Full text of Commercial and Financial Chronicle : January 29, 1959, Vol. 189, No. 5816

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CANADIAN ANNUAL REVIEW AND OUTLOOK ISSUE

FVolume 189

Number 5816

Re*. U. S. Pat Office

New-York 7, N. Y.,

Price 50 Cents

Thursday, January 29, 1959

EDITORIAL

Canada's Business and

Financial Leaders

"We must zealously safeguard and improve

\the institutions of our free and competitive econ¬
omy.

over

the

small

established

new

ways.

,part from the pressure which this
entails.

Measures

shelter

competition
from these

groups

limiting
w

week

last

is well

them, of this sheltering process even

if he

"leaders of labor

solemnly

unions have

the

financial
.' "

Continued

■

crease.

of the

afforded

address

Mr.

Lambert

wheat,

316

year

exports of
bushels?

million

larger

wealth

Plan

made

countries

credit

and

aid

un¬

the

have

past

further

ar¬

year,

added

most of

the

the United Kingdom.
Canadian
into the United States market
substantially increased volume to supplement drought
going

increase

beef

on page 43
Commercial

during

quantities

contributing

Shipments

to
Barley also has been exported in

rangements

total movement.

the

protein quality

factor

long-term

markets

1958 crops has been

sales.

Colombo

preceding

good part of this in¬

The improved

1957 and

higher

der
Churchill

Hon.

from

1957-58—up

commercial

important

been moving

has

Continued

before the Cincinnati
Club, Cincinnati, Ohio, Jan. 17, 1959.
An

these

accounted for

t0 the other"

and e<-'onomie power' each necessary

in¬

Prominent

commodities.

Sales

year.

spite of a„great disproportion in

the

com¬

highly interdependent, indissolubly
sharing the same continental envi¬

Allen T. Lambert

in the

Substantially

267 million bushels in the

organisms separate and distinct,
each with its own ends and laws; but

as-

are

among

has at¬
in Con¬

level

same

year.

creased sales have been achieved for

several

two

SECURITIES NOW IN
securities

DEALERS

large. Total exports in

the

about

preceding

Perhaps the best way to begin is
with a quotation from the Gordon
Commission: "Canada and the United
States live in a kind of symbiosis—

par-

page

crop

disquiet

either.

country

.and in
munity.
*

♦

Continued

Canadian

Report.

gress,

ronment and, in

that

remained

reached

tracted attention in the press,

appar¬

of tims."

Little trandef that the President

have

1958

these matters has not gone unnoticed

ently is not ready to do what is necessary to cor¬
rect the situation. /'Despite recession during the
first part of the year," the Economic Report
points out, "wage rates continue to move upward.
The rate of increase was nearly as great as in
periods of economic expansion, and higher than
the rate at which gains in productivity have beeni
achieved in our economy over extended periods

serts

Despite conditions of ample supply in world-commod¬
ity markets, Canada's sales abroad have not followed the

which

thik

life. The statements

CHURCHILL

GORDON

don

money

Minister of Trade and Commerce

Royal Commission on Canada's Eco¬
nomic Prospects—the so-called Gor¬

of the results, or some of

aware

probable

and mining industries, and

gas

downward trend of world trade at

those groups which have been
> sheltered—so far as
government can shelter them
—from the need to make the readjustments that
competition entails. The President himself shows

the

of the

course

herewith:
HON.

The whole question of Canadian-American relation¬
ships in general, and of American investment in Canada
in particular, is analyzed in consid¬
erable detail in the report of the

long for

that he

appear

keep costs from getting out of hand in
supply to expand with output. Fears
overly-restrictive monetary policy would curb business
expansion without lessening upward price pressures.

Report

including

factors,

other aspects of the nation's business

with devices to

discuss

commentaries

The

key

developments in the oil,

growth

encourage

market, capital and consumer eocpenditares, housing, new

to the latter, would

views.

trend

order to allow money

Congress sets forth one
of the most elementary and vital prerequisites
to
that continued and vigorous growth about
which so much is said these days. One need not
look

and,

supplement monetary-fiscal policies to

grow

In these words the President's Economic

submitted

;

capacity to

our

their

qualified to accurately interpret the

of Canada's economy in the instant year present

course

to the form and behavior of in¬

vestments within their border

justments that they compel come at the cost of
?

themselves

express

especially written for the "Chronicle " in-

dividuals eminently

risk to combat price inflation and

some

articles

further economic progress. With regard to the former,
Mr. Lambert opines Canadians should be permitted to

and from the need to make the read¬

pressures

with

program

in large

comes

After Tarn of the Year

Manager

country's dis¬
quiet about the inflow of American investments and,
turning to a nonunique domestic problem, proposes bold

things and to challenge old and

Our strength

General

Canadian banker addresses himself to his

from the fact that

Speak r

LAMBERT*

Vice-President and

been incentives and

there have

years

»freedom to do

measure

A. T.

The Toronto-Dominion Bank, Toronto, Canada

America's unassailable economic strength

derives in

Copy

REGISTRATION—Underwriters, dealers »nd.investors in
complete picture of issues now registered withthe SEC and poten"Securities in Registration Section, starting on page 54.

page

State, Municipal

tial undertakings in our

and

U. S. Government,
State and

Municipal

Securities
telephone:

UNDERWRITERS
BROKERS

STATE

and

MUNICIPAL

623

Members New

BONDS

Associate Member

PUBLIC

UTILITY

30 BROAD ST.,N.Y.

MEMSESS NEW VO*'< ANO

15 BROAD 57REET. NEW
CABLE:

Underwriter

•

AMERICAN STOCK EXCHANCCS

YORK 5, N. Y.

Teletype: NY 1-708

Boad Dept.

01 4-1400

•

Net

1832

ESTABLISHED

^mini

I~ni

Maintained

Markets

Active

Dealers,

Banks

and

Brokers

}

Securities

New York Stock Exchange

American

BANK

Correspondent—Pershing & Co.

The Canadian Bank of Commerce

Stock

INVESTORS

;

Members
f

New York

(Rights Expiring March 17,

t.l.Watson &Co.
"> vZ:'<

Chase Manhattan

TELETYPE NY t-tltt

CO»UW*-H*M

Distributor

y. r/' ""i!

THE

Inquiries Invited on Southern
California Securities

OF NEW YORK

Company

Stealer

-.'•id-'

BANK

THE fIRST NATIONAL CITY
and

offer to buy these
current

SYNDICATE OF CANADA
Block

Inquiries

Invited

Direct private

market.

(

wires to Toronto,

Ottawa, Winnipeg,

1959)

rights at the

Montreal,

Calgary, Vancouver,

Victoria and

Halifax

CANADIAN DEPARTMENT

Exchange

Dominion Securities

Teletype NY 1-2270

California

Municipals
MUNICIPAL BOND
•

23 BROAD

STREET

NEW YORK 4, N. Y.

COMPANY

FIRST

DALLAS

DEPARTMENT

BOND

Corona del Mar,

Hollywood, Long Beach,
Pasadena, Pomona, Redlands, Riverside,
San Diego, Santa Ana, Santa Monica

Encino, Glendale,

SECURITIES

Burnham

American Stock Exchange
Coast Exchange

Offices in Claremont,

FOREIGN

bank
DEPARTMENT

Bonds and Notes

York Stock Exchange

Members Pacific

RAILROAD

CORN EXCHANGE

Angeles 17,

California

INDUSTRIAL

chemical

BOND

So. Hope Street, Los

DEALERS

HAwver 2-3700

Public Housing Agency

Lester, Ryons & Co.

01»£Cr

IJRES TO MONTREAL

AND TORONTO

Goodbody &

Co.

MEY3EHS NEW YORK STOCK EXCHANGE
BRIDGETGP.T

•

PERTH AMBOY

115 BROADWAY

NEW YORK

1 NORTH LA SALLE ST.

CHICAGO

<orp0katio71
Associate Member of American

Stock Sxch.

Exchange Place, New York 5, N. Y.

Tel. WHitehall 4-8161

Tele. NY 1-702-3

DEPARTMENT

■

(Sauk nf America
NATIONAL

JKAngs ASSOCIATION

300 Montgomery St., San

Francisco. Calif.

The Commercial and Financial Chronicle

(534)\r

*•

The

JBanks, Brokersi Dealers only
Specialists ft>Y
30 years

Security I Like Best

week, a different group of experts
iu the investment and advisory field from all sections of the country
participate and give their reasons for favoring a particular security.

they to be regarded,

are

Bank Stocks

VERNER H.

Our 107th Consecutive

Quarterly

as an

KRAFT

United States

request

preoccupa-

"glamour"

f®

stocks, the tendency is to overlook

New York Hanseatic

Corporation
Established

1920

Associate Member
American Stock Exchange

120 Broadway, New York 5
Teletype NY 1-40

WOrth 4-2300

estab¬

BOSTON

•

CHICAGO

tain

SAN FRANCISCO

latter

firm.
_

...

Pendleton, story,

municipal BONDS

many

•f

not

Kraft

unlike

glamour

those of

companies,

merely

carouna^^t

Pendleton

ing.
be

likened

what

car

going

cash

cents

have

caused

RICHMOND,

VIRGINIA

stock

dividend

indicated

can

About

steep grade you've climbed
look back. In 1940, the
company had
approximately 5%'
of the market; today it has about
one-seventh of a larger market.

rate
90

STREET

NEW YORK 5, N. Y.

company
no

raising

and

Raw

—

Refined-— Liquid

Exports—Imports—Fvtures

DIgby 4-2727

solid past and

Market),

sells

Deere &

•

____

Company

are

excellent

cal

equipment,

test

Advertising

the

one

useful tools in 1

most

the latest electronic and mechani¬

management
through this
long history

tracks and ample acreage of

with the company.

kinds

^as resulted in
a ^ne fman-

tools

riety of industries.
are

wide

va-

Three plants

Angeles; others
Portland, Ore.; Chicago;
Jamestown, N. Y.; Fort Smith,
Ark.; and London, Ontario. Although foreign competitors have
made a strong attempt to break
into the American market,
they
have succeeded in gaining only
or

several

types

crop land for development
vanced tractors.
No
Proctor

common

it's

smart

place

of ad¬

stockholder

Winter"

your

★

THE COMMERCIAL AND

3% of total sales. Over

hand,
Last

FINANCIAL CHRONICLE
25 Park Place, New
v

York 7

on the to
anticipate the farmers' need larger expenditures than the 1958
the export for new and improved types of total of approximately $15,000,000.
the company farm equipment, with the result
Sales. in; 'fdreign countries of

into

year,

market by produc- that
Deere has achieved many
selling packaged con- "firsts" in the farm tractor and
sumer tool kits, under the
name-equipment field. Recently Deere
"Diligent Duchess," for household has broadened its scope by entera

1958, Pendleton Tool struck
telling blow at the notion that
a

highly cyclical

In the.face of the recent

recession, company sales boomed
to $19.4 million (without acquisi'tions) from $17.6 million in 1957.
"The

farm equipment products manu-

new

and

In
a

customers.

of Pendleton's sales,

other

ing

new

laboratories with

10%

securing

center contains

world an<* the complete confi-', pride in his company upon passr
dence of the company's stock- ing one of the many distribution
holders and bondholders.
-,
centers or factories of this comDeere manufactures and * dis-< P,any. Deere'has had
continuing
tributes on a world-wide basis program of, modernization and exa
complete line of agricultural pansion of its plants and facilities
implements
and
farm
tractors, having expended approximately
Over many years the company $68,500,000 ;OU \plants and facilihas had marked success in main- ties in the past' five years. The
taining a traditional advantage program ior the next two years,
of fuel economy and low mainte- which includes new production
nance
cost.
The historical ap- facilities and a- new administraproach of the company has been: tion center, will require each year

and

located in Los

are

machinery

Deere & Company who has ever
cial condition,
driven, through
farm
country
an enviable
reputation throughout the farm, could help "but feel a sense of

and

hand

subsidiaries for

was a

had

our

salesmen'

factured

the United States and

Canada have been unsatisfactory
in, recent years. Dollar shortages
ing the light industrial field with and trade restrictions in many
a new line of wheel and crawler parts of the world, and the fact
tractors and has also begun ex-; that products produced in foreign
pansion into light industrial; countries qamoften be priced lower
equipment manufacture. Substan- have brought about this situation,
tial benefits- should be expected To compete^ in these markets,
from this closely related new areaDeerehas taken several significant
of endeavor.
steps. In Monterrey, Mexico the

po-\f.°?[lpai?y, oegan

kept
saying
depression oil but we

newspapers

there

1-5899

..W'

energetic men with many years
of experience in their fields and

business.

Denver—Lowell, Murphy &
Company, Inc.

111 Broadway, N.Y. 9 COrtlandt

Incorporated, New York City

director of industrial relations

it is involved in

Los Angeles—Marache, Dofflemvre
& Co.

Tokyo, Japan
Brokers & Investment Bankers

Assistant Vice-President

hydraulic control equipment must
be developed concurrently.
The
new
research
and
engineering

use.

System ;

Affiliate of ■ *'.

PROCTOR WINTER
•

year of manufacturing farm
equipment. A
succession f of

entered

Wire

■

Yamaichi Securities Co., LM.

a conservative financial
department and a progressive industrial relations department. The
marketing, manufacturing and financial vice-presidents
and the

trade.

Trading Markets

•

essential and conse¬
quently, larger and more power¬
ful
tractors
and
heavier
duty

about 2

Over-the-counter

NeW York,; liic^,"

■

-5

the cornP a n y
will
mark its 122nd

seven

200

of
"

at*,

related items in two divisions and

Teletype—NY 1-1127

„:)

year

ferent

Bell

Yamaichi

Securities Comiuiiiy

manage-

TAC.
It manufactures about 2,100 dif-

1930

...

write

dividend increase and dividends may well rise in
improving fortunes.', 1959?
I highly recommend its
2,500 shareholders own purchase.
"
:

•

department which, at the same
time, has built a reputation for

lenger, Fleet, Duplex

Telephone HAnover 2-4850

Harriman Klpley & Co.,

Pendleton Tool is better known

Established

.Call

the

to its customers through the trade
names
of Proto, P & C, Chal-

OTeei\.e<mdCompaTU\

For current information

about 8V-z times 1958 earnings and

immediate in-

;

through

concepts

officials ?■the-Counter-

...

quality;

SUGAR

promising future, which, at a recent offering price, of 18 (Over-

from

cents

with

company

JAPANESE

va^ ^^ile, electronics and air-

There are many reasons why I and engineering was completed
ment. Morris Pendleton, a human like, the common stock of Deere in 1956 at Waterloo, Iowa.
This
dynamo
who
became
General & Company, the most important concentration of tractor research
Manager 36 years ago right out of which being the company's and
engineering should prove
of college, presides over ati aglong history
most beneficial since the growth
in * the size; of farms has made
gressive
marketing department; of sound mana
larger and more complex farm
cost-conscious
manufacturing agement. This
organization

good

WALL

jn view 0f

following: modern

rate,*; the-yields over 5% on 1958 dividends
be considered a definite —especially when both earnings

prospect for

You don t realize

This achievement came

LAMB0RN & CO., Inc.

brapch oiilces

our

remaining shares widely held,

raisedv the

until you

-fW,

Direct wires to

and tighter ^

1958,

Although

tention

performance cai^

mountain road.
coll

1958u5?m"
com-

NY 1-1557

„

Mobile, Ala.

management;; and.
the firm with the

Rowing market for ^mechanics'
.a^ j? a" T
^ec}s ^
of expenses result-. of Pendleton s sales. In addition,fire at one-of the two of its metalworkmg subsidiv - ^ aries are devoted to tapping the

and,

share#

shows every indication of contmu-

south Carolina;

one-fifthwof' the shares are held

charge offs were made of cerdevelopment costs on new

annuai

a dream of possible
greatness; rather it is a
record of solid performance which

virginia

sales expense

1957j

„

future

west virginia

north

Verner

The

HAnover 2-0700

New Orleans, La.- Birmingham, Mi

profit margins should imfields by providing precision,
prove.
Thus, as sales of "* $20.5 ./ctose, tQlerance ^ components and
million
are
budgeted fdr 1959, special purpose tools and equipearnings could rise substantially. - mqnt.
»,
• ;
s
*
The
company
declared stock
. How frequently
in today's mardividends of 20% in both 1956 and ket cah you find a well-managed

Indus¬

tries, Inc., Los
Angeles headquar t ered
For the

19 Rector St., New York 9, N. Y«

common

omy,

Pendleton

Tool

stock outstanding. Approximately

With the rebound in the, econ-

is the 51-year-

old

:shares

486,000

competition

products and
ing from a
plan^s

ex¬

of the
variety

ample

•

to Principal Cities

and

An out¬

PHILADELPHIA

Wires

rise

lished indus¬

standing

recessiorhowever,(the

nnt

Members Neva York Stock Exchange
'Members American Stock Exchange-r',

'Over, the longer-term, the mcreasing mechanization and autobidding on government contracts.mation of the economy and the,
Also, interest costs were higher* do-it-yourself trend
indicate a
keener

records in the

tries.

Steiner, Rouse & Co.

5=8

''fit Sn?
by directors,
margins.^de--employees of

...

Bought■—Sold-—Quoted

ter, Assistant Vice - President,
Harriman Ripley & Co., Inc.,
City. (Page 2)

not; af-;

Proilt

Louisiana Securities

Industries, Inc.—

Kraft, Vice-president
Oscar F. Kraft & Co., Los An¬
geles, Calif. (Page 2)
:

New York

dnwif" the^ame
®„ ®t }° net%^«^^a

clhfed

Tool

P<?ere & Company—Proctor Win¬

pared with 5.8% the year before

ing up im¬
pressive sales
and
earnings
-

was

company

way>

quietlyTuUd- whicb have bee»

long

the

say

fected by the

Industries, inc.

so-called

with

tion

the 485,969 shares outstanding
closely approximated the $2.10 a
marked up in 1957.
It would be overstating a point

market's

the

With

Available

Tool

Pendleton

Securities Dealers

Alabama &

Verner H.

charpJnntc+anHina

4«*QfiQ

Angeles, Calif.

Members: National Association of

Companies of the

Pendleton

estimated net of $2.07 a

Participants and

Their Selections

be, nor
offer to sell the securities discussed.)

Vice-President, Oscar F. Kraft & Co
Los

intended

are not

™

Comparison of Leading Banks
and Trust

This Week's
Forum

A continuous forum in which, each

over

(The articles contained in this forum

Private

Thursday, January 29, 1959

♦

For
^

In order to insure its future
gition in the farm tractor and

out

selling equipment field, in addition to its
rather than reading the
papers," several established research and
Mr. Pendleton states.
engineering facilities, a new cenEarnings also held up well as ter devoted to .tractor :research
,

assembhng

rac
s an<* .manufacturing farm
wag.ons and; certain other farm
oquipment m a new factory m
V
? expand this
Continued on page,47.
.

;

N. Q. B.
OVER-THE-COUNTER

INDUSTRIAL STOCK INBEX

20-Year Performance of !
35 Industrial Stocks

}

FOLDER ON REQUEST

National Qaotatian B ureal
48 Front Street

New York 4»N.%

Number 5816

189

Volume

The Commercial and Financial Chronicle
3

(535)

I N D E X

Review and Prospects
For Canada's
By HON. DONALD

•
.

Canadian economic conditions, Mr. Fleming is '*
;

efforts not only by
government but of employers, employees and self-employed
persons as well. Willing to admit Canada has its problems, the
Minister adds, however, that the economy is sound, strong and

there

never was

time when Canadians had

confidence in their country and
I

welcome

review and
momic
and

this

j 1
f,

and

estimate

best

|the strength
and

the

have

now

entered/

The

month

able

named, was
always repre¬

have

sented

threshold of
Hon.

year we
past and

accordingly.

forward

The

the

continuity

alteration of

digit in the date.

system,

Minister

- a

observe

I restrictions

ity is

the

very

scope

and

severe
any

House

the

While

mons.

may

§ at times comment

highly

improper

•

;

We behold

j this

the

ditions

deflation.
has

been

j forces

there

suppose

time

when

with

never

evidences

and

the

ing

recession

address

Mr.

•

and

Bank

Of Gold

restrictions

sequel

and

countries

—

See

(Editorial)

Cover

;

Field

specialized in

Wilfred

Reporter

Teletype NY 1-1825 & 14844
Direct Wires to

■"

Our

Reporter's Report

Public

Eu¬

Utility

May___-

Philadelphia
9

;

25 BROAD

...:

.Albany

Securities Salesman's Corner.
The Market
The

...

and

Boston

Nashvflle

Chicago

Schenectady

Glens Falls

Worcester

Security I Like Best__

17
:

Published

Twice

4
„

Weekly

FINANCIAL

CHRONICLE

DANA

C. G. S. Laboratories

Reentered
ary

i5 Reg. tT. S. Patent Office

Western Gold & Uranium

Washington and You

Permachem Corp.

You—By Wallace Streete

The State of Trade and Industry

25,

second-class

1942,

the

post

Subscription

SEIBERT,

President

Thursday, January 29, 1959

.plete statistical issue — market quotation
records, corporation news, bank clearings,
state and
city news, etc.).

Chicago

Offices:

HI.

Request

offiee

New

Rates

135

South

Salle

8
of

mt FRANKEL & CO:
.

Pan-American

Union, $65.00 per year, in
Dominion
of
Canada,
$68.00
per
year
Other Countries, $72.00 per year.

INCORPORATED

39 BROADWAY, NEW YORK 6

Every Thursday (general news and ad¬
vertising issue) and every Monday (com-

Other

Prospectus

matter Febru¬

Subscriptions in United - States, U.
Possessions, Territories and Members

HERBERT D. SEIBERT, Editor & Publisher

York, N. Y., Under the Act of March 8, 1879.

25 Park Place, New York 7, N. Y.

DANA

Company

COMPANY, Publishers

KEctor 2-9570 to 9576

Dryer Corp.

WILLIAM

St.,'

(Telephone STate 2-0613).

Other

f. .*

Corporation

American

Prospective Security Offerings

Exchange

TELETYPE NY 1-5

Chicago

Securities Now in Registration^

developments

ST., NEW YORK 4, N. Y.

Vitro

——

TELEPHONE HAnover 2-4300

Silicon Transistor Corp.*

! '

Stock

Los Angeles

—

Securities

Railroad Securities

PREFERRED STOCKS

York

Dallas

Cleveland

The COMMERCIAL and

New

San Francisco

Governments.

WILLIAM B.

Members

40 Exchange Place, N. Y.

—

Funds

Our

King¬

Spencer Trask & Go.

Mack ie, inc.;

HA 2-9000

;

have

Singer, Bean
&

Observations—A.

an¬

COTltlYllKZCl 071 P&Q6

request

upon

For many years we

■'Prospectus

News About Banks and Bankers

o£ both the Ballk and Fund wiU.
soon be substantially increased;*

Supply*

seems assured that the resourced

•

Reeves Soundcraft

Mutual

important steps
convertibility and removal
discrimination,
and
it
now

important

Ling Electronics
Tractor

Trade Flow Stimulant

Indications of Current Business Activity

come

City

Dealer-Broker Investment Recommendations

.later

recent

United

The

other

Lake

Coming Events in the Investment

as;.

Mont¬

the

Pacific Uranium
18

of Montreal

Bank and Insurance Stocks

against

the

1160

Denver &

Basic Atomics

Regular Features
As

ex-

JCY

wires

the desira¬
soon

Treasury Department "Firmly" Against Any Rise in Price

toward

19S9.
•

Conference

the

at
-

4-4970

Teletype:

Stock Exchanges to Discuss
Merger.—

European Currency Moves Viewed

)

■;

•

(Boxed)-

Scurry-Rainbow Oil Co. to Recapitalize——.

have taken

rope

These

Fleming

Montreal

nouncements.

must be

Club of Toronto, Jan. 5,

the

Conference

dom

DIgby

Pace College's New Courses Include Use of Latest
Computers 29

in. Mont-,

gratifying series

aware of inflationary forces pres3 ent in the economy. The concur-

Canadian

that the

meetings at New Delhi has

-5

laid

was

Things Needed!

rBusiness, Labor and Education—

enlargement of the resources"
the International Bank and

Even with continu- of

unemployment,

say

•

Exchange PL, Jersey City

Urgent Appeal for Trade Voiced by U. S. S. R.'s
Mikoyan
at Cleveland, Ohio, Luncheon Attended
by Leaders of

Common¬

great

the

for

real

in the spring of 1958 to
stronger and healthier forces in
economy.

this

perhaps fair to

Fund.

yielded

j the
i

provide the

From Washington Ahead of the News-^Chrlisle
Bargeron—

} in business activity which happily
j

and

Einzig: "British Securities Markets and the Latest Clouds"— 27

the

as in recent times. In the
ji winter of 1957-58, we witnessed a
relatively high level of unemploy¬
ment

"Fresh Look" at Many

Sep.

/ '

Members Salt Lahe City Stock Exch.

course, were ex¬

;

imports from dollar countries and

j" economy

HELICOPTER

Salt

optimistic,

J.F.Reil]y&Co.,Inc.

econ¬

nations

with

contrary

other

each

of Canada's

course

change, the removal of discrimi¬

were so openly at work in

conflict

most

bility of the restoration as
possible of convertibility

con-

normally associated

Montreal

emerged agreement

a strange co¬
of -conditions normally

J associated with inflation and
*

continent today

existence

in
our

From

economy

probable

Direct

which

Conference

world economy., ;

Conflicts in the Economy

to the

official, up - to - the - minute information
regarding economic trends in Canada.

the increase.

•

Record High Corporate Earnings Projected
by Chase
Manhattan Bank

pursuit by the .Com-.
mon wealth
of
a
more
vigor,ous
role in the larger task of bringing
about a prosperous arid expanding

for

real

him to
relate such factors in a public utterance to future financial plans.

place

groundwork

fht work in the economy, it would

f be

•

present the views of

during 1959. These articles, of
pressly written for the "Chronicle"

wealth association of free nations.

the forces

upon

Economic

hesion

should

cover page,

omy

hopes about the strength and co¬

Com-

and

again

confirmed

except in his annual Budget pres-

the

nessmen as
;•

•

■

DOMAN

reader with

once

took

ji forecasting in which he indulges

\ entation -to

Starting

Second, the Commonwealth Trade

Finance

some

•

States.

■

leading Canadian Government, Financial and Busi-

economic'

America and that economic activ¬

must

i CANADA'S BUSINESS AND FINANCIAL
LEADERS SPEAK AFTER TURN OF THE YEAR

place, it is now widely recognized
that the spring of 1958 marked the
bottom of the recession in North

I know I do not need to remind
| you that under our constitutional
a

Flemings

prosperity of Canada. In the first

our courses

STATE OIL

ADVANCE INDUSTRIES:

United States Indifference to Canada's
National
Aspirations—Ian F. McRae

.Cover

Review and Prospects for Canada's
Economy
—Hon. Donald M.

importance of two events, both of
which augur weU for ^ future

| history is not changed simply by

An economic review of the year 1
1958 must recognize the primary' v

look back at the

j early future and guide

URANIUM *
•

r •

NEW YORK

WESTERN GOLD AND

ECONOMY DURING 1959

inescapably reminded
factor in the year just

this

EMPIRE

CANADA'S

Capital Inflow, Inflation and Monetary
Policy in
//. Canada—A. T. Lambert

Events of 1958

two

[recent

United

WALL STREET,

W. Babson______________l_____ 31

ARTICLES PERTAINING TO

been

Fleming

.faces, looking in opposite direc¬
tions. It is appropriate that at this

i time of

the

•

Sonneberg—

—

is that the;

and

'■.■'J/;

closed.

|the temple
with

trends

the

financial

L. Warner

tive

this

Obsolete Securities Dept.

Guides—Wiiliam

j ; Are Stocks Too High?—Roger

exporting nation," we are sensi¬
to changes in the economic '
climate in various parts of the
world; we are particularly vulner-^ *

God,
3Janus, after
whom

Watch Out for Icebergs—Walter

Canadian economy cannot be iso- >•
lated from world influences. As an

nRoman

Telephone: WHitehall 4-6551

many other countries.
next factor of which full-

The

Helpful Investment

;

—^

Outlook

Price Inflation—Jules Backman

Canada but-,

account must be taken

which

.upon

—Reuben, Tftiorson

tumn, in

year

Market and the Investment

When Wage Inflation Causes

in my travels last au-„

observed

during

new

not only in

servers

probable

itrend of these
forces

ing inflationary potential is puzzling and confusing economic ob-

can

.IJfow High the Stock

c—rrWail Street, 99!

rent existence of higher than nor-'
mal unemployment and a disturb-

the leading ecotrends of 1958

assess

events

opportunity to

How and Where U. S. Exporters Will Sell Overseas
in 1959
—-Walter H. Diamond__
j
1_—J—

The Present Farm Situation and
Averting Oncoming
-V Disaster—Hon; Ezra Taft Benson

for

more reasons
ner future.

THE SITE OF THE

SIXTH HAPPINESS

inflation remains and requires prevention

does not intend to interfere in the support
of its bonds. The Finance Minister explains the advantages of
recent debt-lengthening conversion; comments on its success- <
fulness, including its timing in the light of present decline in ^
the conversion loan bonds; and concedes the critical threat of

Economic Profile of America:
1959—Julian D. Weiss

that the government

Page

t •

optimistic about the basic outlook for Canada and makes clear;

•

Current Monetary Policy and Federal
Reserve's Role
—Alfred Hayes
■;

Minister of Finance, Canada

Articles and News

Exciting Electronics—Ira U. Cobleigh

M. FLEMING*

In reviewing

;

Economy

■

Bank

and

Quotation

$45.00 per year.
Note—On
the

rate

foreign

WHitehall 3-3960

Publications
Record

—

Monthly

Teletype NY 1-4040 & 4041

(Foreign Postage extra.

account of

the fluctuations

Direct

must be made in New York funds.

Wire

exchange,
remittances
for
subscriptions and advertisements

PHILADELPHIA '

{

The Commercial and Financial Chronicle

(536)

Thursctey, January 29, 1959

3-for-l

split becomes effective this
there will probably be
selling above it,
so it will
break part of the price
barrier which has prevailed these

Slimmer,

close to 100 issues

Observations

•

many

have to meet this additional

DELUSIONS THROUGH

POPULAR

THE AGES

petition
level

Their

Mr. Baruch
economic

"All

their

movements,

than

that

have

The
the

ing prices, we had all continuously
repeated, 'two and two still make

This is followed

list of 80

monthly

pull

40 and

of alarms.

never

brilliant

The Crowd's

eco¬

75.

conclusion

there

listed

are

"candidate"

issues,
from Abbott Labs to Worthington,
which
"might have
been
split
even without Telephone's action."

Extraordinary

Behavior

are

Business Failures

"In

reading the history of na¬
<s
* /
nomic thesis
tions. we find that, like the indi¬
The Special Appeal of
expounding,
viduals, they have their whims
a s > t hough
and their peculiarities; their sea¬
Security Speculation
they were ge¬
sons of excitement, and reckless¬
Popular
delusions
concerned
ometrical theness,
when they care not what
with security speculation, unlike
orems, the
they do. We find that whole com¬
A. Wilfred May
such isolated historical outbursts
mathematics
munities suddenly fix their minds
as
the South Sea madness,
the
of
price
upon one object, and go mad in
or
Tulipo¬
movements, that I do not recall pursuit; that millions of people Mississippi ' scheme
mania,
are
uniquely
Schiller's dictum: Anyone taken become
appealing
simultaneously impressed
as
an
individual, is ' tolerably with one delusion, and run after and recurrent through rational¬
ization stemming from their being
sensible
and
reasonable—as
a
it, till their attention is caught by
linked
to
the
member of a crowd, he at once
country's
most
some
new folly more captivating
"legitimate" industrial and eco¬
becomes a blockhead'
With¬ than the first.
Money has often

of the business situation gleaned from
letter issued by the National Association

business

succinct presentation of ihe business

existing to date.

"Business

from the low of only 10 months ago,
has exceeded expectations. The creative initiative
of our business
leaders; the return of the 'hard sell'; several positive actions
by

the market's

reaction"

additional

Yet

see

chain

CHARLES
MACK AY, 1958 ed., L. C. Page &
Co., N. Y., pub Ushers; $7.
•

Index

resume

Credit Management

hundreds of issues selling between

Big Board stocks which

NESS OF CROWDS, by

present world

Trade

Price

Auto Production

Industry

following

conditions

efforts to find

pendable

Food

probably
bullish effect on the

very

whole market."

are

rules to guide
us
in
our

•

and

com¬

selling
above the A.T. & T. new stock, and
hence
are
likely
"split
candi¬
dates"; and
thus
could "spark

to a lower
of
Telephone

motivated four,' much of the evil might have
by crowd psychology. Graphs and been averted."—Quoted by per¬
business ratios are, of course, in¬
mission from B. M. Baruch's Fore¬
dispensable in
word to EXTRAORDINARY POP¬
our
groping
ULAR DELUSIONS and the MAD¬
nature,

very

splitting

Retail

Commodity Price Index

stock. Such action would

nomics,' culminating in 192.9, even
in the presence of dizzily spiral-

Appraisal by

Car-loadings

"Many corporations desirous of
obtaining new stockholders will

By A. WILFRED MAY

Electric Outpu:

State of Trade

years.

Steel Production

The

recovery,

government
us

the

out

and

of the

consumer

ments

have

season

correctives by law helped to
biggest factor was confidence

the

future

increased

generated

America.

consumer

Favorable

buying.

"There

prospects in

adding to inventories,
to

seems

1959.

another

much

honest

high.

The

boom

holiday
goods sales.

-..

enthusiasm

lor

Corporate dividends and profits

all-time

develop¬

The

produced significant improvement in durable

Most industries are

for

built-in

some

slump, but the

expected

business

heading

are

for

I960

should

;

get

good start this

"The

out

due

thinking

recognition
of
(which
often

crowd-madness)
leave

economics

crowd

been

seems

multitudes.

theories

our

much

of
de¬

It is a force wholly impal¬
pable—perhaps little amenable to
analysis and less to guidance —
and yet, knowledge of it is neces¬
sary to right judgments on pass¬
ing events.

sired.

well said,
be

...

the

delusion

Men, it has

nomic activities.

Pacific Northwest Go.

in herds,
only recover their
slowly, and one by one."—
preface to the above-cited

Official

we are

trend

which

trols

plored.

They have power
pectedly to affect any

condition

trend.

so-called

ex¬

Building,

the

unex-

static

normal

For that reason,

The Pacific

the following

announces

they have

savings of

"The

never

and

the

will be told.

further

even

avoid

the

(and

therefore

diabolic)
spells,
incantations. I have
always thought that if, in the lamentable era of the 'New Eco¬

current

letter

Wall

and

seasonal

tries.

curtailments in the

Claims

most

rose

ent

construction

substantially the

says:

and lumber indus¬

1959.

same

£4.9 Billion

expect to spend $4.9 billion for

But while total expenditures will be
in 1958, individual items show signifi¬

cant

changes. This is the consensus of the 55th "Annual Statistical
Report" on the electrical industry, as prepared by "Electrical
World," McGraw-Hill publication.
Generation, while still holding claim to the largest single
budget item, is slated to drop 4.1% to $2.48 billion. This decline

$787 million.

These
011

Even the smallest segment of the utility budget,
a 5.3% boost to $197 million, the maga¬

changes

are

particularly significant since they

are

based

recession year which held energy sales to about a 2% gain
in across-the-board cutbacks in 1958 utility spending

and resulted

plans.
1958

The economy moves by utilities had the effect of cutting
plans as follows: Generation, 2.5%; transmission,

spending

j 9.8%; distribution, 11.1%, and "miscellaneous," 10.1%, for
Lyle F. Wilson

Robert E. Daniel

decrease of

total

6.5%.

The greater
on

portion,

72.4% of 1959's construction spending

will be by power companies. Last year they accounted for 76.7%.
Of this 72.4% or $3.6 billion, $1.6 billion will go for new genera¬
tion facilities compared
wth $1.9 billion in 1958, down 5.5%.

drop

Steam

plant expenditures will decline 8.9% to $1.5 billion while
hydro spending will plummet 53.5% to $119 million.
Investor-owned utilities have also budgeted a 1.5% increase

transmission

distribution

expenditures to $617 million;
$1.2 billion, and

a 5.6% increase in
2% increase in "miscellaneous"

to $155 million.

Record Year

Expected for Electronics Industry

"Electronics," the McGraw-Hill publication, predicts that the

market

will

1959

with

sales of equipment and

set

billion.

Stanley N. Minor

The U. S.

our pres¬

"When Telephone's

for the electronics industry,
replacement parts totaling over $9

another record

year

typically devoted to "Split

era

construction

noticeably in California, Pennsylvania, and

Missouri.

"miscellaneous," is in for

Candidates" and the return of the

popular Split Appeal in

growth

claims for unemployment insurance rose 27% in the
jweek ended Jan. 10, but were 6% below a year ago.
The weekTo-week, rise was due to post-holiday cutbacks in trade and service

example,

Street

toward resumption of the
postwar period."

Unemployment Claims Up 27% for Jan. 10 Week

(Splitomania Again)

scientific

way

Initial

January 1959 Item

yet in all primitive, unknown

there may be

our

zine says.

Baldwin

"Although there be
cure,

harmful

Distribution plant spending, the second largest item, is ex¬
pected to jump $82 million or 6% to $1.46 billion. Transmission
expenditures for 1959 are scheduled to inch up 3% or S23 million

their full effects.

number

$712 million.

years.

story of what happened

Thursday

limited

results entirely from a 10.9%
drop in expenditures for new steam
plants since hydro construction is up 18.1% to a record peak of

Locomotive, a stock that
place in the
considerations
of sold at
$285 a share, was recently
thougthful students of world eco¬
split up four for one, the new price
nomic
conditions.
accurate
being around $66. It went down to
knowledge and popular recogni¬ $15."—From VARIETY, Wednes¬
tion
of
them
and
their
early day, October 30, 1929.
symptoms should lighten and may
.

has

science

—

official appointments:

migration of some types
"Wall Street Lays an Egg"
of birds; the incredible mass per¬
"The most dramatic event in
formance of the whole species of
cotton eels; the pre-historic tribal the financial history of America
human
eruptions from Central is the collapse of the New York
Asia; the Crusades; the mediaeval Stock Exchange. The stage was
dance crazes; or, getting closer to Wall
Street, but the onlookers
economics, the Mississippi a 11 d covered the country.
Estimates
South
Sea
are that 22 million people were in
Bubbles;
the Tulip
Crazes [termed "Tulipomania" in the market at the time. Tragedy,
a following chapter]
and
the despair and ruination spell the
Florida boom and the 1929 mar¬ story of countless thousands of
ket-madness in America and its marginal stock buyers. Many may
sequences in 1930 and 1931 — all remain broke for the rest of their
these
are
phenomena
of
mass lives, because the money that dis¬
action under impulsions and con¬ appeared via the ticker tape was
.

that has characterized the

new

Northwest Cornpany, Exchange

1929 Item

"The

well

ever,

The nation's electric utilities

Appointments

SEATTLE, Wash.

book, 1852 edition.

...

history.

Electric Utilities to Spend

think in herds; it will

they

From

now

some scars and problems.
Business
will always have trade and seasonal fluctuations.
Over-all, how¬

been

that they go mad

seen

while
senses

cause

recession

industries and locations it left

...

year.

Chairman of the Board: Lyle F.
Wilson.

Government, biggest

consumer

of the electronics in-

Continued

page

President: Robert E. Daniel.
Chairman

of the

Executive

Committee: Stanley N. Minor.

Vice-Chairman

1929

1959

0u//tc

S/et/nonic £/toc/&

ant/

nominal
nium

Ltd.

The

capital

0r*l*t/fnf

par
was

First

dealers

per

:UiamdSanh,
f/icc 0r-eitt/en/ Y/YrraUfrm)

announce

that

•

(without

stock

value)
made

1001

of Alumi¬
on

Boston

Jan.

Corp.

concession

share. The offering

has

and

stockholders,

accrue

New

and

to the company.

Member Corporation

of the

York Stock Exchange

cents

The net proceeds will go to sell¬

ing

become

was over¬

subscribed.
1

Adolphue Tower, Dallas 2, Texas

a&sociates at $30.50 per share, with

ofcpJt 2/anncn

pleased to

Securities Co., Inc.

A secondary offering of 452,155

t$ont/x

Gannon,

are

Dallas Union

Secondary Offering

j\Cc/eot

Board:

Aluminium Limited

ear

fUtx&le

the

Ben B. Ehrlichman.

^/ei
-

will

not

H. Obenchain

James

Owens

B. F.

(Doc) Houston

Jack C. Payne

Dick Clark, Jr.

Jock P, firown

Herbert M. Jones

J. Ries iftamlsenek

Volume

189

Number

5816

The Commercial arid

Financial Chronicle

been in a steadily
rising curve—
8224,000 in 1956, $370,000 in 1957
and $720,000 in 1958 (fiscal year
ends Oct. 31). The basic company
product is potentiometers. These

Exciting Electronics
By I)R. IRA U. COSLEIGII

Enterprise Economist

basic units in

are

A swift review of the

products,

and profits of certain

progress

the

large capital gains

industry, and
have achieved for early investors.

some

Horatio

ago

years

now

seem

archaic;

literary

Among

ties

today

Probably

r." But re¬

vanced

admiration

new

utstanding
«

fortu¬

nately

lra

Cobleigh

viewpoints in Wall Street,
Rapid market multiplication
of
dollars remains a major goal for
of

thousands

vestors

and

tors and

shrewd

in-

imaginative specula-

in the

industrial

commends

Treasury's willingness to pay going interest rates
asks that increased public spending be
matched with tax revenues, and dispels notion that the Fed is

Continuous

for

jn progress jn other broad

bearing functioning at fantas(up to 200,000
R.P.M.); servomechanisms; high

past five years the
group
showing

stock

point where

OVG1

This

along

coming

millionthe
a
is

company

the fmld of

ana-

of the total business in this area,
Its 231 R high precision computer
PACE costs $20,000 for the simplest unit, with the price for more

in 1958<

Results this year are ex_

pected to continue
Up

c]ue to

curve

favorable

steady rise in

United

The

States

would

the

make

tary policy in the kind of world
we

Annloeue

both

o w n

country

Rie

reads

electronic

elaboiate systems running up to
several hundred thousands. Other trols, Inc. consist of $305,000 in
major products include ADDAVonvertihle subordinate de-

our

ally

all

other

nations.

Now.

unfortunately,
seems

have

bought

Electronic

Associates at 1(4

in 1954 and sold

share in

1958.

issued

was

sold

1955.

Acoustica Inc.

week.
for

above

Electronics

Milgo

last

offered

was

converts computer data to chart
readings.
Electronic
Associates

has achieved a nice balance between
military
and
industrial
markets (about 50-50), and operates at an above-average profit

over-the-counter
listed

an(j

New

Toronto

York

sells

Alfred

Hayes

Other Candidates
Other interesting

grown

around the

concept of
monetary poiicy an aura of

cun-ently^at'7'".

ultra-conserv-

electronic

atism, which suggests in the minds

margin. Earnings of around $1.15 equities you might wish to look of some people that monetary
1954.
It sold above 25 last year, a share for 1958 should grow to mto wouid include D. S.
Kennedy policy is essentially negative, and
And General Transistor, now sell- - about $2.25
this year.
On this Co., leading maker of large anten- hence obstructive >.of the more
ing on the American Stock Ex-- basis the present snare price of 54 nae; AMP, Incorporated, leading progressive elements in our sochange at 55, was buyable at $3 (over-the-counter may seem a bit manufacturer of solderless electric ciety. To my mind this view is
a share in 1956.
Now this dazzling full, but no doubt, gives weight to wjre
terminals; Electro Instru- wholly misguided. In fact, monepublic

subscription

documentation

at $1

the

building opportunities

fortune

and I
missed is not presented to make
anyone feel ashamed of his own
ycu

quite

remarkable

growth

rate,

ments, maker of measuring instru-

there

F
,
Electronics, leading producer of
i^psco, inc.
connectors
and
cables
used
in
Epsco, Inc., too, has traveled fast communication, aircraft missiles
always great bargains with sales rising from $95,522 for ancj computers; American Bosch

are

found

somewhere

the

market,

waiting only for those
wit, wampum and nerve
buy 'em. Since 1954 such bar-

with the
to

1954

$4'/a

about

million

for

1953. The company has grown up
around its pioneer development

and perfection, in 1955, of the first
adjustment-free high speed analog
currence among growing electronto digital converter.
This basic
ic enterprises.
converter called DATRAC is used
This industry today is a versa- by such system manufacturers as
tile giant.
Omitting entirely the Convair, General Electric, Lockhuge telephone and communica- heed and Bell Telephone Laboragains

tion

have

been

frequent

oc-

V.,
vast

tories. Epsco systems include Data
Logging, Digital Recording and
Telemetry; the ADDAVERTER for

surging business is going on
commercial, industrial and military electronics. Of these by all

analog/digital computer linkage;
the DATAVERTER for,conversion
of data; and test, Alarm1 and Moni-

odds the most romantic is the mil-

tor

segments and

ment

electronics

Hi-Fi

and

tape

the entertain-

radio,
recorders,

T.
a

and
in

itary. Government expenditure
electronic

units
rockets

components,

systems for missiles,

and

Pulse

militronics,
Code

Epsco

offers

Modification

(automatic telemetering of information

fus'an
:.Z.TK

improve^nts^a^cx/nstantly, tbdse

being, made. Research
tronie

company

m an

elee-.

indispen-

is; an.

sable and unepding-ingredient. To-.

day

product

yesterday.:
_

Before

was

outmoded

(„

touch

upon

issue

few

are

monetary policy is the degree

Electronics
The

right

are

indeed exciting.

company

Cadillacs.

can

But

here,

keep you
as
else-

much

life, you
for glamor!

can

pay

principal reason for
public image of
of
emphasis it has necessarily placed
on
fighting inflationary tendena

There

cies.

are

Federal

critics who

accuse

Much

common

May & Gannon Inc.

thus

attain

the

better

results

expected for 1959 with
a 75% increase in sales,
and net earnings of above $500,be
perhaps
may

C00, a possibility. Management is
price-earnings excellent and divisional coordinafifty
or
even tion within the company unusu-

Forty,
eighty to one ratios
None

are

the

not

un-

ally efficient.

younger

being

effort

that

Mass.—May & Gan¬
140 Federal Street, is

our

System,
so

for

obsessed

My reply is

greatest interest lies

BOSTON,
Inc.,
celebrating
non,

'the uTirtieth^nn'ive^

address

York City, Jan. 26,

the

and

Communist bloc,

percentage figure

But it is clearly desir-

attain.

...

Continued

Hugoton Production Co.

Oil Company

Republic Natural Gas Co.
Wm. J.

Burke, Jr.

Falcon Seaboard Drilling Co.

Joseph Gannon

of the firm's
January 1929.
sary

founding

The firm deals in industrial,
textile, public utility, nucleonic
and electronic stocks and bonds,
Joseph
Gannon
is
President
and

William

Unlisted Trading Department

Burke, Jr., Vice-

President and Treasurer,

White, Weld Adds

WERTHEIM & CO.
Members New York Stock Exchange

out

NEW

.i_

•

able to SGt OUf SltohtS high m the

1959.

White Eagle

the annual

rate of growth we should expect
to

by Mr. Hayes before the
31st Annual Mid-Winter Meeting of the
New
York
State
Bankers
Association,
*An

New

significant
Analogue Controls, Inc.
especial to the financial chronicle)
dividends, although sizable.
..
BOSTON, Mass. — Francis J.
stock dividends, or stock spljts are. r Much smaller than the two just
Tviullin has been added to the staff
common.
(No one would think of mentioned, but growing rapidly is 0f White, Weld & Co., Ill Devonbuying an electronic for current Analogue Controls, Inc. Sales have shire Street.
pays

cash

average

I know of no way of setting

achieve price

stability at all costs.

Celebrates 30 Years

un¬

■

best

world

one-sided

Reserve

now

completely
smooth
and
steady
growth, for some moderate fluetuations are not only probable in
a free economy where millions of
individual
decisions
are
being
made at all times, and where expectations are bound to range
widely
between
optimism,
and
pessimism,
but
such
moderate
fluctuations may even be a necessary condition for maximum average growth.
Occasional lean periods seem to be necessary to
increase incentives to eliminate
waste and achieve greater efficiency, and thus to spur productivity.
We must be firmly opposed to those superficial appearances of rapid growth which are
so unsound as to carry the seeds
of severe declines entailing heavy
social losses in the form of large
unemployment and large unused
capacity. It has been argued that
a higher rate of growth can
be
achieved if prices are allowed to
"creep" upward. But I think that
without this "creep" we are much
more
likely to avoid excessive
spurts and severe declines and
growth—and it is average growth
that will count in the long-term
competition
between
the
free

the

example,

total of 520,000 common shares,
over-the-counter
quota-

cents

"sus¬

expect

equally important objectives in a

too

conver-;

at questionable or

ratios.

companies

world economy.

unfortunate

can

Delhi-Taylor Oil Corp.

fantastic

common.

and

Doubtless

that

with inflation that it has neglected

where

tion is 45. A net of around $200,000
for 1958 seems probable or about

outstanding.

that many sell

tic

tainable"

present

interesting investment field, some
general observation may be appropriate. So great is the current
electronics

common

called (forcing

even

dy-

0ther missile instrumentation,

sj0n), and certain options are ex-,
erc|se(j there will be outstanding

attractive companies in this most

enthusiasm for

building

this

of; convertible

iUent.ures callable Sept. 1, 1959.

...

r-,

but

factor in

namic, viable and growing domes-

Growth
I do not mean to imply by

Electronic, guid-' Airborne

resently 370,000
_

prime contractors for the
guidance systems for
Titan and Atlas long range misgiles; Milgo Electronics Corp.
maker of the XY recorder, and

Computer Controls for
ance, control, actuating, reporting manned
aircraft,
and
missiles,
and communication systems make
Epsco equipment functions in the"
up more than 50% of the cost of Polaris,
Minute Man and" Dyna
guided missiles. And the bigger Soar missiles.'
*
"
: ~
^ \ I
the
missile and
the
longer its
Epsco,
Inc.
capitalization
Is

try are genuinely interested in
seeing to it that it should continue

inertial

orbiting^ satellites in 1959 will be from missile to control center) and
about $5 billion.

given the responsibility of shaping monetary policy in this coun-

Arma,

Systems.

and

tary policy has contributed strong-

612,084 common shares eutstand- ments, graphic recorders and ly to economic progress in recent
ing\
precision
amplifiers;
Amphenol years, and those who have been

market achievements. It is merely
recited to stress, once again, that

Wants Real, Not Superficial

virtu¬

and

there
could

raone-

Who's

^ho

list

pace,

recovery

few

place of

industry,
Capitalization of Analogue Con-

customer

view

achieving economic growth over
a period of years at a sustainable
rate, and that our close interest
live in—a world characterized in
price stability reflects mainly
mainly by our belief that any appreciable
rapid change, degree of inflation is very likely
either evolu- to
cause
speculative distortions
tionary or and to render unsustainable alrevolutionary, most any rate of growth,

comments

saies> moving to a new and much
iarger modern plant in Hicksville,
Long Island; and expanded sales
representation both in and outside,
ti,e

close rein will be kept

member bank
reserves to forestall false ideas of
monetary-credit inflationary
developments without, however, interfering with recovery and
growth. He blames propensity for deficit financing for Fed's
attitude toward economy and Federal spending, and refuses to
go along with those who would passively accept recessionary
tendencies as strongly as he opposes price inflationary trend.

Rc rotation speeds

Analogue Controls, Inc. netted
$28,623 after all charges and taxes

ultra-conservative.

Mr. Hayes declares

;;

aR.

securities,

new

negative

areas:

torque anti-backlash gear systems
,

has ,ad-

computers.doing about 70 /c

preva-

aie

largest factor

lent

tens

oideis

Associates

rapidly to

month.

ess, are

still,

Electronics

spect for, and

s u c c

Central bankers' spokesman explains present monetary policy,

on a number of
potentiometers including
Rotating Multi-turn,

new

Electronics Associates

world-beat-

models, and is doing research

and development

electronics
will
spcecj gear increasers and reducers
pioduce more mergers than any jor niotors and blowers in
jet airother industry in 19o9.
craft and guided missiles; and low

than

laboratory-

larger
iacih-

factors constantly at work

are

gers.

idolized

By ALFRED HAYES*

President, Federal Reserve Bank of New York

"beat¬

nik"

\
complete

the dnection of corporate mer-

thCi

form.

hot rod set of

broad variety

instrument, mecha¬

partly to continuous outlays on wish Life Wire Wound nam ppn.
research and development. Fur- erated Non-Linear and Oil filled
ther, the advantages in combining varieties.
'
managerial, sales, ami scientific
Major development work is also

ican Magazine
30

TV,

ent

yield.)
Many companies are a
little thin on working capital due

Alger is seldom read
these days; and the sagas of
oflice boys to president
which used
to animate the pages of the Amer-

electronic

Current Monetary Policy
And Federal Reserve's Role

nism, computers and meters.
,Analogue manufactures 28 differ¬

smaller and lesser known units in the electronic

(537)

YORK

page

The Commercial and Financial Chronicle

expenditures for goods and serv¬
ices were about $52y2 billion, ;pi:,

Economic Profile of America—1959

year
are

Company, Inc.

President, First Investment

billion,

Calif.

Los Angeles,

about $iy2 billion'/from the
before; and this year they
likely
to
approximate $55

WEISS*

By JULIAN D.

the basis behind prediction of $470 GNP
major stock decline developing, Mr. Weiss is
not unmindful that this depends on labor-capital harmony. The
investment counselor anticipates a sharp, short spring shakeIn

providing

this year

and

Thursday. January 29f 1959

billionjmd this
billion.
They
have

would

topics

major
All

cover.

(1) the domestic
business out¬
look

and

the

from

Components

Examines Economy's

(2)
foreign sit¬

view;

the

these

dissect

let's

Now,

bond market

outlook; and
(4) the stock

by industry. Total demand by in¬
dustry will be about $85 billion

might men¬
that

the

topics to
covered

are so

Julian D. Weiss

to
comprehensive rather than
intensive approach. I plan to

state

then

and

conclusions

our

give the highlights of the under¬
lying reasoning.
>
Domestic

The

Last

about

production,
Federal

Production.

this

feel

will enjoy an in¬
similar magnitude,

year

crease

the

Index

Board

Reserve

Industrial
that

measured

thereby roughly attaining the alltime

peacetime levels of
more comprehensive'

high,

1957.

For

measurement

National

Gross

dol¬

goods and services in the
States.
We predict that

United
this

This

Product.

the total output in

measures

lars

look

must

approximate
billion, which compares with
GNP

year

$170

billion

$437

billion
resent

will

last

and

year

This

1957.

$440

would

rep¬

all-time

high.
Now, what is the basis for this
relatively optimistic conclusion?
1 might mention, by way of per¬
spective, that just one year ago,
the public and the financial com¬
an

munity
We

exceedingly gloomy.
the viewpoint at
would

were

expressed

ihat time that the economy

business.

inventories

extent

are

of in¬
To the
reduced,

of demand. For

level

actual

1938

about

$5% billion. This
of greater volume
the level
of
inventories
is
reasonable,
I
think we are safe in predicting
was

because

year,

i able

The second component is

hous¬
Housing held very well last
year, and new residential starts
were
about 1,170,000 units.
The
expectation this year is for a
modest increase, a little over 1.2
ing.

this

different

year

face

recovery

situation.

are

trend which is likely
continue at least throughout

this year.

The magnitude of this
will be substantial, as

^recovery

already pointed out.
What

that

ments

t/vder
we

fcjok

the

streams

rnphasize

supply,

the

this?

accurate picture,
at

the

equation.

the

into

look

ele¬

component

enter

get

have

side

the

are

major
United

demand

must

spending
States.

rather

than

the

United

be, and what are the main
spending streams in our economy.
The

three

main

sources

de¬

mand include (1) various types of
♦An

address

Annual
lions'

by Mr. Weiss before the
Meeting of the Teacher Associa*

Mutual

Fund

California,

the underdeveloped nations, particularly to the Latin Republics,
will play a key part in American

trade

increase

•

1958

negotiated

bringing the total close to 200. By

substantial

signed

Russia

Argentine

deals .for

barter

wheat

and

oils, Brazilian coffee and
cocoa, Chilean copper, Colombian
coffee and Uruguayan wool,; as
well as for other stable exports to
edible

the

V--r.vv

U^S./yyA^-.

The

extent

back in U.

the

1959

come¬

trade,'following the
15% drop in commercial exports

.Never before in the history of
American foreign trade has the a|1ct 3%
future course of overseas sales depended so much on two external
elements as ; it' will in 1959. In

Moscow

than 40 bilateral trade pacts,

far the bulk of these were in Latin
America, where for the first time

sales.

3%'for imports.

"eco-

:;; fact, the European Common Mar-

.....

in_0

dip in imports in 1958,
also depends upon the economic
recovery in America. With a $465gross
product esj.lma;ec' 01 1959, r it is probable

aspect

However, costs are

that the dollars

that go into

new

housing will increase by about
billion

dollars.

construction
billion
The

a
percentage in relation to the dishighway? posable income than they did last

Also,

will

another

dollars.

third

excess

component

the

capital goods area is business expenditures for
new
plant
and
equipment. Last year I predicted
a sharp decline in that sector, and
I anticipated little recovery by the

same
same

point to a gain
of about $2V2 billion in 1959.
If
you will total these three or four
things that I have mentioned, you
find

will

that.

have

plus

Let's turn to the government
aspect; specifically, expenditures
for goods and services. The gov¬
ernment has been spending more
and

more.

this

year

fact,

other

asDect
aspcci.

the
tne

mis

a^j?re«ate

aggregate-ex

I want
i vvani

have

to make one
to nidKe otic

had

consumer
is

ment

very

to.'the tad

spending held,
basic reason for

are

talking

with

compared
fiscal

year.

$80

billion

this

Deal

ment

course,

expenditures

need

not

argue

the

peak

will

increase.

whether it is

good or bad. The important thing
is to recognize the existence of
this trend. If the American people
want it, that is what we will get.

interesting to note that last
the

Federal

benefits

decline in

Government's

incomes.-This

in the face of

unemployment.

some
.

Also, it is relevant to look at the

employment figures. We hear a
great deal about unemployment,
and without
question this is a

I think

American.
We
people employed, but

every

see

without

this0thinlTiS perspective' Our
work force todav is 68°/, million'
get

DeoDle

There

people'
States.

are

employed
There

are

million

64Vi

theL

United

about 4 million

unemployed. Any reputable economist will tell you that frietional
unemolovment

neonle heine

sink

people transferring

and so on is
3%-4% 0f the work force.
So'we
have

today

maximum

unem-

$i7T billion 'is 2

maintain

^ Market hiations. The loss,for
tHe'merrium

styed

evnnrter will he

J£ -zed exporter wjil be
his
current
shipments

ana

6{j%

;

the

corporation

nntimiqtie

Although

the

js
hiV

neaIT1ny „.P.ase, rP_ maimam' .fl

^
nearly 4%*, of the
his present busmess to the Com-,

S^fate
ha"

u d
th
'f iiQ s

hi(fu

gross

19?7 Lh

national

the

second

PZts

1957 .when exports
incredible an_time

uiiiiftn

high ol $19.5 billion,
Deteriorating

credit

conditions

in Latin America resulting from
of 30% in actual exports from the Moscow's program -to dump and
s
before "the 15-year expert- • barter commodities on worid marmental Euromarket period lapses, kets is one of the main reasons
a

drop

)tin

e lo g-

American businessmen must count

why the U. S. must look to other
areas
to expand future exports.

that time four out of five>-5^"another ltt% drop in shipcorporations now ship- ments to the Latin Republics in
ping abroad, will be manufactur- 1959^ principally because of ex.By

American

ing 011 the Continent of Europe change shortages brought on by
either directly or through license, inability of the Republics to earn
Not only do they believe their enough dollars from coffee, metals
present sales will be protected, and other raw materials,
but they are convinced that the
To offset these declining Latin
mass market of more than 200
million Europeans by 1975 will ofdepend0 on Western
fer them
fai;. .greater business
,
tak(l Up the slack in over-

mgke a grave error in
concentrating on unemployment
sufficiently
considering profits..
we

,A,

££ess al'

WyeTA *Hhv
reveals. h
•,*?
U. S.;

eventuallv to lose 80% of

the

consumer

increase in

the smaH exporter in the

exnects

gives, tend sharply to cushion the

concern

seduction,

the
so-called
government,

insurance,

transfer

want to

year

mink

interesting point; and. that whiIe
the three business readjust-. mnrp

penditures will go up. So you; get
quite a rosy picture on the con-

coming fiscal year, of ex¬
penditures to a mere $77 billion

about

the

hut
out

has occurred

factor of $13 billion.

oinion

area
aiea,

sumci
sumer

be adversely affected.

gA McGraw-Hill American Let-

MUi^TthKfi if
that

they will probably be in the*

year

Indications

1958.

New

because
—

has

War

declared

continuing to iitcrease. We think

expenditure in
any
fortunately, because of
year prior to World War II was
cur improved
technology and in¬
about $8 billion; and I might add,
creased productivity, etc. •— we
just coincidentally, that our inter¬
have had the
ability, barring the
est
charges on the government
exception of wartime periods, to
debt alone are now $8 billion a
supply the demand. So, the ques¬
tion is, what is the demand going year. We can be sure that govern¬
States

is roughly

year

second

after

Now,

R.'s Economic

is/willing-: ket: and the Soviet economic of- *hat both exportsrand irnports will
ness to buy.
It is quite apparent?)tensive /.already
have ; had - a be
£ greater woiId deT
that, in view of the better psy- marked impact ou the planning of mand.apd higher prices for basic
chology now, and with employ-. V.-S. torergn .tfaders. Once the raw^ materials
.
The

spring or early year-end. That has proven 'true.* is, in
These
expenditures,
which
ag¬ ments
which we would'
gregated $37 y2
billion in 1957, decade
fcave a sizable recovery. The bot¬
dropped to about $30y2 billion in - There
tom was reached in the April-May

period.

this

income

$325 billion.

bottom out by late

iummer,

Since 4948

income.

able

increase of at least $3, billion.)
gone from about $190 billion to a
means a shift of $81,/2 billion
figure last year of $312/ billion,
that is going to be added to pro¬ which compared with $305 billion
duction—to the output of goods in 1957.
Our estimate of dispos-

units.

States

volume

at-

are

nomic war" with the U. S. through
dumping, barter, stepped-up financial aid and longer terms to

United

Khrushchev's

in 1959. Dollar

This

million

m e r

ican exporters
i n
l 9 5 9 ,

pro¬

U. S.

markets

from A

of business, and because

and services.

traditional

capture

market

consumer

tained.

whole, the inventory reduc¬

mass

5%, which would tie in with my j
America's
dollar figure.
We can measure? ||
comme r c i a l
probable consumer expenditures
shipments
in relation to two major criteria.
abroad will be
One is
the
ability to buy; the
approximately
other is the willingness to buy;-;
$ I 7 5 billion
The ability of people to buy—and
while imports
it shows up in actual consumer
should exceed
expenditures—is based on what is
Walter Diamond
$13 billion,
known as disposable income. It is
These
figures
what the public has left to spend
inrn
after taxes. It is very interesting represent5% rise oyer the 1958
totals in the case of exports and
to note what happens to/dispos-

production tends to be below the

tion

Economy

there was a decline
or
7% in industrial

year

reductions

from
ventories
by

degree

con¬

ditions will deteriorate further in 1959.

increase of about 4%-

continued

European,* and predicts disastrous Argentinian economic

will

jecting

sees

such as Hague and Paris
Clubs, encouraging the by-passing of U. S. goods in favor of

areas

are

our

exports to Latin

our

areas,

Trade associa¬

retail

the

Considers Canada to be

about 10% to $3.8 billion,

expansion of regional trading

than

$13 billion.

commercial exports will

our

market for 1959, estimates

foreign

tions in

year's

Last

believes

good profit opportunities exist.

1 am optimistic. Consumer

wages.

business decline stemmed in large

be necessary

Lake

situation.

inventory

acter it will

turn,: enjoys

pur¬

measures

Of the countries analyzed, the'

exports.

expendtures should be up by more

The first element relates to the

broad in char¬

America will drop

in Eu-

wages

•,

be up for 36 and down for 16, and concludes this indicates

higher wages than other areas of
the world) are about 40% U. S.

compared with about $53
billion last year, an increase, say,
of $12 billion, which even in these
days is an increase of no small
magnitude. Now, what are the
components that go into this?

look.

tion

average

(which

rope,

this year

out¬

market

that

show

the probable

liquidity and tariff reduction

by U. S. A.

international trade expert

expend¬

consumer

v.:

City

Common Market, U. S. S. R. economic war/*

highest wages in our history, and ' ) Despite the onset of the Euroby far the highest wages of any pean Common Market and Ruscountry
in the world.-. Studies sia's planned economic offensive

com¬

ponents
and see what "makes
them tick." Let's take the demand

uation; (3) the

sued

They still constitute, dollarwise, the largest component of
Gross National Product.
Remem¬
ber that our population is 171 mil¬
lion and that we are getting the

demand by individuals.

(3)

and international

itures;

which has been

domestic point

effect of European

Consumption Picture

Rosy

Next comes

goods
and
services,
growing steadily,

for

ment

than '<}

more-

best export

Invest¬

Corp., New York

ft,)•/. 51 international markets, Mr. Diamond opines

This year they should in- ■
crease by another $3 billion to $42
billion.
Thus,- there - would -be :
about a $6 billion increase in total <
Government expenditures."
;
y
-

International

Before analyzing, country by country, trading prospects for

■

years.

by govern¬

demand

(2)

ment"),

the

i.e.,

scene,

Domestic

Private

"Gross

ex¬

are

tremely important. These include:

McGraw-Hill
..

quadrupled in 20 years and have >
more than doubled in the past 10

(called

expenditures

Director, Foreign Economic Department,

>
*

$19

long term.
capital

By WALTER II. DIAMOND*

Editor, McGraw-Hill "American Letter," and

ago

Exporters

Will Sell Overseas in 1959

in¬

they were around $9
billion, by 1949 they increased to

for the
four

are

such

the debt.

years

favorable buying opportunity—and his one- year forecast sums up conflicting elements as being in rough
balance which should result in a trading range for the market ;
on
a
selective basis. He recommends accumulating sound
values in carefully-selected issues, in opposing increasing risk,
and explains why he foresees the market going still higher %
There

billion.

$2y2

items

How and Where U. S.

Now, let's look at state and
municipal expenditures. Some 20

out—providing

another

excludes

This
terest

(538)

Eu/'

......

The American Letter study also
indicates that during this initial
Plant building period of three to
four years U' S' exports to West"
eflv E"r°Pe will be up considerably- However, the American exP°rter ls bound to face difficult

saies. The rush of U. S. com-.

panies to set up distributing cen)
ters and arrange licensing agreements in the European Common
Market wUI cal1 £or extensive

American shipments of machinery

and other heavy capital equipment. In addition, moderate eco-.

expansion and rapidly
Euromarket between the fifth and growing consumer demand will
fifteenth years before the objec- help to bolster purchases.
)
tives of a free trading area and a * Moreover, practically every

from

times

competition

withm nomic

ployment of 2%

over

what would
,

the

fullest

possible

Continued

employpage

Western

*An
the

address

int'i

Affairs

chamb'"'

Mr.
Dept.

Diamond
of

before

Miami-Dade

Commer«- Miami>

European

has

country

benefited from the $2 billion loss

Continued

on page

Volume. 189

Number 5816

v..

Financial Chronicle

The Commercial and

(539)

new

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The Commercial and Financial

Chronicle

Thursday, January 29, 1959

(540)

data

are

Dealer-Broker Investment

Aircraft
York

New

the following literature:

Atlantic

curities

trends—Bank

Canadian

taxes

stock

York

New

—

Current information

—

Stocks—Bulletin—Robert

Louisiana

Natural

Huff

Co.,

Source

Study

—

Roni, Watkins,

Co., Inc., 37 Wall Street, New York 5, N. Y.
Metals 1959—Brochure—Bache & Co., 36 Wall Street, New
York 5, N. Y. Also available is a forecast lor 1959 on Oils,

New

Stocks—Year-end comparison and anal¬

York

City

ber

Also available are analyses on
Stewart Warner Corp.

5, N. Y.

Tire and

used in the National

Texas Eastern Transmission

yield

and

market

74 Wall

Quotation Bureau Averages, both as to
over a
20-year period —

performance

National Quotation Bureau,

fornia

Inc., 46 Front Street, New York

Portfolios for 1959—Two

suggested portfolios of Canadian se¬
curities—Ross, Knowles & Co. Ltd., 25 Adelaide Street,
West, Toronto, Ont., Canada.
Toronto Stock Exchange—Monthly bulletin of trading data on
all listed issues—Toronto Stock Exchange, Dept. E-3800, 234
Bay Street, Toronto, Ont., Canada.
Uranium—Annual review—John M. Easson & Co. Limited, 217
Bay Street, Toronto 1, Out., Canada.

American Express Company
pany,

•

—

nental

Western

States Refining

case

Pont, Homsey & Company,
31 Milk Street, Boston 9, Mass.
Also in the same circular

are

definitely in

Recent

Washington
some

the

may pay

cles, has made for

some

$14

rities

.& Distribution

though

than

the

bit of caution.

now

ing
that

it will

the

Best guess¬

market

avoid the

obligations

long-term

1 orh

Some

Security Dealers

Association

Trinity Place, New York 6, N. Y.

HAnover 2-2400

the

see
an

lion

412%

first mortgage,

30-

bonds which carried a price
tag of par for an indicated yield

year

Co.,

Inc.;

Farwell,

place

ter & Co.

The Street Club was formed

1948

younger

association

munity.

investment

functions

in¬

pending

drawn

from

diverse fields

57-Bound Volumes of the
COMMERCIAL

FINANCIAL
From

CHRONICLE

Jan. 1,

1929-Dec. 31, 1957

they

Available

Write

immediately in N. Y. C.
Phone

—

REctor 2-9570

maturities.

Meanwhile

the

corporate mar¬
ket currently appears to be af¬
fording new tissues a somewhat

entertainment, and the professions.

"FOR SALE

as a part of the im¬
refinancing offer.
And

expected in the long-term end of

issue of three to five

expect
that such a
plan
would probably help to cut. down

com¬

both

4.50%.

op¬

prospect for

the

stock and bond men

Francisco

the

for

any

in the

use

Sam

Husbands, Jr., Dean V liter & Co.,
and Thomas W. Witter, Dean Wit-

Present membership numbers
about 80, with virtually every
Again it appeared that Trans- stock investment firm and bank
continental Gas Pipe Line Co.'s in the San Francisco area repreoffering of $35 million of 5% first sented.
of

notes probably bearing 4 to

impending

Teletype NY 1-376-377-378

Blyth

Jr.,

social and business organization
reported all-subscribed.
with monthly luncheons addressed
The
same
held
true
in the by guest speakers prominent in
case of Inland Steel Co.'s $50 milthe business world or sometimes

the rate of attrition that might be

Grosvenor

Directors:

large-scale of¬

41/$% interest

Miller,

eration.

year

Members A

Skinner,

Co.

Richard

plans for rolling-over
$15 billion in secu¬

maturing.

around

clusion of

Troster, Singer & Co.

James

Secretary:

The government's fiscal agency
due to make known over the

weekend its

(b) Natural Gas Companies
Transmission, Production

interest

even

of salt, in market cir¬

usual grain

its bonds,

with

received

have to seek

ceiling

dispatches

people there think

the Treasury may

lift

that will
buyers..

an area

institutional

PAeton«

Schwabacher &

Herbert

Davis, Skaggs & Co.

Offerings

tures, brought out at $100 in the
ratio of $100 of debentures for
each 25 common shares held, was

tendency

indicating

(a) Operating Utilities

Davis,

Treasurer:

investment

The

attract

Firm Trading Markets in-

Hanson, Mitchum, Jones & Tem-

quarters is to look for a bit more
levelling-off
in
the
long-term
market before prices and yields

study of Bendix Aviation Corporation and

Instruments—Data—du

Skaggs & Co.

the
This

ferings were understood to have
been taken pretty much in stride
with indications that they could
move easily to premiums over the
offering prices.
Consolidated Edison Co.'s $59.6
million of convertible 4% deben¬

containing lists of sug¬
gested securities in various categories.
Armstrong Rubber Co.—Memorandum—Green, Ellis & Ander¬
son, 61 Broadway, New York 6, N. Y.

Beckman

William C. Richard¬

President:
son,

nicely.

The week's three

directors

and

1959:

"J;-

at the turn of the year.

Negotiated

the current issue of "Pocket Guide"

Products, Inc.—Memorandum—Hemphill, Noyes & Co.,
Street, New York 5, N. Y.

of San Francisco an¬

officers
for

elected

week's offerings were reported to

The Milwaukee Com¬

15 Broad

FRANCISCO, Calif.—The

nounces

Vice-President:

Corporation—Analysis
—Harris, Upham & Co., 120 Broadway, New York 5, N. Y.

Avon

—

better reception than had been

207 East Michigan Street, Milwaukee 2, Wis.

Club Elects Officers
SAN

Co.—Bulletin—Edward L. Burton &

American Radiator & Standard Sanitary
Also available is

upon

San Francisco Street

Co., Inc.,

Co., 160 South Main Street, Salt Lake City 1, Utah.

cents

Street Club

Annual report

be going out

—

per $100 of
reoffering, priced
yield 4.65%, the bonds were
understood to have met good in¬
quiry.

Tri-ContiCorporation, 65 Broadway, New York 6, N. Y. y
—

indicated spread of

was

bid

interest rate.

same

Corporation—Analysis—First Cali¬

Corporation

runners-up

behind with

about

bonds, and

Company, 300 Montgomery Street, San Francisco 20,

•

Report

This

only

Street, New York 5, N. Y.

Tri-Continental

The

rate.

100.779 for the

California.

4, N. Y.

•

interest

Loeb,

Lee Rub¬

Singer Manufacturing Co.—Memorandum—Walston &

British

offering of $12,000,000 of
brought out
some
close
bidding again.
The winning group paid the is¬
suer a price of 100.88 for a 4%%
were

showing an up-to-date com¬
parison between the listed industrial stocks used in the DowJones Averages and the. 35 over-the-counter industrial stocks

stock

bonds

Son, 150 Broadway, New York 38, N. Y.
Chemical Company — Analysis — Laird, Bissell &

New York

5, N. Y.

Co.'s

Co., Richards Building, New Orleans 12, La.
Puerto Rico—Special report on the Commonwealth—Govern¬
ment Development Bank for Puerto Rico, San Juan, P. R.
Pure Oil Company—Analysis—Reynolds & Co., 120 Broadway,

Over-tlie-Counter Index—Folder

Reynolds Metals Co., is slated
market 550,000 shares of SI 00

Central

bank

due to

are

Keeping Bids Ciose
Illinois Public Service

Scherck, Richter

Corp.,

the week.

out

preferred to raise funds to finance

Wall Street, New York 5, N. Y.
Pigeon Hole Parking of Texas Inc.—Analysis—T. J. Feibleman

Street, West, Toronto, Canada.
of

—

"rights"

Aluminum Co. Ltd.

Rhoades & Co., 42

stocks—Laird, Bissell &
Meeds, 120 Broadway, New York 5, N. Y.
New York Clearing House Banks—Comparative operating fig¬
ures—M. A. Schapiro & Co., Inc., 1 Wall Street, New York
ysis

Analysis

Meeds, 120 Broadway, New York 5, N. Y.
New York Capital Fund of Canada—Report—Carl

Mining Stock Reorganizations for year ending December 1958
—Brochure—Draper Dobie and Company Limited, 25 Adel¬

Electric

acquisition

Monsanto

Natural Gas Producers and Construction Industry.

New York City Bank

Shields &

Also in the same circular are

—

two

Looking further ahead, on Feb.
11

Company, 320 North Fourth Street, St. Louis 2, Mo.
Meredith Publishing Company—Report—Stone & Webster Se¬
curities Corporation, 90 Broad Street, New York 4, N. Y.
Minneapolis Honeywell Regulator Co.—Analysis—Oscar Gruss

Jason &

aide

Securities Company

stock of Southern Co.

Friday

Harnischfeger.

Interstate

210

Angeles 14, Calif.

Gas

Company, 44 Wall Street, New York 5, N. Y.
Resistance—Data—Oppenheimer, Neu & Co., 120
data

Research Fund.

common

round

Intertype Corporation—Analysis—Gude, Winmill & Co.,

Broadway, New York 5, N. Y.

Products

offerings, involving 795,000 shares
of Connecticut Light & Power Co.
and 280,000
shares of Rochester

Crane Company.

—

Oil

is
scheduled
to
market 1,350,000 shares

International

Yamaichi Securities

Hammill

Street, New York 5, N. Y.
High Voltage Engineering Corp. — Memorandum

New York.
Insurance

—

Commission, Court House,

Company—Report—Shearson,

trustee

Universal

the pur¬
of capital

Wednesday

1 Wall

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

West Seventh Street, Los

Report

the

from

which

Inc.,

for

funds

being sold for the account of

bring
—

Processes

provide

Petroleum

Commission

Expressway

Co.

Co.,
14 Wall Street, New York 5, N. Y. Also available are data on
Swift & Company, John Morrell & Co., Automatic Canteen,
Green

Harris

Gold—Survey of gold market—Brewis & White Limited, 145
Yonge Street, Toronto, Ont., Canada.
Japanese Oil Industry—Discussion with particular reference to
Mitsubishi Oil Co., Showa Oil Co. and Maruzen Oil Co.

Life

Orleans

New

Pabst Brewing and

6', N. Y.

Japanese Stocks

will

Gretna, La.

II.

in Canada.

business

affecting

Waukesha Motor Company.

and

Greater New Orleans Expressway
^

Oil

versal

chase

Greater

Analysis of Canadian

Cocoa—Report—J. R. Williston & Beane, 115 Broadway,

to offer 2.9 million shares of Uni¬

Halle & Stieglitz, 52 Wall

—

Co. Incorporated,
Mason Street, Milwaukee 2, Wis. Also available are
on
Ilein-Wcriier Company, Mosinee Paper Mills

Company

business
of Montreal,
Montreal, Que., Canada. Also
survey in laymen's language of the major

available

Also available is

Street, San Diego 1, Calif.

reports

able is current Foreim Letter.
—

Denmark, slated for marketing
Thursday,
sandwiched
in
among a run of corporate equity
operations.
On Tuesday, Bankers are slated
on

Duffy Mott Company Inc.—Report—Loewi &
225 East

Review

Analysis

finds;

week

York 5, N. Y. Also available is a report on

—

Equities

forthcoming

only a single debt issue, and that
$15 million bonds of the Kingdom

W., Washington

—

Business

Schweickart

Street, New York 5, N. Y.
Furniture—Analysis—Woolrych, Currier & CarJsen, 233

Monthly Investment letter — Burnham and
Company, 15 Broad Street, New York 5, N. Y. Also avail¬

Canadian

—

Week

The

Company—Analysis—A. G. Becker & Co. Incor¬

Coffee

J. Brown & Co.,

Drexel

7, D. C.
Burnham View

report on National

Refining Co.

Draper Corporation

1033 Thirtieth Street N.

Co., Inc.,

porated, 60 Broadway, New York 4, N. Y.
a review of Maine Public Service
Co.

effects of AEC grants
to colleges and universities, on radiation instrument industry,
and discusses Salem Brosius, Inc.—Atomic Development Se¬
45—Commenting

Also available is

Gas Co.—Memorandum—K.

Wall Street, New

Inc., 30 Broad Street, New York 4, N. Y.
Atomic Letter No.

6, N. Y.

Indiana

Co., 29 Broadway, New York 6, N. Y.
— Report — Thomson
& McKinnon, 11

Industries—Summary—George, O'Neill & Co.,

New

for

Columbia Gas System

will be pleased

Cook

America's

bonds, priced at 98.74
yield of 5.10%, found good
reception. This issue also carried
the eye-appeal of a 20-year ma¬
turity.

mortgage

Ira Haupt & Co., Ill Broadway,

Mulberry Street, Muncie, Ind.
Columbia Broadcasting System, Inc. — Analysis

Recommendations & Literature
send interested parties

Timken Roller Bearing,

Company,
—

South

118

Review

—

Tea Company.

Central

It it understood that the firms mentioned

Square

Western Maryland.

and
Beech

Edwin L.

Beck, c/o Chronicle, 25 Park PL, N. Y. 7

Number 5816

189

Volume

The Commercial and Financial Chronicle

...

(541)

doubtful,

Hartzmark Partner
In

lican

From

1, CLEVELAND, Ohio—Goodbody
Co., members of the New York
Stock Exchange and other leading

security
com m

d
odity
a n

meeting at
Des
Moines,
decided
to
spend
more
money,
build
up
their
organization, get more colorful
candidates,

tannounces

that

Joseph

z m a r k
been
ad-

has

*mitted
>

firm
eral

gen¬

enthuse

health.

come

Good-

got

than

organ¬
since

1939,

the

body
ization

matter

this.

publicity, they
have
to
give
their publicity

Hartzma rk

has been

Hartzmark

Joseph

man¬

the

ager

firm's

Cleveland

National

office,

City East Sixth Building, and will
continue there as resident partner.

men

can't

imagine
moi'6

Record

High Corporate

Earnings Projected
Bank

Manhattan

Chase
forecast

bases

assumption business

continues and costs are

recovery

held in check.

futile

Carlisle Bargeron

job

than one
of
trying to
publicity
Republicans these days.

for the
Who do
you write for—which wing of the
party? The President is now try¬
ing to preserve his budget. Sup¬
pose the publicity men get behind
this project and start to writing

corporate earnings could rise to
record heights in 1959, The Chase
Manhattan Bank's bimonthly busi¬

they will offend at least 14 mem¬
bers of the Senate and no

how many
These

telling

members of the House.

men

these

separately,
press relations

others

agree

this. But the trouble
what.

items

try to out-do the Democrats.

side.

is a
to do.

But

millions

that

the

votes

anybody

are

should
not

work

employed; it is
the many small
Republicans
sell this picture,

try to get

away

says

last year.
ness

was

But

such

Business in Brief,
current issue pub¬
Jan. 27.
statistics on profit

country will buy

not

view of the majority members of
the

want

any

educational

party, but his life was one of

the

1956

the

workers

almost to

recovered

Eisenhower

the

big

record—but

could

convince
They

they want to get out of the

say

matter

process

But

bolt.

peculiar back home situation.
they
It

didn't

was

advertise

the

NEW

continues and costs

in both Houses will be

bill.

Administration

will

duck

trying

against the

this

picture,

should grasp it and make

the most party.

offer to sell

solicitation of offers to buy any of these securities.:

nor a

offering is made only by the Prospectus.

January 28, 1959

ISSUE

$35,000,000

ap¬

in line."

First
Manhattan

Chase

The

report

(Due August 1, 1979)

fourth quarter.

Price
Business

"However,"

Brief

1979

Mortgage Pipe Line Bonds, 5% Series Due

business activity has
regained its previous high, with
gross national product reaching a
record $453
billion in the 1958
that

says

Plus accrued interest

adds, "ours is a growth economy.

98.74%
from February 1,1959

To meet the many

ing

the

demands press¬
nation at home and

abroad, we need to do more than
regain past peaks. Actually, the
economy has the potential to pro¬
duce as much as $35 billion more
than is now being turned out—
and

this ability grows

■

Copies of the Prospectus may
writers,

including

be obtained in any State only from such of the several
lawfully offer the securities in such

the undersigned, as may

publication says that
strength develops to
keep business moving ahead at a
good pace in 1959, how to contain
inflationary pressures could again
domestic

become the number one

"To

problem.
with inflation,"

the
"it
would be necessary to secure pub¬
lic support of policies leading to
an eventual surplus in the Federal
budget, tight credit and restraint
cope

Manhattan

Chase

the

New Hill Richards Office
Cal.—Hill

office

•

Harriman

Corporation

Kidder, Peabody & Co.

Ripley 8C Co.

Incorporated

Lehman Brothers

Lazard Freres & Co.

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

Dean Witter & Co.

Smith, Barney 8C Co.

Paine, Webber, Jackson 3C Curtis
A. G. Becker 8C Co."

Equitable Securities Corporation

fDrexel&Co.

Incorporated

Hallgarten SiCo.

Hemphill, Noyes

A. C.
T. J. Hicks
HIGHLAND
Theodore

The First Boston

Dillon, Union Securities 8C Co.
;

Corporation

Co.

Hornblcwer& Weeks •
&

Lee Higginson Corporation

management of James Hilbe.
.

Eastman

Goldman, Sachs & Co.

Glore, Forgan & Co.

Bear, Stearns & Co.

116 East Holt Boulevard under

the

Richards

& Co. has opened a branch
at

Blyth 8C Co., Inc.

report says,

wage-price front."

ONTARIO,

Stone 8C Webster Securities

White, Weld & Co.

enough

economic

State.

The bank's

Under¬

almost $20

billion each year."

FALLS.

American Securities

Corporation

Clark, Dodge & Co.

—

Dominick 8C Dominick

W. E. Hutton 8C Co.

Laurence M. Marks 8C Co.

business from offices

Main Street

Fred KornfeJd
FRANKLIN
Fred Kornfeld

curities

Allyn and Company
Incorporated

J. Hicks is engaging

securities
201

Opens

F. S.

Opens

SQUARE, N. Y.

is-conducting

business

from

600 Hewlett Street.

offices
-

Moseley & Co.

F. S. Smithers 8C Co.
—

se¬

was

Now the

dis¬

unifying

and

they trying to name the leaders of the

held

are

their

that

something

proached if the recovery in busi¬
ness

been made

level

certainly " be

way.

A criticism that has

level of the past five

new

that

the

up as

years.
If such margins can be
maintained,
corporate -I earnings
could possibly average $46-47 bil¬
lion for the year 1959. This would
mean

country went for big business and

of agriculture
done individually.
it will at this session. public mind that they are the
insist on
sizable number of Republicans image of big business. Instead of sidents

Let
come

The

"it would appear that

says,

the ratio had

the average

was

that

thinks

country they are right.

turmoil.

This announcement is neither an

margins for the fourth quarter are
not available as yet," Business in
Brief

there

Because then big busi¬
not delivering the goods.

lished Tuesday,
"While

from it.

