foundations of

prosperous

With much

tool

builders

obsolete
new

of

their

are

job

tools'® in

reveals that 55%
are

10

in

use

of

American

the

plants.

machines

old

years

or

older.

A

installed

With

are

the

economy

000
lete

machine

class,

these

est

tools

and

a

are

in the

near

in

this

We

costing over $1
than if the new¬

doing the work.
examples of the more
were

both the

not

standard

machines,

of carbides. And

there have been

a

again

in the field

Will 1954 be

more

looks

as

us.

most

of

them

shall have only a

months which
The

three

none

predict

depression,

a

seem to hold
to the theory that we
slight "readjustment" period of a few

will not

be too

harmful

to

our

economy.

hundred

professional economists, in the
much quoted meetings of the American Statistical
Asso¬
ciation held recently, predicted
only
be of short life.
Many of those

to

"mild recession"

a

who

present

were

thought that a drop in total income of not more than
5% would occur in the first part of 1954.
Most of those
predicting even such a moderate recession from 1953's
highs, thought even such a decrease would still leave
1954 the second best year of our nation's
The Southwest is in excellent

shape

history.
far

as

industry

as

is

concerned, and the farmer and stockman are recover¬
ing from the set back they received because of the

of

the

Southwest

even on

a

good year for the bank¬

still look good and long ago we
learned never to sell America
area

short,

those few occasions when the

ily hidden by

cloud that contained

a

sun

no

was

temporar¬

rain.

GRIESED1ECK

brewing industry as a whole, the
promising in terms of growing sales.

keener

than

ever

before, with

year

ahead

many

majors in the field bidding for

new

markets with increased capacity and
relocated

productive

ready in development.

facilities

al¬

Members of

the
industry who have lagged in
merchandising or who are not pre¬

pared to meet competition

be in for

may

a

on

Joseph

Griesedieck

quality

rude awakening.

Competition will be sharpened

even more by the drive
presently higher operating
costs.
Brought on principally by higher labor costs, to¬
gether with higher sales and advertising appropriations
necessitated by the already mounting competitive
forces,
operating c'osts dictate the need for as high or higher

for

sales

volume

to

combat

sales volume to maintain present profit structures. .
Falstaff Brewing Corporation is optimistic in terms
of its own continued high sales for 1954.
Having pi¬
in multiple plant operation almost since the
Prohibition, and already entrenched for a year
in the industry's bid for West Coast
business, Falstaff
enjoys a unique position within the industry.
oneered

close

A

1953?

prosperous as

of

record year in

both production and dollar sales for

1953 contributes to the company's optimism.
Total pro¬
duction of Premium Quality Falstaff in the company's
five

Jose,

pessimism.

Seemingly undebatable is the fact

plants in St. Louis, Omaha, New Orleans and San
Cal., will show a barrelage increase of approxi¬
mately 27% when 1953 figures are complete.

those, like the writer, who be¬

About half of this company-wide increase is attributed

lieve that this government is now in

to Falstaff's new plant and sales operation on the West

the hands of sound and loyal servers

Coast, still leaving approximately a 13% increase in
production for the four plants operating before the Cali¬

that

of

the

people
the

and

vast

public

majority

officers

trust

and

respect, can but look forward to the
coming year with confidence.
The
reduction
in
taxes,
to¬
gether
with
the expectation
that

indicating the greater
of precision grinding,"

number of developments




that

GREER

whom

of

the

will

be

many

Administration's poli¬
enacted
by Congress,

fornia territory was opened this past year.
Sales on the West Coast began only last March,
Falstaff

a

sales

givirg
territory stretching from coast to coast

for the first time in history.
Acceptance there of Prem¬
ium Quality Falstaff from the start surpassed manage¬
ment's most optimistic expectations.
Even with rapidly

vast num¬
bers of business leaders that America

expanded capacity in the newly-acquired San Jose plant,
production could not keep pace with demand during the
first several months of operation.
The production limit

need

has

cies

strengthen

,

the newest machines and methods.

and

for

being broached

productivity and cost ad¬
vantages of the newer design machines, and the oppor¬
tunity for large savings to those users who are installing

of mind

That truly is a debatable question, but in the South¬
there seem to be morei reasons for optimism than

automatic operation.

duction grinding operations.
All these emphasize
the

N.

counted

forecasters

From what I have been able to
gather from the varied

predictions of the economists,

west

designed to
Work handling, siz-."
ing, truing, compensation for size after truing, and.
counting, with a predetermined number of pieces before
truing, are automatic features now being used on pro--

provide

frame

President, Citizens State Bank, Houston, Tex.

There has been growing interest in I the higher horse¬
use

into the

modest set-back as a major disaster. Our
is strong enough and resilient enough to take
peaks and the vallevs in stride.

at speeds up to 200-feet a minute.

power

get

W.

designed
ma¬
in recent years

are

strong economy, would seem to sug¬
will not shy away from the market

-

every

cylinder blocks

the

every

economy

machining field.
|.. Among the more striking examples
are
the
larger
tracer-controlled
Frederick V. Geier
milling machines, increasingly used
in
the
milling of airframe struc¬
tural member forgings.
In surface broaching,, the new
machines combine rapid work-handling with reduced
machining time based on effective usage of carbide in¬
sert tools. Automotive

future. Apart from

consumers

must

be

.

Bernard F. Gimbel
*

1954, the activity of the last half of the
should be higher and, consequently 1954 as a whole,
as prosperous, if not a trifle more so, than 1953.

upon

can

many

accrue to the companies
geared for aggressive merchandising.
Competition for beer sales will be

should be

obso¬

that

-But, most certainly, the real gains

spring of

year

$1,000,-

is

Everyday
productive,
newer
chines brought out
abound

in

a

Americans

in sales will

shift in inventory policy,

a

we

warning

beverage of moderation.

more

a

the

is even possible that such reces¬
sion, if it occurs, may enhance the
growing acceptance of beer as the

place. If the present let-down in business continues into
the

production from

year more

machines

than

the

machines

billion

More

indicators of

gest that

postwar designed machines showing
fully one-third greater productivity,
replacement of over-age,
obsolete
machines is due.

hgve given

now

It

eco¬

■

of

heed

unlikely that the upward trend in beer consump¬
tion will be retarded appreciably by any slight recession
in the general economy that some
economists are inclined to predict.

1954 should be
reasonably well sustained.
Selling, I believe, will undoubtedly become increasing¬
ly competitive, but. the level of employment, savings
bank
balances, life insurance purchases and the in¬
creasing demand for United States savings bonds which

completed, machine

spotlighting the excessive numbers

machine

survey

defense

to

in

It is

over-all demand during the first half of

GEIER

President, The Cincinnati Milling Machine Co.
-

serious situation if

upon

decrease

a

For the

structure of the

temporary adverse effect of

FREDERICK

more

to

income, the slight leveling off period that seems
to have arrived, may prove of
everlasting benefit to
this nation's economy, and
probably will prevent a much

is

than

the

be

or

JOSEPH

the

to

ap¬

items—will

President, Falstaff Brewing Corp.

the

more

luxury

months.

the

be

to

seems

weakness

serving

automobiles, household

most

few

sales,

doubt be kept

no

for there

a

much to make America great.
While few in this area look forward

in

largely instrumental in creating the
set-back we are now witnessing. On
the other hand, this may have a very
salutary effect and may be the basis

There is plenty of money in the
and

in

country. The
talk of recession which began in the
early part of 1953 was, it seems to me,

duce their present
rate of buying.

ings and in

set-back

opinion, the current decline

my

traceable

nomic

in

history and it becomes
merchandise

control

caution

easily offset in

part by the reduced tax burden for the individual.
Consumers have been saving at the highest rate

mild

a

economic structure.

with a highly competitive market
prevailing. Cut¬
backs in Government and
private expenditures may have
effect

suffer

to

further let-down

any

fundamental

no

rate

some

began

offing, it will

under

relatively high

a

is

now

Employment, espe¬
cially in the heavy goods industries and the
railroads,
will be off, but not
alarmingly low! True, greater com¬
petition will prevail, but alert competition has done

quarter of last year. However,

there

the

to expand in
ards of

economy

third

probably

Conditions in this

business outlook for the first half of 1954 is, in
opinion, reasonably reassuring. After 15 consecutive
quarters of expansion and inventory build-up, the gen¬

con-

and

those of

drought. Everything indicates
ing business.

GIMBEL

The

eral

decline in

pliances

my

season.
a

F.

sales—and

smaller for at least

President, Gimbel Brothers

conservative and

expect this to

can

accomplishment.

BERNARD

hardfwork and by

better balance between

feel there

we

outlook

increase.

an

cautious buying policy,

lines,

the realization of

customers good values that our
It is true that during the late

our

consumers

While there

about the sales

confident that with

are

continuing to offer

*

nities and problems holds for each of us the best chance '
of making 1954 a year that we can later remember with

B. C. GAMBLE

/

Steel

an

our

The

(

/

W.

N.

Greer

the

have

slight

belief

little

slack

and

to

of

fear

doubt

from

that

the
now

exists.
Even

under those of 1953,

prevented

expansion

of the sales

inasmuch

as

fall slightly

the year we have just

territory

beyond

the northern half of California.

Company-wide production facilities
if gross receipts

4

.

appropriate time to
plans for the future.
past year has in general been a good one for the
bo able to take
of the lower prices when
Athletic Goods Industry, representing the first year of a
and as they are available.
\ cycle following the economic dis¬
i
In
summary, if we are correct in assuming that our
turbance caused by Korea.
Inven¬
national economy is facing
nothing worse than a reces¬
tories were in good
shape at the
sion of the severity of 1949 of some
10%
in Gross
start of 1953 and appear to be in
National. Product, then I feel that our
area, which has
good balance now.
already suffered from the rolling adjustment and "a
Nineteen
fifty-four holds
many
relatively serious recession in the textile industry, may 1
opportunities.
With the ever
wind up 1954 with results only
inslightly less favorable r
creasing participation in sports and
than the banner year of 1953.
;
the population growth, our industry
\
The outlook for our Banking Industry, therefore,
has a healthy economic climate for
seems to indicate a stable
deposit level with commercial:
further expansion.
These opportutloan demand somewhat reduced from the high levels
nities may be realized through, sound
which
have prevailed. Demand
may
increase in the
business
operation and aggressive
personal loan field, although there may be a
temporary •?
sales and promotional activities.
decline in appliance and automobile
paper.
The rate,;,
In the same way that .the new year
structure may ease somewhat, but
operating costs should
holds opportunities, it also presents
be relatively stable
providing satisfactory profit margins. <
Walter B. Gerould
many
problems which fall in two
Although a special degree of caution is necessary in
categories — first, those beyond our
any period of adjustment nevertheless, the Banks have
a
control, such as world tensions with their direct affect
splendid opportunity to provide constructive service
on
to our economy and
economics, the ever present taxes, etc., and second,
our,, communities by keeping the -*
the other group
Credit sources qf sound
being those which can be controlled by
enterprises readily available and :
us, such as the day-to-day problems that arise in any '
maintaining an open-minded and constructive attitude
business organization.
toward newer but
promising opportunities.
An optimistic yet realistic approach to these
opportu¬
volume

was

gross

years which might call for
caution, unceasing vigilance and untiring energy.
The
lessons they learned in the thirties will not soon be for¬

President, A. G. Spalding &, Bros. Inc.

J With such

a
record breaker in sales, a slight deincome, if met early by a pruning of
expenditures where possible, could easily, result in a
1954 total
that, with tax relief assured, would closely
parallel in net income the highs of 1953.
The business men of
today, in the main, were either
directing or assisting in the management of their indus¬
tries in the early thirties and learned much about how to

in

conduct their businesses in

come.

WALTER B.

re¬

duced volume.

behind

crease

general modernization of productive
equipment in industry. It is expected that the Admin¬
istration in Washington is about ready to ask Congress
to provide for a sounder provision for depreciation and
obsolescence
under
tax
regulations.
If
depreciation
allowances are adequately revised, machine tool builders
should experience a healthy demand for their product
for

left

29

were

Continued

short of deon

page

30

.

1

(478)

Continued jrom page 29

lative activity.

distributed on a
waukee beer strike occurred.

slightly under
year-end fig¬
ures are not available at this writing, it is estimated that
net profit after taxes will be slightly above that for the
three quarters net income after taxes was
the same period in 1952.
Although final

<

H.

FREDERICK

HAGEMANN, JR.

President, Rockland-Atlas Nat'l Bank of Boston, Mass.
The

big question

for

readjustment in the

part of
into

a

the

1954 is whether the
that began in the latter

year

economy

will level off and

letdown

small

by

resurgence

a

be

Federal

The

first

of

part

Board

Reserve

credit

the

brakes

after

in

credit and has eased the money
ation

alike
the

the

signs toward

Republicans from all current indica¬
are
going to leave no stones
unturned to keep business good and

.

f.

agemann,

.

Let

us

continued

increase in

the best business yeap on

record and that the economy,
regardless of the slight downturn, still has tremendous
momentum as it rolls on into 1954.
I, therefore, feel

should

start

on

upon

top of

it further.

have postponed

better to have taken

been

In

and

opinion there is far too much confidence, on the
part of most people, in the government's ability to con¬

...

my

trol

the

business cycle.

Granted

has many means at its disposal,

that the

no

we find our economy again based
huge amounts of credit. There is a limit somewhere '
to pr.edit expansion and borrowing, both on the part of
the individual, business and the government, and there
is a day of reckoning somewhere ahead when debts!
Wilt either have to paid honestly or repudiated by non-7
payment or by payment in depreciated money. V\
,

times when

an

extended

period

of

highly

to

a

outlook

situation. -Due

the

for

domestic

to

the enormous

in

the

of- the

active'

As consumers
"1.

-

The likelihood,

Hammeil

L.

a.

As I

it, the business of transporting goods and com¬
serves all groups across the board
—should maintain levels close to the average during the
see

modities—because it

United

year.

Reports, including those I receive frbm Railway Ex¬

nation, suggest, for ex¬
inventory policies at both

officials throughout the

press

ample, more conservative
wholesale and retail levels.
Merchants may

well expect to meet every opportunity
simultaneously effect real overall econ¬
reducing
inventories and counting on faster transportation to fill

to sell

oil

and yet

omies in keeping capital investment down by

world
output of

i

any gaps on their shelves.
With the speed and
special service features of rail and air express available

quickly

where there are

production and where costs are lower
United States, there is currently an over-

almost

everywhere, Railway Express has reason to hope

that retailers will
decree.

specify its services to an even greater
'' ;' ■'•

■

other

In

in the

directions

.:

year

7V

ahead,

look

we

ance

benefit to the
result of an anticipated continu¬
constructive policies and actions of the pres¬

people

of the

as

a

in Washington.

ent Administration

in the United States

..

policy to get and keep government
of competition with private enterprise, removal of
the excess profits tax and a reduction in personal in-'
come tax rates and steps to remove transportation and
increases the unit cost of production and has a severe ,'
freight excise taxes burdening users of transportation
effect upon'profits. At the same time, the cost of find->
7 services are seen or hoped for in the year ahead.
7
ing new reserves is increasing rapidly. Not only are
>
'
v ;>
Continued on page 35
wildcat wells being drilled to greater depths than here-;!
/ Continuation of the

.

At the moment domestic companies
are
producing only 17 days per month in Texas, and
similar restraints are imposed in many other statesj This

domestic producer.

out

~

-

.

.

Joseph Mc Man us & Co.

New York Securities Dealers Assn. Elect New Officers

;

MEMBERS

New York Stock

f"

—

American Stock Exchange

Midwest Stock Exchange'

\

•

Exchange

39 Broadway

We

1

our

-

r

•

New York 6, N. Y.

pleased

are

to announce

the expansion of

PRIVATE WIRE SYSTEM

J. W. Tindall &

Company

.

to:

Zilka, Smither & Co., Inc.

ATLANTA, GA.

PORTLAND, OREGON

Blanchett, Hinfon & Jones, Inc.
SEATTLE, WASHINGTON

-

Harry

R.

Amott

Charles

H.

With these

Eugene

G.

Statter

Elbridge H. Smith

been

reelected

President

of

Securities Dealers Association, it
Charles H. Dowd, of Hodson

&

our

'<•

the
was

Co. Inc.,

New

York

announced.

Company, Inc.,

Secretary,

Samuel

and

berg & Co., Treasurer.
The

following

Governors:

Mr.

of

S.

Wein¬

,

were

Amott;

elected to the
Mr.

extends

to:

Dowd;

Board

Mr.

of

Statter;

Albuquerque—Quinn & Company

Los Angeles

—Dempsey-Tegeler & Co.

Atlanta

—J. W. Tindall & Company

Midland

—Southwestern Securities Co.

Chicago

Weinberg,

—McMaster Hutchinson & Co.

Hew Orleans

Chicago

— Hulburd,

Phoenix

—Kenneth Ellis & Co.

Cleveland

—Wm. J. Mericka & Co., Inc.

Pittsburgh

—Blair F. Claybaugh & Co.

Dallas

—Southwestern Securities Co.

Portland

—Zilka, Smither & Co., Inc.

—Dempsey-Tegeler & Co.

Warren & Chandler

—T. J. Feibleman & Co.

Eugene

ply,

were

G.

Statter,

elected

of

lloit,

Rose

&

Vice-Presidents of the

Com¬
asso¬

ciation; Elbridge II. Smith, of Stryker &
Brown,

Mr. Smith; Mr. Weinberg; Philip L. Carret; Frank

Denver

—B. E. Simpson & Company

St. Louis

Detroit

—R. C. O'Donnell & Co.

Salt Lake City—A. P. Kibbe & Co.

Dunne;

»pd

El Paso

—Harold S. Stewart & Co.

San Antonio

Knox;
Oliver

Frederick
Hanns

E.

J. Troster.

D.

Gearhart,

Kuehner;

Jr.;

David

Herbert

Morris,

D.

and

'




—Lento, Newton & Co.

Harrisburg —Blair F. Claybaugh & Co.

San Francisco—Wulff, Hansen & Co.

Houston

Seattle

Kansas

—Crockett & Company

City—Burke & MacDonald
Tucson

mm

.

Weinberg

Samuel

now

Harry R. Amott, of Amott, Baker &

b*s

additions,

CORRESPONDENT WIRE SYSTEM
Dowd

'

for

further improvements in our economy of
American

produced abroad is finding a market
to the very great detriment of the

Much of the oil

J As we enter 1954

rfcfP

the

restraints upon

than

oq

one

of

quality.

increasingly more

their

tribution flow.

supply of petroleum. This problem is further compli¬
cated by the dikelihood that the Iranian oil fields may
soon be brought back into production.
This would mean
that another 700,000 barrels of daily production would
come into the world market.

in the long run.

look back in economic history this is

1954

We are now getting
normal peacetime demand
competitive situation that

wells in the Middle East and elsewhere,

application of the economic brakes would have been

we

the

is worldwide in scope.

ii

petroleum

mortems on the 1920-'21 and 1929-'32 periods indicate
thai less credit expansion prior thereto and an earlier

As

costs

industry must be considered in the light of the

government

the strongest of which

increasing the money supply and inflating, neverthe¬
less all the government may be able to do in the light
of history is to postpone the operation of the cycle, but
in doing so it has often accentuated the swings.
Post¬

us

U

Halanan

The

is

better for all of

a

a

savings

and

wage

and

production reached in the war and

back to

In the

put added emphasis on

selective
buying, readjustments will
however, is
that they will be staggered and will
vary in degree with the nature and
problems of the individual industry.
Although some dips from all-time
peaks in many fields are foreseen by
the analysts, the estimated declines
should not materially diminish dis¬

postwar periods.

and 1949 rather than to have inflated to present higher
levels.
,

public's

follow.

leveling off from the peaks

We are
of

fact, it might well have
further correction in 1948

entire economy.

our

will

in

States.

In
a

citizen

every

the

become

responsibil¬
most serious
direct impact

problems, they have a

the old one, history may
well record that it would have been better to have
taken our correction in 1953 and 1954 rather than to
boom

cloud

these

solving

undoubtedly will bring many challenges

business and

service

prod¬

the oil industry has the

of

HAMMELL

dollars

outlook with greater uncertainty than
has existed in many years.
While

ity

-

growth and greater stability.
the retail and consumer goods

In

for

duction, mounting operating
dwindling profits.

these

-

fields large users of express service,
extended sales efforts in competition

demand for petroleum

Altogether,

exception.-

100

They

particularly in the express busi¬
of the challenges will represent long-term

many

ture

and

thfit 1954 is going to be a good business year and sub¬
stantially better than most years which we have had,
with the exception of 1953.
A substantial readjustment generally is overdue and
maybe the current planned easy-money policy will help
to cushion this correction.
If in this attempt another

the

almost

for

to the industry.

opportunities to build for sound fu¬

throughout 1954, it cannot and does not blind itself
the fact that we have entered the new year with
excessive inventories, restricted pro¬

to

new

confident that the industry will

American

ness,

ucts

that in spite of severe corrections in
SQme industries, in general 1953 was

r.

a

nothing

field of transportation,

While, the oil industry looks forward with confidence
to

am

The year 1954
to

President, Plymouth Oil Co.

not forget

are

ALFRED L.

HALLANAN

S.

difficulties

extreme

most

President, Railway Express Agency, Inc.

re-examination of loan and investment

W.

tions

„

a

1954 and

employment high.

.

policies.

going to have an eye on
1956 elections, and the

are

•

major trend in either direction

a

the

Problems

solve its current
problems as it has those of the past. Realism compels
us to recognize, however,-that the problems of
1954 are
more serious
and complex than any the industry has
faced in peacetime for almost a generation. The industry
has a responsibility beyond that of self-preservation to
exercise the necessary industrial statesmanship to meet
the problems of this hour. It has a public responsibility
to solve these problems.
The industry has met every
such obligation in the past, and I am confident it will
measure up to the challenge of this New Year.

People in the banking field are watching
business situation very closely and any

would call for

This year both

dramatically.

present

definite

situ¬

Republicans and the Democrats

the

In

than inflation.

has taken very
since then to expand

.

the rule rather than

are

deflation, has a slight spin toward deflation, and cur¬
rently most people are more concerned with deflation

the

1953

strong measures

mounted
years.

money

1953 saw inflationary forces in a great many fields ef¬
fectively halted.
The economy at the moment while
fairly well balanced between the forces of inflation and

of infla¬

tionary forces.

applying

creases as

•

»

1954, deposits at year end should generally show
only minor changes from present levels, with a probabil¬
ity that they will be some higher.

Thursday, January 28, 1954^

.

.

tofore, but the incidence of dry holes necessarily in-;
unexplored acreage decreases, ..J .7
*
:
The oil industry is today the outstanding symbol of.
our free enterprise system, because it has faeed and sur-.

specu¬

mid

1953 is going to increase in severity and turn
recession or depression or whether the current
followed

.great

human weakness to postpone

a

and deficit financing cushion the economy
and bring about a resurgence.
Our long range major
problem, however, I believe is inflation and not deflation.
In the light of the above, bank earnings in'54 should
be about the same as in 1953, loans outstanding at the
end of the year about the same as now but possibly a
shade lower.
Money should remain plentiful for the
first half of '54 but may tighten some toward the end of
the year with an inflationary pick up in business and
traditional seasonal borrowing.
Assuming that the Fed¬
eral debt limit is raised, and that seems inevitable by
easy

Ilj dollar sales, Falstaff at nine months was ahead of
all pf 1952, the company's peak year.
But for the first

1952.

There is

adjustments as long as there is any credit left available for expansion.
In my opinion, for the short-term out- *
look, which means 1954, our problems will be minor as

with Falstaff being
rationed basis even before the Mil¬

year

The Commercial and Financial Chronicle.

rH!.

business has not culminated in a period of

.

mand for many weeks during 1953,

u

'

>

.

30

—

;

Toronto

—Blanchett, Hirtton Atones, Inc.
.

—Matthews & Co.

Henry Dahlberg & Company

Volume 179

Number 5294...The Commercial and Financial Chronicle

(479)

*

31

i

•

.

New York

Peter

Edwin L.

Security Dealers Association

T. Byrne, Model, Roland & Stone; Tony
Lund, Securities
Warren Wilson, Union Securities

& Exchange Commission;
Corporation

Beck, Commercial and Financial Chronicle; Hal E- Murphy,

Countess

Edward

Maria

Pulaski

Commercial and Financial Chronicle

Edward J.

John

J.

Jr.,
&

John

Transfer

J. O'Kane, Jr. & Co.; Mortimer Landsberg; Arthur Bisgood,
Co.; Harry Fromkes, Lawyers Title & Mortgage? Co.;
Shepard Alexander, Hamershlag, Borg & Co.




New York Stock Exchange; Harry R. Amott, Amott, Baker & Co. Incorporated;
Bryce, Clark, Dodge & Co.; Frank Dunne, Dunne & Co.; Abner Goldstone, guest

Charles

M.

Zingraf, Laurence M. Marks
Stein

Enright, Executive Secretary, New York Se~urity Dealers Association; George L. Collins,
Geyer & Co. Incorporated, Chairman of the Dinner Committee

O'Kane,

Gray,

T. Jerrold

Register

Paul

Bros.

&

Boyce,

&

Co.;

Charles

Bodie,

Baltimore

•

Rowen, Securities & Exchange Commission; David Morris, David Morris & Co.; Edward
McCormick, President, American Stock Exchange; Earl K. Bassett, W. E. Hui'.on & Co.

Sydney Holtzman, Graham Walker, Dan Hannafin, Frank Fitzpatrick, Mike Growner, and
George Dedrick, all of Joseph McManus & Co.

»M

WW

rV.

AW

t,

"

T.

32

The Commercial and Financial

(480)

28th Annual Dinner

Arthur

Queren, Chemical Bank A Trust Co.; Herbert Singer, Singer, Bean A Mackie; J. Bernard
Joseph, J. Bernard Joseph A Co.; Jules Bean, Singer, Bean A Mackie, Inc.; Hector Bohnert,
Bankers

Bond

Co., Inc., Louisville,

York Hanseatic Corporation; Jack Honig, New

York Hanseatic Corporation

Herbert C. Tietjen, Walter C. Nester, Walter C. Foessinger, Albert J. Milloy, and Herbert H. Haines,




i

all

of First

Boston Corporation

Bean A Mackie, Inc.; Edward Ruskin, Singer, Bean A Mackie, Inc.
Coleman, Allen A Company; Bernard Salmon, Singer, Bean A Mackie, Inc.;
M. K. S. Altman, H. Hentz A Co.

Herman Frankel, Singer,

' i

'

Merritt

Harry A. Stillman, Greene and Company; Nat Krumholz, Siegel
Co.; Mortimer Schultz, Home Improvement Financing Corp.,
Plainfield, N. J.

A

A. Voccoli, Jr., Savard A Hart;1 Arnold J. Wechsler, Ogden, Wechsler A Co.; Harold
Murphy, Bonner A Gregory; Hoy Meyer, Joseph Faroll A Co.; Sid Siegel, Siegel A Co.

J.

George A. Searight; Elbridge Smith, Stryker A Brown; Sam Englander, Englander A Co.; Ira Krupnick, Aetna Securities Corp.

Maurice Hart, New York Hanseatic Corporation; Charles E. Klein, Granbery, Men-ache A Co.; Frank J.
Ronan, New

January 22nd

Ky.

Charles Wallingford, H. M. Byllesby and Company Incorporated,
Philadelphia; Harry MacCallum, Jr., MacCallum A Co., Mt. Vernon;
Ralph T. Tyner, Westchester Bank A Trust Co., New Rochelle, N. Y.

Chronicle.. .Thursday, January 28, 195*

Michael

Maitland T. Ijanf*, John H. Barrett, Vincent Fetsch, Jim Waters, and Eric Bjornlund, all of
First Boston Corporation

Volume 179

Number 5294

...

The Commercial and Financial Chronicle

(481)

33

At the Hotel Biltmore

Harry D. Casper, John J. O'Kane, Jr. & Co.; John M. Mayer, Merrill Lynch, Pierce, Fenner & Beane;
Ted Wechsler, G. C. Haas & Co.; Harry A. Michels, Allen & Company; Bert
Seligman,
Straus, Blosser «£ McDowell

Col. Oliver J.

Troster,- Troster, Singer & Co.; Milton Pinkus, Trqsler,
Singer & Co.; Charles S. Offerman, Troster, Singer & Co.
*

Frank

Cestaro,

L.

F.

Carl

Rothschild
M.

Loeb,

&

Co.;

Rhoades

Eugene M. Cohen, Joseph Faroll & Co.;
& Co.; Jeff Lutterman, Birnbaum & Co.

Bob

Kullman,

Robert M.
Topol, Greene and Company; Julius Golden, Greene and Company; Melville S. Wien, M. S. Wien & Co.;
Percy J. Wien, M. S. Wien & Co.




Montanye, Eisele & King, Libaire, Stout & Co.; Vic Reid, Eisele & King, Libaire, Stout & Co.;
D. Knox, H. D'. JCnox- 'A Co., Inc.; Samuel E.
Magid, Hill Thompson & Co., Inc.;
Frank Harrington, H. D. Knox & Co., Inc., Boston

Herbert

Paul A. Brunn, gucsi; Charles H. Dowd, Hodson & Company, In*.;
George J. Springer, Hodson & Company, Inc.

Eugene G. Statter, Hoit, Rose & Company; Joe Markman, Newburger & Co., Philadelphia;
i

Giles

i.anns

E.

Kuehner,
&

Joyce, Kuehner & Co.; Reg. Knapp,
Co.; Edward A. Kole, guest

Wertheim

S. B. Cantor, S. B. Cantor Co.; Daniel J. Riesner; David Magid, Hi.I Thompson & Co., Inc.; Bob
Strauss, Daniel F. Rice & Company, Chicago; Arthur Burian, Daniel F. Rice <£ Company, N. Y. C.

Charles Rufer, McDonnell & Co.; James Mundy, Stroud & Company, Incorporated, Philadelphia;
Harry Grahame, Jacques Coe & Co.; Frank Hall, Gersten & Frenkel; Bob Attmore, Sheridan Bogan
Paul

& Co., Inc., Philadelphia;

Arthur

Winner,

Stanley Heller &

t

ra

y^

Co.

A

i

^

K i., i

*

An

^

34

(482)

I

The Commercial and Financial

Chronicle... Thursday, January 28, 1^54

Four Hundred in Attendance

Bill Moran, Securities and Exchange Commission; Frank
Purcell, Securities and
R. Frumberg, Securities and Exchange

Irwin

Commission;

John

J.

Kelly,

Exchange Commission;

National

Securities Dealers; George E. Rieber, National Association of Securities

Michael

J.

Heaney, Michael J. Heaney & Co.; Stan Roggenburg,
Roggenburg & Co.

Nat

Association

Bert

of

Dealers

Pike, Troster, Singer & Co.; Louis Singer, Troster, Singer & Co.; Wilfred N. Day, Charles A.
Day & Co., Inc., Boston; Frank Kiernan, Central National Bank, Yonkers, N. Y.;
Samuel Weinberg, S.
Weinberg & Co.

Lukow, Birnbaum & Co.; Alfred F. Tisch, Fitzgerald &
Company, Inc.; Nahum Birnbaum, Birnbaum & Co.
■
•

Edward V. Otis, Gearhart & Otis, Inc.;
Gearhart

&

Duke
Hunter, Hunter Securities Corporation; Fred
Gearhart,
Inc.; Earl Hooper, Gearhart <ft Otis, Inc.;
Castanos, Hunter Securities Corporation

Otis,

John H.

de

■

William

Janes, Chemical Bank &
Gersten

&

Trust

Co.;

Lester

Frenkel,

Frenkel

' '

I

'

Irving Stein, Greene and Company; Sam Bortner, Stein Bros. & Boyce,
Philadelphia; John Hawkins,
Amott, Baker & Co. Incorporated; Allan Levian, Amott, Baker & Co.
Incorporated;
Jack Anson, Amott, Baker & Co.
Incorporated

iftiit

Lou Walker,

National Quotation Bureau; George V. Hunt, McLaughlin, Reuss &
Granbery, Marache & Co.; Fred J. Rabe, F. J. Rabe & Co.




Co.; Philip

Carret,

A.

A.

Geller, Allen & Compony;
Elmer

Bert
E.

Stern, Allen & Company; Larry
Myers, George B. Wallace & Co.

Lyons,

Allen

&

Companyp

Volume 179

Continued
A

,

Number 5294

*

from

The Commercial and Financial Chronicle

si.

factory,

milestone iri 1954 is

Express marks the completion of 25

years

of the rail¬

enable

us

and at the

has

time foresee reductions in the deficits

good

anticipated

was

finally

which

by the railroads in providing the underlying
intercity transportation service.

HARPER

anxieties

a year

eliminated

had

all

the

over

ago, the petroleum industry
of the shortages of supply

the

accustomed

oil

for

than

more

decade.

a

stocks have accumulated

tions

1953

23,000 communities.

directly

involved

year-end.

1,200

continue

No doubt

is

In

routes,

miles

of

truck

lines

and

12,137

routes.

The year 1954 should see renewed recognition of the
role played by Railway Express and the maintenance
of its traditional record of service in

an

expanding and

ROBERT M.

HANES

President, Wachovia Bank

Trust Co.,

&

Winston-Salem, N. C.
The

outlook

for

business

in

1954

be

can

considered

good, although somewhat below 1953 levels. The diffi¬
culty is that as we move along from month to month,
we shall be
making comparisons with the same period in
1953

which

was

record-breaking

a

The figures for 1954

year.

foe

good

although

not

can

still

to

the

up

At

time

last

year,

a

production

by

strike

caused

mid-'52.

of

tremendous

There

had

strike.

been

This

upsurge

held

back

upswing

by

weeks

to

marketing

going to encounter stiffer and stiffer rivalry in sales
solicitation, he must remember that this applies both

ways—not only when he sells,
The

dominance

of

but also

sellers'

when

he buys.

market

for so long ren¬
gasoline outlets through
salaried operation entirely adequate.
Though this solici¬
tation has been stepped up
by the use of every conceiv¬
able sales inducement, there is no question but that the
small businessman, acting on his own
initiative, will
eventually outstrip the employees. His freedom of action
and incentive for profit will win out. It's the old
story
of the
superiority of irregular troops fighting for their
own
cause, as against the better equipped mercenaries.
The petroleum industry is in for keen
competition in
a

From

the little fellow's point of

is

In

many

lives

our

cases

we

against well

should

it

as

be.

view, I look for

Jobbers

and

opposition, but

distributors

have

to take

well

may

be

With

possible for the

advantage of this situation

war

show

may

a

slight decrease in profits for the industry;

a

CHARLES

Robert M. Hanea

trends

W>

•' '

"Another

moving

important

into

markets,

'

point

normal

more

is

that

\

■

/

pace may

are
gradually
conditions, where

we

business

be slower in 1954 it is reasonable to expect the
continuance of good business. It will
be

prices,

and production are determined more
the law of supply and demand, rather than
by artificial stimulation. Business is going to be more
largely on its own, a condition necessary to a sound and

work,

If,
be

abundant

manage and

as

for

our

those

economy

who

are

phasis

Interest

sell.

income
search

largely because business management is working
make it good.
Since 1940 we have had crisis
after crisis, wars, all-out defense efforts, and other world
to

events that
tures.

and

scare

shots in

being

in

buying

the

arm

reduced;

which

for

the

had

business.

the
Now

effect

of

repeated

the stimulants

are

shots

Government will play

in the arm are less potent.
lesser role in business stimula¬

a

tion, but will stand by to prevent
swings in either direction.
TOM

S.

wide

or

disorderly

an

Charles W. Hoff

in

as

will

effort

1953.

be for
new

soften,

may

not have

high

as

Here
more

sources

to maintain

a

this

is not to be confused with

in nature and

the

policies that

constantly geared to

an

Barring

depression.

variations

and therefore

and

the

economical

the quality of management.
primarily an agricultural area, and farm con¬
ditions consequently influence the local
economy.
De¬
spite an agricultural price jand income decline in 1953,
on

much

I believe that everyone expects and
a

are

readjustment

business

in

will

be

gradual

that

we

will have

the

highest

and

also

are

ever

in

saving

sales

in

1953

were




is

not

increasing

'v.V

there—is

But

big market—and it will always be

our

when

made

the old

that makes
create

a

better

job.

kind

new

that will do

obviously

an

former—and boilers that will oper-r

that, if

accommodate base~

chimneys to

lower

we

of the latter.

will keep

;

;

;

,

spending money fo*

on

equipment, research and engineering and adequate*

new

sales promotion, we will have a

advertising and
1954.

in

year

find

for

reasons

some

Another

facilities

and

industries

A

may

than

before.

ever

,

Al¬

be reaching saturation, tho

It will

f ;

good year—or even a better

a

attention- to

of

year

facilities,

ou*

It doesn't always have to be a bigger

thing.

statistically to be

capacity,

increased

improved manufacturing
coupled with

broadened

research, may be the year that turns

engineering and

succeeding future years toward increased sales.

Whether the

be

cannot

new

than

slower

little

of

ranks

industry, among others, surely is not.

chemical

many

the

Simultaneously

comforts

technologists have grown and they have*

provide the new frontier We seek,

one.

tends to

Better education

optimism.

how

know

though

good

analyze conditions, we will

we

living standards and demand for home

conveniences.

more

if

Even

scientists and

v

type of heating

new

radiant baseboard heating in mind

mentless houses when I speak
So I think

a

out of date, or when wa

seem

boiler

of

I have

much

create

we

way

when I speak of the

with

constructed

home

new

every

opportunity.

ate

busi¬

prospective sale
presents a similai

Every worn out boiler presents a

and

year

will be about like last year, a

last year, or,

possibly a little better*,

It depends somewhat upon what

predicted.

attitude is and what we do about it.

u

ll.

had by our company
industry.
People

more

life

It

purchase of life insurance.
The
insurance
agent
is becoming
trained and more capable of

Even

opinion,
cause

with

in

a

readjustment

1954

the
a

sales

will

$5.5

new

Tons

industry,' estimated
1953, may be 7%

1954.

of

rubber consumed

history, down only 4%

in 1954

from the

1,333,000 long tons converted
in 1953.
the basis of 1954 production
by

automobile

tire demand will

We look for sales

manufac¬

be up 2%%.

of 77 million pas¬

tires and 13 million truck
a total of 90 mil¬
lion. This compares with about 93
H E Humphreys Jr.
million in 1953 and 85 million in
1952. Demand for industrial rubber products will con¬
senger car

the

and

life
.

the

expected to be the second highest

are

bus

tinue

record be¬

of the above factors.

of

billion in

in

lower

ment

taking

of

Rubber Co.

turers, fewer tires for new cars and
trucks will be required. But replace¬

better

of

States

good year is ahead for the rubber industry..
not be as good as record-smashing 1953. But,

compared with previous years, it will be a prosperous
one for most people who have a stake in the industry-

On

and one of
saving is through

insurance needs
people of the country.

HUMPHREYS JR.
United

Another

forecasts

money

the major ways of

E.

President,

into finished products

the

insurance will set

outstanding

is, among other things, in the heating

Crane Co.
ness.

record

insurance

Life

posits in banks
ing. Consumer

and loan demand is not weaken¬

need not worry about how many-

can—we

bathtubs and other iterqs^
the American people have—they'.ll buy
a
new one if it's improved enough to be worth buying.
Not only that, we can always sell new kinds of products
if they are truly new enough and fill a need.

in

place in industry in general, in my

up

If we
in my

features for comfortable living.

new

we

of durable goods

Sales

during

should equal 1953. Employment holds up well. Farmers
in a reasonably good cash position. Individual de¬

credit

business is more than just

automobiles, TV sets, radios,

jittery

1954.

analyzing

are

en¬

and

continue to do this—and there isn't any doubt

can

HOLDERNESS

continue to compare well with the previous
year. Auto¬
motive and farm equipment retail is
down, and may go
lower. .Public,
business .and
residential
construction

are

products and

our

readily sustained.

more

thb

very

mistake to become

a

courageous only when
the
most favorable and apathetic and fearful

are

mind that

of revenue

impending serious
international crisis

some national or
the business indexes

in

better than average local corn
crop sustained
good business activity toward the year-end. De¬
partment store sales were up slightly in 1953, and should
a

~a

to be

me

ambitious

provide the nation with its needs. This would result"
in a static living standard. What we must do is improve
the standard. We can do this only by creating improved

the current

President, Jefferson Standard Life Insurance Co.,
Greensboro, N. C.

.

Ours is

to

seems

The objective of American

gross

again

up.

to

at

HARRISON

for our trade territory, at least for the first
part of 1954.
The profit potential therein will depend more than ever

opened

em¬

greater

always

are

ones

new

<

satu¬

when they are not.

Caution is a necessary attribute to
successful business management, but

HOWARD

President, The National Bank of South Dakota,
Sioux Falls, S. Dak.
A healthy volume of general business
appears in store

before

upon

:

being

always

are

level of net profits.

have demanded huge Government expendi¬
resulted in Government deficits,
inflation,

This

rates

methods and

so

hard

be placed

banks may

to

It

forecasts

year

for many products.

anticipate, business is good in 1954, it will

we

will

competition,

opportunity

The public andt
industry welcome new and improved?
products with open arms, always
discard what is inferior, inefficient and ob¬

thusiastic,

Un¬

efficiency and lower operating costs,
with a slightly lower average price

to make

willing

sustained recession.

a

der the impetus of

Although business levels will be somewhat off from
the previous year, nevertheless there will .be a number

stimulating factors at work in

of levelling off rather than
of peak production or for that
year

matter of

stable economy.

opportunities

a

one

and more by

of

solete.

and

President, Union Trust Company of Maryland

that we

of action

Hailoway

increase

HOFF

but

"trends"

always

is

but

—

being

L.

.

average

average.

rated
J.

a

small

there

Govern¬

taxes,

and

freedom

Markets

going to have to

are

heeled

With comparatively few
business, but from record high
exceptions—notably that of
levels.
The rate of production, personal
income, and- agriculture—the year 1953 has been profitable economi¬
sales we are now experiencing are well above the
post- f cally and one of high industrial production.
While the
or

enjoy,

ready to

suppliers are
marketing

new

material increase in the strength and
pres¬
tige of jobbers and distributors in a turbulent year that

continued

•

downward

not

are

situation

a

look

ambitioft'

and

for progress.

have

is

I look for

have experienced in recent

from normal

that

the

with

in

consumer,

buyers' market, it

We should remember that the de¬
we

Practices

While the smaller wholesaler in petroleum
•

man

the

unabated until the middle of '53.

clines

exist

mendous capital investments in service stations.

in

steel,
automobiles, and construction, all of
which

to

proven their worth in the field of fuel oil
marketing. If
/ they dig in and use their wits, maybe they will have a
real opportunity this year on
gasoline. It just may^ be
that suppliers have stuck their hecks out with
such tre¬

up

lost

was

straining to catch

steel

continue

single service station, garage or
will regain its old appeal to the
supplier whenever sales begin to lag behind production.

fight for

whole

our

was

the

can

saturation,

restrictions

ment

the

commercial

this

unjustifiably pessimistic.

this

market

through his

ber or distributor> *n comparison to

Harper

tough battles.

This is an important
point to remember, otherwise we can

economy
with the

John

1954.

heights of 1953.
foecome

sales

initiative

the

know how cop-:
pled with vision,- business always
can be good.
It may be a little better
or
a
little worse depending uporr

marketer

dered the slow accumulation of

maturing nation.

the land of op—

talk of, with our

we

as a re¬

The larger volume of the job-

areas.

18,628

water

such

,

daily in providing Railway Express service—
representing a transportation network serving the Unit¬
ed States, Hawaii, Alaska, Cuba and certain Canadian
points—were 179,686 miles of railroads, 112,364 miles of
of

each

as

more

competitive.

going .to

Used

miles

so

With

-

reappearing with the hope of catch¬

In addition to the Agency's fleet of close to
16,000
Vehicles, the facilities of many other carriers participate

Airline

pi¬

speak loudly and continuously

we

often forget what we have been say¬

we

Surplus

and,

ing the other fellows off guard.

express agents.

in express operations.

*'V

'

ing about the wonders of doing business the American*
way when we analyze the prospects
immediately ahead to forecast sales
and earnings.
.

been in moth balls for years are now

as

joint railroad and

But

anybody's mind that the oil business

About 45,000 are express employees, another
exclusive express agents, and 12,250 are

serve

portunity.

regular channels.

Railway Express Agency opera¬

Approximately 58,500 people were
providing express service at the

in

do

to

tries to force

centered in about 15,200 offices serving some

were

^
'

about the private enterprise system and

sult, destructive price conditions have
developed in many areas and will

of service suprevisors and many
other programs designed to strengthen operating, per¬
sonnel and sales activities keynote the new vigor with
which Railway Express Agency faces the future.
corps

At the close of

right when

are

to continual
product or another

one

♦

trained

We

fraternity

tightness of

Realigned and augmented executive skills, continuing
heavy investments in modern materials handling equip¬
a

L. HOLLOWAY

J.

»

As

incurred

ment,

(483),r 3^

: •#>>>

V»;4 Chairman/Crane Co.-

.

indicate, in

be

JOHN

many

same

satis¬

very

President, Harper Oil Co., Inc.

factors now present which will
to further improve our service to customers
are

should

»Vh»jy:iibirY • .Unv."^;

.

»«.»« >»

• «*»i

my opinion, that general
for several months to come.
What happens in the latter part of the year obviously
will depend locally on crop prospects and results.

business

roads' ownership of the business.
As the Agency starts its new contract with the rail
carriers on March 1 it will.be in a sound and reinforced
There

••• +

These conditions

Versary on March 4 ,of the starting of the express busi¬
ness.
Just a few days earlier, on Feburary 28, Railway

State.

fK-Mtrhrt CLfteiH'-'

r.»uf

excessively, and delinquency experience is

30

page

transportation

•'Wwcri?

r.>

Howard

tires, for

good, although not as strong as

in the past two

Continued

Holderness

i

on

page

3$

O

The Commercial and Financial Chronicle
36

...

1954r

Thursday, January' 23,

(434)

traffic outlook—is beyond

35

Continued from page

Orders for these products follow closely
of industrial production. Increasing

years.

enues were

prod¬

will be even more so in

for

1954.

in

mild winters. On the other
hand, canvas, rubber-soled shoes for casual wear and
sports have grown in public favor until they now make
up roughly half of rubber footwear sales. \
The industry's chemical business grows rapidly, hnd
will continue to do so, particularly plastics. The outlook
for reinforced plastics for car bodies, truck trailer bodies
and as a building construction material is excellent.

However, a net increase

expectations,

early

to 'us

it looks

and

this in

all

put

taxes

power.
From all indications the

yet was a little better than
right now as if 1954 should be

the

Co., St. Louis, Mo.

&

as

I believe 1954 will

be

reasonably

a

about 10%

of total sales. A further decrease to

12%%

is expected

HUSTON, JR.

L.

records

when

'

Due

to

the

prices

of

raw

relatively

this
see

with

C.

L.

Huston,

Jr.

ago.

other lines helped bring the company more into line
with its competitors and helped its customers to remain

on

competitive
The

in

their

feed

tomer.

to

getting

making

and

bone

of

of

our

and

M.

HUTCHINS

President,

Bangor

Railroad

that

high percentage of

a

views

our

outlooks

for

the

premised

Whether

on

year-to-year

railroad

industry
dif¬

substantially

on

Detroit

makes

more

our

copper

does

nor
we

are

it

much

Thus

when

1953

since

The

'

cult

one

for

you

all

Maine

1939.

or

1954.

you

ask

us

to

review

just past has been
potato growers and a

year

a

such

diffi¬

year of
many.
Potatoes which sold for $5-$6
in the field in the fall of 1952 have sold for

With
mood

cents

a

barrel in

the

potato house in the

fall of 1953.
As this is
of unusually

We would
these
season

Nor

.

written, the greater part of a bumper crop
high quality is still in the potato houses.

not

potatoes
ends

even

will

late

would

we

attempt to forecast whether all of
find a market before the shipping

this

at

this

time

to

forecast

acreage which will be planted this year.
In short, the potato outlook—which means




a

confident that our business will re¬
While it seems reasonable to ex-

The indications
come

are

that

our

down somewhat from

it has been operating

economy

our

the

potato

to

In addition, Chil¬

during the third

quarter

scrap

copper

was

being held

differential pricing in effect under

The production outlook for 1954 depends both on the
situation and on the course of the metal market;

If copper

prices remain fairly close to present levels and

if there is

no recurrence

of serious labor difficulties, it is

probable that production will rise by 8 to 10%.
*

As

index of the

an

anticipated increases in mine

pro¬

duction in the United States and five other leading cop¬

per producing areas of the western world, the following
estimates (with actual production for 1952) may be of
interest:^

1952

1953

932.629

970,000

258.868

446,144

Country—

1954

1956
1.200.000

250,000

1,000.000
290.000

390,000

450.000

21,802

35,000

40.000

500 000
40.000

226,797

225,000

230,000

230,000

327,191

340,000

380,000

450,000

2,213,431

2,210,000

2,390,000

2.745,000

United States—
Canada

f__

—

Australia.

t

"*

'

t-

Copper Production, Mine Basis, Short Tons

Belgian Congo—
Rhodesia"
_

325,000

that'

has temporarily
on which

the high plateau

almost uninterruptedly since 1950.

The decline should be nothing more than a leveling-off

It will be

from this that

come

—The

production

.

The

and

occur

a

a

further major increase

within the next three years, as
during the Korean crisis

projects lounched
into actual production.

new

period of readjustment which, barring an unforeseen
change in the international situation, may continue for a
year or two.
The immediate months ahead, however,
promise to be characterized as a buyers', rather than a
Revere is geared to meet this stronger

seen

in production will
the

—a

competitive challenge.

that

due

labor

Revere enters 1954 in a

good level.

appears

1952

price controls.
Since these price controls
dropped in late February, 1953, copper of foreign
origin has sold at approximately equivalent
prices and scrap has flowed freely.

good year for our elec¬
re-manufactured prod¬
stampings, lockseam tube and

drop from the 1953 totals, all signs indicate
the new year will be satisfactory.

curtailed

was

in

and domestic

Sales of Revere

a

than

were

was a

us,

increased, it

lower

was

government

The

company's expansion plans have

behind

somewhat

last year that much

Chile

this record

been

output

because of the

sellers' market.

spring.

attempt

forgings,

of optimism,

main at

80

back

rolled moldings.

pect

as

as

has

production

made

ex¬

trical welded steel tube and our
ucts

production

—amounting to about 115,000 tons as compared with
46,000 tons in 1952.
This is in line with the comment

centered and will continue to center

Nineteen fifty-three also

give

are,

in

Although mine production showed little change, there
a substantial increase in the
recovery of copper from
scrap by the primary refineries.
In the United States,
1953 production was more than double the 1952
output

ana

this metal.

spite of increases

of mine output to increase during 1953
primarily to labor disturbances in Chile and
Although productive capacity of both these

mine

.

per barrel

low

Kennedy

production

was

other

from

World

little changed from

large tonnages of unsold
under the Chilean Government's program of at¬
tempting to maintain a high selling price for its metal.

company's sales

benefited

in

was

copper

co-operative advertising program for
these utensils which should aid substantially in further I
stimulating demand in 1954.
-

near-disaster for

as

also

1952

metal.

because of the accumulation of

retailer newspaper

you our thinking for
in effect, asking us to
write in terms of forest products and
potatoes. To take the second first:

Hutchins

i

and

1954

ean

alloy mill products con¬
1953 to provide the
many

in

this

strikes in the second half of the year.

mained

concerned whether

greater

actual

during

our

of

mine basis

on a

failure

due

countries

copper-clad stainless steel cooking utensils re¬
gratifyingly strong as they have in every year
they were introduced to the American public in
We have recently established a manufacturer-

Ware

matter

coal and wheat and most of the
prod¬
ucts of industry move in

volume in

business

copper

around

freight

revenues,
insofar as

M.

'James

or

less automobiles in 1954 than in 1953
has almost no effect on our

M.

The

brass fabricator to
enter the wrought aluminum field,
Revere has an increasingly impor¬
tant stake in this industry and -1953
sales reflected this growth.
Much of

first

ferent factors than those which
gov¬
ern most other railroads.

less

availability
in 1953

production

founder, Paul Revere, copper

products

freight traffic, the Bangor and Aroostook is popu¬
larly known as "The Pulp and Potato Road." And, since

are

the

capacity.

Inc.

ceptionally strong demand.
Aluminum is one
example.

our

it follows

important buyer of copper, Revere is concerned

an

of copper

As the back¬
since the days

shipments.

our

largest share of the
volume.
However,

Aroostook

&

Co.

Because it pretty well describes

Curtis

As
with

KENNEDY

sales
9

tinued

so,

ing high speed equipment to roll larger cakes, to finish
longer coils and to roll wider widths of metal.

industry generally, Revere
Copper and Brass Incorporated in 1953 had one of the
best years in its 152-year history.
Business was exceed¬
ingly good with high levels established in net income,

the end of the year.

is

of providing new equipment to further improve service
and quality.
For example, we have added and are add¬

American

with

as well as to cover ex-,
A continuation of this program

contemplated for the year 1954.
The funds for this
will continue to come out of earnings.
..

was

M.

earnings,

fields.

new

.

figure out.

Along

1945, will continue as scheduled in 1954. Steel
processing facilities will have been expanded by more
than $32 million in planned or
completed additions by

CURTIS

increased

As a leading copper fabricator, and with a larger de¬
veloping interest in aluminum, Revere over the years
has pioneered in many production techniques for these
metals.
This pioneering is continuing with the addition

substantial

no

JAMES

since

that

the

and

program

fair price for their feed

a

Chairman, Revere Copper & Brass

of customer standing through improvements in
quality
and service. The plant expansion
program, in progress

and

of

conditions

better

is

this, of course,
country.
Cattle

range,

and acquiring new facilities
operations, improved service to cus¬

for

Canada.

expansion program should enable further consolidation

Chairman

the

from

i

,,

„

pansion into

of

fields.

business appears to indicate a
relationship between Lukens and its cus¬
company's continuing modernization and

The

and

lot

industrial

on

present status of

constructive

be
for

Clinton,

tomers

of livestock.

profits. Lambs purchased
early in the season for around 140 to 14V2 0 are showing
a
small profit; lambs purchased in the last 30 to 40
days would show a substantial loss. With a shortage of
lambs in the country it is hard to understand why the
depressed market. With hogs selling at around the $23
level, cattle selling up to $28, lambs selling at $19.50, it
hardly makes sense. Apparently there is something
wrong in the sheep industry which most of us are unable
but

The price reduction along
previous decision to refrain from increasing prices

a

the

feeders at this time are

reduced the price of carbon and al¬

loy plates several months

primarily the financing

is

If
10% to 20%, we should
satisfactory prices for cattle during 1954 both

very

based

Lukens

at

needed

shortage should run from

from

favorable

materials.

business

Our

'

•

will
now

improving plant facilities

National Bank, Omaha, Neb.

My personal opinion is that 1954 will see a shortage
cattle in the feed lots as compared to a year earlier.

tually all phases of Lukens' produc-,
tion and marketing.
The tax picture for 1954 is ex¬
pected to be less burdensome due to
lower
excess
profits
taxes,
and
and should help to offset in some
degree the profit reduction indicated
by the forecast of less overall sales
dollars.

we

Revere's capital investment program in 1954 will again
be substantial. For several years the company has been

Jones

KARPF

C.

H.

Live Stock

President,

vir¬

set in

were

extent

Ordnance.
D.

Edward

information, but it is not anticipated
that 1954 will be as profitable as
1953

that

to

have defense contracts

of which run through the first quarter and
the first eight months of the year.
It is

some

Division

adjustments.

market

current

and

we

;

that our Clinton Manufacturing
111., has recently turned out its
millionth 90 mm. steel cartridge shell case for the gov-:
ernment,
for which we
have been cited by Army-

tax

during 1954 due to price ad¬

justments among the company's steel specialties and a
progressive change in customer's production selection.
The company should experience re¬
latively good business during the

to

1954,

However,

.

.

there will be

others through

rein¬

because of thrift and

vestment,

overall return

Lukens Steel Company expects a lower
in sales dollars and profits

affected.

durable lines.

consumer

Department has indicated

spending

in

cuts

some

corpora¬

some

Defense

of interest to note here

Steel Co.

President, Lukens

according

secu¬

for

funds

have

should

tions

and

Individuals

1953.

of

year,

Retail

imagination.

rity sales should equal or run ahead

in 1954.

CHARLES

The

-

10%

to:

power

volume in

work

90%

be

will

expected

new electrical starting systems and;
steering for the automotive industry
expected to help compensate for possible lower

—are

out.

year—it

is also

and

pumps,

electrical

and

2% drop fromneighborhood

substantial, which should produce a continuing goodaluminum. New products—such;
air conditioners, new types of household appliances,,

heat

industry defence business declined in 1953 to

the

demand for copper and

industry

Rubber

in

year

appliance market

household

The
be

Edward D. Jones

good

building

of $34 billion.

JONES

EDWARD D.

negotiations between the government and the
will decide the fate of the synthetic
rubber plants. It is hoped that a suitable schedule for
transfer of the plants to private industry can be worked

indicate only an approximate
totals—a

1953

the

In 1954,

rubber

supplier to the construction field,r

optimistic over the outlook in that industry, in,
fields of both1 residential and commercial building.

also

Estimates

comparable.

a.

considerably higher. This will be a drop,
still provide good busi¬

Revere, as a leading
is

1952,

produce

to

in 1954, with some fore¬

for automobile suppliers.

ness

quite

of*

—

1953 total but it will

the

from

expects

—

of five million cars

casts running

1954 will

.

one

automobile industry

customers

principal

Revere's
minimum

products,

sentence—1953 was not up to

a

of $2.4 billion is expected which,.

with the fact that corporation excess profit
will be removed, should increase potential buying,

together

greater.
To

overtime

of

elimination

probably be equal to 1953 and possibly—and especially
if
better days come
to the potato industry—a little

volume, partly due to recent

reduction in per¬
of this may be offset by thet
and reduced hours of work.