Admittedly they have a hard
time doing this when there is a

report,
in the

ness

this

are

for
The

businesses.

recession

are

At first blush, that would seem to
be the correct thing. It certainly

what

for

the

made

aping party of that campaign, because neither
poor
man
he has another think coming. The
House nor Senate was carried by
The President, of course, is sup¬
only possible outcome of such a
the
Republicans, - is
that
the
posed to be the boss and the safe
policy will be to push the Demo¬
thing for them to do would be to
Republicans
campaigned almost
crats farther to the left.
publicize his policies
on
these
The
only
excuse
for
anyone exclusively for Eisenhower. They
matters. But then they are doing
voting Republican is because it is gave the impression they were
one half of the party a disservice.
different
from
the
Democratic
This
writer
worked
at
the party. Admittedly that has been running only one man, and that
Republican National
Committee costly, but there is nothing on the one man the country voted for.
in 1943 and part of 1944. He tried record to show that the
Repub¬
..But they won't be able to do
to keep alive the idea that Roose¬ licans would have been
any better
anything until they get together
velt had led us into war. All the off if
they tried to show they were
time, he would be having com¬ just as liberal as the Democrats and that seems in the far distance
plaints that he was an isolationist. and could do it better. The facts today. There have always been
If this were true the compliments are
they can't.
times when several Republicans
were coming from members who
In
this
writer's
opinion
the
jumped the traces on an Adminis¬
were interventionists. The writer
Republicans should unify as con¬
was
undoubtedly expressing the servatives and then try a thorough tration bill, but that was because

Well,

preservation of the budget.

profit margins that prevailed
in the latter part of 1958 continue,
If

one

those who say the
Republicans must turn to the left
and

business

Big

country. It is responsible for the

some-

thing to write
about.

stand

There

looks

any

all

and

with him

spending.
They
money
for defense,

When

They
have
to
do

member

the

thing,

for housing, more for slum
clearance, and more for educa¬
tion,
and
more
for
national

precinct

the fence

it.

responsible

Gold water

the

doesn't jump

Repub¬
Everett

Arizona,
eminently right when he says
party must stand for some¬

workers.

partner.

and
the

the

as a

want

if the
Senator

one.

Senator

curtailment

Republicans,

this

By CARLISLE BARGERON
The

exchanges,

;

Dirksen,

Washington
Ahead of the Neivs

Goodbody & Co.

indeed,

leader,

The Ohio Company

Salomon Bros. 8C Hutzler

Shields 8C Company

Spencer Trask & Co.

Tucker, Anthony & R. L. Day

G. H. Walker & Co.

The Commercial and Financial Chronicle

production and move in. The
a piling up of sur-

their

result has been

The Present Farm Situation and

Thursday, January 29, 1959

Averting Oncoming Disaster
v.;'-

By HON. EZRA TAFT BENSON*
Secretary of Agriculture, Washington, D. C.

lion

farm

1951; asserts

Farm markets are
burdened
Agriculture, industry, and fi¬
are
certainly not remote. with surpluses of a few crops, cre¬
ated at least in part by unwise
Modern
agriculture uses vast
farm programs of the past.
Agri¬
quantities of industrial goods. It
requires great culture in general feels the pinch
outlays of cap¬ of a price-cost squeeze. Farmers
ital.
The en¬ occupy a relatively poor bargain¬
tire American ing position and they are exposed
nance

very closely
tied
together.
All

hazards.

to innumerable economic

Nevertheless,
1958

was

the

average,

good year

relatively

for U. S. farmers.

g r

for

Improved Productivity

iculture
daily

The produc¬

Fact Number Two.

our

est and public land management,

ourselves

pricing

it's

Now

nearly 6 million cars a year.
Transportation? 16% of the gross
freight revenue is from agricul¬
tural products.
Chemicals? Fifty million tons a

represented about 95% of
acreage harvested
last year.

crops

southern

Africa.
are
producing more
than consumers will buy
at the prices at which peanuts for
food must be supported—note I

Farmers

said must be—under the old obso-

all

Thus

had

almost

all

Electricity?

Agriculture

electric power than

uses

Chicago,

Detroit, Houston, Baltimore,

and

Boston combined.

yields from

land.

our

production
impressive is the fact that this

outpouring

produced

crops was

est planted acreage

cost,

while

back in

where

bigger without the Soil Bank.

Our yields per acre were 43%
About 20% of
exports consist of farm prod¬ higher than the 1947-49 average of

ucts.

Consumer goods?

ica

provides

Rural Amer¬

big

decade ago.

Output

the work

I he costs

tion programs

have risen danger-

PA-

« surplus larm com-

lties

and

we will have over

government inventory

Interest onthese govern!

This is the agricultural techno¬
ment stocks will be $1 billion a
$40 logical revolution really in action. year. This is fantastic and inde¬
It shows how utterly futile it is
American
fensible.
to try to balance total production
economy.
Farmers produce commercially
and demand
through ineffective
Yes, agriculture, industry, and
*
oVn5 piocluce commercially
about 250. farm crops.
But most
finance are closely interrelated.
legislatively imposed production
of our
costs
are
for just
three
controls.
Finds Past
Year Good
crops—wheat, cotton, and corn.

Agriculture,

billion

market

short, is

for

the

Free

Commodities

Do Best
begin by nailing
Fact Number Three:
down some rather important facts.
The com¬
Here is Fact Number One.
Ag¬ modities that have stayed free are
riculture in general had a rela¬ in the best shape today. Most of
tively good year in 1958. The real¬ agriculture is free. Livestock is a

I would like to

ized net income of farm operators

good

reached $13 billion. That was 20%
more than in 1957 and the highest

only the brightest part of the farm

since 1953.
On

per

farm

basis

the

com¬

parison is still better—realized net
income per farm averaged 23%
above

since

1957

and

the

was

highest

1951.

example.

trols.

50%

average

best

all.

The

average

—$1,027

per

person—4V2%

above

the old record of 1951.
These

erages

figures, of

and

ceiving.

can

de¬

People have drowned in

water that averaged

only 10 inches

deep.

groups

individual farmers and
of farmers have been, and

economic islands in
national prosperity.

are,

•An

Board.

twice

American

60%

citrus

flour

and

than

15%

The

consumes

But he eats

ago.

wheat

now

did

26%

less

take-over

our

from

ernment will have

January,
25

ignated

basic

corn,

legislatively des¬

crops—wheat,

rice,

peanuts,

and

cot¬
to¬

bacco—are in trouble
today.- These
are the
crops that have

depended

the most

out

supports and controls.

priced

their

competitors
used our

our

old-time

than twice

cotton crop
2.7 billion

70%

last

much

record

much

our

total

year.

bushels

of
as

the

all-time

1958 crop.

our

1957

1958

and

wheat

home

That's

what

has

resulted

from

clinging to outmoded, obsolete, ineffective price support and acreExpenditures of the Department
of Agriculture this fiscal year are
now
estimated at $7.3 billion, of

which

„

about

tically all of the government price
support outlays.
Six:

Number

Fact

made

have

l-Mi?.

billion

for

are

wheat

this

our

are

national

scope.

but it has
painfully slow.
Yes, we have made some progress
toward sounder programs through
limited

been

and

citizen. No nation
indefinitely living beyond its income.
can

markets,

I'm

referring

being

Act

summer's

last

1956—and

Agricultural Act of 1958. But we
still have only a small part of the
program we

asked for 6

that farmers

and

ommended

years ago

Our

need.

really

program

rec-

been put into operation.

has
It

it hag been

The President this week submitted

balanced budget for

the combudget that
"win
help
prevent further
increases in
the cost of living and
a

{ng

fiscal

nation

year

—

imposes

personal

sav-

ings and incomes."
the

state

said

President

Union

of the

fiation

can

prevented.

Gf business

and

his

"In-

message:

demands statesmanship on

necessary

|0 devise and maintain such emer-

the Soil Bank
special surplus disposal oper-

But this
the part

labor leaders

and

yes> it demands realism, in our
approach to farm programs.

programs as

gency

it
not

important

tremendously

only for farm people but for

all segments of the economy that
^nd all this time the irreversible we definitely reverse the trend totechnological revolution in agri- ward more and more government
momentum,

in agriculture—the trend that we

That is why the surpluses have

have been fighting against for the

cujture

gaining

was

bullt "P-. ,That ls. w%hy a few farm p
still

commodities

for

their

expenditures

for food distribution
programs and

„

If the voices of 20 million farm

serious

have

problems.

people in America could be crys-

If farmers had had more freeinterference from
clom—ancl ?ess, mxerierence irom

tallized into one voice, it would,

I feel sure, demand more freedom
'

gQvernment—their production ad- 10^*a*me^
justment

the

over

have been

markets

Farm

would

That voice would say:

would

years

realistic—

Give

have

been

have

been

unit of output could
lower;

Agriculture would be on

basis;

sounder
.

fiscal years agricultural
budget would be smaller,
Our technicians estimate that

Give

cut cost.s to taxpayers by a billion

dollars in 1958
These six facts that I have disare

the

utmost

impor-

tance to anyone who hopes to
understand the present farm situation. tiiviHIv make certain cone uThey
sions vividly clear
p

cinnc

par

/the

commodities.

with

clamp down
rigorous controls on

must

that

can

Over

freedom from

may

gov¬

interference—so that

again be independent

self-reliant.

and

century ago the French

philosopher and historian De Toc-

queville,

^onditio;is

who

knew so well the
country wrote:

of thi

'Democracy

socialism

and

have

nothjng jn common except one
word—equality.
But notice the
difference, while democracy seeks
^
equality in liberty, socialism seeks
equality in restraint."
....

Government's Growth

Today, the

scope

and variety of

governmental operations have be-

come
amazingly wide.
We are
touched by government from be-

producers of some fore
Wheat particularly die.

extremely critical position,

ernment

expanded markets and

Either

farms

expand our markets.

have been able to get on price sup-

for

plant-

freedom to meet our

us more

competition—so

with the little legislation we

run our

incomes.
Give

This

suit

we can

Give usjrore freedomTo jnaNcet—so
that we can increase our

even

that

efficiently.

freedom

larger;

is in

every

the Agricultural Act of 1954—the the hidden and unfair tax that in-

lay. It may be later than we think.
and interna-. Unless
the needed changes are
is unfair to promptly made, disaster could re-

farmers to attribute all these
as

blends

of supply.

present costly farm procontribute to unbalancing
That is of utmost con-

cern

We must complete our revision
of the farm programs without de-

ex¬

benefit alone.

abroad

for

na-

wheat, tobacco, and peanuts,
Qur

toward

progress

some

sounder farm programs,

Calls for Immediate Revision

tional

sources

grams

penditures, of course, do not benefit
agriculture producers
alone,
Many of them have general benefits that

their

.change

pro-;, other

acres.

cussed

control programs.

expenditures

and

the

law

the budget.

ports,

combined.

crops

44%,

highest income—account for pra.c-

corn—over

2.5 billion bushels of wheat—more

products

priee umbrella to expand

followed the

old

allotment

tional

S™£amSaf?r Stabllizati0" of farm

six of the

the

Thus, relatively small numbers
of farms—usually those with the

cotton—more

prices and farm income. These

All

allotted

Farm costs per

bales

wheat

cereals.

year

Least

Two million farms, or

acquired—since

1953—

million

the

Aided

last

year's crops is completed, the gov¬

age

Citrus is another example.
average

While

address by Mr. Benson before the

Industrial
Conference
York City, Jan. 23, 1959.

National
New

sea

about

years ago.

ton.

Many

eats

chicken, and 2times as
turkey meat as he did 20

years

course, are av¬

averages

person

beef,

person

total income per person on farms
reached an all-time high last year

When

than

The

ture

per

not

hog, and poultry producers have
stayed free of supports and con¬

income from

picture—it is the most expandable
part of our farm market. Cattle,

basis—taking much
all sources—the pic¬ much

Livestock

—

ations.

ivhvm

age

American market.

approach

one

Incidentally, if
formula

That .g why

stabiliza-

income

and

price

farm

52% higher.

was

has never been given a real try* of government at all levels."

ously high.
<tQ

Deserved

nevo

Fact Number Four:

farm

man-hour

per

high
cut

This doesn't make

Foreign trade?
our

been

production is

Surmorts Are Now loo fWlv
buppoits Are Now Too Costly

the small¬

in the past 40

have

acres

areas

sense.

farm

Production would have been

years.
even

increased

most efficient.

What makes the 1958
tremendous

year.

record

That

controls—more regimentation.

and turn to
The pres90% of the farm products ent laws require price supports at
duce
marketed. More than 2V2 million continually rising levels. Legislafarms produce less than 10%
of tion is needed to permit adjustthe products marketed.
ments in support levels,
Less than one-third of our farms
For peanuts, too, the law should
account for by far the greater part be changed so that growers can
of our price support outlays.
A expand their markets,
little over one-fourth of the cotton
The
Agricultural Act of 1958
farms have three-fourths of the provided more freedom for procotton acreage allotments.
Two- ducers of corn cotton, and rice,
fifths of the farms with wheat now we need prompt and effecallotments have nine-tenths of the tive action in behalf of producers

acreage

has

export farms.

largest tobe in North

bacco market used to

Carolina.

out

world's

The

markets.

levels that would balance supply

would be zero —no wheat
The first time farmers had a real
production at all.
choice they chose freedom.
Last
Fact Number Five:
Our price
a far better approach, I believe,
November, corn producers by a support
programs,'
even
though would be to provide wheat growers
majority of nearly 3 to 1 voted originally designed with small with a program that moves toward
controls out altogether.
family farms and low income farm freedom7 to produce and compete
Our rice exports depend heavily people in mind, have resulted in for markets,
on
costly government programs.
huge expenditures for a few farm
Changes are needed for tobacco
We have the best quality tobacco products produced primarily on a and peanuts also. As prices of U. S.
in the world, but we have been relatively few larger, mechanized tobacco
increase, foreign buyers
_

—

rubber to put tires

and demand for wheat for dollars,

tivity of the American farmer is lete law still on the books.
s e 1 f would
growing much faster than the pro¬
And wheat is our number one
soon
cease
if ductivity of American workers in
problem. We cannot continue with
Since 1950, output per the wheat
agri culture general.
program as it now exceased.
But man-hour in nonagricultural in¬ ists.
Harvested wheat acreage has
Ezra Taft Benson
many, I am dustry has risen at a rate of about
been cut by over 20 million acres
sure, find ag¬ 2%, per year. The increase in out¬
since
1949—yet, under artificial
riculture important to their eco¬ put per man-hour in agriculture
pricing combined with good
has averaged 4%% per year.
nomic interests also.
weather, we now have by far the
Last year's output of crops alone
Have you investments in the oil
greatest wheat surplus in all hisbusiness?
There are 12 million was 11% larger than ever before.
tory.
tractors, cars, and trucks on Amer¬ Total farm output—crops and live¬
By July, 1960, the carryover of
ican farms. Agriculture buys more stock—was up 8%. This was nearly
wheat will be about IV2 billion
petroleum than any other industry twice as big an increase in one bushels
enough to supply our
—about 15 billion gallons a year. year as we had in the entire decnormal domestic requirements for
We had record
Are you in steel? Farmers take ad® of the 1920's.
2V2 years. We will have %'dy> bil6V2 million tons of finished steel production of 14 major crops, in¬ lion tied
up in wheat alone.
a year.
cluding corn, wheat, barley, soy¬
We have spread the wheat belt
Rubber?
Agriculture buys beans, and grain sorghum. These all over America. Wheat
raw

and

More controls means stopping
up the
loopholes—increasing the
penalty for overplanting—setting
acreage and marketing quotas at

These programs are of direct bene-

bread. Life it-

enough

and

compete.

soil and water resources, and for-

compliance with the program.

must move

market expansion
greater freedom to produce

toward

develop-

market

controls

been will-

ever
we

have

before—more

ing to impose—or

services, protection of

and

ment

peanuts

depend upon
a

education,

trol,

The

pleads for less governmental intervention in our lives, economy

economy

I refer also to

even

than

producers
had

ever

with the aid of our fit to all our people. They should
heavily subsidized export pro- not be regarded as programs solely
grams, we hold only about 30%
or
even t predominantly
for the
of the market.
v
benefit of farmers. Yet the public
The corn program was so un- is concerned, and rightly so, over
realistic that last year only' one the size of the budget for Agricorn acre out of eight was farmed
culture.
.
. <---v

23% above 1957 and the highest since
farm programs have become too costly; and
and freedom.

Our cotton used to hold
of the world market.

or more

Now,

was

our

planted less than 12 V-i milAnd still we have a

surplus.

"practically all of the V . . price support outlays, are dealt with
by country's agricultural chief executive in a fervent appeal to
"complete our revision of the farm programs without delay."
Mr. Benson refers to agriculture's past good year within net
income per

In 1958 pro-

land.

farm

wheat

such programs as research, meat
inspection, disease and pest con-

acres.

60%

relatively few farmers who need the least help receive

the

ducers

fact that

Misconceptions about farm supports, and the singular

paid with interest.

•'

Thirty years ago cotton was
planted on close to 45 million acres
of

to foreign aid—and for Rural Electrification and Farmers Home Ad-

cut- ministration loans, which are re- than Congress has

followed by further
our output.

pluses

backs in

♦

(542)

lives

are

born

until

after

Government impinges on our
every

hour

of the

day and

night,
Most of these governmental ac-

Volume

Number 5816

189

The Commercial and Financial Chronicle

(543)

J•
tivities

helpful in greater

are

from

Founding Fathers.

our

It is

Let

remember that

we are

■

"fresh Looks" at

lesser degree. But we must face a philosophy foreign to our shores, prosperous people todays because
the central problem of just how. These men understand our system, of a free enterprise system founded
inuch of our lives, of our freedom, thoroughly—and they hate it thor- on spiritual, not material Values,
,

economy, and of our society
want to entrust to government,

our

oughly, too.

^ It is founded

Many Things Needed!

freedom of choice

They owe their allegiance to an- —free agency—an eternal Godother land, another government, given principle.
ter century a tremendous shift They profess no
allegiance to God, £
We must keep America strong
from individual to governmental nor to
any moral code. The make, —-strong I economically, strong so-,
responsibility—and from local and unwitting allies "of the uninformed., eially, but above all, spiritually
State responsibility to the Federal They rationalize the worst motives strong—so that our
way of life may

Government.

We have

in the past quar¬

seen

the

/, Is government going to get big¬
we

self-seekerS.

They thrive endure.
This is your challenge
proportion to the amounts ?nd mine—<-a challenge to every
of class hatred they can
create.; American no matter who of what
They are wolves in sheep's cloth- he may "be. "God grants liberty
ing.
'
'
T only to those who love it and are

vetoed nlrtaM

always ready to guard, and defend
A***"
•'- V
* •.
:
.•

purposes,

■

(

;

cabinet committee

provide such
"Each

;

p ^

this—iand we mustt
with the help of

"We

}e ^

though

only

are

of the world's
These

world's people and have

the

land.

abundant

(1)

Free

enterprise—the

right

market

—the

economy

others

only

the

farmers'

Working together,

main¬

we can

mechanism.
programs

cov¬

Hop-

—

make

sure

that

Eisenhower

are

not con¬

tributing to the nation's inflationary problems by
way in which we run our own government
business."—President Dwight D. Eisenhower,
:

Much

To Admit to Firm

£ins' Harbach & Co., 609 South

need

Pres.

than "the way

in which

government business" needs

own

we run

convinced

Grand

Avenue,

members

the

Coffee & Sugar Exchange

New York and Pacific Coast Stock

members

new

that

businessmen

their organizations should be

fully

other

active

politically

^Special to The financial Chronicle)

INDIAN

counted for what

believe.

;ORCHARD,

Eucalyptus

with

now

Street.

Board

Association

tional

two-year

I thank God that

announced

Charles jS.-

They

are

The-

two

members

people are
the dangers
agriculture—and an

Arthur A. Anisansel,
and

director

that lurk in

depend too much
on
government.
Gradually they
are
learning that basic American
beliefs, principles, and attitudes

This advertisement is not

threatened

are

today

The
NEW

ISSUE

Board.

„

or a solicitation of an offer to buy these securities.
offering is made- only by the Prospectus.
' »
'
'
'
•
:
:

offer to sell

•

■

never

before.

By whom
*

are

■

Freedoms

Inland Steel

they threatened?

By the uninformed;
By the self-seekers;

■*-.

$50,000,000

■

Threat

By the subversives;

First Mortgage

By the disinterested.

Company

bVz% Bonds, Series L

Yes,

freedoms

our

are

threat¬

ened

by well-meaning but unin¬
formed people who see the short¬
comings of our economic system
and
believe
they can legislate
them
to

existence.

out of

reach

the

promised

passing laws.
stand

our

Dated

February 1, 1959

Due February 1, 1989

7 "

100% AND ACCRUED INTEREST

OFFERING PRICE

They try
land by

They do not under¬
They

economic system.

would load it down with burdens

was never

Copies of the Prospectus may be obtained in any State only from such of the
undersigned and others as may lawfully offer these securities in such State.

intended to carry. As

their schemes begin to break down,
more

and

controls must be

applied.
Patch is placed
upon
patch, regulation is added to regu¬
lation until ultimately freedom is
iost—lost without our desiring to
lose it and without our knowing
why or how it was lost.
Our heritage of freedom is
threatened
by another group—
self-seekers. They are men who'
see
in government legislation a
way to obtain special privilege for.

Kuhn, Loeb & Co.
The First Boston

A. G. Becker & Co.

Corporation

themselves-

competitors.
as a

restrain

their

They

use demagogy,
smokescreen to deceive. They

have no love for freedom

en¬

terprise. They would bargain away
their birthright for a mess of pot¬

tage. They would learn tlie value,
of freedom-only after it-was gone.r
To one who lived among people

in
nations where freedom no longer
exists, this is arr alternative too
horrible to contemplate.
A third, and much .smaller sub¬
versive group is dedicated to the.
overthrow

the

economic

and

social system that is our tradition.

DigitizedTheir philosophy does not
for FRASER

stem

Blyth & Co., Inc.

Incorporated

•

Ea&tman

Incorporated;

Lehman Brothers
r

Incorporated

William Blair & Company
Lee

Smith, Barney & Co.

Merrill Lynch, Pierce, Fenner & Smith

Stone & Webster Securities Corporation

January 28, 19SQ

Goldman, Sachs & Co.
Lazard Freres & Co.

Kidder, Peabody & Co.

Harriman Ripley & Co.
'

Glore, Forgan & Co.

Dillon; Union Securities & Co.

White, Weld & Co.

Drexel & Co.

Higginson Corporation

Slover who have retired from the

our

economy—that

succeed

Charles J. Meono and Charles

Lowry, President.

aware

Commodity

during, 1959 and 1960, it has^ Exchanges.

Vice-President

the

serve

been

Mass.—•

be. Robert C. Kerr & Co., 103 Essex

and

Primo

stand

term

any

organization.
must

Managers

With Robert C. Kerr

tain the strength of these pillars—
we must!

becoming

oiii?

"fresK look."

Imperial Commodities Corp., im¬
porters and exporters, and J. A.
battle of everyone who
Appoints Board Members Higgons, Jr., senior partner of
Exchanges, on Feb. 5 will admit
J. A. Higgons & Son, sugar brok¬
The New York Coffee and Sugar
believes in individual enterprise D. Roger Hopkins, III, to partner-.
Exchange, Inc. has elected two. ers. Mr. Higgons is former Exec¬
rather than super-bureaucrats.
I ship.
utive "Vice-President of the Na¬
This is your bat-

right to exchange.

the

own.

not

tie

Private property—the right

(3)

battle to be free.

and
to

all

among

LOS ANGELES* Calif.

This

to venture—to choose.

(2)

choice

earth.

only 6%

blessings have
come to us through
an economic
system which rests largely on
three pillars:
'

nation

land

wheth-

the

tfOPKllfS. flaroacn bO.

rest of the world combined—even

see

activities

by this order operates under its own law and regulations,
and each was set up for a spe¬
cific purpose. What is needed
today is a fresh look at how
they are operating in the-light
of modern-day economic
problems.

?he D?incinles
J^ice landwasfolded

central mechanism

ered

Edmund Burke once said,
people must remain free.
"AHto ~ve
must remain free. that is necessary for the forces of
UDOn
wWch
this
Our
society must remain free. evil to win in the world is for
Free
of excessive
governmental enough good men to do nothing."
rounded.
Vm
,
....
,
God grant that we may remain
paternalism, regimentation, and
rpu Wt n G wJ?!
£ v ever mindful of our heritage and
control.
neglect as well as .
by direct attacks.* 0ur
duty
As a nation, we are strong. With
Too long have too many Ameri¬
the freedom of economic enter¬
cans stood
by as silent accessories
»
I,"
fti
L
LA
prise that we possess, we have to the crimes of assault
against
been
able to
•
produce | about as freedom—assault
against the tra-'
1
much industrial goods as all the
ditions which made this
economy

affecting "prices and costs) will

Our

now

for following their current operations to
er
they are being conducted, in
so i far as possible, in line with
the need for reasonable stability
of prices and costs. This
newly
established committee (special

' ^' us here today rededicate
ourselves to this noble end—to.
keeping our nation strong and free,
Let us firmly resist every move

concentrated, even for
it is all there,
<
in one package, where it can be great group of otherwise' intelligrabbed by those who may be evil gent people who shrug off any ■"J* we achieve
responsibility for public affairs. : —and we will
in its use. \;-V ? '
" /•
is

power

helpful

"procurement-T-there is

in direct

and still bigger?
going to turn still more
of our freedom, of our economy,
of our society over to centralized
They have left their mark 0n
government?
this land.
'■"< -r1
I We must not do this. Deep in
They work 24 hours a day. They
their hearts the American people
speak glibly of ultimate victory/
know that great concentration of
Lastlv
a
fourth eroun has dp power is a dangerous thing. Once
and bigger

ger

Are

"Although. the government has many programs
that affect prices- and
costs—including, of course,

Dean Witter & Co,

Ladenburg, Thalmann & Co,

Salomon Bros. & Hutzler

;

The Commercial and Financial Chronicle

(544)

How High the Stock Market
And the Investment Ontlook
By REUBEN TIIOUSON*

Chicago, Illinois

dealer

several

offers

reasons

corporations by treating interest there are fluctuations in the mar¬
charges as a deductible cost of ket value of high-level individual
doing business, while there is no stocks like IBM and Minnesota
But, as many have noted, the comparable tax credit for divi¬ Mining & Manufacturing. Beyond
dends paid out.
- that, the only major risks I see
upturn in average prices started

More and more is being said
before the
business, and these days about the diminishing
the rise in average prices has been supply of quality stocks. This has
at a faster rate than the rise in, been a pet theory of mine for a

four

months

five

general

supporting belief:

paradoxical simultaneous fear of inflation and confidence fci

dividends.

economy's future is primary motivation for equity-ownership.
Mr* Thorson admonishes against reliance upon averages, and
specifies industries apt to show particular promise.

from

phenomenon; a ket of stocks than of the stock
If a
person
makes a
steady and persistent stock market market."
rise with scarcely any interrup¬ well-chosen purchase in a security
because
he
is confident
of the
tion, save for
a
few
weeks
management and the longer-term
in

April and

of the
possible,

prospects

should

and then.

himself from the

the

ceived

cepted Dow-

stock

Jones

regrets

Aver¬

583.65,

Reuben

the

This

Thorson

was

year.
an

increase of 34%.

Poor's

Index

The Standard

of 425

industrial

stocks, considered by many a bet¬
ter barometer, rose from 43.20 to

can

High the

Market?

the

level of 590.

recent

It is my opinion that we perhaps
ail pay too much attention to what

the averages are

lenge

and

reversed

many

are

asking if securities prices have
not gotten too far ahead of busi¬
ness

earnings

recovery and

pros¬

before the top is reached in the
succeeding bull market. Thus, the
percentages would seem to be in

doing from day favor of

further rise.

day and I have no doubt that
As I look at it, the outlook for
they frequently cause hasty deci¬ the next two or three years, bar¬
which the person who is
ring war, is for major further gain
moved by this impulse often re¬ in
earning power of the companies
grets.
We hear more and more which are well adapted to these
a

talk

Mr.

Outlook

for

Minneapolis, Minn., Jan.

Thorson
1959

16,

before

meeting,
1959.

changing times. With such pros¬
pects, and there are many who
share this view, it is hard to be¬

The securities listed beloiv

Not

market

had

strong desire for common stock
ownership; that is, that the long
term history of

10, 15 and 20%.
Today,
margins
are
90%
and
practically all shareholders own
were

their stock outright.

lion.

The

the

believe

'57-'58

after

recession

the

have

sions

This

postwar
convinced

years
third

amount

the trend.

to
'

many

controlling

reces¬

maintaining

rela¬

also

must

change,

they

and

owned

are

have

mind

all been
the

and

change of these

sold
ex-'

mere

from

another creates

owner

borne

securities reach the Ex¬

once

Commission

years

Study,
indicates

ago.

the Stock Exchange average 5.3%
in dividends and had an annual

Stock

currently

period that

have developed

for
for

and

—

II.

War

some

is good.

York

that

World

The Cowles

stocks in

common

economy

that

owing brokers
about $3 billion 400
prices will re¬ million, or 1.3%. In other words,
main relatively firm for several stocks are what we call "in
strong
reasons:
hands"
and
are
unlikely to be
(1) Foremost is the mildness of disturbed by a minor interruption
I

dynamic

of all listed

Exchange today is about $265 bil¬
is

made

The present value
stocks on the New

earn¬

Submits Reasons for Firm Prices

are

being offered

as a

belief; that our real danger is
inflation—not deflation—has cre¬
ated

demand

The
for

rate

for

one

all

total

period.
cost

the

listed

appreciation of 3.1%, or
8.4% over a 60 year
When it is realized that

average
a

stocks

common

living index since the
century has risen
slightly less than 3% per annum,
the importance in owning equities
whose capital values alone have
turn

the

risen

slightly

than that be¬

apparent.

comes

;

Paradoxical Fear of Inflation and
Confidence

new

the

turnover

most

1957

inflation-and

confidence

future of American

popular

com¬

panies

investors;
such as pension funds, insurance
companies, mutual funds and trust
companies.

subject

industry.

inflation

the

The

one

new

areas

stocks from institutional

(3) The above factors, combined
with the growing belief that qual¬

ity

stocks

combine;

(a) The safest form of invest¬
with

ment

the

on
the
Exchange, with
which I will not dwell, but it is
representing 18% of all
sufficient for me to point out to
shares listed, was only 3.3%.
In
you
that the dollar of 1939 has
other words, 96.5% of the shares
today,
in
terms, of
purchasing
of
those
companies
were
not
power, a value of 48 cents.
traded in an entire year.
With a
Certainly, we all expect that the
strong resurgence of confidence,
combined with an ever broadening growth of our dynamic economy

interest

the part of

individuals
acquiring equi¬
readily see what ef¬

fect

ing one's estate without toil.

price level.

together,

ward

the

stocks has greatly enlarged
demand for them during
a

period

when

ties,

strong

you can

this

demand

There

the

above
changes in the public attitude to¬

encouraging

debt

policy of
financing by

secondary distribution by the undersigned.

January 28,1959

ahead.

another

which

case

chases

argues
of

contributing

for

continued

well-bought

and

that

Gains Tax.

is now

Promising Industries
It

the

man

pur¬

the

Capital
has bought a
over

say,

selling at 60. If he for

some

seems

with

that

the

indus¬

particular

promise in
drug, elec¬
tronic, office equipment, cement,
aluminum
and
food
retailing.

1959 should include the

Others which appear

to have im¬

proving prospects are automotive,
including rubber, building mate¬
rials, petroleum and specialties in
paper and glass.
The airlines
should have

better days ahead, as
desires to sell, he is im¬
should
the
packing
companies.
mediately subjected to a capital
Utilities stocks continue to give
levy of 25% of his profits. He is
an
excellent performance and I
reluctant to take this action, even

reason

though

market

may

recognizes

decline

that

the

somewhat

believe

chase

the

his

for

stock

same

tax

liability.

and

have

place

every

investment portfolio.

because the decline must be very
substantial before he can repur¬

New Issue

continue in the years

tries

retention

exerts

forces have
tended to restrict the supply of stock at 30 and has held it
good stocks. Biggest of these fac¬ period of time and, let us
tors is the government's

will

and institutions in

only adequate
hedge against inflation and
(b) The only hope for increas¬

Taken

*From

stock

Aside from, the foregoing, we
tively full employment. There is. capital.
Now, if most of these
danger in this philosophy, as we stocks are locked up in boxes and have been witnessing, in my
all
know; nevertheless, itdoes the floating supply is narrow, the opinion, a paradox—a strong ris¬
recovery was near at hand; hence,
whether prices at that level would ■exist.
impact of new demand is readily ing trend, based on fear and con¬
fidence
hold or advance. Today, the chal¬
simultaneously; fear of
(2) This conviction, plus the expressed in higher prices.

sions

Investment

rising

the

Margins

ings and these, in turn, to create
higher dividends?

safeguards

prices had been de¬

58.97, or about the same. Aver¬ pects.
ages in themselves can sometimes
The answer is made somewhat
be misleading. Recently, a market
easier by the knowledge that in
analyst pointed out that if Ameri¬ 12 months the Dow-Jones Indus¬
can Telephone had not been sub¬
trials have, risen 34%. Normally,
stituted for IBM in the Dow Aver¬
stock
market
prices advance a
age in 1939, that average would great deal more than this amount
now stand at about 1,800, instead
from
the
bottom of a recession
of

volume to create

ness

clining sharply and our big chal¬
lenge wa£ to determine whether

low, to
where

closed

common

shareholder

ested

today. Why, then, should we
not anticipate a substantial down¬
ward "correction" in prices during
the period needed for rising busi¬

seems

A year ago

from

436.89

a
well-con¬
position in a

of the most

ation.

highly speculative approach to it.

Admittedly, the yield

dividends is extraordinarily

investors that

stocks,

rose

that

How

market

the

one

have.

age, consisting
of
30
indus¬
trial

investment

influence of the

Loss

averages.

commonly ac¬

he
detach

company,

try

inherent in the international situ¬

earning power.

rare

few days now
Based

low

During the past year we have often today that, "It's more a mar¬
a

for diversified investors are those

I hope that my discussion up to
long time and, I think, represents this point has not been too techni¬
General improvement in divi¬ one of the most important factors cal and that I have not presented
the strong volatility too many statistics but, in sum¬
dends has started only recently. creating
Moreover, it is as true now as which exists in our market today. mary, I would like to give in the
When I entered the business, a simplest terms what I
ever, that the ultimate support of
regard as
all equity prices is the yield from large proportion of those inter¬
the
primary motivation in the

(1) high-multiple stock prices will continue relatively firm and
lower yields will remain for sometime; (2) "temperamental"
fluctuations will occur at these high market levels; and (3)

witnessed

Thursday, January 29, 1959

to catch up.

general business
Securities

lieve that prices will drop seri¬
ously while waiting for earnings

upturn

Senior Partner, Paine, Webber, Jackson & Curtis

Forms Estate

allow

Planning

the

PITTSBURGH, Pa.—A. Edward

two factors: The public nbw own¬

D'Emilio is conducting a securities
business from offices in the Frick

Thus,

ing stocks outright and on a cash
basis, combined with a high capi¬
tal gains tax, has tended more

452,155 Shares

and

particularly

Aluminium Limited

freeze

the

the high

Building under the firm
Estate

supply,
quality

(Special to Tire Financial Chronicle)

Thus, the remarkable revival in

FARMINGTON,

stock

Capital Stock
(Without Nominal

Par Value)

With M. P. Giessing

issues.

prices—bringing them to a
high-multiple times earnings and
low-yield basis ahead of full busi¬
ness
recovery
is not simply a

name

Planning Associates.

Marler

with

has

Mo.

—

become

Giessing

North Jefferson

Thelma

connected

Street.

Co.,

108

change in the mood of the markets

change from pessimism to

—a

timism.
in

the

It includes
ratio

op¬

Krakowsky Opens Office

basic change

between

the

(Special to Tite Financial Chronicle)

supply
BEVERLY HILLS,

of good stocks and the demand for

them—the

kind

lifts

the

Price $30.50 per share

change which

free market.

price of

Continued

any

commodity

ris

Krakowsky

Calif.—Mor¬

conducting

securities business from offices at
232 South

Beverly Drive.

High Price-Low Yield

With Morton, Hall

Level

assume

that these

condi¬

Maine —Reginald
tend to persist in the
H. Letourneau is now with Mor¬
ahead, it would seem that
high-multiple stock prices
and ton, Hall & Rounds, Inc.. 226 Main
lower yields will be with us for Street.
tions

LEWISTON,

will

years

sometime.

Investment
Securities

NEW YORK

•

PHILADELPHIA

BOSTON
-

PITTSBURGH

SAN FRANCISCO

lieve
the

CHICAGO

for

other words,

I be¬
witnessing in
for quality
stocks what happens in the market

The First Boston Corporation
CLEVELAND

whole

are

now

market

individual stock whenever

,
.

Donohue & White Opens
Donohue
in

White

securities

engaging

business

from

higher rating offices at
1632
Grand
Central
with the investment public.
Terminal
Building,
New
York
Of course, there will be "tem-1
Joseph G. Donohue is a
peramerital" fluctuations at these City.
moves

high stock market levels just

principal of the firm.

Volume

189

Number 5816

The Commercial and Financial Chronicle

Mr.

Jones Heads L A.

Bank and Insurance Stocks
Insurance Stocks

—

As time passes, it becomes more
likely that Congress will come up

additional

some

tax

the

life

insurance
companies.
The
companies are concerned because
of
the possibility
that, if new
legislation is not enacted, the car¬
riers will be put back on the basis
of

the

that

law

was

effect in

1942, and in this case it is
mated that the tax take will

esti¬
jump
from about $290 million to $500
million.
Some of the companies
are spelling out the unfavorable
in literature sent out
premium notices.
The appropriate Congressional
Committee has been holding hear¬
ings on the subject, and, to quote
the "Wall Street Journal," if the
bill now being considered is en¬
acted, the stock companies would
prospect

with

be assessed about 32%

dustry's

total

the

versus

of the in¬

Federal

tax bill,
they have been
the stop-gap ar¬

26%

paying

under
rangement. The mutuals
better served,
for their

will be

companies seems to say that the
prospect of a bigger tax bill has
;

that

about

n, i

:i!

95%

the

made

stock

ment to start from scratch.

tively few
the

assented

with Hartford Fire,

among our largest stock groups.
There continue to be announce¬
of

mergers

life

writers;

few instances

in which the reverse action takes

are

Rela¬

based on

latter procedure; many more
chosen to
absorb
existing

life

companies.

Before leaving the

intrigued by the

lifes,

we are

acci¬
hospitaliza¬
tion coverages being brought out.
The newest, Continental Casual¬
ty's, covers hospital and surgical
needs.
This company faired ex¬
tremely well when it set up a
polio policy and had relatively
few claims several years ago. The
new
effort apparently counts on
volume, for it applies to those
persons 65 and over.
It was tried
out in several Western states, and
dent

now

It's

numerous

health

and

in several around New York.

to see this aggressive
approach for new business.

last

year

of the

of
has:

Exchange

1938,

H. Jones in

m e

Division.

Norris

good

three

losses

started

have

again

How much of this

will

take

say;

but the

move

place

we
cannot now
severity of the re¬

g6bd

nbt ja

waves

Also the flooding in Ohio
Pennsylvania has been an
cause of heavy fire losses

and

indirect

cities.

several

the

Company, has been

of Canadian

the

Fund, Inc. and Cana¬
dian
Investment
Fund, mutual
Angeles
funds, under the management of
and Lincoln Calvin
Bullock, Ltd., it is an¬
nounced by Hugh Bullock, Presi¬

Los

California

Investors Continental

CHICAGO, 111.—The Executive
Committee of the Midwest Stock

Continental Service,
Exchange has elected to member¬ Ltd. is engaging in a securities
ship in the Exchange:
business from offices at 510 Madi¬

for
year

Investors

James R. Cruttenden, Crutten¬ son Avenue, New York City.
den, Podesta & Co., Chicago, 111.;
John D. Kipp, A. G. Becker & Co.,
Joins Julien Collins
H a r b i s o n,
Chicago, 111.; Joseph H. McFay(Special to The Financial Chronicle)
partner of
William H. Jones
den, The National Co. of Omaha,
Harbison
&
CHICAGO, 111.—John C. Haley
Omaha, Neb.; and George R. Torhas joined the staff of Julien Col¬
Henderson,
rey, MeCormick & Co., Chicago,
Frank F. Hargear, partner, Sutro
lins & Company, 105 South La
Illinois.
6 Co., and George W. Weedon,
Salle Street, members of the Mid¬
west Stock Exchange.
partner of Crowell, Weeden & Co.
New Walston Branch
J. Earle Jardine, Jr., partner, Wil¬
liam R. Staats & Co., was elected
New Siegler Office
SALEM, Oreg.—Walston & Co.,
to a two year term on the Gov¬
Inc. has opened a branch office
SUNDUSKY, Ohio — Edw. N.
erning Board, and Brian F. Neary,
terms

were

C 1 a r t y

partner of Neary, Purcell & Co.,
was elected to fill a one year term
on

the Governing Board.

Governing

Board of the Los Angeles Division
is

composed of C. Jerome

partner,

Hogle

Cable,

Co.,

115

High Street, N. E., under

Siegler & Co. has opened a branch

the management of John A. Gof-

office

frier.

Bpilding under the management
of

With

the

Securities

Harry Krohngold.

chronicle)

G. Sessler

partner, Mitchum, Jones & Tem-

Jr. and John F. Langan are now

pleton; and Stevens Manning,

connected

partner, Paine, Webber, Jackson &

Humphrey Company,

Curtis.

Haverty

with

The

Robinson-

Rhodes-

BOSTON,
Zawacki

has

Mass.

—

Walter

well.

con-,

Using

Best's

were

prices
end

markets

43%

higher,

Square.

1958

than

an, offer to sell nor a solicitation of an offer to buy any of these
Debentures, The offer is made,only, by the Prospectus.

This announcement is neither

year

place.

Probably the chief reason earlier, and about 52% above the
the sharp- expansion of
low of 1957, in October. r
business written by -the life com¬
In the January issue of "Best's
panies since the end of the war.
>
Insurance News" an 'interesting
has

$59,609*500

been

.; For example, total coverage of
life in 1958 has been estimated

Alfred

Best

Company at
over $65 billion, down some
$1,200,000,600 from 1957. This is. a
stupendous sum, when piled on
top of the present insurance in
force, and it is no wonder that
the fire-casualty writers want to
participate in such a volume of
business if possible.
•

Cons&lidated EdMfrv Company

gives vyear-.enjd ^prices;
long list of fire=casu£lty in¬
surance
issues, with percentage;
tabulation
of

of New ark, Inc.

changes from year to year. For;
through 1958, Con¬
tinental Casualty carries off the
the ten years

laurels, with a gain of 640%. Who
can
argue that this doesn't put
this stock in the class of "growth"

4% Convertible Debentures, due 1973
Dated February

conversion

price of $61 per share, payable by surrender of $100 principal
and$22 in cash in exchange for each two shares

added

life

incentive

department as
fire-casualty

the

having
an adjunct
is the fact

amount of Debentures

Dallas Union Sees

of Common Stock,

New NYSE Member

that the latter lines have had such

going in underwriting for
years;
the addition of
some life business, particularly in
an era when longevity is so much

DALLAS, Tex.

favor,

the

insurance

tends

company's

smooth

out

the

year-to-year results.

Finally, there is the matter of
the
agency
plant.
Many firecasualty companies have
large
agency
plants (examples, Hart¬
ford Fire 14,000; Insurance Co, of
North America 20,000; Home In¬
surance
40,000; Phoenix 13,000;
Continental Casualty over 28,000).
Many of these can add life cov¬
erage to their other lines and in
times such
volume

Dallas Union

Inc.,

Co.,

consequence

Officers

Subscription Price 100%

Stock Exchange.
of

the

firm

are

Obenchain, President; B. Franklin
Jr.,

James

Jack

Payne,

Vice-Presidents; Jack

Brown,

Vice-President

Secretary-

Houston,
C.

Dick

Owens

Clark,

and

The several Under writers have agreed,

subject to certain conditions, to purchase any un¬
period, may offer

subscribed Debentures and, both during and following the subscription
Debentures as set forth in the Prospectus,

Treasurer; and Philip L. Hendrix,
Assistant

Secretary-Assistant

Treasurer.
Herbert

M.
are

Jones

also

and

Ries

principals

Copies of the Prospectus may be obtained in any State from only
such of the undersigned as may legally offer these Debentures
in compliance with the securities laws of such State.

the firm.

THE FIRST BOSTON CORPORATION

MORGAN STANLEY & CO.

Annual

Comparison

NATIONAL AND GRINDLAYS
BANK LIMITED

13 N. Y. CITY
BANK STOCKS
Bulletin

Amalgamating National Bank of India Ltd,
and Grindlays Bank Ltd.
■°

Exchtnic

LONDON, E.C.2

SQUARE, S.W.1

54 PARLIAMENT

Bankers

GOLDMAN, SACHS & CO.

HARRIMAN RIPLEY & CO.

GLORE, FORGAN & CO.
KIDDER, PEABODY & CO.

Incorporated

LAZARD FRERES & CO.

LEHMAN BROTHERS

MERRILL L YNCH, PIERCE, FENNER & SMITH
Incorporated

SMITH, BARNEY & CO.

STONE & WEBSTER SECURITIES CORPORATION

WHITE, WELD & CO.

DREXEL & CO.

HORNBLOWER &

WEEKS

CARL M. LOEB, RHOADES & CO.

STREET, S.W.1

the Government In: aden, kenya.

Members American Stock Exchange

uganda, zanzibar k so.mal1land protectorate

120 BROADWAY. NEW YORK 5, N. T.

Branches in:

Telephone: BArclay 7-8500

northern and southern rhodesia.

WERTHEIM & CO.

tanganyika, zanzibar, uganda,

(L. A. Gibbs, Manager Trading Dept.)
Specialista In Bank Stocks

PAINE, WEBBER, JACKSON & CURTIS

india, pakistan, ceylon, burma, kenya.

Bell Teletype—NY 1-1248-49

EASTMAN DILLON, UNION SECURITIES & CO.

London Branches:
13 ST. JAMES'S

Members New York Stock

BLYTU & CO., INC.

Head Office:
26 BISHOPSGATE,

Available

Laird, Bissell & Meeds

February 13, 1959.

member corporation of the

New York

Bambenek
of

January 26, 1959. Subscription Warrants tcill expire at

3:30 P.M., Eastern Standard Time, on

Tower, announces that it has be¬
come a

these with the heavy
"sweeten" up their com¬

factor

of Common Stock held of record on

Adolphus

missions.
One

Securities

—

subject to adjustment in certain events.

Holders of the Company's outstanding Common Stock are being offered rights to subscribe
for the above Debentures at the rate of $100 principal amount of Debentures for each 25 shares

rough

several

Due August 15, 1973

13,1959

Convertible, unless previously redeemed, into Common Stock on and after May 1,1959

stocks!

aden, somaliland protectorate,

January 28,1959.

joined the staff of

John G. Sessler Company, 10 Post

Office

Building.

{o^hefinancial chronicle)

ATLANTA, Ga.—Harry M. Boon,

Harbach & Co.; P. J. Shrospshire,

Western

Robinson-Humphrey

(Special to the financial

Roger Hopkins, partner, Hopkins,

stock

Index,

that

cific Railway

elected to the boards of directors

for

Insurance

tinue

well

President

long-term they
offsets to the burnings.

in,

come

will act

increased rates continue

Crump,

Roy

dent.

The remainder of the
Fire

to mount.

Norris

and Director of the Canadian Pa¬

Mr. Jones is a

1938.
of

Roy Crump

Named Director

Midwest Exch. Members

Governing

Board

e r

Athletic,

■>

Elected

the

rab

Clubs.

membership
meeting of the

in which fire-

casualty companies of fleets take
Over

mergers

have

has

5 t

the annual

absorbed, over the matter
setting up a new life depart¬

notes

Company

adding life writers

Insurance

ments

Vice-Chairman

member

and, has
previously
served two three year terms as
of
Governor.. He has been active; in
Wm. H. Jones & Co., was elected
the banking and securities busi¬
Chairman of the Governing Board
ness
in Los Angeles since 1923,
of the Los Angeles Division of
organizing his own firm of Wm.
Pacific
Coast

Unit is

Boston's Columbian National Life

to the merger

Jones,

Division Board

since

change for the
year
1959, ; at

sign.
been

has

current cold

Announcement

the matter

is that' much trouble and expense
is avoided when an existing life

propor¬

tion would drop from 74% to 68%.
The price action
of the stock

been discounted.

Div. of Coast Exch.

By ARTHUR B. WALLACE SSS

This Week

with

the

been

William H. Jones, President

=====

(545)

TUCKER, ANTHONY & R. L. DAY
DEAN WITTER & CO.

The Commercial and Financial Chronicle

(546)

provide

When Wage Inflation
Causes Price Inflation
University,

from

material

forthcoming book, Dr. Backman

a wage, and
and inflation. The
economist concludes wage increases have contributed signifi¬
cantly to consumer price index rise in recent year3. He notes
that (1) wage inflation takes its toll in rising prices, lower
profit margins, or unemployment; (2) labor cannot escape
the toll entirely; and (3) we cannot accept even creeping
inflation as a way of life because it would adversely affect
future economic growth.
Issues the warning that creeping
inflation can change into galloping and then runaway infla¬
tion, and urges vigorous action to stem; all forms of inflation,

singles out principal criteria guiding the setting of
analyzes the relationship between

whether

While economists debate various

refinements to
<

attempt

theory of wages
evolve new theo¬
a

ries, businessmen and labor unions
must go

the
of

about

business

reaching

bargains

over

wages

and

various

non-

in t i

im¬

pact

Jules Backman

nial

contract.

What determines the maximum
increases

that management. will
Or the minimum decreases
it will accept?
What determines
the minimum advances acceptable

pay?

the

The

unions?

factors

con¬

sidered usually are referred to as
wage

into

criteria. They are divided
categories: economic en¬

six

vironment,
wage
comparisons,
of living, workers' budgets,
productivity, and ability to pay.

cost

When times

that

must

attached

role of the unions in cre¬

ating it have been recognized by
a growing number of economists.
Included in this group are such
respected authorities as John M.
Clark, Gottfried Haberler,s F. A.
von Hayek, Sumner Slichter, and
Neil H. Jacoby.1

grant

—

Effects of Wage Inflation

are

prosperous man¬

usually

willing

and the unions to

referred to but they are

pressure

prices of the rise in

wage

ever,

work

happened
do provide a frame¬
boom.
reference,
usually
a

they
of

insist

during

the

1955

This announcement is neither

ance,

effects

matter

Unless
offer to sell nor a solicitation of an offer to buy these securities.
offer is made only by the Prospectus.

The

are

clude

simple arithmetic.

recover its
increasing
its
revenues, it must reduce its profit
margin or cut its costs or some
a

higher

Per

labor

Manpower

described

been

these

the

benefits
the

understate

total

thus

tend

rise

relative

labor costs.
Real Wages, Output i'er
and

Manhour,

Wage Inflation

It is sometimes stated that wage
*

increases have not caused any in¬

flationary

"total fac¬

items

Long-term changes in
for labor which exclude

non-wage

tivity,
broadly
conceived. Pro¬
ductivity reflects the relationship
between all the inputs of factors
of production—labor, land, capi¬
tal and entrepreneurs — and the
resulting output. This relationship
has

non-wage

bill.

outlays

wage negotiations emphasis
given primarily to output per
manhour rather than to produc¬

because

tor productivity" in order to indi¬

ture is

about

pressure

real

have

wages

line

prices:
risen

with

data

5% Convertible Subordinated Debentures

$14,931,900 principal

amount

of the Debentures

holders of its Common Stock for

are

$11.50

per

offset in

such magnitude that over^
head costs per unit decline enough
whole

part

and

being offered by the Company

subscription, subject

the

terms

and

con¬

terms

and conditions

set

may

offer

forth in the Prospectus.

Subscription Price 100%

equipment. One observer has
it is
"expedient" to use

manhours.
beled

as may

lawfully offer these securities

tion

demand presses hard on
stock of physical re¬

nation's

costs of production and
prices cannot remain stable. If in¬
both

prices and incomes
expected tp move still higher,
impulses of expanding de¬
mand are again strengthened all
comes

in such State.

Emanuel, Deetjen
/

January 28,1959.

"output

made

figure, la¬
manhour," re¬

labor.

factors

other than

5.'

:
"

Total

Labor

Costs

Are

Proper

desirable

are

Co.

concept of
labor costs which is broader than
average

use

hourly earnings. It should

noted

that

some

the

non-

benefits; are reflected in the
data for average hourly earnings.

around.

There

can

be little doubt

distortions

create

sons.

United

their
States

essays

Economic

Problems

Development

4 New York Committee lor Economic

velopment, January, 1958), Vol. 1.

De¬

the

oversimplified
that output

assume

prices.

decline of 9% in consumer;
prices, real wages would inby 10%. (Money wages;
100 divided by consumer price,
index 91 equals real wages of
no.)
:
•
s*

If money

If money wages

rise by 120% and
would increase by 10%.
(220 divided by 200 equals 110.)

wages

Note

that in

Without
Keynes
&

Fringe Benefits, 1957 (Washington:
Chamber, of' Commerce
of the United
States, 1958), p. 13.
4

Ibid.

each

of these in¬

stances, both real wages and out¬
per

10%.

manhour have risen by

To compare the two would;
us

trend

pressures

Smith,

32% and-

wages

the

6-7.

wages rise by

prices by 20%, real
would increase by 10%.
(132 divided by 129 equals 110.)

consumer

give

pp.

crease

then the

(Buffalo:

;

and a

•

by using

Inflation

manhour

If there were no change in. wages.

put

F. Burns, Prosperity

per

varying assumptions
about,
changes in money wages and in

actually worked,

2 Arthur

illustration
point. Let us.

by 10%? and then make

increases

labor

per

rise

longer periods

will demonstrate the

determined

Marshall, 1958),
lSee

manhour compari¬

However, when output

manhour
hours

per

costs

decline,
then total costs rise and there is;
pressure for higher
prices. The
higher prices, in turn, reduce the
value of the higher money wages
received so that it is not too far.
out of line with gains in output

Included in this category are paid

cost-output

labor

other

per manhour over
of time.

Comparative

Comparisons usually are made
between changes in average hour¬
ly earnings and output per manhour.
Because of the widespread

unit

than

final

per

manhour, unit labor costs in¬

crease.

flects the contribution to produc¬

the

Lehman Brothers

The

vacations, paid holidays, shift dif¬
one of the main characteristics of
ferentials, paid lunch periods, paid
such a period is a decline in total rest periods, travel time, and callvolume with the consequent rise in pay. For these items, both the
in unit overhead costs.
hours paid for and the amounts
The
interrelationship between paid are included in determining
hourly earnings. When
wage inflation and other types of average
inflation has been summarized by hours paid for are also used in
calculating output per manhour,
Dr. Arthur F. Burns as follows:
these
types of benefits do not
"When
sources,

signed,

money wages and other employ¬
ment costs rise more than output
per

wage

Copies of the Prospectus may be obtained in any State only
from such of the several Underwriters, including the under'

changes

noted

situation

might develop
during a period of boom, it obvi¬
ously cannot develop generally
during a period of recession since

February 10, 1959. The several Underwriters

Debentures pursuant to the

to the diverse nature of machines

increase in unit labor costs. While

forth in the Prospectus. The
subscription offer will expire at 3:30

P.M., E.S.T.,

are

impact of wage in¬
prices, it is futile to use
in
real wages.
When

creases on

easily measured, and are common
to all industry. This is in contrast

such

February 1, 1979

Convertible into Common Stock

homogeneous,

are

the

It is true, of
that under some circum¬ introduction of non-wage bene¬
stances, increases in volume may fits2 in recent years, however, it

Manufacturing Corporation
Due

because

To de¬

the

termine
manhours

course,

the effects of the rise.

be obtained.

use

company can

costs

set

Output

Versus

these

have

become relatively
only in recent years,,
longer - term comparisons, which,
often are the significant ones, may
be distorted by the failure to in¬

of some increase in
unemployment and some reduc¬
in ,profit margins is greater.
Productivity

many

benefits

important

tion

unavoidable

combination of both.

$15,000,000

ditions

Since

probability

relatively

without the support

output per
given much weight except in labor costs will tend to be small/ cate its all-inclusive nature.
manhour.
According to this line
connection with minimum wages Where labor costs are a large per¬
Although gains in productivity Of reasoning, it is improper to
under some conditions.
centage of the sales price, the: arise from the contributions of all
compare money wages which are
price effects tend to be more sig-; of the factors of
Wage comparisons assume
production, they measured in dollars with output
nificant.
•
:
T usually have been stated in terms per manhour which is measured
major proportions to both parties
When unit labor costs rise, a; of
in many industries and labor mar¬
output per manhour. This fig¬ in physical units.
kets. Wage leadership and follow- company is
faced with $ one * or? ure does not in any way measure
% An illustration of this point of
of three
the-leader is an important factor more
alternatives:; (1)J labor's efficiency, oi labor's net view was contained in the
ques¬
in
collective
bargaining.
Pro¬ prices can be raised; or (2) profit contribution to production.
All tionnaire sent out by the Joint
ductivity has emerged as an margins are narrowed, and/or (3) that such a figure shows is the Economic
Committee, Subcommit¬
important factor in the post-World other costs can be reduced. Since total physical volume of produc¬ tee
on
Economic
Stabilization.
War II period.
Ability to pay is labor costs, direct and indirect, tion arising from the combination Question 3C was as follows: "Do
emphasized by unions in good often are the most important costs, of manpower, tool power, mate¬
you believe that in recent years
times
but
inability
to
pay
is programs to reduce costs usually rials, etc., as compared with one rising prices have resulted in
ignored by them in favor of more result in a rise in unemployment. variable factor, the hours worked
significant part from a tendency
helpful * criteria. And, of course,
The effects or combination of •or paid for.
In some estimates, of real
wage increases to exceed
management is in the opposite effects
which
only production worker manhours the rise of
develop
depend
productivity?
/
corner in its attitudes toward the
upon
the general trends in the are used, while in others, output
This approach begs the question.
proper use of this criterion.
economy.
During periods of eco¬ is related to all manhours, wheth¬
Higher
real wages
reflect the
those of the janitor
nomic expansion, it is probable er
or
the
One caveat is in order.
These
combined results of rising output,
that the rise in unit labor costs president of the company. Clearly
criteria cannot be fed into a com¬
per /manhour and
rising prices.
will lead to a rise in prices and the
output
per
manhour
data
puting machine which will then
However, we are interested in
possibly to some shading of the should be calculated on the basis
yield the correct answer to a
knowing why prices rise as well
margin of profits. This is what of all manhours if a complete pic¬
particular
problem. How¬

These

Avco

occurs

Of monetary inflation, the price
effects are less certain and the

;

flation

During a period of stable or
narrow zone
of toler¬
declining business activity, it will
within
which
the
final
upon—larger increases than when agreement will fall. Accordingly, be more difficult, and in many
instances impossible, to pass on a
economic conditions are unfavorit is important that both labor
rise in unit labor costs in. the
and management understand fully
form of higher prices. Rather, the
♦An address
the economic implications of these
by Dr. Backman before
the American Statistical
tendency would
be
to
reduce
Association, Chi¬ wage criteria.
cago, 111., Dec. 27, 1958.
The material in
profit margins and/or to cut costs
(...»«
paper was
taken from the author's
When the parties cannot reach
with the resulting increase in un¬
Wage Determination to be published in
agreement and the issue is turned
lie
spring cf 1950 by Van Nostrand.
employment. This is what hap¬
over to an arbitrator or a fact-find¬
''or a development of the
points covered
pened in 1958.
Chapters 8, 10, 13.
ing Jpoard, then the wage criteria
is

agement

industrial

eral

much

bien¬

trien¬
problem
reaching agreement on a new

nial,

are

•

meant i me,

benefits

...

the

they face the
annual,

substantially exceed the increases
that have been occurring in gen¬

wage

vice

versa.

number

important nonnot reflected in
average
hourly
earnings.
Ex¬
cluded are such outlays as pay¬

unions to win wage increases which

parties will reveal the heavy em¬
phasis they place on one or more
of the six wage criteria.
This is
further evidence of
the impor¬

must

theo¬

and

ry,

that the ability of trade

third

these

Whether or not wage inflation
reduction in the
worker's level of living and its will be converted into price infla¬
tion depends in part on the rela¬
restoration becomes a minimum
objective to workers, with man¬ tive importance of wages in the
agement usually taking a sym¬ sales dollar, the trends in other,
pathetic position. When the cost costs, the strength of demand, andThus, where labor
of living declines, on the other other factors.
hand, the unions tend to ignore costs account for a small percent-"
this criterion.
Workers' budgets age of total sales revenues, the,
are

hourly
earnings
data
similarly calculated.

ruled

great part of the postwar

Any review period,

mean

that such expectations have
over

Thursday, January 29. 1959

not

will

frame¬

recommen¬

made.

decisions

and the

wage.

which

can

the

Increases in the cost of liv¬

able.

ing

often

benefits.
Their actions,
wage

have an

wages

fiscal, monetary

dation

tance

New York City

Based

meaningful

the

within

productivity did ments
for
pensions,
insurance,
to kindle and fan the ex¬ health and
welfare, social secu¬
pectations of rising prices and in¬ rity, and workmen's compensa¬
them.
comes.
Thus, expanding Remand tion. A study of 1,020 companies
The increase in wages and
in served to pull up both prices and showed that in 1957 these pay¬
other employment costs in excess wages, while rising wages served ments
accounted
for
10.2%
of
push up
both demand and their total payrolls.4
of the gains in output per man- to
hour, with the accompanying rise prices."2 (Italics added.)
Clearly, the labor cost-output
in
unit
labor
When
costs,
has
been
wage
inflation
occurs per manhour comparisons may be
called wage inflation.
While the simultaneously with monetary in¬ significantly affected by the in¬
labor unions deny that we have
flation, it reinforces the tendency clusion or exclusion of non-wage
had wage inflation, its existence for prices to rise. When wage in¬
benefits in many key industries.

By DR. JULES BACKMAN*
Professor of Economics, New York

work

these

guidance

concerning

as to the,
exerted on prices. Yet
three illustrations, we

prices or

have
widely varying price ber
havior, namely, a price decline
of 9% and price rises of 20% and
100%. On the other hand, if the,
changes in money wages and in

Volume

189-

Number 5816

■■■■■■'

manhour

per

are

lead

pressures

output

prices.

20%

by 10%

increase

wages

32%, there is

provide

increase

unit labor costs which could

order

ere-

ate significant
pressure for higher

producers with

may

prices-

When output per manhour-4

•
..

Despite

this

warning,

For'

fees, increased in

in-

not

are

which

•

Peri<J^

worka ^nd ^he^ost °is

rii

bour

fact that the increase in total em-

ner-

gate into a major erosion of purployment costs in the steel indus- chasing power over a
®
and various house- try between 1945 and l955 was years. Thus
an
annual rate of
(e.g., painting, greater than the

rapidly, than

prices.

electrical

for

care,'automo-

medical

rePpair'

force

turn out that labor costs rise

rapidly,

^rep^V
**

In this event, i

production.

and

working

the

wage rates

expand

Thii«

and may

increases

price

Thus, when incentive to bid

per manhour rises

money

also

com-

we can ascertain one of the

^ese

output

other

out

if steel prices had of a century. The prospect that
increased, the industry half of the purchasing power of
have operated at a huge the

would

per man-

available

to the

COnsumer

in higher

Table I shows that unit labor costs

Wage inflation takes its toll in public officials, workers, and the
rising prices, lower profit mar- public generally as to the pvil
.

rising level of productivity.
m m<mey wages properly
are
compared
with
changes m
output per manhour to determine

Changes

the pressures

costs

and prices.

dPone

escape
them
entirely, about this situation. We cannot
11 is not Blirnr««w-t|i- find that cannot*
smpnsing to find that
prices cut the purchasing accept creeping inflation as a Way
the steady rise
6 Po\ver of all wages and benefits of life because it would
^
labor costs has been
adversely
received under security programs, affect all
^
entire
fixed
income
^
the entire; private economy sieauy use
economy
groups
prices of
leceivea u
rs
does not mean that a similar re- types of services.
affect and WOuld eat away at

and

prices did not diverge too
markedly in-any of the years surd
SUch a close relationship

fia fd?

^e±lecte^ m

steady^r^injhe

iationship will necessarily prevail
f
each
company
or
industry.
;plearly
wages
and prices have

all

AIV.UUVVU

the

Between

March, 1955 and June,
1
1958, the |JX 1CCD of OV1 *
iJOO, LUC prices \JJL services rose
AVVW

—"

af'feCted significantly by the

Labor

7ao%CiiTthe

Costs

relationship

eoodfurices^rose

•

1957.

19573620—*.
Table

data:

neSi^
ing

these

summarizes

tion, and

edly
>u y was

numer-

costs

produc-

change in price
be explained by reference
single factor, even one as
1 nKav

nnofc
costs.

labor

Where

the

showed
a

year

this should

description
not

the

of what

necessarily

other

during

period

taken

happened and

major

costs.
~

the

'caused'

explanation

Rapidly

product

leadersTve disavowed
^f^^oirliliio between wrge

job
JUU

—

an(i

economj,st

Unit

labor

facturing

costs

for

industries

all

and

? slower rate of gain in productivity/ Unemployment, attending excessive labor cost increases, means
that

those

who

hold

their

jobs

°!>t;iln expense of those who lose
their highH Jeal e®mi,ngf
at the
their
tneir

jobs

who

fail to obtain

bs.
jobs.

were

and 1957

but wholesale

is^ expiameu by .sevww factors:
IS
explained UJ several
and
prices of raw materials and SPtTllse
—.•

vn-.Tr

manufacturers

during

the

all

for

volume

°.n ly
period, Pr°

rising
an

demand for

wviiiuiiw

industry

xwx

may

"Wage

in-

—-

11.0% to o.o/o

can be no asthat inflation would con-

sion

As the steady eropurchasing power of

money takes place, more and more
will seek to protect them-'
seives by anticipating the price

perSons

rise.

cceding gains in output per manhour by some 2% or 3% a year.
The net impact on prices has been

runaway

„

and

„

benefits have been

ex-

Some

very

inflation.

sible to hold down labor cost mcreases to the level o
g
output

caused

per

That such

years
y

buiU

pnions

statement has

ago." o
no

ist

PWc«

anJ

Committee,

tionsbip to reality is shown by the
(

-U-"

Such

by
an

the

iabor

attitude is defeat;

While prmp

mere as

3/o a year seem sma

90t

f<^con^g;= pro^bte,

because

f
the alteinative of large
large,
scaie unemployment. We cannot
escape the horns of this dilemma
s0 long as
we persist in tolerat-.
ing wage inflation and insist upon

full'

employment.

We'

must

Tocilmnnv
,o«7

Hea'rings
Committee
ment

Otis

7 See my "Steel Prices, Profits, Pro¬
ductivity and Wages," in Steel and In¬
flation:
Fact
vs
Fiction
(New York:
United States Steel Corporation, 1958),

Brubaker in Jana-

Economic Report of the Presi-

Before the Joint Economic

(Washington:

Printing o

ice,

y. S. Goyern-

pp.

dangers

This announcement is neither
-

The

offer to se//,

inflation,

whether

it' be

nor a

solicitation of offers to buy, any of these securities.

offering is made only by the Prospectus,

350,000 Shares

Arnold Altex Aluminum Company
(A Florida Corporation)

(Par Value $1.00)

(1947=100)
Implicit Price
Change—Private

Non-Agricultural

Consumer
Price

Price $6,/s per

Index

1947___

100.0

1948

106.0

106.6

107.6

1949————

105.0

107.6

116.4

116.2

117.0

118.6

120.6

121.9

120.2

31,

131.6

125.7

Cruttenden, Podesta & Co.
First Securities

dollar of real product.

Committee,

1958),

be obtainedfrom such of the undersigned

121.7

"The

Fulton Reid & Co., Inc.

Corporation

Durham,. N.C.

Relationship of Prices to

Economic

Stability and Growth" (Washington: U. S. Government Printing Office,

March

may

lawfully offer the securities in this State.

119.9

127.2

133.0
per

123.9

128.1

Economic

af may

119.8

122.4

Copies of the Prospectus

118.8

120.9

121.7

Employee compensation
Joint

106.6

109.3

112.9

1954—

Source:

108.1

104.9

The Johnson, Lane,

697.

Space Corporation

Plymouth Bond & Share Corporation

Varnedoe, Chisholm & Company, Inc.

TABLE II

Unit Labor Costs and Wholesale Prices
of Finished Goods,
All Manufacturing, 1939, 1947-57

Baker, Siinonds & Co., Inc.

Frank B. Bateman, Ltd.

Saunders, Stiver & Co.

Erwin & Co., Inc.

(1947-49 = 100)
Wholesale Prices of

Unit Labor Costs*

Finished Goods

1939_

54.2
95.9

95.9

Livingston,Williams & Co., Inc. Nolting, Nichol & Co. Wcstheimer & Company

54.5

1947_
1948_

101.7

103.5

1949-

102.5

1950_

100.2

102.4

1951.

111.1

A. M. Law & Company, Inc.

Carr, Logan & Company

100.6

112.1

1952.

116.1

1953.

1954.

118.3

111.5
.

LloydArnold&Company R.F.Campeau Company Clayton SecuritiesCorporation
*Mann and Gould

Morgan & Co.

110.4

120.4

1955.

119.6

110.9

125.3

114.0

129.3

118.1

Mullaney, Wells & Company

110.7

1956.

1957.
♦Total compensation

Security Associates, Inc.
Hudson White &

of all employees per unit of output.

Sources:"Productivity, Prices,

and Incoipes," op. clt., p. 144 and "The Relation¬
ship of Prices to Economic Stability and Growth," op. cit., p. 698.

January 28, 1959

Sellers, Doe & Bonham

Company

fiscal,
i

Common Stock

Unit

inherent in all forms of

monetary, or wage.

127-30.

276.

Labor

take

vigorous action to develop a
growing public awareness of "the
the
^

«
„

TABLE I

Costs*

true that

rela_

manhour. Presumably,
ariges becaUse of the

the formati0n of the SteelUnion
u

(Wash
(Washington: Joint Economic

1957),

Moreover, there
surance

m steel nave not caustu
single steel price increase

workers

affect

tinue to creep.

lndust

rose

—^oductiMyi

adversely
future economic growth,

percent 01 sa

manufacturing

declined from

rose

same

before taxes

would

prices

time

Psychological factors become
I
important. - The
resulting
flight from money would accelerate the rate of increase in prices.1
The creeping inflation can becomea galloping inflation and in turn a

Increases in money wages
InCx^^
non-wage

manu-

esti33.0% between 1947

rise

one^lteel Punion.
stated:

bas

ations of incentives to

economists have viewed creeping these developments will require
in- inflation as unavoidable.
They support from monetary and fiscal
in,prices, have suggested that it is impos- inflation. That:tbis suppoit wou d

advances

^ef%:ample

theJoundsave.
This*

new

opportunities

Unit Labor Costs and
Prices for Private Non-Agricultural
Economy, 1947 to 1957

—

any

the

con-

even

sharply, thus maxing
change. An' it possible to distribute overnea
increase in unit labor costs
may
costs over a much larger numoe
lead to an increase in
price, but of units.
conversely an increase in price
Wages and Prices of Services in
can result in
strong pressure for Consumer Price Index:
The imincreases in wages.
1
pact of higher labor costs is most
"There is,
moreover, a strong apparent in connection with the
interaction between demand and

of what

The result

called "creeping inflation."

^ see."?fs1_ety^<
SSSffieantlv tothe rise in the
; f,
: °Hex in recent years
~

cieases

increaSes.

Part ;of t e

of
finished
goods increased only
'1 (Tt
Thiu
23.1%. This aiirortfPUPP TirobablV
divergence probably

any

figures

greater increase

particular

years,

one

responsible for the
n

large

Wtiovn

that

prices

;mated to

indicate that prices ana unit
mat prices and
unit labor
laoor
r»r»ofe
cliniim/1
oVi/m.4
costs showed about
the same inor

the

and

cannot

juiuiuaie

crease,

138.6%

increased

unit labor
industries

The underlying inflation undoubt

subject

and

and postwar pe-

of finished goods rose by 116.7%

influences of changing market

conditions

war

concern-

between wages and puces.
between wages and nricesous

During the

riod from 1939 to 1957,
costs in manufacturing

relationships

causes and effect

are

with conclusions

"Prices

^
in

invest

eduipment.

BLS properly warns that "cau¬
lion must
tion
be exercised" in conin
•

fslal^r
1S iewei

——1

—

rise of

VXAVB

incentive

retail prices
and Prices:
war
and
of goods
postwar
inflation
in
between
unit money and credit and the large r> ♦ L
1 nc 1
T„r,o
Between 1951 and June, -l qko +hp
1958, the,
labor costs and prices is not albudgetary deficits of the Federal
ways easy to determine.
Never- Government. However, these facwhite
while goods prices
only'
rose
only
theless, very large increases in tors'were not important in the
9ml70m
/°'
unit labor costs must have some 1955-57
period because the Fedimpact on prices. The U. S. Bureau eral " budgethad a surplus and Bebveen 1949 and June, 1958, the
jncrease was 35.4% for services
of/ Labor
Statistics
has
made money supply was increasing at
and 15
for goods.
.
•
available some
very
interesting less than long-term rates, lanie 11*
data on this subject for the entire shows the data m manufacturing
oi,o(.nvo
.
economy for the period 1947 to industries.
wa„
contributed

Unit

;

The

Tt. is the
It is the

Q| economists to educate the

°£ ^ ^

output per manhour to determine
dc
whether wage earners are
Butuxug
in

task

ereht'eiff°
^-tftheir rote when they

real wages properly
compared with changes in

_.e
are

grounds for hnmnlappnpv
complacency.

Conclusion

h^pr™"16 PreSSme
Changes

d^lar jv^ld bc^^e^d^out ha

loss in 1955.

^ ^sorb^hrgher^labor

direc*tly

tad-ustrgjtott J™ theprice teveiraq^rter

Swords,

been

not

serv-

by 100% and there is tremendous

(547)

output

pared,

and

Chronicle

The Commercial and Financial

Zuckerinan, Smith & Co.

MacNaughton-Greenawalt & Co.

The Commercial and Financial Chronicle

(548)

29, 1959

Thursday, January

The Commercial Bank of North capital stock from $1,840,000, con- dent of Central National Bank of
1 America, New York, has promoted sisting of 92,000 shares having a Cleveland, Ohio, was announced
Garry
Stolzberg, Irving Herbst par value of $20 per share to $2,- on Jan. 22, by Loring L. Gelbach,
024,000,
consisting
of
101,200 Chairman
and
President.
Mr.?
shares at the same par value by
Killpacl^'s retirement will become'
the sale of
an
additional 9,200 effective in the early future.
„ .. .
shares.
Subject to approval by
Mr. Killpack will remain close-;
the Commissioner of Banking and
]y identified with the Bank, servInsurance of the
State of New ing in an advisory capacity and
Jersey,
these
9,200
additional continuing as a member of the
shares, having an aggregate par Bank's Board of Directors and its
|

ABr££>

CONSOLIDATIONS
NEW

BRANCHES

NEW

OFFICERS, ETC.

REVISED

CAPITALIZATIONS

Chemical Corn Exchange Bank,
New York, has elected

George J.

value

Philip H. Robinson as Assistant

Bender and Walker G. Buckner to

holders

.Donald I. Rogers has been
ed

held.

Sav¬

the

ings Bank, New York, it was an¬
nounced

basis

directors

and

fix

shares of stock

County Trust Company,
Brooklyn, N. Y., was given ap¬
•

Maher

James

and

were

pro¬

Metropolitan advisory boards, moted to Vice-Presidents of the
announced by Harold H. Fulton Savings Bank, Brooklyn,
Helm, Chairman. Mr. Bender, who New York.
is President of Brooklyn Savings
Bank, Brooklyn, N. Y. will serve
Central
Bank
and
Trust
Chemical's Brooklyn Advisory
Mr. Bruckner will become

member

Chemical's

Grand

Central Advisory Board.
A

type

new

will

become

Yorkers

Great

Neck,

service
to

New

stocklJom

tomer to

qualify for this service,
and applications are available at
New

York

City

..i

supplement

credit services

other

with

individual
line
of
credit,
the
Ready-Credit plan provides for a
mutually agreed upon amount of
credit that the customer

can

V\J

established
from

amounts

minimum

maximum of

ranging
$120 to a

$3,000.

The Citibank

tUliV

has

Macearo

....

become

now

serve

Vice

Ernest
j

the

George E.
general

Slade
/■

Nassau

office,

tive

head

President

the

account

will

at the rate of

one-twelfth of the

credit

Interest

line.

charged only
credit

line

the

per

(less

and

outstanding

98/100th

$1 per month
few cents for life

The

available

amount

to the customer is

continually

re¬

stored to the extent of his
repay¬
ment.
*

National

vice-president it

Shareholders

dend,

pending
rvf

May, 1952, Mr. Bragalini left

O'Neill,

Assistant

Newark,

of service, Jan. 21.

lice

He has

charge of the Bank

242

Also

Mamaroneck

announced

ond

banking

neck

Post

was

The

York,

jov

and

New

office

sec-

Mamaro-

£™gr

Schroder

York,

Trust

announced

promotion of Joseph A. Matefrom Assistant Secretary to

Assistant Vice-President, and the

.appointment of Norman W. Davis,
Harold
Willis

Navan

and

Frederick

Assistant Secretaries and

offering

its'capital

stock

Jan. 23 rights to sub-

$50

one new

share for 80 000

per

$12.50

par

share for each six shares

held

Stockholders of record
|o

Nangle

Bank

New Jersey,

additional

Jan. 24 at 624 East Boston

value capital stock at the rate of

Koad.

Ann

its

stock-

common

Kenneth

000,000.
t-i„—,•

nt.

Zwiener,
meet-

the

ffi gsident,-presided at the meetinS-

the basis of 16

new

re-election.

to stand for

T>aivj .arry B- McDowell,
™/es\dent andr£hief Execu'
?tlc^r» and Wilbur C. Edas casmer.
* * *
Effective Feb. 2, the name of
^

TTia

Natinnal

Kpnmifl

Riinlr

undivided profits to capital and

authorized the issuance of 250,000
additional shares of $20 par value
capital stock. The new shares will
be distributed to stockholders of
record Jan. 19.

win be

Ranged to The First NaBank

SOciation

Washington,

holders

approved

share-

.Tan. 13.
Jan. 13.

on
on

wS»n" &

of The

tor

pany,

elected a DjrecNorthern Trust Com-

S. Reed

John

Chicago, 111.

^ Ree/

James

replaces

who requested

chennan
i

considered

not to be

I'D.Dlopfinn

for re-election

the

to the

Board.
Robert C. Baker has been electuuucu
jma uccn ucu-

ed ?resident and Chief Executive
nnr

r\£

-f Vi

The shareholders of

imoruton

•

the Uptown

0fBcer of the American D C He Nat,01JaI Bank of Ch,ca§:0, Illinois,
Security xr
7 ^"A& Trust Co., Washington
will succeed Daniel W Bell who increased its capital stock to $1,continues
Chairman
"
750'000 on Jan- date it receives
15- Therefore,
effective
the
on

certificate of approval from

the

Assistant

receiVGd

capital

24,000

tangle0 inthtoe0fnew
Roblrt

shares,

Jan.

bringing

?hares(.now

offered for subscription will increase
this to ^Rft nno charpc
f? f. inis jp at>u,uuu snares.

President

rZT* by
VrnT'

dividpnri

St°Ck t0

^ 7

<?tnrk

Arthur W. Brock, Honorary Vice- be forwarded to shareholders of
Chairman of the Board, I. T. Van record as at the close of business
Patten, Jr., Senior Vice-President, on Jan. 15.
Baxter c-Carr, Senior Vice-PresiThe additi0nal common stock
^7e- ' and.T,inw°od E- Bradshaw, consisting of 10,000 shares of the
^lce-Presidentpar value of $25 each, is offered
*
*
for subscription at $35 per share
Six officers were promoted to to the shareholders of record at
Vice-Presidents, following the an- the close of business on Jan. 15,
nual stockholders' meeting of The in the ratio of one new share for
Cleveland Trust Company, Cleve- every five shares of the existing
Iand» Ohio, Jan. 21, it was an- common stock then owned.

Sctodll

George

TlSk^W

The combined capital and surfollowing the issuance of

plus

L* shares

provided will be $3,500,000.

Imfth^KH'. gumon^^nd A.w! gmM. Metcalf
' " *
.netraM Gordon eb
«

Gwted

Director

has been
American

eieciea a uiiecior oi amentdn
,
Several officer appointments at National Bank & Trust Co. of
^a^10na^ State Bank of Newark National City Bank, New York, Chicago, III.
E^ank T. Bailey, a Vice-Presi- began operations in January, 1812, were announced by Francis H.
*
ar¬
dent of the
,

"xt*

-rx

Chappaque

Bank,

Henry

Corporation,

cribe

of
112,500
value.

State

holders of

0f record

open-

Ciiappaqua,

•

National

Y.,

died

Jan. 20 at the age of 89.

Banking

Company,
the

directors

Schroder

New

par

National

to the

of-

Avenue,

the

same

The

years

the

Vice-

White Plains, N. Y., completed 30

President of The County Trust Co.

Mr
Co., return¬
E
Fsnnstto
ing to the Bank in March, 1953. In office will be
ir
^
Tm ' Esposito
August, 1953, he was appointed and Mrs. Winifred Gilmore.
Supervising Vice-President of the
Bank's offices in the Borough of
Queens. In December of the same
year he again left the bank.

elected a
Director and authorized a

new

was

consisting

$5,625,000

James

Manufacturers Trust

Edward

Company, New
given approval to
increase its capital stock from $5,"Mcaac na ca^jLtax siuua huui

Piu-ronnv

ing of the County Trust Co.'s

President in 1953.

Stockholders of Harris Trust
Savings Bank, Chicago, 111.,

and

The Board of Directois of Na- Comptroller of the Cuirency the
inmiai
rrf^Hntf Imiio rS 408,000 consisting of 108,160 shares tional Bank of Commerce, Norfolk, stock dividend provided by the
/vffiL
of the par value of $50 each, to Va-» announces the retirement of shareholders at their meeting will
nunnngion oince.
Fnmnimiifto

an assist¬
ant secretary in 1944, an Assistant
Vice-President in 1946 and a Vice-

...

ouwauiiwc vii uic uaaia uj. iu new

«ihiuuaicchiciau

Trust

York, N. Y„

Mamaroneck, since 1947.

assistant

^as^ year-

Empire

Mr. Bragalini first joined Manu¬
facturers Trust Company in 1941.

appointed
an
branch manager in 1943,

Tan

announcement

Clifford.

voted unani-

been

was

bF President

made

3% stock dmapproval by toe

approval of

Trust

and

Mass

also

Worcester

'dine

mous

to subscribe

tee of the North Brookfield Office
of the Worcester County National

Vice-President in charge
8
of the Center Moriches offices.

made

President
of American
when it was formed in
was elevated to chairman

1955 and

amendment to the Articles of As-

E. Bruno, formerly an
Vioc
ViDOn
vice-president, has been

announced by Horace C. Flanigan, Chairman of the Board.

was

Safety Bank

a
member of the Advisory Commit-

xHPD-nrhcirlonl

George M. Bragalini rejoins the

York,

ctonl

as a

Ralph W. Igoe was elected

Rank

Minnie

$10)

tional

respon-

branch administration department
of Manufacturers Trust Company,
New

troller, assumes division
sibility for operations.
ci

phnrPP

^B^k, New"TokTndtoe

ComnComp

assistant

he in

Mr.

Assistant

than

$100) plus

insurance.

the amount of the

used

rate

month

will

division.

the

and

will

administra¬

becomes

wants, and when he wants it. The
balance

Trust CornMr. Wollen was

clerk.

rPiatinns at the hank's

tive with the Chemical Corn Ex-

Mi.

Division.

Slade, who has been named Vice-

repayable in monthly instalments

pany, as

JLVJ.AAA—

y.ears* Prior to joining Commerc.ial Bank ke served as an execu-

have

will enable each customer to pur¬
chase what he wants, where he

AAAVJ

Mr- Backer will continue

placed in charge of Security

ford

Piiii-.uoini,;-,

1 Q94

JLpr

Sohm, principal officer at the Sea-

Ready-Credit plan

WOAUV14V*

loan officer at the 1400 Broadway

planning

Benedict

...

National's

office where he has served for six

Presidents

and

business in 1920

with the old Fletcher

Joining the institution in
_
.
^
,as a messenger, he later >lvr^ Diractors of The
Following the favorable stockferv^e,
as a
and in the
® ©well National B^nk of Sha- holder action on the recommended
bank s accounting, auditing and ®'Fa*»announces the election of stock dividend, the bank's board
vault departments.
^
oon b. BycroH, Jr., as Chairman voted to transfer $5,000,000 from

construction.

been

tered the banking

12'

named Vice-President of

Sohm

at their annual meeting

President.

charge of the office at 528 Broad-

Din-

counsel. Director Emil M. Keen is
and

Fletcher .National,
Indianapolis, Ind., died
Jan. 25 at the age of 61. He en-.

Bank

The new director is Frank H.
shares of common stock for each
£.^225? ^in FifthAvenueshares then held; rights to ex- Woods.
m<'ln 0111Le' JJU 1111 avenue.
jre on Feb
16
Price_?35 per
Fred G. Gurley a director of
Mr.
Herbst
will
continue
in
share.
Harris Bank since 1942, chose not

A*AAAAA.VV4AV»VV/*

James

President

Philadelphia, Pa., it was
by Frederic A. Potts,

^cebeftns

immediately.

VXJ.VVV

Vice-President

dent. Vice

National

announced

(par

Bank's Administrative Vice-Presi-

draw

against with personalized checks
supplied free. Credit lines may be

Bank

National

tions to take effect
UlO

Vice

to
was

Jan. 20 announced officer promo¬

branches

Directors

•"

;■

common

Maass, President of

■

—

Long Island, Huntington, N. Y. on

kelacker

personal

Security

the

Bicker

ooshionT

fminrlmf/ in

•

Herbert

President

Board

SfflMO "coSw nounced on Jan 29 byJacob It was announced on Jan. 26
% s t o c k dividend reco„
2F5SX Leichtman, President. They form- that the Broad Street Trust Co., ™e?dedby !be.increase the banks
b^jJbank's
dividend will
Sy. served as Assistant Vice- additional shares of
Philadelphia, Pa., willissue 32 000 dividend win $15,000,000 tovdi.no
increase me $20,Presidents
stock caPital from
Presidents.

Herman

and head office.

Designed

granted

was

2, when The First

introduces Citibank Ready-Credit.
It is not necessary to be a cus¬

Bank,
Herbert D. Backer

Irving Herbst

the

•

American

the

named

Philadelphia

Wollen Jr., Chairman

Evans

National

Hallowell, Jr., has been

The

no.HiM snares 01 the par value
186,903 shares of tne Dar value
of $10 each, to $2,310,140 consisting of 231,014 shares of the same
par value.

National City Bank of New York

all

Y.,

elected to

Co.,

of credit
available

Feb.

the

Fletcher

was

Board.

dent.
*

proved the plans.

its
it

been

has

Stephen Wade, Louis R. Tissot

Walker G. Buckner

since March 1957
Executive Vice-Presi-

and

president

new

20 to approve plans for a merger,
both banks have ap-

January, 1950, a Director.
He
named in 1953 Senior Vice-

issued.

„*

was

Directors of

value.

Bender

Shareholders

elected Vice-President and

he
jn

price for

Vice-President.

Assistant

Community Bank, Rutherford, N.
J., and Ridgefield National Bank,
Ridgefield, N. J., will meet on Feb.

each, to $2,662,000 consisting of
13$,100 shares of the same par

shall

*>.+

proval to increase its capital stock
from $2,420,000 consisting of 121,000 shares of the par value of $20

George

the

the Bank in 1938 as
In 1940

jje joined

new

set

which and the date when the

Kings

one

which rights are to be

upon

allotted

Garry Stolzberg

President of the Bank.

t'fi

The stockholders authorized

board

date

Lewis,

Wilbur

the

Executive Committee,

share of stock for each ten shares

elect¬

trustee of Union Dime

of $184,000, will be offered
subscription
to
the
stock-

tor

Treasurer.

Traders
Company, Buffalo, N. Y.,
given approval to increase its
capital
stock
from
$11,283,570
consisting of 2,256,714 shares of
and

under

the

State

name

Bank

Newark. Today the bank operates
its

main

office

f7d

the surrounding

Newark

509,245

consisting

shares of the

same

•

2,301,849

par value.

Ream

President

Glenn
manager

of the

National
Stockholders of Trust Company

Morris

County,

Morristown,

since 1950.

a proposal
by the board of directors to in¬
1

This

the

action

J 2

bank's
would

capital

increase

the

appointed

The

retirement of J. M.
Executive Vice-Presi-

early

Killpack,

First National Bank in Fair-

^ HI

w.to common capital

^ntaiy hquTatioifby 7^Uon of

shareholders dated Dec.

27, effective Dec. 31.

City's Trust Department

stock.

was

trust officer. Mr. Roe has been in

inS Jan- 27» approved
f

Accounting

City 10 years ago.

National

crease

Bank's

William B. Roe

New Jersey, at the annual meet1

nreviouslv

Furrv

Newark and Department.^appolnted assistant; comptroller Mr. Furry joined
area.

Trust

was

the par value of $5 each, to $11,-

...

from

:js

Manufacturers

Liquidating agent: M. E. Tarpy,

1nimimin* bnnV

Absorbed by: Farmers National
Bank

Fairbury,

111.

(which

bank changed its title to National
Continued on page 53,;
^

Number-5816

189

Volume

The Commercial and Financial Chronicle

which,- obviously,^ makes the but ~ since ; then
stock

THE MARKET...AND YOU
By WALLACE

to the

considerable
RoiisseJotReeiecfed
strength has shown up, mak¬
time, j :I ing the: copper shares more attractive for a change. The;
Harold
A.
Rousselot, general
Listless
yield item in this group, with partner, Francis I. duPont & Co.,

candidate for

old rate in

Rails Continue

STREETE

return;

By Commodity Exch.:

Rails showed little life

return of better than 4

Jan.

despite the fact that at recent levels, " is Phelps elected
that the period for realizing they
are reporting quite a Dodge
while the leveraged
cash for tax payments was sharp turnabout in earnings item, in
part because of. a
rapidly approaching, all from the depths of the recent large funded debt, is Anacon¬
weighed on the near-term recession... Southern Pacific, da where the recent yield has :
constructive sentiment. ~
despite the fact that through¬ been a scant 3 %. An unknown:
group

continued

Stocks

hobbled

by selective profittaking this week but it didn't
stop a few issues from carving
out

good gains although the
was spotty and errat¬
overall

The

ic.

effect

one of a stalemate
until the list could find some

incentive for

determined

action.

Rotating leadership in the
chips kept the industrial

blue

average close to its all-time
high, but there wasn't enough
concentrated strength at any
time to enable the list to

work

the

across

line de¬

600

cisively. So far the only read¬
ings above that line have been
achieved solely by taking the
best prices of the components,
and no actual hourly posting
has made the mark which has
become

something of

goal.

Spotty Rallying
Some of the

oils, steels and

4'split candidates" were able
to supply the rallying tenden¬
cies
when
the going was

rough
here

one

the

but

record

even

bit spotty.

Steels
sparking better action at

was

were

■

sfC

Jjt-

' J

The market

was

also rather

time but

news

that Beth¬

lehem Steel and

Youngstown
definitely ended

had

Sheet

their

government-opposed
the latter

merger plans cut
back rather hard.
i'fi

■f

Presi-

dentMr,
is

Rousselot
the

the troubles of last year facet in the
copper shares is *
it was able to boost per-share the
possibility of a strike this
out

tenth

President
serve

the Ex*

net

; change
' since
slightly, was lifted only summer for TJ. S.: producers,
its founding in
moderately marketwise. To be which would: serve; to : cut
1933.
;
world supplies since a third of
ture for a change, after it had specific,, its gain on the news
Other1 offi*
was only a fraction. Its
cers elected
yield the world's output comes from J
ploughed ahead steadily de¬
runs past 4J4%.
were:
Vice;
? this country.
spite any and all news devel¬
Presidents,
*
s«s
if
/ v
if
*
H. A. Rousselot
opments and bad earnings
Timothy
Baltimore & Ohio isn't one
The oils continue, despite
.Carberry,
through the bulk of last year.
President,
Metal
Traders,
Inc.,
Rejection of a shipment of of the higher-yielding items, their momentary popularity,
representing the Metals Group;
OL
motors
to be the more neglected of
by the government hovering lately in the V/s
Matthew S. Fox of Balfour, Mac4
brought an immediate and area. But the regular payment the major stock groups. laine, Inc. for Rubber; Walter S.
somewhat excessive decline in could well be larded with a Skelly Oil at recent levels was Stern, President, H. Elkin & Co.
for Hides;
J. Raymond Stuart,
Westinghouse. Court action better yearend distribution holding at a level that re¬ General
Partner, E. F. Hutton &
by Texas to disrupt the this year. The line paid 50 traced less than 'half of the Co., representing the Commission
planned merger of Sinclair cents last yearend but covered decline from the 1957 high. House Group; and John McN.
Oil and Texas Pacific Coal & its
full-year's payment of In less than a decade the capi¬ Sullivan, President, Gerli inter¬
national Corp. for the Silk Group.
Oil was all that was needed $1.50 more than three times tal expenditures by the com¬
Joseph Fischer, of Joseph
to unsettle the latter speedily. over.
pany approximated its recent Fisdher
&
Co.,
was
reelected
❖
ijc
tsjs
if
*
market price. Its dividend was Treasurer.
New Governors elected to the
On the basis of earnings covered twice over by last
The really wild item—and
that dropped from $10 to $8V& year's earnings. Moreover it Board for a three year term were:
explanations failed to answer
William J. Deevy, Jr., President,
is an issue with little floating
most of the questions — was to $5.37 in the last three
Schmoll Fils-Deevy Corp.; Timothy
capitalization since nearly F. Carberry, President, Metals
Borne Chemical on the Amer¬ years, the record isn't good.
substantial
economies 60% of its less than six mil¬ Traders, Inc.; Henry Mintz, Her¬
ican Exchange, maker of oils But
lion shares are held by Mis¬ man Hollander, Inc.; William
been
made
and, like
and greases. A few months have
Reid, general partner, Bache &
other rails, B. & O. showed a sion Corp. The company has a
Co.; and Joseph Louis, President,
ago it was 712 and two weeks
upturn
in the final good record of boosting re¬ L. Littlejohn & Co.
ago had reached 28. It took good
off as a skyrocket from there months of last year. Projec¬ serves and any major dis¬
Commodity Exchange, Inc.,
1959 earnings
to reach 80 in a handful of tions are for
covery could have a sharp ;which recently celebrated its
around $8 a share. The reSilver Anniversary, is a member¬
trading sessions which served
impact on the small capitali¬
ship corporation, with membership
to bring on official investiga¬ c e n 11 y increased quarterly
zation available outside Mis¬
owned by individuals who repre¬
tions, and in even shorter time payments for this year that
sion's holdings.
sent a cross section of the nonthe issue had lost around half put it on the $1.50 basis be¬

sensitive
ments

news

•

develop¬

unfavorable

na¬

of its

fore any yearend extra make
the payout a puny fraction of

peak price.

Interest in Meat-Packers

Oils

second

his

term

-'•*

one

Exchange, Inc.

was

mostly

22 was unanimously re¬
by the Board of Governors
of Commodity

demand

(549)

showing the first
signs of life that they have
were

mustered in months when the

One group that was getting
much attention both because

total

[The
article
time

earnings.

views
do not

coincide

"Chronicle."

Coppers Volatile

expressed in this ferrous ; metals, rubber, burlap,
necessarily at any and hide trades and most of the
with

They

those
are

those of the author

of the well known brokerage and

presented mission house

only.]

offices

The volatile section of the

and

practically

firms

with

com¬

branch

correspondents

every

important

city

good prospects ahead and
drop of a third in profit in
in the U. S. and abroad.
•
"
list was the copper shares, in¬
With Merrill Lynch
because it is far from being at
Standard Oil of Jersey came
Comex was founded
in 1933,
fluenced mostly by wild fluc¬
(Special to The financial Chronicle)
anything approaching a tooalong, as telegraphed in ad¬
the
National
Metal
Ex¬
tuations in the price of the
WINSTON SALEM, N. C.—Rob¬ when
vance
by the Venezuelan de¬ high status is the meat pack¬ metal in world markets. From ert M. Wearn, Jr., is now affiliated change, the Rubber Exchange of
cision to revise its tax bite ing shares. Most of the atten¬
around 50 cents in 1956, the with Merrill Lynch, Pierce, Fen- New York, the National Raw Silk
tion was concentrated on the
retroactively. Jersey wasn't
red metal lost more than half ner & Smith, Incorporated, R. J. Exchange and the New York Hide
nondividend-paying, de¬
overly hard-hit consequently,
Exchange were merged into one.
of its value by early last year Reynolds Building.
since the
shock value was pressed items in the section
where the capital gains could
diluted.
be greater. But Swift & Co.,
while admittedly not destined
Divergent Split Reactions
These securities
placed privately through the undersigned with institutions purchasing them for investment.
Even
where
split hopes to outperform the others per¬
were high, apparently a good centagewise, was still an item
•

were

bit

of the

already of interest both because of its
notably yield approaching 4 V2. %, and

had

news

been discounted,
Warner

Lambert

which

was

the fact that there is consid¬

definitely reactionary after a erably less risk in this than
2-for-l division was proposed. in the more speculative items
Denver

rails hailed

in the

Grand

Rio

Becton, Dickinson and Company

in the group.
*

stock split pro¬

$500,000 Promissory Notes,

due December 31, 1963

Swift's

posal momentarily, but then
good yield continues
profit-taking moved in. Allied despite a trim in the rate from
Kid
which wasn't overly $2
to $1.60, which helped
prominent among the split carry the issue nearly a dozen
hopefuls was able to appear and a half points below its
among the good gainers when peak of as recently as 1956.
its split plans were revealed.
Reduced livestock supplies in
❖

The
cated

much

❖

$4,500,000 Promissory Notes,
due December 31, 1978

couple of years have
meat packers plus
that to a good extent the fact that profit margin is
good news had already extremely low. But indica¬
reactions

varied

the last

indi¬ hurt

$2,000,000 Subordinated Notes,

the

due December 31, 1983

are'that, particularly in
the livestock supply this
The inability of the industrial year will be substantially
average to get going again, higher. Rough projections of
the dwindling volume that in¬ Swift's earnings potential for

been discounted. It
Street

even

made the

been

satisfied,

e m

and

tions

cautious. hogs,

dicated much of the new year
reinvestment

and

the

had

the current fiscal year range
to where the

fact is

covered

present dividend

three times

over

F. Eberstadt
January 23, 1959

Co.

The Commercial and Financial Chronicle

(550)

Urgent Appeal for Trade
Voiced by U.S.S.R/s Mikoyan

the

gathering in Cleveland, Ohio, in honor of Deputy
Premier Mikoyan, Gyrus Eaton recalls past fanatical rivalries
in

profitable exchange of farm visitors; and
Dr. Charles C. Higgins declares there are no medical secrets.
In response, Mr. Mikoyan readily concedes U.S.S.R. is trying
"to catch up and overtake" us in peaceful race for higher living
standards and productivity; blames Congress for preventing
trade from developing in urging trade take place; and issues
a rebuttal
to charges of undermining markets and dumping
benzol, tin, copper and natural rubber.

The

NOTE:

following

transcript of the speeches

that

theory

the

agriculture, labor and science
on the occasion of the Jan. 7
luncheon in honor of Deputy

decades

Anastas

Premier

Mikoyan

of U.S.S.R., at the Union Club
in Cleveland, Ohio.
of

Remarks

first

Cyrus

word

Eaton

;

visitors

our

from the Soviet Union is to extend

to them
tions

our

warmest congratula¬

their

achieve-

scientific

The

rnents.

admiration

three/
hatred,

After

profit by these examples of the
past. Let us have healthy compettion between ideologies, without
Exchanges of visits such as we

provide one
highly useful means of under¬
standing
each
other.
Mutually
profitable commerce would be a
today

broader

path

further

been

friendship. To enable such inter¬

the

ing

quire changes by our Congress in
restrictive
legislation
that
now

the

serious barrier.
Again I say welcome and con¬

planet
is now

new

,that

poses a

gratulations to

its

taking

place in orbit

hope

several

For

years

with

Russian

Soviet guests.
enjoying your
back to Cleve¬

I was

associations,

quickly con¬

Union posof the most brilliant

vinced that the Soviet
some

aesses

minds of the world.

this luncheon today
representatives of great cor¬
porations with headquarters in
Ohio, ■ many of them doing a
Attending

are

world-wide

business.

sure

people

can

com¬

petitors and still get along to¬
gether. But even though competi¬
tion is healthy, it becomes dan¬
when it is carried to the
extremes of fanatic rivalry.
gerous

50 years in business,
I have seen unwise rivalries jeop¬
ardize a number of our great in¬
During

dustries. In meat packing,

steel

electric power,

and

rubber,
for ex¬

ample, the cardinal policy at one
time was for each company to at¬
tempt
from

to
keep
its
competitors
making money. "Wholesome

competition now prevails in these
industries, since their leaders have
that

discovered
more

their

companies

likely to prosper when

competitors are

also thriv¬

State

University, to say a word for
agriculture; Grand Chief Engi¬
Guy L. Brown of the Broth¬

neer

history,

business, ri¬

Locomotive

chairman

the

board

American

the

nors

word

gover¬

Board

It is
be

here,

have
tion

this

from

the
o

Soviet Union. It is

these that

this

try

future

world,
am

foreigner here

common

We have had

table.

this

three

about

agriculture.

c a

In this day

of satellites and sci-development, we still must
not lose sight of the fact that ourgreatest wealth, our basic wealth,
is still in the soil, whether it may
be in the minerals, whether it's in

could not live in the same world.

who is

have

Menshikov is here,
known

outstanding

before,
man

and

his

fanatics would arise to field.
The thing we need in this coun¬
Inspire bitter warfare, and to urge
complete death and destruction. try is to have more and more ex¬
Today the globe has been found change of visitors, exchange of
to be big enough for both re¬ goods, exchange of ideas. After
At times,

all,

try to think that

different
say

of the yet

they

from
are

we are

other

are

people. We

''Communists," and

going in that direction

unofficial
casion

use

;

oc¬

ex¬

press your

Anastas

Mikoyan

working,

stop

you

only begin working.
And when

had

our guest,
pointed to

Eric Johnston, he

Mr.

interesting fact which I was
not aware of before/It was in 1944
one

of the best. He said that

were

other

each

two

our

only three

removed

are

from

miles

frontiers

the

fact

countries

one

point. Only three 'miles of water'
divide us.

•

the

called

and

is-1

two

Diomecje

Large Diomede. Eskimos

the

live

Small

the

the*

near

Straits there are

Bering
lands

Pacific,

;

And

both, Soviet Eskimos and
Eskimos which shows

American

activities

how

Soviet

near

Higgins

ity to discuss world problems.
VVI had the privilege of 'holding
operative clinics at the various

that

fact

State

your

those

near

very

are^

since

especially

neighbors,
new

and yet how far.

are

But
C.

Cnanes

opportun¬

when

addition to

the

a n

Wash ington.

that he first came, when our rela¬

summer.

hours between

parts. I would like to congratulate

having this new State, our
neighbor.
'
very much overjoyed to
hear what I just heard here. If the
spirit which guided the statements
made here today were to become
universal
in
our - relationships,*
that would open a new page in the
history of mankind. It was espe¬
cially important to hear
those
words from your lips. All sorts of
things are being told about us,
good and bad things. You can't
United States and we know also
everything - you ■, hear.
is, .the'1 tube leading from the- believe
that it is one of the fundamental
Along with success we have pur
mouth to the stomach, for benign
things in the development of the.,
drawbacks.
We
adopted correct
and cancerous conditions in the
country of the Soviet Union.
decisions and we made mistakes.
We are very happy indeed to
largest series of patients in the Then we did our best to right
add

word of welcome to these

our

world and more than any other,
they
travel across the United
States, surgeon. He is to be my guest at
while they are visiting industries, - the next meeting of the American
while they are seeing our cities,
College of Surgeons.
the resources of the people of this,.,
In addition, obviously I devoted
country, they will not be unmind¬
a
great deal of time to the re¬
ful; too,
they fly

trust

guests.

that

across

our

that they will

season,

wealth

America,

which, I

communicative. There

are

where

Leningrad

work

done

was

blood

the

had

studying

friends here—

a
a

to you that

as!

their

for

inital

conditioned

opportunity

any

re¬

dissemination

are

There

position.

the

to
of

have

ing

your

Guy Li Brown

people or men
w h o
actually
on

the

and

country

medical

are

freely

fraternity

the world. I feel that

attitude prevailed

American

railroads

in- your

how

would go a
a

great deal to mak¬

step.forward for the peace

and prosperity of the

Mr.

Eaton:
to *

countries of

now

have

present

you

Deputy Premier Mikoyan.

that

say

expression

at¬

their efficiency, their

respect

.Vw

was

for

Amer¬

and for Americans.

U.S.S.R. Objective ]

Claimed

Today

have set it

jective to catch

the

Soviet

as our

ob¬

and overtake

point of view of

living standards and productivity.
Americans

that

sort

"How

can

look

even

anyone

upon

insult.

catch

with

us?" they say.

But, first of all, I
that

tive,

you

point of

are

your

which

ity,

this

want

to say

our

objeo

recognize

being

set

the

for

above

time

from the

material productiv¬

means

that

there

much to learn from you.
The first
and

chev,

Secretary of

constantly
telling our
learn from Americans

people

field

the

party
Khrush¬

our

Prime Minister,

our

agriculture.' How
for instance. We are
trying to learn how to grow corn

to grow corn,

well,

but

are

still

not

standard. That is just
ample.

your

we -honor

it. We

businesslike

these

should

in in¬

the world.

country visit us and see..what
have here

the

if such

would

one

sci-

dustry and other segments of life

here.

entists of

throughout

glad to

have you

At the very

Some

medical secrets. Sci¬

achievements

given

North

of prog¬

their tempo, as we say.
j
beginning when our
party first came out of the under¬
ground, Lenin told us that we
should
try
to learn
from the

ress,

great deal that

unique

most

are

entific

Cont inen t—

work

labor

the

or¬

country in the world.

cupy

oldest

Americ

the best

their high rate

also

and

in the science of medicine we oc¬

them

ganizers of industry.
We have
always admired the businesslike
attitudes of the American people

ica

patients, which is dif¬

It interests

la-

organiza t i o
on

looked upon

of /blood

system

the

and

the

al¬

have

upon
Americans—
Lenin said that a long time ago—

looked

ways

America from the

man

v e

But

mistakes.

those

repre¬

t i

was

ability to organize industry.

ferent than that that is utilized in

say

the.world, famed Pavlov Institute

agriculture

opportunity of being

our

nearest

titudes and

I believe they come to <us as<

the

hes¬

you on

projects. They devoted one day to

glad indeed that

very

was no

itancy in discussing their research

production.

'We

the

biologists,

Jthe

physicists, the chemists, were very

is. in the soil, and that means,

food

vestigators,

see

say

laboratories," where the in-

though it is not at the

even

railway

particularly glad that Ambas¬

this

even

tions

Union; we'had

bor—in fact,
Lincoln

nations. I

two

y -

fuels, or whether it may be in' universities in the Soviet Union
and witnessed the skill,
food production.
th^ dex¬
In
an
educational
institution, terity of the outstanding surgical
such as we have at the College of personalities in the Soviet Union.
Agriculture at Ohio State Uni¬ •>' I do not want to speak too long,
versity, the Agricultural Experi¬ but I would just like to mention
ment Station, we are particularly, that we can learn things from the
interested, of course, in the pro¬ Soviet surgeons, they can learn
duction of food, fiber, and timber. things from us.
v
So we have this particular re¬
Professor Petrov in Leningrad
source
which
is
great in
our has removed the esophagus, that,

organized

the

sent

James

years.

entific

and

the

ister of Health;
We feel that the Minister
this is one of the things that Mr. of Education,
problems
Lincoln may have had in mind— o n*
that we have had this exchange - not only per-of
taining to loinformation, and particularly
two

laboring

agreement

Col¬

Union during the past

the Soviet

friends—and

dously helpful

Board

with the Min¬

and

going

the

American

disc ussions

exchanges

many

be tremen¬

o r

farm

great

are

getting out of

the

during the

with our visitors here ; last

of welcome

month

one

I would like to add a few words 'banks

that

o n

proxima t

my¬

self, coming from away down
State, so maybe I have something
at the head

that you want to make

see

can

Moscow

Chairman

flexes.

the

and

sure

what

who

The Thirty
Years War

I feel like

Remarks of Guy L. Brown • v

the

and

nations

lege of Surgeons I had the oppor¬
tunity of visiting the Soviet Un-

here with you on this occasion. *

sador Mikhail

Christians.

Remarks of Dean L. L. Rummell<

the

but

Remarks of Dr. Charles C. Higgins

being

Cleveland.

coun¬

persuading

and

greet you and welcome you to >; Governors of

have had the

necessary

Christians and Mohammedans

Mohammedans

States

the world.

for the future

United

are

hundred years, with the

ligions, and there are hundreds of

very

representatives

visits

the

particularly when we
very fine representa¬

exchanges

s o

Lincoln

great pleasure for

Gentlemen, I consider it a great
privilege to be in such company.
I am not on an official
visit, but I

And I say to you, your Excel¬
country. You
lency,".we are glad to have you see, it might
here. We hope that you gain some
seem
that we
benefit from
your
visit in this are very far
country ' and that there can be ' away fro m
something said or done by some each other.
of us that will help bring a better There is a dil- <
■' understanding
between the na¬ f e r e n c c o 1'
tions, not only of Russia and the .*• time of eight,

that

thing.

Deputy

'•

brothers.

blood
I

are

growing
James F.

Remarks of

between

millions

actually

lands,

Surgeons.

valry between ideologies has fol¬
lowed a similar pattern. The Cru¬
sades were carried on for several

partisans
themselves that

Engineers,

for labor; Dr.
Higgins, a great sci¬
entist to speak for the scientists
and the doctors. Dr. Higgins is
say

Charles

ing.

who

industry,
which
he
has
largely created, will speak for the
industrialists. I am going to ask
Dr. L. L. Rummell, dean of the
College of Agriculture, of Ohio

that

Lincoln,

Electric Company, a great Cleve¬

nize, as I do, the importance of
reaching a workable understand¬

found

land

erhood

Soviet Un¬
ion, whose progress in science and
industry has been so impressive.
In
my
long lifetime, I have

table

the

chairman of the board of Lincoln

that these business leaders recog¬

ing with the powerful

ask four

around

say

James

Mr.

these

going

are

word on behalf of
fields which they represent.

the

Cyrus Eaton

and-

scientists. From the first of

come

who

men

here to

meeting

6cholars

Now,

have

been

are

land often in the future.

cun.

our

you

visit and will

the

'around

will of course, re¬

national trade

dra¬

launch-

matic

and

seems

obvious

Soviet

visitors from the United States to

and recrimination.

the world has
drawn

Remarks

better understand¬

Thursday, January 29, 1959

better working arrange¬ feelings in re-.
ment- but, after all, it takes both. i
gard
to
my

something which we must answer,
something which should not
be too difficult for people who

enjoying

ing and

not, if we can

work out

can

and

possible to live and let live.
The world today can well afford

are

that

but sensible conclusion

rancor

Premier Anastas I. Mikoyan

anything" without capital. There
may be a time come that someone

understanding between the two

countries?

partisans came to the belated
that it was

the

than

closer

get along with each other here,
why can't we do the same thing

was not
both Protest¬

of bitterness and

came

tries. Why can

Europe

big enough to hold
ants and
Catholics.

cooperation and bring it down to
is * our country;
; _■
*

there

from the communistic coun¬

came

seventeenth century proceeded on

by heads of leading corpora¬
tions and representatives of

ex¬

some

from Europe
originally, and remember that a
very
large proportion of them

L. Rummell refers to

EDITOR'S

much

will

Americans,

Dean L.

closeness of the ideas of communism and capitalism;

believe—there

firmly

place for all of the people of

the world to live in peace and

anything we have seen before.,,
It
is
well to remember, too,
that all Americans, or almost all

that it is possible to live
live; Mr. James F. Lincoln comments on growing

let

long J; 'r Capital is not worth much with¬
between the two out labor and labor is not worth,

agreement

ideas

pointing out partisans can agree

and

believe

not

least

capitalism,
tent.

-■

much doubt but what before

recent

tremendously

There is also every

believe—I

rapid speed.
indication that
the communists are going toward
at

There

are

many

an ex¬
.

other fields in

Volume

Number

189

5816

.The Commercial and Financial Chronicle

(551)

■.$

which

have

much

learn.

Among your businessmen there
hre gifted people who can do great
things, as is evidenced by the po¬
sition in this State.
When I go back to my

I will
the

Mr.

tell

people

feelings
Cyrus

Dean

back

country
there, of

expressed here by
Eaton, Mr. Lincoln,

Rummell, Mr. Brown and
Dr. Higgins. I will speak of the
friendly words spoken here, whieh

•*.

indicate

the

coexistence that I
ist

between

for

basis

That

us.

peaceful

am sure can ex¬

espe¬

cially important fact at the pres¬
ent time.

•

general, I would

idea is

that

say

sublime than that of

friend ship

between

peoples,
friendship .between nations, and
peace between them,. And that is

especially
and
*
-

important

this

day

age.

former

times,

might

even

money

some.

have

make

been

people

able- to

Formerly,

war.

bnly the people at the front died
in

the

Now

war.

to be

were

people, if there

There is

tion

going

tremendous

construc¬

in our country in all
people are making
^tremendous^ effort to support
on

fields and

would be dy¬

war,

ing everywhere.
/

Thompson, sometimes a young, to be embellishing something, that
pianist can do more in an hour must not be the whole of the
truth,
to bring countries togetherthan
probably," and he said that one
diplomats can for many years." v " Of- the firms "did' not want to
In
fact, he impressed us so make that transaction because it
much, and the reason he was re- was ; not profitable
enough for
,

ceived

so well, I should
say, is that i them,"
atmosphere is ripe for better them.*
understanding.
' .- Here

our

trade and

course

our

country.

When I observed

might

want

from

labor

our

but

our

ested in in your country, but it is
fact that we have something to

never

»:• Our scientists are

out

trying to find
of building shel¬

the ".means

ters

otherwise

from

these bombs,

people

save

but when

one

has knowledge of what the bomb

really is,

thinks that all these

one

shelters

merely

are

consolation

until

matter

the

exploded, because there is
fense

against

the

dollars.

preTherefore, all these fables of us
from developing trade? >being' such terrible devils are not
'%
7
v : ;; H.well-founded.
We want to trade
Blames Congress for Trade
V:. in earnest and do it well.
We

Barriers

-vy want to getf as high a price on our

the hands of

man.

That

ever

your

the

recession

and you have
buying abroad. Un¬

economy

reduced your

der those conditions you were

problem

Russians

men.

hard,

but

they

ment

isr not

fact.

men

The

our

business-

countries.

fight for

Denies Any Dumping
We

accused

are

of all

;

•

sorts

tance in all fields of life. And the

speeches made here today by rep¬
resentatives of industry, agricul¬
ture, labor and science reflect the

feelings of the people, and if they
rare made often enough on both
sides they will tend to help create
a friendly atmosphere and
change
the present atmosphere of uneasi¬
ness

and

distrust.

Personal

con¬

the ability to see how the
side lives, also have great
importance.

tacts,

other

Even
would
with

the

war

fields

have

seem
or

which' it

nothing

peace,

to do
in those

even

fields, important contributions
—be made

understanding.
.When your young pianist, a very
nice boy, came to our country, I
heard him in our Conservatory,
public stand
applaud him until their
ached, and when he said

terrible

things, of wanting to

There

was

such talk

urn-

and

hands
few

words

fight for
tween
<

your

peace and

us.

friendship be¬

Our people came to love

young

that he

the

becomes

pianist

came

and

our

said

people,

too. And

we know that
your pub¬
lic has been very generous in re-

ceiving
*

our

musicians

and

dancers, who came back
country deeply moved.
Your

our

Russian

dumping,

another

and

case

said, -"A

at the reception at which

this young

pianist

was

also present

Digitized forIFRASER Ambassador,
and
told the

"See,

Up 5%, with practically all classi-

Eastern

carriers

has

That

dumping .which

I asked the official i'n

was

foreseen

decline

interests

the

which

all

I< suggest

that

earnings

our coun^

estimated

are

gain

unite.

can

j—
iron

-—j
and

J,-

his
t.

membership
has

"How
•

That

can

that

not

be?"

both

I said,

above

This

cars

Board: Up 12.3%(

...

Northwest Board: Up
^
i3 ^orecast §air}
111 ^um^er an^ forest
products.
|

individual

following

Franciscov for

uompany to

LOS

Calif.

ANGELES,

Barth & Co., members of the New
York
and
Pacific
Coast
Stock

Exchanges,
Mr.

5 will admit

Feb.

Rhodes to partnership.

Rhodes will make his head-

quarters at the firm's Los Angeles
oooo
T3Ai,in,rorj
office, 3323 Wilshire Boulevard,

Scrap

at 26.5%

territorities

predictions

(special to the financial chronicle)

are

RALEIGH, N. C.
Chesson

New

England
of

Board:

0.1%,

This

with

The

offer

The

Securities

are

only

offer

offer to buy
made

now

—

Richard T.

affiliated

with

Street.

neither

Bache & Co., 130 South Salisbury

main

the

in-

announcement

solicitation

NEW

with

any

sell

nor

of these Shares.

the

Prospectus.

speculative nature.

ISSUE

San

of years,

number

1,1 fcB ""vUW

made:

crease

Joins Bache Staff

the

well

ira

a^o.

vear

and slag 10.4%

ago

items

almo 14 all

above

Robert

--1
— j
steel is placed

Board: Up
classifications

A(l|M|f D F D||A(lac

for the

interest.

300,000 Shares

Philip M. steams has also been
elected~ to .membership
through
San

Francisco

Division.

Surrey Oil & Gas Corp.

Mr.

general partner of the
of

Oscar

Common Stock

Dooly

& Co. of

Miami, Fla., has acquired
membership by intra firm transfer
fr0m Emery Flinn.

(Par Value $1

W. H. Roundtree Opens

per

Share)

the

Price

per

(Special to The Financial Chronicle)

COCOA,

Fla.

—

William

from

business

Res

securi-

offices

Underwriter

explained-that 28c to
30c is the price of benzol l'.o.b'.
U. S. railway, while "we sold it
at that
price in Batumi, f.o.b.

Bellair ^Arcade.

Batumi."

E. Shaw is conducting a securities

truth."

calculated

the

trans-

portation costs, the interest to be
paid, and the unloading in New
York, and the final price would
be the same.
I said, "You seem

vv^.

t•

peter morgan & company

E. onaw Upens

WASHINGTON, D. C.—Clarence
business

from

offices

1021

Street, N. W., under the firm name
of Clarence E. Shaw & Co. Mr.
Shaw was previously with King
Merritt & Co., Inc.

Western

J. Darin

add

should

revenues

are

year

corn-

associated
business

said^ Roundtree is conducting

the' whole

422,417

gain

that firm. H.

been

securities

true and

not true at the same time.

A
„

matter

was

are

little

higher.

Birr, Jr., President of the

firm

Some facts

Central

Some of the supplemental fore-

between our nations and to friendship between them,

member

sentation.

3.3%,
also
most
rising slightly.

over those of a ; i
t
<«

9.8%.

items

will

Board:

...

anticipated to rise 24.7% over
1958 quarter. Coal and coke,
main commodities handled,

cast

Stearns,

some

2.4%, with almost all categories
Participating.^;

carloadings of ore and concentrates. Iron and steel shipments

toast to peace

the

Southwest

11.5%

away-with the fear of
basis

explain why they weren't getting
the proper price. I said, "We need
American currency and you. seem
to be losing it through these transactions." He said, "That is a misfact, he said that

On the other

hand, this district set iron and
steel loadings at 40.9% above a
year ago. This probably will mean

nations and of doing considerably to
war is a period.
;

peace among

try in charge of these matters to

fications forecast to .show

pro-

ever

Gentlemen,

pany,

Trans-Missouri-Kansas Board:

have

feelings so many of you have compared with actual loadings of
graciously conveyed to me.
384,696 cars in the 1958 period, a

the

24c."

which

been hurt by the drop in the

^al

gallon of benzol in America costs

undermines American-economy.

anvyextent

been before, pected. This is anticipated because
speeches he made in Detroit 0f a pickup of some 1,900% in

28c, while the Russians sold theirs
for

Cdingf toreS to bfoff

only

the

presented that

Then

Ambassador, Mr. Thomp¬

son, was

capitalist

Board, Pacific Coast Stock
Exchange,* has
announced
the
election 0| HrT Birr, HI, to niembership through the San Francisco
recorded. There are no secrets..
Division, * effective Jan. 26, 1959.
Then a firm of ours from Ba- Mr.
Birr, Vice-President and vottumi sold some benzol to one of
ing stockholder of Birr & Co.,
your firms.
Some of your papers inc., will confer the privileges of

something correct and-a misrepre¬

beyond

goes

and

in all grain loadings.

ai' hack as

^ as

,:>^lces

happens,

music and

when we exported practically no tin at all, and furthermoie,
all
the
transactions
arc
1956,

representation." Well,

that

sians, or a part of the blame. They New Coast Exch. Members
say/ '-Wenr the price; of tin
has;;SAN FRANCISCO, Calif.—
iallen. The Russians aie to blame.,
Qeorge W, Davis, Chairman of

in
Russian,
they
were
cheering without end. When that
confines of

concentrates

a sharp increase in the first
three months as compared with
a year ago.' These roads would be

of y°11'
of,
Mr* Gyrus
The largest increase in forecast
Eaton,, who has become more pop- for the Allegheny District where a
u*ai' ia our country than any carloadings rise of 17.2% is ex-

before,-May

you had your recession
were people who wanted to
put the whole blame on the Rus*-

better

and I saw our

;

can

transaction

one.

I have been talking much too
long and I must ask you to excuse
me, but I would like you to accept
us as people wanting to
be good

ort4*

there

has impor-

peace

and

ore

wi?h pralScaUv ® classYhcatS

■' *:sre

but when

the

profitable

ward us he has been expressing

scientists

also

Great Lakes Board: Up 10.5%,

have

ancJ the^ saia;_^This is not a nor- are
;
we have seen the
compli^ ^at .the feelings of friendship to- the

it.
You, ~ of
.businessmen

better

riermine your market, of dumping;
and so forth.

and

bonus

bargain an(* elsewhere, for instance, were
is ,published
is.,published in full in our papers,

the
contributions
being
by Mr. Cyrus Eaton in try¬
ing to .bring together on a plat¬
form of peace and cooperation the
.

also

and

le,
the, bargain

fulfill

are

but

when

we/are.

before in the

made

tv»

concentrates

^®
with

,j~,

important than

value

hot

should say that perhaps you do not
trust our traders yet enough, al-

1han

from Russia.

history of manhind. And that is why we highly

and

ore

*?ttyear

in:a''iM^lion^""fwrei^'-im^rt8^b^Be8smtoin-intOTnaUoi^c<Mn- year ago. if -not
changed
Furthermore, 1 meice. 1 would like to thank aJJ

made

Eaton's Efforts

why
is

peace now

Also, there has been

course,

Praises Cyrus

over

improvement.
goods i as we can, and as low a duction of heavy industry.
price on the goods we buy, as any
Of all the districts reporting,
Southeast Board: A rise of 4.6%
businessman.
only the Northwest Board fore- mainly because of a gain in ship¬
' ilAs a matter of fact, the officials cast a drop of loadings. This was ments of frozen vegetables.
in our foreign trade ministry get set at 2.6% and the main reason

conflicts with American business-

dangerous toy

weapons are a very

though in the history of our tradb
with America there have been no

Those

control

«a

been exporting copper, yet

Accordingly, what is

venting

de¬

bomb.

better

has

bomb

view

"in

arc

ourselves

the price: of copper in Chile, for
j?'
S K o/io So iron and steel rising sharply,
buy and sell from each other. >r3r example, has fallen twofold. Who
.Lt,iaiiv
n?Sfhp liC i'S
Ohio
Vallev
BoardTTn
5
> r. Our total exports'now are about c is do-blame
for. that?Not "we;
U
four and a haM billion dollars a because the copper is being bought- pe"0£?'
a.gfn °* 5'9™'
.
lowing
year. Of course some of the goods
by America.. It is a matter of
It .is interesting to note that
8
P
we export you also
export. There- market conditions.
J
"V among the largest gains forecast
Midwest Board: Up 2.7%, with
lore, they are of no interest; to:
As for natural rubber, we buy are for iron and steel, up 25%; and a mixed pattern but gains in iron
you, but if you take only the goods ,it> not sell it, and nevertheless the ore. and concentrates,
up 23.3%. and steel expected.
.
;
which: you - import*- you will see price of natural rubber has fallen ™s
should mean that revenue
Northwest
Board*
A
dron
of
that we export the same goods to considerably, too. We are not to and net income of the railroads
2 6% but grain sWom^ts we the
a
total of one and a hail billion blame for that either.
serving heavy industries could

....

„

•

might be lost.

being blamed for
country, and you probably don't fall in the price of tin, but take
know what we would! be' inter- "copper,'tor ' instance. ~ We
have

secret motion

buy

...

Carloadings Increase Forecast

kind of goods
American
market

new

„

First
picture made in our country of the.
of ;
all,
the
Congress
a hydrogen bomb exploadopted barriers to trade. Then, of
sion, the idea entered my head course, it is a fact that you busi-'
/ that we are building and building nessmen have your clients and
i and yet one explosion would be you cannot ignore them and say,
t enough
to. annihilate everything. "We want to buy from the Rus¬
In one minute, not only the fruits sians instead."

upon

;

—

results of

commerce

•

prevailed

"we

-}
was

;

entering the
has also a great . deal' of impor- ,»from our*=
The forecast of the nation's car- increase in automobiles and
country, and immeelitance for peace. Trade can help
ately there were^ attacks against Jaadin£s
the first quarter of. trucks, up 169.1%.
xuZ
iu
this vear bv the Shinners Advi¬
year by the Shippers Advi■
strengthen peace, and peace on the that,
Atlantic States Board: Up 4.8%;
sory Boards is for an increase of
other
hand
creates
the ' proper
Then the total cost of the benzol
with the big increase of 25.7%
5.9% over the like 1958 period.
conditions
for
trade.
Unfortu- sold by us was $7 million, while
iron and steel.
This should mean a good increase
nately, for
the past years we the ..press reported that it was
Allegheny
Board:
haven't been trading much at all.'* $13*2 million.
Up
17.2%,
Apparently the cost *n
*01
three
Wo
months of this year, particularly with the increase as noted above
We do not even i,nm,r-„rW you; became doubled,
know what

,plans;for the upbuilding of

our

but.

the

F
'

Mr.

149

Broadway

These

securities

have

DIgby 9-3430
not

been

made

eligible

New York, N. Y.
for

sale

under

the

laws

State where action for this purpose is necessary. The use
this document is no assurance that the registration or
qualification requirements of the laws of this State will be met.
any

The Commercial and Financial Chronicle

(552)

Thursday, January 2.9, 1.959

Canada's Business and Financial Leaders
Continued

from first

page

decline, most experienced some degree of improvement

depleted supplies in

The annual export

that country.

for the first time since 1950.
.

than two-fold since last year to a

figure well

liquidation is
1958 the

natural gas through the West Coast trans-

the delivery of

NATO countries have added more than a $100

now

million to

offset declines in

the

reduction

exports

of industrial

Conditions, in this respect

industry.

creases

still

materials

which

ures

work.

have

•

going

part upon

will to

small extent offset the dam¬

the cost increases which
imposed on the industry.

./'/■

off-season

been

have

;

| As

turn the corner into

air of quiet confidence

confirmed

exterhalanfluences. Ih this regard, recent

pessimists
have
been
be without foundation.
M} The depths of the 1957-58 recession,
\i& which to no small - degree was
?V brought about by contagious repeti-

eco- •

encourag¬

are

k^V proven

ing. Production, in that country, has already recovered

J.rtion of those

duction in total

nearly all of the previous decline and employment, after

V been plumbed and

parts.

Geographically,

nearly

all of

the reduction in total

imports is accounted for by the fall-off in purchases from
the United States. Imports from the United Kingdom,
which in 1958 have included substantially larger ship¬
ments of automobiles and commercial

aircraft, have held
previous year's level. Consequently,
Britain's share in Canada's import market has increased
from 9% to 10%. Purchases from other major over¬

about

even

with the

trading

seas

areas

also have been reasonably well main¬

making allowance for

A sustained

of merchandise

level

exports, and lower
imports, has entailed a substantial decline in Canada's
merchandise deficit which for the first 10 months of the

stood at $242 million compared with $733 million
period in 1957. Most of this reduction has
occurred in the commodity deficit with the United States
which has declined from $983 million to $589 million.
year

for the same

On the other hand Canada's imbalance

dise

non-merchan¬

as tourist expenditures and interest and
payments, has been increasing. For the first

items, such

dividend

nine month of 1958 Canada's deficit with the rest of the
world

all current transactions amounted to $795 mil¬

lion compared with $1150
the previous year.
|

million in the

same

period of

At mid-1958, capital spending plans, both private and
public, provided for outlays of $8.5 billion in 1958.
Housebuilding has proceeded more rapidly than antici¬
pated at that time. Capital expenditures of other types
appear to have reached and possibly exceeded the level
previously indicated. Over-all capital outlays for the
year may fall but little short of the record $8,700 mil¬
lions spent in 1957.

Though little changed in total, there has been a sub¬
stantial shift in the composition of capital outlays in
.1958. Much of the recent build-up in mineral and forest
product industries had been completed by the end of
1957 and expenditure of this type has been down sub¬
stantially. On the other hand large outlays have bqen in¬
volved in the late construction stages of the St. Lawrence
Seaway and the Trans-Canada gas pipeline system.
Power

development also has held close to the record
pace of last year. Expansion in the fields of trade, fi¬
nance, and other service industries has continued at an
rate.

the

same

time

institutional

and

government building has continued upward in response
to the growing need for additional facilities.
Most

noteworthy of all has been the spectacular rise
housebuilding. It is estimated that housing starts for
the year will approach the 160,000 mark, 30% more
than last year and well above the previous record of

138,000 units in 1955. Close to 150,000 dwelling units have
been completed. A much increased carryover of unfin¬
ished houses at year-end will give an

important lift to

employment during the winter. The current upsurge in
housing activity began in the latter part of 1957. At that
time minimum requirements for loans obtained under
the National Housing Act were relaxed and
large fed¬
eral sums were made available for
mortgage purposes.
An important factor

contributing to the sustained high

level of housebuilding throughout 1958 has been the im¬

proved

availability

mortgage

funds

from

private

sources.

Prospects for the Coming Year
Of the industries

principally in the durable goods and
export processing areas, which had previously suffered

are

and prospects of sustained expan¬

generally considered to be good. Increased activ¬

ity in the United States will, in turn, reinforce measures
being taken internally in other industrialized countries
to stimulate
to

hard

these

stronger jraites of growth. Recent additions

currency

countries,

reserves

some

without strain

occur

ing

that, in

means

number of

rise in domestic consumption could
foreign balance positions.

In these circumstance

some

upturn in world demand

likely to

occur

during the com¬

With greatly increased capacity in export in¬

year.

dustries and expanded reserves of proven resources, Can¬
ada is better equipped than ever before to meet increases
in

requirements from abroad. For the present many of
the commodities of importance in Canada's export trade

are

in ample supply and this is being reflected currently

in export levels. In

general, export markets
pected to strengthen as the year passes.

may

ex¬

In recent months

new capital expenditure plans have
appearing increasing volume. In terms of the actual
physical capital being put in place, this rising
volume of new work may not for a time fully compen¬

been

forecasts, have

very

found to be shal¬

safely apparent that
months we have been
'exposed to; nothing more than
a
.vitally
necessary
and
inevitable
/'. period of readjustment and consoli¬
dation in the business cycle.
After more than 10 years of almost
feverish endeavour on the part of
world industry to meet the urgent
Allan J. Anderson
demand
resulting from
war-made
shortages of goods of every sort, it
was inevitable that the pendulum would swing too far.
Stimulated by prices, at artificially high levels for a
variety of reasons,: productive capacity was hastily
created—often in circumstances which could not bear
is

low.

now

in the past 18

the cold scrutiny of

normal economic conditions.

In the

mining industry this was particularly so. Mines were
enthusiastically developed /on mineral occurrences of

character.
Output in every branch of the
industry surged upward with the result that,
shortages had been met and world inventories

marginal
mineral
when

replenished,

Similarly,

of almost every commodity have
with productive capacity surplus to
consumptive requirements of industry.

miners

themselves

found

the current actual

amount of

parallel

of events

course

place in

took

other fields of industrial endeavour.

large projects now
What is presently known of capital

past two years fanciful fiction has been
by-fundamental fact. Rather than be desig¬
nated as the 1957-58 recession, the period might better
be termed "the years of reckoning."
After years in
enforced restraint the basic law of supply and demand

However, a period of improving business condi¬
tions tends to encourage the creation of new expansion

world, thereby creating circumstances in which only the
fit could survive. There have been and will still be casu¬

sate for the termination

of work

completed.
expenditure plans for 1959 indicates that business in¬
vestment will be up in some sectors but moderately down

being

Capital Investment

undiminished

be broadly based

sion

for industrial material is

principal overseas customers.

changes, is now

seasonal

moving upward. Moreover, the present upswing appears

tained. To this extent the reduction in Canada's require¬
ments from abroad has not reacted to the detriment of
her

usual

with

and restrained optimism.

outlays for industrial materials, machinery and related
investment goods have accounted for most of, the re¬

purchasing from abroad. Some consumer
good imports have declined also, particularly cotton and
woollen products and North American-type cars and

it is stimulating to

In
just completed the direct forecasts of the most

the year

of further recovery wilLdepend in-large

developments in the United States

1959

note that the business world enters the New Year

nomic

Ambrlif •

A. J. ANDERSON

President, Frobisher Limited

•;

D. W.

age done by

than usual

stimulate

will ;be

v/. •

value of the Canadian dollar which

customary

result of the special* meas¬

taken

they

of course, be possible that
financing which is now
in Ottawa will lower the

operations, accompanied by

-.S

■.

The strength

been

deficit

the

partly due to the1 record carryover of un¬

finished houses and also as

Imports into Canada, on the basis of figures available
to date, are about 10% lower in 1958 than in the preced¬
ing year. A more moderate pace of industrial actiyjty, fn
Canada and reduced outlays for plant anicl equipment '
have involved widespread declines in imports;'.Smaller

It may,

relatively high level of unemployment. Nevertheless,

this winter,

States.

operation,

in 1959.

number of industries

construction activity is likely to be higher

has been relatively moderate when considered in rela¬
tion to the decline in industrial activity in the United

full

this, in turn, is having/ a favourable effect upon

winter slow-down in outside
a

when all the wage rate in¬
and freight rate increases are

parent

that the full impact of market demands are

industry will be higher in

than

The cost squeeze will be very ap¬

broad segment

lying improvement will be masked by the

principal forest and mineral export commodities. On the
whole

earnings. In the months immediately ahead this under¬

number of Canada's

appears

and

in the value of exports of the foregoing items

have roughly

drawing down of

it was in 1.958, it is also
entirely unlikely that the industry's
earnings will be any higher.

end. In the first part of

Operating levels are rising in

farm implements to the United

States have been substantially higher during 1958. In¬
creases

being reflected in new orders at the producer level.

exports during the past year. Among Canada's more tra¬
ditional markets, sales of

1959

from one trade to another. On balance, however, it

vary

goods, deliveries of military aircraft to

coming to

quite prevalent throughout

Canadian

proaching the $20 million level. Within the category of
manufactured

and paper

reflection of this improve¬

tendency to meet orders by

stocks was

jmission line the export value of this item is fast ap¬

now

AMBRIDGE

While it is entirely likely that the
output in tons of the Canadian pulp

expansion in

further

ment and also contributing to it is the fact that inventory

billion dollars annually. With

of one-quarter

in excess

indication of

market demand. Partly as a

Among Canada's newer exports,.sales of uranium have
risen

strong

however,

President, Abitibi Power & Paper Company, Limited

production to date has been quite moderate. There is.

the $100 million mark

value of this item has surpassed

of 1958. In aggregate terms the pick-up in/

by the end

in total.

programs

and the speeding-up of existing ones. In the
is likely to be a further filling

situation there

current

out of business investment intentions affecting the short
as well as the longer term.

Meanwhile, outlays for institutional building and pub¬
lic projects are continuing to increase. In aggregate, cap¬
ital spending in 1959 may be only slightly less than in
the

current

year.

A further

rise

the

proportion

total outlays spent on building construction, as opposed
to engineering construction and industrial equipment,
appears

probable. This

means

of the program will remain

that the domestic content

relatively heavy.

interest in durable goods, particularly automo¬
biles, sales of which have been lagging in the last two
years. Also the rising volume of housing completions will
give further momentum to the upward trend in pur¬
chases of home appliances. New incentives to buy will
be reinforced by the improved financial
position of con¬
sumers
and the continuing rise in personal incomes.
sumer

conditions

augur

well

for

the

enterprising

re¬

All in
ditions

all, the current improvement in economic
is

proceeding

con¬

sound basis. The upward
moderated, but employment
prospects are improving and purchasing power at the
disposal of the wage earner is being maintained. Prices
of materials have firmed, but with capacity being ample
on

movement of wage rates has

have

its

re-asserted

predominant/ control

the

alties but, by and large, the process of economic
has achieved the necessary result, weaklings

business

selection
and the

opportunists have fallen by the wayside and economi¬
cally sound enterprise t invigorated • by an invaluable
breathing spell, is gearing up to resume the climb to
higher and more stable ground.
In retrospect it is obvious, therefore, that far from
being calamitous the period through which we have
just passed has provided industrial enterprise with a
much-needed opportunity for critical self-appraisal and
vital

re-orientation

outlook.

Valuable

lessons

have

Cogninance has had to be taken of basic

precepts, all but forgotten during the hectic
The return to the highly competitive
market has cultivated an
increasing conscsiousness of the essentiality of careful
cost control and high productive efficiency.
Perhaps the most significant outcome has been the
clear-cut demonstration of the vital necessity for labor

business

postwar

years.

situation created by a buyer's

and

the
of

management to work in ever closer collaboration for
good. In fact, the very continued existence
North American system of free enterprise will

common
our

depend increasingly on the sympathetic cooperation of

industrial team.
unprecedented threat
in the subversive economic warfare being waged by the
Communist group. The rapidly expanding productivity of
Russia
and
its
satellites, which benefits from the
all the factions which go to make up our

tailer.

not

surged upward. At the same time, output in
industrial establishments is moving closer to the
optimum level of plant operation. These developments
should help to some recovery in business earnings. The
market forces which have been described give promise
•of a progressive increase in physical
demand, yet give
little indication of an upsurge of boom proportions. In
the continuation of such a balanced improvement lies the
hope of achieving prolonged and steady growth.
many

the

been learned.

Perhaps the sharpest impetus to demand in the period
immediately ahead will come from the consumer. This
new punch may be sparked by the
resurgence of con¬

These

Over

overtaken

Free world industry today faces an.

employment of near-slave labor and accounting practices
geared to political expediency, is a matter of grave
current concern in many of our most important fields
of

industry. If these latest malicious stratagems are to

nullified, and our system of free enterprise be sus¬

tained,

best

the

concerted,

effort of-each individual

harmoniously

required.
At

this

thanks to

cooperative

in American industry will be
'

New
a

Year

let

us,

each

one,

give

grateful

kind Providence for the blessings which we
"

.
.

Continued

page

Volume

Number 5816

189

The Commercial arid Financial Chronicle

CYCLICALi INDUSTRIES

Helpful Investment Guides

.Superior

By WILLIAM L. WARNER*

client with the general suitability
of a* particular group of industries
his purpose, whether it be

;

TGroiyrtlt:>,/ <??

Aircraft

Missiles

Dean Witter & Co;, Investment Bankers

Good Growth:

Mr. Warner

series of guides for attorneys who are
their clients abdut. investment. Drawing
upon his business and academic teackii^ experience, he pro¬
vides a portfolio planning, sheet which classifies potentialities
of industrial groups as stable, average and cyclical, and, in
turn, subdivides them into superior, good and average growth.
He also presents a composite list of industries believed to have
a
superior outlook and suggests,, as the final step, use of
brokers as "expert witnesses'- in selecting particular companies

provides

Air Transport

catted upon to advise

Goal "*

7"\
.* "

Fertilizers
"

to the balance of the market.

Auto" Harts
•

two,

■

have

composite list of industries
by various sources to

superior

Average Growth

;

the

capital

Stable

Utilities

;

—

Banking

such

One is to identify
industries, which
historically have been appropriate
ablutions for his investment prob¬
lem whether it be provision of
income, capital gains or freedom
frbm worrisome
price fluctuaperson.
for/him- those

dt is appropri-i
.ate that

few.

should

words

be devoted

•

investment

•

Meat Packing 7
Motion Pictures

Stock

Stores^ r; '-, • ^;V >
^
Note:Area growth aridcompany;
position in the industry. (whether,*

before
see
;

us,

their

what

begin

issue

recent

;and

should

the

Financial

plexed

for

'declines
■

the

likely to be

seems

sized
-

the

1917

future.

the

gov-

charts

given

stock

bought

price bulges

the

issue

investors

basis

are

than'

;

would; require.
are

client

;

Details

Glass

■

Fahri/io+nrc

-sdS'pSJ'Vegetable Oils"
®-?

;

which

owns,

substantial income
a

talk

Stanislaus
Jan. 5,

Warner before
Bar Association,

Mr.

County

1959.

Dominick

Textiles

Dominick

MONTREAL

TV; Broadcasting

VANCOUVER

VICTORIA

MEMBERS NEW YORK, AMERICAN

Average? Growth:
^

of securities

Calif.,

Flat

ITotol

-.available ^

perhaps about the investment
lump sums of capital from

*From

the

./Machinery

MEDICINE

Apparel

REGINA

HAT

MOOSE JAW

SWIFT CURRENT
*

PRINCE ALBERT

SASKATOON

Brewing

;7l Highway -Transportation "J,

seeking advice is
more likely,
however, to be won¬
dering about the handling of a

•

Fertilizers

which

Containers

.777: |q

Chemicals and Drugs 7,

prospectus. One should be.come familiar with, those funds,,
having good records.
'
"7 7

list

Growth:

Atomic* Energy:
"
7 -Building Supply, Paint

They provide

convenient booklets which we

Your

private wire

Good Growth:

not

particularly-appropri¬

of. their operationcall

;

conm^blerdd-Tftyonr^elf• * '^Pi^Mg;and:Puhlishingi7

portfolio
.in

Tire and Rubber
-

span.,of years. indialso accumulating in- y

ate for this purpose.

Conditioning
Equipment
Specialties
Materials Handling Equipment
Oils (Int'l) Petrochemical
Paper and Packaging
Photo Equipment and Plastics
Prefabricated Housing

making monthly or
quarterly purchases. Mutual funds
shares

& Company, 615 Hillsbofo Street.

Averages.)

Glass

; vestments ~by

the

Electric

over a
are

acquainted

RALEIGH, N. C.—John W. Caffey is now connected with Pitser

Air

buying stocks of leading
companies on a dollar-averaging
viduals

have

by stocks in the Dow Jones

Superior Growth:

: alone in

ance

AVERAGE INDUSTRIES

buying

are

companies.

Tobacco

Institutional

r<.

With Pitser & Co.
(Special to The Financial Chronicle)

machine

Telephone

is deferred entirely.

That this practice will flatten the
peaks and fill in the valleys' of
stock price charts is obvious.

tool

Variety Store

"cheap"

—

Soft Drinks

; whereas only normal amounts are
in

Nat'l Gas Distribution

company

becomes

equipment

Baking, Dairy, Foods
Banking

earnings. Thus, institutional buying tends to be increased when
a

CITY, Fla. —Southland
Holding' and" BrokerageCorporation is engaging in a securities
_

Distribution

Average

stock

than

to The financial Chronicle)

PALM

....

Once

Water

prices from this
leveling of earnings, but, in addi¬
tion, long-range buying of stocks
by institutional investors tends to
smooth stock price charts even
more

Southland Holding

';,. (Special

whose understanding of the mar- become the leaders of the next. Scribner, Secretary-Treasurer,
ket is undeveloped. It will help (For documentary evidence of

Natural Gas Products & Pipes

empha¬

:
"

grouping of im- the novice to see differences be- this I refer you to the various
position one can tween utility issues, for example, stu1?1i.e®
industry performance

Electric Utility
Insurance

and

cycli¬
downturns
in
the
private
sector of the economy—by action
in the public sector—the possi¬
bility of longer declines in cor¬
porate earning power is slight.
Not only do I observe a leveling
.

_u.

Good Growth:

eminent continues to offset

■

Finance

cal

effect

per-

"Portfolio

the

Grocery Chains

than in

years

far back

Superior Growth:

say
is that the
going to have smaller

future

the

for

orie

STABLE INDUSTRIES

This trend has been in

past.

evidence

Planning Chart

will

where

stability.

cially the Industrials—sell higher."
I

client

was.

wrong in my forecast a year ago,
the Dow Jones Averages—espe¬

What

: areas

stocks of that industry for growth,

Commercial

practice. Mr. Babson writes "I

averages are

Planning Sheet." This chart, described below,
contains nearly

be?

Chronicle, Roger and
the folly of this
7

shows

Babson

number

X am not going to every industrial
probable future level portance. By its

with,

forecast the

...

Aid

which decides the investment pattern. When asked for investment
advice

o|faih£ ?

in gory. Attention must also begiyeiF-.mupb lower these groups are than

dominant

lems.

William Warner

thinking

yester¬
(at the

high of the year} but it often, pro¬
vides a more satisfactory longterm. result. Attorneys are well
~
aware that speculative advice and
—18
—16
prudent counsel don't go together.
—21 : Therefore, if you do advise your
v
t
clients about investing, I counsel
show how you, let it be prudent!

they
and

of ten

those

active stock

—2<h

to position in the cycle (level of the general market. Each industry
stock prices and business gener- WouldT have to sell higher by the
earning power, book value and aliy), and to industry positipn, indicated percentage to occupy its
organization can be currently pur- notably the level of industry sales "normal" position in the market.
chased at a reasonable price. We within the industry cycle.
Needless to say the market alhave aids for each of these probThis chart can be only an ap- ways has some groups "ahead'V
in

work

with

the purchase- o£*

day's most

industries

appropriate

will

—30

cheapness

relative

both

not afford as much entertainment

-<60

order that he might put his money

lawyers
or
with bankers

the

depressed

for one's investment dollar. It may

marginal) can shift •
■
Metais
;
" frt«c:
of a holding into an adjacent cater -7 The> index figures

—21

; SpeciaRy

______

The other is to advise him

those

many

consult

show

that

Ex-

-change
-

tions

- -

—;—

wise choice

is one way to get book val¬
working capital,, and general
investment quality in exchange

—20 ;

Textiles .——
v'„
Cyclical Groups
Machinery

7-oi/y1

Railroad Equipment

■

theory. Bur- '
veys by the

—17

Rayon

;

ues*

Retail Trade-—
.

his

groups

Average-

;

earn

command; With these
materially

Purchase

counts.

Floor Covering, Furniture
Mail Order
'
7
'

can

values

aids I believe you can

Groups

Chemiqal
Two things can be done to help

investment

the

assist him to

^ i

Agricultural Machinery

have an-equal opportunity to advise investors;

selection

the

course

the income he

an(j

showing the
industry.

position

ested

outlook fop 1959

Radio-TV, Appliances
7 7 Truck Mianulacturing
Shipping, Shipbuilding

brought in as "expert witnesses."
Your client, if he be an investor
rather than speculator, is inter-

believed

Machine Tools
Non-Ferrous Metals
Railroad

do this I refer you to aid number

,' 7
,

0f the particular companies whose
growth, stability or cyclical flue- stocks are to be purchased. Space
tuation potential, there remains does not
permit a discussion of
the problem of
^helping him to se- how you might do this—indeed
lect those which are also "cheap,
this probably marks
the point
or
reasonably priced in relation where we brokers must be

Manufacturing

Helicopters

step in advising your

The final
client

for

Aluminum and Light Metals

Manager, Modesto, California, Office
-

(553)

PRAIRIE

KENORA

CHATHAM

KINGSTON

KITCHENER

BRANDON

GALT

PORTAGE

ST. THOMAS

SIMCOE

MEMBERS

LEADING

Gold

Milling
Shoes

Sugar

BARCLAY 7-4600

LEAMINGTON

.Confectionary
Drug Chains

CANADIAN

COMMODITY

TORONTO STOCK EXCHANGES

ALL
STOCK

EXCHANGES

AND

WALL

STREET

NEW

YORK

The Commercial and Financial Chronicle

(554)

Continued from page 20
enjoy
Let

each

members of this North American community.
take

the firm resolve to

make

the

maximum

personal contribution, physically and mentally, during
1959 and the years to follow, to the end that we and
our
children may continue
to savour, to the fullest
possible extent, the enjoyment of this

way

of life.

Thursday, January 29, 1959

Volume

188

Number

5816

The Commercial and Financial Chronicle

(555)

is 3.3% and the

Public

Utility Securities

At the

latter

price, the yield

District and in Westchester
County
excepting its northeastern
por¬
tions; gas service in the Boroughg

price-earnings ratio 20.
Revenues

recently has been af&und 40.

-Common Stock Record*

Manhattan

and

The

Bronx, in

(Millions)

Earnings

Dividends

Price Range

$70

$2.00

$1.32

39-25

1957_

1.85

1.20

26-22

1956

1.64

1.10

28-23

steam

1955

1.70

1.10

26-23

hattan.

•1954

1.63

26-20

company's

23-17

derived

20-16
17-14

approximately 15% from sales of
gas and approximately 5%
from

16-13

sales of steam.

1958_

By OWEN ELU

Carolina Power & Light Company
Carolina Power &

Light

serves

nities in North Carolina including
and Goldsboro;

-.important

area

Cotton rand-tobacco

-2-

:: 1951

but industrial activity has.been gaining rapidly.

crops,

1949____.
3948

V* chemicals and food products.

company's

1957

...

0.95
0.95

0.99

6.99

1.22

1.50

i.4o

«45

1950__J.

1.00

1.39

are

1.47

19521-w-.l—

I?Products incluoe :textiles, ielectronics, munitions,v;b6ilers, ^^paper, ^
'The

—

1953

supplied at wholesale;

are

2,000,000.

over

commu-

Asheville, Wilmington,. Raleigh

municipalities

Some 24

.Population in the

•

electricity to about 200

Year

0.95

•

the

♦Adjusted fo* 3-for-J

stated:

Pteport

''Fortunately

the

spHt in 1»54 and 5%

stock

dividend in

1»5.T.

area

V industries
■-

new

industries and expansion of existing

announced for the

approximately 50%

during 1957- showed

area

the preceding year.. Much of the

over

'^dustrial development is in the Tidewater area. --f'

-.P.*

In spite of the increase in industrialization, only about 22%

revenues

•J ing).

are

Con Edison Offers 4%

industrial (over half are from textile manufactur-

Residential and rural business contribute 47%, commercial

>f17% and• wholesale 9%.. •'%%<'y v.:
p - ' About 18% of output is generated by hydro, and with efficient

the

payment

$53,000,000
notes, and

estimated

short-term

the

?)DebSk to Stockholdersi payment: for

in-

new

'V''

;-V4

gain of

balance

additions

bank

toward

capacity residential rates

are

In connection with the

the

was

and average residential

average,

gram

tures
for

the

national

usage

months ended Sept. 30,' 1958, usage increased 396 kwh.

•j with

gain of 260

amount up

kwh.

in-the

to 4.839 kwh.

;

1957)

year

/•■.%-

vi,000,000

kw., of which

211,000 kw.

new

was

187,000 kw.

at the 1957 year-end

was

hydro and

175,000 kw. unit

new

additional

estimated

the

earnings. About 70% of higher

months

ended

debentures

are

convertible

1959-63.

years

This

in¬

O'Hara

amounted

•

The

company

1957 and

•

of 1957

expended

over

comparable amount

long-term debt

14%, and

;

the

y'y •'•;

Harris,

become

Upham

Avenue.

formerly

associated

common

was

stock

An underwriting group

•:

First

The

underwrite

the

Boston
offer

headed

Corp. will
which

will

Feb.

13, 1959.

and

distribution

Queens

excepting

the

members

the

New

York

Rcckavny Midwest Stock Exchanges.

* '<■' ■

At the end
y

The

sold $20 million 1st 4V8S of 1988 in March, 1958, which
had the effect of reducing the equity ratio moderately.
However,
the latter should still compare favorably with the general
average.
the

table below,

than

company

3,000 tons of ore per (lay

•;

'•••*.'

over

revenues increased at the rate
the previous period, despite some decrease in industrial
the first half of 1958. However, for the September

revenues

quarter,, industrial sales made

showing, considering the loss of industrial business in the first
half. However, the company was probably favored
by good hydro
conditions; operating expenses (other than maintenance, deprecia¬
and

taxes)

increased

only 1% during the 12 months ended
Sept. 30, indicating fuel savings. However, indications were that
hydro was less favorable in the month of October than in the same

'L
r

Highlight
'

' ■.

•

- •

in Canada

7/ x;
-

ALGOM

January has advanced to

URANIUM

NORTHSPAN

MINES

URANIUM

LIMITED

MINES

LIMITED

ALGOM "NORDIC'

3,000 tons of ore per day

MILLIKEN

LAKE

URANIUM

MINES

LIMITED

yyyyys/sssssss.'.
^.y'yyyr///yy/yyy/y//yy//y/yyy/y/yy//yyyyyyyyryyyyy-\

V/&y//s&&$8' '"'v'""

PRONTO

•'•••••••••••'

month of 1957, and the calendar year earnings were lc lower than
for the 12 months ended September.
The stock in

•

improved comparison with 1957.

lent

tion

The Rio Tinto Group

tripled in price during that period.

Share earnings for the calendar year 1958 were $2 compared
with $1.85 in the previous year, a gain of 8%. This was an excel¬
-i

In the 12 months ended Sept. 30,

of 6%
.

Uranium Mines

ALGOM "QUIRKE
•

the

has enjoyed a
favorable growth record with revenues increasing 133% since 1948.
Share earnings have more than doubled and the common stock has

;

indicated in

URANIUM

Combined capacity

MINES

LIMITED

largest in the World

high of 41% and

new

The Rio Tinto

Mining Company of Canada is managing
production today represents
60% of the current output of the famous Blind River

companies
some

NORTHSPAN "PANEL'

CANADIAN STOCKS

3,000 tons of ore

per

day

Buffalo,

Chicago,

Cincinnati,

Philadelphia

Cleveland,

and

Detroit

in Northern Ontario.

6.000

the

seven

many

an overall cost of $200,000,000, and
possessing vast ore reserves, the uranium producing mines
and plants of the Rio Tinto Group are today one of the
world's great assets in an age of nuclear power and promise.

NORTHSPAN "LACNOR"

PITTSBURGH

3,500 tons of ore per day

ZENITH 0210

—

area

Brought into being at

Louis

St.

ENTERPRISE 6772

JAMES A. TRAVISS

More than

already
live with their families in new homes and apartments in the
fast growing-Jownsite of Elliot Lake, a modern municipality
based entirely on the district's uranium development.

WALKER 5-1941-2

Milwaukee,

—Algoma

whose uranium

men are
now employed
major properties of the Rio Tinto Group and

NEW YORK

Boston,

MGR. U. S. DEPT.

S. J. Brooks &

Company

Members

The Toronto Stock Exchange
185

BAY STREET

TORONTO 1

NORTHSPAN

"Spanish

2,000 tons of ore

per

»•

KANSAS CITY, Mo. —Edward
engaged in the genera¬
tion, manufacture, purchase and K. Owen has joined the staff of
sale of electricity, gas and steam.
Barret, Fitch, North & Co. Incor¬
It supplies electric service in the
porated, 1006 Baltimore Avenue,
Boroughs of Manhattan, The

company

Barret, Fitch

(Special to The Financial Chronicle)

The company is a public utility

fThe proceeds from the sale will Bronx,. Brooklyn, Richmond and
be applied by the utility company

Joins

system, additions.

43% of capitalization, preferred stock

(5,330,000 shares outstanding) 43%.

915?

O'Hara

Vice-President

budgeted for 1958.

Co.,

Mr.

The

transmission

■

expire at the close of business

CITY, Mo.—Benjamin
has

$22 million for construction in

was

Authority subway systems. the bond department of Com¬
major expenditures for elec¬ merce Trust
Company, with which
tric plant would be $465,000,000
he had been associated for
payable by surrender of $100 of for
many
turbo-generators and associ¬ years.
debentures and $22 cash in ex¬
ated equipment and $449,000,000
change for two shares of common for

and
>fc

serve

Transit

through automatic adjustment clauses in rates for larger industrial
•

Oct.

revenues

costs resulting from increased unit prices for coal are recoverable

and commercial customers.

electricity,

■,

KANSAS

was

";j jointly by Morgan Stanley & Co.

equipment should reduce the amount

with resulting favorable effects

revenue

(Special to The financial Chronicle)

$1,000,000,000

City of New York which

The

972,000 kw.

was

Man¬

Harris, Upham & Co.

which will involve expendi¬

Baltimore

stock.

of purchased power and presumably will benefit overall efficiency

•

•?
•

added in mid-summer 1958, bringing total

was

The installation of this

Ben H. O'Hara With

proposed

with

was

available through purchased-power contracts.

available power to 1,386,000 kw. Peak load in 1957

(compared

bringing .-the annual

Net capability of generating plants

part

1957.

cludes the proposed acquisition of

stock then held.

and after May 1, 1959 at a conversion ;i price
of $61 per share

During the 12

average.

year

three power plants owned by the

common

above

sales

company

shares of
-

43%

the

amount of debentures for each 25

low and usage high.

20%»below

operating

from

the

financing the company reports it
is engaged in a construction
pro¬

•

4,539 kwh.

Approximately 80% of the

$571,502,000 and net income appli¬
common stock to
$54,404,000, compared with $552,669,000
and $47,121,000 for the calendar

plant after Nov. 1, 1958.

^ Consolidated Edison Co. of New

York, Inc. is offering the holders
v of itsj common stock of record Jan.
•26, 1959 rights to subscribe at
100%"? for $59,609,500 of 4% con¬
vertible debentures, due Aug. 15,
•'
1973,: at the rate of $100 principal

f Jn 1957 average residential revenue per kwh. was only 2.05c, about
-

utility

;!• steam generating

Wards

cable to

'served by the company is blessed with tremendous possibilities for

L; growth.;,Investment in

Third

31, 1958, total operating
of

service

For

15-13

and

populous
parts of Westchester County; ancj

16-13

;

First

Queens and in the

American'

day

THE m TINTO MINING COMPANY

MILLIKEN LAKE URANIUM

3,000 tons of ore

per

day

PRONTO URANIUM

1,500 tons of ore per day

Of CANADA LIMITED » 335 Bay Street l&rafito.

and
;

The Commercial and Financial Chronicle

(556)

secondary manufacturing plants are

industry during 1959, but believe that
spending for equipment to make operations more ef¬
ficient will be at a higher level than during the previous

vate enterprise system,

year.

provided under pri¬
has been successfully introduced
into British Columbia during the last few years adding
incentive to new plants for such local manufacture of
The past year, on

and paper
been

sumer

industries had a much better year than had
expected. Prices and .markets remained very com¬

petitive, but production arid sales were satisfactory. The
fishing and agriculture industries enjoyed a prosperous
year. On the other hand, the value of mining, dependent
as it is upon foreign markets, especially on those in the
United States, declined. As an offset, provincial natural
gas and oil production, showed a marked increase over
the previous year's levels.-;
- ; :
,
.

expectations for the next year, derived from
a survey of corporation executives, are bright.
From all
indications 1959 will be a'year of general improvement,
although somewhat higher, labor and material costs, and
competition may affect some industries. The forecasts
for the next year indicate investment spending at about
the same level as in 1958 (which was the third highest
in British Columbia's history). Although there will be
no immediate large scale projects outside of utilities, the
construction industry is expecting a high level of ac¬
tivity. Retail trade in 1958 was at its highest level yet
and the total is expected to go even higher next year.
Business

Thus the prospects for the

economy

of this Province

look promising in 1959. The year will see

consolidation

gains and channeling of surplus resources into most
effective use. Theije is an atmosphere of confidence
of

business leaders of British Columbia, and the
government, for its part, strives to create a propitious
environment for the growth and prosperity of private

among the

enterprise, be it large

small.

D. BATEMAN

President, Sarcee Petroleums Limited
The

past year was highlighted by frustration, declining
markets, and uncertainties for the independent Canadian
petroleum company. At the beginning of 1959, however,
we can look forward
to improved sales of both crude
and
natural gas with much more
T
confidence than we have been able
|
to
generate
during the past
12
months.
for

ket

The Pacific Northwest
crude

competition

lost

was

prior

mar¬

the voluntary
U. S. restrictions on imports of for¬
eign oil. The preliminary report of
the Borden Royal Commission threat¬

berta to Montreal.

Despite these discouraging events
J. D. Bateman
exploratory drilling continued at a
high level, resulting in important
new oil and
gas discoveries that will stimulate develop¬
ment drilling in Western Canada throughout 1959. The
new 60:40 profit split decreed in Venezuela is estimated
to give Western Canadian crude a competitive
advantage
of as much as 70 cents per barrel in the Montreal refin¬
ing area, thus greatly increasing the incentive to con¬
struct a $350,000,000 pipeline 2,000 miles in length.
The completion of the Trans-Canada
gas pipeline to
eastern Canadian markets has initiated revenue from

growing

natural

gas. reserves

that

have

been shut-in for many years. These
conditions, and the
anticipated Borden Commission favorable recommenda¬
tion

may

the export of natural

well

revitalize

during the coming
The economic
real

canont

nomic

survival

the

to the United States,
Canadian petroleum industry
gas

year.
a

overestimated
of

the

crude pipeline to Mont¬
in considering the eco¬

western

Canadian

independent
producers. A large part of the exploratory stimulus is
provided by this group of independents, Who must find
markets for their oil in the face of
comeptition of the
alternate foreign sources of the major refiners.
The greatest

plea I should like to make at this time is
necessity to integrate the North American crude
supply in the common interests of sensible economics
the

and
U.

national defense.

S.—Canadian

Sensible economics—because

the

boundary

transgresses natural trade
supply routes. National defense-—because, in an em¬
ergency restricting sources of off-shore oil, our survival
depends on the integration of continental sources of
petroleum products. No one action in 1959 Could do more
to integrate the North American
petroleum industry
and

than the abolition of restrictions and duties
oil across the international
boundary.

pipeline

increase by about 5%. On the west
coast, management
will have great difficulties
dealing with a more aggres¬
sive and dissatisfied union
management, and the
pros¬

lengthy strike about the

middle of. the year.
-We do not anticipate an appreciable increase in

'ij

recovery

The sustained and

upward'tre^df ~

business " in

the

also exert

beneficial effect

States

United

will

portion >
of this gain should be in real terms. ;
.

started

second

continue and

substantial increase

rise

prices for

in sales of tires for

oil

It is

President, The British American Oil Co., Ltd.
Canadian

petroleum industry has

come

through

the roughest year in a decade in surprisingly good con¬
dition although the short-term outlook for

finding

markets for crude oil

still hazy and

new

product prices

continue to remain under pressure.
This year, however, an increase of about 5% is fore¬
cast in the sale of petroleum products, and crude oil pro¬
duction is expected to rise about 7%.
Production of
domestic crude is expected to reach 175 million barrels

during 1959, regaining at least half of the volume lost
since the 1957 peak.

over¬

unfortunate that the oil

States

and

As far

Canada's

production

bulk markets

reduced

connection

cannot

concerned, these

New

capital investment in the petroleum industry fell
1957 level as exploration and development
activity slackened in Western Canada. A further decline
in the overall capital expenditure program may occur
in 1959.
It is hoped, however, that the Canadian Gov¬
ernment will soon clear the air with respect to natural
gas exports and the proposed National Energy Authority
so that the
industry's expansion program may resume
its normal pace.
:
: ;
■
'
:
Canadian petroleum consumption is expected to rise
by some 6% in 1959 as our economic recovery continues.
below

the

With somewhat firmer

prices for refined products, the

industry's earnings position should improve consider¬
ably. Producers can also look forward to an increase
of about
10%
in Canadian crude demand resulting
.

mainly from

new

refining capacity installed in Ontario,

In conclusion, 1958 was a year of
Canadian petroleum industry, but

adjustment for the
prospects for 1959
are encouraging and the long-term outlook ig particu¬
larly bright. Our population growth and the rise in our
standard of living are the main factors pointing towards
rapidly increasing domestic energy demands. The avail¬
ability of large, economical supplies of crude oil and
natural gas make it plausible that these two sources of
energy will play an important role in satisfying grow¬
ing domestic and export requirements.
N. R.

CRUMP

President, Canadian Pacific Railway Company

During 1958 the volume of railway traffic in Canada
adversely affected by the recession. Liquidation of
inventories, substantial declines in investment in new

machinery and equipment, and the drop in

can

of weakness

latter half of 1958
consumer

be found.

tions.

large gas lines as the Westcoast and Trans-Canada, as
well as the big Alberta and Saskatchewan gas grid sys¬
tems.
Pipe line construction for 1959 is likely to show
a decline in spite of a greater volume of small construc¬
tion jobs for local distributing systems, especially in
Ontario and Quebec,
At a time when oil production in Western Canada is
lagging well behind the producing potential, natural gas
appears to be a birghter spot on the horizon.
Gas pro¬
duction in 1959 should increase to 500 billion cubic feet,

factors

in the

decline in

con¬

spending, which had a marked
effect on the sale of automobiles and
household appliances. In trade, de¬
pressed conditions in the United
States outweighed gains in wheat
and uranium exports.
Sources of strength which contrib¬
uted to the moderate recovery in the
sumer

the only phase in which

in the first half of the

year. Other adverse
first half included the

year

volume

non-resi¬

dential construction were all factors

the trend

should stay above 12,000,000
drilling and could exceed
13,000,000 feet with any moderate increase in comple¬
on

this

duction.

the

was

gas,

Footage drilled this

adversely affected in 1958 by the world-wide
petroleum prices, the squeeze on operating
margins and the reduced revenue from crude oil pro¬

accumulated

Any increase in 1959 will be dependent

feet

role

were

of oil markets and whatever action is taken in relation
to the export of natural
new

proportion¬

weakness in

industry's hardest-hit
segment during 1958, falling off 14% in the first three
quarters of the year from the same period in 1957.
It
appears that for 1958 total well completions will be
somewhere between 2,400 and 2,600
wells, for a reduc¬
tion of about 15% below the 1957
figure of 2,962 com¬
pletions.
1

large

Province

import program of the

the industry's earnings are

off.

oil

the

than their

overlooked.

in
1957
have
largely been
However, the prevailing world surplus of
crude oil will probably continue to affect
profits ad¬
versely into 1959.

Crude

was

Throughput at Canada's 44 refineries during 1959
should improve moderately over 1958, since excessive
worked

Producers

forced to bear

supplies to satisfy growing U. S. requirements in the
long run is clearly of major importance to the United

The

conditions.

were

United States continues to disregard trade and defense
factors which suggest a different type of treatment for
Canadian crude. The. availability of dependable crude

BROCKETT

Campo

ate share of this decline.

some

E. D.

market

Alberta

too much in the recession

firmly believe that the Canadian Rubber Industry can
face these adjustments, meet these problems and
give a
good account of itself in the coming year.

A. F.
oil

production dropped by
9% in 1958 to 453,000 b/d as a result of lower export
demand caused by U. S. import restrictions and world

prices is anticipated in 1959, al¬
of the industry's products did
period and need to be
improved. Such factors as higher wage rates and the
recently authorized increases in freight rates will inten¬
sify the "cost squeeze." Thus, while forecasts indicate
erode

For the year "

Crude

months.

though

when

again in the y
economic condi- !

1957.

The market for industrial rubber products is provid¬
ing a steadily increasing share of the Industry's total
production. Although there has been a general improve¬
ment in industrial activity for the last quarter of 1958,
at present there is little indication of any major increase
in capital expansion or development projects. Conse¬
quently, only a modest improvement in the sale of in¬
dustrial rubber products can be expected for the next
marked

climb

whole, domestic demand aver- '
aged 755,000 b/d, a gain of 2% oyer-

twelve

half

^tions began to improve.

original equipment is anticipated.
Nineteen Fifty-nine promises to be a good year for
automobile sales in Canada and public acceptance of the
1959 model automoible appears to justify the confidence
that tire sales, generally, will show a marked improve¬
ment.

Domestic demand for

-petroleum products followed the'.
'^(Jowriswihg in; bu siness activity
^through the first half of 1958 and

overall increase in the >
manufacture of. rubber, products comR. C. Berkinshaw
mensurate with an expanding mar¬
ket. The growth in replacement tire
sales which was evident in the past year is expected to
tieipates

•

\-tne: economy.

the

Canadian economic scene/>>
The Canadian Rubber Industry an-

The major

cTbe Canadian petroleum industry ;.
3 waVriot immune to fluctuations in ^

equip¬

The scarcity of major oil pipe line construction in 1958
made than made up for the construction of such

President, Western Plywood Co., Ltd.
|
We anticipate that the volume of
plywood sold in 1959
will be equal or slightly less than in 1958. Prices should

billion.

was

JOHN BENE

pects are that there will be

jTrate/:Pur Gross National Product is

^"expefcted ta rise by about $1 V-i billion ^

be expected to influence ;
in 1959.
■1
;*

inventories

necessity for

ephtiriuabce Of recoV- moderate improvement df ~

may

Nineteen-fifty-eight witnessed the end of the worst
Canada and the beginning of a
somewhat hesitant recovery.
Prospects are that our
economy will continue to expand in 1959 on a broader
front, though not at a spectacular

ensure

and

CAMPO

postwar recession in

inVCn^ry'^liquidation.'

investment in machinery and
ment

supply and demand will continue to enforce necessary
adjustments throughout the entire field of industrial en¬
deavor and the problems of unemployment and the dan¬
gers of inflation will continue to plague us. However, I

regulatory powers
over the Canadian petroleum indus¬
try, and the major refiners were
unanimous in their opposition to the
proposed crude pipeline from Al¬

susbtantially

ery

o f;;

end

should

Qovernmjept ^yendiiigapd

A. F.

President, Canadian Petroflna, Limited

To sum up, it seems likely that 1959 will be a
year
of further consolidation in which the realistic forces of

excessive

ened

and

that in 1959 the Canadian rubber industry will have the
highest dollar volume of sales in its history, the trend in
net earnings will probably be downward.

offshore

materially in overcoming the present temporary decline
earnings caused by restricted markets for crue oil,
low realizations from sale of products and higher oper¬
ating costs.

C.B.E., LL.D.

Although the overall rate of growth in economic activ¬
ity will be appreciably less than that accomplished in
the 1955-56 period, in my opinion there will be a gradual
acceleration of the recovery trend which began in 1958
and a general increase in business
activity for 1959. High levels of con¬

drop in production, industrial sales, and capital invest¬
ment, but there was strength in the forest industry. With
the exception of logging, the lumber, plywood and pulp
a

Thursday, January 29, 1959

'J '

President, The Goodyear Tire & Rubber Company
Of Canada, Limited

the whole, has been a year of con¬
solidation for the Province's economy. The North Ameri¬
can recession was reflected in British Columbia through

\''

;

C. BERKINSHAW,

and aluminum products.

copper

'7:v./

due-to the markets to be served by Trans-Canada Pipe
Line. Income from gas and gas products should assist

all capacity in the

Continued from page 22

Crump

jmclude increased

spending for non-durable

goods and services, new investment
in the public sector of the economy,
and
the marked increase in new

housing under the stimulus of ready
availability of mortgage funds. Indications suggesting
that liquidation of inventories may have run its course
may also be regarded as contributing to recovery from
the recession. Another source of strength apparent in
recent months has been the degree of recovery evident
in the United States economy.

Despite the severity of the recession, which consider¬
ably reduced car-loadings on North American railways
and which affected other aspects of transportation as

well, Canadian Pacific continued to manifest its confi¬
dence in Canada's long-term outlook by advances de-

.Continued

on.

page

Number 5816

Volume 189

The Commercial and Financial Chronicle

(557)

directors.

Canada's National Aspirations
By IAN F. McRAE*
Chairman of the Board,

Canadian General Electric Co., Ltd.
Canadian Manufacturers Association

President,

In blunt terms, but
better

without blunting

strong desire for still

Canadian manufacturers' spokesman
decries what be terms as our "contemptuous disregard" for his
country's sovereignty in pleading for non-discriminatory trade
treatment and closer economic partnership between the two
countries. Mr. McRae points out that Canadian oil, raw mateV-.'i:' rials and manufactured goods are virtually excluded by our
V;
high tariffs and quotas, yet U. S.-controlled firms account
friendship with

us,

•

We .*

constrained

United States Indifference to

caprice.'

Nevertheless,- we feel
at: this stage in "our
history '.to emphasize
that
the
share of our national development
is directly attributable to
capital must at all times be

term

in my
in the

reference
up

words:

."America looks
United States."
Implicit
is

this

often, it centers around Washing¬
ton, which is continually inter¬
fering in one way or another with
operation

Canada,
Mexico,

full-scale

and

important

partner in the
defense

not

only

of the
hemisphere

the

and

true

solutions

prefers

this

outside

Commonwealth
that

and

from

trade

was

exclusion

es¬

the

not

could

contemplated.
I

honestly

believe that closer
partnership
between

economic

Canada

freedom

the

and

latest

all

this

close
,'

freedom

collaboration

stands

continent

free

can

best

taking
look

serve

future

tempt to undermine normal

this

mutual

our

think

discussion by

constructive

for.

trade

our

and

sober

economic

in¬

terests. In the last

tween

countries

two

international

friendships.

friction

However,

occur

can

between the friendliest of cousins

and, in the last few years,
has

been

flow

there

criticism,

much of it one way.