1954 by the 10%

sonal income taxes but part

October despite a

This, plus our anticipated, return from forest
leads us to believe that our freight revenue in

of that the

about $2.9 billion in

several other sources of revenue which
did not bulk large in our total in times past are now
increasing.
In fact they have increased to the point
where our freight revtenue in October of last year was
slightly greater than the previous
sharp reduction in potato traffic.

opinion the American economy is strong and
outlook is encouraging.
It is esti¬
that the consumers' income will be increased

our

mated

very

addition,

In

changing

sales continue to follow a

Rubber footwear

is

to believe that they

reason

the difference.

pattern. Waterproof footwear, which once accounted
the big bulk of business in this field, has declined

brighter side, the forest

good indeed. Forest product rev¬
highly satisfactory in 1953 and there is ample

outlook

ucts

demand
for power wire and cables, new types of transmission
belts, plastic pipe and other plastic industrial products
will partly offset any declines in other lines.
The market for foam rubber is increasing, rapidly. We
do not expect this growth to be slowed much, even by
the cutback in auto production. Added sales to the bed¬
ding and furniture markets will probably more than
make up

In

because

On the other and much

the £en"

level

eral

ability, at least, to fore¬

our

cast.

first

of these

new

projects in the United

States

Mine—began operating late in 1953
Silver Bell Mine—will begin
early 1954, and a third project—White

Yerington

second project—the

in

Pine Copper

Mine—expects production in late 1954.

At

Volume

179

Number 5291 ...The Commefiiil arid Financial Chfbiiicte

least three other substantial

bfe used easily and
effectively in
variety of everyday dishes. There

new producers are expected
begin operating sometime within the next three years.
This expansion program gives assurance of
ample copper
supplies.
" "
'■ - * •
1

to

'

In

view

of

ihetal
.

*

for both

technical and

the development

standards .of

of

enced
and

and

at

Revere

and

enlightened management,

confidence

to

successful

a

JOHN

-

F.

From

some
us

experience

the

in

within

*

1953.

readjustment

that

seem

Co. Inc.

j

.

to the

the

and

course

Based

longer
wide

made

it

we

whole

a

to

be

ous,

and

to

seem

near

show

may

definite

time, other segments, and they
to

us

show

great

O.

bar, but also in the kitchen.
facts, the outlook for 1954 is

good.

Consumers

for

the

W.

am,

*

I feel

that

we

lines, and that

to

There is

quite

authorities

the state of

on

much

can

few years back.

longer resist the law

sooner or later we

other

We at Argus

economy.

competitive

will

year and
many

of

Such

to

the

to

sell

to

a

sellers'

market.

will

as

"salesman's

a

market

a

is

market."

in which the

one

money and

the desire to buy but are

looking for

values and

has

been

have

said

to

be

about

sold,

the

Much

fact

that

little real selling has been done
Robert E. Lewis
by American industry since the be¬
ginning of the war.
While many
may not be willing to admit it, it is nevertheless true.
We at Argus plan to increase our
merchandising and
advertising efforts by 30%. We feel that aggressive ac¬

a

tivity along this line,
are

as well as offering products that
real value, will result in increased business for us.

a

'

^ In addition to
ing

program

an aggressive and increased merchandis¬
are also busy improving our facilities

reducing our costs so that we can be
petitive when the chips are down.

to be

sure

com¬

If all American

•

industry will concentrate on providing
doing a real selling job, the American econ¬

values and

omy will continue to grow.
Pessimism has no place in
the picture and those who preach it are
doing a disserv¬
ice to our country.

ARTHUR B. LaFAR
President, The Angostura-Wuppermann Corp.
During the fiscal year which ended
August 31, 1953,
sales of Angostura aromatic
bitters reached an all-time
an

after

period,

taxes

and

of

the

the

than

These

net

profits

were

to

point solidly to

tinued

24%.
did

not

either

surprise

in

entering

acceptance

stura since the product

eighty

years

More

ago.

bottles.

The

registered

a

in

crease

2-ounce

size

spectacular

sales

over

*

The

smaller

bottles

of

developed and put

ence

of

for

correction; in

-

and

in¬

not

individual

home

use.

Angostura

year's

who

wanted

sales

the

product
indicate that

figures
moving directly into people's homes more
rapidly than ever before, and the! Angostura-Wupperbitters

mann

are

Corporation believes that there

for this.

Both

are

based

on

are

two

^reasons

"taste."

According to the most reliable statistics, drinking at
home is increasing.
It is apparent from the unit sales
figures of Angostura that consumers who drink at home

sumer

with

the

on

the

industry

and

F. LONG

of high beef and veal production is in

1954.

But the volume of pork, lamb and
moving from packinghouses to the meat markets
lower, while poultry supplies will at least equal
are

the conclusions

economic

many

we

reach after

factors that

close study

a

the nation's

govern

Assuming that business activity will decline only
slightly during the next six months, we believe that
purchasing power will be sufficient to sustain the high
anticipated meat production. The supply of feed grains
and

concentrates

visible

is adequate to provide for the present

livestock

population and

to

promise carry-over

stock at the end of 1954.
The cattle and calf

population reached its peak in 1953

and

now stands at 94
million, a high figure. In addition
to normal production this
year, we anticipate that some
herds will be reduced, providing the nation with about

the

beef and veal

same

production

because

the

production

going

Federal

to

we

had last year.

consumers

Government

be

may

The

greater,

beef pur¬

emergency

chasing program last year removed the equivalent of
som 830,000 head of cattle from normal trade channels.
~

The pig crop in the spring of 1953 was reduced ap¬
proximately 10% by producers.
That cut is reflected
this winter in smaller hog marketings and a consequent
reduction in pork production.
It is likely, however, that
the better prices commanded in the hog markets will
encourage producers to increase the 1954 pig crop.
The

pork supply tends to fluctuate more rapidly than
production cycle for hogs is less than
year, while cattle production has a three- to four-year

beef because the
a

cycle.
the

Today's

large

cattle

population is
in the

traceable

stimulus given production late

prices.

The

abundance

of

cattle

and

war

to

by high

the

shortage of
hogs drove beef prices down last year and pork prices
up.
We do not expect an appreciable change in this
price relationship before the end of 1954.
Heavier marketing
inroads

on

pate

a

as

i

of lambs and sheep in 1953 made

the population of these animals.

result that

fewer

year, which means a
and mutton.

will

reach

the

We antici¬
market

this

slightly lower production of lamb

Overall
meat

prospects for 1954 seem to point to a total
for the public about equal to that of
not slightly greater.
With a rapidly growing

production

if

per

capita consumption of meat may de¬
a small gain in total production.

in the face of

even

W.

to

Lower

production
on

a

Crystal

gazing is outside the sphere of the banker's
He gathers the facts, examines the trends,
important factors and measures the results by

conclusions.
We

do

know

that

the

climate

in

the nation's Capitol for business has

of

improved,

that

and

free

enterprise

has been able to absorb without seri¬

need

ous

difficulties

the

first

inevitable

economic shocks generated by a more
realistic
approach to the
nation's

problems.

con¬

Only a start has been
goal is the maintenance

made

capital industry,

The

of

consequent

delicate

the

forces

business

indices, generally
speaking, - somewhat lower than the
year 1953.
*

Leverone

years,

of

If

Continued high employment is not to be expected, but
rather a probable return to a more normal status of un¬

we

balance

between

the

inflation,

rampant for 20
and of deflation which threat¬

ened in the

.

-

LOWNDES

of the past.
Bulwarked by experience and infor¬
S
mation, he attempts to draw accurate

come,

in

BLADEN

President, The Fidelity Trust Co., Baltimore, Md.

weighs

dealers'

will

months

goods will have

the

are

early months of this year.

to

avoid

both

"boom

and
W.

'

employment which

might approximate a figure some¬
million.
Private credits are at a

what higher than six

liquidation of this amount
50%—would be a very healthy factor
economy.
These are the pessimistic

dangerously high figure and
—between 30 and
for

our

American

well




of American businessmen

of American

those

internal

a

factors.

is becoming more adventurous in her
cooking habits, and food editors have supported the use
Of Angostura as a reliable and
exciting spice that can

expansion

activities.

proper

consider it essential to their
drinking enjoyment that
Angostura be used in the standard cocktail recipes that
call for it as an ingredient.
It is also true that the
woman

per¬

*

for

These

con¬

goods

condition

a

condition

dampening effect

*

the market for the conveni¬

consumers

Last

Lafar

a

recession.

a

solution will be found,
in price wars but in lower pro¬
a

duction.

previous

on

with

shelves./ This

Arthur B.

were

consumers

swollen inventories

year.

the

Another year

prospect

return to normalcy.

a

was

alone

21%

the

as

was

the 2- and 4-ounce consumer size

in

the other—to

or

will be right, but
likely that we are
period which might be

confronted

are

revealing

extreme

more

Manufacturers of

•

some

In the
end-of-the-year figures
that the major gain in unit sales

a

described

first in¬

was

troduced in the United States

be

President, The Cudahy Packing Co.

cline

prediction

rather it is

consumer

one

business, or to
opinion, it is not likely that

those who have watched the

growth
of
Ango¬

again

prevail, with the fullest confidence that the

population, the

E, LEVERONE

boom level for

In my

figures

sound economy,

commerce.

A great preponderance of financial
prophecy to date
regarding the business prospects for the year 1954 seems

by

up

a

demand will

and

President, Nationwide Food Service, Inc.

Angostura-Wup-

Corporation

perman
more

L.

high.

month

to

of supply

continue

1953,

"

showed

recession.

ingenuity and resourcefulness
will

we

and

the'

The net income per share after taxes
increase of 24.4% over the
previous twelve¬

mitted

"

,

record

severe

that the law

very

supply and de¬
quit producing

quantities of agricultural products
government.
I hope my views are in error.

more

hopeful that in the interest of

am

total
a

consuming public has the

will have to

large

or

1954

year

dicted

,

I think

I

areas.

probably be
neither, but could be more aptly pre¬

a

There is nothing political in
my views.
I think Mr.
Eisenhower is doing a wonderful
job under the present
circumstances, but I do not believe that he or anyone

mand, and

our

more

The

offering fabulous rates of interest
a

a

i

economists and

buyers' market

are on the
verge of bank¬
ruptcy and the showdown with most of them will
probafbly come within the next 12 months.

else

the soundest

are

It is commonplace to talk about

great many
prosperity, rests on a ficti¬

compared to what they were
great many small businesses

much

a

taste

However, we believe that the net
result will be an excellent year and
the profit record for American in¬

the;

.

are

product,

undoubtedly find downward adjustments in

1

borrowers and they

credit, it is to

these

drinks.

variety of

a

resorts to

pump-priming,
be feared that
temporary palliatives may stave off the day of
reckoning for a year or two, but finally might result in
unrestricted

supply of meat.

agree that 1954 will be

to be in great demand
among the small

seems

the

debate among

a

degree, pessimistic about the

present

:

Money

their

President, Argus Cameras, Inc.

a

tious and make-believe basis.
Just how long we can,
continue to fool ourselves with this kind of
prosperity is"
doubtful, but I feel sure the end is not too far in the
future.

indicated

mixed-at-home

dustry will be second only
high record set in 1953.

in

hand, the Administration

pushes

LOUIS

ROBERT E. LEWIS

.,

year or two.
have over-production

considerably

although

lower,

a

of

for

need

and

next

our

bit

period of renais¬
generally

a

of corporations

those of 1953.

KILLAM

a

other

will be

I hesitate to express
my views on the general outlook
for business, for I

the

in

Angostura successfully in

,

for

picture

very hopeful sign for the American econ¬
if the Administration continues to point toward a
budget and sound fiscal policies. If, on the

excep¬

foundation for sales.

weak¬

both

little

a

It will be

mutton

Laredo, Texas

situation

have

product

are numer¬

for

strength

long-term outlook.

be

profit

healthier.

acceptance

recession, and

prove

might

makers have used

to

not

salesmanship will enter
the

food recipes and will be
encouraged to experiment with
it further.
These facts, which indicate direct consumer

would

combat it, have
reducing its mag¬
anticipate that 1954

will

of

and

places w.ill be inclined, in the competitive
market, to cater to the tastes of their patrons.
Home-

of severe decline from the two
preceding banner years.
Although certain segments of the

economy
at this

nesses

food

More public

publicity given
a

art

sance

or

these

preference

,year
John F. Kidde

processed

effective in

nitude, and
as

term

room

on

tionally

better1

a

lost

and

recreation

opinion this
have run more

possibility of

plans

been

of

number

a

outlets, newspapers, radio and television programs durihg the past year. The result is that many homes now
consider Angostura standard equipment not
only in the

our

may

the

in

the secret

now

A sixteen-page booklet of home recipes
using this "shelf of spices in one bottle" has been dis¬
tributed to thousands of homemakers through grocery

Surprising.
the

ingredient

shelf, and it is

Angostura aromatic bitters has distribution in grocery
and chain stores in every major
market, and consumers
are
being reached directly with the sales story of the
product as a flavoring agent through intensive promo¬

business tone by the second quarter
of 1954 would not be in
any way
Over

the

on

tion programs.

In

than half of its

"holds"

flavoring

own
company, and by,,
knowledge of general business affairs, it seems to
now
already been a lull in new orders
a
stretchout in delivery requirements for orders
on
hand, dating back to the early

of

product

products.

non-

of experi¬

our

summer

the

•

anticipated that business mortality will rise some¬
what, particularly among marginal producers lacking
adequate financing or sound management, or both. The

balanced

that there has

dnd

for

market

Federal fiscal picture within more desir¬

our

It is

omy

KIDDE
&

this

that

bring

able limits.-

gostura

look with hope
1954.

we

year

President, Walter Kidde
C

within

indicates

will

offers tremendous possibilities for growth.
Commercial
food processors are discovering that the flavor of An¬

reasons.

industry, and the benefits

level

sumer

free copper market,
technical skills and higher

greater

The new

ail

assurance of a

quality

ferrous fabricating

economic

limitless

doubt that

no

use of Angostura as the perfect liquid
spice,
all-purpose seasoning and flavoring agent in food
recipes, has been virtually unexploited up until now.
Experimentation on the commercial as well as the con¬

copper

Therefore, with the

be

Angostura is growing in both the
liquor and food fields.

this

another

almost

an
can

cbnsumer "taste" for

outlook, pessimistic forecasts which
shortage in the next seven or
eight years do not reflect the true picture.
There will
be more than an
adequate supply of copper into the in¬
definite future—more than
enough to take care of all
the major applications in which
copper is the preferred
predict

37

(485)

*

On
to

the bright side, the decision of the Administration

permit
as

aspect.

the

some

expiration

of

of

the

excess

profits

tax,

as

the excise taxes, is a very constructive

Undoubtedly, further economies in the defense

establishment,

as

well

as

in the foreign spending budget,

-

J

■*

bust"

it

will

require

sourcefulness,
sense

our

calculated

all

of

the

B.

re¬

and common
leaders have. They are dedicated to
to

Lowndes, Jr.

courage

maintain

that

a program

balance.

Recently there has been a noticeable increase in the
of optimistic
prognostications by government
experts, businessmen and economists. Some of them may
be whistling to keep their, courage up, some because it
is politically expedient and some because they are con¬
firmed optimists. Others, however, believe that the fa¬
number

vorable

factors

justify the expectation that business in

Continued

on

page

38

v

33

time

Continued from page 37

record-smashing

will not fall far below the

tiighs of 1953.

I belong to that group.

is

is less, that freight car loadings have
dropped and that business failures are up. But it is
believed that too much weight is given such soft spots.

take-home

pay

Steel production, for instance, is being measured by the
all-time high, the number employed set a new mark in

1953; excess inventories have been substantially reduced,
retail sales remain high when measured by the normal,
wholesale prices are fairly stable, and power

production

Is up.

ment

plant

equipment, together

and

with state and municipal projects in the making,

includ¬
ing ambitious road programs, will help offset reduced
defense spending.
Money and credit are likely to be
easier and the prospects of a lighter tax burden are good.
favorable

These

basis.

cannot

factors

be

should

will be a
as defense spending and foreign aid have to
be
continued at high levels. Furthermore, a nation which
has been given constant inflationary inoculations for 20
years must be carefully treated if economic indigestion
is to be avoided.
The

success

failure

or

*

/

;

of business, generally,

depends

marked degree upon the

ability of the consumer to
buy what he can afford. His situation is by no means
discouraging. It is estimated that this country enjoyed
a gross national
product in 1953 of approximately $367
billion, with disposable personal income not far from
^248 billion, and personal consumption of about $225 bil¬
Even if these figures are reduced toreflect the 1940

lion.
^

purchasing power of the dollar, they are still colossal

Markets

being increased by sizable and continuing

are

population

growth.

Personal

savings

and the
number of families in the income bracket between $3,000
and $5,000 are said to have increased 33% since 1940.
are

up,

Discretionary spending power—or surplus income—of
the typical middle-income family is estimated to be 4%
times what it

12 years ago.

the consumer's

sis bf
and

was

debt, savings,

discretionary spending

similar factors in

Consequently,

an

disposable

analy¬
income,

when compared with

power,

1941, produces information which

ap¬

pears to justify the expectation that business in 1954 will
be better than normal.

HARRY J.
0

LOYND

M1

'y

President, Parke, Davis & Co.
All

branches of the medical

fessions

pharmaceutical

pro¬

pursuing aggressive research programs, and
many projects — representing years of

are

fulfillment

and

of

work—can be expected next year.

Despite

bility of
ment,

some

we

business adjust¬
about the

can

a

fairly

both

health

growth
ment

great

majority, however,

the

stock

the

of

popu¬

by

1960.

number

pension funds

of

At the other end

of the

money,

ing and waste, and a

service

This

crease

than

over-all

the year ahead,

are

in

and

the next decade, lies a
world of expanded professional service.
We

new

this

challenge

with

intelligent

planning

and

year

1953,

breaking all

and

earnings.

chance of

repeating

I expect

profits have kept
bank operating

Beginning with the

Several

a

1954 to offer
of

upon

the

our

experienced

we

We

as

have

leveled

example, with a
building construction
mobile

production.

has

important

the

other

side

expect
'

but I
a

see

decline

in 1952

was

dangers
hanging over

or

Martino

state,

still

and

municipal

outstanding

an

A

recession,

ernment
a

Federal

as

of

none

in

duction
in the

gross

inventories

and

mediate needs.
The

continued increases in

.

the

give further support to

a

'

-

year

•

of,

*

v

Nineteen

fifty-four should
soft goods business. With
only

bi

and to redouble their efforts to obtain
lation

for

hold

crease

a

in

level

equal to

1952.

There will be

shopping

outstanding features of the

year,

no

be

no

cause

for

concern

about their 1954

WILLIAM A.

sales

1954.. I

in

auto¬

we

Lead

more

market.

these

?•'
we

reason

than

have

returned

to

This

the

over

that

competitive

a

consider

I

fact

a

healthy

quality controls,
controls, and efficiency of opera¬
Research

motes

important part than it has in

/recent

* years,

be

to my

expenditures would touch
business downtrends

:

general

good

because

McKinley

an

even

competition

the

level.

to

increase

retailers.

In

1,953, .con¬

their savings at a greater

Sales of new life
result which
happy to report.
More
aggressive retail merchandising in 1954—some¬
thing that we can forecast with a high degree of accuracy
—may translate more of the buying potential into actual
sales.
The savings reservoir is now at a high level,
and the consumer can safely reduce his rate of saving,.
He may well do so if there is an easing of international
tensions and continued indications of domestic stability*
In such event, The year might surprise the pessimists,
At the beginning of 1953, the forecasts of nearly all
businessmen and economists were for a high level of
their

were

retailers

purchases of goods.

15% higher than in 1952—a

would

have

been

very

year, with a slight falling
For once, a universally accepted

general activity during the
off in the second half.

substantially correct.

Perhaps^

new

forecast turned out to be

mind, indicates that the

year..

then, the present general expectation of a slight decline,
in industrial production in 1954 will also prove to be
correct. However, this does not necessarily mean a de*
cline in consumption, although there will undoubtedly
be some shifts from certain types of- durable goods to
semi-durable and non-durable goods.-, So far as shoea

the

effort

better

to

make

products.

1954 will see production geared to
the desires of the buying public, with
more'effort than

w. A.

play

retail

near

this,,

products,

-

will

total
or

All

inspires

a

to

carry

tion.

to

And when the

refer

Melvill*

continued

than

most

condi¬

the

will

of

at

the spending attitude of the
influenced as it may be by
a
wide variety of factors, including
the
merchandising policies of the
country's

careful attention to
cost

there

to

Ward

insurance

that

held

public,

sumers

condition, because it forces the most
-

•

seem

belief

the "level
be

upon

an

figures.

apparent

volume of more than,

There seems to
be a fighting chance of that, in view
of the generally good financial posi¬
tion of consumers.
The buying po¬
tential is there; everything depends

medium-

McKINLEY

my

can

billion

$170

for those

President, The Midland Steel Products Company
is

if

1953

as

rate

into

irr l 954

up.

but

a

tion, especially when the latter in¬
cludes large military components.
Even if total production should de¬
cline slightly in 1954, we may be
justified in considering it as good

de¬

some

in the

Shoe Corporation

When retail sales have reached

selection of merchandise within price lines will be one
the

i

MELVILLE

WARD

the part of the consumer, and

on

the period
when;

incurred and the period

are

President, Melville

purchasing of high price lines, there will be

most careful

profit,

appropriate legis¬

allowed.

in

now

in

costs

are

the

in

year

Mitchell

S.
-

"time-lag" between

reducing the

increased

l.

good

a

Henry

seek rate increases in 1954 in order to operate at a

a slight decrease in gross
total factory production and wtih
the increase in population in
1954, and the increase in
spendable income, it would seem that soft goods ought

product,

It

and

the

$170 billion, as they did last year, it may well be askedwhether the rate of consumption has not now become
a better measure, of the economic health of the country
than the rate of industrial produc¬

■

McCONNELL

President, Munsingwear, Inc.

wages,

difficulties being
experienced in obtaining necessary
approval to eliminate deficit pas¬
senger train operations, may result
in the railroads being compelled to
with

coupled

a

activity.

purchases

limiting

strictly in accordance with im¬

more

further prop to the

a

will* have

any,

tion

payrolls going down for




if

railroad industry to
necessity, the re¬
income will result
industry as a whole reducing
Of

goods.

move

rate increases

not

'

seen

spending, for which
should keep our

need,

threatened,
slump in new

National

1953.

months now, yet business holds

pacity of the

when

is

outliving is that the cutting of gov-:
off

phasis in 1954 will be upon increased

ledger,—savings are at an
all-time high, thrift plans are becoming increasingly
popular, and the cash reserve of Mr. and Mrs Citizen is

is

.

appears

efficiency, rather than upon expan¬
sion of facilities to increase the ca¬

the

ma¬

interest

Another prediction

We have

of

now

quarter.
Generally speaking, I believe em¬

are attempting
inventories, the prospective home buyer is
more price conscious, and the instalment buyer is more
hesitant, in building up his debts, and the resulting
monthly payments. Added to these factors, is the basic
farm price situation. None of these conditions need give
cause for any alarm, or any particular tendency toward
an immediate recession of any proportion. 1

On

It

first

expansion has apparently

off, the wholesaler and retailer

Industries, among others, and we
have shared the general concern lest
the unpleasant prophecies might be
right,

L. L. Matthews

reduce

to

been

for

an

con¬

rever¬

a

<

Atlantic RR. Co.

probable that the railroad industry will
experience a substantial decline in gross revenue in
1954 compared to 1953, although it is still possible that
there may be an upturn in business activity after the
.

in Korea,

war

sal of this trend. Today, plant

very good
that performance.

economy have still failed to

terialize.

with

expense.

a

individual

that have been cited

many

pace

S. MITCHELL

HENRY

sistently strong until the summer of

1953, when

a

President, Duluth, South Shore &

aggressive advertising and sales campaign, there should

high level during the
its previous records for

improving

or

and

priced bracket who give good value and who have

President, National Lead Co.
National Lead Co. operated at

A.

decades

manufacturers of quality merchandise

J. A. MARTINO

I

'Joseph

two

past

reduction in our excessive taxation.

period of adjustment is not a cause for alarm.:
and a better standard of living; incentive
reward for a job that is well done.

Ahead is hope

rates.

the demand for loans remained

of

production.

sales

or

GEORGE D.

arg confident our industry has the vision and foresight

vhole

of

product

increased

to

meet

eco¬

Fortunately, in¬
flation
has
provided more dollars
available
for
that
service.
Hence,

potent market for infants' and children's needs.

to-

no

the

over

interest

national

great

of

which has experienced less of an in¬

nearly 4,000,000 babies born each year.
Added to the approximately
40,000,000 boys and girls under 14 now, they represent a

][n

the rental

and I know of

»

scale, there

in Washington that has made,

Administration

profit from

a

•

of the people.,: f

We have

confidence.

We in the banking business derive

forecaster

accurate

an

sub-

consumer needs, espe¬
cially those developed to improve the health and welfare

view the future with

can

great hope and

progress.
-It has brought back integrity and honesty to,
government, and there is a fearless determination to
protect and fairly represent all of the people.
A real
start has been made in the elimination of reckless spend-,

as

Harry J. Loynd

retire¬

mean

able

an

nomic conditions.

average

oif; This population segment

and

up in the summer and
easily make 1954 a- happy

pick

can

Business
Arthur E. McLean

crash, which proved to
announcing a four-year depression.
With this in mind, I hesitate to pose

elements of stability

The

a^ntial markets for all kinds of

,

market

1929 debacle. Marginal buying of
big factor, as was the case in the
late: twenties. Banks at that
time, were 70% loaned
and 30% liquid. Today, those figures are reversed. The
liquidity of the nation's commercial banks is an out¬
standing feature of our present economy. Many other

.12,500,000

are

lull (so to speak), but I

business year.

unprepared for
be the siren

totally

were

was

somewhat
the case ai

If that turns out to be the case,

fall,

A

investors.

and

characteristics of the

it is estimated there

16,000,000

art increased

and

businessmen

fortunate

few

listed stocks

65 now, as a result of
and medical advances in re¬

be

Looking back to the fall of 1929, I recall that there
a

a

believe it can well be of short dura¬

active
were

show

than

volume

ago; a

tion.

Bend, Intl.

President, American Trust Co., South

situation.

over

cent years, and

will

ends

There

-

will

months

six

MATTHEWS

L.

•

a

change over those of 1953.
:
For business as a whole, the first

year

L.

fairly even keel; it:

a

feast and famine business,
1954 results should show little

not

and

I believe it will be.

tion, available savings will act

scale.

is

lower

Federal,

encouraging facts
is the greatest population boom in
U. S. history.
There have been big
increases at

rocks along on

the

of

keel, 1954 should be a very good year

National Lead Co.

If I confine my comments
banking field, I believe a
is
rather easy.
Banking

the

to

With business on
for

higher in 1954.

a

supply has

with demand, and that the imme¬
somewhat slower pace than has

prevailed.

economy near normal for the foreseeable future. In addi¬

One of the most

persons

not any

are

even

up

is for
va

profits tax. Without this tax, most corporations
surpass last year's income even though production

there

business.

outlook

that business as a

of the fact

aware

forecast

elimination

the

is

factor

Bank,

gradually slowing down; that

and assurance.

more accuracy

favorable

diate

and
by

all-time high. Money is easier and the rate trend
is lower.

prospects for the pharmaceutical in¬
dustry,, w h i c h is a fundamental

lation

has now become more constant
economic planning can be- considered

are

excess

optimistic

are

inflation has been halted,

Monetary

us

temporarily caught

near an

talk about the possi¬

general

a

off.

of

Most

whole has been

in the nation's economy

power

Another

by our government many months
deterrent to Federal budget balancing as

long

a

level

industry with

Of course,

ignored.

should

long-range

made

-ago

fairly low level and replace¬
aid in keeping business on a solid

Significant fluctuations

purchasing

■

■commitments

to

orders

and sales

to

additions

Planned

good. In general inven¬

The outlook for 1954 continues

J

McLEAN

President, The Commercial National
Little Rock, Ark.

tories have been kept at a

production has receded, that

that steel

admitted

stride, too.

shall be able to take that in

we

ARTHUR E.

be cut further,

that military expenditures can

comes

I believe

the new, year

It

Chronicle.,.Thursday, January 28, 1954

The Commercial and Financial

(486)

ever

being directed

toward better quality at

lower prices.

Vt

•

»

-

"

,

""

•

;

*

,

Volume 179

Number 5294.. .The Commercial and Financial Chronicle

fire concerned, the expectation is that both production

and contains both auto

apd consumption, for the year as S whole, will equal
the levels of 1953. Recent substantial population growth,

tive offices.

of

course, is a
the long term.

persistent factor for

an

increase

over

IRWIN L. MOORE
}i

President, New England Electric System
New

England Electric System's electric expansion

pro¬

gram is proceeding according to schedule.
Two major
construction projects under way are the 150,000 kilowatt

Samuel C. Moore Hydro Station on the upper Connec¬
ticut River and a 77,000 kilowatt

plant addition to the South
Station at Providence, R. I.

Street
While

the

in
<

,

same

1953.
As

to

amount
'

spent

wks

as

•

and

revenue

kilowatt hour

sales

in 1954, it might be best to
point out that industrial curtailment
Irwin L. Moore
in some parts of the System's service
area began as early as two or three
months ago, and it is expected to run its course before
the last quarter of 1954.
Although down from 1953, in¬
dustrial sales for the calendar year of 1954 will, there-

tore, reflect the recovery anticipated in the last quarter.
Growth

trends

in

other classes

of

sales

are

not

ex¬

pected to be affected by this industrial adjustment. Since
sales to residential and commercial customers

annual
total

aboyt the same as industrial sales in kilowatt hours,

fcut average a much higher rate
a-evenue over 1953 from these
offset losses in industrial

dicate that total

While

there

the

in

revenues

is

current

both

sources

will

more

than

Rough estimates in¬
will show an improvement of

3%, with virtually
the year as a whole.

.general

of return, 1954 gains in

revenue.

about

change in production for

no

in our area is quite
non-durable industries,

adjustment

durable

and

little

apprehension concerning the long-term
outlook, as new industrial facilities continue to be added
?to our lines at an undiminished rate.
Furthermore, a
large part of this increase in manufacturing Rlants con¬
sists of new processes and young industries, such as
•electronics and plastics.
We believe that this trend will
continue, assuring for the region a more diversified and
more prosperous economy, and for our own business, a
Ifiigher rate of growth for all classes of sales. Our longterm expansion program is geared to this outlook.
\ During the past year considerable improvement in the
economic thinking of our New England area could be
noted in several communities served by the System.
In
fcrief, this may be described as the winning fight for in¬
dustrial diversification.

As

Baking, as a pioneer in commercial breacj
baking, places its emphasis on meeting competition on
the consumer level.
We have found, however, that
bread must keep its place on the American menu amid
a
growing variety of new foods, such as frozen items
and cake mixes, and amid a host of dictatorial diets im¬
posed by outright food faddists.
As producers of an essential food, and one of utmost
convenience, we have met this problem by diversifying
our own basic product, in accordance with the demands
of Mrs. America.
Consequently, where only one loaf

To date all I
which

unfor¬

tunately has been magnified, by many so-called experts,.
as the beginning of a
major economic calamity.
I per¬
sonally cannot see any Indication of this, or any reason
to fear it,

-

,

H.

C. MURPHY

roi

I

!'v ''

President, Burlington Lines

l&V

While actual figures for 1953 are not
available,
anticipated that about 610 billion ton miles of freight
service

were performed
by Class I railroads in 1953.
This represents a slight decline from
1952, even though'

carloadings

slightly greater. A

were

moderate decline in the average haul
of freight accounts for this

consumer

about"

This is

General

teristic of American business
generally.
seen is a minor economic
setback

have

started out more than forty
years ago, we now produce eight.
In addition to our
basic loaf, we now offer seven other types to attract all

project will not be com¬
pleted until sometime in 1956, we
do expect South Street to be fin¬
ished by the middle of 1954.
;
During the year we shall spepd
about $40,000,000 for additions ^tnd:
improvements * needed to meet v-in-^
'

repair facilities and administra¬
Already completed, last May, is a $400,000

distribution building in Wilmington, Del.

enue

existed when

the Moore

dreased electric loads.

3»

(487)

our

company

groups.

Furthermore, among the assets of the company which
do not appear on a balance sheet is the high level of
experience provided by General Baking's notably low
employee turnover, and by its even lower turnover of
executive personnel.
Many General Baking executives
and many employees at all levels have spent long years
with the company.
Some have devoted their entire
working life to the company.
This concentration of
veteran cQunsel at policy level, veteran baking knowhow at all levels, is considered most important to our
operations,
No

i

of

estimate

baking's performance in 1954 should

our economists.
In this respect,
sharply warned that the gross national
product might shrink as much as 10% in the forthcom¬
ing twelve months.
We are not prepared either to accept or reject such a
prediction at this time. We are bakers, not economists.

ignore the forecasts of
are

we

rather

We do

know, however, that whenever the economic in¬
dices fall off, the consumption of bread rises propor¬
tionately to the rate of decrease. The record proves that.
Wholesome

bread becomes the dietary standby when
relatively expensive delicacies go out of reach.
Even should the gloomiest economic forecasts for 1954
come true, simple arithmetic shows us that the coming
year will be the second most prosperous in our history.
We expect, confidently, to produce and sell more bread
in

1954 than
Even

showing.
We expect passenger traffic and rev¬

the

ever

most

Gross
in 1953

conservative

analyst will admit that
existing in a boom economy caused
by defense spending. We foresee a return, by readjust¬
ment, to a more normal, healthy, average economy bal¬
ance of the couuntry's resources.
the country has been

Chairman, North Central Airlines, Inc.
As

North

Central

Airlines provides so-called "local
highly industrialized middle western sec¬
country, trends evident in our territory
of national importance and may offer in-

revenues
are

a

,,

Ill 1

V*

AllTM

Our

own

is

that

the

Anv.ni:

/\v\

thinking based

serve

we

dications of what is in store for

traffic.

traffic

in

Burlington territory should increase
prediction is based on probajbil-

1953 and this

over

ity of more normal weather than the extremely moderate
temperatures that prevailed during 1953.
It is reasonable to presume that defense spending will
be lessened in the coming year and
this, of course, will
on

revenues.

The application of Federal excise taxes
amounting to
15% on passenger tickets and 3% on freight charges
continued to affect both passenger and freight traffic

should, in

judgment, be removed.

our

travel by railroad.
ing to have such a tax continued at
roads

While

we

experienced

reduction

a

last November in passenger revenue,

problems, have improved their industrial climate.
All in all, the general economy of the area served

which

(by New England Electric System looks healthy for ,1954
while there may be temporary adjustments iri the

downswing, we now have positive
ievidence of resumption of our nor¬

•early quarters of the year, we expect overall business
conditions to be about the same as in 1953.

passenger

spending huge
transportation. '
are

to

sums

a

passenger

■

time when the rail¬

encourage

passenger
s<

Present circumstances do not make it easy to forebast
the 1954 business trend.
From our

mal long range improvement in use
of our service by the flying public.

GEORGE L. MORRISON

The

tickets,
II, was to discourage
It is particularly aggravat¬
on

ing year.

result, many of our New
JSngland communities, by constructive community self
^analysis and by a realistic approach to their economic
a

!}(.

)•»

.

.

^

1954

entire national economy for the com¬

our

.

„

avowed purpose of the 15 % tax
when enacted during World War

are

a

"leveling off" will continue during first quarter of 19§4#
a possible strengthening of business thereafter.
We anticipate that products of agriculture should de¬
velop an upward trend with ample supplies generally
prevalent in all such products. Any changes that ^duld
permit this country to more strongly enter the < world
grain market could provide a real stimulus to. grain

volume and

probably

i

^

with

tion

this

i-U

v.

observations in the territory
(and past few months!

on

current

service" to the
of

,

of Class I railroads*

expenses are estimated at $8.1 bil¬
lion, and tax paid at all levels at
$1.3 billion.
Capital expenditures were high¬
H. C. Murphy
lighted by equipment purchases duting 1953.
The railroads, including
the Burlington, will continue this important program la
the extent warranted by traffic revenue and
earnings..;
It is not practicable to make a statement reflecting the*
anticipated traffic vjolume for the railroads generally.

have its effect

ARTHUR E. A. MUELLER

will

lower than 1952.

estimated at $10,746 milslight increase over 1952.
.Record
peacetime
operating
ex—
senses and tax payments were ex¬
perienced
in
1953.
Operating

lion,.

Coal

before.

of Class I railroads in 1953

be about 7%

of commercial users of North Central

was

and

This is

\
}

.

the complex process of industrial prophecy there
is one area of stable ground—it is easy to determine the

future

casional
Arthur E. A.

Mueller

bread-baking industry.
Despite the in¬
creasingly varied selection of foods offered to the Amer¬
ican housewife, bread, man's basic
food, continues as our nutritional
Common
denominator,
No
magic
from the scientist's laboratories, no
miracle from a test tube,. can re¬
place the Staff of Life.
The year of 1954 promises to be a
rewarding one for the bread-baking
industry because bread is essential
to man's well-being.
This age-old
staple food still represents the great¬
;

est

nutritional

value

for

the

least

money.
The

have

a

bakers

of bread

in

1954 still

number of business and

man¬

agement

more

usual

in
or

pro¬

seasonal

contrast

with

we

definite

the

vacation travelers.

ward the end of the last

1953,

of the

our

have

increase

also
in

oc¬

quarter of

experienced
the

number

a

of

long range growth and development of commercial
airline service between the small and medium-sized

the

Besides my

castings for a widely diversified list of industrial
Here again we experienced a minor falling
off in orders during September and October but we are
now back to normal operations with normal backlogs,
and we see evidences of continued good business based

customers.

is expected to go still higher in the first
quarter of 1954.
likewise, shortening, another major ingredient of broad,
"will continue roughly twice the price of 1952, or about

on

17 cents a pound.
Labor costs, as in most other indus¬
tries, continue prevailingly high.

But none of these cost problems is

considered insur¬

Latitude for improvement, under our com¬
petitive system, is always to be found by any well-run
business.
For instance, General Baking is meeting the

mountable.

,M

,1'

Railroad Co.

The

last

brought
railroad

customers' inquiries and

few

the

traffic

ever,

it

decline
end

of

evidence

would
will

first

the

quarter

and that the year as a

approach the

levels

volume of

^distribution building costing more than $300,000. at Langborne, Pa. The latter will house a fleet of route trucks




business transacted in this couuntry.
not

1953.

This belief is based

only on such generalities, but upon my personal ex¬

perience" and contacts in .the air transportation and metal
both, of which I feel are charac¬

manufacturing fields,

K.

Norton

P. PARSHALL

President, Bank of the Commonwealth, Detroit, Michw
In 1952,1 was of the opinion that bank
earnings would!
improve in 1953, and that we would have higher interest
rates. This proved to be true, and the
forthcoming yearend reports of our banks over the country should show
substantial increase in earnings over
1952.

The

wave

of

both proposed and

those of

This

us

is

bank

mergers*

actual, that werd

taking place in 1952
a

appear

good

to have

omen

to

who believe in indepen¬

dent banking.

Certainly,

bankers are well rep¬
Washington: Dr. Ran¬
dolph Burgess, formerly of the Na+
tional
City Bank in New York,
recognized as one of, our nation's
foremost economists, is Undersecre¬
tary of the Treasury, and Budget
Director Joseph M. Dodge, former

resented

consider normal, with increased activities

$1,700,000 bakery for bread, rolls and cake, at
Spartanburg, S. C., to be completed in the spring, at
■which time also scheduled to be completed is a new
A

1954

Henry

in

.

industries taking up the slack in others.

foundation

the

of

subsided.

industrial peace, are all resulting in a firm
for future improvement and progress in the

this

by

whole should

of

HOWARD

My feeling is that the sounder attitude toward business
in Washington, as evidenced in its credit policy, its attitude on taxes, and its twin programs of international and

r

that

appear

chtecked

field reports from the sales

problem through a program of plant improvement and
^expansion which has been pressed steadily, and designed
to improve efficiency and consequently cut costs wher¬
ever possible.
Among the main details:

in

available, how¬

be

adjustment was indicated, while others are apparently
just beginning to encounter such conditions.
However,
our over-all volume of business seems, now to be at a
we

which

1954.

the

manufacturing field seem to show
that certain industries have already completed whatever

some

1953

portend serious difficulties in
From

Our activities in the

in

of

decline

well

departments.

level that

months

ominous

might

Airline interests, I own and operate five

and

challenges to meet.
Costs
George L. Morrison
are
the
overriding problem.
For
instance, while the cost of flour
soared higher by 60 cents a 100-pound bag in 1953, it

-

President, New York, Susquehanna & Western

metropolitan centers of our territory.

foundry and machinery-manufacturing businesses in the
Middle West which, in my opinion, are definitely of a
barometric nature since they manufacture components

-

•

HENRY K. NORTON

To¬

inquiries for flight information and requests for reser¬
vations, much of which was for contemplated use of our
Airline during 1954.
In the past, against this type of
inquiry pattern, we have always obtained a very satis¬
factory volume of actual business. We at North Central
have every reason to be confident of improved business
in the foreseeable future and look for continuation of

cities and the

knowledge of - the
situation, however, it is anticipated that our 19541gross
*may be about 7% less than in 1953.
<

particularly true on the part

Airlines

Chairman and President, General Baking Co.

In

somewhat

than

nounced

President
H.

P.

Parshall

of

the

Detroit

Detroit, both excellent
fine

record

of

Bank:,in
with a

men

outstanding

accom¬

plishments. We also have a very able man in George M.
Humphrey, Secretary of the Treasury.
Continued on page 4d
•

•

The Commercial and Financial Chronicle,.. Thursday, January 23, 19§4-

(488)

40

cated business of loading and unloading passengers and,

Continued from page 39

cargo.
In 1953,

the fiftieth anniversary of powered flight, the
acceptance and use of the airplane reached new highs.
In 1954, still greater progress can be expected. The pros-,
pect of what will happen in the next 50—or even 25—
years-of aviation challenges the imagination.

maintain a sound dol¬
mentioned men, along with their
associates, cannot bring this about, then, indeed, we are
in
a
sad plight. The present Administration
moved
swiftly toward sound money, too swiftly perhaps, and
it was necessary that they reverse themselves, at least
to some extent. I am still of the opinion that the above
men
and the Administration want sound money, and
will work steadily toward that goal. Their s is not an
One of our

greatest needs is to

if the above

and

lar

Los

There

farm machinery and
considerably, just to
mention a few examples. In the De.troit area, the indus¬
trial power consumption was down in November, 1953,
as
compared with November, 1952. There were more
persons receiving unemployment checks early in Decem¬
ber, 1953, than on the corresponding date a year ago,
and unemployment in the Detroit area as of the middle
of November was estimated at 76,000, as compared with
25,000 a year ago. Inventories are considered high.
Against some of these depressing factors is the out¬
standing fact that we will be spending 40 billion or

be

dollars

more

national defense.

on

the

It is not serious.

President

hand

to

has

do

developed,

were

probability of

the

over

It is here.

at

means

means

The
of

•

Spending money for

proportions that might set in. Savings in
high, and employment over
nation is at a very high level. Our economy is com¬
of large

banks are at an all time

plicated and very delicate. For the past 15 years, our
as a whole, have been prosperous. Of course,
there are classes of people who have been hurt badly by
inflation and high taxes; but over all, we have lived well.
It would, therefore, seem that the policy of inflation
and deficit financing is good. It appears to the writer
that we have built on a foundation of sand, instead of

question

skill

and

already
are

It

can

defined his
necessary to

so.

and

President in

torative

World War II.
that 1954 business will
he/down from the high level of 1953. The huge defense
expenditure and economic measures which will be
adopted by our government should keep it from going
too deep. Maqy of our economists estimate that total
volume of production will be off 10 to 15%. Banks
should enjoy another good year earning-wise in 1954.
Interest rates will probably average lower than in 1953;
however, banks follow the trend of economic events

the

needed.

are

is not
face

overnight

cure, so

continued

an

Washington

puts

have,

HAYES PICKLESIMER
President, The Kanawha Valley Bank, Charleston, W. Va.
Business in this area has held at better levels than we

anticipated. Employment, with the exception of coal, is
approximately that of one year ago with, of course,

slightly higher wages.

This latter factor, coupled with

more

liberal credit terms, has main¬

tained retail sales rather well.

Our major customers, as you know,

guarded, and that ideal is FREEDOM—FREEDOM for
the individual. If we will continue to preserve and

planned in the blueprint stage by
the manufacturing and natural re¬

are

source

ideal, having faith in God, faith in our¬
our country, we never need fear for

industries.

Wholesale

selves and faith in
the future.

customers

i

.

business

W. A. PATTERSON

industry probably share"
the confidence and optimism of other industry leaders
in the general outlook for 1954 — not so ipuch in terms
of profits, but rather on the basis for a more normal
business operation in keeping with
the best principles of free enterprise.
Probably no year in airline history
will be as competitive as 1954. Sub¬
stantial

in

increases

airline

capac¬

ity and service will take place in
what already has become a buyers'
This situation is welcomed
•market.
by those who believe in competitive
enterprise and initiative.
While continued gains in passen¬
.

and

traffic

expected
in the new year, we may also find a
further narrowing of our profit mar¬
gin. Airline costs have been rising
ger

cargo

faster than airline
W. A. Patterson

are

with the

revenues

result that there has been

a

dimin¬

ishing return on airline investments.
There is a question as to how long the airlines can con¬
tinue to offer virtually the same fare level which existed
in 1941 plus the considerable gains in airline speed, com¬
fort, dependability and efficiency without some upward
adjustment of rates and tariffs.
Along with the opportunities which

we see on

line horizon, there are the inevitable problems.
the nation's scheduled airlines have
new

aircraft

substantial
come

valued

at

investments

into the picture.

$276,000,000
will

be

While

we

on
—

order

the air¬

Already
some

175

and still further

required

as

jetliners

do not expect such air¬

craft to be in commercial domestic operation before
1960,
we

must be

making preparations for them

type of jet airliner which

we

now.

The

envision for service will

cost around $4,000,000 each as compared with the
ap¬

proximately $1,650,000 which

we

are

spending for to¬

day's DC-7s.

projects of the

new year must include im¬

provement of ground handling of
to

keep

pace

presently is
i

which

we

Hayes Picjilesimer

passengers and cargo

with developments aloft.

studying certain

new

Our company

types

pf

facilities

hope may revolutionize the presently compli¬




year,

inventories

in which:

one

*

V

;

.

.

and

;.

•

methods

;

;

:

;

new year, we can

us

conviction

a

that

JAMES

H. POLHEMUS

President, Portland General Electric Co.
The electric

utility industry of the Pacific Northwest
the Eisenhower Administration's;
"partnership" power policy and will initiate important
expansions during 1954. We can anticipate new proposals
is reacting quickly to

similar

the

to

recently

announced

preliminary

for

permit

whole, are
not aggressively seeking any loan accounts.
The major¬
ity feel that their loan portfolios are large enough. The
larger banks are an exception and are continuing to ac¬
cept business loans and to solicit them if accompanied
by substantial deposit accounts. I do not think that any
of the banks are as aggressive in this respect as they
were in the early part of 1953. This policy may change

improve. Most of them

have been "frozen in" with losses too. large in .their, bond
portfolio to justify switching into loans even at higher

'

rates.
think

I

it

is

well

hydroelectric projects

to

recognize that the economy of
Southern West Virginia is basically coal, and while the
past three or four months have seen the mines operating

two

a

Clearwater

will

dams

The

cost

in

of

$300,000,000, but they con¬
stitute only a "starter" in fulfilling
load requirements of the region.
The term "partnership" must of
necessity have a broad meaning, at
least until more definite policies and
procedures have been formed. Cer¬
tainly ond facet of "partnership" will
be a greater participation by local

excess

program

stem

of multiple purpose development

of'the Columbia, inasmuch

complexities

attaching

these

to

lie

or

ever,

major

private agency

or even a group

plan? will be based

patirig systems

may

in

vary

project to project, depending

quirements..

number

is

in

fact will

be stimulated

;■ During the entire

by the

agency

era

electric facilities

vent

of

photography

lower

priced,

trie systems

were

tended to become

more

will

slight slackening in the-

rate

of

upon

The

a

rather steady growth in popula¬

and in business development despite the

in certain

tight

power

limiting

supply which has marked the last

Although there is

some

unemployment

lines, others—notably lumber—seemed

"upswingafter going through
earlier in the year.

a market

on

the

adjustment period

|

Building permits in the Portland
1953 than the previous year,

area

were

higher

and public buying

in

power

; as indexed by retail sales and other evidence continued
year

high. In the latter category

company,

motion picture projection equipment

particularly., Also microfilm equip¬
ment sales should make major gains

:

Chas.

H. Percy

kilowatt-

>

kind of business.

o.ur

in 1953.

As" of $ov. 30, 1953, PGE's annual average

consumption of electricity
than

because of the economies microfilm
every

was a record use of

I hours by residential and farm customers, at least in

increased demand
for sales films of afl kinds and sound
see

systems make possible in .almost

their for¬

increase

a

several; years.

on

of hard competition selling that lies
we

Now they are-

reassume

An extrapolation • of current industry trends indicates

tion

easy

into 1954.
firmly expect that in the

distributors of fed¬

power.

full-scale producer and distributor role.

factor of.

of amateur movie and slide projec¬
tion equipment.
We feel this will
We

hydros-

or

electric-utility systems in the Pacific Northwest.

public.

carry over

such that locajL

steam-electric

erally ^produced and subsidized

-

to use
equipment—particularly in the field

Administration

discouraged; and the region's elec^

was

region is continuing

American

of

of, the former Democratic Ad¬

construction of either

dustry, the outlook continues bright.
As far as Bell &
Howell is concerned, we expect to increase both
sales
and earnings this year over last year.
During 1953, there was a marked in¬
the

re¬

the possibility

new

ministration Federal power policies

mer

heightened by the ad¬

character^
power

responsibility for development of hydroelectric sites. 1

only

of

and

policy yyhich has handed back to the industry the major

Business activity in 1954 should
certainly not be far
off record levels of last year.
In the photographic in¬

was

a

Local partici-r

individual

on

example, there

For

How*?

gether in the sponsorship of some developments.
1 Independent construction of projects will continue, and

President, Bell & Howell Co.

Interest

of agencies.

publicly-owned and investor-owned systems getting to¬

CHARLES H. PERCY

in interest in

developments

the announced policy of

on

maximum amount of local development.

better work

part

the main

on

the problems and

as

making their beginning attempts to

the

Polhemus

would be difficult of reconciliation by a single local pubr

ment for the

crease

H.

James
-

agencies in future hydroelectric development. It is likely
that the7 Federal Government will not discontinue its

schedule, which has provided employ^
miners, nevertheless from an earning stand*,
point, the net has been a loss to the operators. At the
moment we see nothing in the picture that
indicates a
change in this situation.
on

the Clear¬

on

water River in northern Idaho.

distribution

not optimistic that the
momentum
will
carry
are

if conditions in the bond market

including Portland General Electric,
for
permission to investigate the
possibility of constructing two large

*

retail

Banks in this area, as a

ahead,

Other major

and

through in 1954. Production and pur¬
chasing policies, as well as plans for
expansion, if any, are what one
might term as "wait and see."

President, United Air Lines, Inc.
Those in the air transportation

challenging

veyy

of five Northwest electric companies,

a

that

for

application

danger in 1954.

great country and we became great because
ideal which we have always cherished and

cherish

a

Our greatest opportunity lies in the development and"

or can

Eisenhower; and I have every reason to believe that
situation well in hand—and so we face no

real

be

expenditures,

shall have gone a long way toward
making this another,

has the

he

will

and

good year for American business.

policy. We will neither talk pur way into nor out of a
depression; we might conceivably fumble our way into
one.
The immediate future of our economy lies with
Mr.

convince,

can

will'
require the closest scrutiny. For each dollar we ?pend
or invest, we will have to insist
upon a full measure pf1

Edwin W. Pauley
It is
have,
a free and unrestricted economy when so much of our
national income goes to implement defense and foreign

naive to think we

we

on

we

coal, chemicals, oil and gas, lum¬
ber, wholesale and retail distribu¬
tion, and as far as we know there is
not much in the way of expansion

an

costs

find ourselves in trouble.

may

more

large reservoir

a

instill in each person who
he, as an individual;
Shares part of the responsibility for our being able to
meet the. challenge of 1954, no matter what his
role, we

if, in the

elections

November

the

after

..

efficient and

more

at^lose to present levels.

This

If, in this

danger signals,
off action until

of

slowly.
had

tinue

works

Pump-priming

delay.

".

key to 1954 will be

There seems to be no limit to human;
Wants and needs, nor no limit to the ingenuity of ourengineers and designers in satisfying them.'

port in Congress so long as he avoids
or

*

guying public.

He

will have continued by-partisan sup¬

indecision

and projectors "appear

cameras

introduction of a profusion of new products—products
that will capture the imagination and the dollars of the

one

is

still

'

value in return.

applying whatever res¬

measures

caused, I will not say made necessary,

In conclusion, it appears to me

largely

timing by

now

industryX^

buying our goods and serv¬
ices, the tempo of business activity in 1954 should con-*

;

proper

by the huge expenditures of

We have

dimensional

excellent.

velt and Truman.

people,

we

three

people to buy and to keep
a

to be effective, under Roose¬

proven

or

the rock. This was

the

These

preparing for war is never good. It is wasteful,
being it stimulates business. Our gov¬
ernment is prepared, both the Treasury Department and
the Federal Reserve Board, with economic weapons that
we can rest assured will be fully used to stem any reces¬
our

life into the entire motion picture

Among amateur photographers, prospects for sales of

effective merchandising.
There is still
of untapped purchasing power and if

Angeles, Calif.

debate

no

The

corrected.

has

but for the time

sion

be

policy: he will take whatever steps
prevent a recession. Fortunately, he

peared some weak spots; farming,
the used car business slowing up

war

need

business decline.

1953 has been a banner year, with full em¬
and good profits; however there have ap¬

The year

ployment

new

But the

W. PAULEY

EDWIN

task.

easy

We also feel that the introduction of Cinemascopic (wide
screen motions pictyres) has revitalized
public interest^
in movies as an entertainment medium and has
breathed'

double

was

residential

6,223 kilowatthours,

the national, average, and

227 kilowatthours over the same

an

more

increase of

period in 19.52.

1

Volume 179

W

Number 5294-.-.. The Commercial and Financial Chronicle

'

(489)

w,

ernest

potter

Flint, Mich.

Flint, Michigan, is located in the heart of the automo¬

to have many

when

located in this

are

they

busy

are

markets for

ucts, etc.

are

by

of six million

and

they are,,
Mich¬

believe

igan should enjoy very good business
conditions throughout the year.
are'

the

in

reduction

some

Overall in

year.

to exceed

at

our

and

men's

wear

The

reeves

mills

such

and

mills

.

Arthur Reis, Jr.

They will

show

last
,

a

turn, I believe, is

John

M.

come.

now

..

Such

.

just about

referred

cottons
'

and

to,

has

entire

the

industry

suffered

.

from

this great increase in output.
•
In the past two years, however, cottons have regained
their position due to new developments in finishing

f

processes

t

:

In fact, cottons are fast
skirt and blouse fields for all

expanding in the dress,
year wear.

All

in

I

can

much

see

better

business

for

the

j

case

v

for

time.

some

w.

.

j.

w.

k

reid

share

largely, though
exclusively, within the confines of the Canadian
construction industry.
One may perhaps excuse an ex¬
pression of opinion derived from such a relatively lim¬
ited field by pointing out that in

indicator

of

the

national

overall record

an

<

;

'

year

of

in

larger

other

factor

reached

this

stage

and

it

:

terms

of

}

4

appears
Reid

the

mination of urban building
erent from those of any

*„

appear to

be altogether dif-

preceding boom.

For example,

industrial.and residential building, which in the
past have invariably declined previous to the urban
peakj. continue at high levels and in-fact-show indiea-




the

we

1954

average'.

Co.

outlook, for

natural

the

bitu¬

gas

"dump"

factors

of

have

already

of the loss of millions

coal

business

and

of

if allowed to continue

will make further inroads in

for

coal

hand

1954

the

will

in¬

or

industry.

On

production

also

be

of

affected

by economic conditions, particularly
the production of steel, as it takes

approximately
.

*

one

Joseph

P.

Routh

and one-half tons

of coal to produce one ton of steel. The other
hope for
the industry to maintain a production close to 1953 will

•

depend
is

the increased demands of the utilities.

on

There

no

:

bituminous

our

directly to

into

of

is

will

has

rather special sector
industry. Such adjust¬
industry as has occurred

ever,

research,

technological

Pittston-Clinchfield

coal

of

acreage

lurgical coals that
the steel

Com-

companies

that

have

virgin high-grade metal¬

be produced

can

industry requires,

mines

coal

try,

or

at low cost which

that have low cost steam

geographically located

the shortest

will do

so

that they

are

on

freight haul to the expanding utility indus¬
well.

very

On the other hand,' coal

com¬

panies which produce steam coals at average cost and
which

not located

are

will suffer

greatly

on

short hauls to the

utility plants

the markets which these companies

as

formerly served, namely, railroad fuel and domestic

that

can

be

not

industry, perhaps not

overlooked

as

soon

tion of coal with
the

new

continuous

miner and

in combination with
up

machines.

.

use

of

efficiency

auger

mining

strip mining during the past

the average production

continuous mining

now

will

the produe,-

The further

the

that

1954, is the

as

further development of mechanization and

of

re¬

trade, have almost entirely disappeared.

per

year

man-hour.

being experimented

by Union Carbide will be another great develop¬

ment

in

increasing production and reducing costs
are

to

necessary

per

meet the encroach¬

ing competition of oil and natural gas if the industry
is

continue

to

production

years.

The

margins have tended to de¬
cline, yet very slightly, due to low¬
ered prices and
increased costs of

distribution, both brought about by
very competitive conditions.
How¬

well and

Pittsburgh Consolidation Coal Company

ton, all of which

on
a
highly
reaching a slightly
higher level in 1953 than in the two

very

'

with

remained

certain segments of the

seem,

industry will likely do

substantial

The type of

plateau,

previous

the

or

either

as

again brought

retail stores,

may

poorly and show substantial losses.

very

part,

readjustment,

a

identical

do

panies such

affect the
a

of the textile

stable

coal

Another factor

company

years

it

as

increase both their production and profits where others

President, Van Raalte

appear

fall

Paradoxical

tail

riesenberger

Profit

construction industry, the Canadian
cycle appears to progress in a succession of
residential, industrial, institutional and finally,
large
urban building peaks.
It must be recognized that in the
past a general economic decline has usually followed the
urban peak but the circumstances of the present cul-

both

*

time

or

on

a

production

basis equal to present

to increase its production in the future.

will undoubtedly

come

when the mining in¬

dustry will be completely revolutionized so that instead

.

.

two

well

to have clearer sailing ahead for 1954.
Since we are completely
integrated producers of underthings, hosiery and gloves made
principally from synthetic fibres and

almost

economic

'

as

If this situation does not become overly burdensome,
adequate consumer demand in our industry should be
available to make 1954 a good year.

Volume

•

that
construction
W. J. W.
contract
totals for 1954 will approach, if
they
do not surpass, the all-time record level of 1953.
In

Intense competition

1951
through 1953 has had no
appreciable effect on our operations.

The

(summer)

cause

tons

coal

the

in

likely

'

is

as increased labor costs combine to narrow the gap fur¬
ther between manufacturer's cost and

ment in the

now

appraise

crease,

that apparel has re¬

The primary
difficulty in 1954 appears to lie in secur¬
ing adequate profit margins for the manufacturer. Increasing transportation expense as well as rising costs

we
•

follow¬

construction.
business cycle has

studies" In

to

in

p. routh

course,

long-term growth in the country's
population. This is making itself felt in a fast-growing
boys' industry, in itself a short step removed from the
men's industry.

-

increasing

urban

to show

Various

our

profit

,

distributed

productivity and prosperity.
One
to-be-anticipated result of such an
expansionist period is a sharp rise
Canadian

•

years

dollar.

and

question that the utilities will use more fuel.; The
ceived a shrinking percentage of consumer
spending. / question is what proportion of these increased fuel reThat trend should at least be arrested. The men's wear
quirements will go to imported oil, to low-priced sum¬
mer gas or to coal.
industry stands also to be the gainer from two factors
•

would

In 1953 the Canadian
economy en-

ing six previous

of

industry to hold its place in securing

consumer

recent years have tended

-

economic

health, and with its secondary indus¬
tries, a far-reaching source of diver¬
sified employment.

joyed

our

the

industry, of which
having passed through several

have

we

These

the

The textile

long regarded the
construction industry to be both" an

-

of

The business interests of the writer
falf

Canada

to

frank r.

not

;

appeal

sales

for the

up

business,

low prices.^

very

been the

with wool for men's suits, and crease-resistance for
cottons. All of these innovations and many
rqpre

President, Otis Elevator Co., Ltd.
;

or

re¬

selling prices.

properly managed mills this quarter than has been the

.

has

make

Whether increased amounts of

off-season

quality-conscious consumer.
These include shrinkage control for cotton,knit goods,
fast colors and shrinkage control for rayons, improved
handling of the new synthetics such as blending of dac-

that

,

_

all,

industries,

elsewhere for the retailer have led him to seek assistance
in terms of lower
prices.

and to better styling.

j

oldest

that

will be available at so-called

better prices.
to gain.
Si-

number of significant

to

government

the
may

*

been

textile

of

affecting the country at large. More leisure time result¬
ing from longer vacations and a shorter work week
haye developed a need for additions to the wardrobe in
terms of sports and leisure wear.
Thus new and addi¬
tional garments are
becoming virtual necessities. The

deflationary period, which
brought about by over¬
production, particularly in the field of synthetics. Dur¬
ing the years 1939 to 1946, a great many new mills
were
put into operation on synthetics.
Many of the
fabrics made replaced like items in cotton and there¬
fore the over-production in this field spilled over into
have

(2)

other

a

possible

it

limited,

or

multaneously the textile industry,
notwithstanding being one of the

with

While

(1) Whether the importation of
foreign residual oils will be stopped

factors

itself in
for better quality
improved styling.

stands

ago.

new

on

coal

bituminous

its

This

I

is

brings

difficult

the

up

help to enable

here.

Reeves

turn

volume

placed

year

a

of

on

was

industry for 1954 due to a number of in¬
determinate factors, of which
perhaps the. two most
important are:

woven

shape to take
change for the better

which has been bound to

in

is

minous

reflects

and

particularly

Chairman and President, The Pittston

_

It

the

ron

be in fine

advantage of
a

us.

in

large volume of

a

that

will be above

Ries

j.

overly missed.

other

J.

improve-

come

ments

profits.

some

demand

nation's

cently

have plowed back a good part
of their profits into
new and
upto-date machinery and which have
good cost systems installed a»c now
position to

behind

E.

repre¬

volume

during 1954 from non-military

be

feel

both

reasonably good busi¬

country

Overall

years

a

well

several

this

This

or

Those mills which during the

be

marked

been

have

pronounced

The improved living standard

merchandise

merging or going through
process
of severe curtailment.

closing

in

to

picture

point toward
of

•

the

overall

ness.

.

,

appear

readjustment,

industry

,

not

has

total

our

customers,

loss

Inventories at

years.

business

of

,

orders

favorable.
Quite apart from being free from
conditions that might make for a

belief there will not be

This

28%

■

market

a

;.

'We anticipated

reis, jr.

and hence will not be

is ending its second year of
deflation or readjustment.
This is one of the longest
of such periods in its history.
During this period, in¬
ventories have now finally been brought down to .a
i
realistic basis, prices on most items
have declined to the
point where
there is little or no profit to marginal
textile

1953.

While large-scale military business
is not likely, it was not profitable,

'President, Reeves Brothers, Inc.
The

January.
sented

many

industry, has dwelt in

years

re¬

some

ries

Our contracts for dental
and medi¬
cal equipment for the
Armed Forces
will
be
completed by the end of

expan¬

are

and
manufacturing levels are currently normal
varying to low.
The high inventories of several former

:

m.

prod¬

retail

t

j.

equipment

buyers' market for several

all-time high.

john

paper

President, Robert Reis & Co.
The

reduction from the 1953 figures which

10%

a

an

wheat,

1954.

arthur

income

farm

in

in

coupled with the psychology of an

business

in

election

industries, with

favorable factors
picture. Individual

are

duction

were

With
and

at

are

be

may

means

tinue to flourish

an all-time high, bank
high and banks are in
Ernest W. Potter
a very liquid condition.
Taxes must.
go down, not up, which will leave
more take
home pay.
Because of the growing popula¬
tion there is a great need for more new homes and em¬
ployment should be satisfactory.
The unfavorable factors in the picture are that there

savings

-deposits

e.

Chairman, Ritter Co., Inc.

fast alleviating, though
eliminating, our dependence upon export
continuing development of our basic re¬

many

national

anticipate increases in both volume and
profit for the
1954.

year

major projects includ¬
ing the St. Lawrence Seaway planned or in prospect, and
with a sustained high level of
capital investment, there
is every reason to believe that Canadian
business, in
spite of some individual or regional exceptions, will con¬

If their forecasts are
we

no

sources

a

the entire southeastern pkrt of

There

country at large

trade.

production
and trucks during

cars

the year 1954.

automobile

the

forecasting

are

correct,

in

basic products, such as

The rapid industrialization and urban

k

executives

industry

our

sion of the

prosperous.

The

to

economical
production, plus a program
intelligent selling, give us the confidence

and

still highly

are

area

we

known

are

large projects planned and contemplated.

and

hard

for, international trade to a very high degree. We
susceptible to the fluctuations of world

cern

the production and sale of automobiles and
The largest of the General

Motors units
and

These authorities

sources.

Canada shares in the world-wide interest in, and con¬

upon

parts.

efficient
of

relatively low contribution from Governmental

a

and other official

bile and automobile parts producing area of our
country.
As a matter of fact, our economy is pretty much depen¬
dent

tions ~<of; still further increase. • Furthermore, present
high construction levels in Canada have been attained
with

-

President, Citizens Commercial & Savings Bank,

-f

„■

tl

of
F.

R.

Riesenberger

mining into

a

Union Carbide is

seam
now

of coal,

machines of the type

experimenting with will actually

pull the coal out of the seam with a tremendous

im¬

provement and ingenuity in styling have largely coun¬

in production per

teracted these adverse market pressures.
The condition of the economy as a whole

increase

man-hour and thus a great reduction

in cost.

and

what

happens to the-level of disposable income in 1954 can,
of course, have a.bearing on our operations.
We are un¬
able to foresee, however, any important change in dis¬
posable income beyond perhaps a slight decline some¬
time during the first six months of the year, to be more
than compensated for during the last half of the year.
We have a large consumer acceptance of our

products

and

a

sound

relationship of long standing with all of the

A good deal

of adjustment has already taken place in

the bituminous coal industry,
should not be any less

general is off for that year.
the industry is
that

are
'

and in 1954 its production

proportionately than industry in
The long-term outlook of

excellent, especially for those companies

well situated.

Continued

on

page

42

<

The Commercial and Financial Chronicle
42

government bonds are ready
of the respective holders.
accounts and

JOSEPH F. RINGLAND

National Bank of Minneapolis

Tresident, Northwestern
As

enter

we

extremely high levels of
We must expect

already receded from the

lias

the
of itself but it

business generally throughout

1954,

is giving an excellent account

country

the spring

and early summer of 1953.

We cannot reason¬

lines.

certain

in

continue—especially

to

decline

this

of auto¬

ably expect the production
mobiles

other durable

of many

and

to hold to the high level of
1953.
Housing starts may be down
and additions to plant and equip¬
goods

The high rate of
accumulation
of
inventories
that
served as a stimulus for business in
1953
can
hardly continue in the
ment

fag.

may

Year.

New

There

i

however, many favorin our econ¬

are,

stabilizing factors

ble

big

Our

omy.

production

defense

the
reduction in Federal taxes.
While
the number of unemployed may in¬
should

J. F. Rinf land

decline

not

than

more

only a small percentage
Disposable personal income should
4be about as high in the first six months of 1954 as it
was in the first six months of 1953.
With high incomes
«nd lower taxes, it is to be expected the consumers will
keep up and probably increase their expenditures for
non-durable goods and for services. Building of roads
nnd schools may accelerate and commercial construction
Should not decline. This will give us a relatively high
level of business activity.
While it is improbable that
tmsiness will be as good in 1954 as in 1953, we can rea¬
sonably hope that it will be as good as it was in 1952, and
1952 was one of the best periods for business in our
it should still represent

crease,

the labor force.

of

fiistory.
In

general territory, the degree of

our

prosperity is

^dependent upon agriculture. Despite the decline in agri¬
cultural prices our farm income was only moderately
lower in 1953 than a year earlier and most farming com¬

Cabinet

the

applied wherever weak spots occur in our econ¬
This may take the form of increased public-works
outlays and the assignment of defense contracts in areas
showing signs of excessive unemployment.
Defense
spending, however, will decline about $5 billion this

the

that plans have

is obvious

will be
omy.

halt

in

late

the rise in inventories came to a
will

and

1953

have

be

to

cut

to

more

a

healthy level particularly in the hard goods lines. Con¬
sumer spending can be expected for housing and other
services, making less available for other goods.
Car
manufacturers expect to produce and sell, five and onehalf million units, as compared to 6.1 million in 1953.
The government can be expected to encourage exports
and no severe change can be foreseen in this segment
of our economy. The Federal Reserve can be expected
to loosen credit further in

an

attempt to stimulate busi¬

activity.

ness

With lower taxes,

disposable income will hold close to
Personal savings
expected to increase at a rate slightly below the 7%
of 1953. The mortgage money supply is expected to be
plentiful. With an active construction industry; demand
for goods by an ever increasing
population; thoughtful
are

assistance from the government and the keen search for

products,

i.e.,

(color tele vision-synthetics-plastics)

and their distribution

by industry, the country
excellent business in
1954 though recessed
record breaking peak of 1953.

J.

G.

can

expect

the

from

1954 holds every prospect for satisfactory
corporate progress by the American jeweled watch in¬
dustry because the base of its operations is being broad¬
ened

year

by diversification into other fields of production
and selling.
This has become

reasonably prosperous. Now

solu¬
tion to competitive attrition in the

prices of farm products including livestock appear to
t>e stabilizing.
We can expect there will be continued

watch manufacturing field, resulting
from
disastrously
low
tariffs
on

price support of basic farm crops and it may be that
with the decline that has already occurred in prices

Swiss-made watch movements made

munities in this area were

under

things the farmer has to

a

prevailing

thirds

sell, he has largely made
'his post-Korean readjustment.
If crops in this territory
in 1954 are as good as they were in 1953, the cash in¬
come of the farmer should be almost the same.
In that
«f

lower than

that

labor rates twoour owfr.
But it

discovery
precision
contribute importantly to

the

skills

"frontier"

several

of

fields

tech¬

is

illus¬

nology.

reasonably

anticipate

of

Elgin's
trative.
est in
Shennan

J. G.

good level and should continue good in 1954. As
elsewhere in the country, banking in the Ninth Federal
at

enjoyed

District

the

reflecting

area's

results

satisfactory

prosperity.

business

in

This

trend

with

to tremendous new

had to weigh many

resenting

change

a

But

intangibles. A new President, rep¬
in governmental philosophy, was

the

world.

Business

butions

of

achieved.

ernment took the first

to the

states and

and business.

In

the

It

soon

Under exception¬

Department

steps in

its citizens

years

control

government, it

was

one

the

of

of

toward returning
of local
a

resources

period of read¬

offer,

low-cost

our

chief

production

of

resistors,

But

still-infant

some

•

come

Home building starts reached 1,100,000 units, even though
the so-called "hard money" policy tightened the mort¬
gage money supply last spring. Personal savings con¬
tinued to increase at about 7% of available income. Re¬

industry
10% re¬

personal income tax that has just gone
add

It is estimated that this tax relief will

$2 billion during 1954 to the spendable income of the
consuming public—even with the increase in the social

strong

ness

additional expendi¬

inducements to make

tures, thus raising the level of business activity.
Finally, there is the prospect that the liquor industry
will receive some relief in the form of the $1.50-agallon tax reduction which is due to take place, under
the law, on April 1.
This

Federal excise tax will be a

of the

lowering

gain in that it will make possible a moderate reduction
in prices.
While welcoming this reduction, members
of the liquor industry are determined that it should not
become a signal for any letdown in the campaign toobtain a tax reduction large enough to strike a blow
at

bootlegging.
with

Even

the

reduction,

$1.50-a-gallon

the

liquor producer in 1954 will be the legal industry's

illicit
chief

competitor for the consumer dollar.
It will be necessary, therefore, to press the drive for
a
tax reduction to $6 a gallon with the utmost vigor..
Genuine relief for the liquor industry, as

well

allevia¬

as

increasingly acute social problem flowing
from illicit activity, can come only when the bootlegger'stax advantage is abolished.
of

tion

an

f ]

PERRY SHORTS

R.

President, Second National Bank & Trust Co. of
Saginaw, Mich.
businessman,

learn

to

detect

estimated

1953

sales

volume

more

of

To

we announced in 1953 our in¬
with other companies to diversify
fields where our characteristics of precision,

expedite this trend

tention of affiliating
into

two

miniaturization

and

quality can be applied most aptly
components and automatic pro¬
duction instruments. Other diverse products already in

—miniature

line

electronic

include watch

men's jewelry, watch at¬
tachments, Wadsworth imported watches, decorative
emblems for automobiles and home appliances, and other
items in the jewelry and related fields. Even more sig¬
our

nificant

from

a

cases,

diversification

abrasive products,

standpoint

are

our

in¬
of our "Elgiloy"'
large volume of
military timing
for delicate

in

a

continued healthy pattern of corporate

growth. We

expect the 1954 watch market to approximate the 1953

level, but even if this should not happen we believe the
growing fruits of our diversification program will keep
our company healthy and growing.1 *'
1 r * A •' *
1 *

course,

]

definitely read the-

can

a

intelligently decide when to step on the "accelerator""
and when to step on the "brake."
I
believe
the final figures
will
all

business broke
with highest

that American

show

records

in

1953

—

lowest prices in ratio to earn¬
ings, greatest abundance of the good

wages,

things of life, and the highest stand¬
ards of living.
I also believe they
will show that the pace slowed down
considerably in the last half of the
year. The question now is—will this
current
1954

down"

"trend

and, if

so,

continue

into

how far will it go*

Everybody knows that heavy na¬
defense
spending in recent
years stimulated business by at least
10 or 15%.
We also know that the
tional

R. Perry

Shorts

Eisenhower Administration's

success

bringing about the Korean Armistice and continuing
substantial cuts in government spending will correspond¬
in

ingly reduce this stimulation—for decreasing spending
means decreasing business. I think we can logically con¬
clude, however, that, barring war or other new moneyspending emergency, American business in 1954 should
be down not- over 10%
from 1953 levels—unless, of

there is enough upsurge
(which I do not anticipate) to fill

course,

in
up

business

civilian
the gap.

Bankers are very close to businessmen—and when
they lend them money they become business partners
them.
That is why they watch "trends" closely.
They know that when business prospers, everybody
prospers; and that any law that hurts business, hurt3
everybody—for everybody who works for a living is in

with

whether1 he knows it

so

bankers

and businessmen speak the same language and

feast or

business

starve

or

not.

And

In fact, I heard of one bankrupt busi¬
specified in his will that all of his pall¬

together.

nessman

bearers

The combination of these factors should reflect itself

of

o

careful student of business, he can
"trends ifp" and "trends down"—and'

future, but if he is

to

has al¬
than 25%

By contrast in 1949 only 2% of our $27,625,000 volume
came from diverse products.

than




the

in

into effect.

man¬

instruments.

expand with production reach¬
in America's economic history.

The automotive industry produced and sold more
ever
before.
Expenditures by industry for
plant expansion and modernization reached new heights.
cars

duction

program

speed.

peak

industry such as the one in

Of major sigificance to an

which this company is principally engaged, an
that is dependent upon consumer income, is the

capacitors,

of the degree

measure

diversification

Defense production, while leveling off, continued at top

the highest

economic tendencies.

a

lubricants
struments, high precision applications
unbreakable mainspring alloy, and a
complex ammunition components and

Business continued to

Arthur D. Schulto

reflects both
optimism on the soundness of the national economy and
an intention to take positive steps to counteract adverse
attitude

This

contri¬

$60,000,000 will
from products other than American-made watches.

our

"Dymo"

justment.
ing

the whole problem of economic sta¬

transistor, generally considered

ready grown is shown in the fact that

Defense
re-examined its operations and its requirements. Gov¬
leadership

in

which

review the happenings of this past year we are

capable

therefore

is

forts to that work.

became
apparent that our President was determined to stop in¬
flation.
This was accomplished.
A truce was arranged
in Korea.
Departments in government were reorganized
ally

inspires, is the attitude of the Ad¬
in Washington toward

ministration

ufacturing field and will continue devoting its very best
research, engineering, manufacturing and marketing ef¬

was

and unessential activities eliminated.

complexity too often produce
in many instances defeat the
unless it is miniaturized.
may

Elgin expects to remain vigorously in the watch

Daniel T. Rowe

the

of

because

too,

ponents.

What Did the Year 1953 Hold in Store for the Country?

with the record

Encouraging,

public confidence in the future that
it

transformers, printed circuits and other electronic com¬

'

we

tures.

promise substantiated in the esti¬
a miracle
of miniaturization, is at least twice as large as it need
be if made to tolerances commonplace in the watch
industry. It is believed that similar reductions can be
we can

mate that the

made

creasing at a phenomenal pace.
Money for mortgages and inventory
loans was plentiful.

As

that

Miniaturization

booming and production was at an
all-time
high.
Savings
were
in¬

impressed

that

know

instrument's purpose

countries

given to most

being

also

we

bulk and weight

•party after twenty years of a phi¬
losophy of ever-expanding govern¬
mental spending and control.
The
country was at war in Korea.
Huge
expenditures were being made for
armaments.
Financial
assistance
around

today are strong enough
relatively minor reductions
governmental 'defense expendi¬

in

No

opportunities.

tary, commercial and industrial devices men are learning
how to make more complex and versatile instruments.

Bank, Brooklyn, N. Y.

just taking office bringing new personalities into political
power whose actions and decisions
might well change the course of his¬
tory.
This Administration repre¬
sented the first change in political

was

the industry, have ranged far

example, we are all aware that in a host of mili¬

For

of 1953, prognosticators of business trends

In January

work

at

to offset

chemistry, optics, electronics, plastics and
This activity, combined with our special¬
production experience during the past 13 years
high-precision military instruments, has exposed

ized

us

President, Kings Highway Savings

There is an

year.

other sciences.

ROWE

T.

this

later

metallurgy,

1953,

should continue in the New Year.

DANIEL

experience

Our research facilities, larg¬

afield from the customary areas of
horological research into work with

a

Reserve

own

a

inclination, in other words, to rec¬
ognize that the basic economic forces

our

watchmaker's

can

that the measure

can

we

with

present downward trend will be re¬

necessary

has also resulted from

prosperity in our area this year should be at least
-as good as that for the country as a whole.
Just as business is at a high level so also is banking.
While loans have not risen this pa^t fall as expected
demand for money is strong. Bank earnings have been

event

continue
to
remain
good chance that the

mild,

security tax rate that went into effect concurrently.
The elimination of the excess profits tax and the re*
duction in the corporate tax rate due on April 1 are
still other favorable factors since they will offer busi¬

SHENNAN

President, Elgin National Watch Co.
The

readjustment now un¬

will

derway

bility.

the peak rate of $250 billion annually.

new

that the mild

versed

year.
In the business world

economic factors

developments, should operate in its favor during
year.
Not the least important of these factors i3
prevailing opinion of economists

able

been made and

members it

Corp.

industry enters the first quarter of 1954
that, barring unforesee¬

liquor

certain

with

by the President and

From statements made

President, Park & Tilford Distillers
The

Store for Us?

What Does 1954 Hold in

|

D. SCHULTE

ARTHUR

policies, savings
for the use

of available funds in insurance

serves

41

Continued from page

1

...Thursday, January 28, 1954

(490)

who

should

be

bankers,

and

when

asked

for

an

explanation, he replied: "Well, these bankers have been

carrying

me

all my life and I'd like to have them

finish

the job."

My experience
it

doesn't

take

as a

much

small-town banker tells me that
of

a

variation

in the

"ups"

or

Volume 179

Number 5294.., The Commercial and Financial Chronicle

/'dowus'k of business-to spell the difference, t^tweep aprosperity and a. degression;'* All that is because our
industries are dependent,, one upon the other—"all bound
round with a woolen string," whether we like it or not*
Viewing it broadly, every citizen of every state benefits
by virtually everything that is produced in industry.
Production

'

The surprising .fhing jjs tlaat

r r

a

.certain reluctance to

businessmen. Maybe their, ability to. predict

some

behavior is superior to ours,

consumer

Or perhaps they

just feel that enough is enough, even where prosperity

means prosperity—nonproduction means de¬
You can't increase wealth by not producing
goods—law or no law. A new ship in New York calls
for a new warehouse in Seattle—and a healthy pros¬

is concerned.

perity in Ohio

flected in the higher sales quotas agreed upon in our

or Kansas spreads its beneficent influence
great country. Prosperity is contagious—%
is depression.
:

over

and

so

our

Some economists give us a

hundred and one reasons
Why business will go down—fewer jobs, increasing com¬
petition, heavy overhead, reduced production, lower
profits, etc.—but they all boil down to decreased spend¬
ing. And others give us plenty of reasons why business

,

will go up—lower taxes,

babies, continued infla¬
interest rates, etc.—but they all boil down to
buying. In fact, I have come to have the great¬
in the economist who tells you all he knows
predicts—"The future is uncertain."

tion, low
increased
est faith

and then
And

more

after considering the whole picture, I am
laying my own plans with confidence and pleasant ex¬
pectations, for a good, busy, profitable year in 1954. I
think the pace will be down somewhat—but still good.
so,

My own conviction is that the
if

organization for 1954.

own

is

foy Alabama Power Co., with greater kilowatthour sales
Early in the year 250,000 kilowatts of new
generating capacity will be available for service from
the company's Barry Steam Plant
Mobile.

A

unit of

new

156,000

kilowatts is under construction
the

mines

coal

of

the

near

company

at

Gprgas. The completion of this pro¬
will bring the installed capac¬

gram

ity of the

to 1,536,000 kw.,

company

an increase
of 741,400 kilowatts or
93% since the end of World War II.

In November the
company filed
with the Federal Power Commission

application for

an

preliminary

a

and

services

for

money^ will

the

not

expected but demanded by our customers.
that the selling job must begin

development centers of
is becoming a more

ical

shortages

plentiful

are

I

-

available

Better

only

be

This means

in the laboratories and

plants. The American family

our

longer

car. builder. It was organized in 1899 as a-con¬
solidation of nil the steel freight car manufacturing facil¬
ities in the country; it was responsible in its early
daysi

always

higher

cause

for useful products

year

that

total

new

of

standards

that represent

industry

people in the food

steadily

stream

of

sense

being

has already

spent

caught

are

ex¬

Salesmanship in
on.

More money

product improvement.

for

items, developed

new

A

the basis of high

on

quality, fair price and convenience is constantly flowing
from

the

factories.

The

increased

use

of

hard-hitting

advertising and sales promotion ideas is plainly evident.
New

methods

wholesale

of

and

cutting costs of distribution, both at

retail,

these activities,

being found

are

day.

every

continued aggressively, lead

lieve that the food

me

All

to be¬

industry is heading toward another

banner year in 1954.

DAVID E.

per¬

putting all-steel hopper and box
on the rails; and for nearly 50
years it continued to make practi-v;
cally nothing but freight cars.
Today, the company presents a, |
very different face—the result of ,a
program inaugurated
1949, when Pressed Steel Car
started moving into steel fabrication;
More than any other factor, this
in

diversification

Of

M. Smith

Lewis

at

$100,000,000. We expect to
with the work when

ward

a

cost
for¬

a
go

license

is issued by the Federal Power Com¬
mission and to complete the project within a period of
10 to 12 years.

The company

operates

now

on

the Coosa

Hiver three plants with an installed capacity of 253,j500
kilowatts. It also has 236,200 kilowatts of installed capac¬

ity in three hydro plants

the Tallapoosa River.

on

This proposed increase of 240,000 kilowatts is expected
to supply only about 25% of the new capacity needed

to

a

SMUCKER

to be abundant evidence pointing
decline from the high level of business

seems

moderate

activity which apparently reached its peak in 1953, our
plans for 1954 are based on a belief that it will offer
traffic at much higher than nor¬
mal levels.
The physical pldrit of
the railroad industry generally * has
been expanded and immeasurably
strengthened through huge postwar
investments
in the most modern

equipment and facilities. The De-,
troit, Toledo and Ironton has done
its share in this regard but we feel
that we have not yet begun to realize
the full measure of inherent im?

in the next decade; The remainder will be supplied from

fuel-fired units, of which type the Company has under
construction 403,000 kilowatts.

\

,

Back of these demands for additional

power

is

sus¬

a

tained interest in the company's service area as a loca*i
tion forfhew industrial plants. Existing industries have
expanded:greatly as the demands for locallv made product$ increased. < Residential use of electricity continues
\ to grow as more television sets, air-conditioning units
and other

appliances are;installed.

provement both in service and cost

levels

which these investments* tilti-f

mately will make possible. A short
period of slightly depressed generaji
business may well prove1 to be help?
ful in our never ending search for

E. Smucker

David

summer

pay

-We

*

Of

ways

in the

every ten years

our

present rate

will not continue.

to do a bigger and better job

President, Thomas J. Lipton, Inc.

^

At about this time each year, the business

thickens

with

outlook.

Certainly 1954 is

pens

to

expert advice

dollar

sales,

the

on

record

highs

been made in

and

figures

must

the

of words

all .the

by

,

our

already have

volume

used

economic

Whatever hap¬

casters.
V. This great

puzzle

atmosphere

general

exception.

no

fore¬
/

..

interest in trying
future trends strikes

to
me

as a very
healthy sign. It is prob¬
ably true that the average business¬
man
today is better informed on

vital economic forces than

predecessors.

Yet

were

his

certain

questions
dealing mostly

continue to baffle us,
with the attitudes and moods of the
;

American
v

public.

lems that
than

I

think

we

good

mass

of

facts and

business

pinnacles

of

seem

year.

last year

variations of opinion

eral

in business

must

be

more

alert

'

leading authorities
a

be

ever.

The

feel

consumers

Are they going

willing to continue, or even
increase, recent high levels of spend¬
ing? It is on these important prob¬

Robt. S. Smallwood

consensus

to indicate that 1954 will be

are

some

declines

mentioned, and

we

two important

respects.

wherein we reached agreement
with an organization which represents nearly half of our
men
in a remarkably short time and without go verm*
mental intervention of any kind. These two things alone
can be of tremendous value to the railroad industry in
their

employees,

minimizing the effect of over regulation.

The freight car

mildly,
always
feast

higher

and

or

,,

business, to put it

John I. Snyder, Jr.

has a poor history. It has
been terriby unpredictable—liable to violent
famine sales fluctuations. Right now, a famine
,

period appears to be getting started, with the outlook,
far from bright for the nation's freight car builders.
Without diversification, Pressed Steel Car, too, would bo
a bleak year—it never used to be immune to the*
depressions that hit the industry with fair regularity.

facing

Today, however, with less
coming from feight cars, and

than 35% of total sales
with the remainder of its

product base very broad indeed, within the framework
of steel fabrication, the company is immune. Since 194^
it has added divisions that are now turning out petroleum

equipment, engine lathes, aircraft parts, farm holding
(for the dairy industry's new milk collection pro¬

tanks

gram), industrial and residential steel tanks, electrical
conduit fittings, stainless steel cookware,
automobile
bumper guards and accessories, and waste receptables.
Pressed Steel Car also operates one of the largest tank
and armored vehicle depots ifi the U. S., at Hegewisch,

Most of these

new

divisions

The most

doing well.

are

them all, Axelson Manufacturing, a 62year-old West Coast maker of oil well pumping equip¬
ment, engine lathes, and aircraft, components, has just
finished a year in which its sales hit almost $25 million
—more
than double its average annual sales volume
between 1942 and 1951; and the division's pre-tax net ©4
$3,000,000 was also a record. The company's Hegewisch*
important of

plant, in addition to its tank depot, is working on a $10,-j»
000,000 government order for heavy-duty, low-bed trail-T¬
ors and accessories.
Other factors like the company's
Chicago Steel Tank business, its Conduit Fittings Divi¬
sion, its Rockford Ordnance Plant (which it operates fofr
the government), and its Solar-Erie Division = (which
is making everything from milk cans to -automobile
bumpers) are also growing.
;
>7" 7 V;
1
.

.

this is reflected, of course, in the
company's current sales figures. Last year Pressedt'Steel
; The impact of all

Car established

a

volume of better

sales

record

all kinds of

These figures, however,

—which

on

tice of diversification.

.

transportation and

The report was

in

no sense

not have been dominated by the

have been
to basic
create
may

railroad spokesmen

emphasizing for several years.

Amendments

regulatory laws recommended in the report will

an

atmosphere in which the user of transportation

select the means which best suits his needs from a

group

of aggressively competitive agencies, each attract¬

best and

cheapest.

With these

/•

face 1954 with calm assurance that continued progress

are

will be made and that the railroad industry will prove
that it is

dynamic and alive—willing

arid able to cphir

pete for traffic and to win and handle this traffic on

equal terms-with all comers.

~

'

/

,*

,

,

\

$

In the minds of most businessmen, the year 1954 ha*

question marks facing it than any year over the
past 10. In the early forecasts, I have read predictions*
ranging from dire doom to big boom ahead. In between,
a

glanced at forecasts predicting
drop in business to a gain

small

of about

10%.

One good
is

that

page,

thing about
all

we

start

a new

with

a

ydar
clean

especially the forecasters. One

bad

thing is that judgment day i»
only 12 short months ahead. So here*
goes with the elean page, realizing
that whether right or wrong we will
all know after the twelfth page has
been

torn

off

our

calendars.

energies are devoted to
the Variety Chain store end of re¬
tailing, I will give you my guess
first on the other main branches. f
feel the largest decline will take
Dr. L. Spangenberg
place in the Department Store fieldL
This does not make me a pessimist, but a realist. With
lower take home pay forecast for 1954, the higher pricO
tags carried by these stores will make them feel the de¬
Since my

cline first.
The Mail Orders

will

achievements behind us

recent important

the idea and prac¬

more

companies.

railroads, yet its find¬

,

President, United Stores Corporation

t

of representatives of

and by its very nature could

,,

LEONARD SPANGENBERG

transportation companies with the thoughts

use

,

important, as tlie

so

fact that Pressed Steel Car can now look rto the future

I have

investors in the securities of transportation

not

are

with confidence—a future based

representatives of companies—large and small

of similar

.thai|

$90,000,000—more than double its average annual;;vQltyma
over the past five years.
Its net income afjer taxes isP
estimated at more, than $2.5 million; compared with"»
1951 net of $1.9 million.
/

outmoded regulation
of ordinary business
principles to railroad problems, 1953 saw publication of
the report of the Transportation Association of America
Cooperative Research Committee. This report combines
the collective thinking of high level representatives of

there

gen¬

in

more

respect to excessive and
which has prevented application

we

might well-experience

even

stable sales and earnings.

With

the

the second largest year in our economic history.




in

from

by specific industry. But the

suggests that

generally

ing the type of business for which it is inherently the

figures already presented by

True,

country

ings highlighted the very things that

How confident do

; as we enter 1954?
to

the

Very great progress has been made

First, and probably most important to our regulated
industry, is stabilization of the purchasing power of the
dollar; the second is found in recent evidence of restora¬
tion of true collective bargaining between the railroads
and

ROBERT B. SMALLWOOD

B*
,

occurs

at minimum cost.
in

nothing ahead to indicate that

see

doubling of load

a

now

'.

'

'

off

more

,

Due largely to air-

system peak

our

months.

the

outlook for the coming
The program has already paid
off; in 1954 and ensuing years, it will

*

conditioning load,

colors

program

company's
year.

Illinois; and manages and operates a government ord¬
nance plant—one of the most completely automatic fac¬
tories in the country—at Rockford, Illinois.

President, Detroit, Toledo & Ironton Railroad Co.
While there

'

cars

threat, and markets of

a

honest value.

the
is

it,

However, adequate buying power will be

this

believe

the Coosa River which would add

initially 240,000 kilowatts

a

freight

mit to construct five additional dams
on

Historically, Pressed "Steel Car Company, Inc./ is

diversification

see

discriminating buyer all along. Crit¬
no

supplies

acceptability.

than in 1953.

near

Definite instructions gearing

convincing salesmanship of the highest order.

goods

re¬

have already been issued.

tremely alive to the current problems.

good year in the area served

a

clearly

What it will take to win, for all companies as

I

President, Alabama Power Co.
We expect 1954 to be

be big

new year can

This feeling is

so.

all budgets to these goals

LEWIS M. SMITH

I

decide to make it

we

real

N*

President, Pressed- Steel Car Co., Inc.
*>

for

pression.

all

-vJOHN I. SNYDER, Jr.

believe in this optimistic view seems apparent on the

part of

4$

(491)

also

.

I.

will be next in line of decline. They

suffer from

less overtime pay and a shorter

work week. The grocery

chains will do well to equal the

high volume of last year. Drug,

chains will probably ex¬

small percentage drop in sales volume,
y
f
The sales of the Variety Chains should hold very close
to the excellent levels of 1953. Even-though many of

perience

a

Continued

on

page

44

44

^

(492)

The Commercial and Financial Chronicle...

Continued from page 43

M. J.

the chains

-

President, Spiegel, Inc.

reported

fractionally lower sales totals for

high levels.
that

the

Variety Chains will

'/,(!) Better

highlights for next

for

year

the

be four in number:

Cost Control.

■

(4) New color schemes
I

do

not

.Already
costs.

have

In

deal

1954, still

comb" every

be revived

on

done

will

more

item of

as

long
been

has

be

cost

control.

watch

payroll

better
to

done

"fine-tooth-

to

Saving pennies will again

expense.

the

long

a

way

to go. However,

the installation of such equipment into more and more

1953, two said it would be equal to

1953, and five that it would be some¬

military

down

general drop in the production in¬
and the backlog of industrial
the

are

trade,

negatives affecting

but

this

at

would appear that their

writing ,it
impact will

be

by

no

means

be

ity

'

The lessons learned last year will be
put to practical

experience
up

this

year

as

more

and

the changeover to self-service.

chains

more

While payroll

speed

savings

lhave been the big disappointment, greater sales volume
*

:

and less cash shortage have been the
bright spots.
:

McLellan

Stores

have

lead

the

field

in

color

new

drastic

have

M. J. Spiegel, Jr.

on

no

cient, and who represent the potential over-production
in the country, will find it
increasingly difficult to

new store at
Pekin, 111. has become the
showplace of the industry. It has spelled dollar increases

ment

for

tures

during December, 1953, in the tax reductions, and
obvious determination of the Administration to

In

brief,

Chains

as

1954 will

be

good year for

a

increasing competition will

the

Variety

management

spur

to greater efforts.

on

GEN. BREHON

SOMERVELL

Chairman and President, Koppers Co., Inc.

in

confidence.

First

New

the

company's

first

the

on

reports

decline

is nothing concrete,

Also

under
was

construction
a

new

plant

at

materials

appeared,

the

for the

The

Plans

also

& i

have

been

announced

for

development plant at the Division's Kobuta site and this
is expected to be completed in 1954.
Koppers research1 and development program also has
progressed well during 1953 and production of several
important new products will be announced during 1954.
L. P. SPERRY

President, Scovill Mfg. Co.
The products of the brass mill industry are so
widely

integrated
1954 will
economy

into the American economy that output in
necessarily reflect such developments in that
as the new year may bring.
At this writing the

forecasts of the economists, who have
been meeting in Washington, still are

subjects for further study and interpretation.
of

a

looks

their

course

and

ago

of

two

or

pros¬

drop of this kind means some decrease
in employment in certain industries, less days of work
in many companies, and the elimination of much over¬
time pay throughout the country.
This results in less
buying power but with savings at an all-time high, it
does not necessarily mean that retail sales will drop
in a corresponding amount.
At least, not unless we
are headed for
a
protracted recession, which does not
Admittedly,

likely

seem

While

beyond the peak of government ex¬
the other hand they will continue to be
enough to provide a cushion for business.
The most disturbing factor in the probable decline in
are

on

substantial

frozen
a

effects
the

into

business

number

large

profit levels.

on

picture

will

for

impact of

the

increased

competition.

The

battle,

Big Three is likely to press hard on net earnings and
make

chology of indiscriminate acquisition

"independents."

of whatever materials become avail¬
able under
gontrols and to start
of

In this latter

current

case

an

important

con-

s

p

'

'

perry

a

the

industries,

aid.

burden of

the

lag between plac¬
getting deliveries, a factor which tends
intermediary and primary producers the

holding stocks.

Once the final kinks have been
taken out of the in¬
dustrial pipeline, production should
flow again at or near
its early 1953 rate. The end-demand
for brass mill prod¬
ucts will continue
strong so long as our basic economy
remains healthy and vigorous.




including

position of the so-called

few months

still have big projects ahead.

ing orders

and

difficult the

of
,

tinue

on

more

The outlook for construction and building looks quite

-sideration is the substantial cut in
the
to throw

even

good, much better than

and

requirements.

in

Whether

must

men

proceed more cautiously

recent

lower

unemployment,

curtailed production and lower profit
distressed times or not,' bankers and

margins
business

during 1954.

"guns and butter" economy, we have
expanded production facilities for several years, and now
To

support

a

announced less spending for
produce greater quantities
of civilian goods than the potential demand.
Overpro¬
duction will mean greater competition in most lines of
business at a time when break-even costs are at the
highest points in history. Reduced volume of sales, ac¬
companied by price-cutting, will be sufficient to change
many profitable companies into unprofitable companies.
the

that

government has

defense, we will be able to

The most important

labor
the

investments.

may mean

during 1954.

instance, for the Automobile market between the

into the first half of 1954.
It
takes time to swing from the
psy¬

size

bank

IfturDer

trends

prices,

levels

with tremen¬
dous
increases
in incomes,
prices,
material shortages, spending, savings,
etc. Everything "expended," includ¬
ing bank deposits, bank loans and
before equalled

up

investments,

and

earning assets of banks are loans
sizable losses are not expected

Large reserves for loan losses have been set

in recent years, which exceed substandard loans car¬
as assets.
Moderately larger losses on loans may be

ried

well

cut to

Geo. K

and

feel

have been in periods dur¬

we

never

many

through

companies

of

With

with few minor excep¬

ing which production went to

a

now.

we

penditures,

full

until

bringing inventories into balance

tions,

three

a

enjoy

still

since the latter part
:

Since 1937,

perous economy.

contracts,

ments to the armistice in Korea and
to decontrols on the domestic front
run

levels

business

years

costs

single company is relevant, it
as
though the period of adjust¬

will not have

to

trend, w'hich ha£

of 1953.

new

the

of

continuance

a

recessionary

been under way

phenomenal that it would not be
logical to expect a continuation of
this sharp rise throughout this year.
We could very well have a decline
F. Stern

indicates

sus

mild

so

Lawrence

profit¬

outlook for 1954 is good. The quality
of assets is excellent, deposits are high and earnings
prospects are better than normal. Recent developments
have produced many diverse opin¬
ions pointing out that we are headed
for a stiff depression, a recession, or
an orderly adjustment.
The consen¬

highs in 1953; in many
instances the results achieved were
reached

rather the possible

To the extent that the
experience

Banking has concluded a very constructive and

businesses

Most

bad.

tabulating

able year, and the

will make the

business this year does not seem to be the actual change
in production levels (although they are important), but

||gjp

,

different but not

situation

business

our

President, The Second National Bank of Nashua, N. II.,

competition has re¬

of which

necessarily

large-scale

a

that

that

turned—all

com¬

pany's Chemical Division, formed in 1945, is its fastestgrowing division. With production started at Port Arthur
during 1953, it now has six plants.

production is down some¬
securities of most basic
have
pretty much
dis¬

that steel

mid-1954.
Further expansion plans, primarily in the
company's Chemical Division, are expected to be ready

for announcement in the first quarter of 1954.

fore¬

sharply lower than a year ago. ;
We are not overlooking the fact

company's Wood Preserving Division
at Horseheads,
N. Y., and this is
expected to go into operation by

Gen. Somervell

There

be

what,

in

steadily

F. THURBER

GEORGE

production this year will

that

cast

made

real pleasure to

Not being given to prophecy, we shall take 1954 in
stride, and believe that we are well prepared to take
the best advantage of whatever level business in general

of the

continuation

however, to date to justify a

West

being

a

develops.

index in the latter half of 1953.

Reserve Board's

Coast, and a sizable addition to its
polystyrene plastic producing facili¬
ties at Kobuta, Pa.
year-end

a

accounting
automatic to a

payroll

new

feature,

give unique opportunities for future expansion.
-

reflected in the Federal

was

a

in

division, and electronic computation seems to

Chicago

show

1954

for

in business which

unique

attained, and

is

Progress

National Bank &

Trust Co. of

is

before

never

machine

LAWRENCE F. STERN
American

which

operate.
.

President,

1952.

cluded its first large petrochemical
plant at Port Arthur, Texas, a new
tar products plant at
Fontana, Calif.,

degree

announced

also

have

machine

this

plant facilities largely built in

Koppers plants which went
into complete operation in 1953 in¬

We

are

analysis is correct, it would appear that 1954
will be a good year even though it will not measure
up to 1953.
If

which the company considered
mostly a period of con¬
solidating gains made in 1951 and
1952 and of putting into
operation
new

pleasingly styled and colored.

realistic, for the most part, and al¬
though the trend will probably be toward lower levels,
the changes will be so gradual and the trend so slight
that there will be no upset in inventory values—or con¬
levels

and

speed

the

Price

announcing a complete new line of

are

we

machines featuring quiet operation, increased
convenience of operation never before
achieved in an adding machine. And the machines are
adding

expendi¬

strong consumer

bolster the economy.

sumer

Koppers plans to continue during 1954 the program
of expansion which it started in 1946.
Capital outlay for
such expansion will be
considerably greater than in 1953,

in the

retailer

the

announced an

new

Similarly,

of the picture, there is encourage¬

On the positive side

-

standard typewriter, Lie- Model 150.
It is
of completely new styling, has a most pleasing touch
for the secretary, a very beautiful line of write, is con¬
venient and efficient in every detail, and will give reli¬
able service for a long period of time.
.
' •
entirely

match their 1953 results.

schemes. Their

L. C. Stoweil

recently

Corporation just

Underwood

a

in sales far above expectations.

i

its

pulse buying of business machines.
Such machines are bought strictly for what they can da

profitable basis, even though there is a
drop in the general level of business activity. The mar¬
ginal producers whose operations are not always effi¬
erations

business

work and keeps its
records.
Our products are designed
for
many
essential purposes and
services.
There is little if any im-

distributors who have remained
difficulty in keeping thair op¬

Those producers and

efficient should

which

with

tools

performs

that

and

sudden,

or

,

provide some of the impor¬

we

tant

general level of business activ¬
should remain relatively high.

will

M y

volume.

sales

Speaking for Underwood Corpora¬

.

tion,

These

in

.

dex

retail

less

interpretation was that no one was
extremely optimistic, but certainly
no one was pessimistic.
'

adjustments made necessary by the

the

north

neglected.

.

what

the

that surround

uncertainties

the

not

the

but

1953

than

year

equipment industry—

.nine said 1954 would be better than

expendi¬

-

will

first,

better

a

office

tures, the decrease in farm income,
the slight rise in unemployment and

stores will be the prime aim of all the chains. The south
come

upon

be

the

for

a

orders.

slogan.

a

Air-conditioning still has

t

product of the end
Korean
hostilities,
the

stepped

from the traditional red.

away

dwell

to

great

a

12

in

(3) Step-up in changeover to self-service.
;

should

Based

volume

This will be

(2) More air-conditioning.

i.

months, and studying the factors that will influence
in 1954, there is reason to believe that retail
for Spring 1954 will in general, be under the
levels
established
in
the
Spring

the opinions of many economists, 1954
should be a good year.
Based upon the majority opin¬
ion of 16 office equipment companies whose represent¬
atives attended a recent meeting of the Office Equip¬
ment
Manufacturers
Institute,
it

sales patterns and trends in the past

After reviewing

business

predict

Corp.

President, Underwood

.

.

of 1953.

last year, still the volume of business was at extremely

I

C. STOWELL

L.

SPIEGEL, Jr.

Thursday, January 28, 1954

good,

aided,

Businesses

sibilities of

a

as

governments

utilities

cash

increased

is government

and

are

con¬

government
to

the

pos¬

already taking

still have

high
a

1954, especially when compared with

levels

reached

a

will
tax

year

good degree of prosperity.

ago,

we

should

and

the Federal

surplus expected from
be

needed

to

pay

Government.

The large

heavy early tax payments

off approximately $6 billion of

anticipation notes issued in 1953.

These factors will

maintain interest rates at current levels.
Were

it

Reserve

summation, while business will be down somewhat

very

slightly lower business loan demand will be offset

number

This should help.

in the early part of

the

alert

A

by loans for tax payments in the first half year. A de¬
cline in corporate investment demand, will be offset by
increased demands by public utilities, local and state

A

Home building should

by

competition, which have excessive liabilities, top-heavy
swollen inventories or insufficient capital.]

fixed assets,

public

ago.

important

decline this year,

steps to limit it.
In

are

perhaps,

expected during 1954 on loans to companies affected by

crease

not

for

the money

forecast

the

present

policies of the

supply to combat deflation, I would

higher interest rates for 1954.

Loan and investment policies should not be

merely

Federal

System ancLtJ^e Administration's promise to in¬

on

-

,

established

the basis that the government will not permit

Volume 179

Number 5294

The Commercial and Financial Chronicle

...

45

(493)
depression to

a

Yet

occur.

consideration must be given

to the effectiveness of

L.

an increase m the
money supply
by the government in delaying readjustment. Federal
Reserve open market policies were
very influential dur¬

PAUL

TULLOS

second

President, The First National Bank of Beaumont, Te*.

and

and

moderate reduction in

a

from

the

WALTER J.

1

President, Chesapeake

If

one

to

were

%

TUOHY

would

return

net

investment

about what the railroads will

in

This

property.

in

earn

businesses that

a

are

their

worthwhile

to

us

prac¬

make

In

is

ful

nation's

total

goods and services
1952

over

to

total

of

proximately $368 billion. Many

earnings.

CARL W.

.

previous
are

"

..

'

looked at in the

course

performances

greatly

the

improved.

results

We

are

tion's business.

en¬

couraged to continue efforts towards

correcting

excessive

regulation

and

L. Paul Tullos

best

subsidization

but there

The rise in interest rates in the early
tended to approach a condition where
confidence in even the highest grade of securities was

business

in

years

our

history,

competing forms of transportation " about 1953 before we can look forward to 1954 with any
in the hope that a least a 6% return
degree of accuracy. The first observation which should
can
be attained.' And1- even 6%
is ! be made is that the record gross national production of
.below

the

earned

average

by

other regulated utilities.

-

;

The C. & O. continued its vigorous
efforts at. self-improvement

dbfing

J

Walter J.

zation,, increased centralized traffic
control, improvement of yards and promotion of.diversifieation .through industrial

1954 but at
erate pace

;

moderately reduced.

was

Inventories crept

up

to

will

ness

a

a

experience

disturbance.

business

examination

Better

attention

the

little

a

over

a

The year. 1953

leveling off in the downward
The 10% drop in coal originat¬

saw some

trend of coal production.

trial

has been completed.
in

excellent

Bad

order

compared with
whole.
been

High

coming

year

activities.

our

research and

and

to

freight

low

a

of

of

roadway

about

we

have

will

see

Long-range

deferred

no

projects

such

bring

as

in

2%,
a

of

operations

application of electronic computers to rail¬

road operations will some
day make

stock

and this

important contribu¬

The

results

evidenced

of this

improvement program

are

clearly

a

by the fact that C. & O.'s earnings will be

better

than

1952,

despite

the

lower

brought

revenues

a

to 10%

below 1953.

-

healthy level.

a

level,

believe it

we

can

And with its plant equipment and
a very

high state of efficiency,C. & O.

adjust to such change in the national

can

'Whenever

good to go back to fundamentals.

economy.

ABC's in

our

self-improvement.

On the C. & O.

1954

Here they

in

we

are

efforts toward

our

are:
t

-(A)

Act Now.

There has been too much talk and not

enough action in carrying out

Business

(B)

at The

started

last

these two groups.

these

opportunities

to

A

unique

program,

Industry-College Conference

highlighted

the

mutuality

of

interest

We intend to make full

develop

better

trained

use

per¬

sonnel for the railroad.

-(C)

Courtesy—too often overlooked in

shall be

-(D)
/built

our

our

continue at

new

this

of

invaluable record which

we

are

Efficiency.

(E)

employees will
results

the
will

for
•It

are

more

"inside

efficiency

be

continued

expanded.

than

a

our

During the past

be

as

a

provide

more

stable

give better service to
dividends for

our

employment

pluses and declining prices of agri¬
cultural
products, which have made

for

our




a

employees,

signs

stable price

a

the

high

rate

of

about

an

5%

in

economic

1954.

Whether

predictions materialize
is

Ueland

no

good

pessimism

reason
or

for

alarm.

stiff and almost continuous inflation for
and

a

leveling
is

moderate

downturn

a

or

ing the cease fire in Korea, The Upson Company concen¬
on the development of new industrial outlets in
1953 and showed a substantial gain in that field as well
as

an

We

may

not be

as

good

a

have

had

period of years
of the nation's

business

a steady flow of lami¬
shipments to builders,

maintaining

nated

panel

both conventional and prefabricators.

housing construction
con¬
a steady pace while the re¬

New

tinued at

pair and remodeling market im¬
proved considerably and is expected
to gain momentum in 1954. Housing
starts in 1954 are expected to ap¬

.

proximate the same figure as in 1953
the total exceeded
1,000,600

when
units.
As

was

the

case

manufacturers

with

high

taxes,

We

have

now

a

year,

difficult

the

maintain

to

earnings

as

same

in some previous
a

reasonable

totaled $1.30.

buyers' market instead of a sellers'

and there is

an

increasing demand for quality

products. Upson placed greater emphasis on its
and

con¬

high

years. However, Upson was able to make
return to stockholders and dividends for 1953

market

other

some

past

prices for
materials and high wages made

tinued

it

this

research

development laboratories and quality control pro¬

Through research, we have developed and mar¬

gram.

new

products which have met with consumer

All Weather Sheathing for farm,

and service buildings as

well

for decorative effects, and

as

industrial

homes; Striated Panels

perforated Peg-It Panels for

displays and scores of home and business uses.
Upson's research program developed a revolutionary
a

strong

the construction industry. This process

either

dimensional stabilization process which

impact

on

diminishes

or

eliminates

expansion

has had

and contraction of

these

not, there
attitude of

wood

and other

to changes of

year as

there is every reason to expect that it will be the

cellulosp fibre materials occurring due

humidity in the atmosphere. Its worth and

significance is expected to
1954.

be realized even further in

Three patents on the process

applications for

both inevitable and desirable.

Although 1954
1953

or

recession of

/

,

military orders follow¬

trated

acceptance:

that

dictions of

UPSON, JR.

decline in defense and

record level of personal

business activity has passed its peak,
and this has resulted in many pre¬

will

1954,

a

Toward the end of the year there

our

customers, and continue good

stockholders.

With

keted three

level and plentiful
supply of almost
all goods and services.

Arnulf
we

W. H.

President, The Upson Co.

in buying.
practically full em¬

been

income, ample credit,

Dramatic

that

cautious

more

There has

economy
our

year the

whole have

employees' modernization plan

largely through such efforts

ership.

level of

Minneapolis, Minn.

We need also

political and industrial lead¬

to have confidence in our

W. H. Upson, Jr.

Upper Midwest and the Na¬
enjoyed the highest level of pro¬
duction and income in
history. This prosperity has been
quite general, although there have been
exceptions,
especially those related to the sur¬
tion

An example was

expect to improve C. & O.'s economic position in

of

shall have the means

growth and prosperity.

was

President, Midland Nat'l Bank

to

Huntington, W. Va., shops.

will

future

assure

raw

half-million dollar annual savings which

by

to

December marked

ARNULF UELAND

engineering"
talents of

willing to work, venture within cal¬

to be

cope.

were

and

expected from this program.

be achieved
our

Our

of tapping the latent inventive

need

whole.

Demand for loans has continued
strong, and deposits
holding up very well.
Probably the best way to
sum
up the state of business at the
present time is to
say that we are
experiencing a mild readjustment fol¬
lowing the longest boom in our nation's
history, and this
mild readjustment is
expected to continue into 1954.
However, the basic strengths are still present in our
economy, and there is nothing
apparent on the horizon
with which sound planning and hard work
cannot

have

determined

We

culated risks and save so that we

during 1954.

pace

Far East

solved.

automobiles.

continue.

program

strong

ployment,
we

are

the

industry—

169th dividend

a

the problems of

European countries and of the Near and

very good throughout
Inventory readjustments must be made in
hard lines,
particularly appliances and

area.

farmers
our

a

dock facilities in

December business

byword in 1954.

Dividends. In paying
an

to

and progressive ideas.

Education.

Greenbrier

November,

between

of

and

new

as

for our defense

the

slightly under lower prices,
big factor in the approximately 10% drop
Southwest

within a reasonable time busi¬

burden will remain heavy,

tax

are

problems become complex it is sometimes

going back to

and

some

boom

Our

declined

in the

horizons
popula¬

again will resume its upward trend.

important step forward for the Port of Beaumont.
a slow start in the
early fall, retail sales buoyed

up;

v

be

employees keyed to

expected

and

After

-Many shipper and professional economists view traffic

While this would not be

a

Completion of
an

anticipated lower export coal shipments.

for 1954 in the general range of 5%

was

ullmall

These efforts in themselves will
the effect
make for economic stability.
The

outlays must continue to be large until

Construction in Beaumont, Texas, and
vicinity was at
high level during the past year, and
building activities

are
>

about by the

Coast.

in agricultural income

tions to the C. & O.'s earning
power.

decline

a

ness

an

production

Carl w

.

position.

tion gives assurance that

and top management of our
shipbuilding industries are
busy meeting this problem.
Agricultural production in Southeast Texas in
1953,
rice being the predominant
product, was very good, with
prices fairly firm.
This section of the state was not as
hard hit by drought as in Central and West
Texas.
Live¬

have

all

of

increased tempo in offshore drilling activities.
This type of drilling on a large scale
requires very large
capital outlays for drilling barges and marine drilling
equipment. Already research and development divisions

maintenance.

further advances

Gulf

to

and to

products of scientific research are creating new
This fact combined with a growing

Final favorable settlement of the tidelands issue should

service

maintenance

the Texas

on

are

given

for living.

has felt the stimulation of a new national rec¬
ord high of consumption of such
products, and conse¬
quently these great industries still continue to expand

100%

now

of 5% for the industry as

average

and

95%,

down

are

standards

continued

-The

service

cars

an

Passenger service is

control.

be

be sound for business and should tend to limit

economy

program

C. & O. plant and equipment

condition.

dieselized, switching
88%.

postwar-improvement

and

will

collection of receivables

the inventory

of Southeast Texas.

importance to the petrochemical and re¬
fining industries of Southeast Texas, is the national con¬
sumption of petroleum and petrochemical products. Our

1952.
our

area

Of extreme

ing on the C. & O. was due almost entirely to the ex¬
pected decline in export business.
Excluding this export
coal, the volume has remained virtually the same as in
The major part of

ti\te, operating costs will be under

and the slight national downward trend in
employment
at mid-year had no serious adverse effect in this indus¬

/

We

temporary halt in the es¬
tablishment of new business records,
business will become more competi-

decade ago.