Briefly,

our Canadian feeling
be summed up in the charge

can

that
-does

the

United

States

talks

but

not

always think or act in
hemisphere terms. I would like to
expand on this theme and be a
little more specific.
One distinguished Canadian has
suggested that the time has come

Washington to decide whether

However, there is
Canada

that

the

but

—

taken

not

by
Canadian

—

their

subsidiaries.
proper

to throttle the autonomy of these
Canadian-based companies. If I
have spoken bluntly on this
it
is
because,
like
all

point,
other

Canadians, I want to remove any
doubt that my country's capital

feeling in
economic

pave an avenue

your

far

Canadian Exchanges

■

To Discass

Merger

manufactured

are

been buying from you in the last

few years nearly 14 times as much

hope

are

there

are

simply

what

short-term

strains. I refer specifically to the
United States' surplus wheat dis¬

posal policy and
Canadian

oil.

quotas

your

You

that

say

on
our

grated for common defense pur¬
poses.
We agree—and go along
with you all the way on this.
What

committee

from

not

ask

for

aid,

but

simply

Twin Cities Bond Club

for the chance to trade.
If

summarize

can

reaction

all

this

Canadian

Announces 38th Picnic

a
single
ST. PAUL, Minn. — Thursday,
perhaps that you June
18, 1959, is the date set for
show every sign of wanting to
the annual picnic
at * the Twin
"have your cake and eat it, too!"
Cities Bond Club,; to be held at
In each of the three fields I the White Bear
Yacht Club, White

phrase,

have covered in this brief exposi¬
tion — capital investment, raw

Bear

materials and manufactured goods

Wednesday

Lake, Minnesota.

A cocktail party will be held on

evning, June 17,: at
policy, as we see it, has the Nicollet Hotel in Minneapolis
essentially been one of "going it for visting guests.
alone." It is this and your ap¬
Paul E. Casserly, of the Saint
parent indifference to Canadian Paul
office
of
Merrill
Lynch,
national aspirations which have
Pierce, Fenner & Smith, is Presi¬
inevitably and seriously disturbed dent and Lawrence C. Shaughthose
of
my
countrymen who nessy, Jr., of Shaughnessy & Com¬
think about these things.
pany, Inc. of Saint Paul, is the

•—your

cannot

recognizing
then

that

nounced

the three exchanges would make
such a study, but at: the time some

you have' from
us.
This is
of the members of the Montreal
surely the most telling reason of
Stock Exchange opposed the plan.
all why you should hesitate to
discriminate against Canadian ex¬
ports of any kind. We, in Canada,
as

Ottawa.

economies should be closely inte¬

closer

partnership could

*From

talk

63rd Annual

by Mr. McRae before the
Congress of American Indus-

try soonsored by the National
tion of Manufacturers, New York

to economic union and erosion

seemed

conclude

that

harsh

without

places,

but

thought that this
on

was an occasion
which frankness would not be

the editorial support for Canada's
evidenced

your

own

tossed

irritates

for

the

at, you

many

newspapers.

justification
have

own

brickbats

lies

Chicago Analysts to Hear

CHICAGO, 111. — Dana T.
of Bartholomew, Vice-President and

resented, particularly in view

case

General Picnic Chairman.

have

may

the

chief financial officer of Alumin¬

ium, Ltd. will address the lunch¬
eon
meeting of the Investment
Analysts Society to be held Jan. 29
in the

Adams

Room

the Mid¬

land Hotel.

the

national

our

we
our

Canada

concern

controlled

cannot

that

Associa¬
City.

suppress

United

corporations

States-

should

account for

nearly one-third of all
manufacturing plant sales and for
one-fifth

of
all
employment
manufacturing in Canada.
I would not have you

Practice What We Preach

com¬

petition and world prices.

the

are

rather longer than most

1812,

historic

and her deliberate at¬

arena

.Vt" \

;

us, however, is
of
famous
phrase
of
your
own
independence.
No your failure to carry this desire
for joint action through to the eco¬
Benjamin Franklin — that "we
Form Assets Inv. Co.
firmest base for friendship and, as doubt, magnificent independence
nomic sphere, notwithstanding the must all hang
could
become
together, or as¬
highly
uncom¬
NEW ORLEANS, La. — Assets
the world knows, the friendship
fortable in this half of the century existence of top-level consultative
suredly
we
shall
all
hang Investment
between Canada and the United
Company,
Inc.
has
supposedly
when
designed
two
powerful
ideologies machinery
been formed with offices in the
States
had
its
beginning very
separately."
have torn the world in two, but for just this purpose. Thus, our
International Trade Mart to en¬
shortly after the unpleasantness
That
was
surely appropriate
—even while we recognize this—
oil, which is of great importance

trading

factory
•

analysis, satis¬
agreements
be-

them

And

and

attempt

decisions

is still

vital

with yours

matters that affect

;

ness

growing danger of Russia's newest
and most threatening "cold war"
My country's government is in tactic, her entry into the world

that

impertinence

victimize
certain U. S. companies for busi¬

against the

mutual protection

our

McRae

S.-owned

These perfectly
decisions involved Cana¬
dian
patents
and
they
in
no
I suggest that
simply turning to conceivable way conflicted with
our sister nations
en
bloc is not Canadian law. This
contemptuous
the answer. At Montreal in Sep¬
disregard of our sovereignty is
tember, the Commonwealth itself bitterly resented in my
country,
emphasized in definite terms that We see it as
flagrant dictation by
participation of the United States Washington and a blatant move

free

and

the

some

problems

whether

seek

sential

world, but in
protection
of
an
ideology
embrac ing

rest

the

economic

Canada

Sees Contemptuous Disregard
The

accommodate

can

basic

companies in Canada.

hemisphere. This means a definite
swing to the Commonwealth, but

recognition

that

the

at
in

goods
MONTREAL,. Canada — Mem¬
concerned, the position is even bers of the Canadian Stock Ex¬
considered a Canadian debt and
worse.
Canadian-made
products
change and -Montreal Stock
not outright loss of equity in our
are, with few exceptions, rigor¬
Exchange have under discussion
birthright.
; .r
ously
excluded
from
the
rich a
proposed study of the desirabil¬
What's more, assertion of our
American market by your high
ity of a merger with the Toronto
individual
and
national
rights tariffs. We believe we are entitled
Stock Exchange.
/
does not always turn on the ac¬ to complain about this. After
all,
It
had
previously been
an¬
tions of U. S. corporations. More on a per capita basis, we have

barefaced

| comments is wrapped

•?/J-

Decries Our Tariffs and Quotas

which

U. S.

the

for considerable share of such output.

the, mercy

are

do not realize

heavy
effect

U.
on

S.
our

the

in the event of

gage

aggression against

enough

the

signing

securities business.

approach to other

raw

materials.

Declaration

Independence.

Declaration of Interdependence.

Slayton & Co., Inc.

think that
benefits

investment and its
striking growth, but

the very disproportion of its role
in our economy has caused us to
cock

wary

guests.
more

eye

Certainly,

and

wealthy
know that

our

the added importance of Canadian

subsidiary
companies in Canada are making
equity shares available to Cana¬
dian investors and that the larger
and older companies are tending
to employ more Canadian senior
and
even
a
few
management

Increasing the production and sale of Canadian iron

ore

U. S. and Canadian industry has never been as important
to the entire North American economy. By the mid-period
to

of this
Affiliate of Watt & Watt
6 Jordan

Street, Toronto

half-century, experts estimate, the annual value of
can be in the range of one-half billion
dollars. Most of this will be for export and chiefly to the

this

production

United States.

Members

Long before that date, iron will be in first place
Toronto Stock Exchange

Canadian Securities

Montreal Stock

Exchange

This is the most significant single source of new funds to
Canada's trading deficit and finance' continuing

Winnipeg Grain Exchange

reduce

purchases in the United States.

Private Wires Between
New York

Incorporated
Members National Association

Buffalo
i

of Security

70 Pine

Dealers, Inc.

Street, New York 5, N. Y.

among

Canadian minerals.

Investment Dealers* Assn. of Canada

Watt & Watt

The position of Steep Rock in the industry can be judged
by the Company's present objective — yearly production
of 8.5 million tons from mines directly-operated and under
lease to others, sustainable for several generations.

■

Montreal
Fort William

STEEP

ROCK

IRON

HIRES

LIMITED

Producers of High-Quality Iron Ores to Meet Exacting Requirements.
WHitehall 4-3262

Sell Sytem

V..

Of¬

ficers
are
James
A.
Lindsay,
President;
JosephD.
Lindsay,
Vice-President; and
Robert
K.
suggest to you that it is no less
just another foreign supply and
Morrill, Secretary-Treasurer.
so today when what we need per¬
is treated accordingly.
James A. Lindsay was formerly
And
the same goes for your haps more than anything else is with
Woolfolk
&
Shober
and

North American continent, is
considered by Washington to be
the

Teletype NY

Steep Rock, Ontario—in the Lake Superior Region.
1-374

The Commercial and Financial Chronicle

the increase in

Continued jrom page 24

integrated land, sea

signed to improve its efficiency as an
and air transportation enterprise.

of replacement
using some 9d0
doing about 95% of
its total rail work with this modern type of locomotive.
Further improvements were made to switching yards,
signalling, maintenance of way and other facilities re¬
quired for the efficient operation of the railway. Centralized traffic control was completed on a section of the
Montreal-Toronto line from Glen Tay to Trenton, On¬
tario, to speed handling of traffic with electrically-op¬
erated signals and switches by means of which a dispatcher in front of a control board in Toronto directs
trains into sidings or over the main line by push-button
control. This installation will be extended to link Tren¬
its program
diesel motive power and

diesel units by the year's end Avas

ton with Toronto.

added to its extensive

During the year, the Company

highway operations by acquiring control of Smithsons
Holdings, Ltd., which
company
wholly-owns Smith
Transport, Ltd., Canada's largest trucking firm, and a
number of related companies in the highway transport
business. Canadian Pacific now owns or controls trucks

operating over almost 10,000 route
coast to coast.
1

miles extending from

Piggyback service, the haulage of truck-trailers on
flatcars, was introduced for licensed "for hire" trucking
firms between Montreal and Toronto in October, 1957,
ancf truckers in increasing numbers began to take advantage of this new service, which combines the effi¬
cient mass movement of the railway and the flexibility of

;

the

...

truck in terminal areas.

extend

This service was extended

during 1958 to New Brunswick, to head
into western Canada and plans are now

of Lakes and

under way to
throughout western Canada and to the west

coast.

At the

same

time, Canadian Pacific

continued to ex¬

with

Thursday, January 29, 1959

has enjoyed a

While

recession

passenger

the Company's three

carryings by

The

operating between Canada and the United Kingsatisfactory during the SL Lawrence season,
a world-wide depression in ocean freight rates was re¬
flected in diminished earnings by the Company's seven
dom were

present three liners, Empress

of England, replaced

Scotland as the Company's

the retired Empress of

conclusion

the

same.

Korean

-'V.-'N'' *%'<'•--.c

/ ■

^Recorded statistics show that in recent
of net earnings to sales in the

winter, calling at West Indies
With her larger carrying ca¬
pacity, and being fully air conditioned, this ship con¬
siderably increased the Company's cruise traffic, and
has again been assigned to the cruise schedule out of

be one-third

averages

industries generally,
'

years

an integrated
modern trans¬
portation requirements. To this end, early in November

view

complete

service

customer

basis, streamlined, flexible and adapted to
a

new

merchandise service organization was set up

study, plan and implement by

progressive steps changes

organization, administration, methods of operation,
equipment,1 to be used for all less than car¬

.-in

facil ities and

load traffic.

Along with other railways on this
tention is also being given to
,

continent, close at¬

changes in the patterns and

Notwithstanding the growth
of long distance air travel, transcontinental rail pas¬
senger service under the leadership of "The Canadian1'
with its lightweight stainless-steel equipment and scenic
dome cars continues to enjoy public favor. In the short
©nd medium distance inter-city runs, gratifying results,

«modes of passenger travel.

economies

and

patronage, have

been obtained from

"Dayliners," the new, comfortable, air conditioned, stain¬
less-steel, self-propelled rail diesel cars. However, con¬
tinuing improvement of rural highways and the result¬
ing increased use of private automobiles and buses have
but

eliminated

passenger

traffic

many

branch

lines, and in these cases services are being reduced or
abandoned in the interests of economy and with no
—-hardship to the public.
A two-year dispute between Canadian Pacific and the
Brotherhood of Locomotive Firemen & Enginemen was
settled
dum

May 13th last by the signing of a memoran¬
of understanding ending the second of two strikes
on

called by that
men

organization

the point of whether fire¬

(helpers) would be continued to be hired lor service
service.

diesel locomotives in freight and yard

During the strike of last May, most employees of the
Company remained at their posts and carried on their
regular duties, often under trying circumstances, so that
Canadian Pacific's customers were not deprived of serv¬
ice

employees deprived of the opportunity to work.
The strike was settled on the findings of the Kellock
nor

Royal Commission being accepted by both parties, modi¬
fied so that firemen with seniority from April 1, 1953,
to March 31, 1956, remained as firemen and continued
employment in the same way as firemen with seniority
before April 1, 1953.
In

September last. Canadian Pacific joined with other

Canadian

railways in an application to the Board of
Transport Commissioners for Canada for a general in¬
crease of 19% in freight rates to enable them to meet the
cost of applying the wage increases recommended by a
Conciliation

Board dealing with the requests of their
non-operating employees. The cost to Canadian Pacific
applying these wage increases to non-operating em¬

enquiry by the Tariff Board into the problems of
main branches of the industry, that is, the

three

the

woolen yarn and cloth segment, the cotton segment and
the broad woven silk and synthetic segment, has just

concluded.

been

this

industry was given

study the

all ves¬ .' the opportunity to show that its performance rates very
sels of the
during
highly in relation to world standards of manufacturing
most of the lucrative summer tourist season. Two ships
efficiency, management ability and merchandising skill,
of the B. C. Coast fleet were sold in late July to British
and that its economic position can only be restored by
Columbia operators who continue to operate them in
government action. The report and recommendations of
Northern British Columbia waters,
v1;
v>;; :
that Board on both the cotton yarn and cloth, and the
Although the comfort, reliability and scqnic advan¬
silk and synthetic divisions, have not yet been pub¬
tages of rail travel in modern equipment assure the
lished.
The industry is naturally anxiously awaiting
future of rail passenger services for carefully selected
action on the part of the Canadian Government to give
runs, technological developments in air transport clearly
them some mitigation of the difficulties which have
indicate an enlarging market for long haul travel by air.
been besetting it since 1952.
For this reason, and in order to maintain its position as a
In wool textiles, for instance, these difficulties are
complete transportation agency, the Company, through
primarily the imports of the better grade worsted and
its wholly-owned subsidiary, Canadian Pacific Air Lines,
woolen fabrics from Great Britain, and in large measure
sought governmental authority to fly five transconti¬
the medium to coarse goods from Italy.
I
t
'
nental routes in Canada, and hearings were undertaken
if
The problem in so far as cotton textiles are concerned,
late in 1958 by the Air Transport Board to determine
is
coast, a seamen's strike tied up
British Columbia Coast Steamships

On the Pacific

•

the issue.

ployees and all other railway employees for a period Jan.
1st, 1958, to Dec. 31st. 1959, was estimated at S26.5 mil¬

An appeal was made to the Cabinet by eight Ca¬
nadian provinces against this award. Meantime, the rail¬
ways had informed their non-operating unions that they
would be prepared to sign new wage agreements giving
crease.

effect

the

rate increase

findings of the Conciliation Board
was

allowed

come

into effect.

the

On Nov.

26th, the Cabinet announced that the appeal of the prov¬
inces had been disallowed, and that the increase of 17%
would take effect Dec. 1st.

and

was

accordingly withdrawn.

six

hotels

were

by the reces¬

affected

generally higher costs of wages and ma¬

However, the booking of conventions earlier and
previous years resulted in a longer season
Banff Springs Hotel which, with neighboring
Chateau Lake Louise, continued to attract near-capacity
bookings.
/t
Work continued on the new 400-room addition to the

terials.

later than in
for

the

Royal York Hotel in Toronto, which will give, this fam¬
ous hotel a total of 1,600 rooms, making it the largest in
the British Commonwealth. A strike by certain of the

opening of the new addition, which will

Also, the industry is faced with import competition
low-wage Asiatic countries, such as India, Hong
Kong, Communist China and Japan. In the case of Japan,
the importation of fabric in the form of garments is an
.increasingly serious matter and is taking employment
and earnings, not only from the textile mills but from
the garment manufacturers as well.
The

it should be.

incor¬

The

If, in

electronic computer digests the data,

additional

are

in the textile

the

H.
President
..

The

NORMAN DAVIS

general

The

inventory

the

clothe,

ments

the

many

advance¬

various fronts in the field of transportation and
be beneficial alike to shareholders,

communication will

The development of Canada's economy
an

unprecedented rate, since the last

minor interruptions.

improve¬

business.

educate—

goods will be needed,

still keenly

result
ence

Harry Norman Davis

people

export

shrinking

due

control, such
flour

competitive ad a

over-capacity and depend¬

subsidy

markets

to causes

which

are

beyond ^ts

the American export

program,

the building

by countries hitherto regarded as traditional
markets, thus shutting out imports, and the buying up of
large baking capacity in the United Kingdom by British
mills which assures them a market at the expense of the
mills

These

formidable obstacles to

Canadian

industry.-

overcome,

but Canada is still able to produce

are

the world's

quality flour from its famous hard spring, high pro¬
wheat, and by improving efficiency in its operations
and concentrating on all available markets, it is expected
finest

industry will be able to maintain business during
on a comparable level with the past year. The feed end of the business should prosper as there

the

DANIELS

President, Paton Manufacturing Company Limited

gradual

tein

customers, and employees.
F.

lines of

most

The flour milling industry in Can¬
ada

that

see

Rapid growths in population in
practically all countries means more
accommodation required, more
mouths
to
feed,
more
people to

wide

believes

chasing wages spiral,

prices

should

ment

Telex, the new and revolutionary
of rapid communication, to link Canadian with

Pacific

So, barring

past.

world upheaval which, of course,
could take place and a slowing down
any

extension' of

Canadian

and it* Is

generally is good

position

believed that the low of the recession is

in this phase

public acceptance. A network of subscribers in
Canada, the United States, Europe and the United King¬
dom has now been established for the exchange of in¬
stant printed messages handled by the simple means of
a teletypewriter and a telephone dial.
,*

outlook appears

business management.

brought about during the
continuing the growth of a service which has won

such

to be one of "cautious
optimism" for business during the coming year.
• ~A
The

was

Ogilvie Flour Mills Co., Limited

therefore

subscribers,

industry until it is known to what extent
be given.

marly foreign countries and has been inspected also

means

assistance will

from

United States

industry with its ev^er-present vulnerability

The

difficult

processing procedures affecting opera¬
tions of Canadian Pacific and its ancillary companies
throughout the world. Canadian Pacific has the most
complete installation and application of integrated data
processing of any railway or transportation- company in
the world. The computer centre in Montreal has been
visited by railway operating and accounting .experts
by thousands of other visitors interested

;

price and volume pressure from imports. It is most
to forecast the near-term or long-term future

data

of modern

country and

time the computer centre is undertaking

same

in balance with other industries, the
appropriate legislative assistance is essential, especially
the

its

the

growing economy, manufacturing in¬
be allowed to expand with the needs of

Canada's

dustries

other

competition in the silk and syn¬

source

the field.

where

chief

thetic industry is again the United States,- and Japan's
highly developed synthetic industry threatens to enter

distinctive Canadian pattern.

companies, C.P.O.G. conducted drilling operations
own
account with quite satisfactory results, and
has signed a contract for the sale of gas to Trans-Canada
Pipe Lines Limited. Drilling operations are continuing
under company management.
;
"
Further progress was made in wider application of
integrated data processing in order more speedily to col¬
lect and process information vital to management in this
age
of speedy communications.
Eight
data
centres
throughout Canada on an around-the-clock basis send
up-to-the-minute information on freight transportation
and other operations to a central office
in Montreal

quota

quota for exports to Canada is from 5 to 20 times what

Early in 1958 a new subsidiary, Canadian Pacific Oil
and Gas Limited, was incorporated to assist in the active
development of the Company's oil and gas rights in
Western Canada. In addition
to f'armouts granted to.
on

lines

system for exports to the United States,
but very greatly out of proportion in relation to the
relative sizes of the two markets.
On. that basis the
the

1959, and will present to the public something en¬
tirely new and different in attractive Canadian decor
a

so-called vol¬

industry has established

Japanese

untary quotas for the Canadian market, along the

into

huge

the

of operation and low

from the

porate public rooms named and decorated for. each of the
ten provinces and the Northwest Territories,
as well
as the larger
"Canadian Room," will take place early

woven

competition, where

American

cost production not available to the Canadian producer
:'in the smaller Canadian market.
'
i
;
;
v

building trades engaged on the project, however, brought
a halt in Oct., and valuable time was lost. The

formal

the

American market allows economy

work to

Immediately, tjie railways met with representatives of
non-operating unions and have signed agreements
giving effect to the findings of the Conciliation Board.
In announcing the decision to reject the appeal against

the

Canadian Pacific Air
Bristol Britannia y turbo-pro])

aircraft

intercontinental routes.

Pacific

Canadian
sion

their

A strike notice for Dec. 1st

added

1958

aircraft to fly its

year,

The Board of Transport Commissioners rendered its
judgment Nov. 17th. awarding a 17% freight rate in¬

Lines

chiefly

•

of DC-6B

its fleet

lion.

the rate

Canadian textile industry
of the rate in manufacturing
'*

pand the operations of its own piggyback services, haul¬
ing its freight and express traffic in its own trailers.
Top planning priority is being given to co-ordination
of rail and truck for all merchandise handling with a

com¬

market; the market has expanded

cruise

the

is much the

ship out of New York last

inactive

•'

and South American ports.

New York this winter.

one

Ever
War, this industry
(and no segment of the industry is an exception) has
suffered from loss of its share of the market, and even
to a greater extent loss of earnings. ' The reasons are
many and varied as between the branches of the industry. But whatever branch is viewed, the earnings picture

replacement for one of the passenger-cargo liners
now in the North Atlantic service is on order for con¬
struction in a British shipyard and when it enters service
in 1961 will be the largest of the fleet. The newest of

minor

step with the general growth of the economy:

since

vessels on the North

the

;

few

because of

•

Atlantic and the four smaller
chartered freighters operating from London and Liver¬
pool to Canadian and American Great Lakes ports; ;

boom of such proportions that the recent

exceptions to this picture of health, wealth
and bounty have been among the manufacturing industries, tfye textile industry in particular.
This is not

liners

cargo

other extractive

only be regarded as

can

parison.

shown to exist.

ferrous and
industries, it

industries,

forest

the

non-ferrous minerals and

inquiry into the freight rate structure in Can¬
a view to bringing to an end any: inequities

which may be

Company continued

The

of steam with

mediate

ada

such

segments

freight rates, the Acting Prime Minister
the Cabinet to bring about an im¬

Stated the intention of

...

' (558)

has proceeded
with only

1959

increase in hogs, cattle and

poultry population,, and
4

war,

With particular emphasis

certain

Continued

page

Number 5816

,(Volume. 189

The Commercial and Financial Chronicle

regard the American buying of
British Aluminium shares, which

due to special circumstances,
evident that American .substantial private
holdings were
investors have become encouraged held in American hands,
it

even

f
v

■*s"!

seems

be in the coming British election and the deadlock C
over Germany are blamed for pessimism in London's securities
V
market. Dr. Einzig also points out that this, and not actual eco¬
nomic conditions, may cause a vicious circle and retard eco¬
nomic recovery. He hopes that the increased U. S. investments
in British equities, encouraged by convertibility, will forestall *;
nationalization should the Labor Party win the election, and v
notes the mixed'feelings of British shareholders about this

the vote may

So-

vate holders into surrender. The
risk
of
applying
such devices
would be materially mitigated if

was

public opinion survey-findings revealing how

a noteworthy increase in
cialist Government in possession
American demand for British in- of substantial
holdings might der'dustrial equities. Even if we dis-' vise means to starve or force
pri-

By PAUL EINZIG

refuse to sell out, because

has; been

And the Latest Clouds

(559)

restoration of convertibility there

British Securities Maiket

The recent

the

convertibility decision to

li;rate- MritfSh hi?1hu?"
^ rell0f which is

discourage also American buying.

considerably higher than those of
the corresponding class of Amer1C

-p

rally
>

;

•

mixed

Britain.

•

high taxation and other anticapitalist measures would affect

Merrill, Turben Co.
Official Changes
CLEVELAND, Ohio—Charles
- -

—.

B.,

i -i*
rifeiL ma
Chairman
-Merrill, Turben & Co., Inc.,

Cleveland, and Claude F. Turben.
as President of'

has succeeded him

to!

mg h0USe' " has been announcedA three-man executive commit¬
tee of the board of directors has
been formed, consisting
of Mr.

T^?e<w} S"
ah firms regardless of the nation- Merrill, who will be Chairman*
This influx^of American capital ality of their .stockholders.Mr. Turben and Lewis C. Wil¬
viewed with

U. S. investment invasion.

For

The

.xi

feelings in

Government

welcomes

the

liams.

natu-

resulting

MSD District Mo. t

American demand for sterling
which mdst have been largely re-

*■

Mr. Merrill
&

Curtiss, in 1915.

associated

Elects Jack P. Brows

joined Burke, Hord

Co.

with

New

Later he

Guaranty

York.

was

Trust-

1924

recent change in the attitude ofthemid- ! sponsible i for sterling's firm tone,
formed Merrill &
Co.; which be¬
♦
;
; : *J'* ;
5
British shareholders welcome this
DALLAS, Texas —Jack P.
!4lin
TUn
«<
•!-.
:
came, Merrill, Turben & Co., Inc.
bprovided an explanation of ;the
The reactions,of the public to moderate'buying pressure which Brown, Vice-President, Dallas in 1936.
,UXK
sudden
setbaek on rthe ; London the return to convertibility may tends to raise the value of their Union Securities, Inc., Dallas, was
J?u t,
■
~
>,;■
;
• ' stock Ex- have had something to do with tKe investinents. On the other hand, elected Chairman of District Comutive
Vice-President, became achange after change. The Labour Party is mak- leading industrial firms scrutinize
partner in the firm in 1935, andthe ! turn of ing the utmost use of the argu- the purchases with particular care
Eng.—-The

LONDON,

figures of public opinion surveys die classes.

4.-1-

•

--~1

„V.

•

Iltfvo

Executive Vice-President in 1952.Mr.
Williams
joined

ment that as a result of this move to ascertain whether there are any
sterling has become more vulner- indications of American attempts
unfavorable able and British domestic economy to secure a controlling interest,
change in the has been placed "at the mercy of In one or two instances indications
Government's New York bankers and Zurich to that effect are fairly distinct,
the year. They
indicated an

prospectsat specul<ators." In view of the disasthe
coming trous consequences of the return
General Elec- to the gold standard in 1925, and
lion.
While of the failure of the convertibility

was

Paul

Or.

the

almost

three

surveys

even.

result of this change the op¬

timism
sible

less

are now more or

that

largely
rising trend

was

for the

trial firms

respon¬
on

themselves

under

York

enced

the

by this
.

liable to be

are

new

element of un.

acquisition of shares in the
It

market.

remembered

one

Exchange.

of the fifst

the

The

New

company's

Bldg., and branches are operated
in Canton,
Columbus, Dayton and
Youngstown. O t h e r Vice-Presi-.

American
Jack P. Brown

dents

if not

influ-

was

members

offices are in the Union Commerce

are
mitigated by hopes
that the acquisition of substantial,

Recovery

corporate

controlling, American inter- mittee No. 6 of the National AssoThe
anticipation of a Labour ests in their capital is liable to elation of Securities Dealers which
victory is bound to be detrimental discourage a Labour Government comprises the State of Texas,
from
the point of view of the from
nationalizing those firms,
Mr. Brown succeeds Neill T.
recovery from the recession. Induseither by legislation or through Masterson, Jr., general partner,

the

1 As a

control

Retard

May

So-

opinion

public

cialists

find

business recession.

according to
unanimous findings of

chances of Conservatives and
•

ried about the persistence of the

Gov-

ernment's side,

Einzig

changes.

5
May ,Thwart Nationalization
The apprehension of the man-

recently

the

companies, and holds seats on The
New York and Midwest Stock Ex¬

but in the majority of instances:
the purchases are widely spread.
#

Vice-President in 1952.

Merrill, Turben is one of Cleve¬
land's largest investment banking

attempt in 1947, the Socialist aradvantage guments sound fairly plausible to agement of industrial firms that
distinctly the public which is already wor- they might wake up one day and

until
the

Merrill,

Turben

White, Masterson & Co., Houston,
that, Paul J. Fagan, with offices in Dal-

open

the

company

Hay, Charles F.

are

John

Kling and S. C;

Mitchell of Canton.
Other

voting stockholders of the
company—the equivalent to part-,
Mrs. H. G. Dike, Secre¬
tary and Treasurer; W. H. Clark,
H, J. Gawne, O. E. Maukert, T. A.
ners—are

Doyle, J. . W.
Secretary ot District com
certainty in the outlook, which even though the British Ford Co. las, is Secretary 'of Distric^'com- -Melody, J. H. and S. J. Wolfe,
Secret!
Mitchelt Ganton;
•T way to a certain amount of pessiwill tend to discourage them from wfas exactly in the same position mittee N0,
Dayton.
•, A
•
mism.
capital expenditure, and even from as many British firms Which came
*
-I -Following on the publication of making full use of their existing under the iron and steel nationalWith Moors & Cabot
:;:the unexpected figures there was productive capacity. Unless there ization under the last Labour Gov^
8
Kurt Grunebaum Director
is a change in sentiment in the
♦

Stock Exchange in December gave

deal of selling by investors
speculators alike, and the
^turnover on the Stock Exchange

t leached record

figures. The actual
prices was not excessive, but it was sufficient to give
rise to a widespread feeling that
it is now safer to liquidate investdecline of

-eminent,- it

£ great

iand

near

hood

future in favor of the likeliof

Conservative victory, a

vicious circle will develop in which

pessimism

Conservative

about

prospects, tends,to accentuate (or
at any rate prolong) the recession
while the accentuation (or prolongation)

the

recession

will

(Special to The Financial Chronicle)
was left severely alone.
assumed, therefore, that hisBOSTON, Mass.—James A. Hodtory would repeat itself in respect d„r
Jr.
has. become
associated
of companies with substantial
with Moors & Cabot, 111 DevonAmerican interests in them.

The acquisition of American shire Street, members of the New
participation is widely regarded as York and Boston Stock Exchanges,
a fairly safe insurance against the as a registered representative. Mr.
form

new

socialist

distinctly
towards a Conservative victory a
large number of people are bound
to prefer to be on the safe side

4between

point

now

quite

and

the

General

Another

It is difficult to explain the sud-

political

factor

many.

States

brought,
-

Industries, Inc., Harold
Leitman, President has an¬

nounced.

Mr.

New York

ration,

a
director of
Hanseatic Corpo-

and

government

bond dealer.

& Company,

to have
the tension
.,

„

anticipated.-

....

Gairdner %

320

was

•

? !

Company Limited

Bay Street, Toronto, Canada

provide

complete service for corporate

financing in Canada. Private enquiries from
dealers

are

invited.

'
■'

•

Members

Midland Securities
:

members:

corpn. limited

l t

The Toronto Stock

■

The Investment Dealers' Association of Canada

Canadian Government, Municipal

j
.

and

Corporation Securities

Vancouver Stock

Toronto Stock

members:

Exchange

•

Affiliate

Gairdner 8

LIMITED

60 Wall

Company Inc.

Street, New York 5, N. Y.

Montreal Stock Exchange

Canadian Stock Exchange

Stock orders executed on

all Exchanges

50 King Street West
London, Ontario: Huron &. Erie Building
Sauli Ste. Marie, Ontario: 116 March Street
Montreal, Que.: 215 St. James Street West
Kitchener, Ontario? 2 Queen Street North
St. Thomas, Ontario: 354 Talbot Street
Toronto, Ontario:

Exchange

The Midland Company

Montreal Stock Exchango

Canadian Stock Exchange

Winnipeg Stock Exchange
-

ffil

Exchange

Member:

The Investment

•

Dealers*

Hamilton

Kingston

Montreal

Association

of Canada

Kitchener

Vancouver

...

Calgary

Quebec
London

Edmonton

New York
Private Wire System

executive

and

well-known investment

ham manager for du Pont, Horn- securities firm
sey

Grunebaum

Vice-President
the

been
Con¬

As for the cost 6f

than

Grunebaum has

director of Adairi

appears

relief of

widely anticipated. -* Clouds on the domestic and inliving index, its ternational political horizon are
increase ..during- ^.December r was ; gathering at a moment when in
moderate.
Tjtim'e were no major their absence Britain would have
wage increases in. recent weeks attracted considerable amounts Of
feat would account for an adverse American capital. Ever,since the
So

H.
a

solidated

Mr. Mikoyan's visit to the

change in sentiment regard-

tivelyunfavorable, but riot more

elected

appears
direction is the deadlock over Ger¬

ttie possibility of .a severe
ing election prospects. Admittedly, international political crisis withUnemployment figures are rela- m.a few months is now widely
den

purchases. Such operations
a risk to owners who

which would entail
to be working in the same

United

'Election.

backdoor

SSSW Forunfess Z iend to weaken iurlhVr>he chances Suction ZTmeans~en
of
Conservative victory.
market
indications

Kurt

Ottawa

Winnipeg
Halifax

The Commercial and Financial Chronicle

(560)

Thursday, January 29, 1959

Continued from page

THOMAS W. EADIE

abundance of feed grains on the farms
and farmers can be expected to use them to the best
advantage, livestock feeding has become a complex, sci¬
entific business calling for research into special formulae
to benefit and accelerate growth towards marketability.
while there is

mands.

O-;', '

C. DOUGLAS

province's growing economy.
Steel was the word that quickened the tempo of Sas¬
katchewan's
industrial
activity in
Interprovincial Steel Corpora¬
is proceeding
with the

Ltd.

construction

$15,000,000 rolling
the City of Regina.
The mill will roll skelp, plate and
structural
steel
to supply
prairie
manufacturers of steel products. The
existence of a basic steel industry in
mill

on a

site

opens

manufacturing growth
that should see this province estab¬
lished as a major steel centre of the

for secondary

Canadian west.
Steel

was

December

announcement

the

with

again in late

news

C. Douglas

by Dominion Bridge Company Lim¬
ited that it plans to build a $1,000,000
steel fabricating plant in Regina. Main operation of this
plant will be the fabricating of structural steel for build¬
ings and bridges but it will also warehouse a complete
stock of steel supplies for Saskatchewan industries.
Another event of 1953

was

Saskatchewan accession to

"Potash Province of Canada."
The first mining and refining of potash in this country
began late in the year at the plant of Potash Company
of America, near the City of Saskatoon.
International
Minerals & Chemical Corp. is proceeding with a second
potash development in another area of the province.
When

these

two

the

immense deposits to be

the

and

The quality of

production.

mineral

potash

developed, will see the formation of an industry that
will make* the province one of
ducers of this

The

the world's leading pro¬

important mineral.

present

will

year

work

pro¬

gressing at the site of the South Saskatchewan River

This massive project will

dam and irrigation scheme.

bring the benefits of irrigation to
the
of

large farm area of

province which is frequently faced with the problem

drought.

"..

•

Irrigation will.increase the productivity of farm lands
and make it possible to grow a variety

which

will

processing

prepare

and

the

of specialty

crops

lor the establishment of

way

industries.

canning

The

generation of

hydro-power will be another incentive to economic
pansion.
about

recreational

and

resort

Mines, oil and gas fields delivered
harvest
alone

ex¬

The big lake created by the dam will bring

extensive

was

$200,000,000 in
valued

almost

development.

record mineral

Crude oil production

1958.

At the

firmed the

$100,000,000.

The outlook

Potash will be included in this year's "

are

preparing for another big

development

company

program to evaluate a large body of iron

drilling
the

Prince

is presently conducting

Albert

area.

mining development here
new

steel industry are

possible future supply of

Manufacturing made
plants

and

contributed to

large-

possibilities of
Sponsors

interested in the iron

advances in the past year.

expansions

production increase of

existing
some

plants

$15,000,000.

continuing trend upward in the value of factory

production

should

again in 1959.

higher level of output

Saskatchewan's construction

industry had

place in the 1958 production picture.

a prominent

Building values

for the year appear to have outdistanced the
record of

$379,000,000 set in 1957.

The estimated figure for 1958

$383,000,000.

commodity production have

industries.

come

from non-farm

This is confirmation of the progress

making to develop

industrialized economy.

investment by industry in resource and

development underscores the

very

are

Capital

manufacturing

great

province offers for economic growth.

1958

totaled

These

rates

—

latter

673,000 kilowatts. Projects under construction or
planned in Quebec will likely add another 2.000,000
kilowatts by 1961..
•
.;
'
A:
During 1958; gradual improvement was felt in the rate
of growth of industrial
power load after a decline in
the period of decreased economic
activity in 1957 and
early 1958. Retail use of power in homes, farms and
.

for

commercial

Canada.

Canada's
in

if we are to make sure that
long-term prospects are not placed
must make every effort to keep wages

jeopardy

will

relay system.

Canadian

Cabinet

first

general

rate

activity, howevei, will depend

increase

potential the

ever-increasing demand for

United

States

is, of

course,

The cut of wood, this winter, from
est

land

14,000,000

expected

acres

of for-,
New

the

Brunswick Department of Lands and
Mines

17%

above the cut for

the winter of 1957-58.

This indicates

industry and the pulp and

in¬
pulp
"and paper industry is the Province's
major industry and, in recent years,

com¬

feature

90-minute

special

television

nation-wide

dustry

increased
months.

Canada

the United States.

One of the most impressive advances of the Canadian

need,

direct, reliable communications with

business
we

centers

the

south.

help

have, in cooperation with Quebec-

Telephone, put into operation a radio relay system that
serves both Goose
Bay, on the Coast of Labrador, and
Knob Lake

in Northern Quebec.
Using regular micro¬
tropospheric scatter installations, it provides

trunk route from which
services

into

still

can

extend

distant

communica¬

parts

north¬

eastern Canada.

proportion

Canadian

ownership

company has been fully maintained in recent years.
the 157,000 present

shareholders, 98%

are

resident

the
Of
in

Canada, and they hold 92% of the company's common
stock. The American Telephone and
Telegraph Company
4% of the stock.

whole.

province-wide implica¬
diversity in the provin¬

The largest of the new.construction proj¬

the building of a 42,000-barrel*a-day oil refinery
cost of $50,000,000. The refinery will be owned
by

Irving Refineries Ltd. in association with the Standard
Oil Company of California. In addition, the
Irving Pulp
and Paper Co. with the Kimberly Clark Corp. is
greatly

expanding its mill capacity at

a total cost of $16*000,000:
1958, the sales of the New Brunswick Electric Power
Commission, the provincially owned electric utility, rose
rapidly and were approximately 20% above the level of

1957. This is about double the 10% annual rate of growth
which has been characteristic of the postwar period. The

increase in sales

was made possible
by the coming into
production of the Beechwood hydro electric power sta¬
tion with its 68,000 k.w. of generating capacity.

The

Beechwood

mote

and

as a

power

meet this

substantially during the spring and summer,
spending in the
area was almost three times the
figure for

In 1958, per capita construction

cial economy.
ects
•

economy in recent years has been the opening up of the
north. As the northern areas have been
developed the

industrial

are

The growth at Saint John has
tions and points to an increased

scale, DDD will
eventually enable the large majority of our customers
to dial direct to
practically any telephone in Canada and

paper

The

Saint John

handle

distance calls—Toronto, Guelph and Windsor. iPlans are
under way to bring DDD to a number of other Ontario
and Quebec centers within the next few
years.
Con¬
ceived and developed on a continental

1959.

Greater Saint John area,..economic
expected to be unusually prosperous. At
the present time, over $100,000,000 of new construction
is underway and it is anticipated that this total will be
.■/v.

conditions

conference

at present, three cities in the Province of Ontario
where telephone users can dial
many of their own long

throughout

the total annual value of output has
been in excess of $100,000,000. In the

Hugh John Flemming

Two

program.

press;

companies of North America are extending. what we
call Direct Distance Dialing.: In our own
territory there

owns

the

major importance.

the Province's

A joint project of the member companies

earlier

high

the rapidity of the

upon

economic recovery in the Province's
export markets. Among these mar¬

con¬

efficiently and economically the
increasing volume of long distance traffic, the telephone

The

There are definite indications that the level of eco¬
nomic activity in New
Brunswick, in 1959, will be well
above the level of 1958. The extent of the increase in

the

tions

goods

our

Premier of New Brunswick

Trans-Canada Telephone System, this network
longest of its kind in the world, extending from
Sydney, Nova Scotia, to Victoria, British Columbia. It
is capable of handling both television
programs and
hundreds of telephone. conversations
simultaneously in
both directions. The completed network was
formerly
opened on July 1 last as Canadians from coast to coast

productivity. Other¬

danger of pricing

HON. HUGH JOHN FLEMMING

is the

and

nation's

our

great

out of world markets.

Our company has played a major role in the
engineering
and construction of the Trans-Canada microwave radio-

order

evident

However,

and prices in line with
wise

10%

very

higher production for board lumber

In order to meet the

annual

excellent

munications services during 1958 we extended existing
facilities and further developed the scope of our services.

Recovery from the recent recession is

vices.

its

;

March, 1952—went into effect on Dec. 1. They
designed to produce $8,600,000 of additional yearly
earnings, and will allow us to continue to provide the
quality of service expected of this company.
They
should markedly improve our ability to
attract the
capital needed for financing the necessary expansion of

maintained

purposes

rate of growth.

are

ser

J. A. Fuller

billion

the

a 7% rise over the corresponding period
preceding year.-.
;
<
Top provinces in electric power additions during 1958
were ; Ontario
and Quebec.. New installations in the
former province totaled 1,173,650 kilowatts and in the

of the

wave

For the past two years some two-thirds of Saskatche¬
wan's

kilowatthours,

need has arisen for

result

is expected during
Production of
electric
Canada in the first 11

power

Long-term financ¬

are,

materials for their mill.

raw

new

major

The

promising.

are

increase

year.

months

year

scale

this

held with newspaper men and women assembled in
37 television stations across the
country.
; '

of exploration in the province's Precambrian north. One

The

similar

was

Mining interests

New

Generating capability at the year
end, 13,705,000 kilowatts, was 14%
higher than at the close of 1957. A

rates for service which had been earlier

new

kilo¬

■

kets

weeks

the

November

million

■

since

viewed

five

approved by the Board of Transport Commissioners for

eral production.

ore

end

than

watts.

$50,000,000 bond issue in
the United
States in
March, and the investment of
some $6,700,000 of new capital in the company through
the employee stock plan.
However, in December arrangements were made to
sell $30,000,000 of 514%
bonds, payable in Canadian
funds, to be dated January 2, 1959. They will mature
on July 2, 1980.

for this year is for another substantial increase in min¬

output.

limited to the sale of

was

our

;

total

During the next two or three
further additions are likely to

Canada.

construction

see

power.

demand and to provide for the necessary improvements
Company's capital outlays will
again be larger in the coming year—a pattern which
has persisted for most of the postwar period.;
'
During 1958 our Company continued to develop and
improve its services. However, in line with the general
trend of the
Canadian economy, there .was a slight

ing

to 2.500,000 kilowatts.
Of
1,850,000 kilowatts was hydro

years,

continuing

short-term borrowing arrangements.

in full production their

are

will add- some $25,000,000 to the value

province's

Saskatchewan

plants

this

meet

And

capital expenditures exceeding $180,000,000. Due to the
uncertainties regarding our rate application and the
effect on our financial situation, we were not able to
carry out the integrated financing program we would
have wished, and were forced to- rely more heavily on

the unchallenged title of

combined output

1959.

high.

new

this,

levelling-off ; in the rate of growth.
We added over -185,000 telephones during the year, bringing the total '
in Service to more than 3,140,000...The list of people
waiting for service was reduced from 18,000 to 10,000
and unfilled orders for individual in place of two-party
lines from 34,000 to 11,000.: There was an- 8% increase
in the volume of long distance calling.
,
Construction to extend and improve service involved

•

in the

under way or in the active

in telephone service, our

potential

projects either
planning
stage show equally busy years ahead.
New
capacity installed in 1953,
both hydro and thermal, amounted

into

near

Saskatchewan

additions to installed capacity during the year reached

for the

1958.

for the Canadian

one

The overall rate of growth will
appreciably <^ess, however,
than that accomplished in the 19551956 period since the impetus of a
rapidly expanding investment pro¬
gram will be missing. Unemployment
appears likely to remain relatively
high throughout this winter.
While little change'is expected in
I '
total
capital
spending,
continued
growth in consumer expenditures
and some rebuilding of inventories
should help to move the economy to
somewhat higher levels.
:
:
Demand for telephones should be
relatively strong in view of the high
level
of
home
building jn
1958,
Thomas W. Eadie
which is expected to continue well

Premier of Saskatchewan

tion

busy

still

> Developments that had their beginning in 1958 prom¬
ise to make the new year in Saskatchewan an eventful
one

electric power industry. As the part played by
electricity
in Canadian life from coast to coast continued to
expand,

continue through 1959.

'^AAll in all, therefore, flour milling and its ancillary
departments should come through satisfactorily.
T.

The year just ended was

Following the most pronounced slow-down in eco¬
activity of the postwar period in Canada, the
more favorable trend
of recent months is expected to

equipped to handle increased de¬

HON.

nomic

.'vA/'

a..;*./"

I*resident, The Shawinigan Water & Power Co.

Canada^

The industry is well

J. A. FULLER

President, The Bell Telephone Company of

project is part of a very extensive
construction program which is designed to pro¬

the

accelerated

industrialization

the

Province.

It is

directed, in particular, toward the expansion of the
pulp and paper industry and the development of metal¬
lurgical industries based on the Province's large base
metal deposits. In both these industries, the
availability
of electric power in large quantities is
absolutely essen¬
tial for large-scale development.
The expansion of the New Brunswick Electric Power
Commission's generating capacity will continue during
1959. A new 50,000 k.w. thermal plant is under construc¬
tion at East Saint John and it is scheduled to come "on

line" in 1961.
The aim of

provincial government policy is to promote
of a new industrial complex based on

the development

Continued

page

Volume

189

Number 5816

The Commercial and Financial Chronicle

write fancy financial

bankers would not

projects that

hhndle.:

•

security. YYet for years the
has,;, pursued a policy

age

£"5

Artificial Purchasing Power

Such

Philadelphia, Pennsylvania

departures

from

they

government
under

By WALTER SONNEBERG

(561)
'

ing

which

power

takes

interests

their

protect

the'public;

faith--

fully ; than he who-administers
sleeping tablets to get people to

people only part of the purchas-

honest

can

is serving

which it pays back to the

■

from

believe that all is well and noth-

financing derive from a mistaken them every payday.
ing need be done—only to find
concept of money's real role in
A few years ago the
Brookings that later dangers burst upon an
the economy.; Adequate valuation. Institution
reported
the systemunprepared public."
of purchasing power's limitations
"thoroughly unsound and finam,

Philadeiphian correspondent suspects that the many claims
made regarding our
assets, to the neglect of our liabilities, are
like our icebergs that
carry their damaging bulk below the
water line.
Mr. Sonneberg deplores our resort to "artificial
respiration" to get surplus goods off the market, and our fail-.":
ure
of not
differentiating between artificially created and
■/'
real purchasing power.

;

The

"Icebergs!": recalls the

cry

7^? sinking of the Ti^ ? f!?£en fon"

^Sinkabllity*'of.the

consideraWe
role

•

its

wreck. Dae-tot
this

f i deuce

proper

pre¬

not
soon

enough. Had
the

crew

the

sensed

limitations
the

ship's

pro¬
Walter

tective devices
there

Sonneberg

would

probably

been

different

Carrying eight times their
damaging bulk below the water
line, these- icebergs have protruding peaks that sometime catch the
sun's rays- giving optimists—who
not

the

look

the

below

impression

surface—

pleasing

coil-

tributions to the scenery.

power,, installment
•lation growth and

unwary

optimists.

Big national production, one of
the widely advertised features of
of.
the

prosperity program, can only
become
fully and economically
effective if operating conditions
satisfy certain specifications.
Christian Science

Monitor

Canham,

session

edi-

before

the

Harvard

School,

opinion

registered his
regarding
the
pressing

need for

better accounting with
_.

...

productjon

footing around

policy.

Big

produc-

economically

sane-

production warranting the
plant

projected. "There

great deal

ing and acting

wrong

tion of goods is a

mere

think-

produc-

justifiable goal."

the future. YYY.7

'•
-

fr^uently
-H "

boys

efforts

and

who

social

$125

security

million."
look

never

svs-

College's New

ftft|irf

.llQUlOTSt IHCIInl8 4IS9

Yet the.,
.the fT-|

under

the

saw

"Only

S
TVTr
Mr.

vises

cure

stomach

ache

Walsh

grSn'appleT168 by

more
Pol,,;

latins?

iricina^Gnient

a course re-

and

deficit and

gency.

y course

in Electronic. Digital Com-

continuation of

■

standard^ prematurity is attested

•

extremely with the prospect of gpvernment students: entering .the .day school
by the difficulty which many peo:
takeover,^ .scarcely justifies ;fhe this spring can take an accelerated
Pie experience in financing a host painful economic adj ustments." ; -,
Y And how about social security? pattern planned by the founding -program of 13 weeks in summer

costly items^including; cars,

If*,

conditioners,
iYYYYuY

alr
Y

roads,
'
.

schools, hospitals and other modera reqiurements, without overcommihing their resources.
The legitimacy of the standard

f?rthAr .c^alleiJg^d^ ?n lZ°
courds* .One. Dangled before the
f.yes °/
underprivileged
naUons wh° are. unprepared, socially
and economically unequipped, for
adoption of the standaid, it has

end

any

Americans

but

way

The record shows

fathers.

70 million

some

compelled by law
to"entrust part of:their current
to

income
ment
the

are

the

Federal

return for

government

provide

But

that

the :ldnd

school in order to enter the sophoclass in the fall.,

wel-.

j ;

;

Orientation :for

Day-Division

Senator Douglas remarked: "The .freshmen will be held

Govern¬

Friday, Jan.
warning. 30, and for Evening Division frosh
people in due time so that on Feb. 16,17 and 18.
•

watchman

promise by

world you want you are
to.it.

come

to the

old

who

gives

caused much of the current Middie East turmoil and unrest.

home

the

standard

Two:

creates

situation that has

ond-guessing

many ;

sec¬

issues,

Putting friends of free enterprise
their

toes

socialism

stay the

precipitated

tide of

those

who invite Uncle Sam to under¬

SOO

keys

to Canada

Canada's unparalleled growth is
providing
business oppor¬
«

*" '

',*•

I"*1*/

new

New York

•

Telephone: WHiteliall 4-1770

5, N. Y.

Teletype: NY 14808

An Affiliate Of

McLEOD, YOUNG, WEIR & COMPANY
LIMITED

Montreal

Hamilton

Sherbrooke

Kitchener

advantage of them, The Bank

coast-to-coast

the services

network of nearly

need market facts

Saskatchewan
Ontario
men

•

trade

in.

financial counsel from

who know

overall

contacts

Quebec

...

or an

picture of business trends in

Canada, you'll be glad you consulted
The Bank of Nova Scotia.

500 branches.

London

Calgary

Windsor
">

Edmonton

Winnipeg

The

ANK

London

Toronto

NOVA

SCOTIA

Vancouver

Correspondents in London, England

of its

you

•/. Whether you
**

WEST, TORONTO, CANADA

Ottawa

Quebec City

take

day. And to help

of Nova Scotia offers you

STREET

tunities every

—

for the-asking at the BNS

yours

KING

stu-

other-

if'***

dents prepare for. teaching at the
l'CScue m eyery emer- secondary, level.
An
advanced

•

comprehensive knowledge of Canadian investments. With
offices- throughout Canada connected
by our private wire system we
can
provide-you with prompt and reliable service.

of Learn-

Pace

goveilnnqnt^nqt industry, is called,

nomic ; innocent - denies > that - the
combination of about $10 billion

setup nursemaided by super- .puterYProgramming iii^a
been
spending/with credit ex- salesmen; burdened^ by big. bor- added in order to meet; the need
rowing from the future, charac- for instruction on the IBM 650 and
; tensions
spells inflation on a vast
regarded as an asset, can become
-scale.v Only the blindest optimism terized by deficit financing, and ; 705 computers.
«
Y '
b
^ liability- if overexploited.The
As in former: spring" semesters
; would
expect such inflation to sustained by artificial respiration.

Institutioogf and Dealers .interested in Canadian Securities

15 Broad Street

hti-*

ln the Undergraduate Division
juniors and seniors may enroll in

brought; us. the course> Psychology
impasse,.where_thq ing,. designedvto^'xhelp

to the present

the

^^f,^^ anasemeni ana ine au

that,

Wl!n

Sdeiid^De-

Sociai

Human Organization,

am0°Hvin^arhviS^QtoHn^h!h^

moifidbi'JmintQ

bf^the

offer

P^ment wiU teach Patterns of

or!

Pfllyi, noted,€CQnomist, aaagainst planning to prolcng

inalad] ustments

eco¬

can't

funds' and brokerage and banking

wtYpIv

oT?he S-sffidE

you

Y./.YtJY

pattern:

one"farmer antlv'and

A "Wall Street Journal" article

set

Theretoi^e,; ^we. should: • not;: be

surprised'Sf it'iurhs but:that the
standard
high living,popularly

muddled

tune

testi¬

extended

Federal

Martin

minimize
its
baneful
influence,
result of flagrant disreinflation flourishes. In mounting
gard of this fundamental a varidebt, in overextended credit, in
ety of inept, half-baked, remedial proposals, after having had economically unearned wages, in
undue plant expansions, in ex¬
their day as favorites in the court
of public opinion, have reservedly travagant promotions due to pro¬
duction's incapacity to finance itbeen shelved. In the course of radb?ally. changing values,; followed ;self and in heavy, borrowing from

tioned

Chairman

the

tlvely cultivated,

tion, in his book, is not enough.
should

Reserve

social

monkey wrench into the

calculations of

Business

Pace

•

tern is running in the red Yto the-

artificially.*.;'*
honest
financing

that

JWrict^pand.

poputfe5®S?^te®^S^ii

selling,

roughly to the iceberg
pattern-\ in which assets show,
Ibravely above the: horizon an&
liabilities are pretty much, concealed from, ordinary public view.
Not f o rge tt ing inflation that

recent

"surprising"

fact

conform

Edward

a.;

created

Economically big national i
i W more precise, appreciation-or
biff production, purchasing^mphcahons, there is

tor

the

recently

fied: "We can have in a given hood, hurrah over
a
recent ex¬
period just so many houses, cars, tension of social security benefits!
College;/ located in " New York
Policy
has
been
shaped
as appliances, schools and factories
Gettins Away From Principles
though production was sufficient and myriad other things. Creating
unto itself and we became frus- more money will not create more
It is no secret that we have
Propm
t««ho» of Wanpt
It
trated by surpluses taxing the in- goods. for can only intensify de¬ lost sight of. th^..principles, up6nt organizations ami electronic chgimand
the current supply of which our igreat; nation was built.*
; tal
computer programming.
on unwary customers. The fact that labor and materials, that is out¬
"It is painfully obvious that
peo-•.
••
•
•
production does not finance its right inflation." "::
*
pie allowed themselves to be led,
Undergraduate a n d- graduate
own operations but resort is had
Credit created money has two bribed, ' cohned
and ■ frightened?!,®lasse®'at
to artificial respiration, to get the aspects.
The above surface ban¬ away from a system of individual!
^ace09£fge Wi OJ)e Saturday,
goods off the market, marks the ner-waving aspect, excited: by the initiative: and free enterprise
into.
c?u,'?es W,U
spot where we have gone astray cheering section loaded. with de¬ the wasting disease of the welfare i
^
.e.
tl !?e- 1
in our calculations.
termined
optimists encourages state." There followed ? muddied the GradnatoDivisxon Mr. samuel
;
!
Charles Beard, historian, some people to buy more thah they can situation, characterized by Chair^x5,n
', ~Ie^ °? Y Pensions
afford; and below the
surface man Martin as one of "waste and a"d
Organizatmns Group
years ago explained why! "Mas¬
inflation,
"The
Cruelist extravagance,) and incompetence of the Internal. Revenue Service
ters of huge industries" increased where
(Downtown Manhattan; District)
inefficiency,"Y;andl drawing
production volume without lay¬ Tax," flourishes practically un¬ and
will teach the course, Tax Prob¬
Which convinces from Henry Hazlitt the remark
ing the foundations for a suffi¬ hampered.
lems
of
Exempt -Organizations.
cient
area
of
demand, without, thoughtful observers that "Amer¬ that as long as we. are;plagued
This will be of specific interest to
ica is living beyond its means."
by
false
theories
we
will" be
mastering
the
principles
upon
labor unions, health and welfare
which the area could be effecThough there is much pussy¬ plagued by false remedies.
Artificial Respiration '

come,

-from

production> and purchasing power

•

throws

earned

power

cially reckless."
magazine cited

have

story.

purchasing

between

£an- »»•: ®TraLne^

cautionary
were

differentiating

measures

taken

means

mistaken

c o n

New York

Correspondents wherever

men

The Caribbean

trade

The Commercial unci Financial Chronicle
30

Thursday, January 29, 1959

(562)

tribution facilities.; $12.5

Continued

from page 28

;

base metals — and greatly expanded
capacity. This is the same industrial
complex which has played such an enormous part in
Canadian economic growth in this century, particularly
in British Columbia, Northern Ontario and Quebec.
It is, of course, not possible, as yet, to make any accu¬
rate forecasts regarding income trends in New Brunswick
agriculture and New Brunswick fishing industry during
1959. It is expected, however, that activity in the Bay of
Fundy fishing industry will continue to increase. Toward
the end of 1953, a large fish-processing and freezing plant
was
completed at Beaver Harbour, Charlotte County.
This plant has an estimated capacity of 20,000,000 pounds
of fish per year and will appreciably expand the market
pulp and paper —
electric generating

for ground fish.
In recent weeks, the demand
in the Grand Lake

for coal from the mines
has increased rapidly and, at the

area

present time, the industry is operating at near capacity
levels. Estimates for 1959 indicate that total output for
the year may attain 1,000,000 tons.
An encouraging factor, at the present

for

outlook

industries

the

time, is that the

of secondary manufacturing

expansion

to be improving.
Department of Industry

appears

In 1959, the New

Development
anticipates growth in wood-using industries, clothing,
and electrical apparatus. In addition, new capacity will
be available in the fields of iron products, glass, and
Brunswick

beverages.

-:
";
Moncton,

both

John

Saint

and

7.
railroads
.

the

are

expanding their facilities for moving large volumes of
freight. The Canadian National Railways are undertak¬
ing an investment program at Moncton which is expected
to involve expenditures in excess of $20,000,000.
In brief, the overall level of economic activity in New
Brunswick during 1959 will be determined basically by
events in other parts of North America and overseas.
Growth seems assured, however, in many sectors of the
provincial economy.

The next 12 months may not be

the

see

spectacular. They will,

the difficulties which they experienced in 1958.
like my own, should continue to grow, but at
somewhat

their

than

less

Others,
a rate

postwar

average.

possible to avoid the temptation of drawing
between the conditions under which
the textile industries operate in the ; y
U.S.A. and Canada. The great basic
difference is that the domestic mar-

With

demand

moderating

industry, whereas

even

50-50 share of their

market in broad areas.

have

commodities

been

its

inclined

they

■'!.

forced

are

their

pound higher than the
'
^ > :
world price of the commodity. Not so much is heard of
the fact that an American mill exporting cotton yarn or
cloth is entitled to an "equivalent" export subsidy in an
amount somewhat greater in cents per pound of yarn or
cloth exported than the extra cost per pound of Ameri¬
cotton

American

the world price.

over

exporter cannot

will

but it is manifest how attractive Canadian business must
when

carries

such

substantial return

over

and

the

above

price in the American market for the same
To the extent that the American exporter does

goods.

Further inflation could

Canadian

and

cotton

LEONARD

doubling

duction by
y

;

the industry reached
vious

highly desirable forms of

The

en¬
A. E.

Grauer

the

sound investments, regard¬
less of whether the short-term outlook is good

On such

occasions, sales to

tended to slow down
commercial

outlays

some

types of customers have

than others Residential and
have also had to postpone their

customers
new

using and other types of equip¬
compensating influences are at work.
and the need for greater efficiency

power

ment. Yet this year,

Copulation

bad.

encountered periods of consolidation before.

growth

mills

selling their basic products below a break-even
are forced to follow suit, be¬

are

point the Canadian mills

of the exposure of this market to American goods

cause

and

prices. You can well appreciate why we hope that
the market situation in the U.S.A. continues to improve

that the market is unable to absorb all the
and

lumber, pulp

and mineral products which these plants are
able to produce.
Inventories have been mounting and
over-production has resulted in lay-offs in some outlying
paper

communities. Firms

materials

ess

and

supplying these industries with proc¬
equipment are affected, as are the

wholesale

and

tied

closely to

There
are

are

local

retail

outlets

whose

consumer spending.
for optimism as well.

reasons

under construction than

ever

before.

activities

are

More houses

Investments in

shopping centers and other commercial establish¬

new

ments may

dustries

be higher than they

are

also

were

making additions

in 1958.

Many in¬

improvements to

their local manufacturing facilities.

Government spend¬
ing on schools, roads and other facilities will, we
know,
be

maintained

ences,
ber

together with

and

make

pulp

1959

relatively high level.

These influ¬

reasonably stable market for lum¬
and paper products, may yet suffice to

one

of the

best

in B.C.'s

short

though

spec¬

HARDING

program reaches five

or more

$95 million

over

years

ahead.

the next 12

tal additions of one kind or another.

that spent
Close to

The company

months,

capi¬
This is $10 million
on

on new plant and equipment in

$80 million will go towards the erection

of new electric
power

generation, transmission

and

dis¬

strong

further advance in

indications that"
production rates /*•

in 1959; substantial
capacity have been made
years, and improved eco-:

will be achieved

recent

conditions

nomic

result

increased

chemicals.,
New capital
\
Leonard

should,,,

1959

demand

for

the

investment

;

■

chemical industry during 1958 fell by/
an
estimated 10 to 15% below the
1

Hynes

million invested in 1957, but was
at

high level owing largely to
completion of a number of projects announced or initiated
during the previous year.. There have been few recent
announcements of large new chemical projects which
suggests a further decline in capital expenditures in 1959.
There is no evidence, however, that the decline will
be either sharp or prolonged and as the population inr
creases and requirements expand, chemical consumption
in Canada should continue to stimulate the growth of
a

very

■

the industry.

Canadian

ter
It

part of the
should

this

think

I
1959

year

was

that

the

can

means

United

look

that the

depth of

forward

Jan. 5th speech

the

manufacturing

the

country

level

had

freight, etc.,
There

aware

are

of
are

higher

of the

costs

possible
labour,

Harding

kets.

affect

ably

unpopular

co-operation

of these must be the

require

mar¬

all

aspects

have before

our

may

concern

.and prob¬
require the

courageous

decisions, but it will

labour, and agriculture.
Some unpopular decisions
we

some

Canadians
in

confidence

and her future. Cana¬
mercurial people. At

problems, but it is sound and

remarkable

rec¬

also

During the recent North Amer¬

ican

setback, industrial production in
about 14%

economy;—business,

Jackman

•the United States fell by

while that of Canada fell by
With

•

will

for

Canada has had

Inflation—the stability and value of our dollar
(2) The problem of our greater average unemployment
(3) The continuing government deficits and the con¬

and

not

when

time

reason

ord.

(1)

one

and

strong. Canada remains the best in¬
vestment in the world."

certain problems which are confronting this

The solution to each

are

has its

country, the solution of which will undoubtedly
the economic picture. They are as follows;

of Ottawa

States

their best they are steady, stable and
self-reliant. The Canadian economy

the over-all profit picture.

United

improvement is *

prospects before this
dazzlingly bright. There

their country

regards volume, but most

executives
squeeze

are

was

dians

-construction, though not expected to
be at record levels, will still be high.
It would appear that most busi¬
nesses
are
forecasting a good year
as

1958.
The domestic
improvement in con-

fit Canada. The

should provide a stimulus and, also,
industrial
construction
and
home

for 1959

by the Honourable Donald M. Fleming, ;

over

ditions

Coporation

well summed up in

Finance: "1959 begins with many early

Minister of

never

tories

JACKMAN

abroad which will undoubtedly bene¬

accumulation of inven¬

matched

trend, but it will be on a modest
scale and, in some cases, quite spotty:
The shift from a reduction of inven¬
to

Canada's investment prospects are

advantages

recov¬

ery

tories

HENRY

President, Dominion and Anglo Investment

our

States.

continuation of this

remembered, however,

recession

severe

demonstrated its ca¬
recession and in the lat¬
showed quite a definite recovery.
economy

pressure

sequent weakness of the government bond

Electric, like most other utilities, must plan for
longer-term future. Characteristically, its expansion

?n-oG
I9o8.

the

1958

pacity to meet the

B.C.

will invest

are

President, Harding Carpets Limited.

tacular history.
the

during 1959.

industry will be creating more accounts and augment¬
ing consumption in others. Not only are many more
tomes and stores being built, but a higher level of busi¬
ness activity is reinforcing the demand for such
energy
intensive commodities as aluminum, cement and heavy
chemicals. These decisions, in total, are bound to increase
the volume of business done by the nation's electric
power and natural gas distributing companies.
The outlook, of course, differs from one region to the
next. In British Columbia, our resource industries have
been expanded considerably over the past decade.
Now,
with a good deal of new capacity on our hands, we find

goods market, for when American

post-war years.

additions to

year,

There

in the American grey

We have

;

representing an increase
in physical volume which came close/
to the average annual growth rate of /'

cotton

manufacturing industry, there¬
fore, enters 1959 with some very definite* continuing
problems. It is encouraged by the recent improvements

ergy have, therefore, come to be re¬

garded

Canadian

7
;-

record value estimated

at about 7%. above that for the pret

the problem has been dealt with much
effectively and definitely than in our case, where

can-Japanese arrangements.

seven years.
Utilities
with
the marketing
of

concerned

Limited

potential of the chemical and allied prod¬
ucts industry in Canada even under adverse economic
conditions was further demonstrated during 1958. Pro-

tions is also several times greater than under the Ameri¬

six or

every
these

Sales,

been

have

average,

II.

Industries

The growth

types of goods, and those solely by the say-so of Japan.
The proportionate share of the market which can be
occupied by Japanese garments, etc., under these limita¬

the end of World War

HYNES

Canadian

Vice-President,

exports from Japan to Canada are only limited in certain

the

been resolved.

manufacturers

have elec¬

and

result in

great extent depend on fiscal and monetary policies

which have not

common

natural gas. Consump¬
tion has increased substantially since

quired in such volume

tricity

preference for equities as
in spite of some apparent over- f
valuations. The movement of bond prices in 1959 will,/

Governments
more

re¬

cause

investment medium

7,/77

•

continued

art

the export subsidy to the importer he is in

not pass on

tend

doubt

In exports to Can¬
legally pass on the

subsidy to the Canadian
without contravening the Canada Customs Act,

customer

level, with reasonable
improving prospects.
have a stabilization of prices,
for

by Gross National Product that has
the dollar total has
by all industries, but
excess capacity noticeable in certain
instances may in some cases be. re¬
duced and profit margins could in¬
crease. /
•
\"/,■/ 7/

per

the

long as free world;
is maintained at

been indicated by

George Blair Gordon

several

that

activity

not been shared

price for

to pay a

material

raw

cents

those

levelling out of our Gross National
Product figure. The growth reflected

that

fact

than

assurance

present

this

the

stress

;

continue

chances

Dealing specifically with the cotton
manufacturing business, as exempli- y,

are

year. ago.
'

economic

fied by the cotton yarn and cloth
mills, these producers in the U.S.A.

made

As far as Canadian industry is concerned,
to give a good ac- -v.

touch

count of itself

maintain

respects the economic forecasts for 1959 may

some

Should

textile

American

may

G. HUNGERFORD

problem in respect of cotton fabrics and
garments made in Japan. Through the quota arrange¬
ments established between the American and Japanese

various services.

our

Few

the Canadian mills must struggle to

have

somewhat, our operating and engi¬
neering staffs will have more time
to plan for the orderly development
of

the

supplied

extent

large

In
have

/.
/•

ket for textiles in the U.S.A. is to a
very

which

costs

President, National Trust Co., Ltd., Toronto, Ont.

comparisons
.

still aware, however, of

are

complying with a request for an article to appear in
American publication, but written from the standpoint
a Canadian textile manufacturer, it is well-nigh im¬

pocket.
'
;
The American

Even this has its compen-

sations.

lem

Textile Company Limited-/

benefit of the American export

of numerous industries from

recovery

the pressure of higher
aggravate the existing prob¬
of low-priced imports from low-wage countries. :

In
an

the home furnishing field, we look
business for the new year, and a

good demand for our products.

GORDON

particular industry, that of the carpet in¬

own

dustry, as a section of
forward to improved
We

President, Dominion

taken.

were

our

internal

ada

President British Columbia Electric Company Limited

however,

sin

British Columbia.

can raw

GRAUER

nwhich

195S another prosperous year

make

their

tackled

Kingdom

United

the

problems, faced up to them in a realistic manner, and
would now appear to be reaping the benefit of the steps

B.C. Electric will be doing its part to
for the Province of

this province,

authorities

the

million will be devoted to the

expansion of our natural gas sales. At least $2.5 million
will be spent on the re-equipment and modernization
of our rail freight and urban transportation systems.; As
about 70% of these monies will be devoted to the pur¬
chase of materials and the payment of salaries and wages

Government financial

only about half that figure.
assistance to credit-worthy

borrowers, residential construction in 1958 has shown an
increase of about 25% over 1957. This factor together
with

increased

spending

institutions and community
decline in other capital

facilities did much to offset the

expenditures.
Conditions in both our countries have now

established

apparently strong upward trend so that 1959 is ush¬
ered in with many advantages over 1958. The stock mart
ket in Canada has also discounted this factor but not so
much as in the United States. If the world economy is
an

have to be made, but

the example of the manner in which

Continued

page

Volume

189

Number 5816

The Commercial and Financial Chronicle

Securities Salesman's Corner

High?

jsJones Averages and all the stock
indexes.

By ROGER W. BABSON

other

That is why no
can make

machine

forecast.

Mr. Rabson

explains why he is not equivocating in answering
the question whether stocks are too high. After
emphasizing

By JOHN DUTTON

The

chance, the writer believes
the "chances 60-40 that stocks will go down
considerably in
1959." Advises patience before buying stocks for
profit.

During the past few years there realistic and allow for continued
an increasing awareness
expansion of many of these young
part of certain very astute companies, since their research
and able speculators that the best activity
continues and in most

has been

that offered by the usual type of

trading which is

synono-

with the "board room," the
recommendations of reputable ad-

broker's

market

letters,

developmerit of real property in growing

areas.

rCertain
the

growing

companies

activity

have

the favorite vehicles for achieving

capital gains of several thousand
jpercent during the past few years,
com-

panies originally were of investment
quality,
but
many
have
grown into substantial enterprises
and

their

listed

have

then

been

j7'

The

a n s w e r.

have1

that nothing is

and1

only morticians,

exhuming and dissecting the past.
They can only guess as to the
moods of the people, which deter¬
mine whether stocks are going up
or

down.

and

the

Babson

have

bond,

ihirri
one-third'

in
m

ch nr+Wmc.
short-terms

nnoJliirrl

onH

guarantee

readers may not
dodging or evading the

means

profit.

sure, or

do must

Milwaukee Co. Names
Six Reg.

securities representatives, one of them a woman, have;
been named by The Milwaukee *
Company, members of the Mid-

Se?e

west Stock Exchange, it has been ^

self-control

anr>lv

sto?k

basis

this

law

market.

for

banker,

any

Representatives

MILWAUKEE, Wis. —Six new
registered

announced by Joseph T. Johnson,
«

They include Mrs. Donald C.

definitely going up or going down.
Honest, intelligent, and experi-

cash,
bonds,

readers

the

have

Booth, Raymond K. Gooch, Michae^ L* *mu
•^ran^11-J ®*
JackK. Thompson, anil Cornelius

that

you

stock

that

_ywu.
JUU

gQ^g

the

investment

enced
t

•

J™ one-third in a well-diversi*lst of common stocks,
therefore, whatever the market
^oes is okay with me. Forgive the
above personal reference; but I
above personal reference; but I
want

broker, or financial writer to tell

ever

then

penny! My personal holdings are
one-third

persistence to follow through

chance to the

nor

borrowed

about

fixed,

these guesses.

sale

stock

now-

think I

perity is to make the right guesses
and

for

Roger W.

Chance

be based upon guesses. The secret
of health, happiness, and
pros-

never

commission

Relativity" by
Briefly this law of chance

accepted
a

Law

a m certain. Everything

•

;

The
experienced ^'investment
salesman who is conversant with
the possibilities for the development of these very capable and
substantial
speculative
accounts
that are interested* in" this type of
very ultra "special situation," can
also build a substantial appreciation in his own assets as well as
his commissions if he is capable
of handling this type of business,

been

None of the stocks in these

biased

The Investment Salesman

electronic, chemistry, and land

I, how-

absolutely un-

;

•

development

the

true

accountants

whether

mere

companies, usually identified with
of highly technical
product, or a company that may
with

know

some; type

identified

These opportunities consist of the
purchase into smaller and growing

want

column

guess..

profit
possibilities, j Meanwhile,
the capitalization of these Icompanies in most instances is quite
small and the earnings oh a pershare basis can mount perpendieularly.
The combination of a
favorable tax situation, plus the
foregoing opportunity for high
profit, per share,- has attracted
some of the most keenly specula- *
tive minds in the country.
; A., *

visory services, or the kind of suggestions that appear in represen-;
tative

really

this

lessons learned from past experiments and thus create; additional

mous

are

IBM or

In order that
The V readers

oh the

market

Even

statisticians

the extent of "chance" in the law of

Special Situation

Dow-

determines the

impatience

Am Stocks Too

(563)

advisors

the
tAlc

40-60

some'un

that the market is

not

•

hedge

straddle*

^onestlv be bullish

^ey

that

win

talk

chance and not be

this article is absolutely unbiased.

What About

Moreover, I am not blaming
brokers for usually being bullish.

will

chances
umuto
CnanCeS

lIle

50-50

market

are
are
816

Mrs.

Jr.

Young,
—««

Jacobs,

Booth and
J

Thompson

and

30-70

Messrs.

Thev

Young are serving in the firm's

thev

bearish

terms

imperial.

Special

T-

Stocks?

207 East Michigan Street, Milwaukee office. Mr. Parks is located
m

Waukesha, where the invest-

ment firm

branch office
744 Grand
Avenue. Mr. Gooch is in the St.
opened

earlier this month, at

recently asked the Fresident ?auk Minn., office, Endicott Bldg.
phange. The real profit opporBefore joining The Milwaukee
They have wages, rents, and of one of America's 10 largest
~
^
tunity, however, has existed only development
of ■? such
accounts, ,private wire costs to pay; and companies why it is so difficult to Company, Mr. Parks served nine
before listing when these stocks how
to find them, and* how to parthey find that 80% of their cus- get him to give an opinion on his years with the National City Bank
were only available m the Overticipate as fully as ^possible in tomers will trade only on the own stock. He replied: "Because of New York.
Mr. Jacobs forthe-Counter Market.
some of the great, possibilities for
"up side." Therefore, they must I know that for every buyer of merly was associated with the
capital growth that ate inherent,-be bullish or get out of the busi- my stock, there must be a seller, attorney general s oifice. in Madi';
Popularity Increasing
irt this increasing active segment. ness. Magazine writers and radio These buyers
and - selters^kfrow son, WrsT,aS'U legal assistant. He
_a

National Stock Ex-

In next week's column, we will
deal with certain aspects of the
__
.—

■

^;The impact of

investment -security busi-

an ever increas-" of the
lngtaxburdeii pri earned and-'uh-Cness.
earned; income is forcing
;
means into ventures where).their w

"V-

•

.....

news comjmentators know they J- little about my company, yet they
get their materials accepted determine the price of its stock,
" "
" The stock goes
mostreadily by being bullish. ' But this is noi; all.. ~

can

is a security analyst for The Mil-

waukee Company. Mr. Thompson
has been
The

security analyst with
Company since

Milwaukee

Surely the bureaucrats in Washr up when the buyers are more
capital grows internally, aiMithe ||0lfO|| ofOCK EXChdnSQ i°gton know they can keep their anxious to buy than the sellers 1957. Prior to that he was with
Paine, Webber, Jackson & Curtis.
ensuing capital gains can be^axeci -m
■' m*•*
- ®
f jobs only 'by holding, their tongues
are to sell, and vice versa."
at a maximum of 25% rather .thah Rynfl
AnnualDllHlfil*
*
or ky being optimists. I do not < The above means that the price
P. D. Greenwood Opens
upito 90% ; as .is now the ;,case\in^r? T
"
J 5 ^ •/blame^anyf of these; they must of an individual stock depends
FRANKLIN
PARK, N. J. ■
ipp^ income iz brackets. v Also/'':'the"^ DETROIT, Mich. — The Detroit eat!^^ i merely want my readers to upon the impatience of the public
■

i.'

advent of technical and scientific

know-how in

the

fields

Stock Exchange will hold its 52rid

elec-^Annual

at ' the

Dinner

tronic devices, transportationjinhd ; Hilton Hotel on
the military developments bf iiiist 1959, at 7:00 p.m.

wa..!?Sn^a/,?C!.»a!!, °PP,°r
® £

fJJnct
ahd

man

Brick and mtoter

tools

today only the
lesser ingredients that create prof¬
its

power are

vast scale for many small

enterprises. A handful of brilliant
scientists can come up with
a
product so revolutionary that its
production costs and sales, and
general and administrative ex¬

incident

penses
are

not

field

its

burdensome.

Where

impotent.

the

marketing

This

labor

Tuesday, Feb. 3,

or to sell it.
Impatience Philip D. Greenwood is conducting
truly controls the price of .every a securities business from offices
stock. The total average of this at 11 Springdale Road,

take "with several grains of salt" to buy
what v they

about the

hear
stock

and

today
outlook,

read

market

■

The guest speaker will be Dr.:|=
' William H. Alexander"- of Okla-

^ have

Statler-

homa Gity' okIa- Dr- Alexander's

subject will be "The-Power to
Become,"
an 'dnspiratibnal
and"
hard-hitting talk of >the type that
is responsible for Dr..Alexander's

being

rated

the N

Chamber of Commerce

ti o n

one

a 1
of

SCURRY-RAINBOW OIL LIMITED
i

the

top

public

speakers

>■■■

(Incorporated under the Companies Act of the Province of Alberta)

America.

The dinner will be attended by
approximately 450 members of the

one

bosses

are

Detroit

are

>■539
1

Eighth Avenue West

community.

The profit margins

Underwriters

Industrial ^and

Distributors

Government of Canada Bonds

Financial

Dealers
Treasury Bills

;

Calgary, Alberta

COMPANY IS ENGAGED IN THE PRODUCTION OF AND
EXPLORATION FOR PETROLEUM AND NATURAL GAS

Provincial and Municipal Debentures

Corporate Bonds and Shares

IN WESTERN CANADA

EQUITABLE SECURITIES CANADA LIMITED
Member of The Investment Dealers* Association of Canada
Stock

Exchange

Stock

American

Exchanges:

Toronto

Stock

Exchange

Calgary

Stock

Exchange

EQUITABLE BROKERS LIMITED
Member of The Toronto Stock Exchange

Registrar
^

Head Office
60 Yonge
MONTREAL

•

Street, Toronto, Canada
HAMILTON

WINDSOR

ST. CATHARINES

•

HALIFAX

and

Transfer Agents;

Canadian

Bank of Commerce Trust

Company of New York
20

Exchange Place, New York, N. Y.

Prudential Trust Company

Limited

(Canadian)
U. S.

Subsidiary: Equisec Canada Inc.

Associated Company: KleinWort, Sons &
Direct private wire with Goldman,

Calgary and Toronto

CoLtd., London, Eng.

Sachs & Co., New York
■SI

The Commercial and Financial Chronicle

(564)

tension

Continued, from page 30

Montreal

shaping for a general increase in prosperity, this factor
may well mean relatively more for Canada than for most
other

countries.

■

Canadian crude

for

markets

our

Middle East have

demand

markets.

"«

be it

•

kets,

has

year

witnessed

States

and

Canada.

Iraq, the key¬
stability, is
reported to be showing signs of in¬
creasing communistic pressure, which
continues to heighten the possibility
stone

Persian

Gulf

political

pressures

ern

Vene¬

political interference and at competitive prices.

because of

It urged

1959.

for

a further
expansion of its
expansion which is entirely necessary
ever-increasing world demand for oil
1 Development of the
industry in Canada is moving
rapidly, with many plans under consideration for export

The

gave rise to

the

should

the

industry;

year

oil
in

Alberta

barrels

per

seen a

production; from

day

404,000

United States.

It seems to

Greater activi¬
A.

Lilley

Energy

weather

across

are

over

the

advance

1958.

due

low

cost

houses

increasing cost factors,
price conditions which

of depressed

With

the

unit

cost9

building labor continued

both

building

to advance there

continued effort to hold down the cost of
more

efficient methods

com¬

fabrica¬

assembly^ and by substitution of the cheaper
more

satisfactory products which

implemented

1958,

some

coming

are

oil

the

Alberta, Canada's fastest-rising in¬
industrial, agricultural and

were

reached

and

some

new

others maintained.

indices

particu¬

that

will

1959

another

$100

burning steam locomotives

Exploration activity in 1958, as measured in terms of
completions, declined about 15% as a result of the

reduced export and static domestic
requirements of crude

1957, and $30
previous peak set

over

the

Hon.

C. Manning
.

Decentralization of
cant

factors

creasing

industry is

Alberta's

number

one

economic

plants

of the most signifi¬
transition.

in¬

being constructed in
smaller cities and towns, to make greater use of the
province's primary and secondary raw materials. For¬
mer .agricultural centers as
Blackfalds, Okotoks, Cynthia,}
Lethbridge, Medicine Hat, Red Deer, Pembina,-Wabamum, Pincher Creek,. Whitecourt, Taber, Nevis, Duver-i
nay, Breton, Camrose and others are becoming industrial
and no longer dependent upon agriculture as their only;

observe that consumption

calling at Canadian ports, contributed
heavy fuel oil demand.

million
over

During the past five years more
than $500 million has been invested in the province by
industry—on new plant construction and expansion. In
1958 nearly $65 million was invested in manufacturing
concerns while housing expenditures climbed to a rec¬
ord $162.4 million.
V

Federal

well

oil.

C. MANNING

in 1956.

part of the

Province

million

country last winter.

early retirement

to the decline in

ex¬

year" in the history of the
province.
'I' '
Alberta, with
a
population
of
1,201,000 or about 7% of Canada's
total, drew approximately 10% of
the
nation's investment, reflecting
investors' optimistic outlook in the
province's future.
I
;
Public and private investment in
Alberta
during the past year ex¬
ceeded $1,100 million, an increase
of

With normal climatic condi¬

and fewer vessels

that the only possible

breach.

the result of research.

indicates

group,

Lee

the

population expansion during 1958
levels

increase in product

Looking back

the

Stirling

approved

"banner

heavy fuel oil declined
major portion of the gains achieved
.in the other products. Reduced activities in
key industries.such as the pulp and paper and aluminum

Charles

other

larly noticeable upward surge in
production during the last quarter

Demands for gasolines and diesel fuel in 1958 showed
modest gains over the previous
years, domestic heating
oils registered little change but

compete in its logical markets in the

and

The

consumer.

^sufficiently to offset

the North American level of costs to

and

financing js therefore
construction, unless

dustrial power, continued her

pdtroleum products in Canada registered its smallest
annual increase in the postwar period due to the mod-

compa¬

residential

Premier of Alberta

:of

nies are now
endorsing the inde¬
pendent oil companies view that it
is virtually impossible for Canadian
crude produced under a North Amer¬
ican system of
prorationing and at

banks

Lack

HON. E.

Government.
v.v

per day.

Spokesmen for major, oil

tion

industry, will improve in

expected

mission

and

280,000
barrels

fills

pleted buildings by

exploration activity, mainly in West¬
Canada, will be slightly greater than was the case in
The anticipated development
program could be
seriously affected, however, by a curtailment of invest¬
ment capital if the recommendations of the
Royal Com¬

difficulty and the

seasonal increase

will be

I believe that oil

expanding crude
Already the past four

markets.

will

materials and

1958.

growth. It could be a vitally signifi¬
cant year if we either acquire or ob¬
tain the promise of
months have

existed

ern

restored

materials

earnings of the petroleum
reduced in 1958
the general but relatively

ability of natural gas which will share
space heating and industrial markets.

hearings held partly here in Calgary
healthy and very critical self-appraisal of

economics

1950

chartered

and others because

tions during the winter months,
consumption of domestic
heating oils should reach a record level, despite the avail¬

of boom for the oil

Borden Commission

the

There do not appear to be
any serious shortages of
building materials which will interfere with a high rate
of construction activity in 1959. Prices of some
building

It is

were

in demand for petroleum.

CHARLES S. LEE

of recession and

same

would not be surprising if the rate of
housing starts in
1959 were somewhat below the record rate of
1958.

out

of transportation—
air, road, rail and water, should occur
and contribute largely to the increase

President Western Decalta Petroleum Limited

was one

support. Inter¬
mortgages will be high and,
token, NHA insured mortgages will be less

selling as fast as they are completed, it is
probable that the government will go a long way toward
providing the necessary mortgage funds. However, it

ties in all forms

as of
today,
delay immediate improvement in production and mar
keting. Nevertheless, the oil and gas industry of western
Canada is being built on a firm and
lasting foundation,
for major economic growth.

industry; 1958

brightest spot

the last year;
housing starts continued up to
If anything approaching the 1958

year.

government

seem

demand should boost the industry to

these plans were approved
the lag in construction of pipe lines would

year

the

Sales, prices for proven land have
unexpectedly good prices have
remote wildcat acreage in Northeast¬

record levels in 1959.

Even if all of

the
over

conventional

attractive

A rise in labor and other oper¬

Canadian

was

been

lending : institutions.
likely to be a curb

ating costs might delay the rate of
improvement and retard the forma¬
tion of capital which is essential if
this industry is to keep pace with
the
ever-growing demands of the

capital investment by
trend may well increase the

Nineteen Fifty-seven

rates

by the

tensive competition which developed
within the

in the light of the

gas.

est

mild economic slowdown and the in¬

industry. This same
attractiveness of Canada lor

has

in Canada

rate of housing starts is to be continued there will have
to be substantial additional government

leum products. We believe that

industry which

The continuing trend of political
developments in the
East and Venezuela are
tending to reduce the

•of oil

field

rate

of the

With the gradual improvement which is predicted for

Middle

development,

record

the end

Canada's general economy in 1959, it is anticipated that
an increase of 6 to 7% will occur in demand for petro¬

which7 may control marketing
outlets both in Eastern Canada and in Great Britain
must
provide a market for western Canadian oil.

the oil

construction

President, McColl-Frontenac Oil Company Limited

interests

areas

the

and

but often

her present main suppliers in the Middle
It emphasized that Canada is the
only country with large oil reserves which can be devel¬
oped immediately and imported to Britain free from

these

Residential

in the construction

A. N. LILLEY

attractiveness of

very

office space, etc.

reaching out into the farthest north country, where
even
greater difficulties would have to be faced if oil
was discovered in any quantities.
It should be of great
encouragement to our Government that the oil industry,
in spite of its difficulties, is prepared to take the lead
in developing the far north.