30%

period of ad¬

a

but we need
opinion, look forward to

my

serious

closer

with

.

may see a

troublesome level in certain durable goods,

be

compared

•

expect that busi¬

such as ap¬
development and other means
pliances and automobiles.
Although the C. & O. still J
A second observation about 1953 is that
although in¬
the nation's largest coal
carrier, mer¬
dustrial employment turned slightly downward at mid¬
chandise freight now accounts for about
50% of our total
year, unemployment at year's end was still very low;
freight revenues,
to

-

effects of recent years

not, in

part of this program.

were

continues

mod-

more

justment following the inflationary

and distributing levels tended to
lag during the last half of 1953, and production in several
lines

/,

through

carry

than that experienced in

natural to

It is

the manufacturing

at

set in about

as

somewhat

a

the last three months of 1953.

heavily influenced by a very active economy
during the first half of the year, with an apparent slack¬
ening and leveling off taking place during the six months
just past.
Sales of both durable and nondurable goods
was

,

■the past year./ Extension of dieseli-

*

Tuohy.

1953

year

lacking. The reversal
mid-year will likely

of

...well

market.

part of the

certain observations which should be made

are

intelligent,

an

The year 1953 brought a reversal in the trend of the
money

If this be true, then

1953 must be regarded as one of the

governmental

unfair

for

President, The Dollar Savings & Trust Co.,
Youngstown, Ohio

econ¬

regard this gross national
production
as
the
most
reliable
single index of the state of the na¬

,

light of

attitude of con¬

an

call

ULLMAN

ap¬

omists

Of

time

same

work,
produce and serve, and thus take their part in the com¬
petitive enterprise system that gives us the highest
standard of living in the world.

production of
about 5%

be reporting two or three times those

the

The outlook is good for those ready and able to

was up

record

a

at

appraisal of markets, and effective merchandising.

some

"taking stock" of 1953, it is sig¬

the

of

will

own

and

critical and aggressive review of every business opera¬
assure control of
costs, efficient production, care¬

might otherwise

we

add

tion to

nificant to note that the dollar value

when most

year

on

a

reduction in taxes should

Present conditions warrant

fidence,

fail to do.

say

on

is

causes

analyses which

the railroads did well in 1953, it
be the equivalent of a
stamp of approval to a

4%%

This

tice, for it

Ohio Railway

&

assured.

viewpoint of surveying accom¬
plishments of the past year and ap¬
praising the outlook for the year
ahead.

i

A

already high purchasing power. A stable financial
condition, ample credit, and sound money policies seem

broader

earnings.

levels.

record

to

lowed

In summary, there will be increased
competition for
deposits and loans, greater risks in loans and investments

at

are

Businessmen and economists for many years have fol¬
the practice of pausing at year's end to "take
stock," both from the standpoint of physical inventory

ing 1953, a year of extreme fluctuations in interest
yields and prices of all types of government securities.

or third best in our
history. The prospect for
is improved and employment and personal incomes

peace

other patents

are

have been issued and
under consideration

by the government.
Cnntrnupd

an

naae

46

,

'

46

The Commercial and Financial Chronicle

(494)

Continued

m.

.

President, The Waverly Oil Works Co.

£

The

petroleum industry today is plagued, the same as
other industries, with excessive production—not only in
this country but the other

oil producing areas throughout

goods to

of-the year cessation of inven¬
tory accumulation led to a reduction in production rates

optimism—have energized that system to develop
standard of living on earth.
No one can contemplate this nation's intrinsic poweras ambodied
in its natural resources, industrial knowhow, machine energy, limitless products, increasing as¬
pirations, growing population and spiritual might of its
enterprising people—without abiding faith in America's

and excessive inventories.

Inventories,

ground

of Dec.

as

12,

of crude

1953,

oil above

four of the principal refined products
640,949,000 barrels—an increase in the past

and

amounted to
12 months of

52,635,000 barrels, equivalent to

increase

an

8.9%.

in

our

a

that

production division of our industry, Middle
supplanted domestic crudes and residual
barrels daily. This has con¬
siderably curtailed domestic production and resulted
in proration throughout most of the major oil producing
states, with Texas producers bearing the brunt. Un¬
doubtedly this will be the subject of Congressional
inquiry and the possibility of legislation regulating the
importation of foreign crudes based on domestic require¬
ments.
as

whole, notwithstanding

a

prominent operators, such conditions require qualifica¬
outlined in his message—

as

"Competition
about

.

.

it

.

it forces

is tougher

.

Record

that growth

comes,

to be efficient... to

us

...

.

present is in excess of
increased competition."

demand, and contributes to the

J.

WARD

B.

Economists

that

agree

from

different

be

to

seem

that

the

the

of

pattern

—the highest on record.
This

the response of business management, labor,

was

farmers, and investors to the unprecedented demands
stemming from our high standard of living, from the ex¬
threat to

the nation's

1954

boom

years.
Many
"leveling off,"
recession," and "adjustment"—which means,

predictions employ such
''orthodox

in

^

expressions

all

as

probability, the overall econ¬
settle with the new year

omy,

may

at

discount

a

points

below

a

1953

there is

reason,

about

of

few

percentage
figures. For this

lot of

a

competition

and

talk

today

competitive

markets.

The

Regardless

of

possibilities

"•A

need

for

—
with good
improvement. The
products will be as

for

our

great, if not greater, than
fore.

1 A
1a

1

J. B. Ward

be¬

Addressograph and Mulmachines and supplies are

controls that result in

business

operations.

lower volume,

prospective

ever

Both

tigraph
designed to reduce costs and provide

•

a :*» n

we

volume

current

near,

developments,

sales will remain at, or

our

AJ

of

efficient

more

Under pressure

management

every

man

is being forced to seek out opportunities for such econ¬
omies

in

operation.

With

the

emphasis

on

economy,

however, buying practices go- conservative.
To
the
salesman, an unwillingness on the part of the prospect
to spend dollars—plus his assiduous scrutiny of all capi¬
tal investments—are the signals of a "show me" market.
The true salesman, therefore, realizes that the climate
of his possibilities has changed from one of orders

easy-to-g§t to

✓

of orders he must work to close. He
is back to his traditional role of creating demand where
need exists.
,
The Situation, to our way of thinking, is healthy be¬
cause it is closer to normal.
Today, the business execu¬
one

tive not only demands proof of profits before investing
•—but

he

responds

to

supported statements.

it.
He is not interested in un¬
When these facts are recognized

and

exploited, buyer resistance fades.
petition narrows as the pace stiffens.
with

good

products

The field of

com¬

For the company

services, with sound fiscal and
merchandising policies, and, above all, with strong, ade¬
quate sales power, 1954 should be—can be— one of the
or

"best" years.

of 1952.

World

War

$52 billion

adjustments.

at

attractive

prices.
anticipated temporary
Many already are over

and others will

be dealt with

as

For

newer

months

the security of the nation; this was approxi¬
mately 6% more than in 1952. Goods and services chan¬
neled

directly

value

over

"other

its

policy

of

economic1 stability and
of preparing measures

whenever

Though

or

1954

for

not

Consumers

history.
4

war

year

continued to expand
fully em¬
of prosperity. The num¬
years, were as

63.4

million

12-month

a

aver¬

Of

persons.

the records, while average unemployment of 1.5 million
was lower than ever before except in World War II.

purchased goods and services in the amount

that

it

will

This adds up to an average increase in physical units
of more than 2% for each person in our ex¬

consumed

panded population during the
scheduled

year, we

;

national security requirements for the
able to lift the national average level of

were

But much
was

more

Their qualities of




achieved.

was

A substantial addition

made to the nation's stock of productive

capital. For

example, about 1.1 million new permanent nonfarm
dwelling units were added to the stock of residential

housing; this made the number of units built
the third largest in our

in

number

enough to

of

the

dwelling

take

that to make
of

with

up

requirements and shortages,
titanium, disappeared.

major types of personal income rose except income
proprietors, with wage and salary disbursements
totaling almost $198 billion, or nearly 8% above 1952.
Farm proprietors
income, at $12 billion, was lower for
of farm

the second consecutive year.
The demand

*

flowing from this purchasing

equal volume of output in

an

movements

were

our

ices

characteristic of

Our Economy

New Year Begins

as

Taking stock of our position at the year-end, the fol¬
lowing facts stand out:
;
We

(1)

are

now

a

nation

compared to 1581/2 million

a

of

161

people

as

(2) The personal income of our people is at the sea¬
sonally adjusted annual rate around $285 billion as com¬
pared to $281 billion last December.
(3)
In the year ended Sept. 30, our people added
$25 billion to their holdings of liquid assets, according
to the Securities and
Exchange Commission.
This new
savings brought their accumulated liquid assets holdings
to

approximately $375 billion,
holdings of corporate securities.
(4)

exclusive

of

Inflation has been slowed almost to

personal

stop.

a

The

latest

consumer price index of the Bureau of Labor Sta¬
tistics for the month of November showed a decline from
October and was less than 1%

higher than the

sponding month last
(5)
in

The aggregate stock of capital equipment installed
industries

our

most efficient in

tity

corre¬

year.

installed

of obsolete

and

our

in

the

farms is the largest and
The record breaking quan¬
past year replaced large numbers
on

our

history.

worn-out machines with

or

ones

of

improved

design

and, in addition, added many other new- ma¬
chines and items of equipment to increase the net stock.

By thus

lowering

the

average

age

the

of

individual

some

also

units

built

fully

was

and

were

of

dwellings.

invested

in

improvements, producers substantially raised the
age

large

Record-breaking

motels

and

other

non-

level of efficiency.

construction

record

other than

volume, aggregating about

$11.7

have been eliminated.

ago

year

The result has been

to enhance both the economic freedom of the individual

and the

efficiency of the productive system.

Consumer purchases of goods and

(7)

the year, resulting in

a

ther addition

of

which

contribute

so

the stock

to

for

largest amount

invested in

ever

price change,

plant

and

importantly to the high standard of living

equipment

With

capital

resources

larger and more

income higher than ever

our

before, with

more

powerful than

before.

ever

and, after al¬

ognize the importance of maintaining the growth of the

year

also to have been the

was

valued
Plant

mining, costing $890 million,

those

for

economy

was

any

ance

previous

were

just

between

consumers,

the

our

taken

action to

our

by

we

.

of

may

surprise

many

awareness

economy,

•

.

undesirable

magnitude

be confident that

and

will

take

tjope with the situation.
these

All of

present
in

ability to produce and the demands of

fluctuations

rialize, however,
be

We should appreciate that short-

business, and government for the output of

national economy.

Should

less than

Expendi¬

in the future.

difficulties may arise in maintaining a suitable bal¬

run

high set in 1947.
added

human and

productive and

record, while outlays for commercial and other

also

our

efficient and

one

was

plant and equipment for public utilities,

•Businessmen

compared with

as

$164 billion in 1952.

Notwithstanding these achievements, it is well to rec¬

appears

exceeded

Sales of all retail stores

the

transportation, valued $2.7 billion,

billion,

of this country.

This

manufacturing plant and equipment

new

fur¬

in 1953.

greatest in terms of physical units installed.

$4.5

durables

consumer

the restoration of economic freedom, the nation is more

building remained unusually active.

nearly $28 billion

services have

continued high throughout

billion

Public utility, commercial, religious, social

expenditures
to

residential continued

aver¬

.1

r(6) The price, wage, and production controls in force

beyond

improvement in the average quality

stock

ing the proportion equipped with the latest technological

amounted to about $171 billion in 1953

New

million

ago.

year

existing residences.

near

serv¬

celing each other out.

of the people

at

met

flexible economy virtually can¬

a

housekeeping units and in additions and alterations to

Private

power

Price level

markets.

accordingly largely stabilized with the

divergent movements of various types of goods and

a

of population growth

care

existing

amounts

caught

few exceptions such as

a

The flow of personal income to our people amounted
during the year to $284 billion, a sum 5% larger than the
previous record established in 1952. After allowing for
personal tax and nontax liabilities to government of
$36.6 billion, $2 billion more than the year before, dis¬
posable personal income of $248 billion was also the
largest in our history.

1953

history.

On the basis of recent trends in household formation,

the

with

units composing their total stock of capital and increas¬

consumption.

under the

be

we

mate¬

shall not

necessary,

timely

'
factors—record attainment in
.

1953,

of both "soft spots" and strong points

momentum of current business activity;

spirit—vision, diligence

high overall level of employment, plans

in effect and

in preparation for accelerated progress in

various fields,

crement
Sinclair. Weeks

*

substantially to their inven¬

tory investments during the year, the value of the in¬

'

in the world.

Thus after meeting

year.

types of enterprises, amounting to $7.3 billion,

better years of economic

Americans have been wise enough
to create ourfunique private
competi¬
tive enterprise system, unlike
any

to $218 bil¬

This was an increase of 5.4%j or, after allowing for
slightly higher prices, 4% in physical quantity. In quan¬
tity terms, consumers bought 2 V2 % more food and other
nondurables than in
1952, 3 ¥2% more services of all
kinds and nearly one-eighth more durable goods.

the

materials

personal consumption requirements.

of $230 billion during the year as compared
lion the year before.

year on

-

in

After meeting the requirements for national security,
were able to devote part of the increase in our
output

totaling

ailrtime record boom of 1953, known

optimism

7%

we

tures for

the

conditions and foreseeable prospects
sound
reasons
for. continued

increased

the high totals set in previous postwar years.

prompt

equal

defense

economic aid declined somewhat.

and in

wherever required.

may

national

preceding year while the category of
security," consisting chiefly of foreign

and equipment installed in

encouraging
growth and

offer

among the

into

the

national

at $12.4 billion as compared to $12 billion in 1952.

we

ahead. The Administration will

continue

national product devoted to national
during 1953 was the largest since
Total goods and services worth nearly
purchased by the Federal Government

were

better

of

easing off from

some

to promote

Business

abundance

an

been

our

II.

lowance for

realistic

previous

any

these an average of
61.9 million civilians were employed, a figure which
stands as the highest annual volume of employment in

purposes

business

use

of

age

year1

an
exceptionally fast rate of inventory growth.
Not¬
withstanding the cutback in inventory accumulation, the
national product in the final quarter of the year was
above the closing period of 1952.

and

products

changes, the physical
the steady postwar
the nation's resources.

continue

to

production peaks reached earlier.
Most of the re¬
adjustment has been associated with the elimination of

end

activity and for

larger than that

5%

was

the

amounted

has

4%

in the second half there has

A

Secretary of Commerce

re¬

business activity was
accelerating too fast to be maintained indefinitely; hence

The American people should have a happy new year.
The outlook is bright for a high overall level of
jobs

business

product

During the first half of the

and recreational
1

our

After allowance for price

increased

volume

for the year.

HON. SINCLAIR WEEKS

|

move

in

as

All

national

1953

to the satisfaction of

feel that

security and from

sponsibilities abroad.

security

for

in the achievements of

national economy in the year just

ending. The gross
national product for 1953, measuring the market value
of all goods and services produced, totaled $367 billion
our

The amount of

President, Addressograph-Multigraph Corp.

will

ployed

workers, using more and better capital equip¬
turned out, as previously indicated, the largest
annual volume of output in our history.
Supplies of

Prosperity in 1953

All Americans will take pride

growth in the yield from

but nothing to be sad

.

.

is out of competition

develop greater product
•quality and better services
to new operating methods
new ways of thinking and doing. It is the reason that
the United States has outstripped the world. Supply at

!

The nation's productive resources
in 1953 and aside from the

These

Americans.

ternal

petroleum industry

the above statements, is in good condition to meet any
recession in business. But in the words of one of our

tions

in some lines.

ment,

<uels by almost one million

The

the new year ad¬

as

face the days ahead with the strong con¬
always has been a distinguishing trait of

vances, we can

fidence

the

In

closer

approach

will

Eisenhower

jEast crude has

..

long range view in mind and with hope
hearts that the atom peace sought by President

With such

a

In the latter part

ments.

ber in the civilian labor force reached

Our best days are yet to be.

future.

world, excessive processing on the part of refineries,

the

current require¬

position ample to support

and

S. M. VOCKEL

j

Thursday, January 28, 1954

the highest

jrom page 45

[

...

faith in the long-range; future of our country*,

After the

amounting to somewhat

more

than $4 billion.

period of scarcities and shortages

accompany¬

ing the defense build-up, management brought stocks of

the

dawn

dence

as

of

the

enduring

peace—inspire

New Year begins.

hope for

realistic- confi¬

Volume 179

Number 5294...The Commercial and Financial Chronicle

(495)

47

1
L.

L.

tive industry and its effects were promptly felt by steel
makers.
Carloadings late in the period dipped more

WHITE

President, The New York, Chicago & St. Louis
Railroad
Cutbacks in
about

Co.

but there appears to be

readjustments,
late

pected

to

Road)

long

in

business activity in
for pessimism.

no reason

predicted

in

These

but

in

The

coming year. This loss of rev¬
is bound to further depress rail
earnings "which, is 1953, brought a
return, of only 414% on- the rail¬

*

"than

,

.

(

the interest of
alone

r

favorable

a

farmers. Farmers

situation.

Each

has

dollars

to

improve

their

$168,000,000

the

in

13

nothing to
prefaces

modernize 'and

result"

to

expected

in

a

the system in the best

p-eater decline in business activity,
it riot

were

for

'expanding

the

nation's

rapidly
Because ' of

population.,

1

As

the: railroads

there

year,

ing

future.

anticipates

construction

the

past

almost equal

of

year

a

to that of

importantly in the transportation

ing

of materials for

and of equipment for

construction

Additional

im¬

this

chines

will

some

reduce

be

states

A

sharp

decline

in

carloadings,

Continued

from first

modity

competitive

which

which

developed in

genesis in the automo¬

exist by

now

to

trucks, air¬

to believe that

me

fore

taxes—an

The Credit Outlook
I

course.

am

sure

certain

of

aware

out

on

a

you

broad

new

are

trends

all
in

the expansion

of credit; that after
extraordinary rise of $61/2 bil¬

an

lion in 1952, bank loans did
njrt
undergo their normal seasonal Re¬
in

cline

the

first

half

1953.

of

Then, having held to an exceed¬
ingly high level in the first half,

it is a de¬
might expect,

velopment that we
supplies more readily avail¬
able, more normal business, and
in many cases a lower price level.

with

Under

such

lessened

circumstances,

,

the

in

overall

tions than is generally/recognized.
What has occurred is some shift
in the

of

source

credit,

our

ag¬

result

as a

it

Corporation,

and

large

role.

These

panding,

it

but

a

corporate
relatively

activities

did

loans from
is

ex¬

that

obvious

they did hold such expansion to

they failed in the second half to
match

Credit

otherwise have occurred.

to

advance

from

expect

had

we

come

preceding

years.

Today, bank loans remain at very
high levels. Yet there appears to
be

of

note

a

part

of

uneasiness

on

commentators

some

the
as

they view the record—as though
they had somehow expected that
the steep rate of expansion that

prevailed from 1950 through 1952
would hold
I

*

confess

must

those

among

-Nor

indefinitely.

do

that

who

believe

I

I

am

are

not

uneasy.

that

there

is

for undue

pessimism in the
events of the past several months.
cause

Let

some

to what has

as
r

look at

us

First,

not

of the details

happened.

while

final1 figures

are

bank

loans

the

at

end

of

.1953 will exceed the Dec. 31,

.figure by
crease

1952,
$3 billion—an in¬

over

of about 6%, which is sub¬

stantial, to
ly,- trends
.months

the least.

say

in

have

the

been

Second¬
several

last

mixed.

Loans

to wholesalers and retailers moved

.seasonally higher, but to

smaller
extent than many lending officers
.apparently had anticipated.
The
.same

is

also

true

a

for

loans

.metal *and

ftended to the sales finance com¬
panies. Finally, such basic indus¬
tries as oil, gas, coal, and Chemi¬
cals, as a group, have not called
.upon the banks for larger credit,
What

r

can

we

make of all this?

I would venture to suggest that it

.points to a return to
pace
not

throughout

a

from

a

less hectic

and
great deal more. Moreover,
the standpoint of banking,
our economy,

this

gathering
of
breath
has
.aspects that we might welcome—
-a fact I
want to enlarge upon a
bit later.
When

look

about

there
are certain clear signs as to what
i is
happening. We know, for ex¬
ample, that many businesses are
we

.not adding to

they

have

us,

their inventories

in

the

past

as

several

This leveling off, and even
some
cases
reduction of in¬

years.

[in

ventories, is not

an

unusual proc¬




manufacturers

and

sors

of

than

Credit

In

order

to

place

full

products, who generally
great seasonal users of credit.

perspective,

to

look

back

lower price
level for farm products generally,
a

is undoubtedly the most important
factor
responsible for the less-

than-seasonal

rise

in

bank

loans

during the fall.

period.

At

the

again, certain industries,
presently
experiencing
a
keen
competitive market, at last appear
returning to

taled

approximately

This

represents

a more seasonal

ble

the

start

outstanding

at the

1946.

The

banks

of the

to

time

The

automobile

outstanding

Some

of

how

us

in

this

have

may

this

industry in
days slowed down at the

of

modelv

change-overs.
As
manufacturing slows
host of other industries

ability

the

meet

of business in this

achievement

prewar

a

loans

of

riod

business.

forgotten

$68 billion.
50% increase

from the middle of 1950 when the

pattern dictated by the nature of

is

1953, the

loans of all commercial banks to¬

their

respect.

scope

the postwar
of

end

helpful

whole

of credit expansion in

Korean War broke out and is dou¬

Then

industry

it is

the

on

position

our

is

trates

inherent

adaptability of
tive

one

has

plished

strength

not

without

illus¬

and

free competi¬

our

banking system.

pansion

that

Yet this

been

ex¬

accom¬

difficulty.

some

For

down,

bank earnings have been severely

slow down

it.

with

These

move¬

ments in recent months also have
left

their

for

credit.

mark

on

the

demand

Increasing Use of Commercial

Paper Markets

rect

bearing

having a di¬
the lessened loan

on

demand

from

creasing

reliance

mercial
rate

is

by

treasurers for the

funds

for

the

which

interest

in¬

com¬

corpo¬

placing of

they

With

use.

the

the

upon

market

paper

immediate
in

banks

have

the

no

decline

rate

on
Treasury
increased; and,
while the actual figures are not
available, it is safe to assume that
corporations now hold a very sub¬

bills,

this

trend

stantial

part of the more than $2
billion of commercial paper pres¬

ently outstanding. The larger fi¬
nance companies have been par¬

limited, for

a

with

you

ticularly active in placing their
with corporations, which
undoubtedly accounts for much of
the drop in loans by banks to this
group.

It

is

important

commercial

paper

to

note

outstand¬

ing increased by over $300 million
during the year 1953—and is now
more

than double the total at the

end of 1950.

which

variety of

reasons

all familiar,
with the result that capital ac¬
counts of banks in general have
not kept pace with their
overall
growth. Thus, the loan volume in
to

funds

capital

has

For the banking system

years.
a

are

materially during recent

changed
whole,

it

was

not

that loans

years ago

too

as

many

were no more

than three times the total capital,

surplus, and undivided profits. By
the start of the Korean War, how¬
ever, loans had risen to the point
where

they were four times the
capital funds of the banks; and
today the ratio stands at approxi¬
mately five to one. In view of the
nature of loans which banks pres¬

ently carry, I do not feel this ratio
is

for concern; but I men¬
chiefly to emphasize that
by past standards, bank loans to¬
day are substantial.
cause

tion this

Bank

paper

that

example, during this period,

relation

One further factor

debts

adequate.

loan

that

still

loans

one

needs

Today

are

substantial

in

respect—one that
rectified promptly.

other

to
we

be

hold

far

too

few

re¬

for

possible bad debts in
view of our large volume of loans.
serves

In this

ly
to

trends,

level

of

for

which

re¬

is

*

in

The American

is

matter, we have been bad¬
handicapped by our inability
set aside from earnings—be¬

future

of

in

look

ahead.
to

will

part

at

from

activity

in

Here

I

have

most

con¬

although

year,

for

dynamic nature of American in¬
dustrial

leaders

turning

out

products.
mind

to

who

always
improved
in my

are

and

new

They all add
level

a

continue

of

to

up

business that

be

high,

even

than under the full

so

boom.

expect

what

I

have

great

expansion.

sometimes

But

are

we

to

forget that
there are still significant elements
of strength in our overall situa¬
prone

tion which have

bearing

a

quickly recall

both

on

business and loan activity.

Let

me

First, one of the major supports
high industrial activity has

been

the

heavy

investment

business in plant
All

by

and equipment.

signs point to

little de¬

very

cline in such spending during the
current quarter. Surveys of capi¬

budgets for the year suggested

that downward

adjustments later

in the year are

likely to be minor.

Such a program tends to
the volume of business in
of lines and

increase
variety
directly influences

so

a

Again,
stantial
occur

we read much of sub¬
changes that are due to

in

military spending. While
certainly all hope for read¬

we

justments in

total pattern of

our

spending

whereby

lays will

be

military out¬
prominent, the
that such outlays in the

is

fact
next

six

less

months

changed greatly.

will

not

be

This produces

further element of

a

stability in the

Then

I

mention

believe
the

I

should

also

tax

changes which
have
occurred
only
recently,
These act to improve the incomes
both

tions.
to

some

individuals

Of

course,

increase

the

corporations

decreasecredit.

their

Yet

I

and

one

may

liquidity of
and
thereby

need

am

for

confident

bank

that

these tax changes will so work to

improve

business

balance

loans will be

more

generally
and

not

that
less

needed.

I could go on and describe other
sources

lion of

\

It perhaps is appropriate at this

point for

of strength—the $200 bil¬

liquid assets held by

con¬

to comment

me

on

one

other series of

developments that
affect our loans
developments
that reflect a change of
policy by

1

—

the

Administration

new

Federal

Government.

in

the

On

the

whole, it is the policy of the

new

Administration to get the govern¬
ment
out of
business wherever
that

is

possible—a

policy which
long felt should be in¬
stigated for the good of our over¬
all economy and which we should
support in every way possible.
have

we

Controls

have

been

Mississippi

been

abandoned,

barge

disposed

of,

lines

the

"

have
syn¬

and

thetic rubber plants are to be

in

and

sold;
banking, the
Finance Corpora¬

the field

Reconstruction
tion

is

being

of

liquidated.

governmental

over,

turning

More¬

agencies

-j

are

to private banks for

more

assistance

in financing.
The De¬
Department's policy of en¬
couraging manufacturers to ar¬

fense

financing

range more

is

case

a

in point.

on

their own

-

i

This constructive program is all
the good.
But with it goes a

real responsibility for all to

very

assist

in

way possible on
private enterprise
of the activities which properly
belong to it. In this regard, I can¬

this

not

every

return

to

help but single out for special
the

comment
agency

in

activities

Washington,

counter

run

to

the

of

one

for they

Administra¬

tion's program of divorcement of

from
refer

government

I

business and
to the Small

Business Administration, which is

actively encouraging banks to use
their
guaranty on loans up to
$150,000.
Now this is

corpora¬

result

*

J

banking.

business and loan picture.

1

Banking Business

to

the demand for loans.

re¬

J.

the

few of these.

a

to

Government Getting Out of

art

our

loan activities

our

we can

main in very good volume.

no

fine

in the

engage

be

already said,
that I am no pessimist. Quite the
contrary. We all recognize that
business is no longer in a phase

on

cost—which

are

the strong underlying de¬
construction, the rapid J L
our population, and file
*

sumers,

the
the

by

meeting on Wednes¬
day. Yet I believe you will gather

be

We

growth of

though less

forecasting — that
would trespass on the
grounds of
Mr. Hoadley,
who will tell us
something of the economic' out¬

of

possible

"must."

mand

business

tal

lowest
a

will

Future

course,

large

a

business

months

of

the

much, then, for the present momentum of the recent
recent past.
What about Under these
circumstances,

governed

pe¬

remarkable

a

and

needs

expanding

indeed

the

credit

automobile
a

allowance

bad

immediate

of

Charles D. Wiman

produce

the

the

desire

Period

in

This, coupled with

might

Expansion in Postwar

agri¬

cultural
are

metal

products have
moved down somewhat, as is also
[the case with bank credit ex-

volume

must

that 1954 will be a good
to the records of recent years.

The Immediate Future

and

of

com¬

appears

a special
working very
actively on this problem, and I
am
delighted to hear they are
making very real progress.

of

the commodity mer¬
chants together with the proces¬

to

food, liquor, and commodity deal¬
ers.
But loans to producers of

smaller

a

be carried by

to be

yet available, it appears that

.total

Corporation, through its
operations, has been financing in¬
ventories which normally would

for

committee

So

lower

machinery

Bankers Association has

both the government in
the form of the Commodity Cred¬

ricultural products selling around
the support price, the Commodity

the

of the

squeeze

our

of which

not prevent bank

large portion of

a

advance

the treasurers have played

corporate need for bank

credit is obvious.
With

any way

the

volume of credit in 1953 may have
been more in line with expecta¬

the contrary,

On

ess.

serve

tors,

starting

It

not up

All this leads

at

a

responsibility to keep pace with modern
agriculture and our designers and engineers are con¬
stantly working to perfect quality farm machinery to
meet the rapidly
changing needs of farmers.

lines and waterways.

page

they

modern

scious of

transportation

of subsidies to

reason

prices,

commodities

makes

passed

proposed in others is expected
in

their

fall¬

or

Legislation already

and, in such
labor costs and

high

the

for

during periods of rising

inequities

some

indications

when account is taken of all fac¬

before

the machine tools

are

farmers

competitive

likely that legislation to permit

enacted.

and

highly

a

encouraging

some

It appears more

costs

in

buildings.

new

are

upon

*

the final quarter of 1953, had its

fact, it
sell¬
part of the American

a

labor is scarce and highand,
when
coupled
with
softening farm commodity prices,
makes cost-reducing farm
machinery
all the more important. Farm
ma¬

possible condition.

embark

carriers to adjust rates

L. L. White

Railroads will share

year.

facilities.

In

-

the increase in population, the build¬

industry

its

improve

alarm.

of competitive

era

priced

provements constantly are undertaken in order to keep

be

available

Farm

to

might

purchases,

be

dealers at the time

cause

an

ing, which is
way of life.

in

years

in their

machinery to

proaches the more normal buying
habits of farmers and is
certainly

since

The changeover in production from
defense
items
to
civilian
goods

most selective

expect

they are ready to use it. This selec¬
tive, seasonal buying, however, ap¬

more

year

properties

past

to

inclined

are

with their local

providing better service. The Nickel Plate

spent

are

and

position to

II, rail carriers collectively have spent

billion

a

in

are

competitive

new

'World War

transportation

property.

nation's railroads
the-

meet

enue

in

gets underway.

year

seen:

developing, are exreduce rail revenues in

investment

new

Nevertheless, the decline in revenues from 1953 will
require more aggressive selling of rail services. It is
likely that the coming year will produce the strongest
competition which the transportation industry has yet

the

road's

the

after

1954,

quarters

some

President, Deere & Co.

Softening of the farm market during the past year is
definitely reflected in selective and seasonal buying by

at times when compared with 1952, but this
volume of business is not expected to continue

lower

government defense spending will bring

readjustments

some

rather

(Nickel Plate

CHARLES DEERE WIMAN

15%

than

this

a

strange action for

Administration with

its phi¬

losophy. The Reconstruction Fi¬
nance
Corporation handling big
is out.

loans

The Small Business

Administration
loans
as

is in.

if

the

handling
small
Why? It would look

Administration

that

felt

or

banking

system
was not caring for the little bor¬
rower.
In this I am sure they are
feared

wroqg, and

our

that there is no sound

Continued

on

page

48

48

The Commercial and Financial Chronicle...

(496)

competitive banking system that

times in coming
the Small Business Ad¬ months, and by the nature of their

for the guaranty arrange¬

banks

If

ministration.

not

are

going to accept the risk and re¬
sponsibility for their own domes¬
tic loans, small and large, there
Is little excuse for their existence.
If the risk is greater
ranted

for

than is war¬
we have no

loan,

a

right to ask the taxpayer, through

guaranty,

governmental

to

as¬

it.

sume

Indeed I would say

there is only

circumstance

under

which the risk of financing

should

general

one

t>e

carried

government.

the

by

This is in instances connected di¬

and
large amount of credit

rectly with national defense,
where the

capital, or
experience of man¬

relation

in

needed

limited

the

to

agement, makes the risk too great

less

prosperous

read¬

business be forced to make

will take time.
through periods

justments which
Banks have gone
such

these

as

—in

times

may

lifeblood of

substantial readjust¬
took place in some indus¬

ments

tries during the past year.

experienced lending officers
well know, the readjustment pe¬
riod is a time when customers
As

guidance, constructive help,
and mutual understanding. More¬
need

the record shows that when
commercial borrowers are treated
in such a manner, there may be
over,

periods when renewals are neces¬

beyond the original estimate,
and even additional funds may be

sary

required. Yet wherever there has
been intelligent cooperation, and

good deal of courage,
banks on business
have been negligible. By the

at times a

Is

the

overriding

Here there
need for the

product, tied to our national se¬
curity; and the government is

justified in assuming the risk.
Responsibility of the Banks

-

t\

Beyond this it is the responsi¬
bility of our banks to see that

business, whose man¬

all worthy

ability,
loans. The

agement has integrity and
is

provided with proper

Western

While rail stocks have continued

bank or by
to
push steadily, but not spec¬
invariably see
with limited tacularly, ahead, a couple of spe¬

through the central
direct controls, we
a

stifled

economy

cial

I

confident that

am

be found wanting
bilities

of

one

as

in

the

lending is our present system of
correspondent relationships. The
effectiveness of this system has

in the past

been greatly enhanced
several
decades
by

improved

transportation and communication.
Today it gives us a vehicle for

and intelligently han¬
kinds of banking re¬
quests. For example, as one il¬
lustration of the adaptability of
promptly
dling all

system, you may recall that
National Bank in 1950

this

the Chase

offered

plan

a

its

all

to

corre¬

spondents whereby it would un¬
dertake to participate up to 90%
in

to

loan of $25,000 or less
correspondent wanted

any

the

which

the proceeds of which
used for commercial

make,

the

most

cus¬

formulas

—and

We shall seek

rules.

or

new—reexamine

the

out

shall

we

the old

continue to

be

a

leader for business.

talization.

of

A

a

recommends

that
the

down

turn

the present

first pre¬

preferred stock is owned by Bal¬
timore

f

Ohio

&

railroad

that

and

manyfold, then, to
CHICAGO, 111.—The nominating
follow a program designed to help committee of The Bond Club of company approved the plan. How¬
our
customers
over the
rough Chicago announces the selection ever, two small minority groups
opposed the proposal which was
of Austin Jenner, Vice-President
spots wherever possible.
designed to eliminate the large
These sentiments, I appreciate, of The First National Bank of
arrears
on
the
first
preferred.
are
hardly new to any of you
It will

pay us

the good from
when the going is rough.
So

for the

mucn

it

I

share of

existing

only

_

be

to

discovery

their

Yet

ond

bad

the reduction of

4%

ferred

of
Austin

will require

We are in a pe¬
great change—of practical
research which brings out new

sec¬

arrears.

$10

The pres¬

non-cumulative 2nd pre¬
to be

was

exchanged share

sjaare for the new second pre¬
ferred, convertible into two shares

discovered.

in recent years.

and

for

many,

imagination and initiative on a
scale we have not had to exercise

convertible 4%

preferred stock

ent

are

new

in
cash.
The cash has already been
distributed and if the plan is not
consummated will be applied to

problems that

they

feel

For the

plus the arrears,
proposed to give two shares
new
5%
preferred, one-half

was

of

What about the oppor¬

lie ahead.

tunities?

the

accumulations

amounted to $125 a share.

old 7% preferred

ing there is no substitute for ex¬
perience. It is a very simple thing
to lend money in good times, but
the real test of a banker is to
judge

dividend

Unpaid

Chicago,

Jenner

as

rent year.
are

Joseph E. Dempsey

President of the cur¬
Other officers selected

Joseph E. Dempsey, Dempsey

Each share of present

common.

$100

value common was to
exchanged share for
into new $10 par value com¬

par

have
share

been

It is still

possible that the Com¬
& Co., Secretary, and Edward D.
mission
itself may
approve
the
McGrew, Vice-President of the
methods, new products, new ma¬ Northern Trust
Co., Treasurer. As recapitalization plan or that an¬
other proposal to
chinery, and new systems. It is is
clear up the
customary, these officers will
a period when we should study as
arrears
may be forthcoming and
be formally elected Feb. 11 at the
never before the needs, problems,
meet
with
greater favor.
Club's 43rd annual meeting held may
and programs of our csutomers, so
report of the
in the Mid-Day Club, 33 South Nevertheless, the
as to guide them properly in pre¬
examiner makes it obvious that
Clark Street.
In addition to the

these changes. We officers mentioned, the committee at best this situation will not be
new—reexamine also nominated the following men cleared up for a further consider¬
purposes.
Actually, the response the old. If the customer needs
able period. In the meantime, of
for directors: Paul Mullaney, Multo this plan showed that very lit¬
longer term financing than the
laney, Wells & Co.; Robert Podes- course, holders of the second pre¬
tle help in this field was needed,
banker feels proper for his bank
ferred and common can not hope
ta, Cruttenden & Co.; Robert B.
yet today the Chase Bank con¬ to extend, he should guide the
to participate in the current high
Whittaker, Lee Higginson Corp.;
tinues to be anxious to help its
customer in obtaining it, regard¬
Edward
McCormick
Blair, Wil¬ earnings. If no plan can be de¬
correspondents carry excess loans, less of whether or not his bank
vised and the first preferred ar¬
liam Blair & Co.; Nelson Utley,
whether large or small. We know
rears
must in the end be liqui¬
participates. Only in this manner
Halsey & Co.; and Jules Cann,
for a certainty that our own pol¬
can the banker continue to
be a
dated through cash payments the
Lehman Brothers.
icy in this regard is one which is leader, a counselor, and an adviser
probable' delay will have to be
chared by city banks throughout in the
measured in
way that is traditional to
were

be

to

In

circumstances,

these

*

and in

Moreover, we should reexamine
area9 for financing in which
the
banks are not too actively

policy of
the Administration to get the gov¬
ernment out of business wherever
the announced

possible,

I

Business

Small

would

move

Administration

It has the experi¬

Corporation

nance

as

observed how
that agency mushroomed to a fi¬
nancial octopus whose tentacles
reached
beyond
the
furthest
stretch of the imagination of its
We

warning.

"this

sponsors.

involves

power
which

of
is

concentrating

the

in

unit

lending
subject

any

political in¬

to

fluence, the danger is indeed very

great.
certain
Credit
tion of

I

should
other

like

aspects

Outlook"—to
some

a

to

turn

to

of "The
considera¬

of the problems and

of the opportunities that are

likely to face
times.

source

us

with

Consider first

more
a

normal

few of the

problems.
It may well be that some of our
customers will feel the pinch of




Charles

Including the $10 payment

in
of
Paine, Webber, Jackson & Curtis,
the

Schudt, 71, partner
banking firm

investment

died

in

Brooklyn Hospital after a

short illness.

Mr. Schudt had been

connected

with

Jackson

Curtis

&

firms

cessor

Mr.

Schudt

Paine,

for

and

48

was

Webber,
its

prede¬

years.

active

in Wall

Street affairs throughout his long
He

career.

stage on forward.

was

formerly

a mem¬

ber

of the New York Cotton Ex¬
Again, I have no doubt about
ability to develop new pat¬ change and for a number of years

I

our

terns of
sary

lending if they are neces¬

to satisfy the demands of the

was

a

governor.

He

was

also

a

member of the N. Y. Produce Ex¬

tioned

above, arrears at the end
amounted to $114.50

last year

of
a

men¬

share.

Earnings

preferred

for

the

on

the

12

first

months

through November 1953 amounted
to roundly $46 a share. If

should

remain

at

this

earnings

level

and

if all earnings should be paid out
in dividends (both extremely un¬

it

likely)

would

take

another

three years to pay off the arrears
wrhile at the same time keeping

with

up

ment.
it

the current

$7

require¬

have

only to look back over the
past two decades to observe im¬

innoyations

volving credit, term lending, and
consumer loans among them. We
certainly take justifiable pride

in the

splendid

way

in which the

banks handled the expanded needs
of

business

We

are

during the
indeed

all sides by great

great

challenge.

partner.

into

come

which have however,

proved sound and useful—the re¬

can

limited

war.

confronted

on

onportunity and
More than our

the

until

He continued to
office

he

every

was

day,

the circumstances,
surprising that the two

stricken

New York Central stock. This co¬

incided

with

the

announcement

Mr. Robert R. Young and
associates, including Alleghany
Corporation,
had
finally
com¬
F. I. du Pont To Admit
pletely withdrawn from the Ches¬
Francis I. du Pont & Co., 1 Wall apeake & Ohio picture. The im¬
Street, New York City, members plication was that the step was
of the New York Stock Exchange, taken in order that Mr. Young
will admit Austin J.' Lyons
to could make another attempt to
partnership Feb. 4. Mr. Lyons will get a voice in the management of

with

a

acquire
Stock

heart attack ten days ago.

a
membership
Exchange.

in

the

developments

fight in the fu¬

merely by speculators is
question.
Certainly this
speculative bulge is not based on
any developments with respect to
was

moot

the road's operations or prospects.

The most recent reports available
show

the

of

the

of

continuation

a

trend

ward

cline.

Also,

it

that

quarters

up¬

transportation
to de¬

ratio and traffic continues

felt

is

the

in

many

Lawrence

St.

construction, of which
be taken for granted*
has unfavorable long-term traffic
implications for Central. *
Seaway,
now

may

Pierre Bretey

Joins
Hayden, Stone & Go.

Dr.

Pierre

Railroad

R.

is

Bretey

Specialist

to

be

for

Hayden,
Stone & Co., in their New York
office, on Feb. 1. Dr. Bretey is
teaching a

course on

rail¬

roads

at

New

York

Univer¬

sity, and
the

at

also

Insti¬

Fi¬

of

tute

is

He

nance.

author

of

articles

on

the

this and other
sub-

financial

j ucts,

and

editor

-

is

/

the

of

"Analysts
He

Journal."
has

served

as

Pierre R.

Bretey

that

Security

the New York Society of

Societies.

the

For

past

12

years

with

associated

been

has

he

National

Financial Analysts

of

Federation

the

of

and

Analysts,

Baker Weeks and Harden.

McDermoH Heads

A.S.E. 5 & 20 Club
John

McDermott,

S.

member

a

of the American Stock Exchange
when

since

1920

New

York

air

predecessor

in

trading

conducted

tion

the

Curb Market Associa¬

the

Street,

Broad

was
elected President of the exchange
open

on

members' Five and Twenty

Club.

organization, established in
1946 and currently consisting of

The

160

members, is composed of reg¬
members who have

ular exchange

held

their

25

for

seats

years

or

more.

At

the

held in

elections,

con¬

junction with, the club's annual
meeting, Phillip H. Diamond as¬
sumed

Vice-Presidency; with

the

Rulle.y

Treasurer and
Elwell, Secretary.

Koerner,

Vincent

E.

who

at¬

included

Ed¬

members

Honorary

affair

the

tended
ward

exchange

McCormick,

T.

Under

is not

period ahead. Our free banking change and served as a member junior stocks ran into consider¬
of several industry committees.
able liquidation on the announce¬
system in" the past has demon¬
He retired as a general partner ment.
strated great resourcefulness and
of Paine, Webber, Jackson & Cur¬
On the other side of the ledger
flexibility in meeting the ever
changing needs of business. We tis on Dec. 31, 1952 and became a was the pronounced strength in

portant

Now

some

of

all

The history of
governmental agencies is one of
continuous expansion; and when
original

industries, but perhaps some
the old from the natural re¬

new

grave

a

today.
The great
have taken place
years have opened
for bank financing

—fields that include not only the

Fi¬

Reconstruction

the

of

participating
changes that
during recent
up new fields

with great care and

great caution.
ence

the

the

would hope that

years.

Charles Schudt

profession.

our

these
proxy

a

whether last week's buy¬

or

should study the

the country.

view of

for

paring

&

President of

mon.

riod of

his

first

of this

majority

large

ture

ing

ferred stock.

Gets New Slate

Whether
presage

broke

application on the grounds that
the plan is not in the public in¬
terest and is not equitable to the
holders

Chicago Bond Club

the benefits to the
customers, the community, and
the bankers have been very real.

He

Commission

the

of

the

Ohio.

Mary¬

sharply in Friday's trading on the
release
by an Interstate
Com¬
obliga¬
merce
Commission
examiner of
tions placed upon us by a return
of more normal times.
We shall his proposed report relative to the
not be confined to old habits or company's plan for a stock recapi¬

ago

basis

a

on

with

affiliation

issues

shall accept the

We

few years
Chesapeake

attempt

blocked

was

Western

two

todians of the free enterprise sys¬
tem.

earlier

and second pre¬

of

These

land.

here.
Yet they may bear repeat¬
this ing by all of us for the benefit of
function in the past, and today newer lending officers who have
our
banks are better organized not been seasoned by periods of
than ever | to meet
all worthy economic readjustment. In lend¬

tion, in passing, that one aspect
ef the banking organization which
adds
considerable flexibility to

caused

common

stocks

ferred

responsi¬

chief

the

were

shall not

we

our

excellent record in fulfilling

Here I might men¬

situations

competition. The results are stag¬
excitement
in
this
group
last
nation in business and a lack of
week.
Running sharply counter
progress in living standards for
to
the
general
upward
trend
all.

banks of the country have had an

credit needs.

Maryland, B. & O., and N. Y. Central

by government, either

dominated

token,

same

free econ¬

to

losses

loans

our

for if we study the economic
history of those nations of the
world whose
banking system is

omy,

before

fact,

to justify a bank loan.
an

There

stake.

continued suc¬
cess
and progress of our system
of free enterprise.
It is the free

is the

ment of

at

is at stake also the

The Credit Outlook
reason

is

welfare

own

47

Continued from page

Thursday, January 28, 1954

John

President,

Mann, Board

J.

Chairman and Michael E. Mooney,
General

Counsel.

Leonard C. Greene,

Committee
was

in

meeting

the

for

charge
and

reappointed

Entertainment

the

of

Chairman

current year,

of

the

election

dinner,
arrange¬

ments.

his

New

York

Central

through elec¬

tion to the board of directors. His

Franklin, Meyer Admits
Franklin, Meyer & Barnett,

120

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

will

admit

Albert

W.

Franklin, Jr. to partnership Feb.
4th. Mr. Franklin will acquire a
membership

in

Stock Exchange.

the

New

York

Volume 179

Number 5294

The Commercial and Financial Chronicle

...

(497)

Continued jrom page

5

ties under $5,000,

;

to 37 from 28 in the previous week and
in, the comparable week of 1953. Thir¬

rose

;

teen of the failing businesses had liabilities in
the

production and added that there is

ing at General Motors

j

,

sign of production

no

"Ward's"

reported that' General Motors and Ford Motor Co.
a combined 80% of January's industry car output,

compared with 71% in all of 1953 and 65% in government-con¬
trolled 1952.
Chrysler and all the independents—except Studebaker—are producting at levels below

a

ago.

year

steel

days

have

buyers

longed

don't have everything their own way

yet, says "Steel," the weekly
magazine of metalworking, but they're much more the masters
of their fates than they were a few months ago.
Steel

tions

buyers, it adds, aren't finding many out-and-out reduc¬
prices of steel, but they are able to get the

of

seller

they

standard

to pay

get what

can

watch

don't

of the freight charges; most noticeable of all,

some

out

they

want

they'll get it

when they want it. And if they
before they want it, because some

mills, with their January work out of the way, are rolling orders
booked for February delivery.
If they didn't start two weeks
early to roll February tonnage they couldn't keep operations

as

they are. This means that a further reduction in steel
operations is not far off unless the pace of ordering quickens,
high

it

as

continues.
Some

improvement in ordering by two automobile producers,
General Motors and Ford, has been noted, but this has not been
matched by a similar
The

pickup from other automakers, it states.

demand

reduced

is

steel

for

reflected

by

slowly

a

shrinking rate of steel ingot production. For the second consecu¬
tive week, output declined a half a point, and in the week ended
Jan. 24 was at 74% of capacity.
While a half-point decline a
is

week

the

not

steel

it

lot

a

business

does

the

at

there is no upward thrust in
this trade weekly points out.

signify
moment,

of $100,000,

Oil & Gas Shares
J shares

in

The

weeks.

11

index

fell to

$6.96

as

contrasts with

$6.23

the like date

in

bread

cereal

short
poundings under government loan.

supply due

a

to heavy

quotations

cubic

scattered

Colorado

ing

ducing

business

in

as

men,

once

a

orders

encountered

state

limited

very

be

The

again, and historically there is a seasonal up¬
in the spring, declares "Steel," adding:

regarded as a month of high steel produc¬
encouraging signs are a modest pickup in employment

*'March has long been
Other

at farm

field

tractor' plants, continued

try."
American

Institute

Steel

and

Iron

that

announced

the

operating rate of steel companies having 96.1% of the steelmaking

73.8% of

capacity for the entire industry will be at an average of

capacity for the week beginning Jan. 25, 1954, equivalent to 1,760,ingots and steel for castings, as against 1,766,000 tons

tons of

<100

and

74.1%

week ago.
The industry's ingot production rate for weeks in 1954, is now
based on annual capacity of 124,330,410 tons as of Jan. 1, 1954.

For the like week a month ago the rate was 75.7% and produc¬

;

j

a

tion

1,766,000 tons. ..A

year ago

the actual weekly production was

placed at 2,240*000 tons and the operating rate was 99.4% of ca¬

Ail-Time Peak of Week Ago

The araount'of electric energy distributed by the electric light
and power industry for Jhe week

ended Saturday, Jan. 23, 1954,
estimated at 3,976,608,000 kwh., according to the Edison Elec¬

was

tric Institute.
This

represented a decline from the all-time high record in
16, 1954 when output reached 9,013,905,000

the week ended Jan.
kwh.

•

The

current

figure

-

This

below the
or

preceding week, but an
10.2% over the comparable 1953 week and

over

Car

1,359,587,000 kwh.

the like week in 1952.

Loadings Decline Below Previous Week and Year Ago
4 ' *

f

Loadings of
decreased

*

' ~

•

'

*

'%

.

,

-

*

freight for the week ended Jan. 16, 1954,

revenue

4.358 cars, or 0.7%

likewise

belo1^ the preceding week, accord¬

ing to the Association of American Railroads.

Loadings totaled 619,871 cars, a decrease of 85,146 cars,
12.1% below the corresponding 1953 week, and a decrease
127,789 cars or 17.1% below the corresponding 1952 week.

reflected

profit-taking

and

hedging,

114,148

(revised) in the previous week.
the weekly production was 112,955.

ago

Last
made
and

week,

27,441

1,259

estimated

Canadian

trucks last week,

in the preceding week
comparable 1953 week.

I

reported,

agency

country, as against
in the like 1953 week.

"Ward's"
and

the

this

in

Announce

and

7,359

plants
cars

Commercial and industrial

there

in

were

the

from

bales in the week ended Jan. 8,
son
to date to 5,804,600 bales.

bringing total entries for the
Loan

for the

repayments

.

sea¬

recent

high interest in

many

clearance

sales

some

sections, in other parts the heavy

snows

of

a

year

were

a

total

to

dollar

volume

fray & Hopwood (Resident Governor in charge of arrangementsK

of

retail

in

trade

the

period ended

New

estimated by Dun & Bradstreet,
1% above the level of a year ago.

Still quite popular

were

'office

year

trucks

previous

turned

and

out

and

cars

week

1,795

cars1

7.560

1,657

trucks

200 in

when

1939.

/

increased

the

been

wear.

casualties

173 occurred

were

or

in

Dun

consider1952

when

below the prewar level of 367

1

Failures

to

involving liabilities of $5,000 or more dipped-one
171, but continued well above the 150 of this size recorded

last year.

On the other hand, small casualties, those with liabili¬




East

Exchange,
a new

an¬

branch*

Orange, N. J.,

un¬

management of Kenneth*
who

will

funds.

Mr.

associated

heimer

buyers went ahead with their preparations for the

1953, department store sales registered
2% above the corresponding period of 1952.
year

Retail
6

to

7%

specialize ia
Heyman hay

with the

Oppen¬

organization for about ten

months.

a

trade

above

volume

in

New

York

the

past

an

Sidney Platto Joins
Bache Co. in Florida

ceremonies

and

sleet

and

rain

members of the

sales

in

New York
a

Platto,
week

increase of 9% (rereported from that of the similar week of 1953, while

vised)

was

for the four weeks ended Jan. 16, 1954, an

ported.

For the

year

1953,

that of the 1952 period.

a

an

increase of 4% was re¬

decrease of 1%

was

registered from

with more than 25 years
in commodity trad¬

with Bache &
handle a regular

ize in commodities
Co. but will also

affected

securities business.

.

...

With Reinholdt & Gardner

City for the weekly period ended Jan.

In the preceding week Jan. 9, 1954,

that Sidney

joined their staff. Mi*.

ing and in handling actual raw
commodities, will not only special¬

Presidential in¬

adversely

announce

of experience

advanced

(Special

decrease of 15% from the like period of last

year.

has

Platto

increase of

According to the Federal Reserve Board's index department
16, 1954, registered

New York Stock

1

Exchange,

sales volume.

store

Fla.—Bache 8o
Road Building*

Co.,

the like period a year ago.
A week ago, bad
home, while in the comparable period in

combination of televised broadcasts of the

Lincoln

MIAMI BEACH,

kept shoppers

auguration

slightly to 208

the preceding week,

the

mutual

selling season, the total dollar volume of wholesale trade in
was sustained at the increased level of the prior
period;
it was down moderately, however, from the level of a year earlier.
Department stores sales on a country-wide basis as taken
from the Federal Reserve Board's index, for the week ended Jan.
16, 1954, declined 8% below the level of the preceding week. In
the previous week, Jan. 9, 1954, an increase of 6%
(revised)
was reported from that of the similar week in 1953.
For the four
weeks ended Jan. 16, 1954, an increase of 4% was reported.
For

trucks

in

in

Heyman,

children's clothing, sportswear, and

Stock

opening of

nounces

der

&

York

New

of the*
of OpCo., members of the
head

Smilovici,

funds department

mutual

enheimer

the week

1953

failures

142, they held at 43%
of

the

Oppenheimer Branch;

Silvio

Regional estimates varied from the corresponding 1953 level by
the following percentages: New England and East —1 to —5;
Midwest 0 to —4; South 0 to +4; Southwest 4-1 to +5; Northwest
—2 to +2 and Pacific Coast —1 to 4-3.
The spirited
interest in Winter apparel began to weaken
noticeably in many sections the past week. The total spent last
week in apparel stores was slightly smaller than that of a year

many

Sept. 23-25, Minneapolis, Minn.s
Harry C. Piper, Jr., Piper, Jaf-j

was

Inc., to be from 3% below to

As

also

Associa¬

tion.).

hampered

the sales figures

surpass

ar¬

year ago.

Wednesday of last week

on

unable

of

i

current President of the

in recent weeks most merchants had larger sales

ago;

volume than

generally

charge

of arrangements. Mr. Frost is

*:

Retailers

in

May 12-14, Boston, Mass.: Hor¬
ace W. Frost, Tucker, Anthony &
Co. (Resident Governor in charge

began to

sales.

D. C.r

rangements).

slacken somewhat in many parts of the nation last week.
While
the inclement weather was considered as a stimulant by merchant's in

Exchange

1954 meetings as

15-17, Washington,

Governor

dent

season

Trade Volume Tapers Off in Latest Week
The

Feb.

Stock

of

James Parker Nolan, Folger, Nolan-W. B. Hibbs & Co., Inc. (Resi¬

through Jan. 8 were reported at 65,800 bales, leaving loans out¬
standing on 5,739,500 bales of 1953-crop cotton.

wet-weather

Slightly Upward

Although

reports.'
year ago

similar week

24,416

were

Meetings

follows:

Association

Sales last week totalled 223,300 bales, as against 100,week before, and 137,700 bales in the same week a
year
Loan entries continued in good volume and totalled 251,300

weather

Business Failures Trend

& Bradstreet, Inc.,
able higher than a

in

share¬

own

The Board of Governors of the*

800 the
ago.

the

against 8,843

and

in the week ended Jan. 21

:<,

there

24,953

A

its

to

sharply.

of

week,

with

Gas

and

Firms will hold

ago.

Automobile output for the latest week advanced above that
of the previous week, according to "Ward's Automotive
Reports."
The industry turned out an estimated 118,592 cars last

compared

completion of
Colorado Inter5-

on

financing.

foreign price-fixing, stim¬
ulated by firmer spot markets and some
improvement in demand
for print cloths.
Activity in the ten spot markets increased

or

Output Turns Upward in Latest Week

Gas

Exch. Firms Governor*

together

new

U. S. Auto

own.

holders.

against
Green coffee prices

resistance.

consumer

will

considering means of dis¬
tributing its holdings of Colorado

lower dt 55,581 bags,

were

which

Co.

shares of the total of
shares of Colorado Oil
Corp. common stock to

state is

consumer

Spot cotton prices continued to edge mildly upward the past

The

decrease of 37,897,000 kwh.
increase of 831,934,000 kwh.,

a

cocoa

week in response to domestic mill

"

.

represents

possibility of increased

pro¬

gas

four small oil wells.

outstanding

Oil

with fear of

pacity. The percentage figures for last year are based on annual
^capacity of 117,547,470 tons as of Jan. 1, 1953.

Electric Output Recedes from

market and the

work¬

wells,
working in¬

100%

a

Gas

this

57,005 a week earlier, and 77,117 a year ago.
also dipped sharply from the all-time
highs established last week.

•

—

The

V

London

Warehouse stocks of

expansion in the public utility

newly announced expansions in the automotive indus-

and

in the

has

January, 1952, by Colorado Inter¬

buying of hard wheat varieties

which

Gas

The company was organized in

and

selling

and

productive

as

terest in

buyer interest.

business

steel

Oil

or

well

as

into

of

gay

billion

primarily

royalty interests in 37

or

1,800,000
2,809,000

wave

located

Oklahoma, Nebraska, Kansas,
Utah, New Mexico and Wyoming.

by larger independent bakers in the latter part of the week. Cocoa
prices reversed their upward trend last week as the market ran
a

of 550

excess

has

in

were

some

feet,

Gas
natural

in
County, Kan., and Cimar¬
ron
County, Okla. As of Dec. lr.
1953
leasehold
and
royalty in¬
terests
covered
approximately
379,000 net acres located primarily

barely steady, reflecting poor demand
The United States Department of Agri¬
reported 431,000,000 bushels of 1953-crop wheat under
price support through Dec. 15, 1953. Daily average purchases of
grain and soybean futures on the Chicago Board of Trade last
week totalled about 48,800,000 bushels,
against 47,600,000 the pre¬
vious week and 51,800,000 in the corresponding week a year ago.
Activity in the domestic flour market declined last week as
many bakers and jobbers drew on their purchases of the previous
was

and

of

Morton

culture

There

Oil

reserves

estimated in

resistance.

tion.

•

Colorado
proven

for the increased offerings.

week.

the

acreage.

Corn prices displayed weakness under pressure of hedge sell¬
ing against heavy receipts in the cash market.

Oats

largely for develop¬
existing gas properties,,
acquisition and develop¬

of

ment of
producing oil and gay
properties and for acquiring lease¬
holds in prospective oil and
gay

im-

in

^

for

by some improvement
in domestic and export demand, the shipment of red wheat out of

Chicago, and the outlook for

proceeds from the offering,

ment

selling stemmed from profit-taking and long liquidation
following the recent prolonged upturn, as well as sharp declines

turn

.,

Net

will be used

influenced

was

by
Corp The stock
priced at $12.50 a share.

was

Commodity Price Index Eases in Latest Week

the

1,000,000"

Union Securities

a year ago, or a

daily wholesale commodity price index, compiled by Dun
& Bradstreet, Inc., turned slightly downward in the latest week.
The index closed at 275.11 on Jan. 19, as compared with 279.65 a
week previous, and with 279.58 on the corresponding date last year.
Grain price movements continued irregular with wheat ad¬
vancing moderately while feed grains generally were weak. Firm¬
ness

of

stock of Colo¬

group of approximately
125 investment
houses, headed

The current figure

rise of 11.7%.
The index represents the sum total of the price per pound of
31 foods in general use and its chief function is to show the
general trend of food prices at the wholesale level.
on

offering

common

dewriting

of Jan. 19 from the 31-

month peak of $7.03 recorded a week earlier.

of

rado Oil and Gas Corp. was mader
on Jan. 26
by a nation-wide ma-'

The wholesale food price index, compiled by Dun & Bradstreet, Inc., turned downward last week, marking the first decline

whole, are not discouraged, not pessimistic.
They expected their business to take this downward turn. The
future is not without hopeful signs. The seasonal factor is back

Steel

v

.Public

The

They

for.

excess

ago.

In 11 Weeks

Wholesale

Scheduled for Mild Drop This Week

are1! jhe

These

week

a

or

will account for

Steel Output

as

Wholesale Food Price Index Registers First Drop

waver¬

Ford Motor Co. It stated recent production cutbacks by Chrysler and some of the smaller companies
will reduce original January projections by nearly 52,000 cars.
Indications now, the agency observed, are that January car output
will come to about 476,000."
r*
V

number

same

Bankers Offer Colo,

i

^exceeded their toll of 23

4»

_

ST.

to The

Financial Chronicle)

LOUIS, Mo.

—

Charles ML

Early, Jr. has joined the staff of
Reinholdt & Gardner, 400 Locust
Street, members of the New York
Midwest Stock Exchanges.
*

and

50

!

(498)

The Commercial and
Financial Chronicle...

Joins
(Special

Joseph, Mellen

to The

Financial

CLEVELAND, Ohio

***

ity

Chronicle)

EATON

TOTAL

members

ciation

A; MUTUAL INVESTMENT FUND

NET

the

of

of

assets

Investment

NATIONAL

exceeded

$5,000,000,000,
assets

or

the

at

SERIES

the

the

of

end

Association

open-end

year

yesterday.

and

increased

since

year

FOLDER AND

1941,

in

every

Total

net

RESEARCH

CORPORATION

Established 1930

$215,000,000
Total

120 Broadway, New York 5, New

York

110

31,

mutual

1953

were

increase

an

Dec.

over

number

(before

of

assets
Dec.

on

$4,146,000,000,
SECURITIES &

of

31,

of

1952.

shareholders

eliminating duplications)

increased to 1,617,000 from 1,359,000

a

Sales

of

shares

new

amounted

during

to

$672,005,000,
$783,000,000
in
sales, after re¬

with

compared

while net
demptions, were $433,000,000 and
$587,000,000
in
the
respective
1952,

years.

sales

Net

than in

in

1953

higher

were

previous year except
was
pointed out that

any

It

1952.

shares

of

funds

mutual

at

deemable

re¬

time at the

any

are

op¬

tion of the holder.
Total

1928/

your
or

in

PHILADELPHIA

3, PA.

$237,-

with $242,000,Dividends paid from

1952.

income

investment dealer

share¬

to

exceeded

1953

000,000, compared
000

sales

funds

mately

the

of

the

on

affili¬

I.D.S.

totaled

1953

during

$137,137,216,

liminary

three

approxi¬

basis

of

pre¬

figures.

unaudited

for

1953

totaled

increased

$26,000,000,

by

distributions

while

gains

In

the

$21,-

totaled

sales

managed

of
by

dur¬

$116,063,814

1953.

Thus,
funds

1953

income

three

15.4%

the

of

and

Investors
holders

from

derived

$6,176,673

gains,

capital

from

shareholders

to

during

in

three

the

1953,

Mutual, Inc., paid its share¬
the
past
year
a
total

of

$26,498,275,

derived

was

Shareholders
their

capital

the

in

which

of

of

capital

HOWARD

and

in

the

the

number

a

earlier

year

—

1.75%

a

from

totaled
amount

as

the

of

ANNUAL

rein¬

Board

the
Directors of Group Se¬

of

to

report

search Department head, summed
on

the outlook

as

follows:

in

in
in

common

larger

"Events

months

recent

of

both

stock

the

and

the

in

of

1953

during

market

are

in

ASSETS

NET

of

three

mutual funds managed by Invest¬
ors

Diversified

creased

ing

Services, Inc., in¬
than $88,000,000 dur¬

more

Robert

1953,

Chairman

of

the

W.

Purcell,
of

Board

I.D.S.

reports.
Dec.

31,

1953,, combined

total net assets of the three funds,
Investors Mutual,
Inc., Investors

Stock

Fund, Inc., and Investors
Fund, Inc., were $582,-

Selective

997,850

compared

as

with

$494,-

904,147 at the close of 1952.
A total of

ed

shares

the

190,200 investors

in

close

of

the

three

1953,

an

°9,500 shareholders

own¬

funds

at

increase of

of

assets

U.

S.

Treasury

bonds

General Electric
Northern

General

Motors

Florida

Power

23/4S,

credit

Natural

3/48,

an

increase of

the 1952 year-end

Investors

ported
its

17.56%

over

Stock

Fund, Inc., re¬
that during the past year

assets

increased

$10,472,010,
over

its Dec.

recorded

a

Selective

Fund,

Inc.,

net assets increase dur¬

ing 1953 of $1,128,199, equivalent
to 9.33%.
ONE

The

combined

increase in total
net assets of the three funds dur¬
The

by

of

this

potential

trouble

period
have been successfully bridged by
large military expenditures; and
right now, it looks like another
n6t-so-good-but-still - very - good
year will be supported by military
expenditures.
"As

result, only about

a

of

so

this

some

four

pears

to

a

General

Gen.

credit

Electric

Motors

&

America;

Mutual,

me a

prospectus on Canadian

Investors

Stock

Investors

obligation please send

Co.,

& M.

Inc. $4

stocks

Montgomery Ward &

Natural

Gas

Selective

Fund.

Gains

in

have
time

exist.

period
The

effects

because
factor.

mation

again,

HOWARD

&

now

ap¬

business

ad¬

of

By

$24.16

$19,236,291.

ed to

amount¬
They represent¬

increase of 4.2%

an

of $13,460,979

sales

Stock

year

1953

was

$24.52'

with

compared

over gross

in 1952.

in

totaled

91c

in¬

share

a

compared with 89c paid in 1952.
At

the

year-end,

was

Fund

invested

stocks

94%

in

representing

industries.
stock

The

holdings

96

of

the

common

29

different

larger
in

common

were

the

'

•

oil

Interstate

Products

Goodyear
Merck

&

Tire

Gas

Colanese

million Wellington
criterion. A recent

$280

are

any

analysis made public by A. J. Wilkins, Vice-President, shows that
the average investment in Well¬

400.

by women
amounts to

their

in

own

Their
holdings amount to $109,687,This compares with an aver¬
$2,750.

investment of $1,890 and total
of $90,329,900 by men.
Another $60,725,500 of the Fund,
he added, is owned by women in

age

joint accounts with their husbands
or a male relative.
The remaining

Wellington's

total

of

institutionally owned.
shareholders, ac¬

The

women

located
and
represent a broad cross-section of
American life. They include busi¬

cording to the analysis, are
in

every

ness

Company.

state of the Union

women,

housewive^, doctors,

lawyers, teachers, etc.

Rubber Co.

"These

Co., Inc.

substantial

holdings

will

the

shown

Corporation of America.
& Power.

kins pointed

Elec.

out, "would indicate

that the modern American woman,

investment-minded.
he went
on,
"is
prompting the investment indus¬
try to aim more and more of its

MASSACHUSETTS Life Fund

re¬

is

increase in total net

as¬

This

ports

an

sets to

a

new

high of $16,148,335

Dec.

31, 1953, compared with
$15,953,403.at the end of 1952.
on

definitely

trend,"

sales material

at women."

shortened

be

rising

Fundamental Investors, Inc.

sharply

replacement

demand

Diversified Growth Stock Fund

stimulated.
"In short, passage of time—not
depth of business decline appears

Diversified Investment Fund

most

likely to be the basic means
of settling the stage for a new bull
net

assets

Manhattan Bond Fund, Inc.

made

Dec. 31, 1952

$512,116,358

$435,622,865

57,662,180

Inc

Fund, Inc

47,190,170

13,219,312

total

year

12,091,112

$494,904,147

number

of

shareholders

shown

in

the

are

made

each

fund

following table;

Stock Fund, Inc
Investors Selective Fund, Inc

Totals

:

$139,400

21,700

16^700

5,500

4,600

$190,200

AVAILABLE
YOUR

ON

THESE

LOCAL

MUTUAL

INVESTMENT

FUNDS

DEALER,

OR

Cleveland

Chicago
Dec. 31, 1952

$163,000

Inc

PROSPECTUSES

FROM

by

$160,700

of

Fund by women as
in our analysis," Mr. Wil-

Wellington

ELIMINATIONS

Virginia

Fund

$20,110,300

Co.

&

investmentholdings

net assets is

ADDITIONS

Gerber

more

holdings

Changes in common stock holdings'dur¬
ing the fourth quarter of 1953 included;

Colorado

the

of

total

investment

from

1953

ARE

minded than men if their

names

Dividends
come

WOMEN

ington

a

earlier.

1955 family for¬

$582,997,850

Mutual,

Investors




of

South¬

they might

as

the

Dec. 31, 1953

Investors

quarter

Gross sales for the year
ed

EATON

quarter

1952.

of

Corp

Co.;

in the like

$4,367,280

Co.

all types of consumers' dur¬
ables will be large so that the cap¬
ital goods industries will again be

Inc..

Fund,

the

during the past

c*r

of

1254.

2nd pfd.

conv.

Celanese

of:

of

crease

12/10/53.

1st A 5 V2s,

the

for

$5,662,046. an in¬
29.6% over gross sales
to

justments yet to be made, there¬
fore, should not develop as strong

Totals

Address

10/9/53.

acceptance not^s,

New Orleans, Tex.

Merck

amounted

notes,

fund

Investors
no

year

potentially trouble¬

year

following table shows the gains In total
during the calendar year 1953;

each

sales

Gross
ELIMINATIONS

,

Dec. 31. 1953

GENTLEMEN: At

stock.

common

in¬

sales of shares for
quarter and the

for

31,1952 assets.
Investors

supply conditions.
Significantly, No. 4 was reversed
this past year.
"By now, well over two years
money

cumulative

figure.

-^nuivplent to 22.19%

in

of 1953.

full year

1979.'

fourth

the

both

3%s, 1973.

Corp.

Corp.

in gross

creases

reported

FUND

FIDELITY

9/15/61.

notes, 7/6/54.
35/8S, 1973.

Gas

(automobiles, refrigerators, etc.), (11.7%); power and light (9.8%),
insurance (9.5%), chemical (7.0%)
(3)
the existence of excessive
and banking (6.9%) industries.
plant capacity, and (4)* somewhat

or

Investors Mutual,

Inc., the world's largest balanced
fund, increased $76,493,493 during
1953,

sizable amounts of relatively new
stocks of consumer-durable goods

the 160,-

over

700 reported at the end of 1952.

Net

(1) a declining rate of family for¬
mation, (2) personal ownership of

tighter

of

As

$296,673

of

sales

gross

less

the Associa¬ and possibly into 1955.
combined assets
"During the winter of 1951 we
of
$5,075,000,000,
and
1,832,000 began to note the fact that several
shareholders (before eliminating significant
population and eco¬
duplications),
at
the year-end, nomic conditions of a troublesome
and
distributed
$286,000,000
to nature would exist all through
the 1952-55 period. These included
security holders in 1953.
TOTAL

over

1952.

31,

included

largest gross sales of shares in its
history in 1953. Sales amounted to
$707,998 for an increase of 138%

ADDITIONS

busi¬

tion's report, had

I NEW YORK

the

included:

the

reported

FUND

PURITAN

net

types*

-

Company.

than continuing in the process of mak¬ Fund's 23rd Annual
Report shows
ing a major turn for the better.
net assets of $20,860,870, up from
assets of 32 closed"This is true even though we $17,015,223 at the beginning of
end investment companies were share the
opinion of most other the year. Shares outstanding total
$928,000,000 on Dec. 31, 1953, and economists, businessmen and 863.451
compared with 693,820 and
distributions in 1953 were $49,- bankers that the prospect of a
the number of shareholders 5.286
000,000.
gradual but moderate decline in compared with 4,123. Asset value
The
142
companies
of
both business will continue into 1954, per share on Dec.
$31,000,000

were

Total

STREET

May Department Stores Company,
and Panhandle Eastern Pipe Line

and
The

oil

investments

quarter

De¬

Federated

included

1953

partment Stores, Inc., and Thomp¬
son Products, Inc. Eliminated were
Fireman's
Fund
Insurance
Co.,

light

fourth

stocks added to
last quarter

common

Fund during the

of

1952.

in

WAll

New

the

holdings
(11.5%), power
(11.3%),
banking
(5.3%),
insurance
(4.7%),
and
chemical (3.7%) industries.
in

were

ern

that

suggest

stocks
stocks.

industrials, the largest
in oils, chemicals,
equipment and retail

trade.

stock

common

portion,

were

electrical

1953, the
paid in 1952.

preferred

60.2%

Common

strongly

holdings

ments and short-term notes, 17.3%
was
invested in corporate bonds,

curities, Inc., Harold X. Schreder,

his opinions

Among the

year-end,

was

stock

common

utilities constituted 17.5 h
entire
fund; industrials

stocks

in

was

and re¬

31.6% \ finance and insurance
5.6%; and railroads 1.6%.

were

7.8% of the
cash, U. S. Govern¬

At

Fund

$1.23

the

of

in¬

come

.8% in cash

and

the

In

decline

investment

of the

total investments; 42-9/
bonds
and
preferred

public

after adjustment for the 60c per
share distribution of realized prof¬
its in December.

Dividends

common

ceivables.

shareholders

$31.33 compared with $32.50

was

United Gas Corp.

ness

of

2,906,930

1953,

31,

in

were

20,359 compared with 18,067. A.sset
value per share on Dec.
31, 1953

amount

equivalent to 63.29%
as
1952
dividend
reinvestment
$15,860,542,
equivalent
to

the

HIS

up

with

compared

reached a new>
o64 000 com¬
at the end of

represented 56.3%

stocks

stocks,

253,985

28, 1954;

z:

Dec.

of

As

Balanced

$94,486,854 at the beginning of the
year. Shares outstanding total 3,-

Changes

funds

$19,049,635,

against
figures
61.69%.

high of more than
pared with 540,000
1952.

.

income

gains.

three

dividends

1953

$21,195,-

investment

from

from

$5,302,588

IN

past

.

Shares outstanding

fund's

and

during

amount

vested

the

..

14.7%
of which
investment

totaling $30,097,207,
was

paid

funds

687

only

sales;

Dividends

$23,920,534

and

to

the

In

redemptions

amounted

gross

of

funds

t,j,ree

therefore

I.D.S.

ing

redemptions)

minus

igross

sharps

during
*

same

Redemptions

Executive Vice-President and Re¬

distributions

in

holders

Prospectus from

years,

r

Gross
ated

were

earlier.

year

1953

FOUNDED

previous

over

closed.

Net

funds

NATIONAL

of all

073,402.

said.

PROSPECTUS

creases

Association

the

12-

three funds showed substantial in¬

aggregate

assets

have

funds

FREE INFORMATION

For the sixth straight year,

time Grady Clark, I.D.S. Vice-President
1953, the and General Sales Manager, dis¬

number of shareholders of mutual

WRITE FOR

equivalent to 17.80%.

first

announced

total

The

for

1953 amounted to $88,093,702,

ing

the month gross and net sales

and

110

mutual fund members exceeded

$4,000,000,000,

SECURITIES

of

142

Asso¬

Companies

total

net

of

National

lUdjUI"*

experienced

Fuhd's 22nd Annual Report shows
net assets of
$101,963,256, up from

By ROBERT R. RICH
THE

&

L-

*o*

have

declines
three years."

with

Joseph, Mellen & Miller, Inc.,
Union
Commerce Building.
Mr.
Palmer was formerly with Cun¬
ningham, Gunn & Carey, Inc.

viit

which

severe

Mutual Funds

Richard

—

D. Palmer has become associated

of

Thursday, January

Los

Ar.gclts

Hugh w. long and company

San Francisco

Incorporated

Westminster

at

Parser, Elizabeth 3, J^ew Jersey

Volume 179

5294...The CommeTcial and Financial Chronicle

Number

51

(499)

Continued from page 14

Bankers Offer Bonds

Public

We Can Increase Consumer

Utility Securities

Of Illinois Gas Firm
A nation-wide group

By OWEN ELY

Buying by 10%!
Bchool

facilities

teachers

and

shortage of
juvenile de¬
It will affect housing
well

as

linquency.

as

adding to the need for a high
of non-agricultural produc¬
tion and employment.

food consumption,
phases of family liv¬
It will force extensive con¬

and

many

ing.

struction

and

equipment of

new

classrooms and recreational facil¬
ities.

This

shift

lowered

resulted

not

in

nual

production—on the
total farm output in¬

contrary,
creased

1953

has

because

the rate of 2,700,000 per year and
the 4,000.000 children born in 1953

will

in

The

of

man

hour

1940

to

the

mark

history

our

with

about 212%

(3)

highest

point
increase

an

1952.

over

Change

in the education
people—with 80%
high school graduates in our

level

of

more

our

adult population

than in 1940.

The

rapid increase in the pro¬
portion of our population with a
high school or better education is

in

increase

great

the

in

1953

output

13

in the previous 30

as

in

could

demand

the

El

livestock-raising are major industries in the area
is also an important copper smelting and oil

Paso

is refined in the city of El Paso, and by 1956 Magma's
copper should come to El Paso for smelting.

The

produces about 98% of its power needs. Two
steam plants have a capability of 124,000 kw. The company burns
natural gas as fuel and last year had to pay higher prices for gas.

cre¬

;

company

Nevertheless

in

able

This amazing increase in

$2.11

to

$1.95

earn

the

in

months ended Dec.

12

share

a

on

corresponding

stock

common

the

its

previous

to industrial

(4) Change in obsolescence and
of

now

dwellings—with 67%
20 years old and 50%

our

over

30

over

old.

years

majority of our 48 million
dwellings were built when fam¬
ilies

had

incomes
the

covered

living,

that

bare

when

necessities

only

7%

of

were
high school - gradu¬
ates, when there were less than a
quarter as many passenger cars

few

home

comforts

or

suburban

of

the

of additional popula¬

changes

Major

in

purchasing

power, education, and
of
automobiles
and

have

taken

place

Since

years

in

1940.

ownership

changes superimposed on hous¬
ing conditions of a past genera¬
tion

creating

are

While

sures.

hidden

pres¬

construction in

new

tion

in

7,200,000

1.82

1.05

21-17

serv¬

1950

1.00

19-16

1949

6,300,000
5,900,000

1.74

with

1.68

0.90

17-13

5,400,000
4,800,000

1.48

0.80

13-11

1.35

0.80

13-11

4,200,000

1.13

4,100,000

0.79

3,900,000

0.80

3,700,000

0.64

the

1946

large cities

portion

the

Cities

of

rest

the

of
risen

is

ing of
ilies

beyond

homes for

new

that is

and

the

in

to

ards

dent

ent

levels

modern

education,

of

living

line

in

and

distribution
by income groups.

and

with

of

changed

pres¬

the

families

standards,

toward

trend

will

Pressure

family

vehicles—with 75%
than

1940

in

more

Production

and

roads,

on

number of vehicles in

centers

subscription

With

the

among

than

million

32

the

ing

Is

parking facilities, and city streets
this

accommodate

increase

in

motor

ously offers

Most of

few,

built for

not

for

obvi¬

broad need for

a

construction.
were

substantial

vehicles

a

new

motor age

in

And

example, have

we

pansion of our

sumer

two

present both

of

of

motor

pur

(6) Change in
a

own

million

to

our

car

a

con¬

cars—
no

car.

farm popula¬

drop of iy2

since 1940 and
14

sound

ex¬

could be

economy

million

net shift of about

non-farm

popula¬




$2.30

on

its

probable stock

a

a

major opportunity

a

major challenge to manage¬
The

ment.

task

that

is

financing

stock

end

of

i

of

work

for

of

ability

the

their

living

warrants.

(made last summer) to furnish 60% of the requirements

the City of Juarez

dump power as formerly.
After the proposed financing program

this

year,

Common

the

will

approximately

serve

commu¬

Northern Illinois Gas represented
about
11% of Edison's consoli¬
dated gross plant.
of

nues

12

the

months

sented

Operating reve¬
properties in the

gas

ended

July

31

repre¬

approximately 14% of Edi¬

son's total operating revenues for
the period. Pro forma net operat¬

ing income before Federal income
taxes, based on the assumption
that

Northern

been in

months

Illinois

existence
was

interest

Gas

had

through the 12

$11,998,944; maximum

charges

the bonds to

on

be issued will require

$2,100,000.

Elected Directors
George
Ress

and

have

Fall

been

River,

Mr.

Joseph
S.

elected

along

on

and progress,

in¬
on

on govern¬

revenues.

needed

to

1954-55 is

energize

this

pro

forma

directors

Mass.
is

Vice-President

a

Hanover

Bank

in

New

City; Mr. Ress is President

of E. A. Adams &

Son, Inc., jew¬

elers, and Mr. Robinson is Presi¬
Robinson &

dent

of

New York investment house,

a

a

Frederick

trustee

of

The

East

New

York

director of

9

American Equitable Insurance Co.
and

of

Bank

S.

and

a

other corporations.

100%

-

the prolonged drought in

a

minimum of 50,000,000 kwh.

a

year

to

(instead of buying power as previously).

Regarding the gas supply, El Paso Natural Gas hopes to have
increase cleared by the FPC, after which it is expected
to make a ten-year contract with El Paso Electric assuring the

its

rate

latter's fuel supply

for

a

decade.

"magic"

Effective

Feb.

1

Eliasberg

the firm

name

William

Needle

has

become

J. E. Bennett Adds to Staff
(Special

a

tet

&

Inc., 36 Wall Street,
Gersten, Kastor & Eliasberg, New York City, members of the
60 Wall Street, New York City, New York Stock Exchange.
The
members of the New York Stock company has an office in Monte
Exchange,
will
be changed
to Carlo/Monaco and is correspond¬
Gersten & Eliasberg.
Joseph H. ent of Bache & Co. with whom
Kastor
on

will

the

withdraw
same

date.

from

the

to The

Financial

W.

Lau

has become affiliated wtih James

Co.,

E. Bennett &
1

Co., Grain Exchange.

i

Joins George

K. Baum Co.

KANSAS CITY,

Buchanan

has

Mo.—Lester A.

become

Mr.

Needle

with George K. Baum

ated

as a

Baltimore Avenue.

was formerly
associ¬
registered representative.

Chronicle))

Neb.—Eldon

OMAHA,

director and Treasurer of De Pon¬

of

firm

of

Savings

36

Equity

New De Pontet Officer

To Be Gersten &

W.

Robinson

Manufacturing Co., of

Moran

The

York

Moran,

B.

Frederick

the Rio Grande watershed
the Bureau of Reclamation's Elephant Butte Dam has been un¬
able to generate sufficient power for its commitments in the last
three years. The company has a contract with the Federal agency
to

the agency

ment

Stock

Total——
Due

under which it now sells

growth

quire and operate Edison's gas
utility properties and two small
heating utility properties.
It is
expected
that ultimately
some
plan will be worked out for ttye
complete separation of the gas

7

Debentures

panded markets thus created will

private financing, and

the

capitalization at the end of 1954 is expected to be about as follows:
Mortgage Debt
48%

have

dustrial

Northern Illinois Gas Co., pres¬
ently an Edison subsidiary, was
organized last November to acr

Co.,

produc¬
As

influence

with firm power,

(across the Rio Grande)

instead of

ac¬

with productivity the new or ex¬

magical

ranging from 101.80% to 100.12%.

higher

standard of living advances

a

is

l-for-10
expected

replaced

Preferred Stock

and

purposes

months periods beginning Dec. 1,
1957 to 1977, inclusive, at prices

of

ernment

For

1954

edu¬

of

cating the American people to
cept

a

the temporary wartime structures.
A new
favorable factor is the five-year contract with the Mexican Govnow

redeemable

sinking fund, the bonds may
be redeemed annually during four

Wentworth

They

great detail.

Intensified selling in

vehicles.

54 million

spending units

tion—with

hidden

far from saturation

are

about 22 million still have
'

in

the

further

for

pressures

common

ginning at 105.50%.

have

present purchas¬
on

The

be

of the

underground wells. Of course these underground supplies will not
last forever, but a few good rains would help restore them. The
company's growth has been aided by a considerable amount of
defense installations in and around El Paso; permanent buildings

to

of consumption.

ownership

Only 60%

on

and

power

basis).

will

bonds

—

garages.
■

1954-55

homes

our

about

earn

five years of

Dynamic

in

Needed

These facts

ing

more

in

to

company's growth has been accomplished despite some
drought in the rural areas served. The farmers have
learned how to "live with" this condition, by pumping water from

Po¬

sumption

tive

1940, the
pressure
for action
to relieve
congestion will become intense.
Proper rebuilding of our roads,
to

Favor

million motor vehicles

56

company

despite the dilution of

The

Consumption

1940.

the road in 1954, or 75%

the

year

10, and the senior financing shortly thereafter. By
the company will probably have completed its
present construction program, and little financing should be nec¬
essary in 1955.

for

and

Energize the "Magic" of Con¬

standard
-

on

and

tentials

and

parking

year

expects
this

around March

Growth—But Intensified Sell¬

pres¬

streets, garages,
facilities that were
not adequate even for the lesser

sure

stock

preferred stock, and 76,000 shares of common stock (on

sub¬

vehicles

putting added

Womack

in 1954 will be relieved of excess profits
amounted to about 14 cents a share. Presi¬

increase.

living.

for

continue

shopping

supported

(5) Change in number of motor

typical growth company, its revenues having
a decade; share earnings have increased in
and the dividend rate and market price have
year since the stock was distributed to the

ing through the sale of $5 million mortgage bonds, $1.5 million

fam¬

the

every

The

for general purposes at prices be¬

As of July 31, 1953 the gas util¬
ity properties to be transferred to

Dec. 31, 1943).

bridge operations (property sold

The company

common

rapid shift reflects chang¬

living

ing

the

line with

in

more

but one,

almost

taxes, which last

United

a

oversub¬

other northern Illinois counties.

shopping habits, and the increas¬

replacing
remodeling of obsolete homes
bring the whole housing stand¬

or

seems

quickly

were

County outside Chicago and in 16

»

— — — — —

'

—

;

By the end of March the company expects to have borrowed
about $5 million from the banks, and later to do permanent financ¬

provid¬

new

—

Co.

nities and adjacent areas in Cook

_

1
—

3.38%,

Gas

changing

ing

huge and really unmeasurable

a

opportunity

•'

There

M

Gas

Jan.

450,000 customers in 232

—

than doubled in

public.

grew

politan Areas, increased only 9%.

last few years has been pro¬
viding approximately one million multiple car ownership
homes annually, this has just suburban families.
barely taken care of the growth
the number of families.

_

—

I

more

new

irt

__

El Paso

popula¬

States, ;outside of the 162 Metro¬

This

__

*1943

■"Excludes transit and

Central

and

__

—

Illinois

bonds, 3%% series
1, 1979.
The Northern
Illinois
Gas
Co.
bonds, offered
publicly at 102% and accrued in¬
terest,
yielding
approximately

due

northern Illinois. Northern Illinois

of Metro¬

suburban

the

__

1944

in the rest

as

Metropolitan Areas grew 46%

while

__

1947____.

every year

162

urban

the

1951
__

Northern

come

first mortgage

company's stock ownership. As an
electric utility primarily, Edison
supplies electric service in Chi¬
cago
and
a
large territory "in

24-21

growth

1940 arid 1953

Between

appliances

the last 13
These
rapid

of

rapid

22

-

1.20

politan Areas.

18%

tion.

areas

as

28

1.95

1945

country outside

con¬

veniences.
Tastes, incomes, edu¬
cation, and modern needs have so
changed that a pressure of obso¬
lescence can be far more impor¬
tant to new housing needs than
the pressure

in

the

Approx. Range

$1.30

8,100,000

compared

population

Dividends

Earnings

$2.11

1948

a

five times

Revenues

$9,000,000

1952

(7) Population shift to the sub¬
urbs—with

is

farm

remaining
have electric

88%

Following

1953

11% prewar.

of
our

the

ice, for example,

hardly

adults

and

of

families.

The

Year—

major shifts upward in the stand¬
ard
of
living
and
purchasing
power

was

Common Stock Record

has resulted in

areas

period.

company

compared with

stock

record:

-

age

31, the

common

FoxCo., on Jan. 27 underwrote
$60,000,000 of Commonwealth Edi¬
son Co. gas divisional lien
bonds
which, by assumption, will be¬

scribed.

office

new

ated.

for

pressure

was 2,387 kwh.,
companies which

usage

average)

farm
higher standards of living as well productivity along with a shift of
much qf the marginal production
as
resistance to any lowering of,
or
low: income farm population
standards.
accelerating

annual

average;

El Paso Natural Gas is now building a $4.5 mil¬
building and headquarters in the city. Standard Oil
Company are also expanding their refining operations
considerably. About 30% of all U. S. copper (based on a ten-year
lion

could

be

national

and Texas

increase production by 1/5 within
the next five years—if a 20% in¬
crease

is residential and rural, 31%

refining center.

as

years

agriculture

the

Cattle and
served.

It is estimated

1940.

American

38%

average. El Paso is one of the few
has not raised its electric rates.

per

times

approximate $9 million from sale of electricity, of

slightly above

from

years

1%

was

from 1910 to

that

farm

below

was

of

rapid progress in farm mechani¬
zation and in the increased yields
of
improved farming practices.

grow at

about

commercial, 15%
industrial, and 16% wholesale and miscellaneous. Average resi¬
dential and rural revenue per kwh. sold in 1953 was 2.6c, which

by 31% between 1940 and
output per man hour
59%

Grande

revenues

which

with

by

Electric

Paso

Rio

headed by
Corp., Halsey,

Boston

gan &

Company serves a 230-mile strip of land in
Valley with electricity, including the city of El
Paso, 18 other communities in Texas, and 22 in New Mexico. An¬
the

farm

increasing

Population continues to

El

level

First

Stuart & Co. Inc. and Glore,

El Paso Electric Company

tion

requirements,

The

affiliated

& Co., 1016

AREA

RESOURCES

BOOKLET

P. O. Bo* 899, Dept. K,

on

requert

Salt loke City 10, Utah

/

52

The Commercial and Financial Chronicle.. .Thursday, January

(500)

Continued

from

Dr. Clark's

4

page

"Flow Chart"

28, 1954

Embodying Mathematical Equations and Correlations

Contained in His "Model Building" System of the Economy.

"1954—Recession—
or

tive

powers.

only

other

which

from

the

Legisla¬
Switzerland is the

democratic

does

and

so,

country

I

am

very

not

to

easy

urement

statistical meas¬
analysis of

get

PRQBABU CONSEQUENCES

Washington has set

system

which

the

British

unites

the

execu¬

tive and legislative.
be

much

their

chance

more

problems

if

<ft

now

what I think
*

were

to

the

Let

me

summarize

danger signs.

The first point I want to make,
been raised by many news¬

It has

American

journals,

American

journalist

hostile.

The

any

who

knows

financial

aiiked

journalists

have

a.

a

hand

ence

to

to

me

indicate

stock

the

on

market

col¬

'

-

like,

you

critical

you

leave

can

1929

year

evidence

out

the

of

of. other

and

^declines which the American

has

omy

of

^course

I still

time goes on

as

with

Inventories

ratio

lower

a

ft of-non* storable

been
the

come

through

last

three

to much the

lesser
econ¬

in

the

decades,

same con-

•ciusion, which I shall try to put
before you.

of

In
inventions,
Gross

while sometimes labor-saving, are

equally

I

often

equipment-saving.

therefore

And

is

trend

any¬

Disposable

two

has

been lower than

time

during

except

for

the

the

last

ten

period

of

1937-38, which was one of violent
"•depression, and for the period of
1933-34

just

income

President

the

of

General

Corporation two days
if he is

looking two

ahead,

after

the

bank

col¬

biles

I

as

think

in

1954

going to give my reasons
In ascending order of
importance;
that is to say to give what I think
are
the smaller factors first and

factors

afterwards.

Now, for inventories, there is
IK)
disagreement among econo¬
statisticians

conclusion

fcave

risen

that

to

here

with

inventories

rather

three

years

is,

I

don't

be

high

as

ing

different

We

turn

realized

to

predicted quite
in

that

the

United

with

may

States

the

which

1926

when

lieights and they will have

to come
The reduction process will
he painful. And I would
add that
the longer trend of
business is
to make
inventory

requirements

as

methods

of

mer¬

chandising and communication
improve. So quite a lot of inven¬
tory liquidation will have to be
done.

I think

we are

all agreed

on

that.

quite

hours

equivalent

national

tantamount

to

to

product,
fall

a

worked,
fall

a

and

in

it

in

is

employ¬

ment.

is

I

tion
or a

serious is the ques¬
whether there is a
surplus,
more

danger of

a

surplus for fixed

plant and equipment.

Now, it is




United

States had

think

of

who

the

since he

there is

a

demand

wrote

that

all

is

the

what

action.
be

most

I

The

call

chain

triggered by

event,.* but

serious

once

the

are

it

is

that

more

Professor

re¬
may

it

or

that
I

predicting eight
unemployed, I

more

disassociated

school
wrote

of

in

published about two months

contributions

in

the

Statistics"

"Oxford

in

in 1948.

article

published

national

gross

product and inventories
I

did

not

time

apply
in

a

general way;

that

no

then

to

be

to say in

1948

depression

expected

and

continue.

There

minor

of

was,

recession

in

course,

1949,

but

matter

conference

a

Dr.

Nourse

1949.
Dr.

I

of

in

fact, I did have

Washington with
the

at

beginning

didn't realize until

Nourse's

memoirs

extraordinary

they

the

of

reserve

black

which

we

brain

our

with

the

there¬

can

which

the

I

1949

wrote
in

conflict

I

uncertain

lines—

probable

or

consequences.

artist

has

it

drawn

circle, and circle it is.
round and

round in

will

this

drop

reactions

in

of

what

an

going

was

about

think

and

in

On

the

be'

We

chain

terms

of

diagrams. It may
increasing or decreasing

an

for

is

not

or

all

at

the. economy

difficult

get into a
the one hand

to

beneficial spiral on

vicious spiral on the other.

a

We

will

start

certainties.

with

The

of

one

sales

the

volume

the U. S. is fed by four

August,
bullish

in

lines, four

I

the

of

I

of

mid-

goods,

and

that

that

point,

1949, he could take a
position; and I think he

stract

the

to

agree.

concrete

reasons

is

about

facts

to

ab¬

whether my

satisfactory

Equations and
Now I

or

not.

a

no

of
use

equations of this sort

Chicago.

designing

unless

you

Flow

can

test

"dth

other information except
external variables, and then

the

them by supplying them

no

with

tables

you

that al¬

the

worked

other
out

com¬

in

seeing that the equations of themselves can reproduce movements
of gross national
product..
,

half

a
dozen, whereas Dr. Klein
Michigan works with 21, and

.

The

Tinberg in Europe with
'

certain

a

durable

construction.

amount

together

additional amount

traction

come

with

a

for sub¬

arising from foreign dis¬

bursement

foreign

or

United

of

the

of

much—represents

very

exports

as

small

this

States

in

box

point

knows it is

I

want

to

makle,

gentlemen, is this, that any sys¬
of mathematical equations
correlations

involves,

a

factor

and

much

about

accumula¬
dollars.

the

for

I

sake

of

but
everybody
comparatively minor
need

we

Allowing
ports

as

I

we

There

not

it either

bother

way.

are

two

and

we

have

certainties.

two

posable

more

or

services,
which

goods

or

put in

quarrel
a

some

with

in¬

non-dis¬

go

direct

producer to consumer.

cannot

ex¬

The1 sales

either goods taken out of

ventories

of

for imports

have sales of U. S. goods.

again

lines,

from

tem
and

producer's
private

this

dinarily simple. The number of
mathematical equations involved
in my demonstration is only about

45.

back

put

Chart

field my system is quite extraor¬

Professor

In

come

completeness,
may assure

compared

in

Now

sales—not

tion

though this chart looks complex,
mon

only

imports, and those imports

in

on

can

consumption, or from gov¬
expenditures, from pur¬

chases

think, as a business audience,
prefer more precise examina¬

tion

from

sales

ernment

from

inclined

was

of

matter

I put it to him in

interview

private

thought

you

lesser

cycle

a

go

circle.

a

talk

Things

circles and flow

read

time.

business

which

equations

Friedman

He said there is

-

for

power

arrows—dotted

deal

spiral.' It

minor.
a

only*

arithmetic;

certainties and

laws

The

throughout I think I was on the
right side throughout that period
in saying it could be treated as
As

determined

are

the

some¬

thing like full employment would
the

which

by

was

as

serious

all,

Some of my factors are certain¬
ties

fore

that

at

not

at

certainties, arithmetical

are

are

over

them to postwar events except

method

am

Professor

the text of the article which

was

myself

extremely severe test. I was
imposed upon by my good friend,

likely to agree, and when I

kgo, although he expressed him-

In

errors.

an

I

saw

of

movement

are

certainties.

a,

1

try and
clearly in a
and

were

working was actually
written and completed about the
middle of 1948, and I did subject
all the equations and methods to

quite small

Woytinsky

in

for™

deal

this

I

moment. The Chairman asked
how
were

produce

recognizable

they

with

matters

to

probabilities

or

other words,

which I

proceeds to go on of its own accord
and until some beneficial
factor
comes in to
stop it. I will

explain

to

traae,

have

we

equations

certain and immediate factors.

come

of

started

the

but

of pub¬

course

external

able

were

distorted

the

and

of the

many

which

between him and the President

The

chain

1940s

egregious

"Econometrica" in

reaction

some

the

May of
1945, discountenancing the work
a certain
Steingel who was pre¬
paring plans for a great United
States depression which was to

any

factor

but

finance

they

he

of

housing
kinds, and

The Chain Reaction
But

lic

ever,

that

Bulletin

for

plenty of others—I cannot see
collapse like that of 1929-33.

formation

agree
with my opponent,
degree of uncertainty, some
working on-probabilities.
How¬
some

at

some

which

think

and construction of all
for this reason—I think there

a
fashion.
If you turn up the
original article in "Econometrica,"
you will find, using no ot^r in¬

quite

on

from

tremendous reservoir of

additional

through

specifically

construc¬

I

after

any rate

million

Construction has been very,
seriously slowed down by
once

all

making

housing starts were almost in the
neighborhood of over a million a

down,

flying colors, but at

particular, just about the end of
the war, when so
many American
economists were

labor force and less than half the
real gross product she has
now,

this high cost. And
tion costs
come

able

period 1922 to 1933.

floor

only about three-quarters

far

Now,

the

goods and
services

This very severe test they were
to survive, I won't say with

I

me,

are

substantial drop

a

average

is

gross

possibly

can

conclusions

while the employable labor force
is continually
rising. And he also

think that plant and equipment is

nobody

differently from

our

employment

construction.

Now, while the statisticians

on

r,

close together. He predicted a fall
in employment of about a million.
That
is
a
fall
in

opinion.

next

"•

~

self rather

I

bit further ahead, and I am
willing to agree with you that the
upward trend has resumed, we
a

%

,

a

have

expenditure

profits & capital

y///yss/s////s/Av'w-'^

or

in 1953.

Government

income

Similar payments

I think you

were

on

and

pension

will give a very different forecast
than that. But once you are look¬

abnormal

<down.

•steadily less

Consumption

^

Social services

Now,

he

will

higher than they

very

am

the

f|

Taxes

will find it hard to get statisticians
to agree that the sales of automo¬

I

and

0.

Motors

ago.

or

think he is mistaken.

year.

mists

before tax

labor
income

lapse.

larger

construction

Spendable

three years ago.

or

over-supplied

>ears,

before tax 1

revenues

seven

even

Costs of

1

Profits

a

supply now than they
or eight years ago, or

were

construction

receivable)

categorical judg¬
ment, but at any rate plant and
equipment are much more in an
abundant

struction

expected.

give, I don't think
give,

can

Stock of

Erivate

revenues

(including accounts

downward

some

be

to

can't

body

claim

Recessive Factors

goods

goods

space.
has been
Now, there are four or five fac¬
raising his sights and
The whole trouble in construction
gotten away from me again, since
tors, each small in themselves but1
is the excessively high construc¬
I prepared
which combined may have
my statement in No¬
quite tion costsi The
cost of construc¬
a
vember; and while I have raised
strong recessive effect. Now, in
tion, in comparison with the rest
the first place, although it
my sights in perhaps a slight de¬
may
of the cost of
living has risen by
ceem a bit odd to
gree, still he has gone ahead much
say so, money is
no
less than 60%, and indeed it
faster than I have, and we are still
<^rtainly scarce. It seems curious
is only in this
way that we can
to say that with $205 billion of it
quite a distance apart.
account for the comparatively low
it is scarce, but don't
Professor Woytinsky has made
forget the volume of
construction now as
amount of money must be
some
comments
on
methods
of
weighed
compared with such a high gross
against the labor force which it
analysis, and I don't want to make
national product.
has
to
the discussion too much one of
employ, and the wages
The number of housing starts is
which that labor has to be paid.
personalities, but I must claim the
in the neighborhood of a million
.Although money has turned up
right to disassociate myself com¬
Some people are quite pletely from the rash
«juite sharply since the summer, a year.
and unfor¬
the money supply
pleased with that figure, but in tunate economists he
during the redescribes

at .any

durable

plant and equipment to sales.
other words, technical

abundant,

•cent months

producers'

producers'
durable goods

Sales of services

that
industry tends to

think most automobile statisticians

^evidence; and just by assembling
the

rather strongly

Purchasesof

similar taxes

and

vestment.

if

out

brought

have

And at this point we come up
against the announcement by the

on

But

statisticians

her¬

people's decision to spend
consumption or on in¬

on

some

was

the other will only have
and not a major influ¬

on

money

*he

which

Stock of

/-

^

depression

seem

minor

from inventory

Excises ft

that the stock market boom

lapse

Withdrawals

industry is now not tight
to what it was in
the 1920s, but there is a tendency
compared

as

US. goods

General Motors' Prognostication

therefore, putting before you
conclusion, namely, that the

one

equip¬

and

fact

by a stock market collapse.

do

plant

the

aware

I am,

facts

Sales of

to turnover it appears

fixed

of

being

that the 1932

alded

the

whether I wasn't unfair

me

not

who don't have

ones

the benefit of the doubt.

me

Many
in

that

personally has invariably been

given

relation

that

critics, in the comments in

paper

me

in

interesting work afoot, and

operate

remarks.

are

or¬

than my share

down

come

solving

way.

more

preliminary

of

they

ganized the other
I have had

There would

OI$Cft)8ei> 8Y fQUATtON$

trend of sales

in

ment of

are

on

closely

*/

'x•

US. imports

«t~

estimate of

Commerce

and Africa and British Guinea
so

..

CON$5dUgNC?5

effects

US, exports

The Department of

some

molded

CURTAIN

Gradual

Business

this problem.

to see that many of the
ifcewly established systems of par¬
liamentary government in Asia
sorry

■effects

,

year's sales

economic

or

Immediate

of dollars

retention

FYevious

"Depression"—Colin Clark
Executive

the

*

Foreign disbursement

Depression-Recovery?"

that.

We

We

black line- because, sales
have

some

probable

ef-

Volume 179

5294

Number

The Commercial and Financial Chronicle

...

*

(501)

feet

the businessman's estimate

on

of the future trend of sales.
I am

the

asking

to explore

you now

minds
thing to do.
of the principal fac¬
of

is not

I think two

your

an

interior

which

easy

own

inevitably taken into account

tors

first, how are current sales
going? And secondly, how were
sales this time last year?
are

I

to having con¬
rather simplified equa¬

guilty

plead

structed

a

tion at this point for the

business¬
into

to take those two factors

man

but I think I can claim
have taken the two most

account,
that

I

producer's durable
goods
is
a
slightly depressing factor on the
orders

for

new

able

producer's dur¬
the case of con¬

goods. In
struction, as I pointed out, the
extremely high costs of construc¬
tion are quite a serious factor af¬
fecting the orders for new pri¬
vate

construction.

traveled

have

We

now

right around the circle.

quarter of the
The

happening, I do contend that we
have succeeded in picking out the
most important points in what is
vulgarly called the vicious circle.

as

a

turning

your

alternative

next

is

Continued from page 4

that

legislators will not be will¬

"Recovery"—W. S. Woytinsky

ing to make specific reductions of
tax rates apart from some excise
reductions to which many of them

already
same

committed, but at the

are

time

and

the

as

if

are

fall

to

revenues

Government
deficit may

e .ro°f of the garage.

before

Vi?16 additional therefore
Wil1 eiaPse»
the

power

win

purchasing

trickle

in^the

mar-

When enough of the excisekeeping penmes saved have accumulated,

while

expenditure

build itself

yrPneX Ci°theS *or the ch»dren

goes

anticipated

they

or
a

recession

revenues fall,
willing to pursue a
policy of inactivity and allow the
on

Although I should be far from
claiming to have a precise de¬
scription of everything that is

year

point.

the
to the

up,

up

5»

required level.

them

nnr%rn goods. Thusspend
begin t0 it is
other
on

p.robable that the repeal of
tax

thi
the

excise

concerns, prices will rise and the
real wages
of workers will go
down. The extent of the loss to
workers will depend on the selec¬
tion of the goods to be
destroyed
or

given away. As in the event of

Mr.

Clark's

will

tax

demand

reform,

and

workersv

obtain

wage

raises, and the rise in production
costs will
probably make export

liquors and cig¬ of United States goods increas¬
During the worst months, which
arettes will result in an increased
ingly difficult.
my opinion
will come more
To sum up, both Colin
strongly as I can is that if you likely in August and September
decides
the
Clark's
will not bring a recovery, howonce
start a movement • running rather than the second quarter, if
programs belong to the class of
placing of orders? Here you have
The increase in demand will
I am correct the deficit will have
shock treatment with
to make a more elaborate exam¬ round and round that circle—and
drugs which,
probably cause a rise of prices of
takes
a
few
months
to
get to be running at an annual rate
may be harmful or harmless to
ination of your own mind, and it
of over $20 billion per annum.
the germs, but will not fail to
are
not careful
there even the statistician takes around—if you
Wh
and result in
you may start a spiral movement It probably will not have to run
more factors into account.
.COst of living. Workers cripple the patient.
will claim a raise, and those who
which goes round and round the for a whole year (it is a high
are covered
The Fallacy of Mathematical
by a collective agree¬
;
Sales and the Monetary Position
circle
with
increasing rapidity, rate), but for some part of the
ment with an escalator clause will
Models
year the seasonally corrected an¬
doing more and more harm each
I cannot claim that I have a
satisfied, while adjustSince programs similar to those
time it goes round.
nual rate of deficit will have to
perfect equation by any means
run
at about that figure.
Those mfnf
but I am working on an equation
Wage rates Witt advanced by Mr. Clark are not
meet with resistance on the part
Spirals Controllable
are the conclusions which I have
altogether new for the American
that was set out in this "Econo°
At the same time I do not want drawn to which I will adhere un¬
public, it is worth while to explore
metrica" text.
It has only been
will catch up with the wageof liv¬
cost
to convey the fatalistic impression
their theoretical background. Mrtil they can be shown to be in¬
slightly revised since; and it is
ing only after a spell of labor unthat such spirals are uncontrol¬
Clark's presence here allows me
correct.
that business, in deciding whether
lable. They can be controlled, but
I am well aware that it is not
or not to place orders, takes into
nrnrt.,^losses in to discuss this matter without ex¬

into

factors

significant

account.

The point I do want to make as

point: What
businessman in his

Now this is the real

on

in

wmanotfKr-milk and meat This
?rticles

b.fbe^

°L0ther

^tes

memP>l0Jers' Thus'

first

account

the

not only

all

of

is only
common sense—but also the pres¬
ent level of inventories, for that
has a direct effect on the willing¬
to

ness

sales—and

of

trend

that

The present

place orders.

level of sales of course also comes

Lastly, you

sales.

of

trend

the

operate the system.

-whether

decision

the

put,

enters

supply

money

into and helps

Simply

can¬

the point at

and this is

-which

It
of

if you have no

place orders

xmoney,

that.

estimate

through

in

comes

not

concluded

have

I

an,

as

to

not you can afford to

or

order depends on the
maonetary position.
Now we are getting to the more
iplace

an

circle,

the

of

part

interesting

revenue, in which I have
included
accounts
receivable.

{gross

«Gross

depends on orders
and non-dis¬

revenue

^nd sales of services

posable goods. Now what I call
■disposable revenue is just gross
revenue after paying excises and
similar taxes.
That is arithmeti¬

again.

cal certainty once

ol

^Uncertainty

Income

Now how these

be

will

enues

disposable rev¬

between

profits and labor income is again
;a
matter
of probability
rather
"than

it

longer

leave it the harder

you

to check

is

it, it is like

fire.

a

If you ask how can such move¬
ments be controlled the

the

in

answer

yarious boxes which

is

are

arranged around the edge of the
circle.

The five boxes

of

edge

the

circle

on

the low

starting

with

Money Supply" and ending with
Government
Expenditures" are
all

switches

Washington,
Washington
word

in

controllable

that
is
can
have

Federal

from

assuming
the

Reserve

last

Board

policy. They may or may not be
expedient to be so controlled, but
they are so set up.
The

other boxes

cannot

alter:

things

are

foreign

certainty, although in these

management /as

of

lable.

to

me

plunge

construction costs

high. The
best information I can get from
the experts concerned is that the
unions, the employers, and the
are so

authorities who

municipal

regu¬

late construction all have to carry
a

share of the blame for the low

costs

that
for

present 'time.

a

Once

down there is

come

no

those

doubt

tremendous latent demand

is going

building

new

to

be

supply

of

released.

-will continue to do so.

and some of

Now

and also social service

money

labor income

The

ithe profits,

payments combine to forrri spend¬
able
income.
Now
here again
3iow much of the spendable in¬
come

in fact will be spent

is also

undoubtedly

it is

problematical;

increased

an

will undoubtedly mitigate

the

recessionary trend.

in

the

"Manchester

articles,

I

remission

as

my

A 10% increase in the money sup¬

ply, which is quite

lar taxes but it is not

tion, would have the

idea.

fair

a

erally speaking
income

in

with any change
and

tax

tion about half

ing and the other
saving.

Again this is

similar taxa¬

will affect spend¬

on

obvious common

producer's

durable

{goods.
When

I

was

dealing with

in¬

point out—al¬
though it is quite clear—the level
ventory I forgot to

inventory
depends on new
on the
one hand and on

of

orders

-withdrawals

on

the other.

In the

the stock of producer's
cdurable goods is gradually built
.-same

way

of past years
gradually depleted by de¬
pression of wear -and tear; the

mp

by the activities

;and

.•same

" with

•gradually

$2 V2

a

billion

per

mission of excises.
of

course

must

big proposi¬

be

construction:;" - The

increasing' stock




effect

same

annum

re¬

This remission
a

genuine

re¬

mission and not accompanied by a

Govern¬

ment

that these profits are some
of the principal factors determin¬
ing how much will be spent on
construction and how much will
spent

as

a

half will affect corresponding cutback of

sense,

Ibe

As I said
Guardian"

faith on tax
being most effective.

pin

affected by income

tax and simi¬
hard to get
We know that gen¬

of

thing

advocate

you

to

can

cannot

I

taxes.

excises alone

doing
cut

but I

every¬

out

follow

relieved

the

Professor

householder

ing taxes off his beer
fur coat

he would

the

spend

think every

or

production and employment.
sult of the
our

you

by tak¬

?os?ible that

to

will

go

down.

tnat

a

and

I

sincerely

equilibrium

new

reached

on

ctar1} S

a

level

will

be

slightly lower

experiment
optimistic forecast
course, on the assumption

meanwhile

a

new

not

sell

us

de¬

program

in a way
signed to check the effects of his
which would restore employment
tax reform.
profitably

very

in

automobile

without

and

other

and

forcing

the

up

trades

cost

of

living.

.This reasoning taxes necessarily
does not imply
that each cut in
leads to economic troubles.

duction of selected taxes is

Not Recommending Loans

After

A
a

re¬

part

having described the dan¬

signs in

ger

the

Mr. Clark

omy,

hope first

Lbefore

money
profitably.
I
f
rests, of
householder knows he that Colin
Clark will

would be able to spend the money

do

I

.forecast that losses will be

substantial

his wife's

not be able

It is

posing myself to the reproach of
as a re¬ fighting a straw man.

the cost of labor

rise in

exports

excise

Woytinsky's reasoning that if

article

American

econ¬

confessed

in

the

in

hie

"Manchester

Guardian" that his reasoning "falls*
within the description of

dull, if
platitudinous, financial
journalism," but, despite this con¬

not indeed

fession, he stressed the point that
it

is

"a verbal

nonmathemati-

or

cal expression of

series of equa¬
tions which suffice to predict
the movements
of the busines»
a

.

„

.

cycle."
What

are

these equations?