Venezuela.

business

paid for

the

struction should maintain its pace by reason of continued
demand for new suburban
shopping centers, expanded

British Columbia and the Northwest Territories.

of (1)

reason

been

greater share of the

hasten development of oil production in Canada to free
herself from the political uncertainties and her de¬

that

Crown

a steadying
influence
the recent recession. The
expansion of institutions will cer¬

hospital facilities which is
L'F. Loaj
stimulated by the new gov¬
ernment hospital plans; and (3) by
'
• i
government interest in this type of construction as a
means of unemployment relief.
Strictly commercial con¬

characteristic of the industry that at a time when it is
constrained for markets for its crude oil it should have

profits of that country's oil produc¬
Edward H. LaBorde
will go to
the benefit of its
government, in the form of a tax or
otherwise. Against this background, the Canadian oil and
gas industry offers a favorable economic
climate, and we
in Canada all hope for a continued
atmosphere of poli¬
tical understanding and
cooperation.
Early in January, an oil industry weekly, "Petroleum
News," published in London, urged that Britain should

pendency

recent

been

tion

East and

ac¬

being

great possibility of extending the huge gas

which showed

eventual disruption in the flow
of oil from the Middle East. Mean¬
zuela indicate

rising

mand for

opti-"
have ex¬

been well maintained and

while,

great interest in expanding educa¬
tional facilities; (2) the great de¬

1958

in 1956 and 1957. We expect
interesting developments in the Berland River area, the
Windfall area and several of the important foothill struc¬
tures which have given excellent prospects. The exten¬
sion of gas gathering facilities for these potentially huge
reserves is already being freely discussed.

other than the United

sources

general improvement over

lias been evidence of this already. Statements

There is
fields

Venezuela, the two principal "freenation"

expect

construction,

through,

tainly continue by

crude,

production in Alberta will be from
higher than it was last year, averaging, say

10%

continuation of adverse political and
economic pressure on oil companies

operating in the Middle East

excess

340,000 barrels per day. The allowable for Alberta rose to
404,000 barrels per day for January. We do not expect
any substantial increase in exports to the U.S.A. in spite
of the additional 12,000 barrels per day now going into
the Puget Sound area. We believe that the drilling ac¬
tivity, particularly in the earlier part of the year will
be no less and may be higher than it was last year.

gas industry of Western Canada
major strengthening of its position as
of politically and
economically safe areas of

past

marketing its

We anticipate that

For 1959 the oil and

The

perienced so far has already led to an increase in the
demand for petroleum products through the outlets which
already exist.
r

President, Canadian Homestead Oils Limited

economy.fEven if the industry does not

mistic and the relatively cold winter which we

LaBORDE

;

two or three years into the future, will stimu-

forward to

look

and there

in industrial

ing has been

from both Canadian and U. S. business circles are

ing world economy. The restoration of convertibility of
currencies and the common market in Europe
may bring
about higher operating ratios which will
spell boom
prosperity. Canada is a good place for the investment of
at least a part of one's funds. "
'

supply.

even

late the entire

the world's commodities—importing countries tend to
on their own resources first during economic reces¬
sion—and thus Canada stands to gain greatly from a ris¬

one

Institutional and commercial build-*

•

TThe promise of increased mar¬

receive the green tight for

rely

the

■

celerating towards the latter part of
the year.;
,/ :
'»
■" -

pipeliners or white collar workers, is vitally affected by

anticipate

reasonable to

trend

drilling, seismic or service companies, supply houses,

this marketing problem. -

raw materials and large-scale operation make
competitive in- world markets. Exports during
equalled or exceeded those of 1957, and our
imports have lessened. Every million people we add to
our population lessens our geographical
handicap and in¬
creases our prosperity.
To an extent we are a marginal supplier of many of

can

1958 have

EDWARD H.

existing facilities and establishof new plants.
It therefore

ment

of every phase of the producing industry,

Canada

seems

The activity

that of the United States into an area of
There is every reason to expect that this will
continue through 1959. This
recovery in turn will tend
to
revive
immediate
interest
in
expansion plans involving additions
,

repeated again and again—demonstrates that Canadian
theionly reliable source of crude oil in its own

following
recovery.

profits—a demand, by the way, which could be

dance of

for a greater share of oil

by the Venezuelan Government

crude is

The rate of industrial activity in Canada seems to be

risky it is to tie Canadian economy to these

politically unreliabable areas/ In particular, the

company

Thursday, January 29, 1959

President, Building Products Limited

Recent events in Venezuela and the

Confining this .short review to the general situation
rather than that of particular industries, all of which
have their pluses and minuses, let us look at the con¬
struction of Canada's economy. We are a small, wide¬
spread, fast-growing, high standard-of-living population.
We cannot count on generating a self-contained boom
prosperity. We must export from our treasure house of
natural resources, the more finished the form, the bet¬
ter. A comparative wage structure with that of the
United States militates against this, but efficiency, abun¬

L. F. LONG

area.

shown how

the

is in

means

of livelihood.

are

The

1958

value

manufacturing in Alberta is
ex¬
pected to exceed that of basic agriculture for-the third
straight year. Value of production is estimated to be.
about equal to the 1957 figure of $762 million."The figure

for agriculture is also expected to remain near the

1957jj

value figure of $595 million.

Alberta's 2,200

include
and

almost

manufacturing plants have expanded td*

every

field. Textiles,

clothing, cement,

clay products, glass, ore refineries, steel mills,

sports\

Continued

page

Volume, 189

Continued

Number 5816

from

The Commercial and Financial Chronicle

financed

page

(565)

under

Housing Act.
by

National

actions

government

provinces additional financial

taken

sistance for

field

the

Economy

fourth quarter of 1957.
nine months of 1958

In the first

struction work carried out

expenditures
making a firm recovery, and it is on
residential construction were
encouraging to note that qualified
28% higher than in the same pe¬

promise bright opportunities for
energetic Canadian exporters and
should go far to fulfil the goal of

commentators

the

United

riod

1957.

the winter months.

To obtain

perspective on de¬
velopments during 1958, it is nec¬
a

to refer very briefly to the

essary

over-all

economic

trends during
record-breaking

recent years. The

severe.

gether

presentation.

Exports Held Strong
of

igin in
mand

rapidly rising world de¬

for industrial

materials.

Throughout

riod

early 1957 it became apparent that
many
commodity markets were
moving into a position of oversupply. This had the effect of

the

mood

caution

de¬

veloped, it spread to other indus¬
tries. By the end of 1957 inven¬
tory liquidation began to make
itself

felt, with the result that a
portion of total demand was be¬
ing

met

from

existing
stocks
new production.
developments led to a

rather than from

These

noticeable decline in economic

ac¬

tivity particularly in the durable
goods manufacturing sector. By
Dec.
1957, - industrial production
had fallen 7% below peak levels.
After a short period of hesitation,
output
began
to
show
some
strengthening in April, 1958, and
in the third quarter of 1958 indus¬
trial

production

was

level

about 2%

above the previous low
point. Industrial employment, af¬
ter

adjustment for seasonal varia¬
tion, declined between August,
1957, and March, 1958, but gained
during the succeeding six months.
The

inventory liquidation

which prevailed in 1957 gave way
in recent months to
inventory ac¬

cumulation.

External Economic Conditions
Canadian experience was,

post-war

population

growth and
rich resources

pe¬

the

discovery of
ex¬
erted a strong impetus on the Ca¬
nadian economy and these influ¬
ences continued to be felt during
1958 despite the difficulties ex¬
perienced since early 1957. Indeed,
a variety of factors were at
work,
sustaining total Canadian produc¬
tion during the recent recession
and contributing towards the cur¬
rent recovery. The most impor¬

dampening plans for further ex¬
pansion in the resource industries
and

the

marked extent, influenced by eco¬
nomic conditions abroad. The in¬

markets

•

tion.

in general and

Conversion

the

was

mediate" future.
obtained

principal event in Canadian

Canada

the downturn in the United States

world

could

Funds

last resort from the

as a

opera¬

banks, with the Bank of Canada*
providing increased cash reserve®
to the chartered banks, but afte^

and,

financial history in 1958

1956

—

The Bond Market

Notwithstanding the weakening

had been characterized by the decline was reversed, com¬
immense business capital in-r pared to a drop in output about
vestment boom which had its or¬ half as laree in this country.

Canada Conversion Loan 1958 and

The

dustrial production in the United
States fell by about 14% before

to fiscal au¬

both

countries, and
a serious handicap to the sale ■&§
new
issues for cash in a period
of government deficits.
j: : 7 >
By the end of June the market
atmosphere was very unfavorable
to new financing, yet the Gov-.
ernment of Canada needed large
sums
of new money in the im-7

estimated last June in the budget

the

United States than in Canada. In¬

expansion "in Canada in 1955 and

with

Til®

Canada.

and

matter of concern

thorities

.Finally, Gross National Product

predicting a sustained and accel¬
governments and institutions on
erating upswing in 1959. At the
community facilities, offset the
same time it is a fact of some im¬
greater part of the decline in
portance that the recent contrac¬
business capital expenditures.
tion
was
more

an ex¬

panding world economy."

States

large volume of securities falling
due for repayment each year wa®>

in 1958 attained the record figure
of $32 billion,;, precisely as .was

panding Commonwealth in

unanimous

United

during
V; •

increa.se,
higher outlays

States

almost

to¬

This

the Montreal Conference, "an ex¬

are

public debt has been shortening
for
several years,
both ill th®

as¬

development.
the Federal

resource

Furthermore, in
of housing were a major factor
sphere the government embarked
in bringing about a record level on
a
greatly
enlarged
public
of
housing
starts
for
the
12 works program.
Special encour¬
months' period beginning in the
agement has been given to con-,

Prospects
Tor Canada's

the

The

the

was

Loan

largest

large scale purchases of gov—,

think I may say, the most success¬
ful financial operation in Canada's

particular, total Canadian ex¬
port sales have been well main¬

history.

Let

tained and for the first 11 months

the

of 1958

cision

the

embark

slightly exceeded those in
period in the previous
year. Larger sales of wheat, beef,
uranium, aircraft and farm im¬
plements were sufficient to bal¬

situation

remind

you

which

taken

was

last

ernipent securities by the bank®
and corresponding monetary ex¬
of pansion
in
the
preceding
1£

the

de¬

summer

months this would have been re¬

garded as dangerously inflation¬
unless other steps could ba»
wit!*

this

undertaking.
April, 1958, the rising trend
in bond prices was arrested. In¬

same

ary,

taken simultaneously to deal

public debt structure
ami
make possible the sale of future*
prospective issues of government bonds to*
in the export of industrial ma¬ concomitant of a growing demand non-bank investors. At the same*
terials.
Stability in our exports for money from non-government time some way had to be found*
sources.
In
the
United
States to reduce the heavy proportion &f
was accompanied by a substantial
reduction in imports, largely due worry about the size of the gov¬ short-term
bonds
and
increase*
to the fall in demand for invest¬ ernment's deficit and borrowing substantially
the
proportion oM
ment goods.
requirements and fears of infla¬ long-term bonds.
The decline in im¬
tant of these were: an all-time
tion emerged at an early stage
The five victory loans totaling
record in consumer spending; an ports meant, of course, that the
burden of economic
adjustment and a sharp and continuing de¬ $6,416 million had ultimate2 ma¬
all-time record in residential con¬
in Canada was shared to some ex¬ cline in bond prices set in.
turity dates between Jan. 1, 1959*
struction; an all-time record in
tent by bur foreign suppliers. As
The last reduction in the dis¬ and Sept. 1, 1966. In addition, al$
our export trade; and last but not
a
result of these overall trends count rate of the Federal Reserve these issues were callable on oe"
least,
a
large
and
determined
the Canadian trade deficit for 1958 Banks of the United States was before Sept. 1, 1961,
This pros¬
effort on the part of the Govern¬
will be substantially reduced, and made on
ment to counteract slackness in
April 18. Bond prices pect, in addition to non-victory
the declines

ance

dications

with

appeared,

which occurred

economic

the

recovery

its

the private sector of the economy
through public works and other

will indeed be lower than at any
in the last five years.
The

in that country hit their peak on

time

constructive

deficit

which

measures.

United
Rise

Personal

trade

our

States

than half of what it

Income

with

will be

little

the

1957.

the

social

increased

security

fiscal

field

their purchases of con¬
sumer
goods and services while
putting aside a relatively large
proportion of their earnings in the
form of savings. In the first nine
months of 1958 personal incomes
were 5% higher than in the same
period of 1957. This strength, in
turn, contributed to a rise of 4%
in consumer outlays in the first

strengthened production and

nine

ployment,

expand

months

1958

compared

dustrial countries of Western Eu¬

with

underwent a period of slack¬
ening growth in 1957 and 1958 and

payments

continued

with

new borrowings, made debt
re-organization ' imperative if a
high
degree
of
confusion
and!
demoralization of the bond mar¬

heavy

little

ket

not

reductions

during the last 12 months affect¬
ing the business community, prov¬
inces, municipalities and the in¬
dividual

the

also

were

Federal

tax

wide¬

Federal

over

short

equitable*,

issues

efficient and less costly than,

was

piece-meal approach.

Need to Improve Debt Structure

intervals,

Fundamental to the project wa®
the

idea

that

would

easier

public long-term bond®
in exchange for bonds which they
sooner or later to have a weighty
influence
on
developments
in already held than to sell then*
for cash.
The>
Canada.
And so it has been in long-term bonds
prospective cash requirements of
1958.
,v;, •
Continued on page 3S
The
average
maturity of the

taxpayer. Besides these
measures, which served to under¬
write purchasing power and thus
the

direction

Can¬

let alone in degree of movement,
but undoubtedly developments in

provinces there

financing

for

loan

expected that
Canadian bond prices will always
follow United States prices even

spread

to be avoided and a soundt

created

ada's expansion and developments
The conversion of all five victory

has continued in that country up
to the present time.
It

was

basis

in the last week-of November-and

the

maturities and the need foir

loan

interruption until Oct. 3. A fur¬
ther decline ip bond prices began

and

then set

was

then

but

In addition to the comprehen¬
Despite lagging production and
employment there was an almost sive Federal program in support
continuous rise in personal in¬ of
housing,
the
substantially
comes
in
1957
and
1958.
This higher government expenditures
made it possible for Canadians

A decline

21.

temporarily
inter¬
rupted in the latter half of May,

was

April

em¬

Govern¬

United

States

to sell the

bound

are

tant extent personal incomes were

rope

there

was

sharp

short

economic

but

relatively

recession

United States. These factors

reflected in

mand -for

raw

year

earlier. To

impor¬

ment

has

made

available

the

supported by substantially higher
transfer payments from govern¬

including increases in old
pensions, veterans' benefits,

ment,

the

were

reduction of the de¬

materials

from

age

i'i

Broadly Diversified Mining Exploration and Development

family allowances and unemploy¬
insurance

ment

well

NX
'.A

assist¬

third

countries, and the conse¬ ance payments.
quent'"decline in foreign earnings,
Residential construction, largely
particularly for countries depend¬ because of a shortage of mortgage
ent on primary production, had an
funds, had declined severely in
adverse effect

the international

the

trade in industrial goods.
•

Events

the

United

States

have, of course, an important
bearing on world economic condi¬
tions

and

especially

economic
of

the

developments

because

large-scale movement of
services and capital be¬

tween

our

countries.

half of

1957.

1957

the

1956

the

billion

ment

funds

to augment

private

stimulus

intense, and

dollars

were

made

was

Limited

Limited
Authorized Capital 5,000,000

over

shares Issued

—

govern¬

Authorized

2,658,505

the
,

OFFICERS AND

P. CARR,

Ontario

edition,

Tuckahoe,

GUILFORD,

Director

H. L.

C.
.

RINGSLEBEN,

Toronto,

Director

SALTER. Q.C., Toronto, Ont.

C. R. SMITH, St.

Albans, Vermont

Director

M. OSBORNE, C.A.,

217 Bav Slrrc!

Telephone
EMpire 4-1138

Stock

Exchange

Toronto, Ontario

Treasurer and Director

OFFICERS AND DIRECTORS

Toronto, Ontario

Director

•

Vice-President and

Toronto,

„

Ontario

Director
J

Toronto, Ontario

GUILFORD,

Tuckahoe,

M
■

N. Y.

Director

H. J.

LISACK. Chicago, Illinois
Director

Director

Ontario

Treasurer and Director

Head Office—25 Adelaide St. West Toronto,

M. OSBORNE, C.A.,

Toronto, Ontario

77 Treasurer

Secretary and Director

GLASS, Buffalo, New York

M. OSBORNE, C.A., Toronto,

►'

B. N. APPLE,

Ont.

CANNON, Buffalo, New York
Director

H. L. GAR VIE, Toronto,

r .'

RINGSLEBEN,

CARR, Toronto, Ontario

President and Director

Director

•«*

Ont.

Director'

TORONTO I. CANADA

Canadian

Toronto, Ontario

GARVIE,.Toronto, Ontario

•
-

VV.

Co. Limited

Listed Toronto Stock Exchange

Vice-President and Director

;

N. APPLE,

APPLE, Toronto, Ontario

request.

John M. Easson

Exchange

President and Director

Vice-President and Director

3,000,005

OFFICERS AND DIRECTORS

DIRECTORS

P. CARR, Toronto,

It contains up-to-date information

industry. Copies

—

B. N.

all Canadian producers and a general survey of

Capital 5,C 30,000

shares Issued

•

pur Annual Review of Uranium,

Authorized

3,200,014

Listed Toronto Stock

President and .Director

—

and

provided

v-vta
is now available.

Capital 6,000,000

shares Issued

Listed Toronto Stock Exchange

•::r

-O]

Limited

Additional

by new
therefore reassuring to see that Federal legislation reducing down
during the course of 1958 the payments and lowering income
United" States economy has been eligibility requirements on homes

1959

Mining Company

available

housing loans supplied
lenders.

Fatima

half

competition for loan

lets became less

Multi-Minerals

Mining Company

and first

second

funds from other investment out¬

half

Canadian

goods,

two

second

half

Midrint

■

Canada—Suite 1106

The Commercial and Financial Chronicle

(566);

Continued from page 32

'v,

HON.

balance

MATHESON

East.
Premier of Prince

primary products

fishing lures, plastics, and scores of
are being produced in the province. ;

There is every reason

Edward

near

imme¬

Slight decreases in some industries in 1958 were off¬

is creating new markets for our

Other industries allied to agri¬
gains in 1958. In the first 10 months
of the year flour production value increased more than
$2 million, to $19.2 million; gross sales of dairy products
jumped nearly 8% to $34 million.
Alberta.

ucts.

culture also posted

capitalize

are

refineries

oil

and

other

numerous

using the by-products of oil and natural gas
primary material. /
Gross sales of refined

their

petroleum goods maintained

international

While

conditions

have

resulted

de¬

creased oil

production, exploration is continuing, to bring
proven oil reserves to 2.4 billion barrels and the proven
gas reserves to 22 trillion cubic feet.
Electric power generation in Alberta is being stepped ;
up year by year to keep abreast of the growing demand
not only by domestic users but industry as well. During

1958, generating capacity was increased by 152,000 kilo¬
watts, largest annual increase in several years. Total
generating capacity is now 748,000 kilowatts. Scheduled
increases

will

bring

the

province's

total

generating
capacity to 1,116,000 kilowatts by the end of 1962.

Alberta, however, have
hardly been tapped. Surveys have shown that there are
still many ideal locations for power plants on two major
rivers, yet undeveloped. r

our

In October, a $25 million gas

processing plant operated
by British American Oil Company went on stream at
Pincher Creek. Its capacity is 140 million cubic feet of
sour gas per day with
propane, butane and condensate
the main products.

Another

gas

Other major projects under
way include Northwestern
Utilities $6,000,000 gas plant at

Calgary; Shell Oil Com¬
pany's $2,000,000 petroleum products plant at Okotoks;
a
$17,000,000 gas plant at Pembina, by the Goliance
Corporation; Fibreboard Manufacturing Limited's $500,000 building products plant at
Wabamum; Texaco Com¬
pany's $1,500,000 gas plant at Cynthia; a $17,300,000
expansion to Imperial Oil's refinery at Calgary and a
$720,000 plasterboard plant and plaster mill at Calgary,
built by Western Gypsum Products. A
$7,000,000 expan¬
sion program is also under
way at Canadian Industries
in Edmonton.

Among the major proposed projects is a $15,000,000
petrochemical plant to be built at Blackfalds
by the
Polymer Corporation.
One of the strongest fields of business
activity in 1958
was the construction
industry which chalked up] a new
peak in building progress. Value of
building permits
issued by 10 cities and 167
municipalities was more than
$227 million, up by 75% over the
corresponding period
in 1957. Number of contracts
awarded also

increased by
nearly 75% to 7,753. Value increased by 30.9% to
$214 3
million.

Residential

contracts

accounted

for

the major share
in number to 6,752
Substantial increases

increase—by 87%

and

59%

noted

contracts.

value
in

the

$83,627,500.

value

business

Lidustria1 contracts

72, but fell 33.4%

rose

value.

and

development

recent

by 20 in number, to

Alberta

vast

iron

171,000

ore

involving possible

deposits

southern

miles of forested land are
increased exploitation.
One new
multi-million dollar
pulp mill has been in production
for one year and another
is slated for
coming

square

for

early construction.

nfXifIyWf° i5
the record
of

With
U

the

aT-e ln °Peration» meeting demands

shattering construction

province, as well

program

the

export commitments. "

possibility of increased petroleum sales to
and further
development in

and eastern markets

the general industrial

comeremam m

Present

mated

feet

(1)

attributed

gas

will

increase
This

fold.

Oil

alone

Western
least

does

Athabasca
serve

gas

(3)
the

not

another

which

estimated

oil

100

to 300 billion barrels.

The

future

the

industry, how¬

ever, is dependent on reliable long
term markets, and it is obvious the

present practice of importing crude
refined products in excess of one

McGregor

million

day is detrimental to the national interest.

more, although United States
ural market, there isn't much

is Western

dollars

Further¬

Canada's

nat¬

point in eliminating United

States restrictions against Canadian crude when Canada
is unable to find buyers in the United States for even
50% of the quota allowed under the present voluntary

quota

system.
It is therefore, becoming increasingly
both government and business in Canada

apparent to

that the only answer to the above probl.em is a pipeline
Edmonton to Montreal, Which area is importing

from
in

excess

400,000 barrels

day. Furthermore,

per

finding their

are

the Montreal

way

of crude

oil and

products

substantial part of these imports

far west

Toronto

products line.

through

A recent inde¬

pendent engineering survey which was presented to the
Borden -Commission

indicates

that

field, it would

appear that Alberta

national spotlight for

should

not

The

present

refineries

some time to

Montreal
or

reluctance

the

inch

pipeline

companies

area

internationally

pay

area

when

can

their

controlled

crude

own

oil

brought from

Venezuela, particularly since there is

consumers

fuel oil.
of

Montreal

understandable

affiliated

East
or

the

for their gasoline

cause

from
that

the
no

near

quota

import tax in existence to discourage the practice.
Although the 1958 figures

imported into

the

Montreal

are

not

area

available, Canada
Eastern

and

Canada

approximately 403,000 barrels of crude oil and products
per

day

during

approximately

1957

which

$455,000,000.

about

berta

produced

imports
This

were

alone

$403,405,000 worth

other liquid petroleum products during
of this Eastern Canadian market to the

fact to

all

valued

Canada,

can

1958.

crude

..."

in Eastern Canada and.

Stat.es for both oil and
.

Western '

from

;//r///a'^/////'i-'
'".v.-'x J.;'mcki>JN0N

President;; The Canadian Bank
..*•?;

gas

„,/.

///»;,

of Commerce

iyy;-;f'.'. Toronto, -Ont. /•././/;.;>•/•

^ 1
//y,''/■'/

established, ?:'5

example, continues to grow through '
both
natural, increase and by net/
immigration, which; in 1958. was un- 1
usually .high ' for'. a recession? yeaiv 1
Inventory liquidation, .which was
never as s.erious 'in7 Canada as In the
U. S., may .now be assumed to have

itseif,

pears

income
and

with.

consumer

and,

some

build-up

ap¬

be in prospect.
Disposable
has been well maintained,

sayings at a high .level
purchases should, continue

Neil John McKinnon

expand,.* and broaden into the
neglected field of durables.

somewhat

The .sharp pace

of recovery

in the U. Si, our largest export market, and:
slight easing of import restrictions bv the U. K.,
appear to justify the expectation of a resumption of the
upward trend of export trade.
some

the

present

field, of;

development

resource

ahead, of

not

at,

of the magnitude of;
the St. Lawrence Seaway, which will be completed this
year.
Much steady work in this field is, however, con-,
tinuing and heavy exepndituers are being made over
a
very wide field in preparation for new mining and
other developments.
Access to mineralized areas, both
see

programs

by road and by rail, is an important aspect of the work
planned or in progress. New hydro-electric generating

capacity brought into operation reached a record figure
of nearly 2.5 million h.p. in 1958, and other installations
under

construction

1959

and

start

has

also

should

add

further 2

made

contrast

the

labor

h.p.

years.

large scale irrigation

and water conservation scheme for the
In

million

than 2.6 million in succeeding

been

prairies.

other postwar
years,-unemployment in 1958 presented serious problems
to both governments and employers.
While the outlook
for

the

months

situation

immediately

unusual degree of seasonal

ahead

colored

unemploymeht there

by
are

an
un¬

derlying factors of strength that suggest at least a mod¬
erate improvement by the spring.
Among these is the
settlement of labor disputes that have interfered with
production in a number of key industries; and a high
level of contracts awarded in recent months, which bodes

and

well for employment in

oil industry,

unfavorable

spent

Al¬

The value

readily be appreciated,

ticularly since Canada is also in

amounted

of Canada's total imports for that year.

only

;

Wm.

and
per

picture during 1959 are:

underlying rq a r k e t demand
key sectors of the economy
should 'provide? a
foundation
for
progress
in 1959. X Population, - for

re¬

»■-,

in several

the

Sands

billion 4;

one

The

ten

include

/;
exportable surplus.-vm

ma^kht."prospects

Better

United

Canada.

Canada

potential

recovery/continue/as the economy moves/
further from: last year's readjustment:, In both commerce'1
and industry ..the,'outlook is improving, and resumption
of economic growth after the recent pause now-appears''

oil

feet

flow

The probable approval of gas export to the Unitedf
Government;
/ ;' y

Signs

esti¬

are

barrels

cubic

(2) The setting, up, as recoipmended by the Borden
Commission, of a' National Energy Board to advise the'
government, on exports and imports of oil and gas;

Western

reserves

billion

3.7

trillion

27.5

Alberta

announcement

Alberta.

also

Canada.
and

engineering

Further diversification of the
economy of Alberta is

indicated

discovered

were

cubic

recently
Berland

States by the Dominion

•

from Edmonton to Montreal is not
only economical but

of the construction

were

gas

trillion

and

open

the Western Canadian oil and gas

s. McGregor

and the ultimate reserves of oil and

processing plant, for the extraction of
sulphur, was put into operation in 1958. Located at
Okotoks, the $8 million enterprise is operated by the
Texas Gulf Sulphur Company and Devon-Palmer Oil
Company.

Limited

oil

Things presently under discussion which will influence

calculated

needs and in addition has

gas

advances, the future is bright for our
farmers and fishermen. There is every indication that
the confidence of our primary producers in the future
expansion of our economy is quite justified.

Alberta's major industrial developments of
expanded to become Canada's most important mineral
1958 is the $2.7 million vegetable oil processing
plant, ? resource
and no single Canadian natural resource has a
nearing completion at Lethbridge. First of its kind in
greater future potential. In the five
<
Alberta, the plant is designed to produce both edible
years prior to 1957, 2 billion barrels
and commercial type oils.
•"
Among

with

In view of these

Since the discovery of oil in Leduc, Alberta, in 1947,
the Western Canadian Oil and Gas Industry has rapidly

capital.

five hundred million, cubic feet of gas per day,
There is not much question but what Western Canada
is now more than, able to supply all of Canada's oil and

Quebec has opened a new market for our agricultural
products. A similar service to Newfoundland, established
several years ago, strengthened
our
markets in that
important area.

investment

surmounted for Cana¬

are

River about5125'miles west of Edmonton, Alberta; This
well is considered to be the biggest gas well in the world,

of northeastern

President, Consolidated Mic Mac Oils Ltd.

marketiiig,problems

oil and gas iri Western Canada was pointed up
when a successful gas well was brought in at

The inauguration late in 1958 of a water cargo service
by the Provincial Government between Prince Edward

The potential power sources in

^
>t.

and gas, Western Canada, provides abundant//*
opportunities, ;as; exploration, in Alberta, British Colum- / :
bia, Saskatchewan, the Northwest. Territories and the ~f\
Yukon has only commenced. .One well has been drilled
f:
on
each 10 square miles of sedimentary basin in the %
United States while only one well has been drilled on
each 150 square1 miles of sedimentary basin in Western K
Canada. An Wample of the rewards for exploring for*5'

bringing the nearby

areas

,\/j

.j
r/

oil

dian

markets of Nova Scotia and New Brunswick right to our

Island and the rich, new industrial

and

* '//-.'/

.■?!

Western" Canada; welcome ; .this

Provided

even¬

doorstep and should prove of inestimable value to
promising tourist industry.

Municipal

Provincial,

politically safe climate for,/;
foreign investments and the government and industries

hope of nine-mile causeway between the province
are presently
being sought as a solution
to our transportation problems.
The causeway would provide a spur to our important
export trade with other provinces and the United States.
It would be of particular benefit in

vulnerable

Western Canada provides a

and the mainland

;

lower

Dominion tax revenues.;

tual

Production of crude oil dropped by some 27.5 million
barrels during the first 10 months of 1958 to 92.6 million
barrels. Value of crude oil dropped from $313,613,386 to

reliance

our

Industry hqs 'naturally adversely affected drilling,':,
stores and qll other jobbers and ;"

unemployment,'.and

kets of Canada and the United States.

$700,000 increase in value. Gross sales of cement prod¬
nearly $2 million.

lessen

contractors,, .supply

a result, Island fish processing plants are able to take
increasing advantage of opportunities in the export mar¬

ucts rose by

$233,368,741 in the same period. Natural gas production
in the corresponding period rose from 195,663,809 mcf to
230,390,056 mcf.

Gas

ferry to the mainland and the

would

service companies affiliated or. working for the industry,
which in turn naturally* had its effects down, the line in

car

..,

Biggest single advance in the province's

An additional

The 1958 slow down in the Western Canadian Oil and

is the expanding dragger fishing fleet made
possible through government financial aid to fishermen.

as compared with $133 million for the same period the
previous year. Butane and propane production dropped
slightly but sales held at the 1957 level. Cement produc¬
tion rose from 2,989,529 barrels to 3,193,871 barrels with

Examples of this problem were demonstrated ;/
during the last war and more recently by the Suez crisis.

fisheries

steady rise in the first 10 months of 1958—$136 million

Area,, northwest of Edmonton, Alberta, are
expansion of the industry.
the .economic benefits in having a pipeline

sources;'

cultural front.

new

Hills

States

our seed potato crop, the establish¬
large centralized frozen food plant by a na¬
tionally known firm, extension of rural electrification
and an expanded rural highway paving project are a
few of the policies which are benefiting us on the agri¬

ment of

firms

primary prod¬

The certification of

petro-chemical field has been the leader in the
strong upward swing of manufacturing in Alberta. Today

day and at least two

prolific oil fields in the Simonette Area and

Besides

this changing situation.

States and the Middle
is somewhere

United
per

from Edmonton to Montreal, would be the value in times
of national emergency to both Canada and the United

Island farms, the intro¬

barrels

Swan

duction of dragger fishing, and a proposed improvement
in transportation is enabling Prince Edward Island to/

The

there

Greater mechanization

million

one

indicative of the continued

estimated $20 million increase in output from
the land and sea.
An expanding Canadian population
meat processing plants.
Gross production value from
and a new determination on the part of the neighboring
packing plants was approximately $175 million, main- |
Atlantic Provinces to become more economically selftabling a long lead over all other single manufacturing j
sufficient
industries in

Thursday, January 29, 1959

additional

diate prospects for the advancement of the economy in
Prince Edward Island which is based on the products of

set by an

Venezuela,

Western Canadian daily oil potential

Island

for optimism about the

with

industries.

-<■

the construction and associated

At present/there are indications that private capital
expenditures may be moderately lower in 1959 than in

par¬

trade

Continued

page

Volume

189

Number 5816

Continued

from

page

Financial Chronicle

The Commercial and

market,' there have been weaken¬
ing effects on market offerings
for government issues in Canada.
There is no way of insulating the

Canadian

several

for

Government

years ahead were also a
consideration.
It was ur¬

major

gently important to improve the
government
debt
structure",
to

provincial

influences,
refunding

to face

The

the overhang of refinanc¬ huge maturities overhanging the
ing which would have to be done .market.
in audition to new money financ¬
I have said that the Conversion

reduce

ing,

and

put

Loan

!;•;4>',:

the

terms

the

possible

long-term basis.;
The

♦

much

government's debt

Conversion

developed on the best
advice, having regard for the ob¬
jective,' the erosion "which "had
were

occurred

measures

public

necessary

investment

to
attract
the long-

overwhelming

the

and

The Conversion Loan

term sector:
was

market

the

success.

than $5,803 million,

total of

or more

than 90% of the outstand¬

ing victory bonds, wa§ converted.
The

interest

Conversion

new

set

rates

the

bonds

Loan

re¬

flected the market

yields prevail¬
ing. at the time while taking into
account the size of the operation.
Exaggerated and distorted state¬
have

ments

been made

burden

which

version

Loan

ously

will

that

victory

assume

terest

Con¬

rates

could

each

have

maturity at
The

rate.

been

re¬

in¬

evidence

all

the contrary, especially having

to the fact that: the

regard

hang

over¬

has

fact

clearly
decline

market

over¬

was

that

emerges

the

bond

attribu¬

sense

table to the Conversion Loan, but

out¬

the

earned

the

success,

recent

the

overwhelming has

was

success.

occurred

With

the

spite of it.

exception

of the pe¬
during the Conversion Loan
campaign and immediately fol¬
success was achieved with the full
lowing it, the decline in govern¬
co-operation of the Bank of Can¬ ment bond prices in Canada has
ada. Before the conversion, only
paralleled, but has not been as
17% of the Government of Can¬ extensive as the decline in the
ada's
debt
other
than
Savings • United States.

spoken admiration of the govern¬
ments
of other countries.
This

riod

;

Bonds
10

was

in maturities

after

years 4

of over

conversion,

the

longest-term

category

12^

United States bonds declined

fully 43% was in such maturities.'
points from April to December
Before the conversion, 39% of the
while
Canada's
dropped
HV2
debt other than Savings Bonds
points. In the mid-term field the
was
in market issues with ma¬
decline in Canada was distinctly
turities of less than two years;
than
in the United
less
States.
after-the conversion, 25% Was in
Thus, United States 68s declined
such issues. The average maturity
IQV2 points in this period while
of
the. public
debt other than

Savings. Bonds
from

6 Vg

Canada,

years

and

comparable

lengthened
10 V2 years in
double the

was

now

average

the United States.
While

errone¬

issue

funded

higher

Such statements

impose.
loan

these

interest

the

operation,

been

its

and

Loan

prices

maturity

the

last

The removal of the bulk
Canada

the

from

reason

tinue.
on

should

the market

add

comment

price.quotations

the new.Conversion bonds.

.the market would .still
have persisted. Rates at the time
of such refundings would almost
certainly have been, higher than
on

Promises No

Support

'63
a

operation

ference in mid-term in bond

changes.
In

(3%

the

price

44,

oV;

Canada

loan

'66

and

result

for this relevant dif¬

two

months, the benefits of the
Conversion Loan operation con¬

of
as

market

conversion

chief

government

have .declined

bonds

4.^.4,(

Canada 68s declined less than 7]/2

points.

reverse split will reduce outstanding
1,909,969 from present aggregate of 13,369,783.

Stockholders to
At

the

vote

meeting to be
held Feb. 7 in Calgary stockhold¬
ers
of Scurry-Rainbow Oil Lim¬
ited

will

asked

February 7 annual meeting.

program at

annual

aprove

plan of recapitalization. For

outlets; \ Trans - Canada running
East to Montreal; and Westcoasi
Transmission, West to Vancouver
and the Pacific Northwest o£ the

United States.

some

time the management has felt that

In northeast Brit¬

ish

Columbia; gas is presently
being delivered to Westcoast from
12 gas wells, in which Scurry has
either working pr royalty interest.
In addition, Scurry has contracts
speculative
securities.
Accord¬ signed with Trans-Canada cover¬
ingly, to enhance the corporate ing some 18 billion cubic feet of
stature, make the stock more ac¬ gas reserves in. the Gilby and

13,369,783 outstanding shares rep¬
resented an unwieldy capitaliza¬
tion and tended to
classify the
shares,
pricewise,
with
highly

ceptable for institutional invest¬
ment, and as collateral* stock¬

Nevis fields of Alberta.
On the f inanciai

holders will be asked to approve
a one-for-seven reverse
split* thus

decreasing outstanding
1,909,969 shares.
The

stock

pnajor portion of petroleum

gas
production in
Canada is derived from the Prov¬

ince

Manitoba, Saskatchewan,

Alberta,
and

the

these

and British Columbia
company's properties in
encompass 11 million
acres.
These extensive

areas

gross

increased

its gross

natural

and

side, the report

shows that the company

holdings and the company itself,
are the result of mergers over the
past several years, of 23 individ¬
ual companies. Assimilation of all
these
properties into a smooth
functioning corporate organization
has taken time.
The degree of
progress achieved in 1958 is re¬

income 29%) over 1957,
to $2,176,343; but in particular its
royalty income requiring: no oufci
lay or effort by the company, rose
from $208,579
to $700,418.' Net
profit increased to* $352,728,
against $123,981 a year Earlier.
This
sharp' gain was achieved
despite the poor conditions last
year in the Canadian oil industry.
Alberta
and
Saskatchewan, for
example, where principal produc¬
ing properties of the company arc
located, sharply curtailed produce

flected in the report for the fiscal

tion.

J. E. Schram Co. Formed 4
YONKEKS, N. Y.

—

John Ed¬

ward Schram & Co., Inc. has beep
ending Sept. 30, 1958.
Ac¬
cording to the report, gross acres formed with offices at 20 "Wilbur
in which Scurry has an interest Street to
engage in a securities
increased by one million acres
business.
Officers are John Ed¬

year

longest victory
was
not com¬

1966)

Scurry-Rainbow Oil to Recapitalize

of the

the Canadian
market would undoubtedly have
displayed much more weakness
than is today evident.

high rate structure
inevitably resulting from the un¬
certainty and imminence of these
had

it not

represented

Conversion

who would otherwise have

rowers

had

but,

for the constructive effects

bor¬ whelming

municipal

and

shares to

pletely converted and its market
price declined over the period in
question from 97.50 in April to
94.50 in early July and to 92.13

at the end of December, a decline
government at no time said of about 5 V2 points. However, the
it would"support the current mar¬
typical holder of this victory bond
is now,''--the- ease. r.
'.44 vv ket prices on the Conversion converted into the new 4%% 1972
»v
The coupon rate on all of the Loan.. While the Bank of Canada, or 442%
1983 which on Dec. 31
victory loans Was 3%. The aver¬ acting as the government's fiscal traded at 95.63. His new bond is
agent,
normally operates in a thus about a point higher than
age : coupon ■*' rate on
all * of the
bonds converted is now 3.83 %. .manner to stabilize the "after- his old bond just before the con¬
Since
61 %
of
the
conversions market" for a short period after version and is paying him 50%
each new loan, it is not the gov¬
went
into the
14-year and 25greater interest.
ernment's policy to "support the
year maturities, and since, having
The American holder of the last
•regard to call dates all of the vic¬ bond market" over longer periods. United States victory loan (2V2 %
The government's obligation is to
tory loans were of three years or
>1972) watched the market price
pay the fixed rate of interest on
•less maturity, this is a very sat¬
The

over

able
to

1957.
oil

Eastimated

reserves

recover¬

have

million barrels

increased

the

5,930,000 listed in the last report
on
recoverable^, released in April,

1857.

over

ward
D.

Schram,

Ezechel,

President;

Jr.,

Marjorie H. Schram,

and

tary-Treasurer.

Joseph

Vice-President;

Secre¬

Mr. Schrani was

(

In natural gas the company en¬

formerly with Orvis Bros. & Co*

joys a strategic position, with two Townsend, Graff & Co. and Sulzavailable: major pipeline product bacher* Granger & Co.

isfactory
interest
million

sion

average coupon

payable
of

bonds

rate. The

the

before

$6,416
conver¬

$192,480,00.0. :It; is now
$240,705,000—an increase of $48,225,000, or about 25%.
was

{

Stabilizing
The

Effect

Conversion

Loan

was

Conversion

the

redeem

them

of forces in the market which de¬

and stabilizing fac¬
market, particularly in
the long-term sector.
The bene¬

termines
bonds.

fits

sion

this

influence

accrue

and

maturity.

having given any in¬
dication of supporting the market
price of the Conversion Loan, the
government expressly disclaimed
any
such
undertaking
in
the
House of Commons. It is the play

tor in

bonds

Far from

"constructive
the

Loan

in full at

the

day-to-day price of
happens that, largely

result of the continued
of

the

United

States

ero¬

GO LP

of his bond decline from 97.38 in

April to 85.81 at the year-end,
decline

total

points

than

llJ/2

the period, and at the
end of that time he still possessed
a bond paying 2V-i%
interest.
over

It remains

the

THE SOUND INVESTMENT FOR

added that in

period, January to
November, new issues of provin¬
cial
government bonds in 1958

SECURITY

payable in Canadian dollars
equalled in amount those of 1957
Continued

bond

page

...

HEDGING

11-month

PROFIT

DO YOU

KNOW

MINING STOCK

GOLD

RESTRICTIONS ON

—SELLING

REORGANIZATIONS
CANADA

2nd edition

—RESIDENTS
An

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for all brokers, trust
of

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mining stocks. It is the only

estates

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AND

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holding

complete reference of its kind available.

Many intriguing new developments
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companies and

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Proposed one-for-seven

Canadian bond market from such

Review and Fiospects
For Canada's Economy
the

(567)

possible for

a man

savings and at the same time take

to protect

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profits in the better Gold market.
Write

for

our

free reports and surveys.

SINCE 1923
MEMBERS
THE TORONTO STOCK EXCHANGE

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EM. 3-9171

BREWIS & WHITE LIMITED
145 Yonge

TORONTO

Street

ONTARIO

(568)

The Commercial and Financial Chronicle

Continued

jrom

has shown

page

1958, but it seems probable that the volume of capital
expenditures by all levels of government will be main¬
tained.

There

is,

however, little

early return of
to the pace of 1956.

A large cash

Of the

reason

capital investment

new

anticipate

whole

significant rise in the money supply. As production
and our unemployed resources become
fully
Utilized, however, it should become our objective to

increases

ochieve

some

measure

over-all

equilibrium

the

economy.
--

clifford w. michel

7:7Vv >,/•.

Vs'..

British Columbia to 33%
existence of 27 sub-surface

Seismic work indicates the

structures,

seven

which

Company

production.

Declin¬

ing industrial activity in the United
States and Canada suggested
or

even

lower,

now

be made with any degree of
accuracy,
There are 25 producing or pro¬

declining premium

Canadian

dollar

Stale dollar which results,
internally
in Canada, in a higher domestic

price

for gold.
costs

and

Thus, with lower or stable
a higher
selling price, the

outlook for the Canadian

increase in demand for gas than oil.

ing industry appeared to be favorable.
These

conditions

did

persist

for

about the first third of the year. The
internal price of gold in Canada rose
the premium

about

the dollar

low

Improved. However,

about

Clifford W. Michel

declined from

a high of
operating profits

and

with reduced industrial activ¬

even

ity price and wage levels did not decline and as Govern¬
budgetary deficits increased the general business
turned

around

aspects that marked it
These

and
as

again

recently

had

the

inflationary

1957.

to believe that this

ingenuity has been lost. Further

feelp has come from, the Canadian Government which
revised the assistance to the
higher cost gold mines by
« 25% increase in the aid
granted under the Emergency

longer-range plans for the development of their deeper

end

outlying

ore reserves.

Finally, v/hile the United States Treasury continues its
unalterable position
concerning an unchanged price for

(©old, the

1958 brought a decline of about
■over $2 billion in that
countrys gold reserves.
denials on its part of
any consideration for
year

©rice, many observers

10%

Despite
change in

see

that

continued

decline

reserves and the
beginnings of free convertibility of
European currencies, conditions might
develop where the
©rice of gold could appreciate as the value of

continues

its

money

decline

under

the

low.
most

new

unbalanced

the major countries.

budgets of

this

gas

Our

Nineteen fifty-nine

The level of Canadian

1959.
and

year.

costs

cost of

meadows

lack

Canadian

Shell

and

British American brought
in the
"staggering 1.5 billion cubic feet daily open flow
fx)tential" gasser in Southwestern
Alberta, reported in
the Sept. 15
(1958) issue of the Oil and Gas
Journal, the
Industry was stunned. It was the
eheer volume that astounded
geolo-

eists

and

engineers.

Added

conclusion.

gone

The

well,

w
w#>-

thq Journal pointed out "climaxes
exploration campaign in Western
Alberta that,
during the last three

area

virgin

ence

of Al-

©s

far

Meadows

the cold winter

:mai°r °R fields have been
found,
It is
entirely possible

which rated headlines.

■

+ur
the

...

caaditions could

foothills themselves."

The immediate
impact of this

£?pliCati°nl:
should

In Canada

the discovery

carry on westward

discovery

suggests two

of larger

gas

reserves

increase
rapidly with expanded explor¬
atory activity; second,
producers—both in Canada and
the U.
S.—may encounter diminished crude

cpots.

demand in

Why the latter?

The expanded

„

States. This recovery has already

use

of natural
gas

optimistic

a more

Should the U.S.

markets
to

well, the Canadian economy

benefit greatly.

There

are
still many grounds for caution, however.
important, perhaps, is the obviously changed con¬
dition of world commodity markets. For the first time
since the war, there is now an ample world supply, of al¬
most all of the major export
products on which the Cana¬

rise

Most

William

Miller

dian economy depends. And an even larger
capacity to
produce such goods is available if needed. In these cir¬
cumstances, consuming industries are under little pres¬
sure

to ham¬

build

up stocks, and markets are almost certain
highly competitive. Such conditions are not

remain

conducive to

exports

a strong new expansion either in Canadian
in capital outlays.
; \
,

munn:...; v..

shadow

industry has been

one

U.S.

import restrictions.v. And vai few

other

items, which provided real support to the,,;total flow

Co., Limited

of exports in

1958, are likely to fall off in 1959.*-These
include, most notably, aircraft, grains and cattle. Mean¬
while, in capital investment, the total level of spending
will be held down by the ending of a number of
very
large projects and by the fact that house-building rose
so sharply in
1958, reaching a level which will be diffi¬
cult to sustain in the coming year.
'
' ^

of the bright spots

year of mild recession.

greater than normal contribution to the total income
derived from agriculture.
It was

largely responsible for the increase
in farm income for the
year.
There is every indication that Can¬

All in
crease

all, the prospect

at best in

seems

to be for

exports, and for

moderate in¬

moderate decline in

total fixed capital expenditures. At the
sumer

available, domestic consump¬
tion of meat will exceed that of
the

Overhanging the whole
_

year

with

pork

and

lamb

of finished cattle

limited

however,

are

the

un-

develop¬
inflationary implications. On the other hand,
longer-term interest rates have already risen above their
ments have

R. S.

Munn

the Canadian market in 1959.

Already there have been

economy,

certainties which have developed in the financial
sphere.
Canada as in the United
States, the-past year has
seen
the appearance
of a large federal

government

a new record high
level and it seems evident that this
will result in a short¬

age

con¬

deficit, a big increase in the money supply, a loss of in¬
vestor confidence in government bonds and a
rapid ad¬
vance in prices of common stocks. All of
these

and

greater
per capita consumption continue to
make an important
impact upon total
domestic disappearance. The
export
of live
cattle, mostly of the feeder
type, to the Unitpd States has been at

time,

up 13% and 7%, respectively, and
beef and veal down
5% and 12%.

Increasing population

same

and government outlays are
expected to continue
upwards and there may be some building-up of business
inventories. *
/

output for 1958 will be one of
largest for a peace-time yeari
While figures for the full
year are

not yet

t%eze-upnaCCeSSiblG except during
S1

overseas

would be bound

the

theater,

Nicks

—>v

meat

time,

William

in the outlook^ undoubtedly, is
which has occurred in recent

ada's total commercial livestock and

years has provided some
sensational
•*®w discoveries.
Prior to that

the Southwestern
plains
feerta was one vast

F.
v

notable pickup in the sales of several Cana¬

It continues to be an
impor¬
tant factor in the
economy of Canada and in 1958 made

likely

seems

disturbingly high.

| uptrend persist in good strength and spread out. to influ¬

efforts by Canadian companies to obtain
export orders

The livestock

drilled

unemployment

dian exports and has also encouraged

capital goods, the
of long-term financing

r. s.

jointly-held 400,000-acre block,

prom¬

In the export sphere, moreover, such important prod¬
ucts as crude oil, lead and zinc continue, under the

surprising capacity was the depth:
12,014-12,235 feet—a Canadian record.

strong enough to

sentiment in Canadian business circles.

of export of

President, Burns

discovery will stimulate
exploratory and developmental ac¬
tivity in Western Alberta is a fore¬

remain

brought

for capital
equipment.

this

That this

economy,,

significantly fuller" use of
country's
growing manpower

months in the United

ticularly the Export-Import Bank, will continue
per

seem

The brightest feature
the
marked
recovery

availability in Canada
competitive with that available in the United
States, par¬

President, Fargo Oils Ltd.
When

living. In the field

Canadian

any

indication of

::.

continue well below capacity and the

business expansion and increases the

yet

the

rate

productivity of labor,
keep on rising and prices
There is

■*':

and productive resources.
Production^
in many industries
is expected to-

than
will

the

not

ise

change in this trend. It acts against

•;

same time, however, a num¬
important readjustments are
going on in some of the key ,;

And the general market outlook does

Cost control and in
particular wage
cost control will continue
to be as

will follow.

good chance

At the
ber

well

was very

Production will almost certainly be higher, sales
profits should increase in most

lines, and there is also

industry looks

business, which

that prices
(on the average) will
hold steady during the course of the:

capital equipment will be mainly to
reduce costs or to meet
changes in
product requirements.

continue

for

year

maintained in the face of the widespread downward in¬
fluences of 1957 and 1958, should improve appreciably in

peculiar to individual companies may
call for increased
output of various
products. Otherwise it appears, as it
did a year ago, that installation of

wages

should be another good

f. william nicks

industry during recent years
industrial capacities sufficient to meet
present demands.
There are, and will be in
1959, exceptions where capacity
will be added in
particular growth
industries or where other reasons

faster

the
but

President, The Bank of Nova Scotia, Toronto, Ont.

sectors

problem faced

represents Canada's only

further

capital equipment by
generally have resulted in

any

States

the livestock produced in Canada.

President, Montreal Locomotive Works, Limited

important as
industry. If

United

is still small compared to total output.

g. miller

substantial investments

the

any consequence.
Trade between
two countries increases and should continue to do so,

still

iwilliam

mere

outlet of

discovered, pipeline

are

operating there.

and

export

bright. Not only will exploratory activity be stepped
up,
but so will production and dollar
revenues to the suc¬

The

-s'V

The export of meat overseas continues: td be

plans at

own

assumption.

fields

The future of the Canadian oil and
gas

•

Currently beef prices are high and pork prices
This situation will probably continue throughout
of 1959.
■
•
7:7v7: ■ ■ 7;

trickle

isting in the search for crude. Our joint venture with
Canada-Cities Service in a 50,000-acre block near Innisfail (Alberta) looks
very promising.
•

conditions that exist as 1959 opens, in
which it would seem that the Canadian
Gold Mining in¬
dustry must again meet the challenge of rising operating
Costs and lower
selling prices. Through 20 years of gen¬
eral cost
inflation, the industry has found means of creat¬
ing cost saving devices and methods and there, is no rea¬
son

that

cessful companies

the

are

■■

facilities will be moved in promptly. The
petro-chemical
industry, not now a major factor in the Canadian econ¬
omy should develop rapidly over the next few
years. We
have not, in spite of
this, ignored the opportunities ex¬

mental

climate

predicated

are

believe

'7 .7

' "■

./) 77:

price.

a discovery,
confirming structures of indeterminate,
intriguing, potential.
:;7

Fargo

Gold Min¬

-p:)

The prospect for 1959 appears to be a further over-all
increase in the meat supply, less beef but a large increase
in pork. Consumption will be determined largely

tivity, in fact all aspects of growth, are likely to increase
at a much more rapid rate than in the U. S. Such
growth
will
undoubtedly be propelled in large part by the petro¬
leum industry. National
requirements—both in Canada
and particularly in the U. S.—seem to
suggest a greater

United

year ago.

year.

already delivering gas in mod¬
Transmission Corp.
Of

Westcoast

All projections for growth in the Canadian oil and
gas
an impressive future. The population,
gross national product, disposable
income, industrial ac¬

the

over

some

industry point to

Investment by industry and reduced
activity in international trade pointed
Coward

here,

quantities

particular interest to

but

price level
which bears directly on mine
oper¬
ating costs. Lower levels of capital

most

Disappearance of pork currently on the domestic mar¬
ket is encouraging and if maintained there could be a
good balance between supply and demand over the crop

from

stable,

general

Prices

to the Government floor level,
Agricultural Stabilization Board

en¬

our management at this time is the
apparent extent of the "probable"
producing area. Step
out wells have sometimes been
brought in five miles

economic atmosphere it requires

fair profit from its

the

successfully drilled and tested.

Leading into the kind of
a

dropped

time

With uncertainty about the level of the floor price be¬
yond March 31, the meat packing industry hesitates to
store pork for its own account for future sale.
'

outlook is optimistic.

erate

this

gineers and geologists are optimistic over prospects on
the 20 yet untested structures.
Although reserve esti¬
our

\; •

owns over 8 million pounds of pork.
This quantity rep¬
resents just about the increase in total pork stocks over

Speaking from the standpoint of Fargo, we are aware
Specifically, dur¬
ing 1958 our company increased its working interest in
a 400,000-acre block in the
Blueberry area of Northeast¬
of the problems and the opportunities.

ern

have

markets
and

ducible wells

earn

and the prospects

that this movement will-grow in the near future.

are

Already gas is making inroads on mar¬
thought to be the exclusive province of heating

As the year 1958 began there were several indications
that the Canadian Gold Mining
industry might at last be
If it is to

the United States,

increase should continue well into 1959.

once

mates cannot

President, Dome Mines Limited

Thursday, January 29, 1959

import problem.
kets

Hog marketings have increased and currently are run¬
ning more than 30% greater than a year ago. Such an

have been

•

into Canada from

heating oils

in many northern and western U. S. markets. Continued
loss of crude markets to
gas may indeed have a more
pronounced effect on demand than the well-advertised

oils.

deficit resulting from the fiscal policies
Government has been accompanied by

Federal

noticeable tendency to displace

imports of live cattle

previous peak in the

1955-57 boom and

there is still

good deal of slack in the economy. The outcome of these
diverse

influences

anything

but

clear.

Continued

page

Number 5816

189

Volume

The Commercial and Financial Chronicle

(569)

Continued

jrom

gloomy

page

about

Review and Prospects
For Canada's
and

were

60% larger than in 1956,

and marketings of new issues of
municipal bonds payable in Ca¬
nadian dollars were 74% larger
in

than

1958

larger
of

than

corporate

clined
with

1957, and 32%
1956.
Marketings

bonds

somewhat
and

1957

1958 de¬
compared

heart

Economy
whole

problem

the

liquidity, and the

achievement of growth.

bearing

the

Decisions

management

debt touch the lives of every
individual of our nation."

Cites U. S. A. Treasury Secretary

leave the subject of
The air has been filled of late
debt management and the bond
It is said
market let me paraphrase in Ca¬ with talk of inflation.
that the fear of inflation is dis¬
nadian terms a passage from a
recent speech by the Honorable turbing
confidence in Canada's
Robert Anderson, United
States financial outlook. If it is, the con¬
dition is certainly not confined
Secretary of the Treasury:
t "All

too often these problems
regarded as something of con¬

cern

only to the Treasury or in¬
volving only those engaged in

security
course,

transactions.
That, of
is not true.
The influ¬

ence

of 4the national debt and the

way

in Avhich it is handled pene¬

trates

every

of Canadian
The volume of

corner

economic society.
debt

the

financing

that

distribution

required,

the

debt

length of maturity and ownership,
affect

the

schelne

whole

in¬

Canada.

displaying
which

are

The

all

United

States

the

symptoms
said to exist at present

Canada.

in
I

not

evidence of

deplore

the

current

than

involved

consideration

equity and

profit for the holders of
ties.

Debt

inflation.

concern over

securi¬

but

years

the fear

Inflation

"too

many

goods."

One

flation reflected in the

Price Index.

duction.

Over

has

modest

when
of

this

purchasing

power

public concern will, . I
assist
governments
and

trust,

others in grappling with the prob¬

will not,

however,

overcome

by exaggerating it beyond all

Indeed,

just

year

ago

of specialized financial service

Canadian brokers, banks and institutions

seen

rises

the

cost

part of

services,

care,
and recreation.

personal

especially

health

would

inflation

expect to find

reflected

Price

sale

also

the

Index.

Whole¬

However,

the

general Wholesale Price Index is
the

same

was

is also

16 points
figure.

1951

It
7% below the

year ago.

The condition with which infla¬

tion has currently been associated
is an increase in money supply,
that

Many of them
circumstances turn

these

the

government for

solution

of their cost

problem.
society there is no
simple formula by which the gov¬
"In

our¬

free

ment can, of course, help to pro¬
mote
an
environment which is

the
The
;

to realize

for individuals to place the

easy

full

blame

and

government
fact

omy every

goods—food, fuel,/ bility

The. greater

that

portant extent prices
sult
of
competition

various

governments.
a

free

econ¬

the

power

for

re¬

the
which

among

groups

product. I echo

the

na¬

warn¬

ings issued by the Prime Minister
(Mr. Dielenbaker) to all sections

stability and

of the Canadian

This solemn duty rests
upon
employers, employees and
self-employed. I repeat the stern
warning which I issued in my
budget speech on June 17 last:
my

the

are

nation, each striving

greater

tional

currency.

"Moreover, I confess

economic

compose our

citizen has a responsi¬
play his part in the

maintenance

purchasing

responsibility

ing

have

their
a

free

self-employed,

the

for

regard

terest
for

con¬

people in appeal¬
whether employers,

all,

employees

the

general in¬

returns

they seek
products.
society there is no om¬
arbitrator who can set
services

and

over costs of
production and
prices in Canada. Only by keep¬ nipotent
ing our costs of production in prices and wages at stable levels.
line with those of our competitors One must depend upon the sense

cern

hope to achieve expanding of responsibility of free men and
employment and progressive im¬ women not to demand more than
provement iii our standard of liv¬ their fair share of the national
Continued on page 39
/ '■
In the 12-month ing.
can we

the total of currency in
circulation
and
deposits in the
is,

chartered banks.

recognition.

with

may

mar¬

competi¬

conducive to price stability and
precisely where responsibility lies this government gives a high
in thi£ regard.
It is temptingly place to that duty; but to an im¬

1946,

in the prices of

One

It is also well for

only 2.5%. How

rise

the face of keen

under

Responsibility

the

15% in 1947, 7%
in 1948, and 10% in 1951. Of the
slight increase in 1958 little was

That de¬

gree

year

selves, however, that there is lit¬ ernment can maintan stable prices
value in deploring inflation and there is a limit to what
gov¬
while at the same time seeking ernments can do to assist
pro¬
illusory, will - of - the - wisp, ad¬ ducers to hold down their costs
of
production.
A wise govern¬
vantages it appears to offer.

re¬

last

compared

care

the

risen

retaining their domestic

ket

tle

in¬

slight

tion from abroad.

inflation. It is well to remind

Consumer

Moreover, Canadian producers are
encountering increasing difficulty

out¬

The index in Decem¬

ber, however, showed
index

find

been

pensions,
mortgages.
I
hope the Canadian people will
always be on their guard against

surpluses

expect to

have

anyone

bonds,

would

case

reducing the value of savings,
fixed incomes, insurance policies,

is,

have

think

in warning the
Canadian public of the dangers of
inflation.
It is a stealthy thief,

cer¬

them.

Such

economy.

particularly perilous
of a country like Can¬

in the

certainly no scarcity of goods in
Canada.
The problem with re¬
spect to most products and com¬
of

ada which must sell so much of
its production in markets abroad.

spoken

chasing too
however,

There

danger of becoming

high-cost

ing form.

The present prob¬
lem of inflation arises in its creep¬

defined

"We are iii
a

tively little of it occurred in the prospect

inflation.

been

dollars

vation

Nearly all of that
1952; rela¬

occurred prior to

last two years.

inflation

overt

has

few

period

commenced

Oct. 1, 1957,
supply in Canada, as so
defined, increased by $1,422 mil¬
lion, or 12%.. This increase in
money
supply was greater than

money

increase

the

Fifty

one

was

Canadian dollar.

of inflation

situation

current

management is at the

Over
to

here

The

tainly not

clothing.

the

loss

psychology.

chasing power.

an unwarranted infla¬

contrary, I think it is a
healthy
sign
that
people
are
showing concern for the preser¬

the

dividual,
corporate,
municipal, lem. I am concerned, however,
and provincial financing, and bear that the discussion of this subject
a
significant relationship to how should be realistic and balanced.
we accomplish the economic
goals The danger of inflation exists, as
of a free society.
it has existed for the last 20 years.
"There

tion

modities is that

Inflation

//Before I

are

feared effects

yielding to

the

1956.

talk

and

unemploy¬
ment
actually enlarged the di¬
mensions of these problems by
disturbing confidence, so we can
today actually bring on some of

national
thrift.
It
is
a
major
part of the responsibility resting
on a
competitive society for main¬
taining monetary integrity, in¬
stitutional

exaggerated

the

and

recession

government debt.

The

percentage increase in
money
supply in Canada
twice
as
great as that in

the
was

the

United States. It must be admitted

Branch
303 Dominion Bank

Offices located at

Bldg.

•

360 St. James St. West

TORONTO

that this rate of monetary expan¬
sion did contribute to
Canada's

Connected by

private wires with

our

Main

Office

and Branches at Boston, Mass., Washington, D.

C„

Bloomfield, N. J., Princeton, N. J., and Oil City, Pa.

arresting

recession
of the

tion

success

MONTREAL

and

the

process
stimula¬

the

Canadian economy in

1958.

•

the

With
the

Conversion

Canada

now

Loan

and

Savings loan of 1958

behind us, however, it would
to encourage or

Knowing Canada

undesirable

permit a substantial degree of
monetary expansion in the near
Thus

future.

Laidlaw & Co.

can

look

for

business!

our

lessening of upward pressure from
that source on price levels.

We know the national

Established

1842

Money
25 BROAD
:

STREET, NEW YORK 4, U. S. A.

Members New York Stock
and other

Exchange
leading Exchanges

business

Supply Growth

of 1958 the total volume of money

Bank

Canada increased by less than

1%.
of

In this

sales

general public increased by over
$1 billion.
The Canada Savings
Bond campaign in this period was
the

most

successful

all

We invite you to

•

consult us if you are considering the establishment or extension of your
business in Canada, involving the raising of
capital through the issue of securities.
With

than half

century's underwrit¬
ing and distributing experience, we believe
we can offer
you competent advice and useful
cooperation.
more

the

214 ST. JAMES STREET WEST

Business established 1903.

•

Offices from coast to coast.

fect

those

upon

concerned

•

over

There

ROYAL SECURITIES

recent

events

anxiety

over

COMPANY

Members Montreal, Toronto and Canadian Stock

Exchanges

addition,

profitable. In

we can

supply

you

with national credit reports
and other

MORE THAN

important data.
500 BRANCHES

ACROSS CANADA

1946

a reassuring ef¬
who have been

the expansion

supply during
the
12period ended last Sept. 30.

justify
Affiliate:

business

halted and indeed reversed. These

month

MONTREAL, CANADA

and

other things which

public has in recent months been

money

CORPORATION LIMITED

■

...

help to make Canadian
-

$519 million.
The public added
$150 million to their holdings of
Treasury Bills and $400 million
to their holdings of marketable
government bonds. On the other
hand, holdings of government se¬
curities by the banking system
declined by $450 million.
Thus
the earlier liquidation of govern¬
ment
securities
by the general

facts should have

ROYAL SECURITIES

complete

plant sites,

our
•

in Canada

you

representation,

many

history.
in

give

distribution facilities

There was a net increase
public holdings of Canada
Savings Bonds in this period of

Corporate Financing

can

information

period holdings
securities by the

same

government

picture in Canada.

The Toronto-Dominion

Indeed, in the last four months

aware,

evidence
of

these

themselves

over

however,

inflation.
of

THE

BANK

THAT

LOOKS

it^ pur*

BANK

AHEAD
H-7085

Head Office: Toronto,

Canada

concern

by the Consumer Price

Index, has lost 40 cents of

TORONTO-DOMINION

the long-term trend. Since
the
Canadian
dollar,
as

measured

THE

New York

Agency: 25 Broadway

Chicago Office: 30 West Monroe St.

The Commercial and Financial Chronicle

Continued from page

President, Canadian Ilusky Oil Ltd

1959, it can
look with a great deal of satisfaction upon the important
place it has earned in the economy of Canada. As re¬
cently as 1946, the only known crude oil reserve of any
significance was the small one at
As the Canadian

petroleum industry enters

Canadians had to
entirely on foreign
sources for their gasoline and other
petroleum products.
The Canadian
dollar was in short supply in foreign
markets and selling 15 to 18 cents
below par in the United States. To¬
day, productive capacity in Canada
is sufficient to supply the crude oil
requirements of the entire nation;
and the Canadian dollar, thanks to
the petroleum
industry, in recent

Turner Valley, and

almost

depend

the

governments
playing political football with their export
and import policies.
It is discouraging that again we
enter another year facing the same problems without
and provincial

cease

definitive action by our

have

governments.
suggested that export

United States is the

answer

in the foreseeable future.

contention.

this

two basic fallacies

are

States

United

First,

of crude to the

to our shortage of markets

There

producers

are

facing markets nearly as curtailed as our own. Second,
even
if the United States were to import all of its
petroleum requirements, Canadian crude oil could not
compete economically with other foreign crudes except
few of the border areas.

opinion, it is high time we looked to our own
markets to sustain the growth of the economy of Canada.
Canadian markets
should
be
reserved for Canadian
In my

production.
It seems wrong that Canada, the
world's third largest consumer of petroleum products,
should look beyond its gown, borders ior a market for
crude

its crude oil
more

production while at the same time allowing
its own market to be supplied from

than half of

foreign

sources.

The lack of markets for natural gas is an even

serious threat to the future of the Canadian oil industry.

This

that I have been unable to
to oil, we are critical of the
playing the big brother in pur¬
chasing our oil. At the same time, we are sitting here
with tremendous reserves of natural gas, but the federal
and provincial governments are unable or unwilling to
a paradox
With respect

presents

understand.

United

decide

States

for

not

12 months ago are

discoveries that would result of there were an incentive

markets. Action must be taken soon, or Canada
may lose permanently the United States markets that
are adjacent to our boundaries.
If present conditions continue, the outlook for the
Canadian petroleum industry in 1959 is rather bleak.
Without positive action on both of these problems, the
very existence of many small companies will be threat¬

During the year just closed, the Canadian economy
surprisingly firm, despite a number of adverse
Not the least of these was the now recognized
effect which any swing in United States business pros¬
perity exerts on the Canadian situation and which was
most pronounced at the outset of 1958 in a declining
pressures.

direction.

coming
the
to

the

The economies of the two

result

closely inter-related

that

Canada's

impact of

such

economy

changes

countries

than

Digitized years past. However, recovery from
for FRASER

are

be¬

time goes on, With

reacts

was

the

rapidly
case

an initial weaken¬

insurance

show

should

Industrial

1958.

continue

of the market.
new

limiting factor in

sales

may

continue to be manpower in the sales
It is

highly trained, compe¬
tent sales force and not easily ex¬
panded,
although it provides
re¬
warding and lucative careers.
a

life

Total

insurance, in

force

Canada will go through the $40 bil¬
lion figure early in 1959. This is the '

figure,
that

makes

income,

national

Canadians " the

best

in¬

'>•

in the world.

sured

A. Ross 'Poyntz

Mortality should continue to give/

satisfactory..experience with moderately Improving
particularly at younger and middle ages Even so,

rates
.

the

vast

effect will produce close to $200
beneficiaries, resulting from death'
will he paid .as '*liv-,;
ing" jwnef hs to .the policyholders themselves, v
iii

coverage

All of these factors combined should develop
high rate in the purchasing of consumer goods
(an important element in the marketing of packaging),
although a certain amount of pressure appears to be
building up against consumer prices.

More
thap 80 c^jnpames-^anadian,.British. U S; and:
European', operating in-Canada—will continue to be big'

into

Turning again to our particular industry, we are fore¬
casting in consequence of the foregoing, another modest
increase in the tonnage which will be marketed this year.
While technological development has gone far and will
go much farther in enabling
price levels to be held

l'oi' Canadian

claims. Nc jrjy^ twice this amount

currently.

factors

.investment field.

the

Canadian development;
support from life insurance'
funds. Corporate bonds already financed to the
40% of these funds should have the new issues >

will continue to draw strong
company

extent of

well

supported

there

could'be

1959 than in

life insurance

emphasis

investment.

OveralL

investment

bond

recent years—and

perhaps a slow-up in the!
rising investment in mortgages, though Canadian hous-.
ing will continue to derive its main institutional support

obvious that ground

from the life

counteracting the effect of rising costs, it is quite
is being lost at the supply-demand
rates being experienced at present and at those antici¬
pated in the near term. Therefore, upward price ad¬
justments are needed. Irrespective of the actual turn
events may take, it will be imperative henceforth that
all
industry maintain close vigilance of world-wide
Competitive factors, since a number of low-cost produc¬
ing areas exist which could become potential threats to
future prosperity in this country.
Leaders of industry
conscious

most

are

the

In
with

conclusion, we look forward optimistically to a year
some improvement over
1958 but with keen com¬

petition from
require

inside and outside the country.
further several years before the existing

sources

It will

companies.

assets—a factor of considerable

In office

1959

should

Where do

show

that

the

lowest

Conditions

us.

last

seem

another

of the

there

favorable

upturn of Canada's economy of early 1958 wasby further increases in consumer
spending, largely brought about by rising personal in-*
The

ComU.

paradox

that

and

ployment

some

today,
of

our

these

country has
in

stages

its

march forward. A considerable num¬
Pierre

ber

building projects are com¬
pleted or nearing completion; some
industries have momentarily overextended their plants,

questionable whether housing construction can
sustained much longer at the present level.

and it is

private works being carried
into execution or planned will irradiate activity in many
branches of production. Siderurgy showed a significant
revival during the past few months.
The decrease in
private investments should be compensated, to a great
extent, by the rise in public spending.
. f
But the

large public

The evolution of the
also

our

condition

the

Canadian economy will

main

our

export trade provides

one

foreign

depend
markets,

fifth of the national
the recession was

In the United States, where
severe

than in Canada, the upturn is more

rapid, so we may hopefully expect that our sales will
soon regain lost ground.
Cooperation between the two
countries to the program of armaments should open us
new

outlets.

Great

Western Europe
been

feared,

United

States

satisfactory.

Britain

and

the

other

countries

have not been effected, as might have
the

and

slowing down of activity in the

their

situation

It remains to be seen,

whole

exports

Europe.

quite

however, whether

favorable effect

continued

1957.

growth

2.7%

Mean¬

the

increased,

work

or to 175%
first
half
of

the

greater
sonal

old

that

the

unem¬

importance

of their level in
Of

1957.

raising

even

per¬

incomes were the increases

pensions, in payments to
J.
S.
Proctor
veterans, and in family allowances.,
The total of such payments in the
first half of 1958 was $325 million higher than in the
age

increase of 30%. This remarkable
a recession made it possible for
the consumer not only to raise the level of his purchases;
but to increase his saving at the same time. Should he
decide to reduce his rate of saving to more normal levels,;
considerable further growth in consumer spending would
still be possible, even at present income levels.
Other factors also contributed to the business upturn.*
The rise in house building* has been of great importance
in stimulating the economy in the first half of 1958. The
maintenance of our total exports through increased sales

first

half of

1957,

behavior of income in

uranium, aircraft, grain and cattle, which offset de¬

clines in forest products and base metals, has eliminated
source' of

deflationary pressure common in reces^
in imports as domestic invest¬
ment spending on new machinery and equipment falls
off, has also helped. More recently, the rate of inven¬
tory liquidation has been declining and commercial con¬
one

sions. The,usual decline

struction contracts have shown .remarkable .growth.
The forces retarding the

; <

recession and contributing to

have thus, in part, come into operation auto¬
matically and, in part, have resulted from current eco¬
nomic policy decisions. House building, particularly, has
been stimulated by government policy.
In recent years
recovery

residential construction has had

an important balancing
falling off in boom periods
recessions. The inconvenience that
has resulted from these fluctuations may well be more
than offset by increased overall stability. It is doubtful

influence

the

economy,

and being revived in

our

housing is so poor that we cannot afford some

restraint in times of great pressure on our resources. On
the other hand, it is not so adequate that we cannot
afford to spend large amounts on it when our

capacity is not fully employed.
,

the Common Market will have

the

expanded

half

million,

the

being interrupted by periods
and adaptation.
It
one

first

ployment insurance payments in the
the first half of 1958 rose by $150

the

that,

the

immigration had
numbers seeking

un¬

despite

stabilization

reached

labor force from natural increase and

by the postwar boom. The boundless
development awaiting Canada can¬
not pursue its course on a sound basis

seems

in a
Em¬

showed

time

that

income

labor

while,

■„

without

personal incomes
explanation.

needs

further decline, wage rates rose, and

Board,

remains

factors

growing

recession

over

improvement is more
noticeable in segments stimulated by
government aid.
Obviously, it would be unwise to
bank on an immediate resumption of
economic expansion at the pace set

St.

and

progress

The

quarter of 1958 will probably
point of the recession is behind
be on the way to recovery,

although

Charles

sound

powerfully supported

•

year

JOHN S. PROCTOR

PIERRE

ST.

Chairman

fact

upgrad-.

mean

President, Imperial Bank of Canada, Toronto, Canada

stand at the beginning of this new year?

the

for

work simpli¬

automation, which will

buoyant growth for life insurance in Canada

Banque Canadienne Nationale, Montreal, Que.

Statistics

ing ol jobs and control of costs.

and

benefit to policyholders.^

procedures there will Ire

fication and

capacity of the paperboard and paperboard products
manufacturing industry nears the point of full utilization.

President

Investment opportunities will enable the companies to
continue to raise their interest revenue from invested,

important part which wages

play in our delicate industrial economic balance. Key
people in the ranks of organized labor should do likewise
quickly.

income.

remained

should

million

much

President, Ilinde and Dauch Paper Company

of the total, although

highs; total payrolls, hence disposable income, areexpected to be up, and employment could approach new
record levels in spite of the
slackness being shown

PALM

the Ordinary
continue to account

The

new

by good business judgment to hold exploratory and de¬

velopmental drilling programs to sharply curtailed levels
until these is .a more definite promise of markets. The
active search for petroleum reserves requires tremendous
expenditures and the products and services of many
other industries in the nation, all of which are affected
when the petroleum industry is curtailed.
Any stimu¬
lation of the petroleum industry would have a beneficial
effect on the general Canadian economy.
In refining and marketing, prospects are somewhat
more
optimistic, but still their future is tied pretty
well to the general business outlook. An optimistic note
is found in the promise of more all-weather highways.
Plans already announced by various highway depart¬
ments indicate that requirements in the Prairies for
paving asphalts will be higher in 1959. Studies have
shown that there is a definite relationship between
good roads and the consumption of all petroleum prod¬
ucts. Although increased consumption will be slow under
even a stepped-up road-building program, still we must
express appreciation to our governments for recognizing
the importance of goods roads to the economic growth
of our country.

total. Sales in

account for about 2%

those

problems

nual Gross National

All Canadian oil companies in 1959 will be forced

life

again evident, such

predict another new peak for the an¬
Product; savings are likely to reach

observers

Most

CHARLES

of ready

WILLIAM

Similar

prevails.

year

billion

sales

than

buoyancy

increasing unemployment, difficulties of various kinds
affecting the marketing of a number of our export
commodities, and costs continuing to rise. In spite of
these condtions, it is our opinion that there is sufficient
built-in strength in the collective Canadian situation
to combat these influences, as was the case last year.

realistic export policy.

Granting of permits to export gas would result in a
greatly stepped-up program of exploration for natural
gas.
The reserves of gas that have been discovered to
date in Western Canada are but small compared to the

ened.

Group1 life

of this splen¬
Glenn E. Nielson
did accomplishment is that the con¬
tinuing growth of this young vital
industry may be stopped in its tracks for lack of markets
both for oil and natural gas. Last year, less than half of
the maximum crude oil production was marketed.
The
tragedy of this situation is that markets for both would

Many

prior

which faced

U. S. dollar.

be available if the federal

for about 75%

behaving in a like fashion to that of a year ago
less active note than was apparent at the close of

—a

close to S6

field of life insurance will probably

whole

The unfortunate part

Would

position in 1959. New sales at an all-time peak should
come

with the economy as a

is opening

„

The best insured nation in the world will maintain its

force.

current year

POYNTZ

President, The Imperial Life Assurance Co. of Canada

developing.

times has been from three to six cents
above the value of the

!
The industry producing paperboard and products con¬
verted therefrom, serving almost every field of com¬
merce
because of the versatility of its end products,
closely followed that same general pattern, concluding
the year with a modest increase in total volume and
a new record of annual tonnage produced.
Such a posi¬
tion should have brought forward reasonably satisfactory
results in profitability, however, the over-capacity which
the industry now possesses, coupled with increases in
wages and other costs which could not be recovered,
were
responsible for the downturn which has been
The

ROSS

closed on a rea¬

ing tendency was steady and the year
sonably strong tone.
*

E. NIELSON

GLENN

Thursday. January 29, 1959

...

(570)

productive

Public outlays on goods and services, while subject to

our

Continued

page

Number 5816

189

Volume

Continued

from

The Commercial and Financial Chronicle

about concerning the size of this
anticipated deficit. I hear and read
talk of "the billion-dbllar deficit"

Review and

Prospects

by increased pro-

the

at
.

them; and it is well that the public

occasions, increases
in incomes'• should be concerned about them,
be justified byincreased pro-'Oui aim must be to achieve a susand

the amount of the deficit.

tamable rate of growth in terms

end

nine

the present fiscal
to

reason

year

see

This

European

and

rumours

open

speculation

There

national

l>vould involve .such
tion
^

would,

the

regimenta-

Canadian economy as

the

trust,

Canadian

be intolerable to
people in .time of

s.the street all have the self-denyI^S Will to combat it.
J >.,Soriie of the'.policies which the
present Government has followed

In a free economy in time, have certainly been deliberately
}Of peace, the government cannot calculated to stimulate the econj com pel
the freezing of costs or-bmy.with a yiew to enlarging emprices.
'
/L
,.
.ri ;ployiiiept:; Opportunities. ' UnemI have reserved to-this point my
plpymerit still gives us deep concomments on the responsibility of cernn but "we are now convinced
.'■the Government in its own pi-opeLv thatihe proportions of the unemt

peace.

ployment.problem this winter will
.doubtedly can and do affect the be. smaller than last and that 1959
% economic forces which have either will witness added strength and
}

field,

policies

Government

..inflationary

]consequences.

suspect

that the influence of Government
,

policy

forces

these

exag-

gerated in the minds of many peo-

I» pie; but41 have
i

evade

this

regard.

the
Canadian
^Government is quite clear. It was
(.

policy

stated by the. Prime Minister and

•nmyself

July 14th when launch-

ing the Conversion-Loan cam"!>paign. -On that occasion he said:
the

"Onp

nrimarv

taees which%U1 T

boom;-indeed, I hope that

recov-

advan-

assure

emu-

ISSSA tfyTat
everv^'sense^nti-toflatfoiiaiT ft

statement has

their in-

and

unemployment

soft

try

are

dazzlingly bright.

never was

There

time when Canadians

\hil S t^t

Sr^rLtfnn
pieservation

in the value of tbe dollar
ters

which

attaches the
On

thA

sound currency
maintenance of stability

the

and

the

are

mat¬

Government

the

greatest importance."

same

occasion

I stated:

"Through this Canada. Conver¬
sion

Loan

the Government is

re-

affirming its determination to follow
policies that will maintain
the soundness of
the

our

currency

purchasing power of

lar."

your

and

dol¬

v'•

shall be facing the increased bur- nadians are not a mercurial peoden of a ful1 twelve months' op- pie. At their best they are steady,
eration

new

nati0nal hos-

lays, whether for services

bene¬

remains

ing

inflation.

keenly

The

said

in its current review of estimates

singled out

as objects of the dis¬
crimination inherent in trade re¬
strictions that still exist, and it

an¬

the recent financial

"an

was

the

and

thus

easier

exchange

easier

said that in its full

money,

and

nels

■

widening of the chan¬
international trade."
v

•

■

•

New York Stock

Exchange
Weekly Firm Changes /

the term

that "a country's currency

freely exchanged for any
other, by either residents or non¬
can

the

international

sense

disappear. Thus,
developments
European nations

soon

should pave the way towards
pro¬
gressive removal of trade barriers

in¬

exchange of goods."
Defining convertibility, the bank
means

among

important mile¬

road

hoped that this discrimi¬

nation will

The New York Stock

residents of that country, and ir¬

has announced the

respective

Exchange
following firm

changes:

of whether it

was

ob¬

tained

through current dealings in
goods or services or acquired as
result of

transfer of

capital."
This was the situation that largely
prevailed before the war.
a

With

the

stringent

outbreak

exchange

instituted

trols have been
in

cease

Bernice

Leavitt

will

to be

a limited partner and
a general partner in
Spooner & Company

will become

Leavitt,
Feb. 5.

war,

regulations
by
almost all
combatant nations, the review re¬
called. Since the war, these con¬

were

Mrs.

Application of Sutro Bros. & Co.
for. * the
Globus

admission
to

partnership

Morton

has

been

withdrawn.

gradually relaxed

Application of J. R. Williston &

varying degrees, but only Ca¬

Beane for the admission of James

nadian and U. S. dollars and Swiss

Cooper

francs

withdrawn.

fully

were

convertible

partnership

has

been

Ca¬

unprepared public."

is, I

applying a firm
hand to controllable expenditure,
I was, as you know, obliged to
budget this year for a substantial
deficit. I regretted the conditions
which made it necessary, but it
assure

investment

Cashiers Association

Elects Officers

the

William R. Muller, of New York

choices

Hanseatic Corp., has been elected

to the Government in June,

P^sident of The Cashiers Associa¬

the

soundest

best

be done—only to find
that later dangers burst upon an

you,

under

open

the

circumstances

the

limited

■■

1958.

aware

responsible talk which is bandied

deplore the loose and

ir-

tion of Wall Street, Inc.
Mathew
P.
Deane,
of
Rothschild
First

Co.,

was

Vice-President

elected

the

asso¬

ciation; Peter Krysko, of Allen &
Co., Second Vice-President; An¬

PATINO

thony Kahwaty, of P. F. Fox &
Co. Inc., Treasurer, and Charles
B.

of CANADA

Named

Limited

Aline

,
-

7 r

Pateo, Toronto

First

Boston

Directors

were:

James

Marine Midland Trust
Co.; George Boggiano, R. S. Dick¬
son & Co. Inc.; Frank A. Flaherty,
A.
C. Allyn & Co.
Inc.; Henry
Israel, F. P. Ristine & Co.; John J.

Financing and Development

Address

The

Secretary.

G. Baldwin,

55
Cable

Webber,

Corporation,

•>•\y

Yonge Street

Toronto, Ontario
■

Suite 1107

Kelly, National Association of Se¬
curities
Dealers Inc.; Robert A.
King, Shearson, Hammill & Co.;
Raymond
R.
McAuley,
Halsey,
Stuart & Co. Inc.; James A. MeCorkell, F. Eberstadt & Co.; Fred

Santi,

Chester

Co.,

Ward,

Inc.;

Cities

and

Members

the

Committee for 1960

Frederick

Hoch, The Hanover Bank; G.
Howard Ekstein, American Secu¬

Investments

EDMONTON'S MOST MODERN OFFICE BUILDING
•

CHOICE DOWNTOWN LOCATION

•

AIR CONDITIONED

12,000 SQUARE FEET PER FLOOR

•

GROUND FLOOR AND UPPER FLOOR

Kenneth
Gibbons,
Glore, Forgan & Co.; Frank J.
Kleinsmith, Bear, Stearns & Co.;
and Ralph Jones, Blair & Co., Inc.

320

Bay Street

Toronto

Ontario

TANKOOS & CO.
331 Madison Ave.-

New York 17,

N. Y.

—

FULLY MODERN

SPACE

STILL AVAILABLE.

OCCUPANCY EARLY

1959.

Corp.;

DIRECT

INQUIRIES TO

•Northwestern
10124

TANKOOS YARMON LTD.

Renting

Nominating

are:

rities

Now

Service

Company.

Canadian Realty

Nearing Completion—

•

Alkow

104th Street

"MILNER

BUILDING"

Utilities,

Edmonton,

Alberta

—

Limited
Phone 22121

Samuel Goldsmith
Samuel

Maitland

Goldsmith,

in Zuckerman, Smith &
Co., New York City, passed away

partner

Jan. 25 at the age of 85.

that

need

risks

not underrate the

self-reliant.

and

bank

is to be

ternational

any

nadian economy has its problems,
but it is sound and strong. Can¬
ada

This remains, let it be

said, the
policy of the Government. /

stable

fits, advance proportionately with
the increases in our population.
Nevertheless, the Treasury Board

was

States Government's Policy

of the

pital insurance scheme. Other out¬

Business

the Netherlands, Lux¬
embourg/ Denmark, Norway and

economy. It will be remembered
also as a year when recession was

coun¬

the

Belgium,

spots

prospects before this

stands,

by the United King¬
dom, France, West Germany, Italy,

in certain sectors of the Canadian

ing recovery. Notwithstanding the
setbacks, 1958 deserves to be re¬

Summarizing the position
now

nouncement

abnormal

former "hard currency" countries
like Canada "need no longer be

January, issued Tues¬

The review said the recent

stone

year

Montreal's

gold

currency,

tions.

day, Jan. 27.