Both

the long-run growth and the
rent

ups

and

downs

in

cur¬

business

.eacb

the

expenditure. In other words,
unpleasant medicine which I

recommend as feasible is

deficit, and I

am

well

a

budget
that

aware

American

legislators for
perfectly honorable reasons are
very much opposed to the idea of
allowing such a deficit. However,
many

if

sign
a
in the
foreigner to economic
system may do more
suggest anything of that sort, and harm than
good.
particularly while the political
and
diplomatic situation
is so
claiJ's alternate program is

entirely wrong for

Now it is not for

the

labor

speaking labor
its getting close to 80% of the dis¬
posable net product and probably

strongly

on

Pro&ram of struggle conditions are reflected in statis¬
Professor
Woytinsky
gave
a
against depression. The question
ments!, previous year's sales, or
tics related to production and con¬
rather condensed account of what
stock of producer's durable goods.
is, however, what should be the
I had said about the possibility of
sumption, sales, prices and wages*
Unless
amount, timing and distribution
you
organize an earth¬
employment and hours of work*
legislating to make loans abroad of tax cuts.
My contention is only
quake or something like that you
imports and exports, changes in
but I want to make it clear that
tnat a massive remission of poorlv
cannot
alter
those.
So
broadly
I am not making any such posi¬
inventories, investment, bank de¬
speaking, those five items, plus tive recommendation. I discuss it selected taxes at a time when
posits, money in circulation, and
prices are stable and there is no
construction
costs, are control¬ as a
so forth.
The "Survey of Current
possibility, but it would be
of
deflationary spiral

with a very high
productivity and extremely high
-degree of probability J how- they
costs of the construction industry
^are
divided.
If you include the
at
income, generally

reductions

disburse¬

•days we know

salaries

Avoidable

possible to concentrate such large

we

into the very delicate issue of why

Disposition

divided

the

the

legislators

cutback

Gov¬

a

not much better.

delicate.
In

my

I

article

"Manchester Guardian"
said,* and

sincerely, that

a

meant

very

lot of American

From the stand¬

point of the immediate effect

Business" publishes

There

series
also

approximately
every
month.

numerous

quar¬

be

used for business

can

analysis.

on

The Actual Interrelation of

business and employment in this
country, it is irrelevant what hap¬
pens to $20 billion worth of goods

j

Economic Statistics

Practically all the series are in¬
legislators were under very heavy
purchased in the United States by terrelated, to different degrees.
pressure. The pressures to which
countries accepting its long-term, For
example, statistics of con¬
a Congressman is submitted from
low-interest loans. They may use
sumption/production, sales, inven¬
all sides are very, very serious
American capital goods to develop tories
and
income
and
money
and if he decides in his best con¬
their productive forces, or distrib¬
supply tend to increase with the
science that it is more to the point
ute
American foodstuffs among economic'
growth of the nation;
to distribute
the available eco¬
the needy, or stockpile them, or almost all
figures related to in¬
nomic resources among American
dump into the ocean. The imme¬ dustrial production and employ¬
taxpayers than among grateful or
diate impact of all these actions ment
reflect the short-run ups
ungrateful beneficiaries in other on
business in the United States and downs in business
conditions;
countries he is entirely entitled to
will be precisely the same as if
many are subject to seasonal fluc¬
do so.
All I want to say at this
the government had itself dumped tuations.
There is,
therefore, a
stage is that if Congress for some
these goods. The important point
vague similarity between the
good reason of its own decides to
is that the amount of goods avail¬ movement of series of
the same
make any distribution abroad I
able
for
domestic
consumption class or between the curves which
think it will have economically
will be curtailed by $20 billion,
represent their movement.
This
almostly exactly the same effect
bince the reduced supply will con¬
similarity may be strengthened by
as it would have if a similar dis¬
front an undiminished purchasing an
appropriate choice of the units
tribution were made to American
power of consumers and business of
measurement
and
the
point
taxpayers bv remitting excises.
from which changes are measured*
I conclude with the point that system and the American people
and
by replacing original data
prompt action is much the most I should say that any long period with ratios or
moving averages,
valuable thing that can be done depression is out of the question
excluding the trend component
and if Congress cuts expenditures, If you are taking a view two or
and making allowances for sea¬
forces up tax rates, refuses tax three
years
ahead
as
General sonal
,

remissions,
latter

the

situation

by

the

of the year may get
control; whereas, really

part

out <of

prompt action may put it within
few months, within control. The
intermediate course, letting tax

a

Motors
be very

are

then I

variations.

think you

optimistic. What I do

can
see

revenues

melt

The

ries

quite

fied to

make that.

From what I

political

se¬

also be expressed mathe¬

as

the depression which caused it.

a

1%

way,

do know of the American

similarity between two

can

sharp short period de¬
matically. It is found, for exam¬
pression and a recovery which, if
ple, that physicians' fees in the
wisely handled, may be as rapid United States
equal approximately
is

As I said at the beginning, such
the deficits
build up, if you ask me to predict an event might do
tremendous
tax rates, then I should say a seri¬
harm
to
American
as closely as I can what will hap¬
prestige in
ous depression is quite inevitable.
pen,
that will probably cause other countries, and I do sincerely
I think the best policy would things to run down fairly rapidly hope that when your legislators
be for the legislators to advance until the third quarter of the year come to face their responsibilities
boldly in front of the trouble and and then start a slow upturn.
they will not earn for themselves
to make the tax remissions imme¬
However, you are asking me at that wretched epitaph Sir Winston
diately, and if they did that the this point to make not an economic Churchill pronounced on his un¬
recession would be cured in a few
but a political prediction, and I fortunate predecessor for the failmonths and I would be in a posi¬ am of all of you the least quali¬

with Professor Woy¬
tinsky in putting even the second

are

terly and weekly series that

•urem°/n tbe Norwegian campaign

in1940; that his action came too
late and too little."
-

of the national income.

If

ernment expenditures or increase

tion to agree

such

2,000

you

have

relationships

enough

time

thousands

establish

can

of

among

you

such

the series in

the "Survey of Current Business,**
calculate one value from the

and

other.
fit

If you

cannot

satisfactorily,

to

Colin Clark

or

make

you

to

them

may

write

me,

and

we

shall

advise you how to improve
the fit. In most Cases our advice

will be identical.
;

-

There is, how-

Continued

on

page

54

54

(502)

The Commercial and Financial Chronicle...
Thursday, January 28, 1954

Continued

from

with

gest that
expressed

same

statistical value be
function of two or tions, he has discovered four pos¬
values (the trade name sible originating causes of depres¬
is

this method

"multiple

sion:

cor¬

a

decline in exports; a decline

contrary, in government expenditures; an
shall warn you never to do such increase in taxation
without an
a
thing: this procedure is defen¬ increase in government expendi¬
sible only when the data used for tures; and an attempt to go on
I,

relation").

on

the

calculating unknown values are collecting the same amount of
entirely independent of each other. taxation when business activity
The formula becomes meaningless and income are declining.
Simi¬
and misleading when the data are larly, the prophets of the postwar
interrelated as are practically all depression, looking at their mod¬
economic statistics.
After

els, decided that depressions result

interrelationships
statistical

different
been

established,

have

one can

describe

the operation of the whole econ¬

system

omy

by

This

of equations.
means that certain

simply

a

national

income

and

oversaving.

Actually, however, there

may

thousands of

depres¬

sion

such

as

causes

of

excessive

a

real

peak (average for JuneAugust) declined from 65.1 mil¬

as

business

our

lion in 1950 to 64.5 million in 1951
and later increased to 64.6 mil¬
lion in 1952 and to 64.7 million in

statistics.

1953.

rate)

while

$372 billion (at an annual
in the second quarter of
1953 to $365 billion in the fourth
quarter.
It is noteworthy, how¬

be

estate

that the decline

ever,

after

came

quarter.
half

The
the

of

in

loss

the

crease

in the

Personal

the

Civilian

incomes

for
in

'

it

solute and relative loss, but it is
fairly certain that the setback did
not wipe out the growth of our
economy in the early part of the
year.
Thus, despite considerable

up

de¬

losses in

on

has

durable

tions)

manufactures

the

—

1953

(including
level

of

higher

was

than

at

the

of

muni¬

economic

the end

at

of

end

1952.

high level' This development can be repre¬
small seasonal sented by the movement of gross

a

very

comparatively
downs.
Nonagricultural

and

in

goods

activities
of

been

lines of production

some

—especially

national

-

employment reached

its

product.

If

the first quarter of

all-time

its value

in

1953 is taken

1953,

peak in August 1953 (56.1 million)

than

income

in

1953

was

ap¬

by 1 million by Oc¬
precisely the same sea¬

sonal decline

as

in 1952 and

Unemployment
level

plateau ap¬
proximately 4% above the level of
the preceding year.
on

it advanced to 102.5 in the second

tober—

proximately $1 billion below the
1952
level.
Nonagricultural in¬
levelled off

for

and declined

August-December

come

with
ups

1952.
Farm

was

quarter

employment

maintained

remained

$9 billion higher

January

way

spring.

average,

last

is

proving this hypothesis. Cur¬
rently, the total labor force is
slightly inflated, in relation to its
long-run trend.

may

practically unchanged from JuneJuly to the end of 1953. It was,
on

in

the

It

latter part of 1953 are
urtdeniablf.
is difficult to measure the ab¬

It

of

second

be due at
least in part, to this excessive in¬
year

size

in

ined.
The slowing down of eco¬
nomic expansion and the contrac¬
of economic activities in the

tion

possible that in the
latter part of 1953 some
marginal
workers were squeezed out of the
labor force, but there is no

spectacular $10 billion jump (at
annual
rate) in the
second

a

Its

clined.

an

among automatically from the growth in

series

try to read
signs of a
they are re¬

from

trap

the American prophets of doom
in the 1940's. Observing his equa¬
as

a

1954,

in

sonal

now

danger

Gross national product declined

as a

three other
for

Clark fell into the

Mr.

important exception.
Mr. Clark will sug¬

one

ever,

in

flected

"Recovery"—W. S. Woytinsky

the

you

slump

Eventually,

1 shall

records.

53

page

a

as

quarter
the

1951.

below

was

considered

basis of comparison

the

tors

characteristic

fell

and

fourth

downs

in

various

deviated

pattern^

back

quarter.

=100,

as

101

to

The

ups

economic

from

this

in

and
sec¬

simple

Some industries reached

of
a
full-employment economy
by
(2.5 to 3 million). It was partic¬ the peak in March, others in June,
disorganization of the financial
a
few in August, but, all in all,
ularly low in August 1953 but in¬
Personal consumption expendi¬
tions are described as mathemati¬ system; a financial panic; indus¬
creased and returned to the 1951: economic activities were expand¬
tures did not decline in the third
trial unrest; a false fiscal
cal functions of other characteris¬
policy;
level in the latter part of the year. • ing until the middle of the year
tics. For example, one can express sudden changes in money policy; quarter of 1953 and hardly went .- Its
further growth is anticipated. ' and contracting in its second half.
down in the fourth quarter.
At
rapid geographic shifts of indus¬
The
downward
savings and
employment
as
a
movement
was
the end of 1953 they were prob¬
Employment in nonagricultural
function of national income, or tries; monetary inflation followed
very slow, it did not gain momen¬
establishments
shows
mixed
by a deflation; unsettled political ably 3% higher than in 1952.
national income as a function of
tum, and by the end of the year
changes. Since August 1953, em¬
Business sales fluctuated within
conditions affecting the will to
savings and employment.
expansion forces began to prevail
ployment in manufacturing in¬
invest; retardation in the growth a narrow range. The downward
in
some
industries.
An
upturn
Such equations, often called
dustries declined steadily.
Sev¬
of productivity of labor; the shift trend in the spring of 1953 was
was
noticeable, among others, in
"mathematical models" of the eco¬
eral hundred
thousand
workers*
from a war (or
cold-war) econ¬ reversed by an upswing in July,' were
business, which is supposed to
nomic system were in great de¬
laid off, and further reduc¬
followed by a new drop in August.
foreshadow the trends in other
mand in Washington in the 1940's omy to a peacetime economy; and
tions in personnel were in sight.*
the coincidence of several local The movements were mixed in
industries:
I mean the trade of
and served as crystal balls in pre¬
The losses in manufacturing in-,
the latter part of the year.
and partial dislocations in
business forecasting. Some econ¬
produc¬
dictions of postwar depression.
dustries
were,
however,
partly omists
tion.
and agencies that had been
Business inventories increased
offset by increasing employment
In the issue of "Econometrica"
rather gloomy in the middle of
The economic system is exposed, slowly but steadily until Septem¬
in wholesale and retail trade and
of April, 1949, Mr. Clark tried to
1953 shifted to cautious optimism
at any one time, to divergent pres¬ ber 1953 and declined slightly in
in government.
portray the operation of the United
or
optimistic caution by the end
sures.
Forces of expansion and October. Inventories of manufac
States economy by a system of
Average weekly hours of work of the
year.- ''
'
growth
clash continuously
with turing industries grew until June, in
equations related to five factors:
manufacturing industries went
Outlook
depressive factors. Danger signs remained stable from July to No¬ down
steadily
from
December
vember and rose to all-time peak
Public expenditures,
In
are always around us! Their num¬
my
personal
opinion, the
1952 to September 1953, recovered
ber grows as the speed of eco¬ in December. In this respect, the
Exports,
current economic trends suggest
slightly in October, and declined
nomic progress increases. To check year 1953 is in contrast to the ex¬
that the "adjustments" have not
Quantity of money,
again in November, reflecting the
Stock of capital goods;- and
yet been completed. Considerable
danger we must have a deeper perience of 1949, when manufac¬ decline in the amount
of over¬
Changes in inventories.
layoffs
may
be
insight into the economic system turing inventories went down $3} time and the
anticipated
in
t
spreading of partbillion.
If the recession of 1949
than a "model" can provide.
some
industries,
especially
in
It seems that he has now added
time work in some factories.
was
an
inventory recession, this
manufacturing.
The volume of
to his list a sixth factor—construc¬
Consumer prices inched up in
Forces of Recovery
term obviously does not apply to
construction may decline.
Pro¬

characteristics

of

business

condi¬

and stock speculation followed

a

-

¬

1

-

tion

costs.

He

these

calls

values

the first half of 1953 and remained
duction of automobiles may be
Characteristic of a booming and the recent development.
stable after June.. The wholesale
More alarming are the changes
cut in the second half of 1954.
vigorous economy is not the ab¬
:
price index fluctuated within a
sence
of danger spots,
industrial
production.Total
but the in
On the other hand, there are no
mines personal consumption ex¬
very * narrow
range,
averaging
presence of dynamic, recuperative - industrial
output
declined
5%
indications of a precipitous con¬
penditures, gross national income,
109.8 in the first quarter of 1953,
forces
able
to
overcome
them. from the high plateau on which
traction of the over-all volume of
imports, and so forth. These are
109.5 in the second quarter and
Such forces in the United States it
remained
between
February 110.8 in
economic activities; personal dis¬
the equations which, according to
the third quarter.. /
; :
and June of 1953;
manufacturing
his statement in the "Manchester economy are: a growing popula¬
posable income and consumption
Average hourly earnings rose
tion; the* widespread desire of production went off about 6%/.
expenditures are likely to increase
Guardian" "suffice to predict the
people to improve their living Losses were mainly concentrated slowly but steadily. Weekly earn¬ as a result of cuts in income taxes;
moyement of the business cycle."
ings were at an all-time peak in,
consumers seem to be
conditions, to,, live better than in durable goods industries. Out-:?
reasonably
What is their value? What, for
declined
slightly
their fathers did, and to ensure put of nondurable goods in No¬ March. 1953,bullish;
investment * plans
are
example, do we learn from the to their
more than 1% by
September, an(p being stepped
children more comforts vember 1953 was practically the
up rather than re¬
statement that new private con¬
'■
than they can afford for them¬ same as in July. In general, in¬ recovered in October.
vised downward; the steel indus¬
struction growth- equals oneselves; the relentless technological dustrial output was at the peak r., Prices of common stocks were try anticipates an expansion—per¬
fourth of the growth of gross na¬
in
the
early spring of 1953 most sensitive to changes in busi¬ haps temporary — after
progress; the abundance of natu¬
February;
tional product, minus one-seventi¬
(March) and declined sharply in- ness conditions and the expecta¬ there is no indication of a sizable
ral resources, including the vari¬
eth of the accumulated value of
the summer. After July the down^: tions of the
business community. reduction in business inventories
ety of climatic conditions and the
construction in the preceding 40
ward movement slowed down and* The Standard and. Poor's index in
the near future and no danger
geographical location between two
years, minus $3.57 billion?
in many industries reversed itself. reached a
(This
peak in March 1953, of a deflationary effect of the re¬
oceans; the human factor—aggres¬
is simplified Expression of one of
sive management, a competent la¬
It is worth while to notice the - declined in the summer,: touched vision of the defense
program. In
Mr. Clark's equations.)
bor force, and the genius of im- upturn in production of alcoholic the low point
in,|eptember brief, it seems that the United
Such a statement may be mod¬
(nearly
10%
below
the
peak States economy is close to the low
provization in an emergency.
beverages, leather, meat packing
erately interesting as a descrip¬
paper
and paper products, level) and then rose steadilyvin* point in the current adjustment
These factors, however, do not and
tion of past
experience, but it
and in various branches of the the -next three months.
process..
*
/ensure
a
perfectly smooth eco¬
conveys no knowledge of the in¬
chemical industries.
In order not to stbp on this op-,
nomic progress.
If a period of buyers' markets,
The growth of
terdependence of the volume of

"exogenous,"
riables and

or

independent,

from

them

he

va¬

deter¬

,

>

,

.

.

-

our

private construction and natipnal
income. Least of all can it predict by
national income

and

construction

activities in the future, say in 1954
or 1955.
The

fallacy

of

mathematical

Contract

economy may

setbacks

and

some

resolute

ernment.

vention,

of

of

be interrupted
varying severity,

them may

require

intervention of the
The

methods

however,

must

of

a

gov¬

inter¬

be

ad¬

no

construction

-

,

,

showed

sign of weakening in 1953. Un¬

til the late autumn, new construc¬

tion continued
as

in

crease

1952

in

and

cost

on

the

same

1951.

of

If

level

the

construction

in¬

is

justed to the specific character of taken into account, it appears that
the emergency and cannot be re¬ public construction lagged slightly,
duced to the prescription of horse- behind that in preceding years
was
conclusively demonstrated in
while private construction more
the 1940's. To pull a white rabbit size doses of bleeding or blood
than held its ground.
The value
from his
hat, the magician must transfusion—the only two medi¬ of
contracts averaged $1,650 mil¬
cines in the books of builders of
first put the animal there.
Eco¬
lion per month from July to No¬
nomic equations are such magi¬ mathematical models.
vember 1953, as compared with
cian's hats. If you know the
An
economy described by half
trick,
$1,510 million in 1952, an increase
you need only look at the system a dozen equations has
no
recu¬
of more than 9%.
,
of equations to know what kind of perative force and
appears
ex¬
Changes in the size of the civil¬
white rabbits
they contain, and tremely brittle, ready to collapse
ian

models of the economic
system as
a
means of
economic forecasting

what "assumptions" must be used
in order to let the rabbits loose.
In the case of Mr. Clark's
equa¬

tions, if

you

assume

a

cut

in

in¬

result of any
This is the cause
as

a

tional

disequilibrium.
of

an

occupa¬

disease
observed
among
builders of economic models: sur¬

labor force

have

been

deter¬

mined mainly by the interplay of
four factors: the natural growth
of

the

population

(an

in the number

increment

of workers of 500,pull rounded by these strange contrap¬ 000 to
550,000 each year), enrolla loss in
pur¬ tions, they become victims of
ment of young men in the armed
chasing power of approximately hypochondria.
forces
(approximately v 2,000,000
$20-$25 billion. This is how his
since the middle of 1950), an inRecent Trends
equations—his
magician's
hat—
influx of marginal workers as a
From the
work.
disheartening spec¬ result of
more-than-fuil employ¬
tacle of economic models let us
ment, and seasonal fluctuations
Originating Causes of Depression shift to
developments in real eco¬
(influx of temporary workers in
In
substituting a mathematical nomic life. What is ahead of us?
the summer). The pattern of re¬
model (or
equations) for the ob¬
To answer this question, we cent variation is not
clear. < The
servation of economic
processes, must turn to current economic civilian
labor force at the.< sea-*"

ventories

by $2 billion,

you

out from the model

\

'




timistic

note, let us look at the hard competition, and weeding out
most
ominous
danger sign-^the, of
marginal,
inefficient
enter¬
dwindling output of steel. After prises, even on a high level of
having reached a .peak* of 10.2' economic activity and income, is
million tons in March 1953, the described
as
a
"recession," the
,

monthly output Of, steel dropped
to 8.7 million tons fn November—
of

than

.more

15%.

One

ber 1953 output trailed by

7% the
figure for the samEr;month in 1952.
It must be

remembered, however,

that steel production in late 1952
and to some extent in the early

part of 1953
strike

in

was

the

Roistered by the

suhimer

of

1952.

Steel output in the first 11 months
of 1953 totaled 103.7 million tons,
as

compared with 83.4 million tons

in 1952—an advance of

24%!
of

If

an

steel

builds

than

more

the

sinews

economic system, the United
is in good form to meet

recession.

This

is

a

recession, however,
not

described

lack of

in

type of
type that is

new

a

textbooks.

For

better term, I should like
to label it as a recession de luxe,
very

a

comfortable

not

are

brings

for

those

who

directly hurt, although: it
difficulties

to

certain* in¬

dustries and individual firms and

hardships to

causes

many worker
The distinction between

families.
a

recession of this

type and a high
plateau of prosperity is subtle and
is a marginal question, of the eco¬
nomic science and semantics.

States
the

challenge of
Summary

This

brief

of

a

slump.

_

Observations

examination

cent- economic trends

of

*

;
■"

re¬

is intended

to be

nothing mobe than an exer¬
reading the danger signs
the wall. ;
v
"
;

cise
on

in

,

.

*

loss

a

should also note that the Novem¬

United States has entered the year
1954 in the advanced phase of a

/

Let

us

try to- piece together the

conclusions fronTttie data

exam¬

Because

of

acter of our
or

the. dynamic
economy,

downward

char¬
sidewise

a

movement

of

tftis

type cannot last long. My guess
is that it will be of shorter dura¬
tion than that in 1949: the hollow

trough

may

be reached in the first

1954 and the upturn
begin in the second quarter,
coinciding, with the seasonal up-*

quarter

of

may

swing

in

employment.

-

If

this

Volume 179

Number 5294 ... The Commercial and Financial Chronicle

guess proves to be correct^
volume of economic activities

the

end of

1954

may

the

Continued

index

to approximately 250
(as
compared with its present level of
"close

to 230), and the index of
manufacturing production to ap¬
proximately 260
(as compared
with its current value of 240-245).

This is my
the
question

Present Business Situation

•

indicated

his moving over to agreement
with the General Motors' ^'billion dollar prosperity bet" excepting
for a relatively minor quibble over the short-term interlude.
But Clark's qualitative argument is subservient to the en¬
gineer's elaborate and precise mathematical model of the economy
embodying a series of equations designed to predict the move¬
of

ments

the

business

Can Resist Contraction!
There
end

This model-building by equations

cycle.

and

eclecticism; with particular vulnerability
uncertainties of savings and investment estimates.

the

tentative answer to
— 1954:
Depression,

and

labor force

been

inflated

/force in February or March. Al¬
though this rate of unemployment
/is compatible with the concept of
.a
full-employment economy, it
.would imply serious problems to
imany individuals.

higher

,■

than

comfort

the

At the

beginning of this paper
-I explained why I reject the plan
/offered by Colin Clark: his over-,
dosed antideflationary program of
'

*

tailored to

action is

?

which

model

has

above

1953;

economic

an

only

remote

a

pie

consumption

It would be hard to show that any

like

analogous conditions, or
similar danger of massive
credit liquidation, exists today.

'

On

in the field of population,

economists

required

measures
:

agree

by

conditions:

economic

-.the

on

wherp he became head of the Statistical and Eco¬

Department of the German Federation of Labor.

serving the ILO in Geneva, he
is

now a

present

credits to construction
/

/

easy-

of

industries.

activation of long-overdue public

Dr.

strengthening of the
unemployment insurance system
farmers,

"

and other forms of ^social security.

!
„

;
*
,

-

-

However, the advantages promised by each measure must be

against its undesirable
implications. Essentially, this is
riot a problem of restoring arti¬
ficially the purchasing power that
weighed

is lacking but one of ensuring the

environment

favorable

most

of

sobering

a

trend

this country in 1935, and

came to

forces.

economic

<

for

Much

harm

if too little is

done and necessary measures come
too

late.

But this is not the sole

Much

danger.

also

done

taken

are

.

caused

be

wrong

if

harm

energetic

would

be

measures

early and in the

too

years

has offered

to

-To

stock

rent

up, my

of

does

minimize the need for a bold and

-

-

upturn rests
*

,

-

policy.

firm economic
nostication of

in- the

a

My prog-

prompt economic

rather on the faith

dynamism .and. flexibility

of our economy,

the genius of the
and their ability

American people,
-to

take proper

proper

More

and the

approaching the end of its

summer—

Today commodity prices

forecasting became dull." He tellingly cited

of the weakness

none

the widely-publicized forecasting

SOCiated

late December.
•

Professor Woytinsky then effectively showed the difficulty in

With

Clark's consumption

save

enough

a

periods

tax cuts," he remarked:

.

ous

price support

as-*

programs

un":

agricultural commodities have,
reduced, thus creating tighter

wjSu
^

in^raase lts use-

'

2®

wf tl? iSfcw

^nmnp+ifWi
nf

that^ias placed

*)ro^uc*'on

industries in Si lave
boom years" Yet. exPe«eite« has

fnrYhe^Drndmpr anH'^p^fsfrihn6
f 2, P
ha?

that

onri

whS 1

J^at the public wants and who ofSal
such Is ?he
* a Prlce
iswiU"
sharply reduced crops of coffee
® °p
v
*
and cocoa. But it reflects also thethe case of apparel, changes
fact that prices of primary food- ln the character^of our living have
stuffs and raw materials had, like wrought great changes^ in the kind
wool, already been well shaken pf^ things we buy.
The trend . to
markets

In nart

it is due to

sue-

circumstances!

[Dr. Clark's] programs remind

.

k®

andeemplwmentinin^Dar^tt^is'°is' ov

been

buying power for new clothes for the children or to
.

hi

pn5PtjjL
5?^® wJSnSJT+t
Ti

falling^p nrrthl<^

Of

der which free supplies of numer-;

lot of bottles pf excise-free beer in order to

repair the roof of your garage.

2

f ?.ln®

show

usually

352

ment

predicting the effects of government-induced depression remedies.
for results from

since 1941

Certainly

polls taken at the scientific societies' meetings in Washington in

As

YnL
carryover

None of this is to say that either
soft goods in general, or the up¬
most widely anticipated and best Paral industries in particular, face
advertised we have ever had.
an easy time of it in 1954. On the

persisted in their error, the forecasters became

business of business

end!0AeJ
2™ °

r

the present letdown is one of the

quite hysterical, and "finally things became so confused that the

the margin of error inherent in

last

ening of commitments.

When

war economy.

truce

.

constant

recession—especially since

Korean

TT

re-

have encouraged a general short-,

*

-

me

which have been widely advertised but

of shock treatments

never

checked properly.

harmless

the

for

These drugs can be harmful or can be
but they

germs,

always harmful

are

for the

patient, and secondly may prove to be much more harmful than
.

the diseases for which they were intended."
Professor

Woytinsky then launched

mented attack
of

on

a

devastating well-docu¬

precise mathematical equations for predicting the movements in
He wisely emphasized that he was not merely

negating the forecasting
Professor Clark, but the

derived from the equations of

powers

equations of all economic analysts.

characterizing model-building, as an

After

"occupational disease

.

.

.

hypochondria"; he followed with the sound conclusion: "None of
these indicators,can cast

light

on more

small sector of the economy."

L'f

than

from

down

So far

so

culties, if not actual

one

single factor, one

resistance

to

and prediction-debunking

of forecasting business move¬

ments, he nevertheless promptly entered into precision-forecasting
on

not

his oWn account—to wit:---that while current

been

completed, there definitely will be

traction of overall
its low.

activity; and that the

pointer-marking

a mere

no

adjustments have

precipitous

con¬

economy is now close to

"recession-de-luxe," with late 1954

greater, due to high

the

corrective

decisions at the

time.




wine coming from the role of forecasting.

businessman!

Not

so

the

an

cur-

actual

this country and

both in

The

bear

.

so
on>
Gf distinctive
design.
Standards of
taste today are better and mbre

individual.

usual

Finally,

hallmarks

we

of

the

business

in

community

+

which

can

creating

those who

have

the

incentives,

tabling

a

con-

and which

its intention to

strong

and

are

are at the same
opportunities for
prepared to seize

For the textile industries, this
return to

ditions

idence, which believes in fostering feared
individual

tol

in

them.

have in Washington

Administration

now have

articles

fjL?16 i??ht K-ce' ^ these fac-

situation, in short, does not .time

the

Merchants

with* atStive

of merchandising,

_

.

cycle of "boom and bust."

an

and

tors, while adding to the problems

ikWlv
.

and

color

abroad. j?ight style, at the right time, and

No Cycle of "Room and Bust"
w
,.

sujts>

sup-

only

a

as

competitive

more

is

not

something

be

abnormal; actually it is

return to what has been

familiar ahd

regarded

as

"nor-

Working under conditions

growing of pressure puts

tion to

economy.

con-

to

a

every

organiza-

test, but it gives the

All of these indications that 1954

"When I'm asked whether business is

should be another active year for

to demonstrate their superior

business

qualities and push ahead.

going up or down, and if down, how much, I become deeply em¬

I'm

of

a lessened demand for :cpnventypes, and preference for
slacks, jackets, woolen shirts,

Said Crawford H. Greenewalt, President of duPont

in £an Francisco last week:

barrassed.

action

suburban living, with its emphasis
uP®n casual clothing, has brought

plement private initiative in main- mal."

Apparently no professional economist is. prone to withstand
the heady

pro-

beginning

Meantime,

output.

has
^

consumption has continued high,

has declared
if

back

ui«u

become

tailed

are

decline

duction costs and to the
of

induced

-

At this point,

further

X

After so impressively implying the diffi¬

impossibility,

Korea

to pre-Korea levels.

.

good with the realistic

But, alas!

Woytinsky!

the

peak early in 1951, and

Clark's Model "flow chart" containing his system

•the business cycle.

not

'

,

two
little incentive
past

far ahead.

up

merchandise

talk of

falsely in this country continually since 1943 when

this country was

analysis of cur¬

trends

economic

the

over

"discovered"

production to rise by 10%.

direction.

sum

and

2
JSth

?nnniv'
5
f
H' pmupr oSi

cently the increasing availability

Woytinsky first aptly pointed out that the danger signals

if
*-

boom

which Dr. Clark cited in his Manchester Guardian articles had been

interplay and development of

would

Korean

experience,

price

.,

the

the

un^r
^LJr?A

the

works, selective tax reduction, aid
to

our

our system. The

After

research director and author for the 20th Century Fund in

*

'

had

we

.

an

liberalization

policy,

contrary,

of heavy-weight apparel, sales of
seBsotiable goods this spring
should be more normal, assuming
no serious deterioration in the

that together with the commodity

addition to his post as Professor of Economics at Johns Hopkins.

'

money

the

aftermath

social welfare and living standards. Born in Russia, he left it in 1918

"You have to drink

Generally speaking, most Amer-:

rican

or

any

pretty well out of

nomic

..

The stopping point has to be passing its crest, the peareached, the expansion re- dulum may be swinging the other
versed, and the downward spiral wayWhile the warm weather
started when the money "ran out." during the fall retarded the sales

specialized in labor economics

as

are
peo-

*the consumer's money has been
going into new motor cars, new
'homss, appliances, and the lifce
that the soft goods lines have

great speculative binge after Korea, and since then have got it

well

products

rapidly and

more

been

qualified to lead the opposition
(albeit it turned out to be "the Loyal Opposition"); having long
as

their

as

consumed

poses.

Professor Woytinsky is well

and purely accidental similarity to
;our
economic system. Since this

by his medicine.

demand,

may have turned to at the
time; and by excessive credit ex- tended to suffer relatively. Now
pansion for such speculative pur- that the hard goods boom appears

;

^system shows no signs of a gen¬
eral deflation, it cannot be helped

active

by

speculation in securities, commodities, real estate, or whatever peo-

was

.United States economy.
:

10%

these prophecies

to

stuff —accompanied

Equally disillusioning on the forecasting front is the net im¬
pression left by Professor W. S. Woytinsky of Johns Hopkins, who
joined in debate with Clark at the Conference Board's embroglio.

for Germany

unworkable and would bring
harm

income

forced

~

Skepticism About the Skeptic

In the past./ew months numer¬
ous proposals ,have been made for
Ichecking recession, preventing de¬
pression, and accelerating recovlery. Most programs are running
iin the same direction, and differ
ibnly in detail, emphasis, and so¬
cial philosophy; Other programs
more

farm

and

their capacity,

greatly

In contrast, the soft goods indusliquidation fries tend to enjoy a more stable
money

thing—when a down- Pie, by and large, have less leeway
spiral such as some people for putting off buying,
fear has developed before, it has ~
usually been preceded by unbri^he Soft Goods Situation
died
optimism —the "new era"
During recent years so much of

«

V

care

1952;

the

years ex-

conditions

Another

above both 1952 and 1953; prices 10% higher than 1953; employ¬
ment practically unchanged; and real corporate profits higher
after the payment of taxes.

Desirable Program of Action

'.

than

and

from

boom

ward

conclusions

put per man-hour lagged behind
{the assumed trend (increase of
some 3% a year). The current ad¬
justments may, therefore, squeeze
marginal workers out or px educ¬
ation. A rise in unemployment in
{the first quarter of the year can

free

ment, which in recent

perienced
the -expanded

keep

.

political and economic factors, disagrees radically with the Clark
for the
1954
U.
S.
Their mathematical findings
bring forth a forecast limiting unemployment increase to 800,000,
and setting gross national product at $174,800 million at 1939 prices.
The Michigan economists, on the basis of their own model, further
predict for 1954: personal income about the same as 1953 and

jthe recruitment of marginal work¬
In the past two years the out¬

ers.

Jbe
anticipated,
and
nobody
{knows how far it will rise.
I
share the opinion that unemployment may be close to 2.5 million,
»or 4 to 4.5%
of the total labor

in the Manchester
Jan. 7, 1954 there

thoritative

by

event will

any

that have aggravated business de..clines in the past.

appeared an equally respectable mathematical model by two au¬
American technicians, Messrs. A. L. Goldberger and
L. R. Klein of the Department of Economics of the University of
Michigan which, while not quareling with Clark's attending

has

in

pressure

I

of better than some of the hard
goods
sound lines and those associated with maenterprises. This tional defense and capital equips

all

encourage
people to. go
with investment programs,

situation

interesting is it that also
Guardian, following the Clark articles, on

abundance

an

worthy

ahead

to

today

and .credit for

should

A Counter-Model

Particularly

A sobering remark should be
Udded to this diagnosis. The most
vulnerable spot in
the present
situation
is
employment.
The

is

capital

mathematical analysis likewise appears to us as gross over¬

simplification

Recovery?

"Recession,

fact, he has actually

and

4

•

•

In

55

Continued from page 11

from page 5

by
be close to

the/trend line as indicated by its
growth in 1951-52.
This would
bring the gross national product
to $380-385 billion at an annual
rate, personal income close to $300 v
billion, the industrial production

(503)

If I tell the truth and say I don't know, people think

ignorant fellow. If I close

my eyes

and say

up

5% or down

10%, according to my mood of the time, I am'Violating a cardinal

scientific mind."

Hence this industrial leader

principle -of

my

confines his

forecasting to cover half-century periods.

ably

not

breaking

generally, though prob-

equaling
1953,

the

suggest

more

alert and efficient

chance

a

This

record- test, Jooking at American business
that

the broadly, is a good

thing.

Most pf

clothing and soft goods lines also-us, as has often been said,doour
should have an ..active year.'These

heat .work

industries should, in fact, hold pp

challenge.

when

faced

with

«a

t56

The Commercial and Financial Chronicle...Thursday, January

(504)

28, 1954

v

cation would have helped greatly

Employment?

Can We Stabilize
etion since
Industrial

the beginning of the
Revolution, two cen¬

turies ago.

machines.

such

some

began

It

production in the fall and worked
through the winter, making and

When spring
While we have been concerned shipping machines.
about stability as a general goal came, the plant shut down and
—and mostly with praiseworthy stayed shut until the loiiowing
motives—it remains true that peo¬

example, have been greatly
concerned about stabilization of
income for employees, but their
interest in stabilization of income

by profession and prob¬

thought of themselves
They were predominant¬
ly farmers and farm boys from the
neighborhood of the plant. When
ably

the

farm

with

ended

season

the

who are fre¬ fall harvest, they went to work in
quently the same people —- ap¬ the plant. When it came time for
proaches absolute zero.
spring plowing, the plant closed
Businessmen are greatly inter¬ down and they all went back to
ested in the stability of prices and their farms for the summer.
That is
costs; that is to say, their prices
the background from
And costs.
As to their suppliers, which our company came. It did
-for share owners

take

Ihey
«dew.

a

—

somewhat different

Government officials, judg¬

ing by their actions,

have certain¬

ly had a strong interest in stabil¬
izing taxation and spending.
;
Yet all these groups—so conJ

stability—are always

cerned with

the prices of pork
chops, television sets, automobiles,
clothing and
other items will
twpeful that

somehow go down.
It seems to be an almost

callousness
implement
manufacturers.
It was just the
natural result of a highly seasonal
result

not

the

on

from

of

part

industry.
In recent

any

farm

business peo¬

years, as

-

adopted

in

that has been most
most

and

widely

industry has been to
products.
done a great
point where
in at least six
The later de¬

different industries.

one

possible be gain¬ bilized employment in mind.
fully employed. In this respect,
Originally, all farm implements
we are all for one and one for all.
were animal-powered.
But start¬
This unity is sometimes con¬ ing about 1908 we entered into
fused by discussions of such topics the manufacture of farm tractors
as
the guaranteed annual wage. and, at about the same time, we
The guaranteed annual wage idea began the manufacture of motor
is an attempt to achieve stability trucks which were originally sold
cf income for a certain group of almost entirely to farmers.
We
ether people as

,

It is related to, but far

workers.

from being

"
,

identical with, stabil¬

already engaged in two other
industries—the cordage industry,

were

ity of employment.
through the manufacture of bind¬
Obviously, if we could achieve er twine (and now baler twine),
^Stability of employment on a wide and the steel industry through our
and general scale, the problem of possession of a medium-sized steel
-the
guaranteed
annual
wage mill in Chicago which sells a part
would
automatically
disappear, of its output to Harvester and the
because stability of income must rest on the open market, in vary¬
follow stability of employment. It ing proportions.
Is far from being certain, however,
Almost 20 years ago we began
that the reverse is true, and that to get into the industrial power
stability of employment will re- field, through the manufacture of
cult as a consequence of stability
crawler-type tractors and Diesel
hoC income. That doubt is what a
engines, and that line has now
large part of the argument is broadened out to become a full
'About.

line

of

earth-moving and con¬
All this is preliminary to saying struction
equipment.
that I am not going to talk about
We began in a small way in re¬
sfhe guaranteed annual wage.
.
frigeration in the middle 1930s,
I was asked to talk about the
manufacturing milk coolers for
Ibasic problem of stabilizing em¬ the
dairy farmer.
Immediately
ployment. I have no over-all so¬ after World War II we voluntarily
lution to offer for this problem, dove into the
highly-competitive
And I will not attempt to offer a
refrigeration
industry,
and
we
^general analysis of it as it affects now make a line of home freezers,
.

.

*fhe nation.
I will

'

attempt to illustrate for

■you, from my own business, some
«f the attempts we have made and
jome of the obstacles we have met

In trying to grope our way toward
Vmore

s,table employment. You

consider

these

if

remarks,

can
you

household refrigerators, room airconditioners and dehumidifiers.
The result of all this has been

that, while the farm market is still
the backbone of

our business, we
longer rely on it exclusively
and many of our products find

no

their chief sales in the urban

mar¬

like, as in the nature of a case ket. pur sales in the urban mar¬
Jiistory. I must admit at the out¬ ket alone, during 1953, consider¬
set that it is not the history of an
ably exceeded in dollar volume
^outstanding success.
Neither, I the total sales of the company for
iJhope, is it the history of a com¬ any year before 1942.
plete failure.
The Harvester

Company,

as you

jprobably know, began its exist:*ence many years ago

implement

as

a

farm

manufacturer.

It

.vwould be hard for any one to find

What has been the consequence
of all this diversification in terms

of

stabilizing employment? Frank¬

ly, I don't know.
has

stabilized

for the

I

It has expanded our
usefulness

To

and

income

company.
I can see
created many more

'business.

-f-

it

has

than

how it

can see

sales

industry more naturally sea¬
sonal, more subject to ups and
Hdowns, than the farm implement

;-Jn

used

to

exist

and

our

in

that

jobs

Harvester.

products,

our

employment.

point,
the It has probably had some helpful
^typical farm implement plant of effect on stabilizing employment
'

*70

or

illustrate

80

.factory in
«ne

or

years
a

two

the

ago

was

a

small

but

I

can't trace that effect and

small town.1 It made

prove it to you, :

products, perhaps
a grain drill,

in

grain binder and




If

a

or

swoon,

a

all

one

our

products

plant, I

were

made

am sure diversifi¬

as

cause other employees in—say—
the Refrigeration Division are still
at work

on

full schedule.

a

Product

idea of diversification led

however, to another idea ap¬
plicable to a multi-plant company,
which

does

call

work.

This

is

what

the

principle of product
balancing. By that, we mean sim¬
ply that we try to put into a given
plant the products which will give
we

it

year-round schedule of

a

rea¬

sonably even employment.
This problem is largely related
to the farm implement plants and
some
collateral
plants.
In the
farm implement plants, since farm
machines

still used seasonally,

are

production

most

seasonal.

also

of

The

the

space,

the

machines

floor

same

may

different times of the year to pro¬
duce different products. Some im¬

tities

others

get

only

■' I

short

example, at our McCormick
Works in Chicago we make side
and

they
only in summer, the
involved
are
large

used

are

quantities
enough
them

the

that

so

on

While

mowers.

we

can

year-round

a

produce
basis. In

plant, however, we also
ensilage cutters. The output

same

make

We

then

build

which

on

is

the

the

fall

in

through

August

By

this kind of

on

balancing,

we

balancing
a
single
real help in job stability.

diversification within
a

ask

complete

a

me

whether it is

answer,

I

must

One

must

|
is that the machines

reason

be

manufactured

consider¬

ably in advance of their

sale, if they
all

for

tell

that it is not.

you

around
use.

weather

are

the

of

to be distributed
in

time

We don't know what the
will

yield will be.
sible for

season

country

us

late

rapid

up¬

1953

revisions

The

principal

for this is

reason

be, what the crop
So it is quite pos¬

to find ourselves with

quantity of machines that con¬
siderably exceeds the eventual
sales requirement.

a

that happens, we carry
inventory and that inventory
depresses the manufacturing

But that

brings me to the third
principle which has frequently
been put forward as a help toward
stabilizing employment. This is
the principle of careful forward
planning,
of
extensive market
analysis and careful inventory
a

means

of

Under this

theory, in times of ex¬

If any of you have had experience
with the farmer as a customer for

durable

and

mercurial nature of the buy¬
our

farmer customer.

goods, then

customer

know that

you

display a more
eager desire to buy, or a more
complete apathy toward buying—
or
go from one position to the
no

other

can

quickly. When farm¬
ers decide not to buy they don't
taper off. They stop, right then.
That happened to all the farm
equipment companies in 1953. So
again, the principle of forward
planning is a help, but not neces¬
sarily a solution to the problem of
steady jobs.
more

another

Still

recommendation

that has frequently been made is
that business should expand into

markets, especially into

new

over¬

markets, with the idea that
help bring job stability.

seas

this will

I believe

perience

have

we

this

in

ex¬

most

as

corporations, since
business

overseas

much

as

area

dates

our

back

to

1851, when Cyrus McCormick ex¬
his reaper at the Crystal

hibited
Palace
sold

London.

in

abroad

Last

year

we

in

thereby avoid radical changes
employment. The idea

our own

that

is

drop back*
subcontracts.
quite a bit of experi¬
that idea.
In normal

We have

with

ence

things

>vhen

just drop

we

some

Company

Harvester

times

the

buys

goods

or

of vari¬

services

kinds from some 35,000

ous

sup¬

small. No busi¬
ness like ours can possibly begin
to provide for itself the thousands
of kinds; of specialized
products
big and

pliers,

and services it needs.

do

to

out

set

that

Henry Fordl
once,

many

but even he eventually
had to give up.
i
This again is an idea that has
some good in it, but is far from
being an answer. For one reason*
no
company can be ruthless in
chopping off its suppliers when
the market turns down—not if it
wants
to
have
good
suppliers
when the market turns up again
and components are hard to get.
For another reason, it is often true
that the company itself can pro¬
years ago,

than $150 mil¬ duce the needed items more effi¬
lions worth of goods made in our
ciently and at a lower cost than
more

American

plants.
Therq is no
question about the help that those
sales gave to employment in our

to

preserve

factories

on

the

here.

On the other

the

hand,
experience

same

similar to

company

having, namely: if
in

business

in

do

must

we

we

have had

every

ours

other

has been

to stay
markets,

we are

foreign

an

goods made in America and

any

supplier. For a third, it doesn't

seem

to solve the

public problem

stabilizing

employment.
We have put great emphasis on
this phase of our efforts. We make

a

reached.

soon

those

Now,

of

some

are

the

shipped abroad constituted slight¬ ideas that we have tried and are
ly less than half the goods sold still trying in my business. Obvi¬
by our foregn subsidiary com¬ ously, some would work muchpanies. The rest were manufac¬ better, and some might have noapplication, in businesses of other
tured abroad.
types.
We are interested in the
It
has always been necessary
problem; we try to work at it
for us to do some manufacturing
steadily; but we do not have and?
because

overseas

in

market in the
are

machines

used

foreign countries have

some

United

States

not made here at all.

biggest

no

and

have not had the kind of success
we

for expansion of
plants and production is

our

or

employees

Employment Reduction

reason

overseas

like

would

would like.

But the

tota$
has probably been
by about 20%. Much of
blocked
currencies,
import re¬ that represented lay-offs. Some
strictions, tariffs and the rest. If of it represented normal quits who
we
did not manufacture abroad,
were not replaced.
we would lose much of the sale
Maybe that is just because the
of American-made goods which
management of our company is

the

Since June of last year our

political and financial barriers employment
surround
World
trade
reduced

that

—

we now

have.

Help, But

a

Not Cure

So

tion

I

ence

argue

Maybe the

ment

the

of employment.

tion.

won't

that ques¬
similar experi¬
of the rest of the farm equip¬

dumb.

Foreign Markets

principle of expansion
into foreign markets is another of
schedules and the employment for those ideas which helps but does
the following year. It is a sort of not cure.
Incidentally, it really
delayed-action bomb. That, inci¬ helped us in 1953, for foreign sales
dentally, is one of the problems were
up
while
domestic
sales
Harvester has right now and it were somewhat down.
has affected our current employ¬
There is another theory some¬
ment adversely.
times advanced for the stabiliza¬

as

to avoid sharp curtail¬
employment is to avoid

way

sharp increases in employment—
a
sort of ever-normal jobs idea.

pansion and high production, in¬
stead of increasing our own fa¬
cilities and our own employment
we should subcontract more work

the

When

over

control

Finally, there is the theory that
one

ments of

are

that this sort of product

But if you

make

downward.

year,

implement plants, where the prob¬
lem is the greatest. It is our belief

plant is

In

and they

people,

expand their tacilities in
the face of a declining market.

countries in those countries. Last

orders.

have been able to make progress
in regularizing employment in the

or

to

other

as

rarely

or

season
We start

December

January, depending

have

much

and

selling

winter.

these

producing
continue

through March.
ensilage blowers,

best

and

be taken

employment,

make

to

be

increasing share
of the manufacturing for foreign

they are used
only in summer and early fall.
We schedule production of them
December

had

we

and

still

still

can

ten

were

can

steady work force
payroll of Company A but
have wildly fluctuating employ¬
ment in the plants of its suppliers*
Companies B, C, and D, depend¬
ing on whether Company A is
buying or not.
So this, again, is an idea that is
good within limits but the limits

is rather small and

from

we

we

we

downward.

or

American

i

For

rakes

ward

made in large quan¬

are

and

and

surprise,

by

is

employees and
be used at

same

tools

same

But

ago.

ing habits of

Balancing

us,

runs.

made

market

tractor

it recently
has, the employee in a tractor
plant is not stabilized much be¬

the suggestions
often

exception to this rule velopments of this sort have rep¬
is our common interest in the sta¬ resented conscious planning on
bilization of employment, because our part.
But I must say, as a
me all understand that it is to our
matter of honesty, that the earlier
«wn interest—whatever our pecu¬
developments were probably un¬
lations may be —that as many dertaken with no thought of sta¬
The

into

goes

plements

uni¬ diversify the line of
versal truth, that men are inter¬
Our company has
ested in stability only in their deal of that, to the
capacity as sellers and never in we are now engaged
;

farm

the

ple have talked about the problem
of stabilizing employment, one of

-

iheir capacity as buyers.

sudden shifts in

never

such.

as

than

area

When

This

not factory

this

wrong

Predominant

Farmers

The employees were
workers

the labor unions,

Our friends in

tor

years

stability.
But since our
products are made in more than
20 plants, I consider it dubious.

fall.

ple are people, and therefore to
«ome degree inconsistent and self¬
ish.

in

toward

iContinued from first page

industry indicates that the
industry is dumb. I don't
believe that. We may be a little
whole
thick

20%

but

I

don't

believe

tion in
able

we

are

dumber than the; rest of in¬

dustrial management.
So the problem of job
our

goods

stabiliza¬

type of seasonal, dur¬
industry now looks

something like this to me:

That is the

(1) Because we have not had
idea of deferring maintenance and 100% success is no reason to quit
construction worlt and doing as
trying. We have had some suc¬
much as possible of it when times cess. It is better than it used toare

dull.

Our

achieved

can

be

not

very

reasons

tenance
seldom

^

experience is that
much.

in

little

a

(2) I

am sure

that

we

can

still

this way but

There

are

make progress, either by doing the
two present things in a better way or

for this. One is that main¬
and

be.

construction

work

by doing

some new

things that we

haven't thought of yet.

employ the same kinds of
(3) I don't believe we or any
economic forecasts ranging two people or the same individuals as
other industry in a free market
years ahead and adjusted at rea¬
production work. Union restric¬ society will ever have 100% sta¬
sonable intervals.
We have an tions and other problems enter in.
bility of employment.
Estimate and Order Review de¬ The biggest reason, however, is
I believe -there are three things
partment which
constantly re¬ that necesary maintenance can which have the greatest effect in
views all factors affecting the fu¬ be deferred only so long without
preventing stability of employ¬
ture market. We have calculated threatening a possible breakdown ment.
"normal" yearly schedules for our of operations, and that new con¬
One of them—and the smallest
thousands of products, based on struction is not usually under¬ —is strikes
by labor unions. In
ten year figures.
We receive all taken when times are bad. Maybe these days of interrelated indus¬
sorts of crop and other reports. it should be, but the record will tries the strike is a weapon which
I am sure we have made
Businessmen sets off a chain reaction and in¬
progress- prove that it isn't.
and that we are doing a better job are subject to fits of pessimism as jures people whom the strikers

Volume 179

in
of
a

have

and

never see

harm.

Number 5294... The Commercial and Financial Chronicle

desire

no

to

stability of employment, the strike
is a fact that cannot be ignored...

A major strike in mining,

shipping, in steel, in oil, or any
the other basic industries; or

The

in

major strike in the plants of a
manufacturing coma n y,
creates
unemployment

thousands

of

miles

away.

factor

the

that

sense

making

stability

means

changes—is technolog¬
ical development and progress.
I
am

-

no

I

sure

do

not

need

to

argue

I am not arguing against the
right to strike. But I am trying

that point nor to explain it. And
I am sure everyone in this room,

to

or

-point

that

out

conditions

under modern

strike is like firing a

a

if

in this

country, will agree that

certain

Joe, who happens to be standing

instability is the price
we have to pay that
price. We don't have perfect sta¬
bility today.
We didn't have it

in

100

shotgun
people

into

crowded

a

because

the

first

considers

you

of

of

mad

at

When

row.

the

mass

are

anyone

general problem

a

of

either.

ago,

progress we

it Aircasters, Inc.
21 (letter of notification)

shares of

construct

120,000

Price—At par ($lper share).

acquire broadcast stations.

or

for

Jan.

4

have

certainly
all of us is

years

taught

share.

drilling

wells

for

working

Shares, Inc., Minneapolis, Minn.
shares of class A

15,000

consultant.

Basin

Chicago-Lake State Bank.
Co., Minneapolis, Minn.

Armstrong Rubber Co.
27

(letter of notification) 1,000 shares of class A
stock (no par). Price—$21 per share. Proceeds
;—To James A. Walsh, the selling stockholder. Under¬
writer—Gruntal & Co., New Haven, Conn.

•

Gas

Price—40 cents per share.

stockholders

mon

Feb.

New York
Jan. 25 filed 200,000 shares of
capital stock. Price—At
(market. Proceeds—For investment. Underwriter—None.

15.

ments.
•

& Gas

Co., Dallas, Tex.
Dec. 14 filed 2,017,801 shares of common stock
(par $1)
being offered for subscription by common stockholders

through

Proceeds—For

Vice-President and Investment

as

Consultant

for

Fidelity

7

stock

stockholders of record

purchase

Alton,

and

share.

of

six

ITEMS

REVISED

ISSUE

expire

Jan.

22; then to public.
For

—

down

stock being offered to preferred stock¬
Dec. 16 on a l-for-4 basis; rights to
Price—At

dividends.

($25 per share)

par

Proceeds—To

and ac—

bank loan. Un-

repay

California

Water

&

(2/2)

Telephone Co.

Jan. 14 filed 120,000

shares of $1.32 cumulative converti¬
ble preferred stock (par $25). Price—To be supplied by
amendment.
Proceeds—To repay bank loans and for*

on

construction

construction and improve¬

Proceeds

Bay Gas Co., Hyannis, Mass.

(letter of notification) 4,000 shares of 6% cumu¬

i

Price—

payment on

new

Louis, Mo.

Underwriter—Blyth & Co., Inc.*.

program.

New York and

barges.
Office—210 William St.,
Underwriter — G. H. Walker & Co., St.

111.

ADDITIONS

PREVIOUS

derwriter—Coffin & Burr, Inc., Boston, Mass.

Lines, Inc., Alton, III.
(letter of notification) 65,990 shares of common
(par $2), to be first offered for subscription by
per

wast"

associated with Loomis, Sayles &»-

Kings Highway East, Haddonfield, N. X
Rambo, Close & Kerner, Inc., Philadel¬

expire Feb. 16.

Underwriter—None.

$2.62 V2

Fund oif

Boston. From 1929 to 1950 he

eye

—

Buzzards

cured

Blaske

Jan.

<of Southern Union Gas Co. of record Dec.
28, 1953 on the
•basis of one share of Aztec for each Southern Union
common share
held; rights to expire on Feb. 8. Price—

which

warrants

new

101

lative preferred

Light Co., Rapid City, S. D.
(letter of notification) 14,100 shares of common
(par $1) to be offered for subscription by com¬

stock

pasfe

served

holders of record

Pro¬

Jan. 12

Axe-Houghton Fund B, Inc.,

acquire equipment

(par five cents).

Black Hills Power &

common

—

Jan. 13

Natural

the

phia, Pa.

Underwriter—

Corp., Santa Fe, N. M.
Dec. 23 (letter of notification) 748,000 shares of common

ex¬

For

Company.

Underwriter

ceeds—To acquire properties and leases. Office — Blatt
Bldg., Santa Fe, N. M. Underwriter—Hunter Securities
Corp., New York.

Proceeds—To

the

three years Mr. Patterson

same.

Office

Price—At par

M. H. Bishop &

Proceeds—To

—

Federal

Budget PEan Corp., Haddonfield, N. J. (2/1)
13 (letter of notification) 20,000 shares of class A
common stock
(par $1). Price—$5 per share. Proceeds*—To establish additional offices and for working capital

common

St., New York 5, N. Y. Underwriter—Samuel W.
Gordon & Co., Inc., New York, N. Y.

share.

ment

24

Jan.

©9 Wall

per

Co.,

announces

•

capital.

stock

-$3.83

see

&

SINCE

($20 per share). Proceeds—To ac¬
quire shares of capital stock of The Marquette National

plore and develop the Murfreesboro, Pike County, Ark.,
and for general corporate purposes. Office—

Aztec Oil

all

we

Mass.

Preston^
Street*appointment
Theodore G. Patterson as ^invest¬

Moss

situation where every¬

body's goal is the

property

Nov.

Preston, Moss & Co»
BOSTON,

beginning, this is

problem where

to eye, one

to be

ceases

and

(letter of notification)

stock.

Bank and the

American Diamond Mining Corp.
(letter of notification) 260,000 shares of
per

one

30

53*

T. G. Patterson With A

Registration

Bank

Business—Sale

Dec. 8

Price—$1.15

last

I said at the

as

societies

Underwriter—None.

com¬

Proceeds—To

Co., Red Bank, N. J.

stock (par $1).

Fascist

and

that when the market

in

of programs and announcements to advertisers. Office—
157 Broad St., Red Bank, N. J. Underwriter—J. Gilbert

Currie &

the

should

property,

Jan.

(505)

* INDICATES

Now

stock.

of

the

But

of the things which the

one

Communist

have made in that 100

Securities
mon

And

progress,

years

rb <.

i

3rears
has brought us more of free,
everything
and
everyone
practically anything else you care el$e soon ceases to be free also.
to name and, I believe, more staI haven't got an answer to the
biilty as well.
problem
of
stabilized
employ¬
The third and the largest factor ment. I don't believe
anyone else
that makes perfect stability im¬ either has or will have such
an
possible is the market itself. So answer. We cannot achieve com¬
long as the market is free; so long plete stability. But we can and
as any man can spend his money
we will work towards
stability as
on the goods of his
choice; or elect a goal. I hope to see more prog¬
to keep his money in his pocket, ress in
my business and I am sure
we will have instability.
you all will see it in yours.
For,

works

that

against stability of employment—

component
p

second

J

San Francisco.

it Carling Brewing Co., Inc., Cleveland, Ohio
Jan. 18 (letter of notification) 3,750.4 shares of capita*
stock
(par $15) to be offered to stockholders; with,
rights to expire on Feb. 26. Price—$40 per share. Pro¬
ceeds—To

retire

current

indebtedness.

Office—9400*

/

Underwriter—None.

Quincy Ave., Cleveland, Ohio.

it Central Wyoming Oil & Uranium Corp. (2/3)
Jan. 20 (letter of notification) 599,000 shares of common,
stock (par 10 cents). Price — 50 cents per share. Pro¬
ceeds
For exploration expenses and working capital.
—

Office—79 Wall St., New

NEW ISSUE CALENDER

Cherokee

January 28

(Thursday)

Southern Pacific Co.
(Bids

February 16
Pacific

Gas

$9,660,000

Budget Plan Corp
(Rambo,

&

Kerner,

Inc.)

Essex

$100,000
.1

February 2 (Tuesday)
California Water;

Co.,

4s

inc.)

to

be

(Bids

=

Preferred

v

N.

EST)

noon

(Paine,

Webber,

Hirsch

&

noon

Co. Inc.)

Si

February 3
Central

&

by

Inc.)

Rico

(Bids

(Bids

11

EST)

a.m.

February 4
&

Co.)

of)

Bonds

Public

Service

(Bids

11

Tobin

Suburban

Gulf

Sulphur

Alabama

&

Co.)

•

Bids

EST)

noon

Bids

to

be

Equip. Trust

Republic Co. Inc.)

February 9

Utah

Power

a

&

Louisville Gas &
•

Bids

a.m.

February 10
Bids

•

noon

CST)

•

Wagner

Bids

Electric
(G.

H.

EST)




Co.)

a.m.

Common

on

page

59

shares

30

(Tuesday)

Bonds

$17,000,000

(Tuesday)
Bonds
$11,000,000

(Friday)

First Nat'l Bank of Toms River, N. J
(Offering

shares

200,000

(Bids to be invited)

Bonds

to

stockholders)

May 19

$5,500,000

150,000

working capital
Inc., Hartford*

Middlebrook

Common

EST)

May 14

Common
&

&

!

$6,495,000

Corp

Walker

«

Equip, Trust Ctfs.

1

noon

11

April 6
Bonds

$12,000,000

Mystic Valley Gas Co.

:

Georgia Power Co

(Wednesday)

Chicago & North Western Ry

Proceeds—For

(Tuesday)

(Bids to be invited)

shares

(Tuesday)
CST)

public.

Records, Inc.
shares of capital stock (par 50 cents>
being issued only in exchange for shares of Universal
Pictures Co., Inc. common stock (par $1) on the basis ot

$6,000,000

Diego Gas & Electric Co._

i

Electric Co

10:30

to

Dec. 22 filed 145,842

$17,000,000

Light Co

March

San

Common

100,000

share

Decca

Bonds

be Invited)

Bonds

$12,500,000

Southwestern States Telephone Co
(Central

Manufacturing Co.

24

Ctfs.

$1,995,000

Invited)

shares for each 10 shares*

Continued

Public Service Co. of Oklahoma
•

to

March 23

$7,000,000

RR

(Tuesday)

(The First Boston Corp.)

(Monday)

&

Nashville

16

National Union Fire Insurance Co

$99,875

(Bids

Louisville

seven new

Underwriter—Qoburn

Co

(Bids

Preferred

Morgan

Power

shares

Corp

(Peter

March

Common
by Kidder,

Common

February 8

basis of

Conn.

Co

Albany Corp.)

on

Danielson

per

$4,000,000

(Friday)

527,865

?

.

by stockholders of record Jan. 15; rights to expire Or*
Feb. 15. Price—$9.50 per share to stockholders and $12.
Bonds

be invited)

to

Court*

(letter of notification) 10,704 shares of class A
preferred stock (par $5) being offered for subscription,

$20,000,000

Co

Electric

•

Dec.

(Wednesday)

Common

Packing Co., Inc
(First

Bonds
Bonds

EST)

a.m.

March 3

$300,000

Bonds

$30,000,000

EST)

19-S.

The unsold balance, phi»
12,181 shares are offered to public. Price—To stock¬
holders, $14 per share; to public, $15 per share. Proceeds*
—For working capital.
Office—1901 W. Fourth Street^
Wilmington, Del. Underwriter—Laird, Bissell & Meeds*.
Wilmington, Del.

(Monday)

a.m.

Inc.,

held; rights to expire Feb. 3.

$7,500,000

Southern Natural Gas Co

$10,000,000

(Offering to stockholders—underwritten

Peabody & Co.)

invited)

1

11:30

(Bids

Missouri

ord Jan. 8

(Thursday)

Lighting & Power Co
(Bids

Three States Uranium Corp
(Tellier

be

to

March

Houston

(Thursday)

February 5

by

shares

j

$5,300,000

(Commonwealth

151,672

Barney

Pittsburgh & West Virginia Ry

Equip. Trust Ctfs.

(Bids noon EST)

3

underwritten

Florida Investors

CorpAmerica, Inc., Wilmington, Del.
Dec. 29 (letter of notification) 20,000 shares of class A.
non-voting common stock (par $10), of which 7,819"
shares are being offered to class A stockholders of rec¬

Common
be

and Smith,

equipment, working capital and general corporate*
Office—1800 Atlanta Avenue, Orlando, Ffau

Street, Orlando, Fla.

I

•

(Wednesday)

February 25

Underwriter—None.

mill.

Underwriter—First

Curtis and

&

.

stockholders—may
Co.)

(par one cent). Price—$1 per share. Proceeds*

purposes.

Dillon,

$299,500

Pennsylvania RR.

—For

200,000 shares

Securities Corp,
&

272,500 shares

(Wednesday)

Co.,

to

—.Common

Wyoming Oil & Uranium Corp...Common
(Eaton

Puerto

Offering

Union

stockholders—underwritten

to

Read

•

stock

Clayton Mines, Inc., Orlando, Fla.
Jan. 11 (letter of notification) 299,000 shares of class !>■
common stock.
Price—At par ($1 per share).- Proceeds

Common

Atlantic City Electric Co..

EST) $2,970,000

Southwestern Public Service Co
(Offering

February 24

$6,000,000

Y., Chicago & St. Louis RR.____Equip, Tr. Ctfs.
(Bids

•

Inc., Oklahoma City, Ok(s»

Bonds

Jackson

Co.)

Industries,

—To construct

(Wednesday)

...

Preferred

Eaton &

Bonds

Corp

„

[Bids

—

$60,000,000

EST) $5,000,000

noon

Instrument

$4,000,000

Mississippi Power & Light Co

Co

invited)

County Electric Co

General

Telephone Co

(Blyth

Electric

February 17

Class A Common

Close

&

(Bids

February 1- (Monday)

Underwriter

Dec. 3 filed 5,000,000 shares of class B non-voting com¬

(Tuesday)

mon

Equip. Trust Ctfs.
EST)

noon

York.

Co., Inc., New York.

Utah

Power

&

noon

Chicago
Philadelphia

(Wednesday)

Bonds

Light Co

(Bids

Common

$150,000

EST)

i

Cleveland

San Francisco
Private IVires to all

offices

$15,000,000

I

*

58

Continued

from

•

57

page

Gulf

Oct.

two

Decca

for

shares

the

directors

ex¬

Feb. 8, subject to the right
offer to not later than

on

extend

to

The

share.

Universal

each

change offer will expire
of

.Thursday, January 28, 1954

The Commercial and Financial Chronicle..

(506)

the

Feb. 23.

Sulphur Corp.

Minn.

if Monarch Lumber Co., Minneapolis,

(2/8)

non-cumulative
convertible preferred and participating stock
(par 10
cents. Price—$10 per share. Proceeds—To develop com¬
pany
concessions.
Underwriter—Peter Morgan & Co.,
filed

27

700,000 shares of 60-cent

New York.

6% debentures
provided for under
the company's profit-sharing contracts and to a few
employees. Proceeds—For working capital. Office—900
First National Bldg., Minneapolis, Minn. Underwriter—
Jan.

be

to

(letter of notification) $25,000 of

18

offered

to

yard managers as

None.

if Delhi Oil Corp., Dallas, Tex.
Jan. 22 filed 1,031,753 shares of common stock (par $1)
to be offered for subscription by stockholders on the
basis of two new shares for each five shares held (with
oversubscription privilege). Price—To be supplied
by amendment. Proceeds—To pay approximately $8,500,000 indebtedness maturing with the current fiscal
an

and the remainder used for general corporate pur¬

year,

Underwriter—None.

and working capital.

poses

Detroit Edison

convertible debentures due
subscription by stockhold¬
ers of record Jan. 6, 1954, on the basis of $100 of deben¬
tures for each 25 shares of stock held; rights to expire on
Feb. 1, 1954. Price—At par (flat). Proceeds—To repay
loans

for

and

Underwriter—

construction.

new

None.

Co., Salem, Mass. (2/17)
of first mortgage bonds, series

Essex County Electric
Jan.

filed

18

$5,000,000

A, due Feb. 1, 1984. Proceeds—To repay short-term in¬
debtedness and balance, if any, for construction. Under¬
writers
To be determined by competitive bidding.
—

Probable

bidders:

Halsey, Stuart & Co. Inc.; Lehman
.Brothers; Kidder, Peabody & Co.; Merrill I^ynch, Pierce,
Fenner & Beane and Union Securities Corp. (jointly).
Bids—Expected to be received
about Feb. 17, 1954.

to noon

up

of

(EST)

on or

record

share

Jan.

for

Feb.

1,

each

Price

1954.

the basis of one new
held; rights to expire on

on

shares
—

$31

Proceeds — To
in C. B.

share.

per

reimburse company's treasury for its investment

&

Co.,

O.

Cleveland,

Jan. 25 filed

1,000,000 shares of capital stock.

Proceeds—For investment.

market.

Price—At

1,000,000 shares of common stock (par $1).
Price—To be related to the bid price of the shares on

if Keystone Custodian Fund, Inc., Boston, Mass.
Jan.

filed

25

25,000

shares,

series

B-l;

25,000

Oils, Ltd., Toronto, Ont., Canada

18 filed

Dec.

shares,

series B-2; 1,000,000 shares, series K-2; 1,000,000 shares,
series S-l; 1,000,000 shares, series S-2; and 50,000 shares,
series S-3. Price—At market. Proceeds—For investment.

the

Toronto

Stock Exchange, with

commission.

underwriting

20%

a

Proceeds—For general

corporate

purposes.

Underwriter—T6 be named by amendment.
New

England Gas & Electric Association

Underwriter—None.

Dec. 10 filed 32,126 common

shares of beneficial interest
being offered in exchange for common stock
held by minor¬

$8)

if Lisbon Uranium Corp., Salt Lake City, Utah

(par

Jan. 20

of New Bedford Gas & Edison Light Co.

stock

(letter of notification) 1,292,000 shares of capital

(par

15 cents), of which

1,079,000

shares

are

to

bp, offered

to the public and 125,000 shares are to be
reserved for option to Moab Drilling Co. at 20 cents per
share, and 88,000 shares are to be reserved for option to
at 25

cents per

incident to

expenses

share.

Proceeds—For gen¬

mining

operations.

ity stockholders

the basis of 4% New England shares"

on

for each New Bedford share held. The offer

New
•

will expire

Advisor—The First Boston Corp.,

23. Financial

Feb.

on

York.

_

Northern

Indiana

Service

Public

Co.

Office—

Continental Bank Bldg., Salt Lake City, Utah.
Un¬
derwriter—A. P. Kibbe & Co., Salt Lake City, Utah.

Jan.

filed

5

shares of

315,961

(no par)

stock

common

being offered for subscription by stockholders of record
Jan. 8 at rate of one new share for each ten shares then

stock

(par $1). Price—$5 per share. Proceeds—For ac¬
quisition of property and equipment and for working
capital. Office—43 Birge St., Brattleboro, Vt.
Under¬
writer—Barrett Herrick & Co., Inc., New York.

New Bristol

Underwriter—None.

801

60,000 shares of common

(2/10)
Jan. 12 filed $5,500,000 first mortgage bonds, series A,
due 1974.
Proceeds—To pay an equal amount of out¬
standing promissory notes. Underwriter—To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co.
Inc.; Kidder, Peabody & Co.: Lehman
Brothers; Merrill Lynch, Pierce, Fenner & Beane and
Union Securities Corp. (jointly). Bids—Tentatively ex¬
pected to be received up to noon (EST) on or about
Mystic Valley Gas Co.

Feb. 10.

if Investors Stock Fund, Inc., Minneapolis, Minn.

eral

(letter of notification)

1954,

19,
seven

Cottrell & Sons Co., and for general corporate purposes.

underwriter

if Estey Organ Corp., Brattleboro, Vt.
Jan. 21

filed

30

{

*

49,605 shares of common stock (par $1)
being offered for subscription by common stockholders

Dec.

Underwriter—McDonald

Co.

Dec. 10 filed $43,358,000 3*4%
Feb. 1, 1969 being offered for

bank

Cleveland, Ohio

Harris-Seybold Co.,

if Loomis-Sayles Mutual Fund,
Jan.

filed

22

market.

Inc., Boston, Mass.

100,000 shares of capital stock.

Proceeds—For investment.

Price—At

Underwriter—None.

Price—$26.25

rights to expire Feb. 3.

held;

construction

Proceeds—For
Central

Republic

Co.,

share.

per

Underwriters—

program.

111., and Blyth &

Inc., Chicago,

Co., Inc. and Merrill Lynch, Pierce, Fenner & Beane of

if Eureka Silver King Mines Corp., Boise, Ida.

•

Jan.15 (letter of notification) 200,000 shares of common
Price—30 cents per share. Proceeds—To develop

Jan. 15 filed

stock.

mining

properties.

Office—532

First

National

Bank

Bldg., Boise, Idaho.) Underwriter—None.
if Tanner Manufacturing Co., Cleveland, Ohio
Jan. 22

(letter of notification) 19,894 shares of common
stock (par $1) to be offered in exchange for 2,026 shares
of common stock (par $100) of Philadelphia Hardware
&

Malleable

r

Iron

(N. J.)
(letter of notification) 39,000 shares of

(Ky.)

Gas & Electric Co.

(2/9)

New York.

$12,000,000 first mortgage bonds, due Feb. 1,
1984.
Proceeds—For property additions and improve¬
ments. Underwriters—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;

Kidder, Peabody & Co.; Lehman Brothers and Blyth &
Co., Inc. (jointly); Glore, Forgan & Co.; Kuhn, Loeb &
Co.; The First Boston Corp.; Harriman Ripley & Co.,
Inc.
Bids—Expected to be received up to 10:30 a.m.
(CST)

Works.

Feb.

on

9.

if Nuclear Research Corp. (Pa.)
Jan.

common

stock (par 25 cents). Price—$1 per share. Proceeds—For

purchase of land and machinery, to erect buildings and
working capital. Underwriter—A. Kalb & Co., 325
Market St., Trenton, N. J.
for

debentures, at
1011

(in units of $500 each); and for stock,
Proceeds—For working capital. Office—

par

share.

per

Langford

Bldg.,

Miami,

Underwriter—None.

Fla.

Association of

Philadelphia

if Massachusetts Investors Trust, Boston, Mass.

(Pa.)

Dec. 11 filed 340,000 shares of capital stock (par $10) be¬

Jan.

ing offered for subscription by stockholders of record

the Trust.

Jan. 18

the basis of

rights to expire
ceeds—To

on

share for each share held;

one new

Feb. 17. Price—$22.50
capital and surplus.

per

increase

★

to

the

stock

for working capital.
Ferry Ave., Philadelphia. Pa. Under¬
Co., Jersey City, N. J. Offering—Ex¬
pected late in February.

tions,

of

record

14

on

writer—1Tellier &

Dec.

10 filed 527,330 shares of common stock (par $12>
being offered for subscription by common stockholders

to stockholders and $12 per

construction, etc.

Price—$10.75 per share
share to public. Proceeds—
Underwriter—None,
j

'

I

.

Florida Western Oil Co.
Nov. 6 (letter of notification)

250,000 shares of

common

stock

(par 10 cents). Price—$1 per share. Proceeds—For
drilling test well. Office—803 N. Calhoun St., Tallahas¬
see,

Fla.

Underwriter

—

Floyd D. Cerf, Jr., Co., Inc.,

Miami, Fla.
1

.

if General Alloys Co., Boston, Mass.
Jan. 19 (letter of notification) 50,000 shares of
stock
to

(no par), of which 30,050 shares

certairi

officers

under

options

are

and

to be offered

the

and

machinery.
—Wm. S. Prescott & Co., Boston, Mass.
space

new

^General Instrument Corp.

remaining

common

Underwriter

(2/17)

Jan. 27

filed 200,000

shares of

stock

(par $1).

Price—To be related
of the stock

on

to the then current market
price
the New York Stock
Exchange. Proceeds

—For plant
of other

additions, research and possible acquisition
manufacturing companies.
Underwriters
Webber, Jackson & Curtis, Boston, Mass., and
Hirsch & Co., New York.

—

Paine,

★ Glenview Metal Products Co.
Jan. 21 (letter of
notification) 75,000 shares of 8% cumu¬
lative preferred stock (par
$3) and 75,000 shares of com¬
mon stock
(par 10 cents) to be offered in units of one
share of each class of stock.
Price—$4 per unit. Proceeds
—For acquisition of
machinery and equipment. Office—
Rancocas and Ash Roads,
Delanco, N. J. Business—To
manufacture Flyride Helicopter. Underwriter—None.
★ Gray Manufacturing Co.,
Hartford, Conn.
Jan
21
(letter of notification) 2,100 shares of
capital
stock (par $5). Proceeds—For
working capital. Office—
16 Arbor St.,
Hartford, Conn. Underwriters—None.




beneficial

interest

in

Proceeds—For investment.

•

Jan.

of

26

filed

2,000,000 shares of common stock (par 10
cents). Price—To be supplied by amendment. Proceeds
To repay notes, for exploration and drilling expenses
additions

tq, properties,

and

working capital.

for

Underwriter—Continental Securities Corp.
Medina Oil
Dec.

9

Proceeds

—

the basis of

construction

For

Otter Tail Power

due

one

share for

new

Under¬

program.

Co., Fergus Falls, Minn.

28 filed

$2,500,000 of 414% convertible debentures
Jan. 1, 1964 being offered for subscription by com¬
stockholders

of

record

Jan.

22,

1954,

on

basis

the

$100 of debentures for each 25 shares of stock then

held

rights to expire

on

Feb. 8. Price—100% of principal

amount. Proceeds—To retire bank

loans and for capital
expenditures. Underwriter—Blyth & Co., Inc., New York
and San Francisco.
v
*
>
Pacific Gas & Electric

Corp., Orlean, N. Y.

(letter of notification)

Jan.

Co.

(2/16)

filed

19

$60,000,000 first and refunding mortgage
bonds, series W, dated Dec. 1, 1953 and due Dec. 1, 1984.
Proceeds—For
construction
program.
Underwriters—

2,800 shares of common
stock.
Price—At par ($100 per share).
Proceeds—To
purchase drill rig, etc. Office — 10 East Corydon St.,
Bradford, Pa.
Underwriter — Winner & Myers, Lock

To be determined

Haven, Pa.

ders:

•

Merritt-Chapman & Scott Corp., New York

Dec. 31 filed 513,594 shares of

common

being

for

offered

Steel
common

19,950 shares to be offered to certain employees. Price—
$1.25 per share.
Proceeds—For additional office and

manufacturing

of

on

(with an oversubscription privilege);
rights will expire on Jan. 29, 1954. Price — $35.75 per

Dec.

in

exchange

authorized and issued

1

*

shares

14. 1954

of record Jan.

each 10 shares held

mon

l-for-8

a

Feb. 6.

on

•

Jan.

1,907,712

Price—At market.

construct laboratory and

to

Office—2563 Grays

if McBride Oil & Gas Corp., San Antonio, Tex.

and

24,975 shares of common
being offered first for subscription by

stockholders

basis; rights to expire
new

Ocala, Fla.

(letter of notification)

(par $10)

common

for

as

company.

Florida Telephone Corp.,

Dec. 30

filed

share. Pro¬

Underwriter—

None, but The First Boston Corp., New York, will act
advisors

25

com¬

cent). Price—15 cents per share.
bank loan and current trade obliga¬

one

writers—White, Weld & Co., New York.

Underwriter—None.

on

(par

Proceeds—To repay

share.

Fire

2,000,000 shares of

(letter of notification)

stock

Ohio Edison Co.

Jan. 18 (letter of notification) $250,000 of 8% debentures
and 416 shares of common stock (no par).
Price—For

$120

21

mon

if M. A. C. Credit Co., Inc., Miami, Fla.

Federal Pipe & Foundry Co.

Nov. 16

Louisville

Corp.

stock

for

expire
•

on

at

common

rate

each 2.1

of

one

shares

Feb. 26.

of

of

Feb. 16.

stock (par $12.50)

1,078,546.25 shares of
stock (par $1) of Newport

share

by competitive bidding. Probable bid¬
Halsey, Stuart & Co. Inc.; Blyth & Co.. Inc.; The
First Boston Corp.
Bids—Expected to be received on

Merritt-Chapman

Newport stock.

Offer will

Underwriter—None.

Mississippi Chemical Corp., Yazoo City, Miss.

Jan. 5 filed 26,666 shares of special common stock

Perfecting Service Co., Charlotte, N. C.
Dec. 28
stock

(letter of notification)

(with

($10 per share).
general corporate
Charlotte,

Jan.

facilities.

to be offered

company

employees.

Sales will be handled by

Offering—Expected during March.

Mississippi Power & Light Co.

(2/2)
Jan. 7 filed 60,000 shares of cumulative preferred stock
(par $100). Proceeds—For additions and improvements.
Underwriters—To be determined by competitive bidding.
Probable
bidders:
Union
Securities
Corp.;
Lehman
Brothers; W. C. Langley & Co. and The First Boston
Corp. (jointly); Blyth & Co., Inc.,iEquitable Securities
Corp., Shields & Co., White, Weld & Co. and Kidder,
Peabody & Co. (jointly). Bids—To be received up to
noon

•

(EST)

Missouri

on

Feb.

Public

2.

Service Co.

(2/5)

Jan. 14 filed 527,865 shares of common stock (no
par) to
be offered for subscription by common stockholders of
record Feb. 5 on a share-for-share basis (with a

13-day
supplied by amendment. Pro¬
ceeds—Together with other funds, to acquire capital
stock of Gas Service Co.
(a subsidiary of Cities Service
Co.). Underwriter—Kidder, Peabody & Co., New York.
standby).

Price—To

be

purposes.

to

up

Price—At

standby).

working

par

capital- and

Office—332 Atando Avenue,

Underwriter—R.

C., for

Charlotte, N.

15-day

a

Proceeds—For

C.

N.

(par
$75—-limited dividend) and $1,500,000 of certificates of
participation (to be sold in multiples of $75—5% inter¬
est). Proceeds—From sale of these securities, together
with bank borrowings, are to be used for expansion of
Underwriter—None.

15,001 shares of common

being offered Jan. 20 for subscription by present

stockholders

a

S.

Dickson

&

Co.,

maximum of 8,001 shares.

Philip Morris & Co., Ltd., Inc., New York
13

filed

444,325

shares of

common

stock

(par $5)

in exchange for common shares of Benson

& Hedges, on a

share-for-share basis.

Offer is subject to

acceptance by holders of not less than 355,460 shares of
Benson & Hedges
less

extended.

Public
Jan.

stock, and will expire on March 1, un¬

Underwriter—None.

Service

18 filed

Co.

of Oklahoma

1984.

Proceeds—For additions and im¬

E, due Feb.

1,

provements.

Underwriter—To be

petitive
Co.

Inc.;

(2/8)

$12,500,000 of first mortgage bonds, series

determined by

com¬

Stuart

&

Equitable Securities Corp.; Salomon Bros.

&

bidding.

Probable

bidders:

Halsey,

Hutzler; The First Boston Corp.; White, Weld & Co. and
Shields & Co.

(jointly); Lehman Brothers: Blyth & Co.,

Inc., Kidder, Peabody & Co. and Stone & Webster Se¬
curities
Feb.

8.

Corp.

(jointly).

Bids—Expected

on

or

about

Number 5294

Volume 179

The Commercial and Financial Chronicle

...

convert

into

building

Price—$1

(par one cent).

Snoose Mining Co., Hailey, Idaho
Oct.

30

Underwriter

Bldg., Denver, Colo.
Denver, Colo.

Dec. 7 filed 300,000

\

shares of capital stock (par $1.

Price

supplied by amendment.
Proceeds—To pay for
leases and drilling.
Business—Oil and gas exploration.
Underwriter—None.
^

(3/1)

ing fund bonds due 1974. Proceeds—To repay bank loans
to reimburse treasury for additions already made
to properties. Underwriters—To be determined by com¬
petitive bidding.
Probable bidders: Halsey, Stuart &
Co. Inc.; The First Boston Corp.; Blyth & Co., Inc. and
Kidder, Peabody & Co. (jointly). Bids—Tentatively ex¬
pected to be received up to 11 a.m. (EST) on March 1
at 90 Broad St., New York, N. Y.

Alabama Power Co.

and

Dec.

15

and

sale

it

reported

was

of

is planning issuance

company

March

14

Co.

(2/2)

filed

Feb.

shares

at the rate of

1

held

(with

rights to expire
amendment.

Feb.

and

share

new

each

for

loans and for
Underwriter—

bank
improvements.
repay

Dillon, Read & Co. Inc., New York.

if Southwestern States Telephone Co. (2/8)
Jan.

filed

21

160,000 shares of common stock (par $1).
Proceeds—To fi¬
in part, the 1954 construction program. Under¬
writer—Central Republic Co., Inc., Chicago, 111.

Price—To be supplied by amendment.
nance,

16.

subsidiary of American Natural Gas
Co., asked Federal Power Commission to authorize con¬
struction of a $130,000,000 pipe line, to be financed
through the issuance of $97,500,000 of first mortgage
bonds, $12,000,000 of interim no(es convertible to pre¬
ferred stock at option of company, and $20,500,000 of
common stock (par $100), the latter to be sold to parent.
•

Atlantic City Electric Co.

Jan.

21

Jan.

of

(letter of notification) 37,500 shares of common
(par 10 cents). Price—At market.. Proceeds—To

the

L. England, President, announced that the
plans to issue and sell early in 1954 $5,000,000

13

mon

stock

Uranium

Corp.

(2/4)

bank loans.

Proceeds

(par

2,000,000 shares of com¬
Price—15 cents per share

cent).

one

For

drilling, surveys and working capital
St., Grand Junction, Colo. Underwriter
Tellier & Co., Jersey City, N. J.
—

be Union

may

(letter of notification)

make

and

an

Proceeds—For

basis.

repay

•'Three States
Nov.

bonds

new

offering to stockholders of

151,672 additional shares of common
10

underwriter, Weber-Millican Co., New York.

(2/24)

Previous

Co.

stock

construction

Underwriter

For

—

on

1-for-

a

and

program

Securities Corp. and

bond

issue

Smith, Barney &
placed privately. Bids—

was

Expected to be received on Feb.
Tentatively scheduled for Feb. 1.

Registration

24.

—

Office—354 Main

* Tobin Packing Co., Inc.
Jan.

(2/5)

(letter of notification) 8,500 shares of common
(par $3).
Price—$11.75 per share. Proceeds—To

stock

John J. Krez

trustee under Frederick M. Tobin Trusts.

as

Underwriter—First Albany

Corp., Albany, N. Y.

i

United
Qct.

filed

7

Price—At

the

&

Manufacturers,

shares of

market

(either

stock

common

the

on

Inc.

New

(par $1).

York

Stock

said

shares

in

stock

common

Juilliard

exchange for'outstanding preferred
of A. D. Juilliard &
Co., Inc., on the

common

or

preferred

Statement effective

ic Voight

Oct.

share.

Underwriter—

26.

1

Central
Dec. 9 it

stock.

capital.

Office—2

Ave.,

Madison,

19 filed

Price—To

supplied

general corporate

by

common

West Coast

Underwriter—G. H. Walker

share of stock.

one

amendment.

additional

Price—To be supplied by

Proceeds—From sale of units and

shares

of common

stock

mile crude oil pipeline.

Weld

be

used

Underwriters

&

Co. and Union Securities
Corp.,
Offering—Postponed indefinitely.

York.

.

1,125,000
private sales of

and

$55,000,000 first mortgage bonds to
1*030

to

build

—

both of New

common

(par

Insurance

150,000 shares of

Securities

common

Co., the




Probable

be

bidders:

determined

by

Halsey,

it

reported company plans sale during the
of 1954 of $10,000,000 common stock after
by New England Public Service Co. of its
of Central Maine Power Co. common stock.
was

Probable bidders: Blyth &

Co., Inc. and Kidder, Peabody
(jointly); Coffin & Burr, Inc.; A. C. Allyn & Co.,
Inc. and Bear, Stearns & Co. (jointly); Harriman Ripley
& Co., Inc.

& Co.

?.

reported that this company is expected to

was

Delaware Power &
Oct. 5 it

was

Light Co.

announced company plans to issue and

sell

of first mortgage and collateral
trust bonds.
Proceeds—For construction program.
Un¬
derwriters—To be determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; The First
Boston Corp. and Blyth & Co., Inc. (jointly); White,
Weld & Co. and Shields & Co. (jointly); Union Sefcurities Corp.; Lehman Brothers; Morgan Stanley & Co.;
Kuhn, Loeb & Co. and Salomon Bros. & Hutzler (jointly);
W. C. Langley & Co.
in 1954 about $10,000,000

First National

it

12

Bank of Toms

River, N. J.

bank plans

announced

was

(5/14)'

to offer for sub¬

scription by its stockholders of record May 1, 1954, an
additional 3,000 shares of capital stock (par $10) on the
basis of one new share for each 26 shares held; rights to
expire

June 16. Price—$50 per share. Proceeds—To
capital and surplus. Underwriter—None.

on

increase

ic Florida Power & Light Co.
company may later this year
$15,000,000 of first mortgage bonds.
Underwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; White, Weld

Jan.

it

25

reported

was

issue and sell about

Co.; Lehman Brothers; Merrill Lynch, Pierce, Fenner
Harriman Ripley & Co. Inc.
Public

General
Dec. 16 it

Utilities

Corp.

announced company plans to offer about

was

600,000 additional shares of common stock (par $5) to
or April, 1954 — probably on the

stockholders in March
basis of
To be

one

share for each 15 shares held.

new

Price—

determined just prior to the offering date.

.

Pro¬

be invested in the domestic subsidiaries.

ceeds—To

derwriter—None,
Beane may

act

as

but Merrill Lynch,
clearing agent.

Un¬

Pierce, Fenner &

parent,

(par $5)

which

be received

through

a

bonds

due

Nov.

repay

bank

loans

and

for

1,

1978,

capital

Bids—Halsey, Stuart & Co. Inc.

provements.
asked

ICC

to

be

first

owns

reject

offered

at

im¬

Dec. 14

on

company's request and that bonds

competitive bidding.

Chicago & North Western Ry.

400

will

be

received

by the

i

,

Dec.

18 stockholders

approved plan of merger into this
of Bank of Syosset, L; I., N. Y., which will in¬
issuance of 12,000 additional shares of Hemp¬
stead Bank of $10 par value. Unexchanged shares will

company

volve the

pubiicly.

be offered

Houston
18 it

Price

—

$31.25

per

share.

Under¬

(3/1)

reported company plans to issue

$30,000,000 of first mortgage bonds due 1989.
—For

construction

termined

Halsey,

bidding.

Co.

Kuhn,

Stuart

&

Corp.;

Inc.;

Lehman

in

to noon

Room

1400,

(CST)

Bids—Expected
on

sell

Underwriters—To be de¬

program.

competitive

by

atid

Proceeds

Probable
Loeb

Brothers:

bidders:

& Co.; Union

Smith,

Barney

to be received

up

to 11:30 a.m.

&

Corp.

Co.; Kidder, Peabody & Co.; Equitable Securities

6, 111.

up

Lighting & Power Co.

was

Securities

(2/10)

company

West Madison St., Chicago

April 6.

on

writer—Francis I. duPont & Co., New York.

negotiated sale. Price—To be announced later.

Proceeds—To

company

Hempstead Bank, Hempstead, N. Y.

•

trust

reported

(jointly); Harriman Ripley & Co., Inc.; Union Securities
Corp. and Equitable Securities Corp. (jointly); The First
Boston Corp.; Lehman Brothers; Morgan Stanley & Co.
Registration—Planned for March 1. Bids—Expected' to

Jan.

collateral

of

(4/6)

plans issuance and sale
bonds due 1984. Proceeds
for construction program.
Underwriters—To be determined by competitive bid¬
ding. Probable bidders: Halsey, Stuart & Co. Inc.; Blyth
& Co., Salomon Bros. & Hutzler and Shields & Co.
was

of $11,000,000 first mortgage
—To repay bank loans and

$6,000,000

(EST)

Registration—Planned for Feb. 4.

March 1.

i'

Feb.

on

ment

10 for the

trust

mature

&
stock

Dec. 15 it

Dec. 3 company sought ICC permission to issue and sell

able

being offered for subscription by stockholders of record
Jan. 19, 1954, on the basis of one new share for each
two shares held; rights to expire on Feb.
1, 1954. West¬
ern

7

Bids
stock

Casualty & Surety Co.

filed

bidding.

bank loans and for

Central Maine Power Co.
Oct.

•

poned indefinitely.
Western

repay

Underwriters—To

Co.

White,

by amendment. Pro¬
ceeds—Together with other funds, to be used to build
pipeline. Underwriters—White, Weld & Co. and Union
Securities Corp., both of New York.
Offering—Post¬

29

■

be in the market for new capital.

a

West Coast Pipe Line Co., Dallas, Tex.

Nov. 20, 1952 filed 1,125 000 shares of
50 cents).
Price—To be supplied

Dec.

issue of $4,000,000 first

Chicago Great Western Ry.

filed $29,000,000 12-y^ar 6% debentures
due Dec. 15, 1964, and 580,000 shares of common stock
(par 50 cents) to be offered in units of one $50 deben¬
ture and

an

1.

Pipe Line Co., Dallas, Tex.

1952

20,

construction.

new

intends to offer and

company

mortgage bonds. Proceeds—To

holdings

(par $15)

Proceeds—For

Co., St. Louis and New York.

Nov.

Dec. 23 it

distribution

(2/10)

stock

amendment.

purposes.

announced

first quarter

150,000 shares of

be

Wis.

1

,

Wagner Electric Corp., St. Louis, Mo.

Jan.

Putnam

Continental Oil Co.

Georgia Power Co.

Stuart
Inc.; Stone & Webster Securities Corp.; Kidder,
Peabody & Co. and White, Weld & Co. (jointly).

,

I.

&

Craig

was

competitive

(Floyd J.), Inc., Madison, Wis.

Underwriter—None.
•

stock:

1

>

Illinois Electric & Gas Co.

sell around the middle of 1954

(letter of notification) 30,000 shares of common
Price—At par ($10 per share).
Proceeds—For

working

common

& Beane;

company is planning to issue $60,collateral trust 4% bonds to mature in
exchange for a like amount of collateral
trust bonds due Jan. 1, 1965 now held by the Recon¬
struction Finance Corporation. The latter in turn plans
to offer the new bonds to a group of investment houses
including Halsey, Stuart & Co. Inc.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane; Alex.
Brown & Sons; and others.
The bankers would then
offer the bonds to the public.

&

Jan. 22

Underwriters—For

or

basis.of 6shares of United Merchants stock for each
None.

and $20,000,000 in 1954 from sale of bonds

stock.

reported

was

new
l-to-16 years in

through secondary distributions). Proceeds
group of selling stockholders who will receive

a

and

574,321

the

Exchange
—To

Merchants

Light & Power Co.

reported company plans to raise between

was

Co.; Chas. W. Scranton & Co., and Estabrook & Co*
Bonds may be placed privately.
•«

000,000 of

21

Underwriters

&

&

Baltimore & Ohio RR.
Nov. 9 it

construction.

financing was done through private
if competitive, may include: Halsey,
Stuart & Co. Inc.; Equitable Securities Corp.; Blyth &
Co., Inc.

to

stock

common

new

bond

Bidders

channels.

Jan

B.

company

15

Pipe Line Co.

Nov. 10 company, a

if Texas Northern Oil Corp., Houston, Tex.
stock

construction program.

American Louisiana

bank loans and for

pay

—Previous

be determined by competitive bidding.

oversubscription privilege);
Price — To be supplied by

an

16.

Proceeds—To

additions

property

one

$17,000,000

Proceeds—For

President, announced that company
plans to issue and sell in the latter part of March $3,000,000 of first mortgage bonds due 1984.
Proceeds—To re¬

and

of' record

Service

Co., Shields & Co. and

(jointly); Lehman Brothers and
(jointly); Morgan Stanley & Co.

Community Public Service Co.

$10,000,000

(3/16)

272,500 shares of common stock (par $1)
to be offered for subscription by common stockholders

Public

Union Securities Corp.

Dec. 7 it

first mortgage bonds due 1984.
Underwriters—To
Probable bidders:
Halsey, Stuart & Co. Inc.; Union Securities Corp., Equit¬
able Securities Corp. and Drexel & Co. (jointly); Blyth
& Co. Inc. and Kidder, Peabody & Co. (jointly); Morgan
Stanley & Co.; Lehman Brothers; The First Boston Corp.;
Harriman Ripley & Co., Inc. Registration — Tentatively
scheduled for Feb. 8.
Bids—Expected to be opened on

12

& Beane, White Weld &

R. W. Pressprich & Co.

Connecticut

Prospective Offerings

Jan. 25 filed $20,000,000 of first mortgage pipe line sink¬

Southwestern

(1) For bonds — Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co. (2) For stock — Merrill Lynch, Pierce,

Jan. 5, R. L. Bowen,

—To be

1,000,000 shares of com¬
mon
stock.
Price—At par (25 cents per share).
Pro¬
ceeds—For machinery and equipment.
Underwriter—
E. W. McRoberts & Co., Twin Falls, Idaho.

Jan.

18 it was reported company is
considering addi¬
tional financing early this year.
Underwriters—To be
determined by competitive bidding.
Probable bidders:

Robert W. Wilson,

—

Wyoming Oil & Exploration Co., Las Vegas, Nev.

(letter of notification)

A-Southern Natural Gas Co.

Jan.

—

per

Office—406 Sunshine

note.

59

if Columbia Gas System, Inc.

Fenner

of notification) 5,000,000 shares of common
stock (par five cents). Price—5Vz cents per share. Pro¬
ceeds
For drilling expenses. Office — 301 Kittredge

(letter of notification) 299,925 shares of common

repay

Kidder, Peabody & Co., New

—

Nov. 3 (letter

share. Proceeds—
Bldg., Albuquer¬
que, N. M.
Underwriter — Gearhart & Otis, Inc., New
York. Offering—Expected late in February.

To

Fort Scott,

Wyoming Oil Co.; Denver, Colo.

(N. M.)

if Santa Fe Western Gas & Oil Corp.
stock

Underwriters

—

York, and Prescott, Wright, Snider Co., Kansas City, Mo.

Underwriter—None.

Washington, D. C.

Office

capital, etc.

For working

—

Kansas.

purchase of new
Office—820 T St., N. E.,

terminal,

bus

buses and for working capital.

Jan. 22

ceeds

common stock, will
Price—$23 per share. Pro¬

stock.

not subscribe for any

(letter of notification) $299,000 of 20-year 5%
debentures.
Price—90% of face value.
Proceeds—To
21

outstanding

the presently

of

92%

if Safeway Trails, Inc., Washington, D. C.
Jan.

(507)

purchase from it of $6,495,000 equip¬

certificates

to

be

dated

March

1954

1,

and

annually March 1, 1955 to 1969, inclusive. Prob¬

bidders:

Halsey, Stuart & Co. Inc.; Salomon Bros.

Hutzler; Kidder Peabody & Co.; Blair, Rollins & Co.

Dec. 21 it

National

was

stock

for-one

Bank, Houston, Tex.

announced Bank, following

split-up,

plans

to

a

23

it

very

was

reported that corporation is

a

substantial emission of debt capital.

prospect

stockholders

50,000 additional shares of capital stock on a one-for-two
basis.

Price—At par ($10 per share).

capital.

to

Chrysler Corp.
Dec.

proposed two-

offer its

crease

Inc.

for

Houston

vote

on

Proceeds—To in¬

Meeting—Stockholders on Jan. 12 were

changing the authorized capital stock from

50,000 shares (par $20) to 150,000 shares (par $10).

Continued

on

page

60

The Commercial and Financial Chronicle

,

Probable bidders: Halsey, Stuart
& Co. Inc.; Kuhn, Loeb & Co. and Lehman Brothers
(jointly); Equitable Securities Corp.; Union Securities
Corp. and White, Weld & Co. (jointly); Merrill Lynch,
Pierce, Fenner & Beane.

competitive bidding.

Idaho Power Co.

and Bankers Trust

Aug. 6, officials of Blyth & Co., Inc
CoNew York, testified before the Federal

Power Com¬
plans to raise $184,550,000
■to finance construction of three hydro-electric projects
Snakp River. Idaho.
If approved, the financing will
^consist of $105,000,000 of bonds through 1962; $27,400,000
of preferred stock; and $52,150,000 of common stock.
Throughout the financing period, the company would/
borrow and repay $29,000,000 of short-term loans. Final
jfftianping details would depend on market conditions.
this

that

mission

company

Jan. 13 it was

and sell

14

defer

of capital stock (par $5) to be

it

(Mass.)
that

announced

was

it has

been

decided

to

bond issue by this company for at least several

a

months.
of

It had been reported that the issuance and sale

about

$3,000,000 of first mortgage bonds had been
planned. Underwriter—To be determined by competi¬
tive bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Lehman

Brothers; Kidder, Peabody & Co.; Merrill
Lynch, Pierce, Fenner & Beane and Union Securities
Corp. (jointly).

company in April, 1954, may
stockholders some additional comUnderwriter—Courts & Co., Atlanta, Ga.

reported

was

(EST)
equip¬
Prob¬

offer to its common
stock.

osion

Jersey Central Power &

•

it

16

Telephone & Telegraph Co.
announced

plans to issue and
sell to its stockholders 1,004,603 additional shares of
capital stock on a l-for-7 basis. Price—At par (100 per
share.
Proceeds—To repay bank loans.
Underwriter—
None.
American Telephone & Telegraph Co., parent,
owns 91.25%
of Pacific's outstanding stock. Offering—
Expected before June 30, 1954.

Light Co.

reported company tentatively plans to
issue and sell in 1954 about $6,000,000 first mortgage
bonds due 1984.
Proceeds — For construction program.
Underwriters — To be determined by competitive bid¬
Bee.

Pacific

July 2 it

was

Inc.; White,
Peabody &
■Co.; Union Securities Corp., Salomon Bros. & Hutzler
aind Merrill Lynch, Pierce, Fenner & Beane (jointly);
The, First Boston Corp.; Lehman Brothers.
ding, Probable bidders: Halsey, Stuart & Co.
& Co.; Glore, Forgan & Co.; Kidder,

was

company

Weld

sell

13 it

was

bonds.

repay

,

Pennsylvania RR.
Bids

vote

on

authorizing the issu¬

will

sive.

exceeding $10,000,000 of debentures.

of not

Feb. 8 for the purchase from

on

(EST)

Probable

bidders:

an

noon

&

Hutzler;

Kidder,

Peabody

it

5

was

Jan. 6 it

was

reported

&

Co.;

Blair,

company

plans to issue and sell

Price—At 100%
Underwriter—Paul C. Kimball &

interest.

writers

$24,610,000 Atlanta Knoxville & Cincinnati Division 4%
1, 1955, and for general corporate pur¬
poses. Underwriters—May be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co.; White, Weld & Co. and Salomon
Bros. & Hutzler (jointly).

be

determined

by competitive bidding.
Halsey, Stuart & Co. Inc.; The First

(jointly). Bids—Expected to

be received

on

Feb. 25.

reported company is planning to float an
issue of $15,000,000 first mortgage
bonds, due 1984, early
in 1954.
Proceeds —For financing, in
part, a $17,000,000 electric generating plant to be constructed in
Denver,
was

Colo.

Underwriters—To be determined by competitive
bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co.; The First Boston Corp.; Harris, Hall
& Co. Inc.; Harriman
Ripley & Co., Inc. and Union Se¬
curities Corp. (jointly); Lehman
Brothers; Kidder, Pea¬
body & Co.; Blyth & Co., Inc. and Smith,
Barney & Co.
(jointly).

bottling

Metropolitan Edison Co.
reported company may sell in 1954 about
$3,500,000 first mortgage bonds due 1984. Proceeds—For
construction program. Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; White, Weld & Co.; Kidder, Peabody & Co.
and Drexel & Co. (jointly); Kuhn, Loeb & Co. and Salo¬
mon Bros. & Hutzler (jointly).
was

•

Puerto Rico

Bids will be

(Commonwealth of)

Received

up

to 11

(2/3)

(EST)

a.m.

Feb. 3 by

on

Dec. 28 it

the

announced

1,500,000 shares of

company

plans to issue and

1955

common

stock of Gas Service Co. of

Underwriter—For

common

stock

in

National

Union

Fire

Insurance

Co.

(3/16)

W. A. Rattleman, • President, • announced that
company plans to issue to stockholders of record about
March 16 the right to subscribe for
200,000 additional
shares of capital stock (par $5) onthe basis of one new
^are for each two shares held.
1

Price—Expected to be

S$30 per share. Proceeds—To increase capital and «u*plus. Underwriter—The First Boston
Corp., New York.
*■

was

reported this company

Issue-and sale in 1954 of about
bonds due 1984. Proceeds—To




share

tentatively plans
$3,000,000 first mortgage

repay bank-loans

Jan.

1,

inclusive.

1974,

1954 and
The

to

Rico for

mature

National

$300,000 of

Bank

]

San

finance

Underwriter—Kidder, Peabody

sell

it

soon

new

to

issue

securities.

an

a

letter of

was

•

Southern California

ana ior

Dec. 30, W. C. Mullendore, President, announced that it
probably will be necessary for the company to obtain
approximately $50,000,000 from the sale of additional

securities in

Loeb

&

Co.

Last

derwritten by The

Probable bidders for

first

new

negotiated equity financing

and

was

un¬

First Boston Corp.

Pacific Co.

(1/28)

Bids will be received at Room

2117, 165 Broadway, New

York

6, N. Y. up to noon (EST) on Jan. 28 ior the pur¬
chase frorh the company of $9,660,000 equipment trust

certificates, series MM, to be dated Jan. 1, 1954 and to
mature in 15 equal annual instalments. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutz¬
ler; Kidder, Peabody & Co.

Spokane International RR. Co.
Dec.

29, F. C. Rummel, President, announced company
application with the ICC for permission to

is filing an

of

28,484 additional shares of capital stock (no par)
31, 1953, on the basis
new share for each six shares owned.
Price—

one

$15

per

Proceeds—Fpr improvement and modern¬

share.

ization program.

Suburban Electric Co.
Dec.

it

14

announced

(3/3)

plans to issue and
$4,000,000 of 30-year first mortgage bonds. Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Lehman Bro¬
thers; Kidder, Peabody & Co.; Merrill Lynch, Pierce,
Fenner & Beane and Union Securities Corp. (jointly).
Bids—Tentatively expected to be received on or about
was

company

11 it was reported this company and Western Pipe
Lines, Ltd. will merge preliminary to the financing and
construction of a 2,240 mile natural gas pipe line from
the Alberta fields to Toronto, Ottawa and Montreal.
Underwriters—Lehman Brothers; Wood, Gundy & Co.
Jan.

Inc.

Jan. 20 it

increasing its cap¬
underwriting. Proceeds
—For expansion program and working capital. OfficeFifth Avenue at Hamilton, Pittsburgh 6, Pa,
MeetingStockholders will vote Feb. 23 on doubling present au¬
was

announced company is

ital stock in contemplation of an

thorized capital stock.
•

Utah Power & Light Co.

(3/23)

18 it was reported company

plans to offer publicly

200,000 shares of common stock.

Underwriters—To be
Probable bidders:

Jan.

determined

by competitive bidding.

Brothers; The First Boston Corp.; Union Securities
Corp. and Smith, Barney & Co. (jointly).
Bids—Tenta¬
tively expected to be received up to 11 a.m. (EST) on
March 23.

Utah

Registration—Planned for Feb. 16.

Power &

Jan. 18 it

was

(5/19)

Light Co.

plans to offer $15,000,bonds due 1984. Underwriters—-To
bidding. Probable bidders:

reported

000 of first mortgage

Underwriters
1

&

Webster Securities

company

ton

—

Probable

To be

(3/30)
issue and

determined

bidders:

Corp. and Blyth & Co., Inc. (jointly); Kidder, Pea¬

by

con¬

com¬

Halsey, Stuart &

expected to be received up to noon (EST) on May 19.
West Coast Transmission Co.
Oct.

it

14

Securities

Co.

(jointly);

Lehman. Brothers;

Corp.; Merrill Lynch, Pierce, Fenner

Bids—Expected to be received

on

March 30.

was

announced that company now

plans to

$71,000,006
in 20-year, first mortgage bonds; and $24,440,000: in sub¬
ordinated long-term debentures arid 4,100,000 scares of
issue

$29,000,000 in l-to-5^-year serial notes;

common

&

(jointly); Union Securities

body & Co.; Salomon Bros. & Hutzler. Bids—Tentatively

finance

Shields

Corp.

thers and Bear, Stearns & Co. (jointly); The First Bos¬

Co.,

& Beane.

1954.

refunding mortgage bonds, series F, may include: Hal¬
sey, Stuart & Co. Inc.; Blyth & Co., Inc.; The First Bos¬
ton Corp. and Harris, Hall & Co. Inc. (jointly); Kuhn,

Underwriter—Eisele & King,

Co.; Blyth & Co., Inc.; The First Boston Corp.; Kuhn,

Union

Edison Co.

applied to California P. U. Commission
for
exemption from competitive bidding on a con¬
templated issue of 600,000 shares of common stock.
On

Jan. 19 company

Corp. and Smith, Barney & Co. (jointly); Lehman Bro¬

announced company plans to

petitive- bidding:

and

New

aggregate value of up to

Proceeds—To repay bank loans and for new

struction.

& Co.,

York.

Halsey, Stuart & Co. Inc.; White, Weld & Co. and Stone

reported company plans to file

$17,000,000 of first mortgage bonds, series E, due

1984.

in

be determined by competitive

Diego Gas & Electric Co.

Jan. 26,

shares held (with an oversub¬
Price—To be named later.
Pro¬
part the company's construction

program.

of

Libaire, Stout & Co., New York.
•

registration

10

ceeds—To

•

City

May, 1952.

notification

to

July 1,

purchased the last block of bonds marketed

was

each

for

scription privilege).

Loeb & Co.; Salomon Bros. & Hutzler; White, Weld &

New Jersey Power &
Light Co.

Dec. 16 it

to

dated

of Puerto

Riddle Airlines, Inc.

.

14,

be

Jan. 7 it

(now in regis¬

tration): Kidder, Peabody & Co.

to

New York

Kansas City, Mo., at a total cost of $32,000,000. Follow¬
ing consummation of proposed merger of the two com¬
panies, it is planned to sell $9,000,000 of first mortgage
bonds, $2,500,000 of debentures and 65,000 shares of
preferred stock (par $100). Proceeds — To retire bank

Jan.

purchase from it of $10,000,000 public improvment

bonds
was

sell $14,000,000 of common stock and borrow
$18,000,000
from banks in connection with proposed acquisition of

loans.

Government Development Bank

Public Service Co.

subject

Blyth & Co., Inc.; Kidder, Peabody & Co. and Merrill
Lynch, Pierce, Fenner & Beane
(jointly); Lehman

the
• Missouri

approved,

^ Trip-Charge, Inc., Pittsburgh, Pa.

Public Service Co. of Colorado
Oct. 13 it

announced company will offer 400,000
additional shares of common stock to its stockholders at
rate of four new shares for each share, held. Price—$5
new

To

directors

^Trans-Canada Pipe Lines, Ltd.

Boston Corp.; Smith, Barney &
Co.; Kidder, Peabody &
Co. and White, Weld & Co.

was

a

—

Probable bidders:

Calif.

per share.
PrcOeeds — To help finance
plant. Underwriter—None.

of

the

March 3.

(2/25)

reported company plans to issue and sell
first mortgage bonds due 1984.
Under¬

was

$7,500,000

bonds due May

April 18 it

27

with SEC, a proposed offering to stockholders of 286,436
shares of common stock (par $4.50) on the basis of one

sell

Pittsburgh & West Virginia Ry.

reported that the company may issue and
issue of bonds late in 1954. Proceeds—To retire

Dec. 16 it

to

up

Co., Chicago, 111.

Maier Brewing Co.» Los Angeles,

Jan.

to its stockholders of record Dec.

received

and accrued

Louisville & Nashville RR.

«ell

(2/3)

company

if South Carolina Electric & Gas Co.

offer

$300,000 of 6% convertible debentures.

& Co. Inc.

Nov. 12 it

Underwriters—

program.

announced

was

approving issue.

on

Probable bidders: Halsey, Stuart & Co. Inc.; Salo¬

Jan.

Hutzler; Kidder, Peabody & Co.; Blair, Rollins

Bros. &

and

Peoples Finance Corp., Denver, Colo.

it of $1,995,000 equip¬

series M, dated Aug. 15, 1953.
Halsey, Stuart & Co. Inc.; Salomon

certificates,

trust

issue

may

Rollins & Co. Inc.

(2/8)

Bids will be received by the company up to noon
ment

be

Bros.

mon

Louisville & Nashville RR.

company

(EST) on Feb. 3 by
the company at
Philadelphia, Pa., for the purchase from
it of $5,265,000 equipment trust
certificates, series BB,
to mature annually on Feb. 1 from 1955 to 1969 inclu¬

Laclede Gas Co.

ance

construction

it

Southern

that

ders:

Underwriters—to

Jan. 28 stockholders will

reported

was

$12,500,000 of first mortgage bonds due 1984.

by competitive bidding. Probable bid¬
Halsey, Stuart & Co. Inc.; Equitable Securities
Corp.; Kidder, Peabody & Co., Merrill Lynch, Pierce,
Fenner & Beane, Union Securities Corp. and
White,
Weld & Co.
(jointly); Harriman Ripley & Co., Inc.;
Kuhn, Loeb & Co., Lehman Brothers, Drexel & Co. and
Salomon Bros. & Hutzler (jointly); The First Boston
Corp. Offering—Expected in March or April, 1954.

and
Pro-

bank loans and for new construction.
be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman
Brothers and Bear, Stearns & Co. (jointly); Kuhn, Loeb
& Co., Salomon Bros. & Hutzler and Union Securities
Corp. (jointly); Glore, Forgan & Co.; Blyth & Co., Inc.
and The First Boston Corp. (jointly); White, Weld & Co.
and Shields & Co. (jointly); Harriman Ripley & Co., Inc.;
Equitable Securities Corp.
«eeds—To

it

To be determined

announced that company may issue

1954 additional first mortgage

«ell later in

16

about

Proceeds—For

City Power & Light Co.

Kansas
Jan.

plans to offer to its
issue of $3,300,000 25-year 6% debentures (3% fixed and 3% contin¬
gent) with warrants attached. Proceeds—To repay loans
and for working capital.
Underwriters—Paine, Webber,
Jackson & Curtis, Boston, Mass., and Hamlin & Lunt,
Buffalo, N. Y. Meeting—Stockholders will vote March 3
21

stockholders the right to subscribe for an

Pennsylvania Electric Co.
Dec.

Thursday, January 28, 1954

if Sheraton Corp. of America
Jan.

new

Dec.

Inter-Mountain Telephone Co.
it

the purchase from it of $2,970,000

2 for

able bidders: Halsey, Stuart & Co. Inc.; Salomon Bros. &
Hutzler; Kidder, Peabody & Co.; Blair, Rollins & Co. Inc.

subscription by stockholders on the basis of
-one new share for each 20 shares held.
Price $7.50 per
^share. Proceeds—To increase capital and surplus.

23

(2/2)

ment trust certificates to mature in l-to-15 years.

offered for

Dec.

Feb.

on

North Shore Gas Co.

announced company plans to issue

11,223 additional shares

if New York, Chicago & St. Louis RR.

Bids will be received by the company up to noon

of Philadelphia

Industrial Trust Co.

Underwriters—To be determined by

construction.

new

Continued jrorn page 59

»

...

(508)

40

stock to be sold to the public.

construction of

a

^natural gas

Proceeds—To

pipe line from the

Canadian Peace River field to western

Washington., and

Oregon. Underwriter—Eastman, Dillon 8c Co.,

New York.

Volume 179

Number 5294

and Financial Chronicle

The Commercial

...

(509)

The

Indications of Current
Business

following statistical tabulations

latest week
week

Activity

or

or

month available.

month ended

Latest
AMERICAN

IRON
steel

Indicated

STEEL

AND

Month

Week

Ago

AMERICAN

and castings

and

(net tons)

§1,760,000

Jan. 31

output—daily

average

(bblc.

99.4

75.7

1,706,000

*1,766,000

2,240,000

BANK

DEBITS—BOARD

of

November

BANKER'S

of

6,33^2,550

jan. 19

Crude runs to

stills—daily
(bbls.)
Kerosene output (bbls.)

(in

(bbls.)

♦6,271,800

6,248,100

6,524,000

OF

NEW

YORK—As

(16,968,000

6,960,000

6,918,000

7,081,000

27,620,000

24,084,000

24,037,000

Jan. 16

2,836,000

2,872,000

2,521,000

2,791,000

Jan. 16

10,323,000

10,382,000

10,220,000

10,903,000

Domestic

output (bbls.)
-—Jan. 16
Stocks at refineries, bulk terminals, in transit, in pipe lines-

shipments

8,923,000

8,599,000

8,281,000

9,023,000

Domestic

warehouse

oil

(bbls.)

output

Residual fuel oil

unfinished

and

Kerosene

(bbls.)