Conclusion
was

dividual merits there is little use
for confidence in
fj iLJ?a Zlini deploring them in their aggre- had more reason — ——
™nnlv nn??/v
T want tn S
gateriTn 1959, for example, -we their country and her future. Ca-

Bank

Sweden

expenditures

the

out foundation.
1958

their currencies had

provements in the flow of inter¬
national commerce, according to
Review for

into

although their
ability to sell in the sterling area
was, and still is, limited by tariffs
and quantitative import restric¬

externally convertible
—should make for significant im¬

from the Department bearing on
our budget plans in any form,
There has been no leak from the
Department arid any statement
alleging a leak is entirely with-

curbing inflationary forces in the
membered as a year marked by
economy, so far as the Government
many important achievements.
has power to do so.
1959 begins with many early ad¬
-The .expenses of Government
vantages over 1958. The domestic
are high.-The Canadian people
continue to demand a high stand- improvement is matched by an
arcf .of-services and social bene- improvement in conditions in the
United States and. abroad which
fits< These must be paid fop. I wish
will undoubtedly benefit Canada.
that f^t were always vrememThe
approve

that

thus

and

other

been made

issued

arrested
and
the
underlying
strength of the Canadian econenable the Government to direct omy asscSrted itself in a gratify-

After people demand and

nations

Finance,

been

ery. twill rather proceed at a steady
and sufe-pace. Such progress will

the' responsibility

Governments

;i The

activity in the Canadian economy.
1 am not predicting any sudden

wish to deny
of --its efforts more definitely toward

under the Department of

un-

anti-inflationary
at times

;

developments
Europe—notably the announce¬
ment at the end of 1958
by ten

speculation
has
any
right to attempt to shelter itself
for

financial

commerce.

lars
Recent

lated.

extend to capital trans¬
actions, the bank pointed out.
«
In contrast, dollar area nations
have all along been able to con¬
vert any sterling earned into dol¬

provement in the flow of inter¬

those who ascribe to

are

does not

that

Ydevelopment of ^what the next Budget may con'^^uffdes and the maintenance of tain. I do not, however, recall a
the government powers which it th£ purchasing power of the Ca- time when I have seen so much
u does not possess, and which, if it
InSatlon is
?heer speculation on this interest4did possess them, it oughtinoLto
*I cail ®
if ing subject. Let me dispose of all
Tsexercise lest the loss of freedom governments
at all levels, and 0f these mischievous rumours by
I should result. Some of the pan- business men, and labour, and saying that at this early stage no
iaeeas which I am asked to adopt farmers and the ordinary man in budget plans have been formu^'

cur¬

applies only to currency acquired
by non-residents, and even then

should make for significant im¬

ductivity alone."

indications

national

External convertibility now per¬
mitted by the other nine
European
nations is still limited in that it

other

for

.season

convertible

rency.

and

currency

discerns

moves

the

German mark became the fourth

fully

Montreal bank's examination of

depart materially from

&9!

prior to Jan. 12, when the West

Trade Flow Stimulant

Now

months

this estimate.

kcan

"ductivity

billion def¬

Last summer I gave Parlia¬
ment an estimate of $700,000,000

As 1 have said oh other

income;

Moves Viewed

than

icit."

s
5

European Currency

and "the

page

(571)

CANADIAN

WESTERN

Company
140 Sixth Avenue West

NATURAL

GAS

Limited

Calgary, Alberta

Phone AM 6-7111

The Commercial and Financial Chronicle

(572)

Continued

from

However, it would seem that the sale of industrial

page

limited flexibility in timing, may also be varied to coun¬
both inflation and recession. This is one of the

teract

it would be most unfor¬
tunate if political expediency should result in the aban¬
donment of counter cyclical policies and the anti-cyclical
budgeting that should accompany them.
lessons of the past 20 years and

ma¬

chinery and equipment that is purchased on an amor¬
payment basis will at least maintain its volume
with last year, and I think it would be reasonable to ex¬
pect some increase.
tized

Over

all, therefore, the total volume of instalment plan
purchases in 1959 will quite likely show some modest
increase

over

1958.

//-

y;/

•'

amount of 75

RAMSEY

President, Belding-Corticelli Limited

President, Reitman's

In forecasting prospects for business for 1959 one is
no doubt influenced by conditions existing at the time ol

writing, and consequently I am considerably more op¬
at this time last year for business in our
field, clue to a much better late Fall
demand. At least the first quarter

timistic than

bodies

being developed to increase the province's
production. In 1958 the value of mineral
production reached an Estimated $56,100,000, despite the
are

copper and zinc

lower prices offered for base metals.
The government's

The

the

shown

have

business

the way

believe at an accelerated
pace) in 1959.
Ladies
Nylon
Hosiery,
despite
some pick-up in Nov.
and Dec., re¬
mains the one department of our
(and

which

with

optimism
plagued by

still

are

We
over-capacity
1959.

for

L. B. Ramsey

much needed work, particu¬
gauge equipment, and we are very hope¬

Hosiery Mill some

Our Children and Ladies Sweater

Division did not

pro¬

hoped for, competition both from
domestic and import sources being very severe. However,
duce

results

the

have purchased new equipment and with demand
(particularly of Ban-Ion type) being very strong, we are
hopeful that this Department will produce profits in the
we

coming year.

lation, larger per capita savings, low inventories, and I
would say a general feeling that the recession, which
had everyone worried at this time last year, is about
over.

■

Conditions that would

seem

to preclude any over-op¬

timism are—large scale unemployment, continued wage
demands far beyond
equivalent productive increases,

higher freight rates, international unrest and the con¬
tinued cold war, expectation of higher taxes, continued
influx of imports from all over the world to a point in
the Textile

Industry where

only supply 50% of our

Canadian market.
We

our

Tariff Board will made

rec¬

ommendations which will be

implemented by our Gov¬
that will result in our Industry regaining at

ernment

least

reasonable

some

lost to

measure

of the 25%

our

imports since immediately before the last

market

upheavals,

show

business in our field in Can¬
moderate improvement in 1959.

With the wonderful natural

blest

ere

resources

with which

country and with our present small
population the long term prospects should be as good as
any in the world.

H. RANAHAN

President, Industrial Acceptance Corporation Limited
trend

of volume

industry must depend, of

the

instalment

has allowed the whole family to shop together at their
leisure. In most cases the top name stores from down¬

opened branches in these centres, bringing with
variety of merchandise at competitive
prices. It is no longer necessary for the consumer to

them the greatest

spend her time in travelling to the stores downtown. Su¬
burban living has created many new styles of dress and
this informality in living has also been responsible for
sale

various
;

types

•

Another factor and perhaps a good reason to antic¬
ipate higher volume for 1959 is the anticipation that in¬
flation

will

tend

increase

fear of inflation will add
far has

dollar

value

prices should be in

excellent

creased volume for the

coming

sales finance

usually financed. First in this category are
motor vehicles.
Indications point to a reasonably good
market in 1959, perhaps some modest
given

1958.

over

the

new

The

models

excellent.

The

owing

instalment

companies

amount

has

been

field,

position to do

in¬

year.

greater

north

and

the solid

resources

the

agricultural industry already in

existence.

Industry has already got a good start in the province.
estimated value of manufacturing production for
1959 was
$666,600,000 while the construction industry

decrease

Federal

The

industrial
a

and

J. H.

Ranahan

year.

the

same

than 1.500 industrial firms in the prov¬

number has

increased

regularly

In the coming years, however,

expected in the number of

about

substantial

firms starting

new

because of the government's industrial development

under

way.

loan fund

help industries

The province's economic base is

Increased emphasis will be put

decentralization of

very

industry.

the

new

To this end the

will

areas

broad general

sense.

province,
a

readily available for small firms.'
some

rural

areas

commu¬

of the

industry has bolstered the agricultural

the north.
ure

gov¬

materials will be close at hand and where

The most

Government

ac¬

diversification

promoting the establishment of manufactur¬

raw

nity.

equipment financing
machinery and equipment and,

tnerefore,-can only toe covered in

$345,346,000

Where this plan has been followed in

commercial

wide range of

the

labor force will be

dramatic developments

are

taking place in

Under the Precambrian shield is

mineral

developed at

resources.

These

resources

vast treas¬
are

being

intensified rate by private companies in
cooperation writh the government.

strengthening of

automobiles

North

types since the introduc¬

1959

those

months

Company of Canada project—

$175 million townsite and mine—is slated for
produc¬

tion

1960

produced.

for

1957.

the

The

conditions that set in

when

million pounds

The production

will

com¬
were

comparable
winter

severe

most

parts

of Canada during Dec. make it diffi¬
cult to appraise the
strength of the

automobile market, and the real test
may not come until the spring selling
season

trend

We feel, however, the

opens.

to,

date

warrants

Sale

reasonable

confidence that 1959 will be a
relatively good year.
It is regrettable that
unemployment continues to be

major problem. I

am also concerned with the
deeply eminflationary tendencies in this country. Notwith¬
standing these factors, I feel Canada is well on the road

bedded

to recovery and will shake loose most of
the shackles of
recession in the coming year.

SAMPSON

President, Chateau-Gai Wines Limited
Canadian wine sales should continue to increase
1959

they have during the past few

during

years.

We at Chateau-Gai have
completed our best year ever,
and look forward to an even better
years in 1959.
We
that

this

trend

reflected

for

reasons

forecast

are

this

optimistic

follows:

(a) A continued improvement
general economy of the country.
(b)

The

crease,

nation's

which

population

includes

one

of nickel will be

increase

annual

in¬

million

Canadians.

A large percentage
people come from wineproducing and wine-drinking coun¬
new

these

tries

the

world.

These

new

Ca¬

nadians, along with our native born,
are
learning that good Canadian
wines are easily superior to much of
the

wine that

Europe drinks.

Sampson

After

all, the world's fine wines constitute
less than 5

or 6% of the total \vorld
consumption.
(c) Specialization and modern methods in Canada are
helping to maintain the quality and standards of the
product. These factors, along with selected vines, are
producing wines which meet the approval of the most

discriminating wine

drinkers.

commercially, in this province,
perimental tout

are

grapes

now7

which

growing,
were

ex¬

few7 years ago.

(d)

Research, w7hich is not only confined to producing
grapes, but which is also being undertaken on
ever before, in order to determine
the wine drinking and wine
buying habits of Canadians.
.

better
a

greater scale than

believe that both

types of research

that the results must then
the

wine

brewers

industry

and

are
reauired, and
carefully co-ordinated if

compete

favorably

with

the

distillers of the country.

Although industry7 figures for 1958 have not yet been
compiled, total production figures of Canadian wineries,
and inventory value,
with the Canadian breakdown
(Ontario produces 9/10 of all Canadian wine) for 1956
and

1957

are

follows:

The International Nickel

the home.

covers

where

implement a further programme making available some
$350,000,000 for home building. If so, this would strongly
benefit other industries which
directly affect instalment
sales financing, namely those
producing all types of do¬
mestic appliances and other articles which
go in or
on

ing and processing plants in rural

to the present quite
satisfactory mar¬
ket for the new models.

the

estimated

are more

and

ernment is

will

opens up. Therefore, it would
anticipated that the lower out¬
standing instalment obligations, to¬
gether with continuing high personal
incomes and savings, will give
depth

that

There
ince

and

before the spring selling

possible

was

year.

tivity.

seems

production

diversified, covering almost all phases of industrial

season

tion

The

mineral

vast

throughout the entire Canadian wine

province,

get

repayments are exceeding new obli¬
so

for

American

Premier of Manitoba

plan which will include

finance

to Sept. 1958. The recent trend is that

take place

There has been

The future for Manitoba has never held more
promise
for progress and
prosperity. It's a future that will be
based on a stepped-up industrialization of the

outstanding

motor vehicles, that is,
passenger cars and commercial units,
is down $37,000,000 from Sept. 1957

gations

SALE

1956 and the first half of 1957.

believe

boost

reception

sales

the

HON. DUFF ROBLIN

development of the

industrial

generally, and for
the automobile industry in
particular, is better than it
was at the beginning of 1958.1 foresee a
continuing, grad¬
ual
improvement, with perhaps some acceleration after
we
get through the winter months,
but do not anticipate a swift return
to the relatively prosperous levels of

successful

for Canadian business

unit sales. Our experience

indicated that in the soft goods

anticipate too great

that

and

rise in prices. Competition will
continue to be very keen and stores that will continue to
give the consumer the best value possible at popular

the volume of sales

course, on

of the goods

increase

above

large increases in the
sportswear and accessories.

freight

•'£>■

models, and our
pany's sales in Oct. and Nov.

and with reduced hours of work, have been a
impetus to casual living. Retailing has met this
suburban development by the greatest wave of new store
construction in history. This new type of ''Shopping Cen¬
tre,'' with ample parking facilities and night shopping

The

•'

-..

great

this

ingredients
'

demand

war.

would appear that the bad outnumber the good; but in
spite of that I feel that, barring general war or other
ada should

result

in suburban living, with a
great exodus of middle-income residents to the suburban

In surveying the above summation of good and bad in¬
fluences which will have an impact on our future, it

international

the

are

The outlook

growth

very

the door

the

RHYS

stores in the suburbs.

spectacular

open

President, Ford Motor Company of Canada, Limited

maintaining their sales and even show a slight increase.
However, we must not overlook the largest potential in
increasing volume by the opening of branches of main

not

hopeful that

are

dominant factor in re¬

town

for next year are—larger popu¬

Hopeful indications

large extent

Department

keep the customer in town, and the
that there has been a great in¬
crease
in office building construction should

The

long-range planning there
developments

areas,

continue.

this demand will

ful

available for

for another type of industry in the near future.
The government is also tackling the difficult
rates question because future

These

Louis Reitman

which condition has existed for over seven
years and, although
there is still under-capacity for
production of Seamless Hosiery in this country, large
quantities are being imported at low prices. The strong
demand for Leotards this Fall has given our Full-Fashon coarser

because

power

future.

fact

Industry

larly

But

extra

development depends to
ability of firms to move both raw
materials and finished products. In this same
connection
the government has
planned and started construction of
an improved
system of highways. Emphasis will be put
on high
quality roads to stand up under the strain of
heavy truck traffic.

year

other
that will want to establish in the north.
The rich forests of northern Manitoba

Stores, Variety
Stores, as well as most Specialty
Shops
have modernized and en¬
larged their facilities in order to

in the Full-Fashionecl Branch of the

ioned

new

mine.

will

power

Downtown locations will still con¬
tinue to be

tailing.

viewed

cannot

much

the

for

of retail sales.

business

outlook

promising and, of cobrse, is de¬
pendent upon man., factors. First
and foremost is the continuing in¬
creases in the growth of population
and with increased purchasing
power, should produce higher levels

during 1958 — Industrial Nylon
Threads, Elastics, Braids and Rib¬
bons—would appear to be the ones
which will continue to lead

business. It is felt that this is

very

results

best

Inco

of Ladies'

good indication for better business

The

of our

Departments

which

road building scheme plus a
project. One power site will start
generating hydro-electric power for the opening of the

activity for 1959.

looks considerably better.

$15 million

huge electric

Specialty
Shops, selling ready-to-wear, sportswear, accessories
and other items of ladies' apparel, have just experienced
record sales in Christmas

This will give Manitoba

part in this northern development

(Canada) Limited

the Chain Store field

Canada

million pounds.

REITMAN

LOUIS

Thursday, January 29, 1959

the second largest nickel mine in.the world. •*'
But in addition to this nickel
project, two other ore-

program

Canada

1956—Imperial gallons
Inventory value
1957—Imperial gallons-

Inventory value

Ontario

5,473,876
$3,295,939
5,403,508

4,945,429
$2,880,176
4,746,998

$3,589,108

$3,151,865

Continued

page

Volume

Number 5816

189

Continued

jrom first

The Commercial and Financial Chronicle

"Further, if such 'economy' prior to Feb. 1, 1969 except for
the sinking fund. Annual sinking
to be practiced at the
fund payments of $1,500,000 com¬
'expense' of farmers, the mencing in 1962 will retire 81%
which balances : expenditures

budget submitted to the Con¬

page

gress

the

great power

The

lodged in their hands.
.
The terms of agreements
.

reached

between

labor

will

matters;

leaders

additional

that

are

'economies'

might

prac¬

of the groups

one

are

the

from

are

still

competi¬

tion which the President him¬

ity? Given the political situa¬ might
tion

stands

now

due

—

does

doubtless

reasonable
$77 billion

appear more
than the proposed

part at least to

now.

"In

bearing

on our success

—r

reflect

must

aware¬

terest whatever in the obvious

may be all that can be ex-,
only road to: remedy—that of removing the
pected, and possibly more
greater; material well-being shelter behind which these than is
likely to be achieved.
for the nation lies in the full¬
organized ; groups of Ameri¬
est realization of our produc¬ cans can and do
Surface Hardly Scratched
constantly
tivity potential, and that sta¬ defy the basic rules which
But the fact is that it hardly
bility of prices is an essential have enabled us to become scratches the surface. Since
ness;

that

condition
nomic

nately,

the

sustainable

eco¬

growth." Unfortu¬
he loses touch with

economic

the

world.

Even

fact

the

may

any

envy

serious

that

the

of fiscal balance

matter

is aroused

have
realism when he contents
politicians truckled to the
himself with generalizations unions and their
bosses, so far
about "self-discipline and re¬ has
legislation gone in giving
straint"
being "essential if them carte blanche to act as
reasonable stability of prices the rest of us dare not
act, and
long

this

in years

result

the future value of the dollar,
for the government

securities

market and the cost of inter¬
est

the

public debt—would

changed."

.|V

have been made that

are now

difficult to

they may be redeemed
option of the company oil

the

after Feb.

The President is

nothing if
planning
prevent inflation.

crued interest

Net

the

bonds

Inland Steel is the seventh larg¬

States.
a

steel

tons

4.4%

emn,

But

there

other

are

points

but probably quite inef¬

at which
thoroughly sound
by generalities of this report are
that either not understood or are

fective when he continues

small

sible for

measure

respon¬

sound and whole¬

budget situation next
warning these leaders
year
and the next several
"if the desired results cannot misunderstood
by the Presi¬ years. But what about this
be achieved under our
ar¬
dent—though we are sure not year's $77 billion budget? As
rangements for determining by the authors of the docu¬ to this we should like to call
wages and prices, the alterna¬ ment. At one point the Presi¬ as an expert witness, Aubrey
tives are either: inflation, dent tells
Congress that "the G. Lanston, who is a recog¬
which would damage our chief way for government to nized authority on national
and work hardships discharge its responsibility in

economy

millions of

Americans,

controls, which

are

traditional way

our

which would be

helping to achieve economic

of life and through the prudent conduct
obstacle to

the nation's economic
and

alien to growth with price stability is

growth

improvement."

of its

financial affairs."

own

Excellent! The President then

proceeds

that

say

"the

tons
on

41/2% Bonds at Par

3.8%

Jan.

■

1, 1953.

"During the fiscal year
spending for agriculture
was
about $1 billion," says
Mr. Lanston. "By fiscal 1958
such spending had increased
to $4.6 billion and for fiscal
1959 it is estimated at $6.6 bil¬
1952

bonds

"If the amount

in CANADA?
To

Business

your

business

or per¬

lion

branches and subsidi¬

letterhead

write

nearest

U. S. office, or to the Business Devel¬

:v- '

opment Department, Head Office.

Montreal

Markets

BRANCHES IN ALL TEN

District

the

CHICAGO:

•

billion

less

billion.

would

instead

for

Securities Corporation.

Stock

Exchanges,

the Montreal and Toronto

net New York markets quoted
request.

on
Private

wires to

Toronto, Montreal, Ottawa, Winnipeg,

Calgary, Vancouver, Victoria and Halifax
BELL

TELETYPE NY

SYSTBM

1-702-3

Dominion Securities Geporation
40 EXCHANGE PEACE, NEW YORK 5

Montreal

Telephone WHitehall 4-8161

Philadelphia

Winnipeg

London, Eng.
Ottawa

Canadian

Affiliate

Member

—

templated
billion.

Toronto,

Vancouver

Montreal

Halifax

and Canadian Stock Exchanges

Calgary

services in all fields are
institutions and dealers at our New York and

Established in 1905, our investment
available to

Chicago offices which have direct private wire connections
to offices in fifteen principal Canadian cities and London,

England.
These

facilities

enable

Exchanges in Canada
funds if desired.

to execute orders on all Stock
at net prices in United States

us
or

Wood, Cuiuly & Co., inc.
Chicago

York

affiliated tvilh

Wood, Gundy & Company
Members
The

Toronto Stock

$1.2

billion.

discussing

Federal

Montreal Stock Exchange
Stock

Exchange

and

Wood* Gundy & Company
Limited

We
Head Office—36 King

con¬

Toronto

expendi¬

$71.5 billion—not $77
.

Exchange.
Canadian

agriculture would be

than

ture of

RESOURCES EXCEED S3.000,000,000

Toronto

Associate Member American Stock Exchange

Boston

the

regard to fiscal 1960, if
government were to spend

would

Office: 'WtcHfrteaC
•

Build¬

maintained in all classes of Canadian

Stock orders executed

than half of that.

eted for

SAN FRANCISCO: 333 California St.

Special Representative's Office, 141 West Jackson Blvd.

TVerzd

Bank

formerly with Thill

STOCKS

culture than it

Headquarters:

725 BRANCHES IN CANADA. U. S„ GREAT BRITAIN AND EUROPE

National

was

external and internal bond issues.

larger percentage on agri¬
spent in fiscal
1952, the amount to be budg¬

&X14C
PROVINCES

Halifax, Toronto, Winnipeg, Calgary, Vancouver
NEW YORK: 64 Wall St.

associated with.

fartfuMd 5^r4t &<ZH6

Wisconsin

BONDS

"In

Bank

now

Ziegler and Company, First

per¬

contemplated $80.9 billion,
and the contemplated deficit
of $13 billion would be hardly

on your

our

$6.6

spending

then

1959

fiscal

business

Federal

$75.5

To obtain your copy,
'

instead

Total

aries, investment companies and oil,

—

natural gas and minerals.

ii I'

larger

agriculture would be $1.2 bil¬

special tax situations with regard

Canadian

of total Federal
spending than it was for fiscal
1952
the 1959 figure for

clude Federal and Provincial taxes,

centage

sonal interests in Canada. These in¬

and

B. C.

1959

fiscal

during

were

of the major Canadian

taxes

agri¬

culture

men's language

spent by the

Federal Government for

Canadapublished by Canada's
First Bank, includes a survey in lay¬
affecting

redeemable

not

are

as
things stand — we will
spend only $5.8 billion or $7
billion to $8 billion for the

MILWAUKEE, Wis.—George J.

fiscal affairs:

support of agricultural prices?

Guide

Ziegler

(Special to The Financial Chronicle)

—

•

Taxation...

"Your

capacity

Steel

will spend $5.8 bil¬
lion. But who can tell whether
,

of industry

some

1960

•

industry's

the

Now With B. C.

Public

lion. It is said that for fiscal

Have you questions on

1959, it had
of 6,500,000

capacity compared with 4,500,000

Offers Inland Steel

The

the United

producer in

As of Jan. ,1,

rated ingot capacity

ing. He

sol¬

of
the

contemplates - additional
capital expenditures of approxi¬
mately $80,000,000 during 1959.

and accrued interest.

are

added

Steel

welfare."

His words

; ; \

of increased sales volume. Inland

Inland

case.

the sale

general funds of inland Steel,
primarily
for
the
purpose
of
restoring and increasing working
capital. According to.' the com¬
pany,
an
increase
in
working
capital is desirable in view of tha
expansion of its steel capacity and

est

Kuhn, Loeb Group

in each

will

Gawronski is

reduction

1969 at prices
to par tw<>

proceeds from

offering of $50,000,000
Co., first mortgage
41/2% bonds, series L, due Feb. 1,
1989 was made yesterday, Jan. 28,
by a group of investment banking
firms headed by Kuhn, Loeb &
Co. The bonds are priced at 100%

real

prior to maturity, plus ac¬

years

repeal, the amount
in outlays
this year is unfortunately
is to be reached within the so
thoroughly did the New limited. This fact, in itself
framework of the free com¬ Deal seduce the
thinking of should serve as a reminder
petitive institutions on which the rank and file, that the that this Congress this year
we rely
heavily for the im¬ task of remedying the situa¬ (with or without the coopera¬
provement of our material tion is a Herculean one.
tion of the President) becomes
of

redeemable at par;

otherwise

not moderate in his

little real interest

past, and since as a
many commitments

bonds will be

and

in attaining a

actions

maturity; the

at its option in¬
annual sinking fundi
by an amount not ex¬

company

words, by tack¬ ranging from 103lk%

other

self says is the keystone of unwillingness of the President. ling one major item of expen¬
high-level of our economic arch; and the and his immediate supporters ditures—one that is acknowl¬
economic growth with stable
disheartening part of it is that to preach and practice fiscal edged to be a national scandal
prices." ' .H e ;;i s ~ on;. strong neither the President, nor any
the
entire
shape • of the
prudence in full measure —
ground when he warns labor other figure influential in our this
budget i total that-r the budget, the outlook, for tax
leaders^ that ."their economic nation's affairs shows
any in¬ President now
brings forward revision, for tax reduction, for
critical

of the issue prior to
crease

and which have been and

have

chances

level of $77

billion, seeks to fulfill this ticed elsewhere (on others)
Groups
payment
is, of course, responsibility." But does it and a $70 billion proposed ceeding the required payment for
unions
and
their really fulfill this responsibil¬ expenditure for fiscal 1960 the year. For the sinking fund the

management in wage and re¬ sheltered
lated

were

trouble

the

that

receipts at

1960,

year,

Sheltered

ticularly critical role to play,
view

for the fiscal

with

See It
in

It-

<573)

Branches

the principal

St. West

1, Canada

cities of Canada and in London, England

The Commercial and Financial Chronicle

Continued from page

40
due to a reduc¬

harvested.

tonnage

shipments for the
$13,315,534 in 1956 and $15,190,809

selling value of all factory

Total

past two years was
1957.

would

that present price support policies

appear

Thursday, January 29, 1959.

We believe that the

present trend toward monopolistic

There

fully

number being regulated by the
Liquor Control Board. In Ontario, with a population
of approximately six million, Chateau-Gai Wines, for
example are allowed but seven company-owned stores.
This makes it difficult for vast numbers of potential
buyers to procure a product which they might serve
much; more frequently at home could they purchase it
outlets,

owned

the

readily.

However, with more and more Canadians serving
our homegrown product, both formally and also using

expect the increase in sales to
1959. This should result in the entire
industry enjoying its best year ever."
it in their

cooking,

continue during

G. SILVERWOOD

Jlixe

the province's livestock deficit. -In the year just passed,
the provincial crown company, Industrial Estates Ltd.,
undertook the,building of four new factories. Plans for

There has been no increase in fluid

markets in 1958.

tion.

Our

of butter the differen¬
tial" between it and margarine
is
slowly increasing; consumption of
butter is declining and production
in the first eight months of this year
is 27 million lb. greater than last
year.
It is conservatively estimated
that

case

stocks

will

E.Gordon Silverwood

requirements by 60 million lb bv
May 1 next. Government authorities
at high level have advised the industry

that we are
unable to give away btfr tremendous stocks of govern-*
ment-owned milk powder, which are expected to be
approximately 100 million lb. by next spring. It is evi¬
dent that support prices have been sufficiently high to
induce an increased production of 63 million lb. of skim

nickel

powder in the first nine months of this year in spite of
the fact that there is no market for this increase.

The

markets.

tained

free

world

at-

;

•

high in annual nickel
production; capacity in 1958, estimated at about" 525,009,000 pounds--

also

double the capacity existing
prior to tliicicoYtdnifct.?-1,'
Total' nickel consumption in the
J
free world duriiig 1958 is expected
to be between 325,000,000 and. 335,000,000 pounds, compared with about
415,000,000 pounds' in the previous
year.
The principal -cause of the
decrease

the

was

the

United

which had

business recession

States

Canada

and

particularly strong ef¬

fect upon the -production of

goods.: Because this

durable
coincided with

Dr. J.. F. Thompson

period of heavy ihvehtory liquida- 4 ■
'5 1
tion by consumers, nickel (deliveries in all forms were
appreciably lower than "consumption.
In the United
Kingdom and "on the Continent there was only a slight
decrease in consumption.
Z
a

1956.

Canadian. production during' 1958 declined sharply,
as a result of a strike, which began in September

largely
at

International

Prior to

Nickel's

mines

and plants

this, due to reduced demand, the

in Ontario.

company

mately lowered its output to an annual rate of approxi¬

record year, highway construction will
continue at a high rate, with good progress towards the
completion
of
the
Trans-Canada
Highway and
its

mately 200,000,000 pounds,

two-thirds

about

■

*04
Canadian

•

1889

Our

•

1959

organization is actively engaged in under¬

writing and distributing Canadian Government,
T

■

will

;

Martin, Aim, Kane, Rogers & Co.,
t

It is

also

equipped to execute orders

Canadian Stock

Chicago, 111.

all

February

Your

Exchanges.

Johnson,

Inquiries Are Invited

The Toronto Stock Exchange

lists

Johnson,

larger

industrial

Where
in Canada
are

the most

industrial

shares listed

than

of
any

other two stock exchanges in

Canada/';
the

$47,000,000,000

over

listed

$41,000,000,000
industrial

than

are

shares of

.companies.

Every variety of company in
Canada's

and traded?

number

rapidly expanding

industry
the

597

represented
in

companies

this

Hugh

Johnson

Co.,

Hugh

complimentary

Monthly

February 10—Chicago: Hugh A.

;

group.

5—Detroit:

Buffalo, N. Y.
J

run

poration, Detroit, Mich., and Willis

Provincial, Municipal and Corporate Securities.

Johnson

Co.,

free

will be

request

our

showing

trading data

issues listed

copy

Bulletin

essential

you

Buffalo, N. Y.

sent

all
to

February 12—St. Louis: John O.

I. E. Ames & Co.

Wheeler, H. O. Peet & Co., Kansas

J
*•

City, Mo.

Incorporated

Blew York

ert F.

Boston
Canadian Affiliates in

Toronto

Montreal

Calgary

Vancouver

and other Canadian Cities

'1
*

largest market for
shares

Canada

Colorado Springs, Colo.

THE TORONTO STOCK

EXCHANGE

February 17—Milwaukee: Wal¬
ter E.

Winnipeg
.

Victoria

Mich.,
•

London, England

Delaney, Boettcher & Com¬

pany,

•

The

industrial

;

February 14—Kansas City: Rob¬

Auch, Bache & Co., Detroit,
and

Burton

Burton J. Vincent & Co.,

Vincent,

Chicago,

111.

February

page

seven

for a full day in each
city and will be largely devoted
to selling methods and techniques.
J. Denny May, Boston, Laurence
W. Morgan, Strabo V. Claggett,
Jr., Chicago, and William H. Mor¬
ris, Detroit, will be the Panel
Speakers from Parker Corpora¬
tion.
In
addition
the following
guest speakers will be heard:
February 3—Indianapolis: Rob¬
ert Seeber, First of Michigan Cor¬
nar

Investment Securities
M..

dealers

major centers will participate in
a
Sales
Seminar
conducted
by
members of The Parker Corpora¬
tion, managers and distributors,
Incorporated Investors
and
In¬
corporated Income Fund, during
the month of February. The Semi¬

cai.4i

Continued

Corp. Plans

Investment
JvV

had

announced, three curtailments in production which ulti¬

Seven Sales Seminars
v/

new

almost

Parker

Was'Ynarked by draimatic changes in
industry, highlighted by abundant supplies

throughout the free world for both civilian and
military purposes as well as by vigorous competition for

there, coal production has tempo¬
rarily outrun consumption. However,
the man-hour output continues to
R.L.Stanfield
rise. The competitive position of coal
in the production of thermal electric power has been
strengthened by recent Federal subventions which will
also reduce power costs for some industries.
Following

:'CVW «

of nickel

Optimism about
the year to come is based on the
steady upward trend, since World
War II, of this province's growth
indicators.
For example, the
1957
selling value of shipments by manu¬
facturers
totaled
$427 million, an
over

The' year 1956

the

Despite the closing of the Springhill
mine
following
the
disaster

domestic

exceed

The
;

increases.

11.2%

jQhairpiaiitbf thritoard, r A
Ihteraattoi]^-.Nickel Company of Canada, Limited
-

steadily
>•»-*•

power is

^.vw

■'A''

<-•**

DR. JOHN F. THOMPSON

„

Premier of Nova Scotia

increase

-y~

and landed values of fish

r
/V:

underlying stability of the Nova Scotia economy
is evident in the way that this province has weathered
the recent economic storms that are now subsiding. Yearend figures are not yet available, but at midyear elec¬
tric power consumption was 4% over
'
v
the same period of 1957 and retail
trade was up 4.5%. Farm cash in¬
come

i,8O0,Ojkj aficl Where purchasing

advancing.

The

showed

"J ■' *

tion

ceeds

anticipates about theame level of
employment in 1.959 as during the preceding year. We
expect record ice cream sales in the present fiscal year;
the increase in fluid milk sales has been somqwhat dis¬
appointing.
We hope and expect the coming year to
provide record unit sales of all products to help offset
the constantly rising levels of wage and other costs.
company

market

overhanging

New Brtfn'swidK?' ®"-

and other costs which are continuing
.

puli^mill continue to.move forward. The

making possible
number (^ important nCw .projects;
including the Sfatit pf Trbn^i^ion grid, cormeetions with

quart to the consumer. The narrowing margin permitted
the distributors could not absorb this increase of onetheir familiar upward trend..

program will attack

cabital~^d}^r^ls$e^ie]tit' budget' of tiie; jOrbyincial
power comihissiofl l^ mdre than1 twice that of - last year;,

Industry Act in Ontario, which
price at the farm for milk for fluid
purposes, will result in a further 19c per cwt jump
sometime during the coming year. When this happens
it will inevitably result in a further increase of lc per

half cent per quart

new

1959

the

determines

large

our

It is expected that the operation of the

new

\ In the

milk prices in

stepped-up cqmmynity pasture

formula under the Milk

problem of huge stocks of certain dairy products

cloud

evidences of faith /in Nova Scotia's

guard in the interests of tne consumers and the best
spur to efficiency in business is still the opex-ation. of
free competition.
V
;
■
"

HON. R. L. STANFIELD

in sight at this time is
the dairy industry in Canada.
The Federal Government is commuted to a policy of price
supports in the interests of dairy
farmers, which results in keeping
domestic sale prices at high levels.
There is of course no relationship
between supply and demand under
these circumstances and the high
prices tend to discourage consump¬
the

many

con-?

economic, future.; A new banner-supported abattoir and

President, Silverwood Dairies, Limited

for which there is

are

Other

marketing of agricultural products will inevitably result
in higher prices to consumers.
The best possible safe¬

wine in Canada are care¬
controlled, which means that purchase of the
product, say in Ontario for example, is through Ontario
Liquor Control Board stores and also through companyGenerally speaking, sales of

$6,000,000 Great Bras D'Or Causeway link.
struction is also at-a high level.

modified.

will, of necessity, have to be

production decrease in 1957 was

The

tion in the

■■y

<574)

19—Minneapolis

and

St. Paul: Walter E. Auch, Bache &

Co., Detroit, Mich.

234 BAY STREET
TORONTO

•

CANADA

/t-r

189

Volume

Number 5816

The Commercial and Financial Chronicle

(575)
1

Continued

from first

page

would

wish

not

for close

imity,

security,

putes,

with

negotiations

iact that Canada is

the prin-

now

cipal supplier and the largest

cus-

United States. On the

torner

other

hand the

countries

two

"No

are

nation

other

being

highly in-

dustrialized as Canada has such a

quite disproportionate in size and large proportion of industry conwealth, with the Canadian stand-; trolled by non-resident concerns,"
ard
of
living
well
below
the
-

American.

late,an east-west rather than
north-south

few

Still, close intermeshing exists and
there

hence

litieah and.

bound to.be

are

the border.

The; size:",of

naturally

one

■

then

state

well

•

industi-y
from

be', dominated

that
may

These

are:

nKniViiAol

sure

I do not have

present and poten-

industrial

situation

eight states (including
which

your

the

own)

adjacent to the Seaway)

are

^Tpowe^ProieTaTln^r/ ^ wiU be for the power facilities^

supplies and equipment

way

St. Lawrence Seaway
coneernin-

ont?afl™V toncelnlng
Canadians

nd th

, 20_

vl'cTnf
of outstanding equity stock
w vanaaians.

New

York..

The

water¬

facilities will cost about $470
It is perhaps not generaL-

million.

SePa'®^,

abroad

111 vest-

tial

resources are

locally.

several of our: most important,
growth industries are inthis categdry, and-the"Gordon Report lists
'
as
examples''oil and gas, sections :"
find of the'mining and smelting indus;

it, considerable

completed,

was

t.hfit.^VlrtlY^-tjP'TTTI

chase of

be owned or controlled

entire < Canadian

•

im-

other

the

State

of such

Among

radian*

-prominence; Using data which became available
after the Gordon

•Report

Alberta.

and Power Project, an engineer- These are expected to require $6(W
ing d?ye]°Pment whose scope and minion, shared equally between
predomi-'-,.!?y.11101 e P?!iacpur- North America, without equal in the Province of Ontario and the
in senior positions and the ia s magnitude are
suggestions.

capital: inflow

the

brings

-Should

companies

yolved in.,the flow of U. S. savings across

has

of Canada's

and processing in-

the Kitimat alumi- comprising as they do 35% of the
climate were favorable,
but the num smelter in British Columbia, total U. S. population,
importance of keeping them that the vast Quebec-Labrador iron ore
All in all, over $1 billion is beway js not overlooked.
project, the discovery of uranium ing spent on the whole project
/
t
believe however it is not in- dePosits in Northern Saskatche- Interestingly enough, although we
annr0Driate that Canadians should wan and Ontario> and the harness- loosely refer to the whole thing as
have the opportunitv to express ing of great new sources of lo™ ''the Seaway," and although it
themselves regarding the form of cost
hydro-electric power. At the navigational aspects that have
the investment und ^its behaviour Preserd> in company with your- captured the imagination of the
within their borders
The Gordon se*ves' J®1.!®*® watching the last public, the biggest share of the

•

large-companies to

nate.

po-

problems in- -in.

economic

felt the opportunities and

man^'c^nadia n industries'for

trade,

movement

benefits

e says the there,r-is Report. As else- Commission Report makes certain
Gol-don
where.""'there
tendencv
where,"'
is a tendency

| -

Tariffs tend ,to .stimu-

resources,

It is assumed, of course, portant landmarks of the last 10
it would not have come in unless years in the development of our

tors from .the parent firm and
from the international headquarters of the union.
.
>.
•

the

and

brought.

ties—geographical prox-'.handled entirely between negotia-

mutual

confidence

the

unaware

someone

hand various factors make

Ontario and Quebec which ac-

their

Capital Inflow, Inflation and
^
Monetaiy Policy in Canada
one

are

of natural count for about 80%

the field

ticularly in

beginning in 1947 with manufacturing
country which is displayed the bringing into production ui dustries. I am
by the large inflow of capital nor large oil and gas discoveries in to describe the

preciative

the

unap-

are

developments have occurred, par-

the

leave

thought that Canadians

moment, I ly understood that Canada's share
about the of the expenditure involved in the
Seaway, an exhila- new water route to the heart of
for

digress

would like to say more
St

Lawrence

rating and fascinating venture and
i«Uu6 aim
one worthy of the North American

people
interest

this continent is much larger than
__

that of the United States,- about
Some idea 0f the public 70% in point of fact. As agreed dry
in it can be gained from the legislatures of both countries,

Inrlncfmr f hvifl "q!

.Unfortunately the avail- and rubber'products.
'• thing that might have been said progress being made on the projWhat is the St. Lawrence Seastatistics do not permit'
? believe I can assure you there ect, and no doubt this year's open- way likely to mean in terms of
this as a percentage of-.
"Benefits Foreign Hands 'js no red anti-American feeling jng ceremonies will bring addi- North American economic devel; our'.total'capital of all kinds, but
The form or nature of United: *n our country.
tional hundreds of thousands of
costs
seem
in
prospect
Asome idea of how significant the
states, investment presents some
Turning now to general eco- visitors. A great deal has already Pin&
percentage must be can be gained' nrohT^m? 'tnirert in vestmentin nomic developments in Canada, been written and said about the through the
-U. S, A.

fable
;

state

opment? Certainly reduced^ship-

.from

that

fact

the

for

accounted

S subSries

same

aents
investments

U. V S. •' direct

year

'alone

the

than

—after taxes.

of Insecurity

Sense

moin<?

in-

year

the part of American

liJLlVJ

normlnr

as a

ally snowed under with reviews residents of your state and city as
p^enTffwns IrT 1955" for'example'the economic events of the re- well as in my own area, perhaps I
-----'
-■
'
'equity-holditigs constituted over 9en' Past and forecasts of things
yeitinent

35% of total Canadian corporation
r

AUp.

elimination of trail-

time of the Seaway but because it is of im- shrppmg charges the saving of
when businessmen are liter- mediate and lasting interest to time and lower operating costs as

this is recognized

C:V.UAIUI111V*

c VC11G5

bilVJ

1C-

tv w*

A**

vrv***

larger sized vesselj .ca^ ^
Some observers anticipate that the
n*

■

■PSSSi 84%
ings, with. Americans owning

rtC

mmrin*

mST* aSPeCtS °f tWS Undertak" through

the8sys£teSeiagShtcompajed

another to the pile. Rather it ing.
mpleted,
about
seems appropriate for me to point
When completed, the Seaway with .. . , « miUion- previously,
the Seaway
.
q. ,^en double
deep water channel of
Z
"°Th t
I concern over foreign investment common stock tends to have a out & few of the problems which will mean a
iv linHnilhfPfllv
is undoubtedly a sense nf ijisecu- "-•"snowballing'', of+'nnf nnt fnnnH in set™ m prospect for 1959 for the 27 foot draft some 2,200 miles m
of insppil- f'ennurrvnllintf'! effect not found in
nrolect shows ' the - world
! rity vis-a-vis our much larger and bonds. .Retention
and reinvest- Canadian economy.- However by length and extending almiet half- ™uat*^eamwork bv two friendly
(more
ijuwcttut
powerful neighbor to the ment of earnings leads to a rather--way ^ background f would like* way/across the continent.
iu
tut
inciii ui ucniuiiys lfdus iu
•—
T
5;
The ™_
can
do in the practical
south
the fear that
.south
the fear that continuing rapid increase in the original to *ete» briefly to the very great waterway will bring into interrefer
f
tUng costs and increas"integration may lead To economic holding.
integration
to
This
growth in value economic
expansion which has nahonal significance ^the already .
which
mutual prosperity.
domination and eventually to-the results primarily from the growth' Fharacterized the postwar period rapidly expanding industrial area
Returning now to the State of
Iloss of political independence. In of the Canadian economy gener- in my country, and as well to the surrounding
the St. LawrenceContinued on page 45
the

root

[these*, equities.
w
^

Investment

in
•

spnsp

;

Canadian

the

IIIUIC

—

the words of the Report, the present

situation"

non-residents
'

confers

large

economic control

upon

measure

over some

our

important industries and industrial activities."
On past oc-

casions
nies

American

have

parent

compa-

ally, yet the benefits remain in
foreign hands. Further, repatriation

still

equities may well never
Historically, an underdeveloped country has been
able in time to pay off the bonds

recession

recent

are

"•

Postwar

to pass.

come

held

The fact

non-residents.

Canada,

which

from

Expansion

other

industrial

coyntnes, finished World War II
3 greatly expanded producP°ten^ial and a general opti™ism among its citizens as to the

;

their Canadian

that in the postwar iieriod invest-

subsidiaries to stay out of foreign
markets.
Then again there is the

ment has usually been through the
medium of common stocks means

point that the Canadian operation
can be used as a battleground for

CANADA...

will not lessen servers expected that private exthe degree of ownership and con- penditures
and export markets
trol conferred by these equities. CT
n.^
sufficient to ottset
~
the drastic decline in government
spending at the close of hostilities

obliged

the settlement of U. S. wage dis■

•

j ■io'"-"

[

■

that

time

long-term

the

can

industrial
in

investors

ob-

Many

How
your

OPPORTUNITIES IN CANADA
Our facilities

prospects.

be of valuable assistance to those interested

that

depression
would be experienced in the short
run.
Fortunately economic events
proved the pessimists wrong and
we have seen an era of expansion
beyond anything experienced
since the turn of the 20th century
when

development of Canada and of benefit to

-X

western

frontier

Our

Limited

securities, combined with

changes,

the United

Great Britain.

Product,
Members of

The

Head Office:

Investment Dealers'

Association

355 St. James Street

Branches in the

of Canada

W., Montreal

principal Cities of Canada

;

„

Canadian

Stock

—

Toronto Stock Exchange

Exchange

the

United States

and

36%

the

Broad

140 Federal

Street, New York 4, N. Y.
Street, Boston, Massachusetts

York,

wire

Montreal,

London

connections

Toronto,

Ottawa,

between

Hamilton, Kitchener,

fOnt.), Winnipeg, Calgary and Vancouver

Municipal and Corporate securities, and

Net U.S.

W.C.Pitfield&Co.,Inc.
30 Broad

Street, New York

HAnover 2-9250
V

During these years, perhaps the
most impressive characteristic of
the Canadian economy has been
not

only the sustained high rate
of economic activity but the per¬
vasiveness
of economic
growth.
capital

on a

basis where desired.

investment

program

which underlies the whole expan¬
Direct

banks, dealers, and institutions

maintain active markets

industrial
production, the Canadian index
increasing by 51%, the U.K. index
by. 50% and the .U.S. index by

The

need.

A similar situation

with* regard

43%.

Nesbitt, Thomson and Company, Inc.

ex¬

put you in immediate touch

interested in Canadian Government,

terms, after the removal of price
influences, Canadian GNP rose
over 52%
as compared with 45%

exists

Montreal Stock Exchange

measure

private wire

provide prompt, accurate service to '

American

with

The Gross National

usual

Great Britain.

Nesbitt, Thomson & Co.

and

can

with the Canadian markets
you

total output of goods and services,
would be one criterion.
In real

Members

States

our

memberships in all- Canadian stock

was

up.

Some idea of the kind of devel¬

with

long and specialized experience in the

system, coast-to-coast network of offices, and

gained from comparison of Canada

Nesbitt, Thomson and Company,

guide to its future

underwriting and distribution of Canadian

opment which has taken place in
the decade 1947 to 1957 can be

past experience can be

severe

our

opening

selecting suitable investments through which to

participate in Canada's assured growth.

our

alone

and

On the north

Great Lakes Basin.

recovering.

sion made itself felt in

tries and in all parts of

all indus¬

the coun¬
try. Modernization and expansion
have been the keynote in every
sector of the economy. Spectacular

•'

Canadian Affiliate—

W. C. Pitfieid & Co., Ltd.
Members of the
Investment Dealers Association of Canada
Associates—

Hugh Mackay & Company
Member of all Canadian Stock

Exchanges

■

The Commercial and Financial Chronicle

(576)

Continued

from

page

specially developed for the purpose by International
Nickel, various battery manufacturers are now expand¬
ing their facilities to develop and enlarge this market."

Cuban production was also reduced as a result
of lower demand and internal disorders in that country.

pacity.

Thursday, January 29, 1959

WILCOX

President, Canadian Westinghouse

Co. Ltd

While the past year was characterized by a reversal of
the downward trend experienced in 1957 and a general

Nickel Output

Nickel Production Capacity to Increase

Free World

Consumption of nickel in recent months has shown

firming of business in

number of

Today's free world annual nickel production capacity
of approximately 525,000,000 pounds is expected to rise

improvement over the low levels touched earlier in the
year, and it is expected that this situation will continue

sheer

progressively in the next few years. This capacity, it is

into 1959.

it would be
continuation of

areas,

been prevalent in the immediate past

complacency to

predict

strong

this upward trend in 1959. There ha3

too much of

nickel production capacity will be about double the esti¬

is entering into a period of vigor¬
During the past period of nickel short¬
age, producers of competitive materials have naturally
taken advantage of the fact that large quantities of

mated total free world

nickel

fits.

•

tendency in this
country to l'oresake long-term plan¬
ning and to implement those policies
which bring only immediate bene¬

The nickel industry

estimated, will reach about 550,000,000 pounds in 1959,
600,000,000 pounds in 1960, and about 650,000,000
It is significant that the projected 1961

about

ous

pounds in 1961.

consumption in 1958. As

who had been forced for

consumers

result,

protracted period
of nickel for civilian purposes can

to curtail their uses

for nickel.

tremely useful metal in the years ahead.
A

substantial

part of the

estimated increase in free

coming from International Nickel's Thompson Mine

in
development for two"
years. This project is scheduled to start its breaking-in
period some time in the latter half of 1960. Full pro¬
Manitoba

which

has

been under

duction at the annual rate of 75,000,000 pounds will be
reached as soon as possible after the end of the breakingin period.

defense

for

world nickel production capacity by 1961 will be forth¬

government stockpile.

were

these

to nickel
:

for Gold.

Already the gold indices

potential

output in

Exchange

v,'"

expansion

in which these

programs

companies

engaged, their respective capacities will re¬
portedly amount to 55,000,000 and 27,500,000 pounds per
year.
It has been reported that the capacity of the
United States Government-owned plant at Nicaro, Cuba,
will be 54,000,000 pounds annually, and Freeport Sulphur
Company has 1 announced it will produce 50,000,000
pounds of nickel annually from its deposits at Moa Bay,
Cuba. The capacity of producers in the United States is

the

ments

with

French

mines

nickel

the

Societe Le Nickel,
Caledonia, contem¬

company,

island

New

plates increasing its nickel output to some 50,000,000
pounds per year.
In addition, there will be a relatively
small output of nickel in Japan, which is also produced
from New Caledonia
In

ores.

October,1957, the United States Government author¬

to the

over-supply, much of this nickel, a large portion
was premium-priced, did not find markets. The
Government has announced it will also offer to industry
in the United States all the nickel
about 100,000,000
pounds—contracted for stockpile delivery in 1959.

of which

—

Nickel Prices

The

market

price for clectrolvtically refined nickel
remained thorughout the year at 74 cents (United States
currency), including the 1*4 cents United States import
duty.
In

July,

sidiary,

International

The

Nickel's

International

United

Nickel

States

Company,

Inc.,

nounced that it had set the price of its 75% nickel

packaged, at 69.60 cents

Buffalo, N. Y.,

oxide,

pound of contained nickel,

per

Previously the company's price

70.25 cents, unpacked at Copper
was

an¬

other established point of entry into

the United States.

duction

sub¬

attempt to price the nickel oxide

duced by International Nickel

was

Cliff, Ontario. This
a

re¬

pro¬

marked

that'

doubt

Arthur

White

bother to make such
It is

less it is

Canadian
that

Further, to

see

dential

spite of U.

her

Gold

Government persistence

Nickel Applications

The

greater

availability

nickel

during

the

brought with it changes in applications, some
others

restoration

older

uses

which

new

had

year

and

been

effect prior to the period of restricted civilian
supplies.
Free world nickel consumption
by fields in 1958 is esti¬
mated as follows: stainless

then

the bar will buy

year

use

for nickel is

consumption in

this

quaternary coinage alloy

coinage, and during the

application

was

rose

Mint, and nickel alloyed coinage returned
for all denominations and to
Colombia for
nations.
cent

Canada continues to

piece.

nickel

use

pure

Europe, established

(copper-nickel alloy)

cupro-nickel coinage
nickel has also been

was

by 50 %<

developed at the Mexican
to

Argentina

some

denomi¬

nickel for its fivenickel

and

cupro-

coinages continue and

introduced

adopted for

new

Spain.

new

Cupro-

coinage issues in

Ghana and Nigeria.
A

and market

battery.

both

product

development, is the nickel-cadmium storage

Taking advantage of

niekel-carbonyl powder

curtail
I

housing, and possibly of

feeling

optimism

of greater

spreading throughtout the business
a very

spending

consumer

real threat which

durable goods in 1959

referring specifically to the possibilities of
inflation.

round

their

view of

already low profits margins,

increased

electrical

turers will be forced to increase the
of their

from

costs

manufac¬

on a

number

know

experience that such action, especially when people

inflation

are

ment

prices

products items in 1959. And

consumer

conscious, could well result in the postpone¬

of their

spending, particularly for durable goods.

look forward

level of business about the

same

moderately higher than that of 1958. It is not reasonable

expect, however,

achieved

that this

level of activity will be

automatically. Unless basic policy help is forth¬

coming, it will have to be attained in the face of increas¬

ing difficulties
no

which the industry has little or

over

control.

H. WINTERS!

It is

President, Rio Tlnto Mining Co. of Canada, Ltd,

the

Gold

mining industry.

some

improved operating conditions, in others, it is
coveries underground.
camp,

New

a new

new

dis¬

In the growing Red Lake Gold

Dickenson

Mines,

along

nearby producers, has been able to

opment of

upsurge

instances

with

announce

four

the devel¬

nadian
for

and profitable orebody. The improved

believe

into
In

mining companies in the

that other

operation—and
the

Gold npne

Mines

Taurcanis
the first

induces

even

Consolidated

nickel,

1959, the total

uranium output should
larger than this year.

full

production,

efforts to

district,

surpassing

Now that the mines and mills are

properties will be put

meet their

after

strenuous

"crash"

devel¬

opment programmes, the industry as

Discovery

Limited, already the highest grade

in Canada has, during 1958, marked

whole

energy

can

devote

time

and

to the vital question of im¬

up even

proving operational efficiencies and

Still further to the north in that district,

reducing costs in order to meet any
outside competition. Efforts will con-

Mines

new

minerals,

the first time. In

year's

soon.

Yellowknife

Red Lake

area

the whole year uranium emerged asthe largest export earner of all Ca¬

other

knowledge of the geology of the district and the activity
of the many

1958 has been

significant year for Canada's uranium
industry. All mines and mills previously under develop¬
ment and construction reached their scheduled, operating
capacity during the year. Exports of uranium, nearly all
to the United States, constituted 5%
:
by value of all Canadian exports for
the first eight months of 1958. Over

In happy.

a*
-v

And what of the Canadian Gold. Producers?
coincidence with the trend to Gold, there is

higher grades.

good potential market, dependent

new

resulting from higher freight rates, higher steel prices
and higher wages, just to name a few, and in view of

that there

of that currency.

base

A traditional

importance,

seems

another

basic, indestructible hedge against inflation.

show that the steel industries continued
to be the largest
consumers of nickel. " :
"V", ;• '
.
*

do expect

So—back to my bar of Gold—if a currency devalues,

steels, 28%; engineering alloy
steels, 16%; nickel specialty alloys, 16%; foundry prod¬
ucts-, 15%; electroplating, 14%; copper and aluminum

alloys, 6%; and. miscellaneous, 5%. These figures

continuing high rate of personal disposable in¬

—and

too expensive to push
•

concerned,

The electrical manufacturing industry as a whole may

heavy drain

less

decided increase in the sales

community. There is, however,
may

1958 promises to be repeated in
the forerunner of an upward
price of the yellow metal—Full con¬
vertibility of European currencies is not an answer to
the American export difficulties — It is an open door,

through it.

are

record demands for

which

pile during

are

already been

even

and it could well be

certainly but the export goods

and

the

financial crisis.

rise in the price of Gold, the

a more

radio, T.V. and appliances. This is undoubtedly due

come,

time, look for "savers" to hedge their in¬
vestments.
And that is where Gold comes in, in 1959.
Gold is the metal by which values are measured the
world over, irrespective of currencies—it is a financial
commodity with no foreseeable substitute. It has come

will be

institutional

same

one

I do not agree with these pessimists but nevertheless,
certain uneasiness is induced in the optimists who con¬
tinue to make their progressive bids in the market, but

than

goods

as consumer

months has

increase

improvement in 1959. In fact, during the past three

some

and that of 1929 to 1932.

by approximately 10%. These

anticipating around the end of the first quarter.

As far

Optimism then—can that be the answer?—it may be,
but for every optimist it is possible to find a pessimist
who can see a "break in the market" just around the
corner and who sees a similarity between today's pattern

rescue

apparatus, the level of activity in
up

construction,

are

What caused that rise?—
many theories are put forward but few will stand logical
enquiry when one considers that profits and earnings
have not come within sight of stock market prices.

to the

may

general increase in the rate of industrial activity which

revaluation in the

industry

public building type of construction, and

rising index for industrials.

at the

level of activity in this area
below that of 1958.

gains will be the result of continued strength in resi¬

freedom—

1958

1959

In the area of small

the

the stock market in

that the

will be about 15-20%

it feels good to own some¬
thing, the value of which, is recognized the world over.
Looking back

to curtail

segment

non-residents of Canada

Wilcox

1959

estimated

buy and own Gold, brought about by the
action in removing restrictions

either residents

it.

of 1957, capital spending programs were drasti¬
curtailed. Consequently, the reduced volume of
entered for heavy apparatus equipment in that
and into 1958 is lust now beginning to be felt. It

year

Government

now

far

cally

transaction?"

new

orders

little difficult to explain, un¬

that, somehow, it symbolizes

the freedom to

stages

might ask the question —
"Why would I, the President of New
Dickenson Mines, a successful, grow¬
ing,
dividend-paying
Gold
mine

1959

competitive basis.

have

There is

One

may own

ized the diversion to industry of some 135,000,000 pounds
of nickel scheduled for stockpile delivery in 1958.
Due

domestic markets. Measures

concerned, prospects for the heavy
of the electrical industry are not
promising. When business started to decline in the early

fine ounces, without any restraint or
restriction.

some

20,000,000 pounds of nickel annually,
originating largely from the M. A. Hanna Company's de¬
posit at Riddle, Oregon. According to published state¬

Golds

low-wage foreign products

apparatus

public interest in Gold is growing.
Gold, the metal itself, has become
a
commodity^ which the man in the
street can buy. In the early days of
1959 I was. able to, and did buy, in
the free market, a bar of Gold of 33

have' been

estimated at

of
our

Gold Producers and

solid

includes from Canada that of Falconbridge Nickel Mines
As the re¬

sult

the Toronto Stock
to new highs.

gone

speculative
gains.

also

1961

have

Established

Limited and Sherritt Gordon Mines Limited.

rising costs, which
are plaguing the business
community and; even more
important, is the necessity for establishing a definite
monetary policy. Conscientious efforts in these areas,
while they may not result in a record breaking year in
1959, are, nevertheless, vital in order to establish the
sound basis required for our future growth and pros¬
perity.
/■

ARTHUR W. WHITE

degree of relief from the in¬

some

President, New Dickenson Mines

tion

total

bearing
.

into

District of Ontario which have

world's

•

flux

consumers.

financed from company funds and without any govern¬
ment guarantee of a market. '
free

considerable

business.

not handled

vide

In recent'times we witnessed years when Uranium
boomed, Copper had its day and Iron was in the lime¬
light. I believe that the year 1959 will be outstanding

The

are

will have to be instituted

At this rate, International Nickel's production

an annual nickel produc¬
capacity of 310,000,000 pounds. This project is being

Action has yet to be taken to pro¬
many
of our industries with

are

of International Nickel

have

level

confident that the-research and sales programs
and the other nickel producers ;
will result in a steady upward trend in consumption
with substantial benefits to the nickel producers as well

com¬

in which

manner

handled

are

will

for

uses

Consequently, during the

problems and the

Now that nickel supplies are plentiful, both
and civilian purposes, the nickel industry
new

ing year, we will be faced with a
number of postponed as well as new

result substan¬

must recapture these markets and create
nickel-containing products.

capacity at its operations in Ontario and Manitoba will
total 385,000,000 pounds per year. The Manitoba project
will be the world's second largest source of nickel, ex¬
ceeded only by the company's operations in the Sudbury

required for defense production and

were

tial inroads were made into traditional civilian markets

be assured of steady, abundant supplies of this ex¬

now

competition.

also put into

years

Limited

plans production and will be

Gold mine since 1952.

So—all in all,

1959 promises to be the year for Gold.

tinue

1959

to provide

R. H. Winter#

additional housing and other

Continued

page

Number 5816

189

Volume

The Commercial and Financial Chronicle

(577)

situation

ment

Continued from page 43

price rise.

than
y.

;

the

end
y

except at
; is

peril.

our

matching

One of these
increases

wage

granted in the U. S. without
Paradox of Tighter Money Now

Capital Inflow, Inflation and
Monetaiy Policy in Canada

rises

are

form

sponding
With

today's price
inflation

tion

all

the same, I can only say that it is
much more subtly based than any¬

cations

you in the
United States.
The
major digression were that we

Indeed

economy,

tions

the

greatest
today is the

government deficit

inflationary at the present time,
though it is possibly not prema¬
turned down a little sooner but problem of reconciling maximum
ture
to
talk
of
balancing the
employment with a stable dollar.
a little less steeply than you did,
budget, and it would certainly be
I would judge
that we" are not a
and
we
also
turned
up
again
great boost to morale if we could
but

sooner

less

unique in this respect. A good deal

aggressively than

your economy
appears
to have
done.
Nevertheless, although we

started

-•

the

out

with

1958

year

misgivings, it goes into the

\ many

record

still

good

very

year

and it has the enviable distinction

of passing along to its successor a
much healthier economy than it

inherited.
i

1959

Economic

Ciiallenge

enter

1959

clear that Canada has

is pretty
long way

to
•

yet before her productive

potential is developed to the lull.
We

have

firm

basis

for

re-

sumption of rapid growth in out¬
put when demand once more turns
upward, but for the time being we
do
have
unemployed resources
that present a "challenge to our
ingenuity.

"
Unemployed labor is one of our
biggest worries of the moment.
Because of our more severe cli-

mate and because of the nature of

;

basic

our

industries,

seasonal

V swings
ways

in employment have albeen greater with us than

with

;

you.

The

worst

season

j. usually in February or March, and
this
v

be
was

expect

year

Worker out

of
in

case

one

10 may very

unemployed
the

that

well
time, as

that

Even if

1958.

have -the
I

expected growth of 3%

or 4% in
measured

Gross National Product

could

•

constant

dollars

conceivably

face

be assured that

would

see

moderate

ST.

traded

even

short

the

Nicolaus

may

structure

LOUIS, Mo.—John W. Bunn,
Vice
President, S t i f e 1,
&
Co., Inc., St. Louis,

Senior

distor¬

cost

was

elected

Chairman of

our

exports

but

domestic markets

run.

our

own

well, for our
domestic
industries
face
strong
competition from imnorts.
as

many

It will take goodwill, coopera¬
tion, and firm resolve on the part
of all of us to find and apply a
satisfactory solution to this di¬

lemma

Now

built

to mention

the

enormous

up,

in¬

supply. In
by over 10%,
this time due
largely to the
Korean war.
Again prices were
crease

1951

money

prices also

rose

the

fluctuations

cycle

within

over

the

tolerable

with

the

techniques

framework

time

close.

Mark A. Lucas, Jr.

John W. Bunn

Vice-Chairman.
District

are

States

matters

these

are not.
However, it
me
that there is very

.real- danger

exaggerating

differences

and

things

hold

us;

cannot

that
find

any

ern

the

.togetheri

better

year,

our

forgetting
note

comprises

the reclassification of

they j

seems

No.

•;

districts last"

Kansas, Oklahoma and west¬
were District No. 5.

Missouri

William S. Clendenin, with the
office in Kansas City,: is

NASD

Secretary of District No. 4.

which to conclude than the word¬

ing which is to be placed

and

the
new
St. Lawrence power dam at
the dividing line between the U. S.

—

1930's, before these

well under¬
stood. If we expect them to solve
all
our
.problems, however, we
were very

Canada.

It will read

lows:

Mulvehill Elected Director
Edward

Mulvehill has been

elected to the Boards of Directors

fol¬

7...

the

Broad

Street

would

artificially
mium

*3/#/'/;

stands

?'/

high

tend

which

our

Moline Company.

Prior to joining
Cady, Roberts in December, 1957,
Mr. Gintel was with Thompson &

business here under the firm name
of C. T. Finney

Rittmaster, business analysts and
financial

Co.

Mail address

is P. O. Box 847.

consultants.

value

The pre¬

dollar

now

something which I be¬
attention and some
the part of our monetary

lieve requires
action

managers.

Wants Controls Plus Easy Money

•

Devoted

over

•

Redeemable

•

Non-dividend

•

I do not suggest we should pas¬
sively accept rising prices as in¬
evitable. Far from it, for we must'
find
some
way
of restraining
them.
As I see it, however, we
must approach the problem as one
of keeping our costs of production

$30 million'.

Canadian and Overseas investments.

Reinvesting all income after

at net asset

value.

paying, concentrating

growth.

from
,

Canadian income
.7

:-•? vestment
•

Traded
ment

tax on

expenses

and prejudicing our
competitive
world
markets, not of restraining effec¬
tive demand.
Without infringing
on
the proper role of monetary
and fiscal policies in promoting
maximum
employment
and
a
healthy
climate
for
economic
growth, we must find supple¬
mentary devices that will keep
our costs from getting further out

and 15%

over-the-counter

through

your

invest¬

broker.

Stockholders available

hand.
Wages are
point. They are by no
only element in costs,
of

Carl M.

Loeb, Rhoades & Co.

Members Hew Tor\ Stock

not

WALL STREET
Wire

NEW YORK

System to Branch Offices,

their connections in 100 Cities

means

and

Copies obtainable from your local
investment

the

dealer,

from

undersigned.

in
the

to make labor the scape¬

our present dilemma, but
they certainly are a very impor¬
tant part.
...
...

Leading Stock and Commodity Exchanges
42

mean

case

SCUDDER FUND OF CANADA LTD.

goat for

Exchange and other

Private

Prospectus on Request

rising

position

non-resident-owned in-

companies.

Annual Report to

Finney is engaging in a securities

put an

exchange

the Canadian dollar.

Capital assets

Group

mutual funds — Broad Street In¬
rising by about 3% per annum in
"This stone bears witness to the
the advanced stages of the 1955-57
vesting Corporation, National In¬
common purpose of two nations,
may end by discrediting them en¬
vestors Corporation and Whitehall
boom, as the monetary authorities
whose frontiers are the frontiers
tirely.
found it difficult to cope with the
Fund, Inc.—it has been announced
of friendship,
whose ways are
Furthermore lor Canada at least
pressure of expansionary forces.
the ways of freedom and whose by Francis F. Randolph, Chairman
by all means
In all these cases it is clear that I think we must
Mr. Mulvehill
works are the works of peace." of the companies.
avoid undue timidity in our ap¬
inflationary pressures of the
is
President and a director of
proach to the problems that are
classic type were at work. To use
ahead of us.
We have vast re¬
American Re-Insurance Company.
the popular phrase, there were
Named Director
sources to develop, and we
seem
too many dollars chasing too few
to have a labor pool that will be
Robert
M.
Gintel,
associated
goods; labor, materials, and pro¬
C. T. Finney Opens
ductive capacity were all scarce. adequate to make use of those with Cady, Roberts & Company,
resources.
If production and em¬ New
(Special to The Financial Chronicle)
York, has been elected to the
Today this is not the case. Instead
ployment are to continue to grow board of directors of Minneapolis of
FLORENCE, Ala. — Charles T.
pressure
on
productive
re¬

because

•

the

Kansas, Missouri, Ne¬
and Oklahoma.
Prior to

braska

parallel.

City, Mo., was elected

Kansas

bring these

I have ranged

some

interests

our

some

business

limits

the

variety of Canadian prob¬

lems.

tolerable indeed by compari¬

very
son

remarks to

not

within

free

enterprise system just as
we
must all share responsibility Committee No. 4 of the National
for the loss which has already Association of Securities Dealers.
Mark A. Lucas, Jr., President,
.taken
place in the purchasing
power of our respective dollars. Lucas, Eisen & Waeckerle, Inc.,
our

end the year
with .rather more unemployment
than we should like. Our popula¬
tion is increasing rapidly, espe¬
cially in the age groups that make sources we have widespread over¬ at a rate commensurate with our
up the labor force. As a long-run
capacity. Instead of labor scarcity potentialities we must be prepared
to act boldly and to take some
matter this is all to the good, for
we
have unemployment.
Indeed
risks. The money supply must be
we will certainly need a growing
it is precisely because of this that
pool of capable labor in order to our concern is so aroused, for it allowed to expand appropriately.
From the long-run point of view
make full use of our potentialities,
is widely recognized that to apply
an overly-restrictive monetary
but for the moment it does agthe usual remedies of monetary
policy
might
-gravate the employment situation.
easily choke off
and fiscal restraint would be more healthy economic growth, and in
Despite an unpleasant volume
the
short-run it would hamper
of unemployment and other indi¬ likely to aggravate the unemployour export and domestic industries

District

Indeed the danger relates not only

the

being said on the- subject in
budget
not
only
balanced but
quarters, usually in terms of
actually put in surplus at the ap¬
the dangers of inflation.
Now I
propriate stage of business- re¬
would be the last to deny that
covery. Tighter money now would
inflation is dangerous, and I must
discourage business expansion
certainly admit that ^ a general without
-bringing
any
material
rise in prices is usually accepted
lessening on the upward pressure
as conclusive evidence of inflation.
on prices.
Restraints on consumer
Nevertheless it seems to me that
credit do not appear needed until
the present situation is very dif¬
there are signs that the supply of
ferent from past inflationary pe¬
capital is becoming inadequate to
riods, and that it would be a seri¬
meet demands for the expansion
ous
mistake to apply the usual
of productive facilities; production
remedies.
Immediately after the
should surely have priority over
war,
for
example,
prices
rose
consumption as a claim on the
quite sharply for a while—by over available
capital when there is
9% in 1947 and over 14% in 1948.
not enough for both, but there is
Probably this was an inevitable no feasbn to
limit .the latter when
product of the transition from a. the
former is ndt'in danger of go¬
war-time economy to a peace-time
ing short.
Monetary -and fiscal
economy, given the great increase
policies have served as ns ad¬
in money incomes and the almost
mirably so far in the postwar era,
insatiable
backlog of consumer for
they have enabled us to keep
demand that had been

propor¬

production

your

Elects Burn SL«cas

productivity.

substantial

NASD Oisirict No. 4

corre¬

not, for a time) prove
too serious. In Canada, however,
exports
are
a
very
significant
part of our total production and
it would be highly imprudent for
us to ignore additions to our cost

unsued

think

challenge

gains' in

such
of

internally

thing we have experienced before,
capacity, how¬ and it will
require equally subtle
ever, consumer prices have con¬
handling. It is not very helpful
tinued fairly strong in
Canada. to describe the

I believe it should
suffice to say that In substance
we have run a parallel course with
the

If it is insisted that

I mentioned earlier that

5, N. Y.

our

two

William Street

Sales, Inc.

One William Street

countries have followed

strikingly
but it is of para¬
importance that we
in

similar courses,

Correspondents and

mount

throughout the U. S. and Canada.

Canada
$

some

not

realize

that

there

paths along which
go

hand-in-hand

are

we can¬

with

you

New York

The Commercial and Financial Chronicle

(578)

Continued from page

mining

higher standards of health and safety in

even

operations.

question of its present and future markets. Through

the
a

recently formed uranium producers'

committee within

contact

Canadian Metal Mining Association, close

the

Government,

will be maintained with the
wide basis, on

on an

industry¬

being made already to

the Government to remove some of the re¬

strictions

presently

sales

non-governmental

impeding

of the in¬

abroad of Canadian uranium. A major task

and the

dustry in 1959 will be to make the Government

general public more deeply aware of the size of this

industry, its permanence on the Canadian scene,

young

substantially

there is

no reason

other

when there has been

years,

industry in general by
latest

wide margin. According to the

increase

months

ended

the

for

Nov.

30th,

1958,

that

Industrial

factured

tobacco

shows

products

recession.

But

tobacco

tured

Increased

C. Wood

the

which the industry was faced

Excise and

operates within

cost-price

squeeze

with

at the close of 1957. The

taxation, the cost-price

squeeze

margin than in many other

narrower

industries.

experienced' favourable

;

provide

will

weather

only very light losses from hail and

being

the

commend

Federal

national

conditions,

early frosts, to¬

policy

the bulk of which will be marketed by public auction in
the growers' second year under the Ontarion Farm Prod¬

contain

The

Department

cities the size of
•

Transport,

$100,000,000 in the next four

will

alone,

spend

enlarging and mod¬

years

ernizing airports Under its jurisdiction.
Canada's population has increased by more than
third in the past decade and the country now is

about 500,000 persons
in

steady growth in the

annually.

282,164 immigrants, the
should

view.

Now

Last

one

absorbing

Canada took

year

largest number since

1913.

happy that the high priority defense-

is all but finished from

program

can

get

Our firm

construction point of

with other jobs.

interest

been

tion

million in

continuation of this trend

through 1959.

has

is no

continuing flow of U. S. capital, estimated
at more than
$60,000,000, into Canadian real estate in¬
vestment purchases. The figure will increase to
$100,000,000 during 1959. This influx of U. S. money in the
realty investment field does not in¬
a

clude funds for such

mortgages

things

residential

During the past four

handled transactions

Canada has

totaling in

never

organiza¬

years, our

of $85

excess

long-term Canadian realty investments. There

the

proposition is

attractive, then funds

are

first

Interest

and more U. S. investors become

develop¬

has

investments

steadily increasing during the past few

tions.
on

Four

Dec.

aware

years,

of the excellent
a

country

the

growing interest in Canada by

the popularity

of mutual fund organiza¬

American-Canadian

investment

companies

31,1954 had $126,245,000 in net assets and 38,336

stockholder accounts.

companies, net assets of $224,927,000 and 74,600 accounts.

recent survey

major

by passing the

new

Canadian

assets of
All
Elliot N. Yarmon

Estate Tax

Act which imposes the flat

15%

holdings. This replacing

cumbersome gradu¬

ated scale and produced

increasing savings. U. S. resi¬
dents whose tax burden is
lightened by realthy invest¬
ments in Canada's ten provinces as a
result of the new

legislation,
amount

can

now save

they invest in Canada.

holding in Vancouver, out of
of $2,000,000, can result in
The new Estate Tax Act

61%

For

for

taxes

example,

the

$200,000

total United States estate

30% tax saving of $60,000.

brings inheritance regulations

happen,
Let

yy '.yy fy ■ -iv

-yyv;' 'vyy'-

-.'-y-Z

hope that no Canadian Government will be
into action which might throttle or retard the

mislead

step.

yy ;'

•-

y..

■_

■

The autumn of 1958 saw Alberta

„

:•

natural gas reach its'

markets in, Eastern Canada, where it received a

gratify¬

ing acceptance. Unfortunately, it is possible increased
acceptance to the extent anticipated may be temporarily
retarded as a result of some recent explosions in On¬
to natural gas. I am informed that theoi Ontario has already instigated a .study of:

tario attributed

safety measures which might be required of a

natural

distributing company. Other Provinces where natural
in being supplied for the first time may-undertake
similar studies. Certainly Alberta can be used as an ex¬
ample worthy of examination. Natural gas has been used

gas

1912. The two major

there since

utility companies have

practically 100% heating load saturation of the market
they serve. Their safety record is excellent. It speaks for
itself: with a properly installed, well maintained and op¬
erated plant natural gas is as safe, if not safer, than any
When the public is

showed that the eight companies had net

$378,923,319 and 127,957 accounts.

steadily increasing
Canada.

search Council in Ottawa

was

the accompaniment of

sold to

build-up
not

of the

too

market all across

long before the rest

goods

The National Re¬

making experiments to

see

will be

community, where natural gas is available;
heated

homes

not
now

gas

the majority of older

and

using other types of fuel will have been con¬

verted.
In the last two years
the

great strides have been made in

improvement of gas appliances, the range, hot water

heater, drier, incinerator, refrigerator, spac:e heating and
air conditioning equipment are at least as
modern
I

should

be a

that

would

construction dollar.

satisfied that natural gas is safe to

built in any

than 20% of the country's Gross National Prod¬

fuel

high standard of courteous service, there should

ness

and services is

if the

and

phases of Canada's construction industry accounts

development of Canada's natural gas industry by un¬
required and undesired regulatory bodies or.procedures.
The industry is not monopolistic, in fact at the prices gas
will be selling in Eastern Canada, it is subject to keen
competition. The industry requires assurance that our
governments will not legislate for over-regulation. It is
confident that they are aware of the dangers of .such*

were seven

uct, meaning that one in five dollars spent

later there

field, $315,246,000 in assets and 97,198 accounts. The most

event during the year
was the Canadian
Government's sim¬
plification of the handling of United
States resident's investments in Can¬
ada

One year

By the end of 1956 there were eight companies in the

difficult to be anything but confident
about our future.

„

factor which must be

one

Canada is similar to Alberta, in that no new house

thodically ironed out by government
the

as more

and business leaders so that
most pessimistic observers

find

satisfactorily, yy

watched to ensure^
that the efficency of Canada's gas industry is ncrt unecqs-.
sarily hampered. The economy of this continent has
thrived under the competitive, free enterprise system.
Pipe lines of the length and size now being contemplated
require the raising of hundreds of millions of dollars.
Unnecessary, too stringent or too much governmental
regulation could quite easily dry up the money .market,
frighten the entrepreneur and strangle the jprpjectykt,
birth. This is something that must not be allowed xoThere

use

opportunities for appreciation of investments in

Americans

even

accomplished in any other fashion as

been

which, generally speaking, provides higher yields.

The

wrinkles brought on by the
monumental growth pattern of all
Canadian industries are
being me¬

^ realty

Canadian

Another facet

ments.

for at least thirty years under favour¬
a manner which could not tiave be^n

other fuel.

available.

President, Tankoos Yarmon Ltd.
1958 saw

investors in

to specialize

capital in Canadian real estate,

shortage of American funds for this type of invest¬

ment.

ELLIOT N. YARMON

by U.

great.

be protected

able terms and in

Province

founded several years ago

was

in the investment of U. S.

Canadian tobacco industry and present indications point
a

will

northlands,. which

Montreal, Toronto and Vancouver.

and

Marketing Act.

For several years there has been

Utility Companies have made with the companies ap¬
plying for export permits, the consumers in the 'Th'ovrnee
are
assured their future requirements for natural " gas;

bacco farmers grew a record crop of 200 million pounds,

ucts

is being transported East,
South, the effect on the economy of Alberta,
Western United States, will be size¬
able. As the result of arrangements which the Alberta
Canada and yes, the

Expenditures totaled

the

West and

against $9,250,000 in 1930.

resources

Yorath

foothills and plains of Alberta

and

out,

and others will lead to the development

Canadian

vast

Dennis 'IC.

•

development program to support

right-of- '*/

be purchased and cleared, just
p.
to mention a few items preparatory
*
to the actual construction of pipe lines. When the pipe
lines are built and in service and the fuel beneath the

payroll of about

Government's

Alberta. In¬
development

way

work.

carried

permission

line routes will commence,

the

bound to follow.

are

y y ~
such

almost immediate im-'

drilling will occur, surveys of pipe

development by U. S. Steel

ore

currently

are

pact on the economy of
creased exploratory and

huge construction projects

many

granting

have

will

the combined budgets of the Fed¬

Although

Quebec, that

Having

The

projects about $1,800,000,000 and schools about

This program

industry burdened by exorbitant Federal

Provincial

nearly completed, there are quite a number, includ¬

problem has, in part, been met by technological progress

but, being

things,

within the next century will

pressure

be.ing written

Washington.

industry in the Dominion employs

$164,000,000 in fiscal 1957-58

labour, coupled v/ith greater promotional activities, have
increased

huge leap for¬

the $400,000,000 Kitimat

other

among

each year than

tobacco, other materials and

permits for additional export of nat¬
ural
gas- will
be
approved
and
granted by the Governments at Ed¬
monton and Ottawa and the import
in to the United States approved by

effects of the.

the major construction projects

the economy on a long-term basis.
Edward

in the total volume of manufac¬

leaf

drop

and old, needs new ware¬

new

about 600,000 persons and has an annual

products.

costs for

and aluminum project—development of harbors

launching

been maintained. Several new brands

published there will be

10%

•

show

may

$2,250,000,000. It is Canada's biggest industry and spends

and

of iCigars have been placed on the
market. When final figures-for the,,
year are

total

peak level in 1957 of $558,300,000,

ing the $250,000,000 iron

packings. The trend to a greater va¬
riety of filter-tipped cigarettes has

increase of about 5%

1958

industry,

construction

The

are

due to the

brands

completed—such

$240,000,000.

Company Limited

•'

on the eve of public hearings tot
the Oil and Gas Conservation Board of
on-applications:of three companies to export gaS
from
the Frivince,
namely Alberta & Southern Gas
Company.-Ltd., Westcoast Transmis'
1
sion
Co.. Ltd.,
and
Trans^Canada \
Pipe Lines Ltd. It is possible that
before this year is over a permit or ;

tfiere is every reason to believe that in

airports,

new

may

construction

;

houses, new factories and new offices.

of the above increases
of

building

Canadian

ward.

introduction

new

industrial construction will take

1959

gain of 4%. In the cigarette and cigar
fields, there is no doubt but that part
are

1980

result of tight-money policies and the

as a

power

Cigars for the period are
10% and the total of other manu¬

V.\-V

This is

000, while roads this year wilj account for $900,000,000,

ago.

year

from the second highest

compared with the same period one

be conducted by

Residential building is expected to exceed $1,900,000,-

eleven

YORATH

Alberta

The

$9,600,000,000 and repairs $3,200,000,000.

show

excised for release in Canada

And

eral Government and the Province of Ontario.

cigarettes

available,

figures

195&

forecasts

hesi¬

has exceeded that of

for the Canadian tobacco industry

$7,100,000,000.

projected

the

Thursday, January 29,

Northwestern Utilities, Limited

to doubt that whatever the final figure

Canadian construction industry with ample

some

in Canada will

Royal Bank of Canada has projected this further and

and

the trend of sales in 1958

tancy in the general economy,

President, Canadian Western Natural Gas

is, it will be topped by work carried out in 1959.

power

WOOD

President, Imperial Tobacco Company of
Canada, Limited

stock divi¬

investors.

in, the total spent on construction

have been

EDWARD C.

States

Even though many of

the Canadian economy.

and its importance to

United

paid to

reviewing 1958, I believe that when all statistics

In
are

all matters affecting the industry's present

and .future activities. Efforts are

persuade

dends

exceed

much activity during 1959 to

The industry will devote

withholding tax

in line with the flat 15%

minesites and to attain

employees at the

facilities for

'•

rate

any

appliance utilizing

efficient and

other type of fuel.

expect the gas appliance manufacturers' busi¬

to boom in 1959.

opinion there is

evidence

population growth in recent

maintained. I Can
or

any

nearly the

see no reason

same

to show that the
years

will not be

to believe that the

same

amount of housing construction will

if construction work oould not be carried out in the cold

not occur in 1959

winter months

provinces; population and housing both adding to the

well

in the

summer.

Canadian winters have always hampered
tion

industry, and,

The

severe

the construc¬

result, its feeders.

Progress is

potential natural
All in

all,

last year,

gas

both in Alberta and other

market.

bright future for Canada's newest major

being made in this direction with the expeptation that
before long construction will lend support to the Ca¬

national industry, which as it develops and prospers will

nadian economy

fort of its peoples.

throughout the entire 12 month period.

contribute much to the wealth of the nation and the

com¬

Number 5816

189

Volume

The Commercial and Financial Chronicle

will

Continued

from

than

page

was

tions

lower

somewhat
the

farm

cash

in 1958.

case

1959

Varia¬

income,

in cash farm,

equal effect

income do not have
on

mcf. daily which will complete the
initial "looping" of the original
line from Louisiana to New York

Transcontinental Gas

course, affect the
sales of farm
machinery companies. But changes

(579)

each company as

Pipe Line Bds. Offered

with large diameter pipe and mark
the beginning of a third parallel

White, Weld & Co. and Stone &
Webster

Securities

Corp.

line;

(2)

the construction of 564

yester¬ miles of

purchase laterals in south*
"operation by manufacturing addi7 ■dealers- which ^change- provided was demonstrated
by the differ¬ day, (Jan. 28) headed an under¬ ern Louisiana to tap new gas re¬
tional
implements
and
some 'such dealers with a more favorence between the industries sales
writing syndicate which offered serves; and (3) the
building of 192
'tractor
components in the niext:able'.opportunity :to settle their: and
earnings results for 1957 and an issue of $35,000,000 Transcon¬ miles of line from points of con¬
:
two years.
.;
K.
1
".v"*': •"^'cbm^ahy accounts with notes they * 1958
compared to Deere's record- tinental Gas Pipe Line Corp. first nection with the main line in New
V*"* In Argentina, Deere has begun" had ^accepted: from their farm and breaking performance. Deere ex¬ mortgage pipe line bonds, 5% se¬ Jersey to the
Leidy Storage Field
-the construction of a farm tractor industrial customers.
Under this
pects cash farm income will con¬ ries due Aug. 1, 1979, at 98.74% in north central
Pennsylvania and
plant near Rosario.;; The Govern-* • new pdliey much more of the re- tinue at a
accrued
interest,
to
high level at least until and
yield the initial development of this
~ment of Argentina has recently tdi! "paper is flowing into Deere
early summer and expects its 5.10%.
field. The new storage field will
'accepted
Deere's" proposal
To radhfer than being financed by- sales will show a small increase
.Net proceeds from the financing increase the company's ability to
manufacture
3X00
tractors
per ^others as had been the case.
In • for
,;the full year 1959 over its
will be used by the company to deliver gas from underground
"•-year in that - eountry. At present'T958 Deere • established a credit record sales in 1958.
finance part of its scheduled con¬ storage during the winter heating
Deere is assembling"-tractors * inj company, John Deere Credit ComDuring the year 1958, Deere struction
program.
The company season from 136,452 mcf. to 340,rented quarterSi-This new factory:' pany,;1 whose purpose is to pur-common stock had a price range
estimates that its total expendi¬ 452 mcf. per day, starting with
'combined.
With' the:' Monterrey chase such retail notes from JohnV
of 54Vs high and 27% low. At the
tures incurred and to be incurred the 1959-60 heating season.
factory should establish the basis Deere sales branches in the United'"
;

•

sales and

for considerable

facturing / expansion

South

•'«

r;America,"
s.l". In

1956'

Deere

high of 54% this stock was selling
expects to make!- at nine times its 1958 net
earnings
capitarcontributions in the amount and 13.6 times its 1957 net earn¬

manu-''States:-vDeere

/ of $30,000,000 r to

acquired

the

new

Credit

a: Company and let the Credit Com-

ings.
all

In these days where almost

seasoned

common

stocks

can

after
its

Sept.

30,

1958

construction

program

The

complete
as then

scheduled, and as subsequently
expanded, will not exceed $165,700,000.
A portion of this con¬
struction program is subject to the
obtaining of Federal Power Com¬

ranging

been

engaged

this business

fornet; current asset position
has- embarked is "Very good (approximately
extensive product re-r $330,000,000 with inventories carsearch and development, program* rfecj, a^
something
more
than
and expects to generate
substan-^.^^ QQo^Oh below market value as
TO®

•

years, v

upon
-

tial

Deere

European-

-business,;through^resURw.6f

careful nurturing of this Company,y there

'-employs -

™

,7,000

persons

totaling

-more

should

approximately- pro\»emerit
has

and

than

><Lifo"

plants

accounting),

substantial*■ im-"

the retail notes now

parent company

2,500,000

ma-

tuie

'd On the financial side the.Deere

s1957^

;

^®1S:
examples of the peinianagement. In

management
has
taken .. equal,/^:r^ln^,vls"a"vl^
pains to insure a firm footingv.Xn 'J1'6
J958

Deere merged its several.
manufacturing companies-

1957/ when- its competitors, with

™n01" exceptions, showed a drop

parent cor: poration. J and.
included
in;: the
merger
was " an ' equitable
plan
into

new

Delaware

,m n^. fmc?^

^ C°?'
pared,to • 1956,j Deere s net sales

"■

its

wherebv

dividend

hi«h

noitrefund able ° prefei-red

were up about 24 % (from ap~
Proximately $313,500,000 to ap-

rate

stock

?roximately $388,000,000) and its

cquld be-converted,(through the.
medium of tax-deductible inter,-

fo r17G

W.
est-bearing subordinated deben- fb°4iA
(from $2.67 per share
tures).:
The.
approach
to
this to $3 96 per share) over the commerger by the Deere'management';pa^ab*e^ £
'h
encompassed four basic standards, from such reports as have been
i.e: (l)Va saving in annual fixed'
^ the sales and net per
costs to the Company, (2) main- share of Deere s competitors have
tenance of Deere's enviable record shown only modest improvement
of meeting its obligations to both in most cases with substantial un¬
its creditors and its stockholders, provement in two cases. In 1958,
(3) assurance of fair treatment of Deere showed the highest net

all
•

holders

its

securities,

J"Laa£

and'

(4) the plan had to be beneficial
to the Company overall. The plan
was
so
successful and well rean

in respect of Deere
Wall Street's analysts
at the switch."
A company which has shown out¬
standing
management
for
122
years, one which shows a superior
seems

common,

have been "asleep

return

$6X6 was up 53% over 1957. From
?■ p°.f °,n
second largest sales

sales

each

dollar

in¬

105%

to par, plus
However, no re¬
be made prior to

demptions may
Feb. 1, 1964 as a part of or in an¬
ticipation of any refunding opera¬
tion in
an

which debt is incurred at

interest cost to the company

5.10%

per year

bonds

are

less.

The

also entitled to

ing fund through which the new
bonds will be retired beginning
Corp. owns and operates an inter¬ on Feb. 1, 1962 and semi-annually
state pipeline system for the trans¬ thereafter to the final maturity
portation and sale of natural gas. date, at a redemption price of
Its main pipeline system extends 100%, plus accrued interest.
1,842

from

miles

the

Texas

Louisiana Gulf Coast to
York

New

For the 12 months ended Sept.
30, 1958, the company had total
operating revenues of $110,485,429

and

the New

case

and

Deere

common.

metropolitan

Jersey - Philadelphia
area and has a pres¬

ent allocated

"add

frosting to the cake" consider the
management's recent estimate
that it believes it can carry-on its
presently contemplated world¬
wide
expansion
and make the

investment in
the
credit
company
subsidiary
without
resorting
to
additional
parent company long-term debt
or equity financing.
equity

necessary

stock is

Deere common

secu¬

Since 1922

Complete Listed and Over-the-Counter]
Service for

BROKERS

BANKS

DEALERS

and INSTITUTIONAL INVESTORS

suitable for long range in¬
vestors of all types as a conserva¬
tive
investment
with
the
only

rity

in CANADIAN
BONDS

STOCKS

Government

being those investors
main
objective
is high
yield. It is listed on the

Bank & Insurance

exception
whose

York

New

Exchanges

and

Industrial

Stock

Midwest

and

Public

Real Estate

unlisted

enjoys

the Boston and pacific
Coast Stock Exchanges.
trading

Industrial
Public Utility

Utility

Mining Shares

Canadian

oils,

gas

and pipelines

abnormally high

KIPPEN &

Form Grunberg & Go.

NEWARK, N. J.
has

Co.

been

securities

—

Street to

business.

COMPANY, INC.

Members Investment Dealers' Association

Grunberg &

formed with offices

at 24 Commerce

607

engage

of Canada

St. James St., W„ Montreal
UNIVERSITY 6-2463

Officers

Direct

Private

Wire

between Montreal,

Toronto

President
and Treasurer, and L. M. Grun¬
berg, Vice-President and Secre¬
tary.
Both was formerly with
Oppenheimer & Co.

are

General Fund

J. Julian Grunberg,

Two With

A mutual investment company

•

in Canada,

incorporated

seeking long-term growth possibili¬

ties through: (1) investments in the
and industries of Canada by means

fied holdings of

resources

of diversi¬

-•

VANCi; .SANDERS & COMPANY
111

Devonshire
Boston 9,

—

Harry

the New York and Midwest Stock

Exchanges.

Mr.

Lustgarten

Canadian Securities

was

previously with Wm. B. Milius &
Co.

Underwriters and

Joins H. P. Wood

Dealers in Canadian

Government and

Corporate Issues

(Special to The Financial Chronicle)

Mass. — George C.
Munzert has joined the staff of
H.
P.
Wood
Company, Inc., 75
Federal Street.
He was formerly

authorized investment dealers or

.Mo.

BOSTON,

Prospectus may he obtained from
I

LOUIS,

/Franc III and Sheldon M. Lustgarten
have
become
affiliated
with
Henry, - Franc & Co., 308
North Eighth Street, members of

Canadian stocks and (2) rein¬

vesting all net earnings at low tax cost.
V

Henry, Franc

(Special to The Financial Chronicle)

...

ST.

LIMITED

■.

with Keller &

Inquiries invited from institutional
investors and dealers

Co.

Greenshields & Co (N.Y.) Inc

Street

J. G. Kinnard Adds

Mass.

64 Wall Street,

New York 5

(Special to The Financial Chronicle)
NEW

Ml iBroadwav

LOS

CHICAGO

YORK
120

South LaSalle Street

zio

ANGELES

West Seventh Street

new

sink¬

and net income of $16,569,302.
capacity of 1,108,529
mcf.
per
day, exclusive of gas
D. V. Stabell Opens
available from storage. The con¬
struction program of the company,
(Special to Thb Financial Chronicle)
ager for possible purchase of the
scheduled for completion this year,
ST. PETERSBURG, Fla.—Don¬
common stock.
includes three principal segments: ald V. Stabell is
All this can be had for a price
engaging in a
of something close to nine times
(1) increasing the allocated ca¬ securities business from offices at
prospective net earnings in the pacity of the main line to 1,292,177 5851-Forty-First' Avenue, North.

is outperforming
its competition for increased sales
is
a
company
that
should
be
studied by every portfolio man¬

dustry wise

current

"$472,600,000), up. 22% ovei 1957,
a£b 1
T-fS1116

received
vote of ap- m *he domestic industry, Dee
proval at its meeting last July 29! now appears to fie first.
M-f Early in 1956 Deere changed its
There have been several recent
vpolicy with respect to John Deere, predictions that cash farm income
ceived that the Company

•

ings, it

from

accrued interest.

"majority oh the capital stock of ^pany-acquire all new retail paper. command a
price of better than 15
Heinrich Lanz. Company,/one of-The'-retail notes now held by thetimes current net earnings, where,
the
largest
manufacturers * ' oi> parent company will remain there for
example, good grade public mission authorization or to deci¬
tractors and farm machinery"dn-'uiitil maturity.
:
utility commons command a price sions
favorable to the company in
; West Germany, and now owns ap- - this; new -approach should re- of at least 20 times current net"
proximately 85%of/the stock-of -suit in two major benefits. First, earnings, and, electronic, chemical pending appeals from certain au¬
thorizations
already granted by,
this Company. Lanz < has-an
ex-rthe^Deefe dealers will be af folded and business machine companies that Commission.
cellent world-wide reputation for a ^er credit base for
expanding in some instances command in ex¬
Transcontinental Gas Pipe Line
performance and qualityj having their - sales;'"Second,
although cess of 30 times current net earn¬
"

•

bonds will be redeem¬

new

able at optional redemption prices

MINNEAPOLIS, Minn.—Walter
the

J. Costello has been added to

staff

John

fomnanv. 80

Kinnard

and

South Eighth Street.

Telephone: WHitehall 3-9525
Canadian

Teletype: NY 1-3708

Affiliate: Greenshields & Co Inc Business established 1910

The Commercial and Financial Chronicle

(580)

hold

the future may

what

Continued from page 5

for the value of the dollar. Taking

•competitive world we live in, al¬
ways with this major proviso as
to "sustainability." To cite specific

Refuses Anti-Recession

The

discourage

reserves

ex¬

pectations or fears of inflationary
developments in credit and the
money supply, and yet to avoid

nation

ac¬

our

bank

Inaction

fact that as

very

keep

into

problem has been to
sufficiently close rein on

count,

Cunent Monetu jr Policy
And Federal Reserve's Role

considerations

these

all

and

ery

orderly

with

interference

recov¬

resumption of growth.

the reluctance of many of our
country's
leaders
to
place
the
choice squarely before
them, is
of

one

the
of

features

most

disappointing

present economy.
might do well to look at the

our

performance of various European
countries, most recently France,
where the people have been asked
to

similar

face

and

whatever

make

called

problems frankly

for

the

sacrifices

Thursday, January 29, 1959

rates.

free-enterprise
rates are the

;

economy

interest

simplest

and

impersonal

most

of allocating savings among

means

various demands

And

funds.

for

in order to have

freely-responsive
rates, we are bound to have fluc¬
tuating * bond
prices,
including
Government bond

prices. All of us
down the
price movements which - reflect
excessive bond speculation, such
would

damp

in¬
as
we
; •';_v'
experienced last summer;
'
figures, I cannot feel complacent successfully than in earlier years tive ways to focus attention on
but there will always remain a
with unemployment still around with the problems of recession has this problem would be to amend
Monetary policy needs allies in
certain range
of movement re¬
the four million mark, with our tended to eliminate the "shake- the Employment Act of 1946 to the private sector of the economy
Index
of
industrial
production out" in prices and wages which provide specifically that preserva¬ just as much as it needs allies in flecting- basic ; business changes
and the public's expectations of
slightly lower now than in the used to characterize periods of tion of stable value for the dollar the Government. I hope that man¬
is a major economic objective of agement and labor are
autumn of 1955, and with per ca¬ low business activity. Because of
growing such changes. And no apparatus
of controls can obscure these basic
pita real disposable personal in¬ this it has been suggested that all branches of the Government. increasingly aware of their very
forces without impeding the ad¬
come virtually static for the past
perhaps we should do less to limit This specific responsibility could real stake in price stability. The
three years. Even alter allowance recessionary
tendencies.
I find not fail, I believe, to focus atten¬ practice of restraint in pricing and justment mechanisms that a mat4
for
the considerable
growth in myself unwilling to accept that tion on the need for better coordi¬ wage settlements can be of ines¬ ket economy must have.
<•-£..
' \
•
s
•population, dollar figures have suggestion, with its implication nation of Federal spending and timable value in furthering the
Commends Treasury
given an illusory impression of that we must sit by and accept tax policies, debt management, national interest. As has been said
Incidentally, the Treasury has
often
in
recent
growth
because ol the rise in heavy economic and social losses and credit activities of various so
years,
the
—but
Government
prices.
certainly the condition I other
agencies.
It granting of wage increases in ex¬ certainly made a contribution to
monetary
conditions
by
have
outlined
does point
to a could provide them a clearer com¬ cess of average productivity gains sound
More Savings From Stable Dollar
much greater need than in decades mon link with the Federal Re¬ for the economy as a whole can demonstrating clearly its willing¬
ness to pay going interest rates on
The social injustices wrought by past for vigilance against sizable serve System, and with our own only lead to the kind of infla¬
inflation have been depicted so average price increases during the credit policies.
tionary pressures we are all seek¬ its new. security offerings.
we

learned

have

cope

I believe one of the most effec¬

are

terest.

public

ably, that I shall pass
phase of the problem,

often and so

this

over

business

the

phase

upward

pausing only to repeat what has
I hope you will agree that these
been said many times but has not
various considerations make price
yet sunk into our mentality deep¬
stability an extremely important
ly enough, i.e., that the consumers,
objective in our economy.
You
the most

numerous

in our

group

population, are the least ably rep¬
resented

political and market

would think the case was so clear

in our economy

that all segments

would join forces enthusiastically
stress
to achieve it.
Yet in fact there
of price has been a
deplorable tendency
stability as a cornerstone of to leave most of the burden to
growth, both national and inter¬ monetary policy—a burden which
national.
I have already men¬
it is by no means equipped to
tioned the danger that inflationary
carry alone. Even many of those
distortions tend eventually to col¬
who

should

arenas.

rather

the

importance

lapse and to be followed by exces¬
sively sharp and severe declines
in business activity, as history has
demonstrated on many occasions.
But there is another aspect we
should not lose sight of. Essen¬

economic

tially,

savings into

the orderly flow of

depends

growth

productive investments. There is
nothing so likely to interfere with
an adequate flow of savings, or to
drive savings into unproductive
uses, as a public conviction that

ing
Blames Deficit Financing

cycle.

highly of monetary
means of "fighting

approve

policy

inflation"

all

are

too

prone

inherent in our methods of

to be

budget formation, in the inability
of the Executive branch to elimi¬
nate individual
from

the lack of any very

close tie be¬
tween the voting of expenditures
with
the voting
of revenues to
provide the necessary funds. Thus,

authorities

wonder, under these
circumstances, that a good deal
of the monetary authorities' time
and

effort

efforts
dencies

absorbed by

been

has

inflationary ten¬
For one thing,

hold

check.

the

should

that

how

vate

decision

that

sure

purchasing power.

its

demand for

the huge aggregate

capital, arising mainly

the investment

from

programs

the

current

would have
more easily

past few years,
been covered much

out

savings

there

had been complete confidence in a
stable dollar in the years to come.
Let
of

consider also the relation

inflation

tional

interna¬

vast

our

obligations.

the

also

their

clamor

groups;

pressure

effects

are

probably

general and impersonal than
any other type of governmental
control. They can be applied with
a minimum of interference with
the
free-market
principles
on
more

which

most

economy

our

this

the

takes

form

public aid or the more desirable
form of private investment (and
in

fact

measure

include

must

transfer of

a
good
the successful

both),

to carry out

resources

assistance retires above all

"h cost

structure

this

devote

Both

the

presume

montary

to decide

and

resources

public
must

activities.

the

between pri¬
made

That
the

whole, both individu¬
ally,
and
collectively
through
their elected representatives. How¬
ever, it is, I think, quite appropri¬
ate for the monetary authorities
to urge that, except in unusual
circumstances such as a period of
people

as a

time

and

effort

country
Announces Fed's Policy
The current

and that we

wise,

longer conduct

can no

affairs,

monetary

other¬

situation is a good

the comfortable assump¬

tion that the international balance

payments

something

that

foreigners must worry about, but
not

Americans.

Now

European industries have
their

capacity

market?
more

readily,

emphasis

supply
we

that

rebuilt

export

must

place

restraining cost

increases and keeping competitive

are

many

avoid

loss

of jobs

American, workers:

hand,

while

the

general

price level has shown considerable
stability for a number of months,
and the near-term outlook is fair¬

that

the

productivity

gains could be shared by the con¬
sumer, and still permit an ade¬
quate return on invested capital,
both of which, it can be argued,
have a legitimate claim to a por¬
tion of the gains.
of

And the holding
increases
within
this

wage

limit would check the dilution
the

purchasing

retired

and

earners

power

wage
workers

by rising costs and prices.
study is perhaps

caused

further

While

before

needed

any

figure

can

this upper limit for
increases (including
benefits), it seems much
likely on the basis of past

relied upon as

annual wage

Suggests More Taxes
But it would be far from correct
say

that

the

Federal

Reserve

is opposed to useful and
necessary public expenditures in
themselves, whether for defense,
System

the

is it willing to shift
national
resources

from private to

public

use

through

heavier tax program? With per¬
sonal consumption accounting for
a

Bankers

terms.

it is sometimes

com¬

difficult problem /to
move from sound general princi¬
ples to effective day-to-day prac¬
I

tices.

would

first

the

admit that there is

vast amount

don't know about the detailed

techniques of monetary policy—
about adequate
measures of li¬

quidity, in and out of the banking
system, about the effect of vary¬
ing liquidity upon our own mon¬
etary measures, about the extent
to which nonbank credit

agencies,

private and Government, may lie
beyond the effective range of our
activities.

These

and many

other

deserve the
kind of
long-range disinterested study
problems

which the Radcliffe Committee is

devoting tc them in Britain, and
which the C. E. D. is endeavoring

that it will turn

fact that

price policies of industry.

are

all engaged in a

enterprise, seeking essen¬
tially the same inspiring goal of

common

Marginal

Influence

Over

At this

word about in¬
may
be
in order.

point

rates

terest

operating

the periphery of

vast economic

enterprise, ex¬
marginal influence, it is
true, but one which shrinks into
relative insignificance in compar¬
our

erting

since the banks' activities in this

field

are

short-term
no

limited than in the

short-term

means

But

area.

even

the

Fed

in the

by
the only influence, al¬
area,

stable dollar. It is
enterprise in which each of
can
be really successful only

growth and
an

economic

sustainable

maximum

Interest Rates

ison with the„.over-all effect of
aggregate capital and credit de¬
mands and to aggregate flow of
foreign aid, or for such domestic
savings — or with expectations of
programs as urban and highway
movements therein. This is espe¬
improvements, school and housing
development, etc. The argument cially true in the case of longterm rates, since the Fed is not
may certainly be made that the
nation needs more of such useful ordinarily a direct participant in
public
expenditures.
The
key long-term security markets and

other words,

speaking purposely

general

very

the neighborhood of

be in

I have been

out to initiate in this country.
In the meantime,
I fervently
2%
or
3%
on
average than in
the hope that as a nation we can
achieve more general and wide¬
range of some of the major in¬
spread understanding of the role
creases sought and achieved in the
1955-57 period. It is, in any case, which monetary policy is trying
gratifying that some of the major to play—of the close inter-rela¬
wage settlements in 1958 seemed tionship of our monetary activi¬
to embody less inflationary fuel ties and the other economic poli¬
than those in earlier years.
Re¬ cies of Government, as well as
straint
in
wage
settlements
of the policies of management and
labor.
Above all, what we need
course implies a responsibility for
corresponding
restraint
in
the is a clearer appreciation of the
experience

balanced bud¬ There is a popular tendency, even
get in fiscal 1960 is a contribution among some financial observers,
of
the greatest importance, not to point to the Federal Reserve
only toward fiscal responsibility, System as the arbiter of interest
rate levels.
Actually the System
but also to monetary stability.

good, the seeds of renewed
upward pressures are clearly vis¬ the great bulk of private expen¬
ible and cannot be ignored. These ditures, such a shift would in all
include the increased (liquidity ef¬ probability require a reduction in
fected in the economy in the past consumption
o f
privately-p u ryear,
the continuing threat of chased goods and services through
further upward cost-price adjust¬ appropriate
forms
of
taxation
ments, the difficulty of bringing" (unless, of course, the economy as
the budget back into balance, and a whole is growing fast enough to
the prevalence of "inflation" psy¬ permit
both public and private
ly

example of the kind

other

of wage

effort to produce a

of dilemma
to this country (over and above which credit policy is called upon
the obvious benefits to interna¬ to
face.
Although
recovery
is
tional
liquidity),
perhaps
the proceeding at a gratifying pace,
greatest was to impress on Amer¬ the existence of very considerable
ican business at least—and one unemployment; and excess plant
would hope on American labor capacity in a good many indus¬ question is, however: "If the na¬
also-—the fact that foreign com¬ tries would suggest that our poli¬ tion wants more of these items,
petition is growing apace, both cies should be encouraging further is it willing to give up something
abroad and in our own markets, growth
in production.
On the in order to pay for them?" In
our

granting

central-

and

law

promoting more rapid economic
growth. The greater the coopera¬
tive effort by other elements in
our economy to accomplish price
stability, the less would be the
need for restrictive credit policies.

-adequately competitive with for¬
eign costs. If the large gold out¬
flow of 1958 brought any benefits

recession, whatever public expen¬
ditures are decided upon should
banking tradition support a de¬ be covered by taxes or other rev¬
termination on our pari
to do enues, and that when boom con¬
what we can to protect the dol¬ ditions develop, revenues should
lar's value.
Certainly we would exceed expenditures. The current

based.

In the kind of
world in which we live a major
contribution by the United States very much like to be able to spend
to the further development of the less of our time worrying about
less
developed nations is vital. this objective and to be able to

Whether

for

not

The

increases.

rises within this limit would mean

fringe

however,

the nation should divide

of its

use

promptly, and without regard for

and

economy

emphasize,

authorities

monetary measures can be taken

sion

monetary

the

toward

restraint in Federal spending.

few years because of ero¬

understandable leaning

part

the dollar will be worth much less
after

expenditure items

aggregate spending bills, and

tively waged.
is little

some

favor of deficits seems

bias in

there is

the Federal fiscal
position all too frequently has
complicated the problem of con¬
ducting an effective credit policy.
years,

neglect their own spheres of re¬
sponsibility where the light on
inflation can and must be effec¬
'

very

help which our
from
budget surpluses
recent

to avoid. Certainly the rate
improvement in national pro¬

know that
considerable ductivity should be considered an
plex
and
activities have had upper limit for the pace of wage

the

Despite

obtain

the

whole-hearted

cooperation of the others. The
ground I have been over is pretty
familiar

—

but

it seemed

sound

that

principles are always
worth restating.
I trust that in
the future, as in the past, bankers
be counted

can

common

better
matters

to further this

enterprise and to create
understanding
ol'
these
in all
segments of our

growing

economy.

Two Join Newhard, Cook
(Special to The Financial Chronicle)

ST.

LOUIS, Mo.

Kniest

with

now

Fourth

and

the

Milton

—

Bernard J.

Meier

are

Newhard, Cook & Co.,
Olive Streets, members
York

New

and

Midwest

Stock Exchanges. Mr. Kniest was

previously with Dempsey-Tegeler
& Co.

admittedly it is an im¬
portant one. Interest rates, in any
though

Harry M. Bennett Opens

are just symptoms of what
is happening to affect the demand

case,

for

supply of funds in the
various parts of the credit mar¬

kets.

the

there

LOS ANGELES, Calif.
M. Bennett is
ties

Above

all.

should

stress

the

fact that, while the Fed can modi¬

natural

swings

limits

conducting

Harry
securi¬

—

business from offices at 4102

West

Fifth

Street.

was

for¬

merly with McCormick & Co.

rates,

which
such action can only mean undue
expansion of the money supply, il
chology as exemplified
in the spending to expand). The reluct-; the effort is to prevent a rate
level of stock prices, all of which ance of the American people to1 rise; or undue credit restriction,
have led to- apprehensions abroad face this choice objectively, and if the effort is to prevent a
drop
are

(Special to Tee Financial Chronicle)

and

beyond

David R. Mitchell

David

Mitchell, Vice-Presi¬
Thompson & Co.,
Inc., New; York City, passed away
dent

Jan.

24.

Hill,

Volume

189

Number 5816

The Commercial and Financial Chronicle

...

(581)

Continued from
page 6

greatly depend oh Britain and the

American

other

Western
European countries, where three-fourths of

How and Where U. S. Exporters

increase.

But

the

comeback

Moving

ap-

i102' Pern

^
mark and Fiance added about
$60

Hcl

taly

posing ul ocigicui

5y/^1]?ei X,

gain has been

reduced

•+

and Coal Authority. But the tre-

Payments Union credits

S^Si^?r
^ Is an adidtional mean dollar imports will rise. A
?
iV01^ 1,1 ^estefti.'-^urope., drop in domestic capital spendn^
frmv tnrfd5°1SPe" g
Amer- wdl be offset by direct investment
goods.
.

lean
>

American

"*if/

exports

AVMil

X/KJ

to. Western
IV

VUbVAi.(

by numerous U.b.compa les tl at
are

aiso

choosing Belgium to set

Europe

1959

consiaeraoiy.

greatest

worry

will. increase

their

at, up

TIT

Common

.i.

.,1

Market

head-

10% while imports should: quarters.
improve by 5%. But this does not

guarantee that all foreign traders
on the East Coast of
the U. S.mec-

tightening

•/. ■<-,

nish

trade

standstm
needed
neeaea

economic
is

and

oil

ana

for

not allow

by
uy
-

halted.

The-

not

the

Government

and the exporter to get a foothold

Economic

Middle East Developas proposed by Wash-

•

doubt
aouot

no
o

luciL
that
inat

nwu>jl

nftrlonnn

„

mc
the

„

ffifre

relative 1m^fn
im—

luauvv,

<•

jl„

i._

off in

h t

IpIFrfnrh indiStrv

nrtP

RecessimiarvfL?s

1958

which

pfiVtail

led iicnvu uiuuour tn curtail
Fiench mdustiy to

icu

nnrk

ventories

and

...

investment pro-

1" f.ia™s in.19^8»
R,KinP«
also

piallv ,n hnnriiw
in
fnnrf«tiiffa*stppl

in
in-

vu.vu..

bave disappeared.
em-ouraeed bv the

,.T

steadily

clines

Grain

>n7

1958

^hepjapst
suneryjg^e-

omer countries were
oflier countoes were

one

of the

worst
n~

crises in recent

Canada

will

spread
the premium of the Canadian dolf J

ers

r-u:

will
wm"

of the
with

recoun

ISRAEL'S payments deficit increased 12% in 1958 due to rising
defense

expenditures. The 25%
exports envisaged for
1958 fell flat with no gain
regis-

jump

—j

a
d

rrpmpnnnuc

iremeilQOUS
tremendous

imports

Krl„,.r

spurt.
spun.

have

been

V_-UI11IU1S
Controls

recoup

than*

half
half

$750 million drop in 1958,
goods finding con-

consumer

siderably better

markets.

Government

the second

curve

beginning

quarter when

swing should get underReasons lor the
improving
outlook are a
strong pound, Gov-

ernment props, a

ling

trade

grams

tries.
1958

sparked

and

recovery

pickup in ster-

the

by
new

the

aid

fortunder-developed
Britain's

was

coun-

trade

surplus in
the first registered since

1899. Gold and dollar
reserves
the highest in
and

as soon as

lion,

pro-

are

nearly eight years
they reach $3.5 bil-

another $300

million

come to life.

But

healthy
relaxed

Jard se

foreign

exchange

ine

? WinCheri

cus-

nunc

JP
ioo

ucxicn

gold and dollar

upward due to

reserves

mar-

ket. Prices have been stable and

been_stablya^a

"l^ntiveness

position

success-

tightening measures and
high taxation. Earnings from the

oiri

W.1C

anri

,_>.

Ampriran

American

ex-

J*1® P01.1^31 ^3ne"y3rl

"lldv

defunct

Area

European

fhur0P®a"

?nrlPd

Pay-

Moderate

expansion is the out-

ing, imports from the dollar

gain.

Denmark's

area

fate

the

European Free
for, without this in-

and

stepped-up capital equipment

investments in preparation for the
Common Market. With labor costs
in

Italy lower than the other Eucountries, Italy is bound

romarket

lure

tegration, Danish exports will be
split in two and British retaliation

Lira

invest-

ment.

against the Common Market

American

mem-

bers will hurt the Danes.

Tourist receipts and remittances will be at a record in 1959.

stability will be maintained

while

exports

and

the
tne

IRAN

commercial

activity

port Bank lending will result in
at least a 15% jump in purchases

proceeds from
the recent
World Bank loan and U. S. financ-

woo

remains brisk. A new liberal import policy and heavy Export-Im-

products is foreseen as a result of
availability of consumer spending

will

intends to

Iraa

new Iraqi Government after all.

Trade

"ot Iormcd'

Soviet

vor-entlv'to

imports

will

But

British

re-entering Iran after

are

than

Dutch,
also

German

six

vain

»,ui

should be
suit

shipments

at least 10%

Hollands

re-

increased

gold
and dollar
holdings. The huge balance of
payments surplus recorded

in 1958 will be
reduced somewhat.
Unemployment will decrease and
a
marked gain in industrial
in-

vestments, particularly from

swskt «—M-k"
BELGIUM'S prospects are

far

fn %59

men

ExpansMn

aluminum, steel, coppei^ and paper
aiuminum, sieei, copper anu paper
production alons with increased
along with
0n refinery facilities is now makerertnetinn

^"^/he Westein wo
8., x5ritciiii snu
3xi6r U»

outlook is for

chartering of

world trade starts upward and the Common Market demands
ment

—

/"<~

accOUll

and

Italians

are

eying increased business.

Africa
first

destined

benefits

common

Market

feel

the

1959

the

preferential treatment of the colonies'

products

will

now

ex-

fended to all the countries of Euromarket. Total imports of the entire African Continent from

after V s-

A™ewTh^ir sa^e.rto
Pr®afe

^"ef~hy

about 15%.

increased

capital equipimports from U. S. Exports

sa—-T
Business

trends

SWEDLN
m

they are slow to adapt their
supplies to Belgian Congo needs,

I?. the„0?st iiye.yeats tbo^U^Sv
^
7io7f trade "fell

f^om 23%

to 17V2% Had the share
maintained duringtim

^ien_inaii tame,a du g
?
^1 °x Con go impoit^Amerii:an
million

capital

one

8nlall

trying

Pr^c^~

baJ_

onomjes and js af_
c

^ital
p

i(f DOiicjes

un_

olitical

provide in-

aIld.f(fJ10^lcn^^er ^nd
cent
ivestopiosperand^ grow.
Gr®88n^t\°annp1esP rlfe steadily
change balances use steaa

grow.

jor

tunber,

ouye

short of

dol-

reducsng tariffs

equipment

other

and

with |he proper salesman-

•

exporters

substantially
earning power

further

from

]y[arket

gain

than

expands
Common
Belgian Congo

benefits.

wip

step up
the

can

sbjPments'

European

any

m0re

from

Euromart

other colony at the ex0f Asian, African and Latin

pense

American countries,

'
s„

WUh c„Hir>mpnt nf oonner

Vu*

strikes

ph^bo'io

anrt

Csaland and pdces forthe metal
expected to be up for most of 1959,
cnances 101* greater dollar imports
uunai miyunij
chances for

power by 1960.
i960. National income
and living standards are gaining
Exporters here have been Mstag rapidly in the Federation.
toVraders"in Japan and
Despite a slight fall-off in deWestern Europe. For instance, tomancpfor consumer goods, in the
tal purchases by Union of South
Union of South Africa, business
Africa increased by 11.3% in 1957
m

equal amount.

^ "cw ^

fc°
foreign

f
up buying to industrialize even are excellent< Gne of the world's
buying to industrialize even
s
|
excellent. One
ucnuany, up
.hnnl^ ?n' though import restrictions will re- fargest roffer dams, at Kariba»
though import restrictions will reco£fer dams> at Kariba,
thk rich mar: duCeh
® frmn the U S bv an
purchases from the U. S. by in wlU be generating hydro-electric
.

anced

Never

AUSTRIA

irteSntf

cause

Congo's

European

in^Belgian Congo'maTkeT b^-

ing headway. Atomic- p o we r e d
ships also are being consideredThe halt in economic growth m
1958 was due mainly to curtailed
earnings from shipping but the
veSsels

Increased

lapse
while

years

recov-

replace

chev.

interests

invcrncf

the dumping by Soviet satel~
lites of Egyptian cotton sent to.
Moscow in return for financial aicfe
bas taught Nasser a lesson about*
close economic ties with Khrush-

^tt

once

American. U.

pl^ITl ^ ^^her^billTon of
go d
help moost the economy in all inW^1 ^f^liYphnldinff 1_now AmT? Sh°Ulrd
certainty
th^ Beigian Congo and former
f^aece?uam17 in tne NETHER- dustrial sectors. Output is schedin the NETHERLANDS
)S.
Sharply reduced inven- uied f0 rfse
worldk l^seS "ii"s"»u«ii*wr;"7V"r
Brit^h and F4rei}^] t^ntones step
uled to rise 20% by 1861, with a among the Western w
1861

Latin

slightly after the 1958 slump. Industrial output is recovering and

fleet

with

no longer de-r
Russia to take his crops

eaTadty

petroleum royalty payments

from

again is a
cotton. Nasser will

NORWAY'S four-year

im_

supplying rolling stocks
two-year lapse, Franc®
major buyer of Egyptian

Xr^th! a
for both these territofrom
S* Z l
ries wher.e current
ll}^si'
3958 hiatus. Reliable infoima
indicate Iraq will demand highei
higher ment projects exceed $600 million*

increase

merchant

Area

torics will be vnninmcVmH or»/i
replenished and imports will gain, jvcii
viL.uiaj.xjr
particularly Hum
from
the
•.uropean
European Common Market
colonies where African coffee
and
other raw materials will

after th® revolution. Great deplants is goTng up in French West
mand exists fOr agricultural prod- ^frjca wjth
British, Swiss, U.
uct? although scarcity of dollars and^French capital.'
Larger purwill
-g force curtailment of manu- and French capital.' Larger purf.hases_of industrial equipment ara
imnnrts.
But

look for ITALY'S economy in 1959.
A surge in demand for industrial

Trade

trade

After

............

Switzerland openly tled Wisuc'h retaliatory measprommeans Moscow

ful credit

Generally, further

the Hungarians and the East Ger~
mans

blllJ-llllti
shifting clWclY lium the U. S. to of the $70 million of Egyptian and
away from
no/^rl
K-v*
France, Germany, Italy and Japan.' Suez Canal Co. funds released b*
The Government counts on a con- the U. S. Treasury in 1958 will

faetureT<?

sales to this

fying improvement. Exports will
continue

«vtm»

-—

fact

of DENMARK is making a grati-

sume

being

to the

should

America during i959

remain

will find business there.

hinges

sub-

•

lion. With
ex-

and Italy is
the American

in-

stantial increase in
purchases from

im-

Germany

crease, full sterling convertibility
can be
expected. Britain will re-

payments to the U. S. and
Canada on dollar loans
shortly
and can be counted on for a

•

slowly. However, competition

The

xvoa

Free Trade Area,

miliary

change holdings
and
imports are

upward

way.

backing

PORTUGAL'S gold and

sharp

....

UH
on

and

Aith5onlvraP2?1 cufhi^ei^wifyerhmd's
s!Cwmg'be°e1ur- mmarv^trade deficlrb^SMO mih

tense.

slight downward
business until the

cunuu

the

are

tailed, still fuithei.
tallecl snu lullnel%

pates

suggested

spending

issues

!LQn*n«Pi1avine

from

reserves

Now to Western
Europe, where
the UNITED KINGDOM
antici-

ugypuau

relaxed

business activity has

iow

^d'u^uTStion^rthS %£SSK si°tu'rn—n
ar^deDle^e^ witl/ne^ issued IS
Sorts^romthe

than

also

are

and farm outpUt, uniaim output, unn

sold,

to dealers here.

-_1W

and

oeriin

realistic

vestment

earnings from thft
1957. U. S. aidlnd chev. Increased earnings from the?
and exchange to pay for American grants are diminishing so Israel Suez Canal will help to strengthen
goods' The 39% devaluati™ ^ must find other way! to offset the newEgyptian-Syrian currency,
September has given the economy the huge deficits. Commerce is calk;d
Arab dinar. Partial use

Lack 0f bard currency, low
-

years

i
sutfe&j&Se- [ndustrial
shinments will
in<tustnal

facilities

pend

,WW

proved

tPT,A

SySaSK wiUC<SC expansion in FRANCE *F^rSelsinkfiias' the'gold iered" over
Sn^r^Tfter
th&fet Cl£

fact, with the onenina ofLawrence Seawav
1M9

terms,

ment Bank
ington. ■
—o—•

badly

strong enough
country. This is the

the

run

been

still

are

promised
promisea

have

foncinnC

tries are being cleverly exploited
by the Soviet Union. The Kremlin will make sure that Nasser will

squeeze

Russia

making extensive
Competitive arar-

for prices and credit
well as servicing of all

Arab countries that the
European-Cairo will import capital goods?
Common Market will
adversely under long-term credit. Japan also
affect the underdeveloped coun- has broken a virtual
monopoly pi

backfiring. Fin-

deliveries

Moscow

technique

surveys.
-

neany loyc. nowever, rears ui me

V '

with

COal
coai

time

French Expansion

the

FINLAND

Q)1

Reds

least

sweaen s

discrimination

resulting from the Common Mar-

S-n-^l^,S' mend0l?f ll}C?uav in g°ldIeSlrVlS ket*
'
m* 1iS re
of the Fan and the huge
Khrushchev's
$14(Mhillion. European

wnoiesaie

Japan

salesmerk

emulate

Continental Europe

rangements

inn^oocQ/i

to
from Britain,
market

to the Middle East,
prospects for improvement in U. S.
exports to this area are excellent,

exporters
and

Kawi'nrt

>a lances-

Austria

Turns to Midctie East
lurns to Middle Last

J..

m&rir

rise again next year..

Swedish exports go. If
recovery in
Europe is slow, then Sweden's industrial production is
likely to
stagnate and unemployment will

Will Sell Overseas in 19S9

exporters

jumped sharply in 1958 and will

over

1956.

nati0n

rose

S. exports to that
by only 8.4% in con-

for>Gr&kt

88.9%

^ ^0

for

continue

West

sssars.^Mf"

even

keel,

Buiiding will be stepped up but
dndustry generally anticipates lit-

Bdtain,
Germany and tions

for Jgpan
The situation is
attributed to tendency on the part

jnahsre

^U^Jyement.

Credit

restric-

be relaxed to

^ss Moving.

The

keep buriadverse trade

hich widened to

nearly $400

The Commercial and Financial Chronicle

(582)

Continued

from

modernization of the
port and the $90million
Seaway under♦ construc¬
tion in that part of the Gulf, along
$77-million

page

How and Where U. S. Exporters
Fa¬
cilities
for
consumer
import
financing will be cut off and ex¬
penditures
for
capital
equip¬
ment reduced to a minimum. Only
a higher price for gold could stim¬
ulate import buying and this is
impossible under the present U. S.
Treasury policy.
As
our
country - by - country
analysis approaches the Far East,
it is again easy to see what domi¬
nates the thinking of these na¬
tions. They,, too, are particularly
unhappy about the linking of
part

the

drop.

ments while those

by U. S. will be

maintained at current level.
In

small

market

where

well

get their foot in the
Singapore becomes

internally independent in 1959.

porters want long-term credit, al¬
though the recpmmendation is for

the

Baton

Russia

with

ments

Western

and

to nearly $400
million will not relieve the Argen¬

amounting

Allies

caution.

.,iV.

sharp im-'
dumping of tin
which cut 1958 exchange- receipts
sharply. Moreover, U. S. decision
to place import restrictions on lead
and zinc will lead to a 25% drop
in Bolivian sales.: Higher wages
and runaway inflation will force
pact

Russian

Prospects for India's exports to

Formosa's industry is benefiting

from $35

the#country's finances, abetted by
political interference, is responsi¬

ble for the government's greatest
Markets deficit spending spree in history.
for jute carpet backing and carpet
Customs revenues will be down
wools are improving as low inven¬
another $20 million. The Philip¬

U. S.

much brighter.

are

tories here caused by the recession
hre being replenished. Tea con¬

pines

direct

will

trade

Japan, which recently arranged
sumption in U. S. will rise as re¬ long-term credits for Manila.
sult of a $3 million promotion
;
In Australia re-election of a
campaign while higher manganese
private - enterprise government
quotations also are predicted. For¬
will prevent the future nationali¬
eign capital is showing greater in¬
zation of industries by the Social¬
terest in India than any time in
ists. Reduced prices for wool and
history under a new series of in¬
metals will be reflected in further
vestment encouragement laws. The
tightening of import restrictions.
industrial potential will climb
But more imported goods will be
sharply in 1959 as German, Rus¬ licensed on the
strength of lower
sian and U. S. steel plants near
prices rather than by country of
completion. India's imports from
origin. Although competitive items
Europe and U. S. will reverse the
the

from

downward trend of 1958.

will

find

orated

rapidly within the past
that it has been left
practically without industry. Meat
companies, as well as such foreign
two

years

investors

International General

have
been
completely
taken
over
by the unions and
Communists. With foreign meat

Electric,

higher duties will slow down
Peru's ability to buy from abroad.

Capacity
lack

export

markets

expands but
low prices
The $200 mil¬

and

for products hurt.
lion

Toquepa^la copper

develop¬

ment will not add to Peru's

ings until after 1960.
Another

earn¬

;

of austerity is in

istan have been kept exceedingly
low and wilt expand.
Credit re¬

substantially
wool.

The

China

larger

will

have

Australia's best customer for wool
for

Russia

for

accounted

million.

Europe

all

with

Trade

continue

will

but

smaller scale under the
A

ernment.

few

new

but

Eastern
on

new

gov¬

orders

are

The

its stature but economic

woes

will

thoroughly impresses Washington.
This is the best tonic the peso has
had in years and better prospects

several

banks

are

tion Administration indicate

agree¬

greater inflow of heavy equipment
from U. S.
.

Economic

has

been

comeback

disappointing

nessmen

ments.
As

ume

come

back

Latin

America, there are other reasons
Japan
evident why U. S. exports to our
to busi¬
southern neighbors will drop the

The

sales

new

Chile

oil

will

strike

not

restricted.

Southern

profitable

for

another year or two.

in store for the

econ¬

import level of
around $23 million monthly will
be maintained while exports will
omy.

business

to increase sales

this

colony. Imports have skyrocketed
in the

past two years but

the U. S.

ing

aware

competition

of the grow¬
the
Gulf

from

area which he is bound to face
for
his Latin American markets. The

American

Central

mat-"

common

Negotiations will begin with '1
Washington to arrange a double^
taxation
treaty.
Export - Import/
Bank and Development Loan Fundwill/provide $10 million whiles
World
Bank
loans
will bolster'?
ket.

U, S. export-a
gra?d-*-£

development,

power

should not overlook this

ers

ually growing market.
The drain

labor problems

and

nancial

exchange balances*

will continue

Honduras

fi-/

con-;-

front the Government. More dollar.,

only salva-* *

is. the Republic's

aid

down!as/.
companies,
A recent World/

Business activity is

tion.

the two American fruit

lay off workers.
Bank

credit

million

$5.5

for/

highway development will allow;
purchase of U. S. construction
equipment.
Additional tax-con-'!
cession

can

to attract

decrees

capital

foreign
1959./;
,

be expected in

Salvador's /growing;„

unem-7

>■

ployment is behind the series of,
Government loans and United Nar ;
tioris aid to increase the country's,

gain

Present

slightly.

Inflationary

pace

will slow and the peso will remain

steady while

shippers will
ease
credit terms.
The recently
signed "little common market"
U.

with Ecuador, Panama and Vene¬
zuela will have slight effect.
Downward trend

curtailed

the

order

narrow

anticipated $300-million bal¬

ance

of payments deficit.

and

Japan

will

market

for

Germany

increase

invest¬

Progress in
to

bananas.

i-rn

Guatemala continues!/

extremely slow under the

five-year economic development-*
plan.; Oil drilling and other ave-'t
nues to earn exchange have been!;

disappointing to date. The Gov-' *
ernment will limit importation of i
many items, including foodstuffs,^
textiles, cosmetics and vehicles, u
-

Ecuador

Ecuadorean

forecast for Mexico

The

fo£

optimistic business condition'4
throughout the entire year. Mex- !
ico is in an excellent position tq
benefit from the economic upsurge

the

New

Government

heavy spending for
the Colombian border harm do¬ public projects while farm pros-*1pects are bright. Tourism, which mestic industry.
Dollar balances
has emerged as the main prop to
will not recover
Contraband

textiles

from

1958

across

contemplates

and

losses

caution is' the watchword.

the economy

with $500 million in

annual
earnings, will get even
sharp reduction in
more promotion from the new-Ad¬
volume of foreign capital entering
ministration. Chief problems are;
the nonpetroleum industries will
inflation, labor and unrest front'
continue at least through first half
of 1959. Investors are waiting for wage demands. Dollar income wilt.
be cut by about $70 million from
the economic and political situa¬
U. S. lead and zinc quotas. Chances
tion to

Venezuela's

Drain

clear.

dollar

are good peso will not be devalued
partly offset by
as gold and exchange reserves are.
rising oil exports—now heading
sufficient and free rate is strong/
toward 1957 peaks.
if
:jr

will

reserves

Brazil and Eastern Europe
there. The anticipated estimated
10%, as already men¬
5% gain in gross national product
A
sharp rise in
trade with
will not take the country out of tioned, to about $3.8 billion. Wash¬
Eastern Europe will mark Brazil's
the recession. But optimism pre¬ ington's policy of higher tariffs
and
quotas on metals will, of economy in 1959. The government
vails once again as steel orders are
will accept many of over 50 pro¬
course,
impede shipments to
pouring in from all over the world.
Chile, Mexico, Peru and other posals now on hand for barter
Trade with Communist
China,
transactions
with
Iron
Curtain
which failed to blossom in 1958, Republics while the coffee-pro¬
countries.. Coffee and cocoa will
countries will earn less
is certain to take some strides be¬ ducing
be the main products bartered. In
dollars from exports as African
cause of low iJapanese
prices. In¬
19 5 8
these
commodities
were
competition broadens.
dustry founts on a heavy increase
swapped for Czechoslovakia]! and
in exports, especially
to Latin
Polish steel,
Trading Clubs Affect Us
railway equipment
America. Sizable credits to Philip¬
The continued expansion of re¬ and ships as well as Russian oil.
pines will help accomplish Nip¬
gional trade areas, such as the More triangular transactions are
pon's aim of laying the ground¬
Paris and Hague Clubs, also en¬ expected as bartered raw mate¬
work there for large-scale trade.
rials disappear behind the
courages the by-passing of U. S.
Iijon
Japan also is eying a greater share
Deficit
financing will
goods in favor pf European. Al¬ Curtain.
of the Indian market and wel¬
remain, forcing the cruzeiro to
though the six European Common
comes the recent liberalization of
Market nations will being to favor sink even lower. Chances are the
British quotas on Japanese goods.
African raw materials over Latin rate will touch 200 to dollar be¬
With Japan voluntarily limiting
America in 1959 because of lower fore 1960. Sporadic riots and dis¬
sales of textiles, toys,
photographic tariffs, the total
orders will continue but no politi¬
impact will not
equipment and other items in the be felt
cal crisis is expected.
Brazilian
for at least five
years.
U. S. because of tariff threats
here, Moreover, there is no doubt that
economy will be relatively un¬
a
reduced Japanese earnings mean
stable with the extent of
progress
European Free Trade Area or a
the
American
exporter
cannot similar
organization
eventually depending on ability of the gov-r
hope to regain the 1958 dip in will be
formed, probably in 1960. ernment to enforce credit restric¬
orders from Japan.
'
•
At the same time the U. S. ex¬
tions. Imports from the U. S. will
Numerous opportunities exist in
porter in the Southeastern, coastal

Singapore for farsighted American region must be

exports have been relaws*5
capital as "the Admin-"
istration
hopes to become Chief
distributing center for the new*;
Government will pass

vived.

to lure U. S.

being tightened.

Out

Chilean copper prices, con¬
years but Australian fro
extremely cautious in sumption and output portend a
c
a jiisning credits for the
Chinese. stronger economy.
Moscow will
loans from
the
Export - Import Canberra will
guarantee repatri¬ negotiate for more purchases of
Bank, World Bank, International ation of
foreign capital and earn¬ Chilean copper products. Collec¬
Finance Corporation, Colombo
ings to encourage still more U. S. tion experience for U. S. exporters
Plan and International Coopera¬
investment
and
will continue to improve but vol¬
licensee

strictions will be eased but price
controls will remain.
Numerous

adversely affected-1

lie has not been

by low coffee prices and the favor-^
able trade balance is larger than"

hardship is

accept Soviet barter deals.

of 1958 wool sales of $98 million,

make

not 1

will

tivity will not be arrested unless
prices for raw materials -.climb.
Apprehension exists over the-U. S.

been

currency

rumored. The Repub-/

output.
Japanese and Swiss artf
making inroads in this market::
while imports on dollar goods are/,

If coffee

almost all phases of economic ac¬

purchases

Chinese

exports

prices plummet much further, real

year

—

mainland

Rica's

be devalued in order to stimulate-

the cards for Colombia.

licensing pol¬
remain.
icy will remain vertically intact with the Communist
More
countries
stringent fiscal policies
despite the drastic drain on ex¬ some
on
a
semi-barter
basis. are slated for Chile in 1959. The
change reserves. Prices lor ex¬
Australian
experts
are
hopeful sound business approach of the
ports of Pakistan's primary matenew
Chilean
Administration
that

trials will strengthen. Inventories
here of goods bought from Pak¬

rewarding.

Costa

producers now gone and the wool
producer
completely
neglected,
Uruguay has no alternative but

coming through now in the U. S.
peso,
which lost 300%
of
better value in 1958, will regain some of

markets, you must count on con¬
siderably greater Australian trade

Pakistan's import

Panama is. >3*

Although

in years as

Bolivia still feels the

tine plight before 1962. Peso will the
Government to fix
another
million of capital invest¬ continue to sag, undoubtedly be¬ lower rate" for the boliviano at
Asia's overseas colonies to Euro- ment by overseas Chinese busi¬ yond 100 to the dollar.
Imports around 12,000 to the dollar. Es¬
mart. America's share of Far East¬ nessmen in Southeast
Asia, par¬ will be cut back more and drastic tablishment of the Inter-American
reduction of state employees will Development Bank, which Bolivia
ern import trade remains static in
ticularly from Indonesia. Formosa
in
serious unemployment backs strongly, is the only answer
most nations of this area and is also will profit from huge U. S. result
and Colombo Plan aid allotments. for the first time since World War to stepped-up purchases from U. S.
declining in several countries
where exchange shortages are This growing economy offers in¬ II. With gold and exchange re¬
: Peru's problem will be inflation.
acute. The U. S. has lost out com¬
creasing markets for American serves exhausted, Argentina has The Government has been forced
the lowest coverage of notes in to resort to borrowing to cover
pletely to Japan and Western Eu¬ exporters.
circulation of any country in the deficits of the last three years,
rope in the automotive field and
The new year finds the Philip¬
Western
world.
in the textile industry.
Export-Import thereby increasing money in cir¬
Another
pines facing the worst financial
decline of 5% in overall American
culation.
The drop in prices of
crisis since the Republic became Bank, International Monetary
Fund and private U. S. banks will Peru's principal
exports to the Far East is fore¬ a nation. A deteriorating reserve
exports, plus the
seen for 1959 as expansion of U. S.
grant about $400 million in loans. effect of U. S. quotas on lead and
position probably will force de¬
foreign aid to the Colombo Plan valuation and wholesale decon¬
Uruguay's so-called
"South zinc, will impede progress. Con¬
nations is held unlikely.
tinued decline in value of sol and
trols.
Gross
mismanagement of American welfare state" deteri¬

India's Exports to U. S, A.

rise in 1959 to stimulate*

business.

Rouge-

$l-billion industrial de¬

velopment

before

traffic,'

CanaL

lessee.

relatively small market, the conh *
potential is growing stead*' iily and aggressive sales here will/1

Mississippi River section, indicate
the New Orleans-Mobile-Houston

In Argentina, the economic sit¬
freely via Hong Kong. A rapid
population growth of 4% annually uation, which has been on the
provides a great number of new verge of disaster for more than
potential customers and wages are two years, now is expected to de¬
higher than in most of Southeast teriorate further in 1959. President;
Asia.
American exporters would Frondizi's oil exploration agree¬
do

quired

sumer

region is trying to grab a larger; no more than 120-day terms. The
did not share in the gain. Gradual share of America's trade with the exchange system initiated a year
liberalization of dollar imports is Latin Republics.
ago
has
brought
a . substantial
amount of stability.
taking place while there is no
H o we v e r,
More Argentina Deterioration
close ties to Argentina necessitate
problem in importing relatively

door

Thursday, January 29, 1959

also will

Paraguay, surprisingly, there

another

imports from the U. S. have picked
up recently.
But majority of im¬

with the

Will Sell Overseas in 1959
recover

Orleans

New

Venezuelan Congress is expected

problems have arisen
to approve the $225 million credit
during the first year of the new
negotiated with U. S. commercial Federation of West Indies but
banks to tide the Government

over

remainder of fiscal year. This will

foreign

investors '
waiting to start ventures. But
reassure

Government

will

demand

now

will

of year

pick up in second half
once the influx of foreign

capital

resumes.,

port restrictions

order to halt the

will

the

per

management keeps the up^,
Trade will continue to/

hand.

be diverted

and more

away/

being relaxed steadily.

Trinidad's'

asphalt will be in greater demand
U. S. Federal aand State highV*

way programs rise $1 billion to,
im¬ $6.5 billion and total construction '
outlays here climb 7% to $52.3'
dollar billion. Increase in world trade-^;

inevitable in

drain

But Venezuela again
best

and

customer

astute

Otherwise,
are

holdings.
Regardless,
American
exporters will sell about 10% less
than in 1958.

Numerous

new from the
sterling area. Exchange,
higher restrictions on dollar imports are

royalties on oil investments prob¬
ably on a 70% to 30% basis. Busi¬
ness

Latin

third

American

largest in
England.

now

over

$200 billion-—will

also'

aid Trinidad since it is one of the

Hemisphere's important'
refueling stations
for shipping.

.Western

aluminum,

is much
which, of course,,
In Central America, the launch*- means U. S. purchases of Jamaica'
ing of a broad program in Panama bauxite will be up. Dollar re¬
to attract American and European ceipts will gain from more tour¬
-manufacturers to the Cblon Free ism in all the Federation Islands,
world after Canada and

Zone

will

create

Panamanian

workers

jobs

and

for

facturing
to

users'
no

and assembling plants
specifications in 1959
capital

and

for

cheerful,

from

bolster American

the economy in general. The Free
Zone will construct several manu¬

with

Outlook

investment

re¬

where

direct

investment

companies in

about

100

byj

Jamaica'S.

firms

started operations within the past;
year.

Sugar sales to U. S. also will
Cuba.
the 3% drop in

increase at expense of
In Puerto Rico

Volume 189

Number 5816

The Commercial and Financial Chronicle

(583)

imports from the mainland
will

Purchases

this

from

will

with

further

products,

ciga¬

dustry, will take

and

unprecedented

provide

for, ;Stepped-up

under

One

increase

liquidity

goods

deleted

were

nesses.

orld and to

the

re-.

mport
ent

the

credits

Fund.

Other

world

ions

moves

trade

take

give

the

are

„

ommodity prices

and

he> Winter-American

r. "S. also will back

lin it.'.

...

omic
orce

the

Community

■

Eco-

the mainbehind the Administration's
renewal

getting

four-

the

Reciprocal
rade Agreements Act, the U. S.osition will now be strengthened
or
negotiating lower tariffs with
11 regions where common marareas

hile

there

1959

being

are

will

resulting

are

up on

not anxious to build

few

steel on'the

same

ing them they will not be stuck with

polled

new

sure

here

careful

are

investigation

markets

U. S. exporter in

ountries

1959.

U. S.

profits

"how

now

and

Morgan

Co.

Jan.

dock

(par

$1)

publicly

Surrey

^as Corp. at $3 per share.
securities are offered as a

Oil

•

These;

The

net

proceeds will

retire current
well

rty

the

secondary
he

W. Evans

recovery

corporated

Delaware

in¬

ice

Its

prospects.
is

located

uilding,
The
ransact

Dallas,

company

business

601

the

passenger

the

week

car

ended

production

exas, Louisiana and Oklahoma.

scheduled

was

week

Jan.

new

orders

of stocks.

•

orders

2.6% below; shipments
5.5% above.

was

were

Business Failures Up
and

industrial

failures

2.9% above;

were

Slightly

;

edged up

in the
week ended Jan. 22 from 294 in the preceding week, reported
Dun & Bradstreet, Inc. Casualties were less numerous than in the:
similar week last year when 333 occurred. The total for the same
week in 1957 was 258.
Twenty-three per cent fewer concerns
in

1939; the total

prewar

was

296

385 in the comparable

Failures

involving liabilities of $5,000 or more increased
slightly to 266 from 258 in the previous week but remained below
the 271 a year ago. A decline, on the other hand, brought small
casualties, those with liabilities under $5,000, down to 30 from 36'
last week and 62 in the corresponding week of 1958.
Liabilities
exceeded $100,000 for 37 of the week's failures as against 33 in the

23, "Ward's Automotive
additional 7% unless Chrysler Corp.

previous week.
All industry and trade
.

truck

38, and among commercial service to 20 from 15. More manufac¬
than last year, while construction and service
tolls remained about even with last year. All of the decline from
turers succumbed

the 1956 level occurred in

six.

contrast,

four

regions

had

Middle Atlantic casualties declined to 116 from. 128, East
North Central to 37 from 51, while the South Atlantic dipped to
23 from 26.
Trends from last year were mixed; five regions re¬
change.

ported fewer businesses failing and four regions

suffered higher

tolls.
"

•

■•

•

Business Failures in 1958 Set Postwar High

Rush to Replenish Inventories

rising rapidly as consumers strive to re¬
plenish low inventories, "Steel" magazine reported Jan. 26.
Fabricators who let their stockpiles decline last year are suddenly. realizing that they don't have, enough metal on hand to
sustain high production.
They are scrambling to get promises of deliveries of cold-

last

Central, up to 23 from
lower tolls and one had no

week ago, and in the West North

from 38

Although dipping 3% in December to 1,082, business failures

Demand for steel is

the

retailing and wholesaling.

regions accounted for all of the week-to-week upturn,with marked increases reported in the Pacific States, up to 54?
Four

total

had heavier tolls during the
except retailing where casualties fell to 131 from 161.
Among manufacturers, failures rose to 61 from 52, among whole¬
salers to 32 from 28, among construction contractors to 52 from

nine-week-old strike.

Steel Buyers

■

groups

week

was estimated at 24,597 units,
The increase, said "Ward's," re¬
resumption of' operations by International Harvester,

two

Demand for

new

Commercial

for

months, but if the United Steelworkers struck
tomorrow, they would catch consumers in their worst inventory
position in about eight years.

States of

the

However, shipments in that period
of Jan. 10, and unfilled

above the total for the week

week ended Jan. 17

Jan.

Meadows

Texas.
is qualified
in

op-

week of that year.

For steelmakers, it is a refresh¬
ing change, the national metalworking weekly commented.
Steel shipments have exceeded consumption by a small margin

properties
principal of-

11%

strike is

rolled sheets within eight weeks.

gas

were

7.5% above production.

and

0, 1957, for the primary purpose
engaging in the exploration,
rating of oil and

decline

which ended

Jam

cquisitioi\ development and

States

was

week, as compared with the preceding week,
production of reporting mills was 16.9% higher; shipments were
11% above; new orders were 21.7% above. Compared with the
corresponding week in 1958, production of reporting mills in the

7.5%' fewer than

Portwood

rilling completions, etc.
The Surrey Company

sulted from

prop-

program

output increased by 70,000,000

reporting mills in the week ended:
4.5% above production, according to the "National

For the Jan.

also

The recent week's

Shipments Show 11% Increase

orders amounted to 39%

9% higher than last week's 22,577.

lease; and to be
working capital, to defray
•osts of possible
acquisitions,ed

Jan.

reflected an increase of 13,368 cars or 2.3,%
corresponding week in 1958, but a decrease of 71,015
10.8% below the corresponding week in 1957.

Consensus is it will last between four and 12 weeks.

ended

were

the original target."
Viewing the truck scene, the statistical publication reported
January volume will reach the 97,000 mark forecast at the
beginning of the month.

used

enlarge

week

were

»'•

above the level of

was

that of the previous week, and showed a gain of 995,r

Lumber Trade Barometer."

Where suppliers

labor outlook all but three believe

Output the past week

latest week

Jari. 17

that

liabilities, to drill

Louisiana;

basis.

of electric energy distributed
by the.electric
industry for the week ended Saturday,, Jan. 24,
at 13,394,000,000
kwh., according to the Edison

Lumber

specu-^

weekly production

average

Lumber shipments of 474

"Chrysler's recent limited operations and the prospect of a
complete shutdown," said "Ward's," "will keep the industry from
accomplishing its January production goal of 595,000 automobiles.
At this time, it appears the figure will approximate 550,000
units,
or

ation.

cars or

"Ward's" estimated the week's car production at 129,599 units
compared to 135,953 the previous week and 107,495 in the corre¬
sponding week a year ago.

New;

the

above

sell

common

the

over

for the

The' effects of a Pittsburgh Plate Glass Co. strike limited
Chrysler activity to scattered two- three- and four-day produc¬
tion "Ward's" said, adding that all of the corporation's
car-making
plants are scheduled to be idle because of the dispute.
Dodge
truck output in Detroit has not yet been affected.

Stock Offered at $3
City,

90.8%.

Carload ings Up 6.6% Above Previous Week

returns to work.

ork

the steel

come.

Report,"'said, and will drop

Surrey Oil & Gas Co.

ffered 30(1,000 shares of

and

128.1%.

was

>verseas."

Peter

rate

power

failed than

you

the

Loading of revenue freight for the week ended Jan. 17, totaled
586,254 cars, the Association of American Railroads announced, a
gain of 36,164 cars or 6.6% above the preceding week. The total

Glass Workers' Strike Cuts Auto Output

commer¬

made

United

Of the

where

ago

000,000 kwh. above that of the comparable 1958 week.

tomers.

cial exports will be up for 36 and
own for
15, indicating there are
ood'

kwh.

vary from $4 to $10 a
ton," at least part of which will have to be absorbed by the cus¬

studied,

month

A year ago the actual weekly produc-i

preceding week.
For

tract," said "Iron Age.", "Their estimates

analyzed reveals
opportunities for

many

the

practically no doubt among steel buyers that
higher prices will follow on the heels of a new steel labor con¬

foreign
through the President's auority to reduce tariffs until 1961.
a

production is based

Electric Institute.

metalworking weekly said that of 31 major steel buyers

"There

rade

But

estimated

was

are guarantee¬
lot of steel if there is no

a
•

The

benefits

the

week

amount

light and

inventory, the automakers

-strike.

rade bill,.the foundation has been,
aid for expansion of U. S.

"Stampede"

are

suppliers to stock
-

formulated,

from

the

that

Electric Output Exceeds Previous Week's Total
The

are tilling up in both directions.
the key month," according to the trade publication.

announced

for 1947-1949.

capacity."
At the same time, the metalworking
magazine said that many
companies are fighting an uphill battle in their attempts to rebuild
inventories.. While they are taking in more steel, they also are
using more because their own business has improved.
Others are
getting', a late start from an extremely low inventory position.
According to report, the auto companies are aiming to contract
for enough steel to last them through the current model
year and
give them a start on the I960'models. They also have told their

was

ccessful drive in
ear

c'CC,

placed at 1,459,000 tons

*Index

coated sheets—to be booked to

Latin Araer-

the

was

trying to book tonnage there and are working
through April and March. The outlook is for plates,
wide-flange beams, and all flat-rolled products—sheets, strip, and

The

European

Sharply

Institute

changes in ratings of continuing busi¬

backwards

to support
Bank.

■

..v

Although

tion

result, mill orcier books

"Customers

market but will not

common

"May

atti-

de toward stabilization of world

For

production 2,058,000 tons.

"Iron Age" said further that steel users are
playing both ends
against the middle in their efforts to stock up against a possible
steel strike at mid-year.
They are ordering steel for second quar¬
ter delivery and at the same time
placing orders for first quarter.

deci-

liberal

Rise

Steel

fore.

is turning into a stam¬
pede, according to the "Iron Age," national metalworking weekly.
A Pittsburgh
mill, which just several weeks ago was pleading
with its. customers to
get their orders in, stated that "orders are
just swamping us." Right now, it was said, new business is run¬
ning ahead of the mill's ability to produce.

Eisenhower-

Washington that will

ift

43,533

and

Output for the week beginning Jan. 26 is equal to aoout
78.1%^
1, 1959 annual capacity of 147,633,670
production of 72.6% the week be¬

The drive to rebuild steel inventories

nations by the ExportBank and the Develop-

Loan

and

Iron

net tons compared with actual

Orders for Steel Likened to

aid the underdevel-

include

American

of the utilization of the Jan.

interesting to note that over 228,100 names, as listed
company's Credit Reference Book for the United States and
Canada, are located in the New York trading area.

by the Internaional Monetary Fund and World
>nk to raise quotas by 50% as

riendly

re¬

It is also

ponsored action

well

Gigantic Mailing Job

biggest mailings the Post Office has handled

ton.

a gross

in the

ped countries.
These

the. Western

the

on No.
1 heavy melting scrap ad¬
straight week, rising another 34 cents to

second

operating rate of steel companies will average *137.7% of steel
capacity for the week beginning Jan. 26, equivalent to 2,212,000
tons of ingot and steel
castings (based on average weekly produc¬
tion for 1947-49) as compared with an actual
rate of *128% of
capacity, and 2,056,000 tons a week ago.

•

York

generally
steps being taken by.

many

erve

price composite

the

Steel Production

Harper, District Manager of the firm's New
office, stated that in the New York Trading area alone
107,187 changes were made in the 1958 Reference Book of Credit
Listings of Businesses; 29,021 new businesses were added; 34,633

be repre-

stimulated

Washington

for

The

credit agency's "Reference Book" early this
year.
For instance, H.

vehicles, textiles, leather prod¬
and all kinds of gift items.
But both exports and imports are

by the

vanced

was that for Dun & Bradsteet, Inc., the national mercantile
credit agency, when its annual request for current
financial state¬
ments was mailed to 3,000,000 separate businesses listed
in the

to be

many

•

"Steel's"

cently

ucts

ound

held.

Although
production in 1959, the full impact of tne
be translated into production until 1960
-

hard-to-get item, but

stimulated line pipe demand.
week, steelmaking operations climbed half a point to
75% of capacity. Production was about
2,123,000 net tons of steel
for ingots and
castings. Rates in nine out of 12 districts were up

billion in 1957.

later.;

decision has

At least $1.9 million will
go for missile electronics.

activity;/

consumer

usually fellow sheets

but company spokesmen

Last

$40.67

many missiles will be in
missile increase will not

continually expand¬

ing inflow of such

and $4.3

Court

1959.

and aircraft contracts.

'ip 1959- the anticipated rise in
shipments abroad will
be^in the capital equipment and
construction machinery lines.
On
the*,other hand, the bulk of the
will

Industry

$5 billion worth of electronics in

1959, likely to be the best for sales to the military,
gains largely due to the substantially increased
production
of many
missiles, combined with continued high sales of manned
aircraft.
Business will be up despite cutbacks in some missile

American

ented by the

than

see

growth in imports

allocation during the second quarter,
such talk is premature.

observers think plates will be next.
Railroads are beginning to
repair and replace old equipment, and reversal of the
Memphis

The year

will

the springboard

business

This compares with
$4.5 billion in 1958

:r Our Exports and Imports

The State oi Trade and

American flag. Puerto Rico's "Op¬
eration Bootstrap" of tax conces¬
sions to U. S. industry Will con¬
tinue

page

Bars

tubes, building
materials and textiles. Imports of
European cars have jumped in¬
credibly to a point where 41% of
new registrations are from E irope.
This

from

say

40%

expand

dairy

tires

rettes,

Continued

1959.

this

pharmaceuticals,

year,

in 1958

offset

country will
million.
U. S. ship¬

$626

exceed

ments of

along

than

light flat-rolled products is mounting, with cold-

rolled galvanized and aluminum coated sheets in tightest supply.
-It is rumored that major steekmakers may put cold-rolled sheets

in the year 1958

involved

reached a total of 14,964, a new postwar high, and
of $728 million, Dun & Bradstreet reports.

liabilities

impact was felt mainly in the first half of the year
when casualties climbed 14% above the comparable period of 1957;
in the last six months, however, the increase slackened to 4%.
In relation to the operating business population, the rate of
failure remained moderate. Concerns failed in 1958 at a rate of
The recession's

56 per

10,000 listed enterprises. This compared with 70 per 10,000
1939 and was little more than a third the record of

prewar

154 in 1932.
4

Manufacturers
increases during

and wholesalers

suffered the most noticeable

1958. Iron and steel manufacturing failures were

half again as numerous as

in 1957, while tolls in the leather and
Continued

page

The Commercial and Financial Chronicle

(584)

Continued

fresh

from page 51

Wholesalers

The State oi Tiade and

ders

industry

There

Slight ftise

substantial

and

up¬
over

year ago

Its chief function is to show the general trend of

year ago.

There

was

marked rise

in the call for canned

citrus fruits and

juices and interest in frozen juice concentrates
expanded appreciably. Purchases of most dairy products, poultry
and fresh meat matched

Bradstreet,

the

Jan.

compared with 276.65

level this week.

Higher prices on most grains, flour, coffee, steers, and steel
scrap helped boost the general commodity price level this week.
The Daily Wholesale Commodity Price
Index, compiled by Dun &
275.18

trading in indus¬

Trading in woolens and worsteds moved up moder¬
week earlier, but interest in carpet wool remained
sluggish. Increases in drills nad sheetings offset declines in print
cloths boosting over-all bookings in cotton gray goods somewhat
over the prior week.
Mid-Atlantic dyers and finishers reported
slight gains in incoming orders and expect an upsurge in the
coming weeks.
Over-all food buying at wholesale was sustained at a high
a

ately from

...

from

274.51

the comparable date

Department stores sales

week

Federal

advanced

year

ago.

those of the

rice, flour, sugar, and coffee moved

Reserve

above the

week, Jan. 10,
ended'Jan. 17

Bad weather cut down receipts of wheat in terminal markets

on a

Board's

for

period

increase of 4%

prior week and the buying
up somewhat.

country-wide basis

index

the

week

last year.

taken from

ended

the

Jan.

17,

preceding

For the four weeks

reported.
registered.

was

during the week; this resulted in a mod¬
erate rise in wheat prices. Influenced by increased
purchases and
light offerings, corn prices moved up appreciably.
There was a
noticeable rise in rye prices as orders expanded and
supplies were

a gain of 12% was
According to the Federal Reserve Bank of New York depart¬
ment store sales in New York City for the week ended Jan. 17
showed»0no change from that of the like period last year. In the
preceding week, Jan 10, a decrease of 3% was reported. For the

reduced.

four weeks ended

and

buying picked

good processor demand and the large amount of
soybeans under price support resulted in a noticeable increase in
soybean prices this week. Wholesalers reported a moderate gain
in

oats

prices nad buying

was

Jan.

17, an increase of 5%
volume in the corresponding period in 1958.

Continued

noted

was

the

over

Continued

sustained at the level of the prior

a week earlier.
Sales of wheat and flour under the International
Wheat Agreement program amounted to
2,070,000 bushels during
the week ended Jan. 20. This boosted the total for the season to
date to 59.1 million bushels, compared with 67.7 million a
year ago.

Despite a sizable purchase by Pakistan, exports of rice lagged
week; distribution in domestic channels expanded and prices
held steady.
There was a substantial rise in coffee buying and
prices moved up somewhat. Cocoa prices declined slightly on a
this

decrease

trading throughout

stocks in New York
a

rose

most

somewhat

the

week.

Warehouse

during the week to 60,033 bags;

year ago amounted to

160,735 bags.
Sugar trading slipped and stocks expanded somewhat, result¬
ing in a slight decline in prices.
Cattle

receipts in Chicago were down noticeably from the
prior week, but trading was steady; prices on steers moved
up
fractionally. The salable supply of hogs fell moderately, but buy¬
ing matched that of the preceding1 week; hog prices were slightly
Lamb prices moved up as

trading improved.

A report on a larger than expected increase in
cotton

to the government loan stimulated cotton

pledged

trading at the end of the
week, and prices advanced appreciably. Exports of cotton in the
week ended Tuesday were estimated
by the New York Cotton Echange Service Bureau at 75,000 bales, compared with 130.000 in
the comparable week a year ago.

Consumer

from

The total dollar volume of retail
trade in the week under
was

unchanged to 4% higher than

re¬

year

ago, according to
spot estimates collected by Dun &
Bradstreet, Inc. Regional esti¬
varied from the comparable 1958
levels by the following
percentages: Pacific Coast+2 to +6; Middle Atlantic and

mates

South
Atlantic -j-1 to +5; East South Central
and Mountain 0 to 4-4East North Central —1 to
+3; West North Central and West South
Central —3 to +1; New
England —5 to —1.
Purchases of women's coats climbed
and volume in

noticeably

over a year ago

lingerie and dresses showed moderate
increases; in
contrast, interest in women's suits and sportswear
dipped mod¬
erately from the similar 1958 week. Increased
buying of men's
suits and topcoats boosted over-all
sales of men's

apparel slightly
Men's stores reported moderate declines in the
call
and slacks.
There were slight
year-to-year de¬
creases in purchases of
boys' clothing, especially sports shirts and
sports jackets.
last year.

sportswear

There
sets

rales

help

it seems to continue to

goes,

lower; putting it another way,
rates
have been rising.
Our prediction is that we have
had the great bulk of the decline.
However, the bond market is on
the defensive, and we look for
stability at best, or possibly mod¬
erately lower prices.
It's important to
realize that
two major conflicting forces are
operative today so far as money
and credit policies are concerned.
interest

that

the

Federal

Reserve

fighting inflation. They think
they can do so by tightening
credit.

and

money

would

ap¬

that they 1 are fighting the
wrong kind of inflation, because
pear

we
are
having an inflation re¬
sulting from increases in the cost
structure of industry, which, of
course, means that prices must in¬
crease in the wake of higher la¬
bor costs. In any event, the "Fed"
is
espousing
mildly - repressive
policies, and I think it is quite

that

possible

the

future

near

they might raise the discount rate
again, which will be a mild de¬
pressant, tightening money
It

not

drastic

the

bit.

some

other

powers they could use.
other hand, the Treasury

Department,

which

agent

vexing

government,
and difficult

With

deficit in

very

lem.

our

fiscal

the

has

prob¬

this

fiscal

of $10-$12 billion, they have

year

lot

financing

new

page

bonds

refund.

do;

They

competing in the bond market

are

and

substantial gains from the
prior week in bedroom
upholstered living room chairs
boosting total furniture
of

over

linens

year

exceed

ago.

those

"White
of

last

Sales"

continued

but interest in
draperies was sluggish. The call for floor
coverings was up notice¬
ably from the comparable 1958 week.
Appliance dealers reported
moderate gains in
radios, television sets, lamps, dishwashers and
refrigerators.
year,

Housewives stepped up their
buying of frozen
vegetables, baked goods and some dairy

should

billion

increase

will be

approximately

very

$30

good year indeed.

Now, lest you think that this is
unalloyed optimism, I would point
out just two things.
First of all,
this increase to $470 billion really
can't be looked at except, coincidentally, in relation to last year,
when it was $437 billion, because
the

fact

the

matter

that

the fourth quarter of 1958 we had

prodigious jump to $453 billion
output which compares with
only $425 billion annual rate six

This
going

expect

can

rate

to con¬
increase

of about

$17 billion in relation to
the present level, a much lower
rate of progression.
A second

uncertainty relates to

business sentiment.

We face

riod of acute labor problems.

pe¬

For

example, the odds favor a strike
the steel industry.
How long
strike is going to be cannot
be
forecast; nor can one state

the

what
the

effect

cost

Capital
we

this

would

structure.

able

have

Labor

and

get

together,
should, by all indications, have
are

very good year.
If the labor
groups attempt to gain undue ad¬
vantages at the expense of other
segments of the population such
a

as
workers in services
and the
trades and to the detriment of the
.

investing
then

public

the

and

the

aged,

present optimistic fore¬

casts may well require downward
revision.
.

The

tinue.

which will

GNP,

Foreign Situation

insatiable,
dedicated
he

ruthless
to

our

zealous

foe

face

that

destruction; and
his

behalf.

products, while interest

must face the fact that

try is in

grave

danger.

our

coun¬

Let's not

other things,

committed
Asia.

this

continued battle be¬

tween East and West for the

nations

un¬

of Africa and

Don't underestimate the im¬

of these

portance

going

happen

and 2%%

when

bonds

ma¬

side

year our exports have
declining, and imports have
going up. It is significant

past

note
that the
major rise in
imports has been in the very area

where

considered

ourselves

impregnable, namely, finished
goods. We are in the process of

pricing ourselves out of the world
market. The old economic formula

The

Let's

applies — you cannot sell
something for less than it costs
you. We have the ability and the

knowhow,
but Japan and
the
European countries are rapidly
improving their technology and
degree of mechanization — and
considerably

lower.
On

other

hand, there is a
partially offsetting factor — the
standard of living in these coun¬
tries

has

been

going

demands for goods are
If we hold down our
to

creases

actual

productivity,
able
kets.

compete

Some

up.

Their

increasing.
wage

increases

in¬
in

possibly shall be
for world mar¬

American

companies

are
"hedging" their position
having foreign subsidiaries.

The Bond Market

Now,

let's briefly

look

the

market
It

has

continued

around
of

Putting

the

decline.

lowest level

price in about 25 years.
it another way,
yields

have moved

up.

way

of con¬

side

The result

fence..

Stock

stand-off.

Market

Outlook

the stock market.

survey

learned, lengthy and erudite dis¬
cussion covering all aspects of the
economy,
and they propounded
their views with great positiveuntil

ness

Stock Market—It

stock

the end.

was

the

came

said:

sentence.

one

was

That

market.

will,

"The

the elder

Morgan once observed, fluctuate."

Now, I will stick out my neck
a

bit

the

than that.

around
only
previous. They are
ages

were

made the low

At that time

A year ago
Aver¬

Industrial

Dow-Jones

440 and had
few months
now about 595.
a

stated: "The

mar¬

ket, at the present level of around
440, faces no important downside
It is

for

evaluation

able

area

and

the

likely to stand
ended

low

recent

We think
of

420

the DOW." We

that

saying

would end

reason¬

attractive

long-term purchase.

that

much

the year
better note

than it started.
situation

The

somewhat

today

may

converse

the

be
last

We started 1958 in a de¬
clining business trend, but the
stock market was moving up. Our
forecast for this year is that the
year.

market

third aspect, the bond market and
the
money
market.
The
bond

the

risks.
the

I
recently
read
the
"Fortune
Magazine" forecast for the econ¬
omy in
1959.
They presented a

still

their wage rates are

of the

pretty nearly

countries.

regard to the economic
two interesting develop¬
First, there
has been an outflow of gold from
the United States.
Second, over

been

"Fed"

tightening up credit,
while the Treasury is on the other

ments have occurred.

the

somewhat

With

been

find "the fundamental element

that

aspects,

Next, let's look at the foreign
situation. We must recognize the

plan, hard facts: That

Among

mean

terms

foods, canned

what

these 2*2%

were

appreciably
sales

borrowers—and it is
getting tougher all the time. And

tinue. We

buying was up slightly from a year ago. Best-sellers
were women's
coats, furniture, floor coverings and linens. Accord¬
ing to spot reports, sales of new passenger cars matched those of
a week
earlier, and moderate year-to-year gains were maintained.

for

ket
go

practical matter. And even discuss the possibility (we ture, and they have to put a 3%%
rate on new short-term paper and
with wage rates going up, and so hope a remote one)
of atomic
a 4% rate for longer-term bonds?
on, I think we can only be opti¬ war. If this were to occur, there
mistic on consumer spending.
would be nothing to talk about., Add the -increased charges to a
The probability is that the cold debt ser vice that, already exceeds
GNP and Labor Uncertainty V
war
characterized
by ' economic $8 billion ^yearly. . .This is some¬
By
way
of
summary
there and ideological conflict will con¬ thing we have to watch.?;But we
ment

previous.
progression is not

consumer

over

No matter how low the bond mar¬

Economic Profile of America—1959

months

Buying Continues at Steady Pace

Continued extensive clearance sales
promotions offset the ef¬
fects of bad weather in
many areas holding retail trade in the
week ended Jan. 21 close to that of the
prior week, and over-all

view

bonds

with private

buying of flour picked up at the end of the week
prices advanced somewhat; export sales were close to those of

lower.

with

1946, when many gov¬
were
yielding a
little above 2%, the government
recently brought out a 21-year,
4% bond, now selling below 99.

lars

Domestic

stocks

trast

and they also have billions of dol¬

week.

and

Thursday, January 29, 1959

One

Most textile mills reported further gains in

trial fabrics and man-made fibers this week, and sales were over

Wholesale Commodity Price Index Up Moderately

■■■■>■•

markets

frigerators.

prices at the wholesale level.

Southern

especially in case goods and
Purchases of floor coverings climbed

moved up

represents the sum total of the price per pound of
meats in general use. It is not a cost-of-

rose

most

and sales of linens and draperies matched those of the
1958 period.
Volume in lamps and television sets
noticeably over the prior week, and there were slight
gains in automatic laundry equipment, air conditioners and re¬
a

foodstuffs and

Inc.,

and

gains prevailed,

holstered merchandise.

and coffee.

slightly over last year.
continued rise in wholesale furniture orders this

York

comparable

4.5% below last year's $6.o2.

earlier.

was

New

year-to-year

Contributing toward the week-to-week increase were higher
prices on corn, rye, hams, butter, cheese, cottonseed oil, cocoa,
and eggs. Down in price were flour, wheat, barley, lard, sugar,

living^ index.

week

Bradstreet, Inc., rose slightly from the prior week, it was down
from the comparable date a year ago.
The index
moved up 1.1% on Jan. 20 to $6.23 from $6.16 a week earlier, but

food

Low stocks at retail

boosted over-all men's volume at wholesale

The Index

better-than-expected increase in or¬
this week and volume moderately
best-sellers were girls' Spring dresses

apparel

year ago;

buyers to step up their orders for women's fashion
accessories, especially handbags, gloves, and jewelry.
Interest in
women's Spring dresses, suits, and coats rose
appreciably during
the week.
Increased buying of neckwear, dress shirts and socks

moderately

raw

ernment

and skirts and boys' slacks and sportswear.

general builders.

Wholesale Food Price Index Shows

Some retail stocks of

encouraged

Although the Wholesale Food Price Index, compiled by Dun

was

produce sagged.

reported

children's

for

exceeded that of

printing and publishing industries surged up some 30%, The over¬
all retail rise amounted to 9% but varied widely, from a slight
2-3% in food, drug, and apparel stores to 12% in restaurants and
24% in the automotive trade.
In contrast to the general upward trend, lower mortality was
noted in one major manufacturing industry, textiles and apparel,
and in one retail line, appliances.
Also, the picture brightened
appreciably in construction where fewer subcontractors and heavy
construction contractors failed, almost offsetting the continued rise
among

fresh

and

meat

canned goods and frozen foods were limited.

will

trading

range

10%

levels.

that

fluctuate

within

bounded

either

side

present

present, it would

ap¬

be moderately
closer to the high than to the pos¬

pear

sible
see

low.

may

However, we do not
major decline developing;
might well see a rather sharp
a

Volume

"shake

Number

189

out"

5816

relatively

The Commercial and Financial Chronicle

short

duration occurring this spring. It
would provide a favorable buy¬

ing

opportunity.

The

trend of the market is

long-term

^learly

up¬

ward.

earnings has been moving up.
Corporations have been reducing
their

break-even

points

once

again; and if the benefits of this
not taken away as a result of

are

important labor fights, the investors

Scans

Major Market

Factors

The component elements of the

enjoy greater confidence

can

the

maintenance

earning

power and

dividends. In addition,

market fall into two

generic cate¬

stocks

not

gories. The first

what

tiples of 10-year

market

are

factors, and the second

intrinsic value factors.
look

call

the

factors.

four

One

Let's first

major

has

are

market
the

been

dis¬

counting function of the market.
The market always sells on the
expectation of what is going to
be*' If you wait until you read
the

good

paper

news

you

this

market

fortifying factor is the
"cash flow" of American industry,
The depreciation cash "throw-off"
is

nually,

moved

discount

This

faster and further

than markets

normally do. There¬
fore, business and earnings must
improve to justify present stock
levels.

the

business

Second,
are

now

the

good

American

people

Further

will

today in

increases

continue.

welfare state.

excess

productivity.

gains

Result

continued creeping inflation.

aie

market
that

poiippHp

purely

nign

level

statistical

pased

approach,

market

have

stocks

rather

than a stock market.
In
other words, the market has been

It is

—

The

are

putting

Continued

Some stocks have

while the Averages recently have
attained all-time highs, more than
75% of the stocks on the New
York

Stock

Exchange

}im«

selling

are

1955-57 highs.

conclusion,

this

not

the

Jan.

Fairbury,

2).

our

Incomes
tech-

economy.

have been going up, and

our

'nology has been improving.
industries

and

markets

jn carefully-selected issues of

ues

qualitv.

proven

New
com¬

The fourth factor relates to
sup¬

ply

demand.

and

funds

the

Institutional

United

States

have

Kenneth

Ehrmann was elected Executive Vice-President at each of the

three Pullman

Group Banks, Jan.
"

The

three
&

Banks

Pullman

Bank,

Savings

are:

Chicago,

State Bank, Chicago,
State Bank of Blue Is-

and

such

prodigious
that it is unbelievable.
The

mutual

started

into

The

his

banking

First

career

with

Bank

and

National

Trust Company in Macon, Ga., a
Trust
Company affiliate.
He
joined the Trust Company in 1939
the

and

appointments

the

Pullman

board

included

directors

the

President

new

con-

Board.

Schroeder

advanced

were

year

Vice-President

tional

Presidents.

The title of F.

Vice-President

State

Mr.

Ehrmann

Phillips Giltner,

and

Assistant

the

Chairman.

First

member

of
of

board

the

three

Pullman

Miss Kollman is

short period of years. The funds

are

selling

about $2% billion a
year of
their shares, and some
two-thirds of this is invested in
stocks.

The private pension funds

have many

billions of assets and

growing rapidly. An increasing
percentage of their monies are be¬
ing invested in equities. The sup¬
ply of stocks has increased in
are

lesser degree.

land;

State

Company of
Company of
In 1948, Mr.

Jack

Dorhauer

elected

was

Assistant Vice-President of Bank
of st. Loui
st. Loui
M
t the

financing has been
through
the
medium
of

Is-

years,
named President of Trust

was

and

Executive

Vice-Presi-

Company of Georgia

early 1957.
Craft, new President of the

Victor W. Klein
the

Board

elected

was

Directors

The

Michigan

Michigan Bank Detroit Mich
Bank, Detroit, Mien., at
at
the annual meeting of the stockholders

Jan.

John

20,

Hay,

President announced.
$

!■:

byTheva^'Nn?hertTr Aml'mH
„

J„h®y

mer

Company,

1933.

His

joined the bank

career

the

Trust

Vice-President in 1940 and Senior

Vice-President in

Merchants

Bank

Walter Kuelper, M. R. Scherman,

J. Marion

Trust

Co.,

On July 23, 1958, the stockholders
the Trust Company of

carrying cost is perhaps Flushing, Mich., and State Bank
of
Ortonvillc, Ortonville, Mich.,
only half that of common stocks.

Georgia, Atlanta, Ga., approved a
stock split of 10 for 1, increasing

bonds.

Interest

ductible
thus

for

tax

bonds

purposes,

de¬

and

Flint,

the

consolidated
Intrinsic Value
Let

trinsic

now

value

.earnings

Factors

consider

factors.

trending
direction of earnings is
are

the

title of
in¬

and

shares from 40,900 to 409,000

Merchants Bank

andReducing[par value trom $100

under

Genesee

charter

& Trust Co.

up.
more

The
im¬

portant than the level of earnings.
We project an earnings increase
of niore than 22%. Net profits in
1959 may approximate $22 billion

compared with around $18 billion
in 1958.
The government, in its

budget, forecasts a 30% increase
corporation earnings..