Distillate

fuel

Residual

ASSOCIATION

at

Jan. 16

165,551,000

Jan. 16

25,873,000

28,588,000

32,389,000

24,932,000

99,675,000

106,628,000

123,444,000

49,066,000

49,668,000

49,975,000

47,745,000

at

Jan. 16

freight loaded

freight received from connections

U.

CONSTRUCTION

(no. of cars)

.

Bituminous

and

coal

lignite

Pennsylvania anthracite
Beehive

coke

(tons)

$195,848,000

$226,520,000

$229,078,000

103,189,000

89,675,000

64,191,000

122,994,000

70,356,000

106,173,000

162,329,000

106,084,000

51,844,000

84,366,000

125,313,000

77,809,000

18,512,000

21,807,000

37,016,000

28,275,000

8,180,000

*8,190,000

8,300,000

685,000

534,000

516,000

703,000

Not avail.

Not avail.

61,500

4,261,700

9,560,000

Electric

AVERAGE

(in

output

=

85

Jan. 16

100

Finished

steel

—

DUN

92

r 34

*94

(per

(E.

8,173,745

31:

$127,647,000

j

goods

on

—l

and

shipped

8 112 00G

56 269 00G

49,032,000

38,743000'

between

foreign countries
Total

;—

42,509,000

40,739,000

32,016,000

$574,079,000

$534,100,000

$491,849,000

$780,047

——

BUILDING

CONSTRUCTION

TION

IN

DEPT.

S.

(000's
All

URBAN

PERMIT

AREAS

OF

OF

VALUA¬

THE

LABOR—Month

U.

S.—

Oct.:

of

omitted):

building

construction

New

residential

New

Additions,

alterations,

etc.

BUSINESS FAILURES—DUN &

INC.—Month

of

Manufacturing

$822 827

422,401

278,133
108,269

—

$801,062

393,646

nonresidential

Retail

260,908

47o'o98
247'l8D

117,753

105',530

BRADSTREET,
;

December:

number

193

number

332

number

service

'

number__

200

162

173

4,634c

4.376c

Retail

$56.59

$56.59

$56.59

$55.26

Construction

$28.50

$28.83

$30.00

$42.00

Commercial

66

583

$13,568,000

$8,458 00G

8751000

4,241,000

liabilities.

5,068,000

1

1,871,000

2,687,000

953,000

$36,795,000

$23,400,000

29.625c

29,700c

29.675c

.Jan. 20

28.800c

28.900c

29.425c

35.075c

.Jan.20

85.500c

84.500c

85.250c

121.500c

.Jan. 20

13.000c

13.500c

13.500c

14.000c

Manufacturing

$46,721

*$47,044

*$43,885

.Jan.20

12.800c

13.300c

13.000c

13.800c

Wholesale

11,964

*12,041

*11,362

Jan.20

9.500c

10.000c

10.000c

12.500c

Retail

22,439

*22,720

*21,540

$81,124

*$81,805

*$76,787

.Jan.20

Export
Straits
Lead

refinery

tin

1

(New

(New York)

Lead

1

Louis)

(St.

:

24.200c

DAILY AVERAGES:

MOODY'S BOND PRICES

MERCE NEW

(millions

of

MOODY'S

112.19

107.98

110.88

OF

107.27

106.74

105.86

108.16

100.98

100.65

100.32

103.80

105.17

104.66

103.97

106.21

Durable

107.80

107.44

106.56

108.52

Nondurable

109.42

108.88

107.98

111.25

-Jan.26

corporate

2.61

2.67

2.78

2.79

-Jan.26

3.31

3.34

3.39

3.24

-Jan.26

3.04

3.06

3.12

3.05

-Jan.26

Aaa

3.19

3.22

Railroad

Utilities

Public

Industrials
MOODY'S

PAPERBOARD

Orders received

Production

(tons)

—

——

of activity
Unfilled orders (tons) at end

Percentage

of period

—

All

3.47

3.51

3.38

3.29

3.31

3.36

3.23

3.28

3.10

419.0

417.8

415.8

404.5

223.396

Jan
Jan 16
Jan- 15
;_Jan. 16
..Jan.

t230,479

—

Number

243,315

Payroll
All

Durable

1414,047

*111.7

149.2

*149.9

17,008,000

♦17,208,000

16,778,000

*9,939,000

9,594,000

7,143,000

(1947-49

♦7,269,000

7,184,000

109.6

Average—100)—

goods

ESTIMATE

AVERAGE

500,300

95

♦107.53

106.92

108.62

<■

145/7

,

of

HOURS—WEEKLY
—

U.

S.

DEPT.

OF

'

.

Durable

*$71.60

$71.78

manufacturing

77.11

goods

_

$72.14

76.73

64.29

goods

Nondurable

All

♦63.73

>

.

30,392

25,360

24,184

36,946

863,821

752,352
$29,001,891

720,666

1,074,494

$32,173,637

24,156

27,941

26,697

32,700

Jan.

—

234

244

137

147

Jan.

23,922

27,697

26,560

32,553

Jan.

sales

668,498

869,608

781,875

41.7

40.6

42.5

39.2

*39.1

40.5

$1.79

goods

manufacturing

*

Durable

♦$1.79

$1.73

1.89

goods

Nondurable

goods

(DEPT.

INVENTORIES

Month

COMMERCE)

OF

'

Jan.

8,092

6,368

4,982

4,906

sales

Jan.

660,406

863,240

776,893

$27,318,721

$27,244,610

$30,113,115

208,270

330,230

268,370

1.53
■*r.

of

dollars):

Inventories—

$26,812

$37,682,687

Jan.

1.83

.

1.63

'$26,983

19,909

*20,057

*$24,002
*19,883

$46,721

'$47,044

♦$43,885

24,559

*24,990

24,271

$30,798,000

$30,398,000

$30,236,000

$285.4

*$287.2

$277.2

197.7

*199.3

191.4

196.9

♦195.6

187.8

87.3

*88.7

85.6

52.6

*52.7

50.0

24.1

*24.2

22.5

33.7

*33.7

33.3

4.0

4.0

900,164

Jan.

1.89

SERIES—

*

short sales
other

•

SALES

&

NEW

(millions

November

of

:

1.64

—

905,070

Customers'

-

*40.0

earnings—<

MANUFACTURERS'

other sales.

•

40.1
40.8

goods

$46,713,904

Jan.

77.78
63.59

{

manufacturing

Hourly

$38,131,438

.

,

December:

earnings—

Nondurable

\

Customers'

285,170

Dollar

value

dealers—
shares—Total sales

Ytound-lot" sales by
of

Number

Short sales

Jan.
Jan.

2*08*270

330,230

268~370

285*170

Jan.

—

STOCK

ROUND-LOT
ACCOUNT

344,460

201,400

223,610

411,750

OF

sales

Other

j

Total sales

183,790

171,520

8,397,870
8,581,660

334,630
8,551,500
8,886,130

6,419,510
6,591,030

158,240

7,516,380
7,674,620

Transactions

of

742,990

614.700

896,470

780,320

95,580

87,620

147,950

101,100

Jan.

583,430

458,860

759,360

665,170

Jan.

679,010

546,480

907,310

766,270

transactions initiated on the floor—
5,500

2,500

143,610

131,870

15,700
261,970

173,700

134,370

277,670

179,300

Jan.

341,700

337,730

338,750

386,211

——Jan.
Jan.
-Jan.

transactions initiated

i

purchases

23,300

26,040
215,811

62,300

17,880

319,195
381,495

222,475

Total sales

Total sales

LABOR

1

PRICES,

—

241,851

1,272,100

Jan.
—Jan.
Jan.
Jan.

.".

sales

WHOLESALE

223,297

246,597

240,355

transactions for account of members—

Total purchases
Short sales
Other

5,600

off the floor—
:

sales

Total round-lot

163,600

149,110

—

Short sales
Other

281,040

Jan,

sales —1

Total sales

Total

156,400

Jan.
-Jan.

Short sales

Other

187,410

Jan.

purchases

(1947-49

NEW
=

SERIES

—

1,108,830

1,516,260

1,330,131

124.380

116,160

225,950

124,580

950,337

?

806,541

1,340,525

1,061,345

1,074,717

922.701

1,566,475

1,185,925

U. S. DEPT. OF

foods

^U^ommodFtles~ot~her
♦Revised figure.
of Jan. 1,

Chan farm and foods

110.9

110.9

Jan. 19
Jan. 19

■

98.4

106.0

95.4

87.0

97.9

Jan. 19

114.5

U4.5

114.4

112.8

((Includes '694,000 barrels of foreign crude runs.

1954, as against the Jan.




'

contributions for social in¬

rental

interest

Personal

1, 1953 basis of 117,547,470 tons.

§Based

on

SSRecord

95.4

income

104.4

103.9

and

1

dividends—

5.1

5.1

50.0

♦49.5

50.0

22.8

21.4

22.8

13.8

*14.5

13.1

268.6

♦270.5

259.1

$107,331,350
21,296,242

$99,941,786

$120,997,87*

21,017,639

16,942,002

120,959,425
3,892,944

137,939,876

from income

128,627,592
4,168,715

charges

124,458,877

100,367,389

2,938,671

117,066,481
83,360,616
2,867,238
80,493,378

97,319,437

42,682,178

42,493,759

41,406,159

payments

nonagricultural

j.

income

—

CLASS I
Commission)—

SELECTED INCOME ITEMS OF U. S.
RYS. (Interstate Commerce
Month
Net

of

October:

railway operating
income

Total

deductions

Miscellaneous
Income

available

fixed

after

Income

for

fixed

90,617,234

charges

deductions

Other
Net

income

income

Other

income

Depreciation
Federal

(way & structure &

equipment)

57,178,847

56,400,565

84,211,928

17,410,173

20,248,721

6,723,082

2,983,279

5,462,222

3.68

3.47

appropriations:
stock

common

3,047,952

23,188,644

taxes

income

3,964,110

133,975,766

preferred stock

3.99

100.1

106.1

high

109.8

98.5

new

110.1

income

87,678,563

transfer

Total

Total

and

3.8

5.1

income

labor

Other

Proprietors

On

products

Processed

employee

On

Jan. 19

95.8

Farm

—

industries

Dividend

100):

Commodity Group—
All commodities

—

surance

Jan.

sales

Total sales

Other

Less

Jan.

purchases

Other

COMMERCE)—Month

billions):

(in

income
Wage and salary receipts, total
Total employer disbursements
Commodity producing industries
Distributing industries
Government

specialists in stocks in which registered-

Short sales

OF

STATES

personal

Service

WOUND-LOT TRANSACTIONS
FOR ACCOUNT OF MEM¬
BERS. EXCEPT ODD-LOT DEALERS AND SPECIALISTS:

Total

omitted)

(000's

30

Nov.

November

of

Total

JanJan.
Jan.

Short sales

Other

of

—As

PERSONAL INCOME IN THE UNITED
(DEPARTMENT

SALES ON THE NEW YORK
STOCK TRANSACTIONS
(SHARES):

MEMBERS

Total Round-lot sales—

Total

Total

MONEY IN CIRCULATION—TREASURY DEPT.

EXCHANGE AND ROUND-LOT
FOR

'-x

purchases by dealers—

Number of shares

TTOTAL

Nondurables

Sales

■

Other sales.

Round-lot

'

5,786,000

110.1

FACTORY EARNINGS AND

All

t78

107.83

Jan.

Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales—

•

7,774,000

5,820,000

—

goods

Nondurable

244,187

Jan.

sales

13,560,000

* 8,000,000

5,694,000
(1947-49 Avge.=100)

♦13,820,000

7,930,000

9,865,000

Indexes

Weekly

Jan.

shares

short

13,624,000

*

>.
Estimated number of employees in manufac¬
turing industries—
All
manufacturing

All

Dollar value

Customers'

workers)

manufacturing

239,772

(customers' purchases)—

Customers'

/

goods

Durable

ODD-LOT ACCOUNT OF ODDSPECIALISTS ON N. Y. STOCK
EXCHANGE COMMISSION:

Number of shares—Total

(production

of

manufacturing

371,487

t212,013

91
390,294

Jan. 22

orders

of

Number of

DEPT.

Hours—

SECURITIES

Odd-lot sales by dealers

S.

SERIES—Month

goods

Employment Indexes

212,033
241,648

PRICE INDEX—

100

AND

DEALERS

EXCHANGE

PAYROLLS—U.

3.25

3.20

AND

LABOR—REVISED

manufacturing

&TOCK TRANSACTIONS FOR
LOT

t

___

LABOR—Month

(tons)

AVERAGE

3.44

ASSOCIATION:

•OIL, PAINT AND DRUG REPORTER
1949

3.52

16

INDEX

COMMODITY

2NATIONAL

3.27

-Jan.26

Group

3.40
3.74

-Jan.26

Group

3.35
3.71

-Jan.26

Group

3.12

3.32
3.69

-Jan.26

—

,"Baa

3.28

-Jan. 26
-Jan.26

A

EMPLOYMENT

All

Aa

COM-

October:

Jan.26

—

OF

108.70

110.88

109.06

YIELD DAILY AVERAGES:

BOND

Average

106.04

112.00

109.60

-Jan. 26

S. Government Bonds

U.

106.92

112.37

L

Group

Group

Industrials

107.44

.Jan.26

Group

95.87

.Jan. 26

Utilities

96.09

.Jan.26

Public

97.62

.Jan.26

Railroad

98.46

.Jan. 26

—

—

SERIES—Month ol' November

dollars):

Total

.Jan.26
.Jan.26

U, S. Government Bonds

DEPT.

7.046,000

4,621,000

$43,754,000

.,

,

INVENTORIES

11,083,000

4,154,000

liabilities

4,836,000

9,757,000

_

service

*

43

815

$23,731,000

liabilities

liabilities

BUSINESS

76

64

liabilities

Total

288

97

" '

45

389

•

813

Manufacturing liabilities
Wholesale

131

88
•

89

*

number

4.634c

175

85

number

4,634c

Electrolytic copper—

124,564,000

11,912,000
47,417,000

28,770,000

„

stored

139,188,000

10,225,000

64,437,000

_—

credits

8,144,074

QUOTATIONS):

M. J.

&

§9,013,905

208

Jan. 21

gross

PRICES

Based

Total

Jan. 19
Jan. 19
—Jan. 19

ton)—;
Scrap steel (per gross ton)
Pig iron

8,976,008

&

PRICES:

lb.)

(per

exchange

Commercial

INDUSTRIAL)

AND

BRADSTREET, INC
IRON AGE COMPOSITE

Dec.

154,308,000

Construction

Jan. 23

kwh.)

000

(COMMERCIAL

FAILURES

$149,738,000

$273,830,000 $245,812,000 $232,145,000-.

Wholesale

ELECTRIC INSTITUTE:

EDISON

METAL

649,694

INDEX—FEDERAL RESERVE

SALES

STORE

SYSTEM—1917-49

705,017

586,824

8173,545,000

Jan. 16
Jan. 16
Jan. 16

„

(tons)

(tons)

DEPARTMENT

618,432

544,544

OF MINES):

S. BUREAU

(U.

01

"i

Federal

624,229

582,053

——~—.Jan. 21
Jan- <■}
Jan. 21

municipal

COAL OUTPUT

of

vSSnrt!

U.

!

construction

Public construction
State and

143,492,000

ENGINEERING

—

Ton

construction

S.

Private

153,586,000

162,343,000

619,871

Jan- 16
Jan. 16

(number of cars)

NEWS-RECORD:
Total

$141,115,000

RAILROADS:

Revenue

ENGINEERING

A*°

SYSTEM—Month

88,773,000

(bbls.)

Revenue

CIVIL

Year

M°nth

Exports

Dollar

Jan. 16

at

AMERICAN

OF

(bbls.)

(bbls.)

oil

fuel

gasoline

at

oil

Previous

OF

ACCEPTANCES
OUT¬
STANDING—FEDERAL RESERVE BANK

24,163,000

Finished

GOVERNORS

DOLLAR

Jan. 16

fuel

OF

thousands)

Jan. 16

average

output

Distillate

of that date:;

are as

INSTITUTE:

condensate

42 gallons each)

Gasoline

of quotations,

cases

THE FEDERAL RESERVE

PETROLEUM

oil

Crude

in

or,

either for the

are

Latest

Equivalent to—
Steel ingots

Dates shown in first column

-

that date,

Ago

*74.1

§73.8

Jan. 31

production and other figures for the

cover

Year

Week

INSTITUTE:

operations (percent of capacity)

Previous

on

61

annual

figure.

,

capacity

of

124,330,410

tons

tNine days ended Jan. 8.

Ratio

of

income

to fixed

charges

TRANSACTIONS IN DI¬
AND
GUARANTEED SECURITIES
S. A.—Month of December:

,

TREASURY MARKET
RECT
OF

U.

Net

sales

Net

purchases

•

n

$1,052,000
$615,500

$11,696,750

62

The Commercial and Financial Chronicle...

(510)

Continued

from

Salesmen—Key to
ican

going to take the position
answer
to this question
an emphatic yes!
It can be
yes if businessmen will keep their
eyes
on
the underlying growth
trends in the economy—if they
will work to create increasingly
attractive goods and services and
sell them aggressively and confi¬
dently—and if their government
am

that

attitude

Now

our

discussing the first of

of

do

series

distance

events

of

the

12 months

million

United States.

in

born

were

This is

for the future.

great importance
It

assured

for

of

look

the

back

with

amusement

theory,

20 years

widely accepted
that the American

ago,

population

about to level off

was

become

and

static, with births
just equal to deaths. Certainly no
one
is warning us today about
the dangers of race suicide.
Our

birth

is

rate

now

among

tion.

Since

has shown

1940

population

our

net growth of nearly

a

of

of

our

automotive

transportation. Measured against
standard but our own, our
in

long

to

way

of

desires

look

have

still

we

a

satisfy the
people

to

go

American

the

kind

the

for

field

this

But

miraculous.

of

personal

trans¬

portation they want.
A

weeks

few

the

ago

of automobiles

count

in

annual
use

was

released

by R. L. Polk and Com¬
This report, the most ac¬

curate

28

fill—and

wonders

instance,

field

achievements

gether with

ical care, it has resulted in a re¬
markable increase in our popula¬

the

any

pany.

advances in med¬

for

the

needs in

the highest in the world, and to¬
our

available
that

shows
were

still

a

as

11

over

passenger

of

industry,
of last July there
the road—out
slightly oveh 42

cars

on

of

total

million prewar

for in¬ million cars in use. In one way
stance, with a net growth of only it is a tribute to the automobile
18 million in Russia, a much big¬
industry that so many ancient
are
still
of
ger country. The striking fact for automobiles
some
the future is that
years

in

in the

—

relatively

a

1960's

the

—

millions born during World

many

"War II will start getting married
and having children.
Then we
look

can

for

birth

annual

totals

that will make the recent records

conveniences of modern life. And

tisone—the drug that has meant so
much
to people
suffering from

with

arthritis and asthma—has been

population

our

manifold

the

and

growing

it is, no one of us here today

live

to

as

less

ing

practical
are

value

how

But

to

their

of

those

many

owners.
owners

content with their cars?

for that

And

matter, how many people

with

cars

built

and

1950

are

late

as

1949

as

willing

to

stand

pat with what they have when
they see the kinds of cars that

goods

est

in creating

force

kets.

this

But

auy

remarkable degree, Ameri¬

a

business creates its

can

own

mar¬

between

1940

and

1975

population will have increased
by more than 70 million!
This
gain alone is numerically greater
our

•than the entire population of the
United
States
in
the
Nineties,
when

the first

appearing

on

automobiles

were

streets.

our

Resource
In

country like

a

with

ours,

an

It

that

means

markets
minds

rapidly
increasing
priceless resource.

a

needs—and

the

do

our

the

our

and

—

to

and

hands

nation's work—

going

are

year

to go on increasing
after year, decade after dec¬

ade.

Of

there

course

and downs, but I
Jong view.

Think of what
million

am

an

people in

will

ups

taking the

addition of 70

one

generation

means

to the American market in

terms

of

homes

to

be

built

and

equipped for Twentieth Century
living — automobiles to be pro¬
duced
to

and

run

for
and

and

on,

them

built

roads

to

places

park

churches

for

and

—

them

provided

and

schools

hospitals

and

playgrounds to be created for the
benefit of the minds, bodies
spirits of all these people.
The
main
force,
the

and

prime

mover

of

the

American

market

is the appetite

Consider

million

these: (1) that people
$200 billion in savings;

are

(2) that the last thing




an

in

ucts

have

that

appeal.

It

irresistable

an

creates

facts:

17

Amer¬

men

some

mobile market.

who

have

the

I

mean

the

mar¬

In 1950 the
some

up

census

facts

some

on

takers collected

place, about half of the 46 million

is

taken

in ithe

but

a

the counters and out of the show¬

It

use.

creates

markets

by

in¬

knows

how

to

it—is

move

4

had

inside

forming the public day after day again the man of the hour. Prod¬
of the pleasures, the economics, uct advertising and product dis¬
and the advantages of the goods play are important, but it is the
and

services

makes

it

and actual demonstration of the prod¬

produces

available.

And

creates

it

that

uct

closes

the

most

sales.

markets by investing in constant¬ Everyone in the automobile busi¬
ly improving methods of produc¬ ness knows that the all-important
tion—thus building into products thing is to get the customer into
the showroom and then put him
more value, often at lower prices.
A

short

time

ago

I

behind

had

occa¬

sion to examine the specifications
of the first Chrysler car that was

presented
in

was

In

the

to

1924,

some

ways

I public.

That

wheel.

a

months

to

And

come

expect
the efforts to bring people close
to the product to become more

other lines.

impressive. It had fourOne of your fellow
bankers, Mr.
wheel hydraulic brakes.
It had
Richard Courts of
Atlanta, said
a
high-speed,
high-compression
recently: "We have mastered pro¬
engine with the highest compres¬
duction, but we have not yet

was

very

sion ratio to be found at that time

in

production

pistons

The

cars.

made of aluminum.

were

The

en¬

mastered

consumption."
In
so
saying, he laid the problem right
the

on

line.

The

mastery of this
gine was lubricated by filtered
problem is an assignment — the
oil under pressure. The carbure¬
top assignment—for the country's
tor
was
equipped with an air
cleaner.
of

Certain

that

30

1924

features

other

Chrysler,

how far

we

have

salesmen.

than

>' The

years.

of

come

standard

-

in

model

might like to

us

a

-greater

people

extent

realize

the

—

however, health of
the nation's business this

frame.

Some

To

many

and

year

one

of

ease

those

and

times

as

mand,

own

in

to

years

will

come

depend on the success with which
the salesmen of America persiiade
the people of America to live as
well

they

as

The

main

responsibility
healthy markets in

creating

ahead

year

afford to live,

can

rests

with

His decisions

nessman.

with

three

and

a

half

and

which

down and eat

can

be

driven

a

generation apart.

The factory

re¬

tail

brakes

and

PowerFlite

So we can conclude that
the price of one of
today's Chrys¬
lers is about the same as the
price

dwelling

was

not

even

an

ice¬

there

effort

three

are

indicated

his

recent

by

mes¬

sages that are of the greatest im¬

portance to business
deserve

the

and they
of everyone
good markets in
—

support

who want to

see

the months ahead:

Stimulation

of
of

for plant and

To

the

business

in¬

through accelerated

amortization

extent

expenditures

equipment.
that

business

is

permitted to write off its capital in¬
vestments in shorter periods than

those

now

more

incentive

required, there will be

equipment,

invest in

to

in

research

the

busi¬

invest¬

on

for

extent

by the amount of
available

agencies—which

from
means

consumer

financing
ultimately

from the banks.' But businessmen
of all kinds—the

salesman

—

all

ence

between

the

two

cars

in

better plants.
most

new

and

need

the

effective

in

of

the

even

be

more

the

creation

and

new

This

is

right

one

created

by

attitudes

the

and

policies

the

and

actions

of

is

fundamentals

(2)
I

modern

doctrines

slogans
and

that

groups

course.

the

of
industry and
have had enough
and
formulas
and

we

commit

individuals

to

unalterable

an

(

in

down to

making

need

we

dollar that will

better

I

also

believe

credit

chase

of

"steady"

it is today.

as

need

we

credit to finance

sion,

a

be worth at least

much tomorrow

as

finance

to

adequate

business

expan¬

the

pur¬

houses, and credit to
purchase of cars and

finance the
hundred

a

other

kinds

durables.

sumer

headed

of-

con¬

Realistic, hardby the nation's

thinking

banking fraternity—working with
the
Treasury and the Federal
Reserve System — can give us a
flow of credit gauged to the needs
of
a
growing economy, and a
sound

(3)

dollar besides.

,

Strong support by the Federal
Government of local efforts in
the

building

of

an

adequate

highway system.
worker in

a

industry I have
mediate
of

the automobile

strong and im¬

a

interest

better

in

roads..-

the building
Naturally, they

better markets for automo¬

mean

tive products of all kinds. I be¬
lieve most people will agree with

however, that to increase the
efficiency of the economy and the
me,

convenience
needs

an

roads,
bring

.

of living the nation
adequate systems of

streets and

highways. To
sadly neglected highway
system up to date will require an
our

expenditure
lion

a

year

of
at least .$7 bil¬
for the next 15 years.

Most of the work of

planning and
building this system will be done
by the states, counties and cities.

It is the states that must take the

initiative, and provide the bulk

of
the funds, and it is the states that

provide leadership to local

pressways

world

government
of

time. .-.In,

products
processes.

to get

of credit.

believe

the

approach to the ever-changing
our

new

Realistic policies affecting the
volume

building

Federal Government in
Washing¬

of

better

a

markets.

the

ton.

problems

of

way

governments

that

The im¬

be

productive

must

atmosphere

government

ways

capital goods; but an
important result Would

I

the

one

mediate effect would
market for

atmosphere for their efforts. And
mean

This is

help build markets.

can

As

for
the

ment in plant and equipment will
determine the size of the market

much power at your com¬ icredit

units were of that first 1924 Chrysler — in
found to be using ice for refrige¬ terms of
what the customer's dol¬
ration; and in another 4 million lars will buy. And what a differ¬
units there

of

v

first Chryslers—but

with less effort than it takes to sit

power

The occupants of more than

million

interest in

business, I would

the President in

can

year

struc¬

good

concerned,

during the

you

and more intense, not
only in the
just 30 years ago.
automobile business, but in
many
that first Chrysler

only cold dollar.
the

are

once

good

million

admitting fully that I

businessman's

like to suggest that so far as your
own
areas
of immediate interest

tion methods is going to keep the

are

running water

and
a

continued

industry does to im¬
its products and its produc¬

prove

I believe the nation is
transmission, is $3,346. Included
going to
percentage of in the current
price is about $700 enjoy more of what it has had
ready right now for re¬ in
Federal
and
state
taxes— during the past
year—good gov¬
placement.
And an even larger
whereas in 1924 the tax hidden
ernment, sound government, and
percentage of them are ready for in the
price of a car was certainly realistic
government. I like the
a
thorough modernization. It is not much over
$100. Also included evidence I
have^een that the
hard to believe, for
instance, that in this current price is about
$1,- present Administration is real¬
nearly 8 million of the dwelling 000 worth of
inflation—since to¬ istic and practical in its
thinking,
units
counted
in
1950
had
no
day's dollar will buy less than and resilient ancfegresourceful in
piped running water, and that two-thirds as much as
the 1924 its

2050,

them

area,

have

.

price of the 1924, 6-cylinder
Chrysler was $1,595. Today the
factory retail price of a valve-inwar or earlier.
Now a good many
head V-8 Chrysler New Yorker,
of those old houses and apart¬
equipped
with
power
steering,
ments will be doing duty when
Census

the

vestment

by rooms and into the hands of cus¬
extending financial credit — by tomers. And this is the job of the
making it possible for millions of salesman.
The
intelligent,
re¬
people to pay for the things they sourceful, effective salesman—the
man
who knows his product and
buy while they are enjoying their

dwelling units in 1950 were built
about the time of the first world

the

the size of the mar¬
things business has
Confining myself to this
on

for

sell.

to

(1)

good steak.
banker, the in¬
housing that point
Now let's look at the compara¬
dustrialist,' the real estate man,
rather startling
tive prices of these cars built a the
automobile dealer and
the

In the first

kets

The Job for the Salesman

more

market opportunities.

the state of business—and par¬

on

ticularly

Nothing

real

for housing—and the equip¬
ment needed in a modern house.

businessmen, all of us are
immediately concerned with
the effects of political leadership

on.

markets

this

ket

ture.

over

these

also

for

Of producing, selling and
serving,
points for all of us to re¬

some

have

to¬

As

directions
told

capital goods: His ingenuity
in creating new and more attrac¬
only for sentimental reasons. Just tive products and hi^yigor in sell¬
selling.
compare that first Chrysler, which ing those products will be
prime
The Housing Market
was
a
sensation in its day, with factors in
determining the size of
Let's look at another kind of one of our current, almost com¬ the market for consumer goods.
automatic
models,
in And people's ability to buy those
market, one that is just as impor¬ pletely
tant to the economy as the auto¬ which you can ride with complete goods will be determined to a great

waiting

another 6

member

the market

on

families

of the people for
high and rising standard of liv¬
ing. As we go about the business

a

be

as it goes.
It creates markets economy moving ahead, however,
by designing and building prod¬ unless the products move across

reveal

will to do

immense and growing productive

potential,
a
population is

being put

Facts like these point to oppor¬
tunities.
The market is there—

Increasing Population—a Priceless

could

re¬

Political

most

kets

was a touring car equipped with
country
have no car at all. Of every 100 curtains. Our company advertised
with pride that the top could be
families that do
own
cars,
89
folded or raised by one man. The
have only onie car. Thirty-seven
standard
wheels were made
of
of every 100 of the nation's farms
wood. The horse-power rating was
do not have passenger cars. And
68. And the body was constructed
66 of every 100 farms have no
of pressed steel over a hardwood
trucks.

years

to

gram

Our

Leadership

mar¬

is

not, by
entirely automatic.

means,

To

bigger

desire

lion.

the

a

re¬

last

This is the

gram.

a

the

and

are

that in

$5

stories

day?

mean

from $200

years

than

during

to

more

By 1960 it is expected to be
178 million; and by 1975, 206 mil¬
will

price

result of heavy investment in
building search and
better equipment.
bigger markets than just produc¬
Similar

is

lion,

This

in

three

fully met.

there

But

look very modest indeed.
Our population is now 161 mil¬

35

duced

will

of those

demands

the

see

markets

the

to

million—as compared,

few

long, long way to go goes on in industry after industry.
I noticed not long ago, for in¬
satisfy, let alone satu¬
markets for housing and stance, that the producers of cor¬
a

we

our

Unler

/

of increasing effi¬

process

Business

com¬

ciency, improving products and
building in greater product value

that

indicate

these

automobiles

the

go,

do,

and distribution that
accomplished in the

past.
Consider,

this

country is
continuous
growth
time ahead. We can

long

a

now
on

that

means

to

to
to

the

about

been

have

have

still

we

production

new rec¬

a

have

have

still

less

talk

the

ord—the biggest year in a series
of very big years — and it has

This

had

units

and

I

the

about

more

still

we

we

needs

just past, close to four

talk

to

better

things

economy.

babies

Yet

wonder sometimes if we wouldn't

affecting the
In the

—

share

our

themselves.

for

"ifs," let's put first
things first and talk about the
important recent event—or

most

of

have done

us

created

three

growth

(3) that while

terms of performance, style,
fort, safety and satisfaction!.

a

services to meet about- the results of investment
of
pointing with pride to the the needs of a dynamic, growing,
in cutting the production costs and
standard of living in the United never-satisfied
population.
The the
prices of the light metals, of
States. And we have good reason
desire of people to
live better
many home appliances, of plas¬
to be proud of the kind of life
tomorrow than they did yesterday
tics, synthetic fabrics, and so on
the people of this country have is without
any doubt the strong¬

economy.

in

rate

desire to live better.
All

realistic

and

toward the needs of

growing
these

sound

a

before

family will do is cut back its

dwelling

like

have

we

people here live better than peo¬
ple anywhere else in the world,
few
people in this country are
living as well as they would like
to live; nearly all of them have
a

million

Facts

standard of living;

the

be

maintains

fact

another

kitchen sink!

no

Nation's Business Health!
can

is

that is hard to believe: Six and
half

I

here

And

box.

3

page

Thursday, January 28, 1954

in

planning
all-important

the
and

arteries

and
ex¬

leading

into the cities.

At the same
time,
however, the Federal Government
should

in

the

continue
program

balance
and

and

its
so

participation
as

to

coordinated

provide
effort

professionalized standards of

road

practice.

The vast American market has
been created in great part by our

willingness in the past to build,
maintain, improve and extend the
world's
way

greatest

markets
we

job.

system of high¬

transportation.

must

To keep our

vigorous and expanding
go

on

working at that

Volume

179

Number 5294...The Commercial and Financial

Chronicle

(511)
Labor Union Funds

&

cast

world is in¬
weather-eye on

a

activities

of

unions

labor

lending field. These organiza¬
tions with their huge
treasuries,
are
showing an increasing tend¬

ency

into industrial

Our Military

soned

ported

market and consequent dip

in yields on

firms

high-grade corporate
causing any particu¬

bonds is not

ventures.

issue market is not,

new

causing

undue

any

in

The

that

they

business

however,

confident

develop

the

at

leaning
waiting
winds
had

it

been

outlays

will

indicated

blow.

that

for

plant

new

It

It

the

expansion

about

and

week

a

thinking

by

in

more

be

'may

file

that

the

it

Sec.v

Hum¬

the

that

assumed

market,

it

was

are

not

indicated

that

expecting anyrthing in the way of new long-term
financing at this time.

and

of

Year

Book

deal

the

■'

There is

that

the

been

February

Thor

—

Hultgren

Two

Rector

Street,

on

COMMON
The

York

G,

N.

(50(!)

per

market

W.

AMERICAN GAS

a

;
Secretary and Treasurer

COMPANY

er

Company have declared quarterly

dividend

of

142

No.

dollar

one

and

The United Gd$

Improvement

Company

Secretary

DIVIDEND
#

A regular quarterly dividend of
\ fortyone cents ($.41) per share on

the Common capital stock of the Company
issued and outstanding -in the hands of the,

declared

payable

to
stockholders
March 1, 1954.

INCORPORATED

A

1954

194th

Edition—with

atlas

and

Y.

Common Dividend and.

an

—1954

New York 3, N.

Extra

quarterly dividend of $1.06K

January
26,1954

April 1, 1954

Dividend

dividend

(850)

dividend

of

of

Eighty-five

share and

per

One

Dollar

extra

an

($1.00)

per

Board

record

of Directors

today
quarterly dividend of
SO<f. per share on the outstand'
ing capital stock of this Com'
pany, payable March 10, 1954,
declared

map

will

latter

become

date

acquires the

properties

of

gas

the

debt
when

big

with

now

of

record

the close of business

at

102,

throughout

tfremely

the

requiring

Harry L.

up-to-

Philadelphia, January 26, 1954
.

10,

are

Business"

some

ties

stockholders of record
of business

A

dividend

of

35

mon

&

per

on

share

the Com¬

Stock of Allied Chemical

Dye Corporation, payable

the

Common

of record

payable

pany,

March

1954

ord

y?
TT

rec¬

the close of business
March 1, 1954.

on

at

Southern

H. D. McHENRY,

Vice President and Secretary.

February 11, 1951.
W. C.

NOTICE

Company

KING, Secretary
HOOKER

January 26, 1954.

DIVIDEND

ELECTROCHEMICAL
COMPANY

New

$4,25 Cumulative Preferred
Stock

RICHFIELD

The

Board of

Dividend

Directors

Company on January
29,
a
quarterly dividend of
share on its $4.25 Cumula¬
tive
Preferred
Stock,
payable
March
25, 1954 to stockholders of record as

dividend notice
18, 1954, declared
75

cents

the first

March

per

share

quarter

meeting held January

regular quarterly dividend of

a

on

to

of

MANUFACTURING COMPANY

year

at

the

1
Secretary

Second

2,

Preferred

Board of

Debenture: The regular quarterly
on

the

Debenture Stock will be paid Mar.

1954, to stockholders of record
Feb. 8, 1954.

The

Board of

Directors

Dividend

RICHFIELD
Oil

quarterly dividend of 30 cents

per

Corporation

Executive Offices: 555 South Flower Street. Los Angeles




A

17. Colifornia

Voting Common:

share

on

the "A" Common and

of Hooker Elec¬

Company on January
20,
1954
declared a quarterly dividend of
Fifty
Cents
($.50)
per
share on its
Common
Stock, payable February 25.
1954
to
stockholders
of
record
as
of
the

Voting Common Stocks will be paid
Mar. 3, 1954, to stockholders of

of

business

February

2,

1954.

ANSLEY WILCOX 2nd

Secretary

record Feb. 8,1954.

A. B.

close

per

payable

BecordattheClose
of Business

on:

Mar. 15. 1954

Feb. 15,1954

June 15, 1954

May 14,1954

l«/4%(62 '/„*)

Sept. 15.1954

Aug. 13.1954

A dividend of sixty-two and one-hcrif cents

(62*/jf) per share on 2,596,400 shares of
Common Stock without par value of Southern
Railway Company has today been declared
out of

pany

the surplus of net profits of the Com¬
for the fiscal year ended December 31,

holders

of

on

March 15,

record

the

at

1954, to stock¬

close

of

business

February 15, 1954.

on

An
per

share

mon

dividend

extra
on

Stock

of

one

dollar

($1.00)

the 2,596,400 shares of Com¬

without

value

par

of

Southern

Railway Company has today been declared
out of the

surplus of net profits of the Com¬

for the fiscal

pany

payoble

stockholders of

vi&m,

declared,

I '/a% (62i/2<)

ness

no™ YEAR

1,200,000

To Stockholders of

1953,

Newhall, Treasurer

been

Payment

1953, payable

trochemical

"A" Common and

on

value of $50

l'/4% (62i/2t)

Directors of Hooker Elec¬

Stock

par

Date of

declared

Common

today

Amount

1954.

Company on January 20,
a
quarterly dividend of
$1.05 per share on its Cumulative Sec¬
ond Preferred Stock, Series B, payable
March
25,
1954
to
stockholders
of
record
as
of
the i close
of
business
March
2, 1954.
1954

3,
Cleve S. Bonner,

March

have

3JA%

Stock of Southern Roil-

follows;

as

trochemical

dividend of $2.00 per share

February 15, 1954.

business

Stock, Series B Dividend

DIVIDEND NOTICES

1954j payable

stockholders of record

of

Preferred

Company of the

share

per

Cumulative

The

way

declared

the close

Framingham, Mass.

stock of this Corporation for

of the calendar

15, 1954,

close of business

a

1954

$1.0625

NOTICE

York, January 26, 1954.

Dividend! aggregating
shares of

of Hooker Elec¬

trochemical

The Board of Directors, at

Railway

yj:.

Dated: January 23,1954.

man-

Treasurer

13,

1954 to stockholders of

the close of busi¬

at

January 22,

of

Southern Natural Gas Com¬

March 10,1954 to stockholders

Survey of

Stock

rev;

Robert Fisher

share has been declared

on

the close

at

open.

cents

per

($.60)

main

,

February 5, I954'JJ

on

The stock transfer hooks will

Common Stock Dividend No. 60

for

ness

DIVIDEND

GAS

hemical

based

regular

quarterly dividend of
cents (75tf) per share
on the
Capital Stock of thb Company has been declared this
day,
payable on March 10, 1954, to

Birmingham, Alabama

45

per copy.

in rank and file and

Consecutive Dividend

seventy-five

COMPANY

Hied
As

major problems and opportuni¬

scaling-down of allotments.

'1

THE TEXAS COMPANY

A

1

SOUTHERN

has been declared

—

•

206th

Hilyard, Treasurer

Sixty Cents

Almanac

Secretary

v.

NATURAL

University of Chicago, Uni¬
of Chicago Press, 5750
Ellis Avenue, Chicago
37,' 111.

Pay

.

•'''

at

1954.

versity

1954

.

February

W. D. Bickham,

January 26, 1954

articles dealing
methods and data on

of

February

Quarterly dividend No. 132 of

—$1.75

heavy,

business

the

country.
ex-

of

January—School of Business of

the

\ Subscriptions were reported

■

stockholders of

Checks will be mailed.

11

—

—"Journal

the

issue,
carrying a ZV2% coupon, offered
an indicated yield of 3.38%.
This
proved attractive to pension funds
institutions

-close

Corporation,
Boulevard,

activity in 1954

ness

out

to

5, 1954.

Com¬

Stock of The American Tobacco

which forecasts of general busi¬

Ih the works.

Brought

Viscose

Pennsylvania

Forecasting

utility

consummation of plans

with

share have been declared upon the

.Philadelphia 3, Pa.

the

heat¬

and

1617

of

fibers

glossary of textile terms-r-

American

assump¬

the

Gas

Wilson

physical properties of all major

origi¬

obligation of Common¬

Illinois

W.

52, N. Y. (cloth), $3.

man-made

Northern

H.

—

Fiber Facts: 1954—Booklet giving

mood.

tion,

■

February 26, 1954.

a

stockholders

to

regular

Cents

New York

by

31,

record

Johns Hopkins, Treasurer

Co.'s

as an

of

§er share on thedeclared payable
4lA % Preferred
tock has been

The

111 Fifth Avenue

Gas

wealth Edison Co., but

March

1954

OIL COMPANY

Company, payable in cash on March 2,
1954, to stockholders of record at the

nally

Of ICE

quarterly dividend of 45c per
share on the Common
Stock, par
value $13.50 per
share, has been

SOCONY-VACUUM

public has been declared payable March
holders of record at the
February 8 1954.

has

Rush

designated

N

A

l

Company, 950 University Ave.,

is

"

KENNETH H. HANNAN,

Common Stock Dividend

mon

issue

February 5,

The Directors of International Harvest¬

GERARD J. EGER,

folding

The

cents

1954.

HARVESTER

//

A

With

Fifty

the outstanding

on

the close of business

seventy-five cents ($1.75) per share on
the preferred stock payable March 1,
1954, to stockholders of record at the
close of business on February 5, 1954.

AND ELECTRIC COMPANY

by the

come

share

No. 172

$60,000,000 of 25year first mortgage bonds, found
the market in a really receptive

and

uee
A cash dividend of

Treasurer

INTERNATIONAL

Y.

BALGOOYEN,
Vice President and Secretary,
1954.

22,

AND CARBON CORPORATION

January

H.

January

Union Carbide

the

at

DIVIDEND

brought out what
ultimately be Northern Illi¬

nois

ing

record

capital stock of this Corporation
has been declared,
payable March
2,1954 to stockholders of record at

and

Bankers who

upon

of

close of business February 9, 1954.

—

of the Company, at a
22,
1954,
declared
a
dividend of 15 cents per share on the Common
Stock
for
payment
March
10,
1954
to
the
stockholders
of
record
February
10,
1954,

held

Foundry Company

Dividend

East Africa Year Book and Guide

;

stockholders

Directors

Board of

meeting

end of the week.

will

to

INC.

STOCK

remain open.

and

sixty cents

share has been declared
capital stock of The Borden
Company, payable March 1, 1954,
per

the

W. J. ROSE, Secretary

a

Treasury's offer will

.

(60?!)

on

NOTICES

New

Pipe

176

E. L. NOETZEL

January 27

really impres¬
sive show over the last couple of
months.
Feeling
is
that
the

Out

DIVIDEND No.

January 26, 1954

DIVIDEND

York, N. Y., January 21, 1954

The Board of Directors this
day declared a
quarterly dividend of seventy-five cents
per share on the outstanding Commou St
of this Company,
payable March 19, 1954,
to stockholders of record on
February 26, 1954.

NOTICES

An interim dividend of

(cloth), $3.

Britain

United States Pipe and Foundry Company

gainsaying the fact

no

government

putting

(paper), $1.50.

JOHN W. BRENNAN, Secretary & Treasurer

Transport and the State of Trade
in

NOTICES

The transfer books will

10, ,1954, to the
close of business

Treasury will

to mature during
early March.

Y.

United States

H. W. Wilson Company,
University Ave., New York

52, N. Y.

DIVIDEND

New

at¬

holders of its securities due

a

N.

and

Edition—with

he

prospective borrowers is
disposed to wait and see what
offer

Economic

John

same

of

kind

23,

—

an¬

refinancing

that

was

at

dealers

the

rank

las

950

Considering the current strength

other direction.
It

Africa

Guide—1954

in the long end of the
government

however, the

been

its

in¬

time, make
provision for the $4,700,000,000 of
l%s, due for payment on Mar. 15.

improvements

ago,

has

—

certificates due Feb. 15.

would,

General Motors Corp. of its plans
to- spend
more
than
a
billion
for

of

noted

was

And

year

announcement

strongly
anticipate some

to

21/4%

compared with last.
Since

was

phrey must provide for the ma¬
turity of about $8,100,000,000 of

there

this

;

new

plans by the Treasury within the
next few days.

slight tapering off of

a

Southern

COMPANY
Street

nouncement

are

to

business

of

AMERICAN & FOREIGN POWER

Wall

seems

borrowers

Bureau

Treasury Plans

due

bit to the cautious side
see
which way the

a

of

might be
as

moment

prospective

of

wealth

develop in the form of
competition in their field.

clined

But,

that

of

may

course.
•

mod¬

proportions

accumulations

the

in

trucking
replacing

in

otherwise

Government

naturally stirs bankers to wonder¬
ing just how far this new element

the

concern among

are

will

aid

and

mounting

such

underwriters perhaps for the rea¬
son

offering

financial

ernizing their businesses.

market.

sluggishness

be

equipment

lar speed-up of plans of potential
borrowers to enter the
money

Prevailing

to

York

Swomley, Jr. — National
Council
Against
Conscription,
1013 Eighteenth
Street, N. W.,
Washington 6, D. C. (paper), 150.

Union

sea¬

National

Research, 1819 Broadway, New

Re¬

M.

Only

recently
the Teamsters
(AFL)
was
reported
as
buying
into
Fruehauff
Trailer.
Currently the same group is re¬

Lord—Business

DIVIDEND

to put at least part of their

cash

Walter

ports, Inc., Roslyn, L. I., N. Y.
—$12.50.

in

the

The current advance in the

during
1954—
Casey, J. K. Lasser

pay

William J.

:

clined
the

agement

investment
to

The

63

on

ended December 31.

year

February

record

at

Hie

16,

1954, to

close of busi¬

February 5, 1954.
i.

J.

MAHER, Secretary.

s

The Commercial and

Financial Chronicle...Thursday, January 28, 1954

(512)

«4

which

features of the above

BUSINESS BUZZ

greater trade
world and

think nicely of a

Washington
A

Behind-the-Scene Interpretations
from the Nation's

the Russian empire.

Commission

any

the fact
"dollar shortage" has

the

that

not give

does

weight

noticeable

M. i/W'

(L\A/

Randall

is that

these

of

One

V/1II

gJ

y*

xJL#

Capital

between the western

•

•

I

are

obviously of politically doubt¬
ful value, like the proposal to

to

become the excuse for currency

which is a device to

rationing,

WASHINGTON, D. C.

—

It is

altogether likely that Congress,
in framing U. S. foreign trade
investment legislation this

and

be influenced little
any by the recommendations
the
(Randall) Commission

will

year,

If
of

Foreign Economic

an

This

because,

is

Policy.

on

balance,

accepts the assump¬
"dollar shortage"
western Europe is a chronic

the report

that the

tion
«f

there is relatively
little that the foreign govern¬
ments can do about it, and that
that

affair,

pretty much the primary re¬
sponsibility for solving the'^ol5lar shortage" is the burden of
the
United States
through
dollar abroad.
be

To

report

the

to draw a balance be¬
tween
domestic
and foreign
considerations
in
the
whole
pears

trade and

of alleged
imbalance.

problem
currency

suggested
that
foreign military aid be
handled carefully, in particular
it

is

projects," though what is a
sound project is not defined.
Mr.
Randall's commission
recommends
that the United
;

vigorously the es¬
tablishment of a sound climate
abroad for investment, and sug¬
gests that the treaty approach
he
worked toward achieving
back

States

hospitable
foreign investments.
such

climate

a

to

agreements are
recommended against, and this
will find favor with Congress,
Commodity

for farm commodities
which might become subsidized
except

of an inter¬
commodity agreement

through the device
national

like the wheat

off-shore

ticularly as
show

ment

agreement.

prise some with its recommenfor retention

d at ions

of the

clause, which many ob¬
figured would be rated
verboten as it is with all

escape

servers
as

internationally-minded.
Finally, the Randall Commis¬
sion avoided any proposal for a
broad, unilateral lowering of
the

importation of
merchandise into the

impediments to
foreign
U.S.

tie

On

other

the

hand,

even

apparent attempts at a
balanced outlook appeared to
these

the

Hill

to

be

negated by the

report itself.
Thus, while the report recom¬
that technical aid be

mended

projects with
sound and capable personnel, it
also
recommended, those re¬
quirements being satisfied, that
the technical or Point IV aid be
confined to sound

prosecuted vigorously.
There is a considerable vol¬

Hill
which, even if not altogether
vocal, is skeptical of the Point
IV concept. They feel that you
cannot eradicate disease, drain
ume

of

opinion

on

the

chief
scarce

materials became

increase food
supply if you can't invest
heavily in foreign agriculture,
In agricultural education, and
you

can't




1

Eberstadt, President

Ferdinand

sort of

"I'm

undecided—do

think the public will

you

place the right interpretation upon

plenti¬

New York City, has

39 Broadway,

it?"

Inc.,

Co.

&

Eberstadt

F.

of

heavy

a

announced the election of Samuel

ful.

Forget

into municipals, higher
for labor, fur coats for
mistresses, or bonuses for ex¬

support

ecutives.

hower Administration

go

spend
Recommend Trade Deal

proposed that the President
could simply ignore the recom¬
mendations of the Tariff Com¬

it

be
an

its

for

mission

use.

welcome

as

on

This will
the Hill as

epidemic of smallpox on

Investment

recommendations

its

re¬

foreign

of

treatment

specting

Randall Com¬
revealed, as its other
the

investments
mission

proposals, its primary concern
with
getting
U.
S.
dollars
abroad.

proposed that cor¬
making foreign in¬
get a 14 percentage
preferential tax on the
from such

returns

One

imagine

can

investments.
;the reaction

such a "liberal" as
Monroney
(D.,
Okla.) of such a scheme, if oil
drillers took their rigs to Al¬
berta
and
Saskatchewan and
upon

even

Mike

Senator

away

from Oklahoma and Tex¬

as, if such a provision
enacted into law.

were

Furthermore the report recom¬

adjustments

that

mended

well

their

be

individuals as

corporations, upon
from foreign in¬

to

as

returns

that
more
credits be given gener¬
and

vestments,
liberal

in¬

Commission

Randall

cluded:

than

in the Trade Agree¬
ments Act, giving the President
power to
cut import rates by
5% each
year
for the three

Recommend Guarantees
Another of the Randall Com¬
mission ideas which will

please

in

States

foreign

raw

Cut rates by 50% of the
of Jan. 1, 1945, where im¬

production, on the as¬
sumption that the U. S. is be¬
coming a have-not nation as to
materials and must under¬

raw

write foreign

output.

Diminish

the

of

use

the

years.

American merchant marine and

level

emphasize using foreign ship¬
ping, particularly repealing the
legal requirement that U. S.
aid
goods generally must be
shipped in U. S. vessels.

ports of commodities are negli¬

gible. Cut to 50% over a threeyear period any rate of import
duty exceeding 50%.
Commission

Order the Tariff
to

rate structures.

tions and

revise

should

gress

defini¬

commodity

simplify

valuation.

Con¬

customs

*

»

Require that American tariff
shall not be given to

benefits

commodities

produced

by fac¬

paying wages which are
substandard within the export¬

aggravated
the

case

bellished

The
add

to

separation
is

big¬
ger part in
bringing it about
together with central banks.

his

directed

consider

agencies
by the
foreign

should

President
bids

on

be
to
an

equal basis with U. S. nationals.
(In view of the "dollar short¬

age"
able

Congress
to

not be
foreign gov¬

would

envision

Take

view

a

that

broader, sympathetic
East-West trade.

Monetary Fund playing

accepting freely U. S.

bids for ships, tanks,

enforce

toward

Two

industry

ever

a

insurable

also
risks,

from

others

trying

investment

Ingalls & Snyder, and Bacon,

to

\ \

Mr.

Burns,

army

officer

in

served

who

an

War

World

as

II,.

joined F. Eberstadt & Co. Inc. oils

in

from

charge

service*

the

of sales for the

territory and makes

mid-western

headquarters in Chicago.

TRADING MARKETS

Big Weaknesses

however, will see
broad, fundamental weak¬

two

trucks, and aircraft even where

nesses

they were cheaper.)

sion

in

the

report,

Randall Commis¬

apart

from

some

Tejon Ranch
Gorton Pew Fisheries

Dennison Manufacturing
National Company

Riverside Cement
Seneca Falls Machine

Worumbo Manufacturing
♦

G. G.

Carl Marks & Co. Inc.
FOREIGN

force

abroad,

can't understand that if the net

of labor, ardent
hope, planning and uncertainty
over a foreign
venture is only
to get your money back with
interest, the money would bet-

Ste¬

& Co.

*

*

Atlantic Coast Fish. 4^2 8>

would

se¬

L. Ohrstrom,

Congress,

glorified.

revolution or war.
The Randall Commission like

many

associated with the

He

same.

curement

would

foreign

the

been

curities firms of G.

venson

the

Prior to this he

eastern territory.

had

in 1944

Inc.

charge of sales for

in

is

his

the

they
one).

of the hives, is
for
guar¬

Commission

and

Co.

&

Eberstadt

F.

fi¬

joined

1921,

since

field

Opposes a "dash toward con¬
vertibility," but instead favors
the
gentle, slow approach
toward this objective with the

a

program

and

nancial

Meanwhile U. S. pro¬

on

other words,

investments
against
losses
due
either to
restrictions against convertibil¬
ity or to expropriation, be em¬
anteeing

Vice-Presidents.

Chandler, active in the

Mr.

tories

Congress about as much as an
that

Chandler, Jr., and Edward Burns,

II, as Assistant

the "Buy American"
reciprocal basis. In
if foreign govern¬
ments permitted free bidding
by American firms on foreign
government munitions con¬
tracts, then the U. S. should do
Repeal

Act

II

Burns,

Edward

Samuel Chandler, Jr.

ing
country
(Senator
Gene
Milliken,
Finance C ommittee
Chairman, wanted to know how

ernments

ally for foreign taxes.

investment by the

Urge
United

material

An extension of not less

The report

porations
point

of

recommendations

Other
the

President asks.)

three years

Prefers Foreign

In

Extension

the

Senate floor.

(The Eisen¬
wants to

subsidized exports.

$300 millions a year to
give away farm surpluses, the

clause,

the escape

of

retention

Commis¬

recommend

to

purported

"price
avoid

inflexible
program" and

the

Drop

wages

ter

Clause

Randall

the

While

sion

American

and

views.)

Chandler & Burns

dog's tail

Off-shore procure¬
scale lost its
popular
support
when

on

possible to increase vastly the
food production to feed those
millions of mouths thus saved

etc.,

coincide with

own

F. Eberstadt Elects

year.

losses

swamps,

the "Chronicle's"

voting
probably

particular

thereby
saving millions of lives, if you
don't simultaneously make it

malarial

and may or may not

amendment cans

some

that

onto

given taxwise to

Negates Balance

(This column is intended to re¬

the

in

up

Congress

vestments

report appeared to sur¬

The

multilateral

flect the "behind the scene" inter¬
pretation from the nation's CapitalI

to be¬
hostile to
procurement,
par¬
spots of unemploy¬

Escape

confined to "sound

them¬

among

increasingly

that

nical aid be

still

trade in many ways.

Congress also is bound
come

will not be

off-shore procurement
used as a substitute
lor economic aid.
It is recommended that tech¬

trade

dampen

selves,

recommendation
Administration wishes.

Let President

so

restrict

this

this

as

and

S.

U.

the

between

tions

despite

rate reduc¬

of tariff

foreign countries, the latter

foreigners in dollars that
they could not continue to be
given by a Congress increasing¬
ly hostile to economic aid.

pos¬

soon

a

that

is

other

The

thousands

put

will

improve

to

efficiency and competitive posi¬

a heavy off-shore pro¬
curement program as a way to

the report
termination of

and a
nation's

adjustments

wage

tion in world trade.

planned

ment

sible.
Furthermore,

and

currency

used to avoid price

are

stimulus

procurement is. In this respect
the present Administration (and
the
previous
Administration)

bailiwicks.

instance,

For

recommends the
economic aid as

controls

procurement as a form of
substitute for economic aid, that
is regarded as just what the
economic
effect
of off-shore

ap¬

for

tariff. In other words,

shore

So

the

becomes

substitute

Regardless of the commission
recommendation
against
off¬

counters

•

sure,

fore

tribution.

proposals to get the

numerous

which there¬
20th century
the
protective

limit imports, and

ot$er economic things
that go to
boost a backward
country's production and dis¬

in all the

SECURITIES

50 BROAD STREET

TEL:

•

result of years

Co.

Federal Coal 5s,

TELETYPE NY 1-971

1958

1958
1969

LERNER & CO.
Investment

Securities

10 Post Office Square,

vrrirr-

5's,

SPECIALISTS

NEW YORK 4, N. Y.

HANOVER 2-0050

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HUbbard 2-1990

Boston 9, Mass.
Teletype
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