Second,
as
to
price-earnings
relationships, i.e., the number of
times prices are capitalizing earn¬
ings—this is at an historicallyhigh relationship. Stocks are sell¬
ing at about. 18-19 times last
year's
earnings, which appears
high. However, we must consider
that earnings will be materially
higher, in 1959. Thus prices are
only around 15 times projected
earnings.
Also, the quality of

from'

transferred

Corporate

The

Board

First

National

rktnahQ

...

Directors

Bank

Omaha,

onnnnnPAH

rn^n'on

the
nm

Arthii?

profits

^
surplus

surplus

$llOOOOO^ Relula?
*11,uuu,uuu.
itcguiar

dividends

undivided

increasing the

cents

per

the bank,

was Promoted

The election of

director

new

and the payment of a 10%
dividend
to
stockholders

stock
were

highlights of actions taken Jan. 21
at the Bank of Commerce,
Dallas,
Texas, annual stockholders meeting and the board of directors

meeting which followed, Berl E.
Godfrey, Board Chairman, and
Harris H. Bass, Executive Vice-

President, announced.
The
of

member

new

directors

President

John
the

the

board

Griffith,

City

National

Bank of Taylor, Texas.

The

First

National

Bank

Mr.

Griffith

Shellman,
Shellman,
Ga.,
with
capital stock of $25,000, was con-

has

verted into

From

title

State

Ga., effective

of business Dec.

Bank,

Shell-

been

Houston,

City

Texas

(now

National Bank).

member

bank's

the

advisory

r—„

board

the

He is

Houston

of direc-

tors-

Thwaite, Jr., as
the Board, William

of
as

Promotion

George

and

Craft

three

new

two

Vice-President

Vice-Chairman of the

and

officers

election

officers

were

of
an¬

nounced

by James A. Elkins, Jr.,
President of the First City Na¬
tional Bank, Houson, Texas.

president.
*

Election

1940.

was
Direc-

National

now

Board, of Directors of the
of Georgia, Atlanta, Ga., announce the election

s. Woods

since

he also

1948,

Houston's

First City

Company

chairman

Bank,

The

Charles

President

1943

tor

31.

the

with

been

First Vice-President and

of the close

has

City National Bank since 1924 and

state bank under the

First

man,

of W.

Mooty to the

C.
C.
Spencer of the corre¬
spondent bank department and -C.

Board of Directors of the IlialeahMiami Spring Bank, Hialeah,

Fla.,

is announced by Charles E. Buker,

F. Tuttle

President.

department, both Assistant VicePresidents,
were
promoted
to

has

been

promoted to

Vice-President; ClarAvinger, M. Lawrence
Phillips and Mrs.
Caroline
C.
Capps were named Assistant

p,.„ciHeinf

continue to work in the
cial

Casl?icrsT and Carey ?• Ho«in.ES-

loan

Briggs, securities

the'Tankta M^ch'
1958,

„

was

ment

officer.

Lakeside National Bank ol Lake
Charles, Lake Charles, La., was

office
Comptroller of the Currency to open a new bank. Tom
A> Flanagan, Jr., is President and
E. Schmitt is Cashier.
The
bank has a capital of $500,000 and
a

dent

office

head

America,

opened

San
new

Chicago.

Mr. Smith has been with the bank
39

years,
*

the c0mntroller of the Cur-

Vice-Presi-

Francisco, Calif., will head

for

Approval of a $5)0()0,000 increase in the capitalization of the
First city National Bank, IIouston, Texas, was received Jan. 13
»

Francisco

San

Bank

•

irom ine uompuuiiw

Smith,

the

office

of $250,000.
«

appointed trust invest¬

Harry R.

the

surplus

commer-

department.

George C

an Ass,st"

ant Trust Officer.

loan

Mr. Spencer has been with the
bank since June, 1949. Starting as
a runner
with the former First
National Bank in 1928, Mr. Tuttle
worked his way up through various departments.
In his new capacity as Vice-President, he will

ence

of the commercial

Vice-President.

Assistant

vice-president,

granted permission by the

]^om Assistant Vice-President to
Comptroller and John H. Cumby
Assistant Vice-President to

Engler, L. G. Newcomb,
A. H. Krekel, John E. Woltemade,
H. E. Anderson, A. H. Schulte and

Mich., Peoples
State Bank of Flushing, Flushing,
Mich., First State & Savings Bank,

done

busi-

...

„

1957.

?.!" w°r2/ J!%'^s_.namcd

F' Morice' W' C' Brown' Jr"

Lin D. Ham.

Genesee

Texas,

ecuuve Committee, and James
Tv.

Company includes promotions to

c. Nichols

Vice-President,
*
and trust officer at Pullman Bank;
The appointment of 12 new ofSecretary at Standard State Bank, ficers of St. Louis Union Trust Co.,
*
#
0
St. Louis, Mo., has been announced
Secretary,

Over the past few
years almost 70% of total of new

corporation

Blue

...

as Presi-

been with the bank for 30

Group Banks. Bank's
anllUal board of directors
Vice-President,
meeBng jan 35; Mr Dorhauer is

Bank

Italy,
close

31.
...

lion in

predicting $25 and $30 billion in rector

Bank,
of the

Dec.

Na-

President of
Fourth National Bank, Columbus,
Ga., an affiliate and in 1957 came

Board,

Mr.

directors of each

the

effective

named

was

The

President of Trust
Georgia and Trust
Georgia Associates.
Thwaite was elected

Trust

officers
Island.

capital

Bank

from

trust

of Blue

Bank

with

was converted
bank under the title

State

ness

third

the President, has been changed
to Vice-President and Assistant

became
Bank

Chairman

will

Bank, and Hilda H. KollJoseph M. Long who

and

mann

who

generation member of a family
prominent in Kansas City banking and financial circles. He
joined the City National staff in
February, 1950.
Mr. Kemper is a
director of
Central Bank of Kansas City.
A.
F.
Stepp
and
Clair
H.

elect-

was

Texas,

$50,000,

state

First

National

Italy,
of

Mr.

Assistant Vice-Presidents to Vice-

land, Blue Island, 111.
Other

Kemper,

The

elected

was

Directors, Walter

First

stock

Trust

He succeeds his father, Rufus

13.

tinue

Wrenn

the Board

The

John s- Coleman, Board Chairman>
and Frank A. Plummer,
Cashiei
and
Director
at
State
qj-' loan oDerations for the
President,
of
the
Birmingham
funds now have $13 V2 bil¬ Bank of Blue Island.
Bank of St. Louis
a
petition he Trust National
Bank, BirmingMr. Long is Secretary and Diassets, and the experts are
h
OCr-uoierI sinreJulv 1953
Iiam> Ala-> announced that Elwyn

increased
rate

Chair-

new

Italy,

Stepp has been in the
Mr. Wrenn,
ing into being. The odds are that
Vice-President of bank's
bond
department
since
this will continue, and the dis¬ the Consumers Banking Division,. 1945. Mr. Schroeder came to City
posable income of individuals and joined the Pullman organization National in 1945.
our standard of
*
$
living will con¬ in 1947. He was previously with
*
tinue to go up.
the leiminal National Bank.
are

the

increase risk but neither to the Trust Company

Crosby
*

Texas,
W. L.

Board,

has been associated with the
Trust Company for 25 years.
He

dent of Trust

effective

Pickens

Dallas,

election

Thwaite,

man,

in
Bank

James A. Bancroft who

Mr.

The third element is confidence
in the future growth of population

area,

and Director.

the tlme for the long-term dent and Director.
investor to discontinue policies of
Mr. Woods, who now becomes
gradually accumulating sound val- Vice-Chairman of the Board, has

News About Banks and Bankers

111.,

reluctant

are

Vice-Chairman of the

the Atlanta

named President of the bank,

was

Bank,

page

buy
bonds, irrespective of how cheap
they may seem temporarily.

they

ing division of

1952

jrom

stocks, and III., Standard

common

the

0,
»,
1,
btaif members of the Lepubiio
and Trust Company JNatlonal
«ank, Dallas,
lexas,
up; others have gone down,
of Augusta, Ga., another affiliate.
pi,°™ot</?' " was announced
very interesting to note that From 1946 to 1948, he was Vice- 5,^
rf. *' H°r^ce» Chairman,

selective.

very

George S. Craft, Senior Vice- ton State
President in charge of the bank-: announces

Company of Georgia Associates in

Trust

institutional,

'and

are

stock

must
j

siocks

and

why

earnings

having

15.

emphasis
.

the

of summary, when
the

public realizes that the dollar will
depreciate in value. This explains
why investors, both individual
.

been

recognize that

below their

analyzes
.

that government spending
continue up, as will wage

worker

in-

year

gains

appears

will

they

—

They

slightly last

Dicture
.

must

recognizing that "built-

inflation"

live

high.

So. by way

recovery

the market would react./

and

of a one-year forecast, the
conflicting elements are in rough
balance and should result in a
trading range for the market.
Now, within that trading range,
terms

Summary

be disappointing, pres¬
ent optimistic attitudes will
shift,
,

the past

over

prospect.

proves

will

continue

decline.

the

market

an-

But the probabilities are they are
going to go still higher over the
longer term because of these other
intangible forces that are operating in our economy and which are
likely to continue operative.
In

gone

Dividends
will

However,

year.

doesn't

sharply

billion

five years.

one

has

$22

face of the business and

twice.

thing

9ame

around

now

Smart

been right in moving
and discounting business im¬

the

Another

late.

The

mul-

earnings.

average

creased

market has

provement

excessive

news¬

people have already bought.
up

your

too

are

(585)

Charles B. Thornton, has been

•

elected to the Board of Directors

of California Bank, Los Angeles,
Calif., Frank L. King, President,
has

announced

announced.

the
annual

rency, it was announced by James

Com-

Schmidt, and Ralph J. Voss. Robert E. Williams, Vice-President

chairman of the Executvie Com-

record Oct. 2, 1958. Shareholders
were entitled to subscribe for one
share of new stock for each 10
shares of stock held last Oct. 2.
Proceeds of the $5,000,000 stock
sa*e wil1
divided equally between the bank's capital stock and
surplus, both of which will thus

mittee.

increase from $25,000,000 to $27,-

At the same time Mr King disMonHo. to rtshier
A. Elkins, Sr., Senior Chairman of closed the election of five top
Menzies to Cashiei.
dividend of $2.60 per share and the bank's Board oi Directors
administrative o f 11 c e r s to the
' Bank in St. increases the total dividends paid
The capital increase involved position of Senior Vice-President
First
National
each vear by $163 600
the sale of 125,000 shares of new of the bank. Named were: W.
Louis, Mo., on Jan. 13, according
Following the stockholders $20 par value shares of the bank's Wayne Glover, Fred S. Hanson,
to William A. McDonnell, Chairmeeting, major changes in the capital stock to shareholders of Darwin
A. Holway, Frank Hv.
.

™

The

„

elected

Board,

new

Brown
new

two

and

are

Erwin

Directors

were

George

Directors.

Stupp.

president

elected to

resignation of M. Weldon Rogers,
m

new

tional
Kansas

President of City Na-

Bank

City,

management
pany were

Directors

fill vacancies created by the death
of
John
N.
Marshall, and the

The

quarterly were declared
stock. This provides an

Trust

Mo.,

Kemper, Jr., who

was

Company,
R.

c.t

Directors.

The
W.

the

....

man

new

Tan

Crosby
elected Jan.

man

the

Trust

voted by the Board of
Charles E. Thwaite Jr.

was

the

elevated to

Board

Chair-

Directors

replacing John A Sibley Mr Sibiey remains on* the
Board
as

William

Woods,

Executive
Vice-President for the past two
years, was named Vice-Chairman
of the Board of Directors.

charge

The Board of Directors of Pres-

the

was

bank's

elected

legal
Secre-

tary.

H. D. Thompson and Henry
Tiarks have been elected Directors
the

Bank

combined total treal, Ltd.

$o5,000,000.
*

department,

London & Mon-

The bank is owned
jointly by the Bank of Montreak
and *he
of London & botitr
America, Ltd.

The Commercial and Financial Chronicle

(586)

Thursday, January 29, 1959;

* INDICATES

Now in

Securities
Dec.

filed

(par five

of common stock

400,000 shares

cents). Price—$6 per share. Proceeds—For research and
development program; and for equipment and working

Proceeds—To liquidate obligations

$57 per share.

Advanced Research Associates, Inc..
>

Registration

ing in the regular course of business.

Ave., Los Angeles 47, Calif.

son

accru¬

Office—1900 Slau-

Underwriter—None.

•
Armstrong Uranium Corp. (2/2)
4130 Howard Ave., Kensington, Md. J Jan. 16 (letter of notification) 3,000,000 shares of com¬
Underwriters — Wesley Zaugg & Co., Kensington, Md.,
mon stock (par one cent).
Price — 10 cents per share.
and Williams, Widmayer Inc., Washington, D. C. OfferProceeds—For mining expenses. Office—c/o Hepburn T.
Ing—Expected in January.
Armstrong, Round Up Heights, Cheyenne, Wyo. Under¬
writer—Bruno-Lencher, Inc., Pittsburgh, Pa.
Alaska Juneau Gold Mining Co.

Office

capital.

filed

Dec.

—

outstanding

640,660

Associated Bowling

common

of which 300,000 shares are to be offered cur¬
rently and the remaining 340,660 shares in the future.
Price—To be supplied by amendment.
Proceeds—To

stock,

Centers, Inc.
300,000 shares of 20-cent cumulative

Nov. 24 filed

preferred stock (par one cent) and 50,000 out¬
standing shares of common stock (par one cent). The
preferred shares are to be offered for public sale for the

selling stockholders. Office—6327 Santa Monica Boule¬
vard, Los Angeles, Calif.
Underwriter—Lester, Ryons

account

be offered for the account of

Co., Los Angeles, Calif.

the

company

the

and

common

will

selling stockholder. Price

—To be

Uranium Mines Ltd.
shares of common stock to be issu¬
able upon the exercise of outstanding stock purchase
warrants of the company which entitle the holders to
purchase common shares at $11 (Canadian) per share
at any time to and including March 2, 1959. Proceeds—
To be used for general corporate purposes and may be
applied to the redemption or repurchase of the com¬
pany's mortgage debentures. Office — 335 Bay St., To¬
Algom

Jan. 15 filed 822,010

Underwriter—None.

^Allied Laboratories, Inc.
(letter of notification)

aggregate market

•

stock

common

undetermined number

(par

$2.50)

not

value of $50,000 to

supplied by amendment. Proceeds—To acquire
bowling centers and increase working capital (part
used in defraying cost of acquisition of stock of
owner of a Brooklyn
(N. Y.) bowling center.
Office—
135 Front St., N. Y.
Underwriter — To be named by
amendment.
Offering—Expected any day.
•

Australian Grazing & Pastoral Co., Ltd.
13 filed 4,000,000 shares of common stock.

Jan.

offered

Purchase Plan. Price—90% of present market value. Pro¬
ceeds—To purchase the shares. Office — 320 V. F. W.

Building, 406 W. 34th Street, P. O. Box 44, Kansas City
41, Mo. Underwriter—None.

general corporate purposes. Office—665 S. Ankeny St.
Portland 14, Ore. Underwriter—First Pacific Investment

Corp., Portland, Ore.
.

IY2

for

each

held

(for a 15-day
$2 per share. Proceeds—For additional
working capital and new acquisitions, etc.
Office—30
Verbena Avenue, Floral Park, N Y.
Underwriter —
new

standby.

None.

Price

—

Offering—Expected about the middle of February.

American Asiatic Oil Corp.

Office—-^VTagsaysay Building, San Luis, Ermita, Manila,
Republfc of Philippines. Underwriter — Gaberman &
Hagedorn, Inc., Manila, Republic of Philippines.
American Buyers Credit Co.
Nov. 13 filed 5,000,000 shares of common

stock, of which

4,545,455 shares of this stock are to be offered for public
uBale at $4.75 per share. [Shares have been issued or are
Issuable

under

Life Assurance

with various

agreements

Buyers Life

Insurance Co.

policy holders
and

American

Co.

(both of Phoenix) permitting them
$1.25 per share. Sales personnel
have been given the right to purchase stock at $1.25
per share up to the amount of commission they receive
on stock sales made by them.]
Proceeds—For the opera¬
tion of other branch offices, both in Arizona and in other
to

purchase

stock at

states.

Office—2001 East Roosevelt,
:: derwriter—None.

American-Caribbean
Feb.

20c).
-

—To

Oil

Co.

Phoenix, Ariz.

Un-

(N. V.)

28, 1958, filed 500,000 shares of common stock (par
Price—To be supplied by amendment. Proceeds
discharge current liabilities and to drill 10 wells.

Underwriters—To be named by amendment.

Enterprise Fund, Inc., New York '
Oct. 30 filed 487,897 shares of common stock. Price—At
Proceeds—For

investment.

Distributor—Ed-

*r ward A. Viner & Co., Inc., New York.
American Growth

Fund, Inc., Denver, Colo.
Nov. 17 filed 1,000,000 shares of capital stock (par
cent).

Price—At market.

Office—800

Security

Proceeds—For

Building,

writer—American Growth Fund

Denver,

one

investment.

Colo.

Under-

Sponsors, Inc., 800 Se-

Price—$5
surplus.

notes, second

trust

notes

•

and

construction

loans.

may develop shopping menters and build or
purchase office buildings. Office—900 Woodward Bldg.,
Washington, D. C. Underwriter—None. Sheldon Maga¬
zine, 1201 Highland Drive, Silver Spring, Md., is Presi¬

dent.

Service, Inc.

Feb. 17, 1958, filed 375,000 shares of

common stock (par
$1). Price—$4 per share. Proceeds—To purchase equip¬
ment and supplies and for
working capital and other
corporate purposes. Office—Salt Lake City, Utah. Un¬

derwriter—Amos

Treat

Co., Inc., of New York.
Name—Formerly United States Telemail
Service, Inc. Offering—Expected early in 1959.
Change

Proceeds—To increase capital and

Avco

Manufacturing Corp., New York
of 5% convertible subordinated
debentures, due Feb. 1, 1979, being offered for subscrip¬

filed $14,931,900

Jan. 26, 1959 on basis of
$100 debentures for each 64 shares held; rights to expire
on Feb.
10, 1959. Price—100% of principal amount. Pro¬
ceeds—To reduce

short-term

Brothers

and

bank

loans.

Underwriters

Emanuel, Deetjen & Co., both

of New York.

Arden Farms Co.

Jan. 9

(letter of notification) 5,263 shares of $3 cumula¬
preferred stock (no par). Price—

Digitized fortive and participating
FRASER

$250 of debentures and

A ski filt and school.

Underwriter

None.!

—

•

Blossman Hydratane Gas, Inc. (2/16-20)
v
Dec. 29 filed $1,200,000 of 5% subordinated convertible;
.

debentures due Dec. 31, 1978 and 120,000 shares of com-'
mon
stock (par $1) to be offered in units of $500--of:
be

and

stock.

common

Price-nToj

supplied by amendment.

Proceeds—To retire short-;
term bank loans, and for working capital to be
u$ed for!
general corporate purposes. Business—Sale and distri¬
bution of liquified petroleum gas.
Office—Covington,
La.
Underwriters—S. D. Fuller & Co., New York and
Howard, Weil, Labouisse, Friedrichs & Company, New
Orleans, La.
B.

Cooperative,

Inc.

Jan. 12 (letter of notification) $162,000 principal amount
of
to

15-year 5% registered debentures due Sept. 15, 1970
offered for subscription by stockholders in units
each. Price—At par. Proceeds—To retire junior

of $500

bonds
due
Sept.
15,
1959.
Office—54
Springfield, Mass. Underwriter—None.

Bobbie

Oafcdale ..St.,
/

Bankers Fidelity Life Insurance Co.

28,1958, filed 258,740 shares of common stock (par
$1), of which 125,000 shares are to be offered publicly
and 133,740 shares to employees pursuant to stock
pur¬
chase options. Price—To public, $6 per share. Proceeds—
expansion and other corporate

lanta. Ga

purposes.

Office—At¬

Underwriter—None.

Bankers

Southern, Inc.
April 14, 1958, filed 8,934 shares of common stock. Price
—At par ($100 per share). Proceeds—For general cor¬
porate purposes. Underwriter—Bankers Bond Co., Louis¬
ville, Ky. Statement effective Jan. 15, 1959.
ic Barden Corp. (2/19)
filed 102,533 shares of common stock, to be of¬
subscription by stockholders at the rate of one

Jan. 22

fered for

share for each six shares held

1959; rights to expire on
supplied by amendment.

about Feb. 18,

about March 5.

Price—To be

Proceeds—To reduce bank loan

indebtedness; for property additions; to acquire manu¬
facturing laboratory equipment; and the balance for gen¬
eral corporate purposes. Office—East Franklin
St., Danbury, Conn. Underwriter — Shearson, Hammill & Co.,
New York.
I
'

Bargain Centers, Inc.
20 (letter of notification)

ordinated

30,000

convertible

debentures

Boston

Garden-Arena Corp.
(letter of notification) 2,150 shares of common
stock (par $1). Price—At-the-market (estimated at $23
per share).
Proceeds — To go to selling stockholders.

Nov. 24

Office—North

for

new

warehouse

due

stock " (par

and

Jan.

1969 and

working

capital.

Office—

Altschull, President, 1027 Jefferson Cir¬
cle, Martinsville, W. Va. Underwriter—Securities Trad¬
ing Corp., Jersey City, N. J.

Bowmar

5,000,000 shares of class A common stock
(no par). Price—$3 per share. Proceeds—For expansion
and acquisition or leasing of new sites.
Office — 2210
Bellechasse

Oct.

filed

Philadelphia, Pa. * Underwriter—None.
Mining Corp. Ltd.

800,000

shares of

common

stock.

Price-

Related to the market price on the Canadian Stock Ex¬

change, at the time the offering is made. Proceeds—To
be applied over the balance of 1958 and the next three
years as follows: for annual assessment work on the com¬
pany's properties (other than mining claims in the Mt.
Wright area in Quebec); for general prospecting costs;
and for general administration expenses. Office—Mont¬
real, Canada. Underwriters — Nicholas Modinos & Co.
(Washington, D. C.) in the United States and by Forget
&

Instrument Corp.
(letter of notification) $300,000 principal amount
5-year 6% notes with stock purchase warrants at¬

The

tached.

warrant, grants

stock of the

mon

the rignt to purchase com¬

the rate of 30 shares for
$1,000 principal amount of notes at the price o
per share.
Price—At par. Proceeds — To reduce;

each

company

current short-term indebtedness and for working capital.?
Office

—

Bluffton

Fulton Reid &

Rd., Fort Wayne, Ind. UnderwriterCo., Inc., Cleveland, Ohio..

Bridgenampton Road Races Corp.
23 (letter of notification) 15,000 shares of common
(par $1) to be offered for subscription by stock¬

Oct.

.share

Forget in Canada.

•

Big Bromley, Inc., Manchester, Vt.
Dec. 9 filed 6,000 shares of common stock,' $300,000 of
5% debentures due April 1, 1979. and $100,0% of 6%
notes due April 1, 1980, the common stock and deben¬

Nov.

record

for

each

1958

four

the basis of

one

new

held;

unsubscribed share
will be offered to current creditors in payment of all
or
part of claims, at the rate of one share for each $4
of

claims

discharged;, rights Jo expire about two weeks
mailing of offer. Price—S4 y•""" share. Proceeds—

after
To

current

pay

creditors.

Addrev

Bridgehampton, L. I., N. Y. Underwriter
ing—Has been delayed.

Box-506

None. Offer

—

Brookridge Development Corp.
19 (letter of notification) $200,000 of 6% 15-yea
debentures.
Price—At par ($500 per unit)
Proceeds—For expansion and working capital. Office
901 Seneca Ave., Brooklyn 27, N. Y.
Underwriter
Sano & Co., 15 William St., New York, N. Y.
Dec.

convertible

Captains Club, Inc.
22
(letter of notification)
165 shares of class
common stock (no par)
and 495 shares of class B com¬
mon stock (no par)
to be offered in units of one class
Jan.

share and three class B

Price

shares.

$540 per unit
Office—111 East

—

Proceeds—For general working capital.
39th

St., New York, N. Y.

Underwriter—None.

Carraco Oil

Co., Ada, Okla.
(letter of notification) 200,000 shares of

Price—$1.50

corporate purposes.
York.

per

share.. Proceeds

—

commo

For genera

Underwriter— Berry & Co., Nev

•

Cemex of Arizona,

Nov. 17 (letter of
stock

Inc.

notification) 300,000 shares of

(par 25 cents).

Price—$1

per

share.

commo

Proceeds

For working capital.
Address—P. O. Box 1849, 3720 E
32nd Streetr Yuma, Ariz. 'Underwriter—L. A. Huey Co.

Denver, Colo.
•

Central Illinois Electric & Gas Co.

Jan.

filed

Walnut Street,

Underwriter

Dec. 30

stock.

sub¬

c/o Edward H.

Station, Boston 14, Mass.
Co., Boston/Mass.

Weston W. Adams &

Nov. 10

$300,000

cents) to be
offered in units of $100 of debentures and 10 shares of
stock.
Price—$100 per unit. Proceeds—For equipping
and decorating a new store and acquisition of real estate
common

Price—To be supplied by amendment.
Underwriter—Bache &

working capital.
Co., New York..
; ;
/

holders

Management Corp.
filed 400,000 shares of common stock (par *
25 cents). Price—$1 per share. Proceeds—To reduce out¬
standing indebtedness and for working capital. Office1404 Main St., Houston, Texas.
Underwriter—McDonald,
Kaiser & Co., Inc. (formerly McDonald, Holman & Co.,
Inc.), New York.

new

stock

Feb. 10,1958,

•

(2/3-4)

15 filed 250,000 shares of capital stock (no
par), of
which 150,000 shares will be sold for the account of sell¬

$7.50

Feb.

For

Brooks, Inc., Cleveland, Ohio

Jan.

•

—

Statement effective Jan. 19.

tion by stockholders of record

Company

American Telemail

share.

ment effective Dec. 3.

Dec.

Dec. 17, 1957, filed 490,000 shares of capital stock. Price
—$10.20 per share. Proceeds — For investment in first
trust

per

Office—Atlanta, Ga. Underwriter—None. State¬

Bargain City, U. S. A., Inc.

Investment Co., Inc.

Business

units

units, $500 each, and of
Proceeds—For general corporate purposes/

Proceeds—For

Oct. 16 filed 250,000 shares of common stock (par $2.50).

curity Bldg., Denver 2, Colo.
American Mutual

par.

shares/ Price—Of

ing stockholders.

Autosurance Co. of America

Nov.

American

market.

Underwriter—None.

Bankers

Nov. 24 filed 100,000,000 shares of capital stock. Price—
Two cents per share. Proceeds—To selling stockholders.

In American

L, Cisco, Tex.

is President.

Robert Kamon

—Lehman

All-State Properties Inc.
- 1...
Dec. 29 filed 685,734 shares of capital stock (par $1) to
be offered for subscription by stockholders at the rate

offered

REVISED

par

Jan.

Allied Publishers, Inc., Portland, Ore.
Nov. 28 (letter of notification) 22,000 shares of common
stock (par $1).
Price—$8.50 per share. Proceeds—For

Price—

(56*/4 cents per share). Proceeds—To purchase
cattle; for improvements; to buy additional ranch in
Queensland, Australia; and for other corporate purposes.

exceed

employees pursuant to the company's Employees Stock

common

notes, at

Office—1301 Avenue

Jan. 19

tures

five

ITEMS

!5SUIV.

new

ronto, Canada.

•

debentures
con¬

vertible

ADDITIONS

SINCE

fered
rate

filed

for
of

145,940 shares of

subscription by

one

new

common

for

each

(2/19)

stock, to be of

stockholders

hold

the

record about Feb.

17* 1959; rights to expire on or abou
Price— To be supplied by amendment

March 5, 1959.
Proceeds—To be used for construction and for paymen
of bank loans. Underwriter—Stone & Webster Securities

Corp., New York.

•

Century Food Markets Co.
118,112 shares of common stock, (par $1) tc
be offered for subscription by holders of common stock
Jan. 9 filed

the rate of

one

new

share for each five shares held

Price—$5 per share. Proceeds—To discharge bank loar
and to replenish working capital.
Underwriter—Jannej
Dulles & Battles,

Inc., Philadelphia, Pa.

...

City Lands, Inc., New York
Jan. 13 filed 100,000 shares of capital stock.

Price—S2C
Proceeds—To invest in real estate. OfficeRoom 3748, 120 Broadway, New York. N. Y. Underwrite*'

per

share.

—Model, Roland & Stone, New York. Offering
pected in early part of February.

—

Ex¬

Volume

The Commercial and Financial Chronicle

Number 5816

189

(587)

Finance Corp.

Civic

Jan.

(letter of notification) 6,000 shares of common
stock (par $4) to be offered for subscription by holders

Connecticut Light & Power Co. (2/6)
16 filed 795,000 shares of common stock

Jan.

to be offered

of stock

1959, at the rate of

notes, series A.

purchase warrants attached to the 5Y2% capital
Price — S15 per share. Proceeds — For
working capital.
Office—633 N. Water Street, Mil¬
waukee, Wis. Underwriter—None.
'
«
>
Clute Corp.

Aug. 21 (letter of notification) 300,000 shares of common
stock (par one cent). Price—$1 per share. Proceeds—To
'

additional costs of construction; and for retirement
of obligations and working capital.. Office — c/o John
Harlan Lowell, 2200 Kenton, Aurora, Colo. Underwriter
—Lowell, Murphy & Co., Inc., Denver, Colo.
pay

Engineering, Inc. f '
Dee. 19 filed-64,011 shares of capital stock to be offered
-in exchange for 81,002 shares of the outstanding common
stock and for 2,131 shares of the outstanding $100 par
•preferred stock of General Nuclear Engineering Corp.,
-tat the rate of seven shares and 3.4302 shares of Combus¬
tion Engineering stock for each 10 shares of common
•

-stock and each share of preferred

stock, respectively, of

/General Nuclear Engineering (of Dunedin, Fla.).
Commerce Oil
Dec.

Oct.

amendment.

from

Refining Corp.

1968 and 3.000,000 shares

of stock and $100 of debentures "~i nine shares

of stocV
Price—To be supplied by amendment.
Proceeds — T<
construct refinery. Underwriter—Lehman Brothers. Ne®
York

Offering—Indefinite

Commercial Investors Corp.

900,000 shares of com¬
mon
stock.
Price—At par (10 cents per share).
Pro¬
ceeds—For investment. Office—450 So. Main St., Salt
Nov.

Lake
-•

108,667 units of 108,667 shares of common
(par one cent) and 108,667 common stock purchase
warrants, each unit consisting of one common share and
stock

Proceeds—Together

with

funds

one

warrant, to be offered for subscription by holders
common stock of Cormac
Photocopy Corp. at the
of one such unit for
every six shares of Cormac
Photography common held. Price—$2 per unit. Pro¬
of the

available

rate

internal

sources
are to
be used to repay certain
outstanding bank loans, to finance in part the company's
1959
construction
program,
and for other corporate
purposes. Underwriters
Morgan Stanley & Co., New
York; Putnam & Co., Hartford, Conn.; Chas. W. Scran-

ceeds—To finance the company's development and mar¬
keting program. Office—80 Fifth Avenue, New York,
N. Y.
Underwriter—Ross, Lyon & Co.

—

York
•

Inc., New York.
★ Corporate Leaders of America, New York

Co., New Haven, Conn.; Estabrook & Co., New
and Boston, Mass.

Jan. 26 filed

(by amendment) an additional $25,000,000
certificates, series B periodic pay¬
ment certificates and 992,840
participations and 2,500,000
Corporate Leaders trust fund certificates, series B single
payment certificates and 101,320 participations.
of corporate trust fund

Consolidated Edison Co. of New
York, Inc.

Dec.

filed

$59,609,500 of 4% convertible debentures
being offered for subscription by com¬

due Aug. 15, 1973

stockholders

mon

the

rate

$100 principal amount

Counselors Research Fund, Inc., St. Louis, Mo.
Feb. 5, 1958, filed 100,000 shares of
capital stock, (par one

of debentures for each 25 shares of stock held of record
on

Jan.

26,

rights to
Proceeds—To

1959;

expire

Price—

cent).

repay short-term bank notes,
utility plant. Underwriters—Morgan
Stanley & Co. and The First Boston Corp., both of New

Louis.

(flat).

Feb.

13.

(letter of notification)

City, Utah. Underwriter—Earl J. Knudson & Co..
City, Utah.

Salt Lake

Oct.

Cooperative Association,
City, Mo.

filed

preferred

ceeds

stock

(cumulative

extent

earned

before

patronage refunds). Price—For certificates at $100 per
unit; and the preferred stock at $25 per share. Proceeds
—For retirement of maturing certificates of indebted¬
ness, redemptions on request of certificates of indebted¬
ness prior to maturity and of 5%% preferred
stock; the
possible improvement and expansion of present facili¬
ties; and the acquisition of manufacturing plants and

Denmark
Jan. 16 filed

Broad

;

Street Trust Co.—

of 1959.

—To

.....Common

—

s <

Great American

Nelly Don, Inc.——

TV Junior

•'

Bobbie

Barden

„r

______Common

Brooks, Inc.—

Jet-Air

Corp.

—

(Bids

(F.

Moseley

11:30

150,000 shares

Co.)

1,350.000

EST)

a.m.

Pacific

Power

Smith. Barney & Co.; Harriman Ripley
and Lazard Freres & Co.) '$15,000,000

Co., Inc.;

(Tuesday)

to be

Common
invited)

(Wednesday)

Common
11

a.m.

EST)

(Bids

96,765

.Common

300,000

Monongahela Power Co

(Friday)

February 6

;

(Bids

Connecticut Light & Power Co.
Common
(Offering to stockholders—underwritten by Morgan Stanley
& Co.; Putnam & Co.; Chas. W. Scranton & Co.;
Estabrook

and
^

Power

...Common

April

Common

Investors Research Fund, Inc—
(Bache

$5,891,280

CO.)

(C.

Abraham

Inc: >

Co.,

Plymouth Securities Corp.)

(Dillon.

Kuhn,

June

(Bids

Government Employees Variable

Mississippi Power

Fund)

*20,000,000

Invited)

Bonds

$25,000,000

(Tuesday)
$20,000,000

$25,000,000

February

invited)

$5,000,000

September 10
Georgia

Power

(Thursday)

Co.

(Bids

Bonds
be

invited)

$18,000,000

(S.
&

Fuller

Co.)

Co.

and

Howard

$1,200,000 debentures

(Sire

Plan

and

Portfolios.

Debentures & Pfd.

Seer.lities Corp.

and

Roman

Montana

Power
(Bids

$500,000

Common

U. S. Land Development Corp
(Aetna

Labouisse,

Inc.)

The

company

subordinated

proposes

outstanding 12% debentures of three subsidiaries
Office—1 South Main

Federated
17

Finance

Street, Port Chester,

Co.

(letter of notification)

subordinated

$300,000 of 10-year 6%

debentures.

Price—At

par (in de¬
—
For working
capital, to make loans, etc. Office—2104 "O" St., Lin¬
coln, Neb. Underwriters — J. Cliff Rahel & Co. and
Eugene C. Dinsmore, Omaha. Neb.
•
*

nominations of $1,000

•

each). Proceeds

Fidelity Capital Funds, Inc., Boston, Mass. (2/2)'
Price—$12

per

Postponed Financing

Frledrichs
120,000 common shares

Sire Plan of Elmsford. Inc.

1968.

Underwriter—None.

Johnson* $1,055,000

share.

Proceeds

Hornblower

Debens. & Com.

Weil,

due

Jan. 12 filed 1,000,000 shares of capital stock.

(Monday)

for the

senior

Bonds

corpora¬

to offer
$210,000 of the debentures to purchase the capital stock
of Consumers Time Credit, Inc., a New York
company;
$442,000 of the debentures in exchange for Consumers
debentures; and $226,000 of the debentures in exchange

Nov.

(Thursday)

$7,500,000

Hydratane Gas, Inc

during the development period of the

Underwriter—None.

Federated Corp. of Delaware
Dec. 29 filed $918,000 of 6% convertible

Common

Blossman

Underwriters—Lee Higginson Corp., and P. W.

Feb. 20, 1958, filed 300,000 shares of common stock. Price
—At par ($5 per share). Proceeds—To cover

Annuity

Insurance Co
Common
(Offering to stockholders—underwritten by Johnston, Lemon &
Co.; Eastman Dillon,
Union Securities & Co. and
Life

Abacus

Bonds

(Thursday)

.eceived)

(Bids
-

invited)

June 25

(Thursday)

February

capital.

debentures

Virginia Electric & Power Co

$55,000,000

Co.)

rate of one new share for each four shares held. Price—
To be supplied by amendment. Proceeds—To complete
modernization and expansion program and for working

of Federated.

Reynolds & Co., Inc.; and

Inc.;

Lceb

$14,000,000

(Thursday)

Southern Electric Generating Co
to

Forge & Steel Corp.
237,918 shares of common stock, to be of¬
fered for subscription by common stockholders at the
Jan. 9 filed

tion.

selling stockholders. Price—To be supplied by amend¬
ment.
Proceeds—For working capital.
Underwriter—F.
S. Moseley & Co.,
Boston, Mass.

expense

Bonds

invited)

(2/4-5)

operating

$7,000,000

(Bids

Preferred

Read & Co.,

Electro-Voice, Inc., Buchanan, Mich.

Ethodont Laboratories, Berkeley, Calif.

(Wednesday)

May 28

$300,000

Reynolds Metals Co
•

Power

(Wednesday)

February 11

(Rids

....Common

Manufacturing Corp

Standard

Alabama

$250,000

invited)

April

Common

Military Publishing Institute, Inc

Wisconsin Power & Light Co
(Bids

(Monday)

February 9

•

(Thursday)
Bonds

(jointly); Glore, Forgan & Co.; Harriman Ripley &
Inc.; Drexel & Co. and Equitable .Securities Corp.
(jointly). Bids—Scheduled to be received on Feb. 24.

Brooks & Co., Inc., both of New York City.

$16,000,000

Co
(Bids

stockholders—to be underwritten by The First
Boston Corp-'
280,000 shares

(Offerine to

Bonds

invited)

April 2
Gulf

795,000

Co.)

Rochester Gas & Electric Corp.__
>

to be

(Tuesday)

invited)

& Co.

Erie

Utilities Associates
to stockholders—bids

Jan. 13 filed 150,000 shares of capital stock (par
$2), of
which 75,000 shares will be offered for the account of

California Electric Power Co

(Kuhn, Loeb & Co.;
At 3

$50,000,000

Light Co

March

Bonds

Denmark (Kingdom of)——

by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; White, Weld &
Co.; The First Boston Corp.;
Kuhn, Loeb & Co.; Eastman Dillon, Union Securities &
Co.; A. C. Allyn & Co., Inc., and Ladenburg, Thalmann
Co.

Bonds

invited)

March 4

Eastern

(Thursday)

February 5

(Offering

(Bids

Universal Oil Processes, Inc
Common
(Lehman Brothers; Smith, Barney & Co.; and Merrill Lynch,
Pierce, Fenner & Smith, Inc.) 2,900,000 shares

$10,000,000

(Wednesday)

March 3

„———Common

(Bids

Common

—Common

——

Southern

Illinois Bell Telephone Co

(Bids

Electro-Voice, Inc.

* Duquesne Light Co. (2/24)
27 filed $10,000,000 of first mortgage bonds due

March 1, 1989. Proceeds—To
repay bank loans and for
construction program.
Underwriter—To be determined

(Tuesday)

be invited)

•

Jan.

Shearson,

Bonds

February 25

$2,190,000

MST)

Light Co

■

Equip. Trust Ctfs.
noon

102,533

Co. )

February 24

(Wednesday)

& Rio Grande Western RR.
(Bids

$375,000

(Offering to stockholders—underwritten by Stone & Webster
Securities Corp.) 145,940 shares

•

Duquesne
Denver

Co.)

(Thursday)
Common

Hammill

——Common

February 4

Central Illinois Electric & Gas Co

Co.)

(Not underwritten.) $100,000

$7,125,000

stockholders—underwritten

*; •'

'•*

Plohn

Underwriter—None.

stock (par 50
cents). Price—$3 per share, Proceeds—For acquisition
of undeveloped real
estate, for organization or acquisi¬
tion of consumer finance
business, and balance to be
used for working capital.
Underwriter — Investment
Service Co., Denver, Colo., on a best efforts basis.

(Wednesday)

CST)

common

new

Diversified Inc., Amarillo, Texas
Jan. 6 filed 300,000 shares of common

Equip. Trust Ctfs.

noon

Proceeds—For

porium, Pa.

200,000

Inc.)

Corp

(Offering

(Tuesday)

(Offering to stockholders—underwritten by Bache &
/
150.000 shares
' '

Co.,

(Charles

Bonds

Common

February 19

52,600

—

stock. Price—$1
equipment, repayment of
loan, acquisition of properties under option, and other
corporate purposes. Office—Toronto, Canada, and Em¬

Common

—

Price—To be supplied by amendment. Proceeds
added initially to the Kingdom's foreign ex¬

share.

per

Publications, Inc.Lu-'—Com. & Warrants

(Stern Brothers & Co. and Barret, Fitch, North & Co., Inc.)

February 3

(Bids

.-Common
$249,500

Inc.)

Co.,

(2/5)

reserves and may be applied to the acquisition
of capital equipment required for the
development of the

$25,000,000

Southern Pacific Co

$12,000,000

Corp.)

Publications, Inc
S.r Burnside

(Mortimer

Crosby

The

Weeks and

CST)

a.m.

February 18

—Common

Fidelity Capital Fund, Inc

10:30

(Blyth

HalloweJl, Sulzberger,
Jenks, Kirkland & Co. and Stroud & Co., Inc.) $1,120,000

k.(Hornblower

(Kingdom of)

change

(Tuesday)

United Control Corp

(Offering to. stockholders—underwritten by

(Bids

St.

$15,000,000 of 15-year External Loan Bonds

Derson Mines Ltd.
June 5 filed 350,000 shares of

Public Service Co. of Indiana, Inc

$300,000

lr*c.)

Corp.,

Underwriters
Kuhn, Loeb & Co.,
Smith, Barney & Co., Harriman Ripley & Co., Inc., and
Lazard Freres & Co., all of New York.

February 17

....../.Common

(Bruno-Lencher,

investment.

Sales

—

Danish economy.

(Monday)

Armstrong Uranium Corp
-

Proceeds—For
Research

For repayment of loan; purchase of
plant and
equipment; raw materials and supplies; and for
working capital, etc. Office—U. W. National Bank Bldg.,
1740 Broadway,
Denver, Colo. Underwriter—L. A. Huey,
Denver, Colo.

NEW ISSUE CALENDAR
February 2

Counselors

office

$6,000,000 of 5^% 25-year subordinated
indebtedness, and 60,000 shares of 5Vz%

certificates

—

Robert H. Green is President.

Cryogenic Engineering Co.
Sept. 22 (letter of notification) 150,000 shares of class A
common stock (par 10
cents). Price—$2 per share. Pro¬

Consumers
Kansas

Price—At market.

Underwriter

York.

offered in units as follows: $l,00u of bonds and 48 sharei

Jan. 22 filed

subsidiaries will be entitled to purchase shares not sub¬
scribed for by stockholders.
Price—To be supplied by

100%

1968, $20,000,00 of subordinated debentures du*
f common stock to b»

1.
1,

★ Cormac Chemical Corp.

new

less then

and for additions to

16,1957 filed $25,000,008 of first mortgage bonds due

Sept.

one

crude oil properties if favorable
opportunities therefore
arise. Underwriter—None.

held; rights to expire about Feb. 24.
Certain officers and employees of the
company and its

ton

Combustion

(no par)

stockholders of record Feb. 5,
share for each unit of 10

common

Co
invited)

(Bids

Finance

$20,000,000

Pennsylvania Power Co
be

invited)

For investment.

Chicago,

Dec.

For

filed

111.,

Distributors—

and

The

Crosby

Industry, Inc.

200,000

shares of class

Price—At par ($1.50 per share).

Bonds
$8,OCO.OOO

—

Weeks,

Corp., Boston, Mass.
Bonds

to be

common

stock.

Proceeds—For working

Continued

page

Chronicle

The Commercial and Financial

Continued from page

Office—50E Ainslev Blag., Miami, Fia. Under R. F. Campeau Co., Penobscot Bldg., Detroit.

capital.
writer

Dec.

Guaranty Life Insurance Co. of America
14 filed 88,740 shares of class A common

—

Nov.

\//Y.;-/;-

Florida Builders,

15-year sinking fund sub¬
and 40.000 shares of common stock,

N. W., Washington,

Fluorspar

Corp. of America

(par 2c cents),'

stock

For mining expenses.

York.

Price—S2.25 per share. ProceedsOffice—4334 S. E. 74th Ave.. Port¬
— Ross Securities Inc.. New

N. Y.

fort

•:

instituted by SEC on

Port &

Pierce

Investment Corp.,

Foundation

Atlanta, Ga.

General Alloys Co.

.West First St.,

IPjoeeeds—Tc the Attorney

New York

stock <u.
(pax $1)
General of the United State*

competitive biddini
.Probable bidders: Blyth & Co., Inc., and The First Bo*
.ton
Corp.
(jointly): Xuhn, Loeb & Co.; Lehmai
Brothers," and Giore, Forgan & Co. (jointly). Bids—Had
fbeen scheduled to be received up to 3:45 p.m. (EDT) ox
May 13 at Room 654, 101 Indiana Ave., N. W., Washinf
but bidding has been

postponed.

7V Glens Falls Insurance Co.
{
(letter of notification) an aggregate market value
.of $300,000 of the company's capital stock (par $5) to
be offered to qualified employees under Stock Option
end Instalment Purchase Plan. Price—At market. Office
—291 Glen St., Glens Falls, N. Y. Underwriter—None.
-Jan. 2

Government Employees

(each due 10 years from first day of
issued). Price—100% of principal
for Israel, 215

the

rights.

Price

Jan.

(par

Price—$5

$1).

Employees Insurance Co., on the basis of one warrant per
eliare of stock held on Jan. 30. 1959 (1,334,570 shares are
row outstanding); (2) to holders of common stock (par
$1.50) of Government Employees Life Insurance Co., on
the basis of IY2 warrants per share of stock held on Jan.

30, 1959 (216,429 shares are now outstanding); and (3) to
holders of common stock (par $5) of Government Em¬
ployees Corp., on the basis of V2 warrant per share of
stock held on Jan. 30,1959 (as of Dec. 31* 1958 there were
143,708 shares of stock outstanding and $589,640 of 5%.
convertible capital debentures due 1967, convertible into
chares of common at $28.0374 per share.
If all these
debentures were converted into common stock prior to
the record date, a total of 164.733 common shares would
Warrants will expire on Feb. 27, 1959.
share. Proceeds—For capital and surplus.
Office
Government
Employees' Insurance Building,
Washington, D, C. Underwriters — Johnston, Lemon &
Co., Washington. D. C.: Eastman Dillon, Union Securities
.& Co.. New York: and Abacus Fund. Boston, Mass.
'
L>e outstanding;

3974 to March

For

per

Grain Elevator Warehouse Co.

Nov, S filed 190,000 outstanding shares of common

stock
National Alfalfa Dehydrating & Milling
Co., holder of the 100,000 common shares is offering to
its common stockholders preferential warrants to sub(par 10 cents).

scribe to 98,750 shares of" Grain

basis of

held

Elevator stock

the

one

common

warrant to purchase one-eighth share of
Grain Elevator- ftock for each share of National Alfalfa
on

Jan.

Price-—$2 pet share.
Office—927

writer—None.

Market

19, 1959; rights to expire Feb. 16
Proceeds—To
Street.

selling stockholder.

Wilmington.

Del.

Under¬

Statement effective Jan. 12.

(2/2-6)
(letter of notification) 130,000 shares of com¬
mon stock
(par 10 cents... of which 30,000 shares will
be offered for 30 days to the company's employees, and
-•to the company's news dealers, wholesalers and distributors and their employees at $1.65 per share; and
100,000 shares will be offered to general public at $2
per

share. Proceeds—To satisfy creditors' claims and for

amount. Proceeds—

improvements, etc. Underwriter—Development Corp.

Inc.

Itemco

of notification) 200,000 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—To
acquire machinery and equipment and additional space
for test laboratories; and for working capital. Office—
4 Manhasset Ave., Port Washington, L. I., N. Y. Under¬
writer
B. Fennekohl & Co., 205 East 85th St., New

Nov. 28 (letter

per

York, N. Y._

Hilton Credit

Corp., Beverly Hills, Calif.

18 filed 1,927,383 shares of common

Dec.

stock (par $1)

being offered for subscription by common stockholders
of record Jan. 15 of Hilton Hotels Corp. at the rate of
one share of Hilton Credit stock for each two shares of

stock; rights to expire on Feb. 2. Price—
Proceeds. — Together with bank loans,
will comprise the operating funds of Hilton Credit and
will be used for general corporate purposes and to
finance the company's purchase of charge accounts from
Hilton Hotels

$3.23 per share.

Hilton Hotels and other establishments who may

Underwriter

—

agree

Carl M.

Hinsdale Raceway,

Inc., Hinsdale, N. H.
capital trust certificates evidencing 1,000,000 shares of capital stock, and 2.000 debenture notes.
Price—The common stock at par ($1 per share) and the
notes in units of $500 each. Proceeds—For construction
of a track, including land, grandstand, mutual plant
building, stables and paddock, dining hall, service build¬
ing, administrative building, penthouse, tote board and

Dec. 29 filed

clubhouse.

Underwriter—None.

.;:■-•///;

•

;

•

(2/3-4)
Dec. 5 (letter of notification) 10,000 shares of class A
common stock
(par $1.50). Price — $10 per share. Pro¬
ceeds—For purchase of modern automatic filling equip¬
ment and for marketing and advertising program. Office
—85-18th Ave., Paterson, N. J. Underwriter—None.
•

U nderwriter—N one.

Jet-Aer

Paterson,

Corp.,

N. J.

Kimberly-Clark Corp.
stock (par $5) to
stock of the Ameri¬

Dec. 30 filed 225,000 shares of common
be offered in exchange for common
can

Envelope Co. of West Carrollton,

of three-quarters

Ohio,

the basis

share of Kimberly stock for each
The offer will expire on Feb. 27,

of American.

1959.

The exchange is

contingent

acceptance by all

of the stockholders.

if Kirkham-Reed International Corp.
Jan. 15 (letter of notification) 300,000 shares of common
stock.
Price—At par
($1 per share).
Proceeds—To

produce
Wilshire
None.

two motion pictures.
Office—Suite 808, 3440
Boulevard, Los Angeles. Calif. Underwriter-

Co., Inc., Arnett, Okla.
Dec. 23 filed 400,000 shares of common stock. Price—$2
per share. Proceeds—For machinery and equipment and
exploration purposes. Underwriter—None.
Laure Exploration

if LEL, Inc.
Jan. 22 (letter

of notification) 150,000 shares of common

Tune 12 filed

Hoagland A Dodgt Drilling Co., Inc.
27,000 shares of capital stock. Price—$lf
share.
Proceeds—To be used fn part for the exaloration of mines and development and operation of

stock (par 20 cents). Price—$1 per share. Proceeds—To
retire loans and notes and for working capital. Business

aer

—Engaged in the design, manufacture and sale of elec¬

nines and in payment of indebtedness.
Vriz. Underwriter—None..

N. Y.

•

Holiday Inns of America,

Office—Tucson

35,298 shares of common stock, to be offered
subscription by common stockholders (other than
the Board Chairman and President and their families)
at the rate of

one

new

share for each four shares held.

Proceeds—In ad¬
working capital and

Price—To be supplied by amendment.

complete the current portions of construction costs.
Underwriter—Equitable Securities Corp,, Nashville, Tenn.

Home Owners Life Insurance Co.

•

stock (par $1)
stockholders 011 the
basis of one additional share for each two shares held
as of Jan. 21,
1959; rights to expire on Feb. 5. Price—
$6 per share.
Proceeds—For working capital. Office—
Fort Lauderdale, Fla. Underwriter — H. Hentz & Co.,
Dec.

being

19 filed

offered

153,840 shares of common

for subscription

New York.

—

380 Oak St., Copiague, L, I.,

Corp. >
shares of capital stock (par
$1).
Price—$5 per share.
Proceeds—To acquire stock
control of "young, aggressivd> and expanding life an
other insurance companies and related companies and
then to operate such companies as subsidiaries." Under¬
writer—First Maine Corp., Portland, Me. Y "

Home-Stake Production Co.,

Tulsa, Okla.
stock (par $5).
Price—$6 per share. Proceeds—For working capital and
general corporate purposes.
Office — 2202 Philtower
Bldg., Tulsa, Okla. Underwriter—None.

fered

to acceptance

by holders of at least 80% of the outstand

ing Altec stock.
•

Los Angeles

Price—S3

share. Proceeds—To be used for new packing houses,
for purchase of citrus groves and for the planting of nev
groves.
Office—Tel Aviv, Israel. -Underwriters-—None

Drug Co.

Oct. 3 filed 50.000 shares of capital stock (no par) being
offered for subscription
on

$10.50

per

by holders of outstanding stock
a new share

the basis of 35 TOOths of

for each share held:

rights to expire

Jan. 30. Price—<

share to stockholders: $11.50 to public. Pro¬
working

ceeds—To reduce short term bank loans and for

capital.
Office — Los Angeles. Calif.
Underwriter Dempsey-Tegeler & Co.. Los Angeles. Calif.
LuHoc

9. C. P. Israel Citrus Plantations Ltd.
Dec. 23 filed 750,000 shares of common stock.

Ling Electronics,, Inc.
335,000 shares of common stock, to be of¬
in exchange for the outstanding capital stock of
Altec Companies, Inc., on the basis of one share of Lin
stock for one share of Altec stock. The offer is subjec

Jan. 27 filed

of record Jan. 2

Nov.. 5 filed 116.667 shares of common

per

Office

Underwriter—Bertner Bros., New York, N. Y.

Life Insurance Securities

for

dition to other funds, to be added to

tronic equipment.

March 28, 1958, filed 1,000.000

Inc.

Dec. 30 filed

Great/American Publications, Inc.

Dec.

savings bonds
the month in which

1, 1978) and 10-year dollar

Fourth Ave., New York City. Offering—
Expected early in March, 1959.

—

bonds,

$300,000,000 of second development

filed

part to consist of 15-year 4% dollar coupon bonds (to
be issued in five series maturing serially from March 1,

Loeb, Rhoades & Co., New York.

(2/12)

shares of common stock (par $1)
tc be offered by company on or about Feb. 12. 1959* viz;
to holders of common stock (par $4) of Government

•

New York.

(The State of)

Israel

—

to honor Carte Blanche cards.

Variable Annuity Life

Nov. IS filed 2,500,000

guna

Development Corp.

Highway Trailer Industries, Inc.
Nov. 24 filed 473,000 outstanding shares of common
stock (par 25 cents). Price—At prices generally prevail¬
ing on the American Stock Exchange.
Proceeds — To
selling stockholders.
Office—250 Park Avenue, N. Y.

TFndenvriter—To be determined by

share. Proceeds—For investment. Office—922 LaSt., Santa Barbara, Calif. Investment Advisor—In¬
vestors Research Co.. Santa Barbara, Calif. Underwriter

per

share. Proceeds—For
payment of past due accounts and loans and general
working capital. Office — 35-10 Astoria Blvd., L. I. C.
3, N. Y. Underwriter—Albion Securities Co., Suite 1512,
11 Broadway, New York 4, N. Y.

Jan 14, 1957 filed 426.988 snare* of common A
.fpar) and 1.537.500 shares of common B stock
.

(2/9)
stock. Price—$12

Inc.

filed 490,940 shares of common

—

General Aniline A Film Corp.;

Jan. 9

—Bache & Co.,

stock

Boston, Mass.

Research Fund,

Investors

Oct. 22

Underwriter—William S

Boston, Mass.

IPrescott & Cc.,

;

Underwriter—None.

Lauderdale, Fla.

Heliogen Products, Inc.
(letter of notification) 28,800 shares of common

(letter of notification) 45,250 shares of common
which 16.900 shares are to be offered
to employees and the remainder to the public.
PriceTo employees, $1.1805 per share.
Proceeds—To purchase
find install machinery and equipment.
Office—367-405

Price—$3

(letter of notification)

writer—None.

acock (par $1) of

Florida
55,555 shares of common
stock (par two cents). Price—$4.50 per share. Proceeds
—For capital account and paid-in surplus.
Office—At¬
lantic Federal Building, 1750 E. Sunrise Boulevard, Ft,
9

At par. Proceeds — To repay
debts/acquisition of investments, and for general pur¬
poses.
Address—P. O. Box-348, Albany, N. Y. Under¬

Nov. 17

& Co., Wash¬

Investment Corp. of

Oct.

stock, ol which
offer 95,000 shares and 105,000

cise

Underwriter—None.

{Insurance Co.

Lemon

(letter of notification) 22,820 shares of non¬
voting convertible preference stock (par $12) to be
offered for subscription by stockholders on the basis
of one share of convertible preference stock for each
10 shares of common stock held on or about Nov. 1,
1958. Stockholders will have 45 days in which to exer¬

Oct.

Light Co, of Columbus
(letter of notification) 15,000

25.. D. C..

Washington, D. C.

Bank,

$5,000,000 of notes (series B, $500,000, two-

capital. Underwriter—Johnston,
ington, D. C.

be sold for the account of
and General Manager.

Heartland

order proceedings

Stop

)

unit; and series D, $3,500,000, 6-year, 5% per unit). Price
—100% of principal amount.
Proceeds — For working

Bernard Kardon.
Price — $3 per
share.
Proceeds—To eliminate $100,000 of outstanding
bank loans, and for working capital. Office—520 Main
Street, West bury, N .Y. Underwriter—Milton D. Blauner
& Co., Inc., New York.
Offering—Expected sometime
during the middle part ot February.
;

shares of common
stock (par $5) being offered for subscription by stock¬
holders of record Jan. 15 on a pro rata basis; rights to
.expire on Feb. 5. Price—$19 per share. Proceeds—For
working capital. Office -— 107 13th St., Columbus, Ga.

'ton

3% per unit; series C, $1,000,000, four-year 4% per

year,

purchaser

Vice-President

231.988 shares of common stock to be of¬
subscription by stockholders: unsold portion
to be offered publicly. Price—$12.50 per share. Proceeds
—To repay notes.
Office—515 Candler Bldg., Atlanta,
Ga. I nderwrlter—None.
Gas

original

filed 200.000 shares of common

shares will

for

Dec. 30

the

Jan. 15.

the company proposes

13 filed

fered

International
Dec. 2.9 filed

Harman-Kardon, Inc.

Jan.

Beach, Fia
Jan.

instituted by SEC.

share of stock at 50 cents
per share at the expiration of
13 months after com¬
mencement of such offering.]
Stop order proceedings

Terminal Co.
Nov. 25 filed 2.138.500 shares of common stock (par SI)
Price—$1.25
per share.
Proceeds—To pay short-term
loans and for" completing company's Port Development
Flan and res: added to general funds.
Office — Fort
Pierce, Fia Underwriter—Frank B. Bateman, Ltd., Palm
<

entitle

rights

which

department.

development

and

thereof to purchase one-half

Underwriter

6. Ore

land

quently filed. Price—To be related to the market price.
Proceeds—For working capital and to enlarge research

(par 25

588,000 common shares issuable upon exercise
options rights previously offered (Oct. 19,

1957),

notification) 133,333 shares of common

(N. Y.)

1958, filed 150,000 shares of common stock (par
10 cents): reauced to 135.000 shares by amendment subse¬

1,176.000

basis. State¬

Feb. 28,

Price—$2 per share. Proceeds—To acquire funds
to test drill, explore, and develop oil and gas properties
Underwriter—None.
[The registration includes an ad¬

ditional

(par one

18.

Industro Transistor Corp.

D. C. Underwriter—None. Statement

1,000,000 shares of common stock

22 filed

Washington, D. C.

Washington, D. C., on a best efforts

ment effective Nov.

cents).

liquidation of bank loans and
■other corporate purposes.
Office—700 43rd St., South,
Petersburg, Fla, Underwriter—None,
Oct. 14 (letter of

both of

Hamilton Oil & Gas Corp.
Oct.

pansion program; and for

capital

effective Dec. 39.

units of $100 principal amount of deben¬
tures and one share of common stock. Price — $110 per
tinit. Proceeds—For purchase and development of sub¬
division land, including shopping site; for new equip¬
ment
and project site facilities;
for financing ex¬

Thursday, January 29. 1959

:ent). Price—$1 per share. Proceeds—To develop and
jperate graphite and mica properties in Alabama. Cnlerwriters—Dearborn & Co. and Carr-Rigdom & Co*,

Price—$5.35 per share. Proceeds—To
capital and surplus. Office—815 15th Street,

increase

to be offered in

July 24 filed 600,000 shares of common stock

(par S1.80).

stock

inc.

$4,000,000 of 6%

1 filed

ordinated debentures

industrial Minerals Corp.,'

general corporate purposes.- Office—41 Ex42nd St., New
York 17, N. Y.
Underwriter—Mortimer B. Burnside &
Co.. Inc.. New Y'ork 5, N. Y.\

Mich,

(588)

Mining Corp.

Sept. 29 filed 350,000 shares of common stock.

Price—$£

share. Proceeds — For the acquisition of properties
under option and for various geological expenses, test
drilling, -purchase of equipment, and other similar pur-l
per

Volume 189

Number 5816

The Commercial and Financial Chronicle

Offices—Wilmington, Del., and Emporium, Pa,

poses.

Underwriter—None.

share.

& Share

Price—$5

Proceeds-^To reduce current indebtedness to

Walter E. Heller &

Co.

derwriter—Plymouth Bond

Corp., Miami, Fla.

^ Magic Mountain, -Inc., Golden, Colo.
Jan. 27 filed 2,250,000 shares of common stock. Price—
$1.50 per share. Proceeds—For construction and working
capital. Underwriter — Allen Investment- Co., Boulder,
Colo., on a best-efforts basis.
Mairco, Inc.
Jan. 6 (letter of notification)
600 shares of common
stock to be offered for subscription by stockholders of
record Jan. 10, 1959 on the basis of one share of addi¬
tional

common

stock for each five shares

held; rights to
expire on Jan. 30, 1959. Price—At par ($100 per share).
Proceeds—For inventory and working capital. Office—
1026 N. Main Street,
Goshen, Ind. Underwriter—None.

• Massachusetts I nvestors Trust
Jan.

filed

(by amendment)

additional

10,000,000

beneficial interest.
Price—At market.
ceeds—For investment. Office—Boston, Mass.

Pro¬

Merchants Petroleum Co.
Oct. 8 (letter of notification)
159,395 shares of common
stock (par 25 cents) being offered for
subscription by
stockholders of record Nov. 24, 1958 on the basis of one
new

for

each

five

held; rights to expire
oversubscription privilege). Price

Jan. 15, 1959 (with an
—$1.40 per share. Proceeds — To reduce bank loan;
to increase working capital and for general
corporate
purposes. Office—617 W. 7th Street, Los Angeles, Calif.

Underwriter—None.

Meyer-Blanke Co.
(letter of notification) 13,500 shares of common
stock (no par). Price—At the market (Midwest Stock
Exchange). Proceeds—To selling stockholders. Office—
310 Bussell St., St.
Louis, Mo. Underwriter—Smith Moore
& Co., St. Louis, Mo.
Dec. 29

Mid-America Minerals,

Inc.

ceeds— For working capital, etc.
America Bank Bldg., Oklahoma

•

Office — 500 MidCity, Okla. Underwriterwholly-owned subsidiary, Oklahoma

Military Publishing Institute, Inc.

(2/9-13)

Dec. 9 (letter of notification) 125,000 shares of common
stock (par 5 cents).
Price—$2 per share. Proceeds—
For general corporate purposes and working capital.
Office—55 West 42nd Street, New York 36, N. Y. Under¬
writer—C. H. Abraham & Co., Inc., 565 Fifth Ave., New
York 17, N. Y.

Millsap Oil & Gas Co.
Dec. 23 filed 602,786 shares of common stock. Price—$1
Proceeds — For additional working capital.
Office—Siloam Springs, Ark. Underwriter—None.
per share.

Mississippi Chemical Corp., Yazoo City, Miss.
Dec. 24 filed 200,000 shares of common stock
(par $5)
and 8,000 shares of special common stock
(par $75).
Price—For common stock, $8.75 per share; for special
common

stock, $131.25 per share. Proceeds—For con¬
struction program, to purchase shares of Coastal Chem¬
ical Corp.
(a subsidiary), and the balance will be
added to

surplus.

Underwriter—None.

•

Mobile Gas Service Corp.
Dec. 30 filed 33,000 shares of common stock
(par $5) be¬
ing offered for subscription by common stockholders at
the rate of one new share for each 10 shares held of
record Jan.

21, 1959 (withan oversubscription privilege);
rights to expire Feb. 9, 1959. Price—$22 per share. Pro¬
ceeds—To reduce short-term bank loans incurred for the
extension and improvement of gas distribution system.

Underwriters—-The First Boston Corp., New York, and
The Robinson-Humphrey Co.,
Inc., Atlanta, Ga.
Montana Power Co.

July 1 filed $20,000,000 of first mortgage bonds due 1988.
Proceeds

Together with other funds, to be used to
carry on the
company's construction program through 1959. Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.;-Lehman
Bros.;
Merrill Lynch, Pierce, Fenner & Smith, and Stone &
Webster Securities Corp. (jointly); White, Weld & Co.;
Eastman Dillon. Union Securities & Co.; Kidder Peabody & Co., Smith, Barney & Co. and Blyth & Co., Inc.
(jointly). Bids—Had been expected to be received up
to noon (EDT) on Aug. 26 at Room 2033, Two Rector St.,
New York, N. Y., but company on Aug. 22 again decided
to defer sale pending improvement in market conditions.
repay

•

—

$15,500,000 in bank loans and to

Montana

Power

Co.

July 1 filed 100,000 shares of common stock (no par).
The stock will be offered only to bona fide residents
of Montana. Price—To be related to the current market
price on the New York Stock Exchange. Proceeds—To¬
gether with other funds, to carry on the company's con¬
struction program through
1959.
Manager-Dealers —
Smith, Barney & Co., Kidder, Peabody & Co. and Blyth
& Co., Inc. Offering—Indefinitely postponed.
National Theatres, Inc., Los Angeles, Calif.
Dec. 30 filed $20,000,000 5V2% sinking fund subordinated
debentures due March 1, 1974, stock purchase warrants

for 454,545 shares of common stock (par $1) and 485,550
Warrants to purchase debentures and stock purchase
warrants. The debentures and stock purchase warrants
are to be offered in
exchange for National Telefilm Asso¬

ciates, Inc.
tures and

common

one

stock at the rate of $11 of deben¬

warrant to

purchase one-quarter of a share
of National Theatres, Inc. stock for each NTA share.
Dealer-Managers—Cruttenden, Podesta & Co., Cantor,
Fitzgerald & Co., Inc., and Westheimer & Co. ~

Naylor Engineering & Research Corp. -<
Sept. 29 (letter of notification) 300,000 shares of cumu¬
lative Voting and non-assessable common stock. Price—
At par ($1 per share). Proceeds—For organizational ex¬
penses and first three months' operational expenses. Of¬
fice—1250 Wilshire Blvd., Los Angeles 17, Calif. Under¬

by competitive bidding. Probable bidders: Halsey, Studri
& Co. Inc.; Kidder, Peabody & Co.; White Weld & Co.|
Equitable Securities Corp., and Shields & Co. (jointly);
Lehman Brothers, Eastman Dillon, Union Securities 3r
Co., Salomon Bros. & Hutzler and Ladenburg, Thalmann

(jointly). Bids — Tentatively
received up to 11 a.m. (EDT/
on Aug. 27 but company on Aug. 22
decided to defer,
sale pending improvement in market conditions.

May 5 (letter of notification) 150,000 shares of common
Price—$2 per share. Proceeds—To
pay loan; to acquire fishing tools for leasing; and for
working capital. Office—931 San Jacinto Bldg., Houston,
Tex. Underwriter—T. J. Campbell Investment
Co., Inc.,
Houston, Tex.

stoCk (par one cent).

Nelly Don, Inc.

(2/2-6)

Jan. 9 filed 52,600 outstanding shares of common stock

(par $2). Price—To be supplied by amendment. Proceeds
selling stockholders. Office—3500 E. 17th St., Kan¬

—To

City, Mo. Underwriters—Stern Brothers & Co. and
Barret, Fitch, North & Co., Inc., both of Kansas City, Mo.
New Jersey Investing Fund, Inc., New York
Dec. 9 filed 200,000 shares of capital stock.
Price—At
sas

market.
and
•

Proceeds—For investment.

Investment Adviser

Distributor—Spear, Leeds & Kellogg, New York.

Northwest Natural Gas Co.

Jan. 7 filed

$7,000,000 of first mortgage bonds due Feb.
Price—To be supplied by amendment. Proceeds
partial payment of bank loans. Under¬
writer— Lehman Brothers, New York. Offering — Ex¬
pected today (Jan. 29).
1, 1984.

—To be used for

Nylonet Corp.
Nov. 24 (letter of notification) 600,000 shares of common
stock (par 10 cents). Price—50 cents per share. Proceeds
—For working capital. Office—20th

Ave., N. W. 75th St.,
Miami, Fla. Underwriter—Cosby & Co., Clearwater, Fla.
Oak Ridge, Inc.
Sept. 4 (letter of notifiqation) 100,000 shares of common
stock (par $1).

working

Price — $3 per share. Proceeds — Foi
capital. Office—11 Flamingo Plaza, Hialeah,

Underwriter

—

Henry & Associates, Inc., 11 Fla¬

mingo Plaza, Hialeah, Fla.
Welders, Inc.
60,600 shares of common stock, $43,333.33
of 3%% debentures maturing on or before May 6,
1965,
$692,000 of 6% debentures maturing on or before Dec.
31, 1974 and $123,000 of 7% debentures due on or before
May 6, 1965. The company proposes to make a public
offering of 25,000 shares of common stock at $10 pei
share.
The remaining shares and the debentures are
15 filed

subject to
O.

exchange offer between this corporation

Rubber, Inc., and O, K. Ko-op Rubber gelding
System, on an alternative basis. Proceeds—Of the public

offering, will be used for additional working capita)
and/or to service part of the company's debt. Office—
551 Rio Grande Ave., Littleton, Colo.
Underwriter—
None.

(jointly);.Merrill Lynch, Pierce, Fenner & Smith
& "Co.

Dean Witter

and

Pennsylvania Power & Light Co.
295,841 shares of common stock (no par) being offered by the company for subscription by its com-'
mon stockholders of record Jan. 6, 1959, at the rate of
one new share for each 20 shares then held; rights to
expire on Jan. 26. Employees will be given a contingent
subscription privilege. Price—$50 per share. Proceeds
—To be added to the general funds of the company and
used for general corporate purposes.
Underwriters—
The First Boston Corp., New York, and Drexel & Co.,
Philadelphia, Pa.
Dec. 17 filed

Pilgrim Helicopter Services, Inc.
9 (letter of notification) 12,000 shares of common
(par $3). Price — $5 per share/Proceeds — For
working capital. Office—Investment Bldg., Washington
5, D. C. Underwriter—Sade & Co., Washington 5, D. C.

Jan.

stock

Pioneer Trading
10 filed 10,000

Nov.

Corp., jBayonne, N. J.
shares of $8 cumulative preferred

stock, series A (par $100) and $1,000,000 of 8% subordin¬
debentures, series A, due Dec. 1, 1968 to be offered,
in units of a $500 debenture and five shares of pre¬
ferred stock. Price—$1,000 per unit. Proceeds — For

ated

general corporate purposes. Underwriter—-None.
•

Plastic

Applicators, Inc.
(letter of notification) $150,000 of 6% convertible
sinking fund debentures due Jan. 2, 1969 and 30,000'
shares of common stock (par $1). Price—Of debentures,
at par; of stock, $5 per share. Proceeds — To purchasei
new equipment and for
working capital. Office^—7020*
Katy Rd., Houston, Tex. Underwriter—A. G. Edwardan
& Sons, St. Louis. 1, Mo. Offering—Erpected this week.'
Dec. 29

Prairie Fibreboard Ltd.

O. K. Rubber

Dec.

& Co.

had been expected to be

Nedow Oil Tool Co.

Fla.

Jan, 19 filed 100 units of participations in Oil and Gas
Fund (the "1959 Fund"). Price—$15,000 per unit. Pro¬

Midamco, Inc.,
City, Okla.

writer—Waldron & Co., San Francisco 4, Calif.

IH. C. A. Credit Co., Inc., Miami, Fla.
Oct. 6 filed 100,000 shares of common stock.
per

(589)

■

Odlin

Industries, Inc.
12 filed $250,000 of 5%% convertible debenture*
250,000 shares of common stock (par 10 cents). Price
—Debentures at 100% and stock at $3 per share. Pro¬
ceeds—To purchase a textile mill, machinery, equipment
and raw materials, and to provide working capital. Office
—375 Park Ave., New York, N. Y. Underwriter—Harris
Securities Corp., New York, N. Y., has withdrawn as
Nov.

and

underwriter.

Oil, Gas & Minerals, Inc.
notification) 116,000 shares of commOD
(par 35 cents). Price—$1 per share. Proceeds—
For development of oil and gas properties.
Office—al3
International Trade Mart, New Orleans 12, La.
Under¬
writer—Assets Investment Co., Inc., New Orleans, La.
Nov. 16 (letter of

stock

Oppenheimer Fund, Inc.
filed 100,000 shares of capital stock. Price—A1
market (about $10 per share).
Proceeds—For invest¬
ment. Office—25 Broad St., New York. Underwriter—
Oppenheimer & Co., New York. Offering — Expected
sometime in February.
Dec. 5

it Pacific Petroleums Ltd.
21 filed 160,792 shares of common stock.
These
shares have been, or may be, purchased by various firms
and individuals pursuant to presenting outstanding op¬

Jan.

Aug. 18 filed 209,993 shares of common stock (par $1.50)
to be offered for sale to

inces

residents of Canada in the Prov¬

Manitoba, Saskatchewan and Alberta and to
residents of the United States "only in the State of North
Dakota."
Price — $3 per share.
Proceeds — For con¬
struction

purpose.

Office—Saskatoon,

Saskatchewan,

Canada. Underwriter—Allied Securities Ltd., and Unite®

Securities, Ltd., both of Saskatoon, Canada.
Public ServiccLCo. of Indiana, inc.

(2/17)

Jan. 21 filed

$25,000,000 of first mortgage bonds, series
M, due Feb. 1,1989. Proceeds—To repay bank loans and
for construction costs.

Underwriter—To be determined

competitive bidding.
Probable bidders: Halsey",
Stuart & Co. Inc.; Kuhn, Loeb & Co.; The First Boston
Corp.; Blyth & Co., Inc.; Glore, Forgan & Co.; Harriman,
Ripley & Co. Inc. Bids—Expected to be received up to
10:30 a.m. (CST) on Feb. 17, at Room 2000, 11 So. LaSalle
St., Chicago, 111.
by

Rassco Financial Corp.

June 26 filed $1,000,000 of 15-year 6% series A sinking
fund debentures due l973, to be offered in denomination#
of $500 and $1,000. Price—At par. Proceeds—For work¬
.

ing capital and general corporate purposes. Underwrite*
—Rassco Israel Corp., New York, on a "best efforts*
basis.
Remo Corp., Orlando, Fla.
Sept. 22 filed 100,000 share? of class A common stock.
Price—To be supplied by amendment.
Proceeds—Foe
working capital. Underwriter — Citrus Securities Co*.
Orlando, Fla.
•

Reynolds Metals Co. (2/11)
12 filed 550,000 shares of second preferred stock*

Jan.

convertible series (par $100). Price—To be supplied by
amendment. Proceeds—To be used to the extent required

company's treasury for the cost of ac¬

to reimburse the

quisition of ordinary stock of The British Aluminum Co.
Ltd. and to meet the cost of any additional acquisition,
of such stock.
Underwriters—Dillon, Read & Co. Inc.,
Reynolds & Co. Inc.. and Kuhn, Loeb & Co., all of New
York.

tions

expiring June 30, 1959 (to the extent of 137,492
shares), or have been purchased pursuant to an option
which expired Aug. 29, 1958 (to the extent of 23,300
shares). The company will not receive any proceeds
from any sales of these shares.
^ Pacific Power & Light Co. (3/3)
207,852 shares of common stock, which the
company proposes to offer to common stockholders of
record March 3, 1959 at the rate of one new share for
each 20 shares held; rights to expire on March 25. Pro¬
ceeds—For construction program. Underwriters — To be
determined by competitive bidding.
Probable bidders:
Lehman Brothers, Eastman Dillon, Union Securities &
Co., Bear, Stearns & Co. and Dean Witter & Co. (joint¬
ly); Ladenburg, Thalmann & Co.; Kidder, Peabody &
Co. Bids—Expected to be received on March 3.

Jan. 27 filed

Paramount Mutual Fund,

Inc.

300,000 shares of capital stock. Price—Mini¬
purchase of shares is $2,500. Proceeds—For invest¬
ment. Office—404 North Roxbury Drive, Beverly Hills,
Calif. Underwriter—Paramount Mutual Fund Manage¬
Jan. 2 filed

mum

ment. Co.

Richwell

Petroleum

Ltd., Alberta,

Canada

June 26 filed 1,998,716 shares of common stock (par $1).
Of this stock, 1,174,716 shares are to be sold on behalf oi
the company and 824,000 shares for the account of cer¬
tain

selling stockholders. The company proposes to offer

the 1,174,716 shares for subscription by its shareholders
at the rate of one new share for each three shares held

(with

oversubscription privilege).

The subscription

period will be for 30 days following issuance of sub¬

scription rights.

Price—To be supplied by amendment.

off demand note, to pay other indebt¬
edness, and the balance if any will be added to working
Proceeds—To pay

capital.
couver,

Underwriter
Canada.

—

P a c i f i c Securities Ltd., Van¬

(2/6)
shares of common stock (no par) to
offered for subscription by stockholders of record

Rochester Gas & Electric Corp.
Jan. 16 filed 280,000
be

Feb. 5, 1959, at the rate of one new share for each nine
shares, or portion thereof, then held; rights to expire on
Feb. 24. Unsubscribed shares to he offered to employees.

Price—To be

supplied by amendment. Proceeds—To be
company's construction pro¬

used in connection with the

Calif.
May 19 filed 20,000 shares of common stock (par $1)
Packman Plan Fund, Inc., Pasadena,

Proceeds—For investment. Under¬
writer—Investors Investments Corp., Pasadena, Calif.

gram, including
the proceeds of

the discharge of short-term obligations*
which were so used. Underwriter—-The
New York.

Price—At market.

First Boston Corp.,

Pennsylvania Power Co.
Aug. 1 filed $8,000,000 of first mortgage bonds due 198S
Proceeds—To redeem a like amount of 5% first mort¬

Sept. 22 filed $1,000,000 of 10-year 6% cumulative con¬
vertible debentures and 99,998 shares of common stock.

gage bonds

due 1987.

Underwriter—To be determined

Routh Robbins Investment Corp.

Continued

pqge

(590)

The Commercial and Financial
Chronicle

Continued

from

page

for

Price—Of

debentures, at par (in units of $100 each);
and of stock, $1 per share. Proceeds — For investment!
and working capital.
Office—Alexandria, Va. Under¬
writer—None.
St. Paul Ammonia
Dec.

filed

stock

(par 2%
cents), to be offered for subscription by common stock¬

holders at the rate of

held.

Price—$2.50

one new

common

share for each four shares

share.

per

Proceeds—For

additional

working capital. Office—South St. Paul, Minn.

Under¬

writer—None.

present establishments
by increasing
alley beds by eight at Yorktown Heights
and by six at Wilton Manor Lanes, Fort
Lauderdale;
$300,000 for deposits on leaseholds, telephones and util¬
ities; and $395,000 for working capital. Underwriter-

•

Saratoga Plastics, Inc., Bellows Falls, Vt.
(letter of notification) 18,000 shares of common
stock (par $1) to be issued upon exercise of stock options
held by underwriters. Price—$1.50 per share. Proceeds
—To purchase molds and equipment
required for the full
Jan. 14

scale manufacture of portable

recording machine units.

Underwriter—Reilly, Hoffman & Co., New York.
•

Seiberling Rubber Co.
Dec. 23 filed 100,841 shares of common stock (par $1)
being offered to common stockholders on the basis of
share for each four shares held

of record

Jan.

19,1959; rights to expire on Feb. 4. Price—$14 per share.
Proceeds—Together with a proposed $3,000,000 term
loan, will be used for general corporate purposes in¬
cluding working capital. Underwriter—Eastman Dillon,
Union Securities & Co., New York.

it Selected Risks Insurance Co.
Jan.

(letter of notification) 8,500 shares of common
capital stock (par $10) to be issued to stockholders upon

exercise of

warrants

the basis of

share for each

one

13 2/17th shares held

(after giving effect to a stock di¬
ll1/2%). The warrants expire on March 16,
Price—$35 per share. Proceeds—For working cap¬

vidend
1959.

ital.

Office—Branchville, N. J. Underwriter—None.

Service

Life

Insurance Co.

Worth, Tex. Underwriter—Kay & Co., Inc., Hous¬

ton, Tex.
Shares in

—

Manufacturing Corp. (2/9-16)
(letter of notification) 150,000 shares of class A
stock (par 10 cents). Price—$2 per share. Pro¬
ceeds—To pay loans; purchase machinery, tools and
dies;

pected

business.

Office—c/o

Brown

Haven

Drive, Dallas, Texas.
—Sano & Co., New York, N. Y. Offering
after Jan. 31, 1959.

klent.

Jan.

and

bonds

and

Underwriter
Expected

Sire Plan of

Elmsford, Inc., New York (2/16)
Nov. 10 filed $250,000 of 6%
10-year debentures and 5,000 shares of 6%
participating preferred stock (par $50)
to be offered in units of
of preferred stock.

$50 debenture and

one

Price—$100 per unit. Proceeds—For
acquisition of. motels. Underwriter—Sire Plan
Portfolios,
Inc., New York.
Slick Oil

Corp., Houston, Texas

Dec. 8 filed $1,500,000 of
participating interests in the
corporation's joint venture
program, to be offered in
minimum

the

amounts

balance

assemble

nental

upon

and

$15,000, payable 20% down and
during 1959. Proceeds—To

demand

acquire

United

interests

States.

Canada

and

Conti¬

Underwriters—Rowles, Winston

& Co., Houston*
Tex., and Dewar,
coast, San Antonio, Tex. i

Robertson

Pan-

Smith-Corona Marchant, Inc.
Dec. 24 filed $7,443,100 of
5*4% convertible subordinated
debentures due Jan. 1, 1979 being offered for
subscrip¬
tion by common stockholders on
the basis of $100
prin¬
cipal amount of debentures for each 25 shares
of stock
held

about Jan.

15; rights to expire on Jan. 30.
Price—100% of principal amount. Proceeds—To
reduce
bank loans and for
working capital. Underwriter
Lehman Brothers, New York.
—

Southern Co.

(2/4)
Jan. 9 filed
1,350,000 shares of
Proceeds—For
investment in

common stcfck
(par $5).
short-term 4sank loans, for
stocks of subsidiaries and
general

payment

common

corporate purposes,
operating affiliates.

including additional investments

Underwriter—To be determined by

competitive bidding. Probable bidders: The
First Boston

CoIp;VMo.^gaTn stanley
Merrill
and

Eastman

& Co.; Kidder, Peabody & Co.
Lynch, Pierce, Fenner & Smith
(jointly);
Dillon, Union Securities & Co. and

Securities Corp.

pected

Equitable

(jointly); Lehman Brothers.

11:30

a.m.

(EST)

Feb.

Avenue, New York, N. Y.
• Southwestern States
Telephone Co.
140,000

*uled 150'0(10 shares
shares are to

000 to company

Bids—Ex¬
250

Park

which

be offered for
public sale and

employees. Price
To
Proceeds—For construction
—

wiS"1?^St*'SanFrancisco
Francisco,
Co., San

—Dean Witter &

10,-

be supplied

program. Office

Of¬

fering—Expected during the latter
part of February.
Sports Arenas (Delaware)
Inc.
Nov.

bentures

filed $2,000,000 of 6%

(subordinated),

supplied by amendment.

10-year convertible de¬
due Jan. 1, 1969. Price—To be

Proceeds—$750,000

pay

AMF

Pinspotters, Inc. for bowling alley
beds; $350,000 to

pay

unit. Proceeds—>

South State, Murray,

Minerals

Co.

(letter of notification)

900,000

Price—At par (10 cents per

Co. of New

•

Wenwood Organizations,

Inc.

Dec. 18

(letter of notification) 100,000 shares of common
(par 25 cents). Price—$3 per share. Proceeds—
For land development and home construction in Florida;
and for general corporate purposes.
Office—62 Third,,
Ave., Mineola, LjI./ N. Y. and 2259 Bee Ridge Roadtj
Sarasota, FJa. /Underwriter—Michael G. Kletz & Co.,]
stock

Inc., 30 Rockefeller .Plaza, New York, N. Y, Offering-**
Expected any day. Y
Vv/;_
'
"J
.

offering, 120,000 units will be

it Whelchel Mines Co. < * Y
Jan. 15 .(letter of notification)

offered for the account of the company and
30,000 units
will be sold for the account of
selling stockholders. Price

;fA

1,000,000 shares of .com.-J
mon stock (par 10 cents). Price—25 cents per share. Pro¬
ceeds—For mining expenses.
Office — 1019-'Arthur,-St.,

—$2.50

per unit. Proceeds—To repay loans'by company
officials and past-due payables owing chiefly to Promo¬

Caldwell, Idaho. Underwriter—None.r; //:; Y

tion.Press; and the balance for working capital and ex¬
pansion of circulation. Office—225 Yarick St., New York.
Underwriter—Charles Plohn & Co., New York.
*

•

William

Jan."

r Y

Hilton Inn Co.

filed,

;

Y -Y; Y *'<&[

; t

together with The William Hilton Trust;

$600,000 of trust participation certificates, 9,000 sharesof class A common stock (non voting), and 600 shares
of class B common stock (voting); to be offered in 60O
units, each consisting of 10 certificates
($100 face
amount), 15 class A shares and 1 class B share. Price—'
$1,160 per unit. Proceeds—Together with bank borrow¬
ings, will be used, to purchase from the Sea Pines Plan¬
tation Co. a tract of approximately three acres of ocean
front property on Hilton Head Island, to construct the
Inn, purchase all furniture, fixtures and equipment nee-'
essary
to operate the /Inn and to provide necessary
working capital (and to reimburse Sea Pines Plantation;,
for some $20,000 of Costs advanced by it. Underwriter—,
The Johnson, Lane, Space Corp., Savannah, Ga.
Y

Bag-Camp Paper Corp.

Jan. 8 filed 23,282 shares of capital stock (par
$6.66%)
to be offered in
exchange for shares of capital stock of
Highland Container Co. in ratio of 0.58 share of Union
Bag for one share of Highland. Unless the exchange
offer is aceepted prior to its
expiration of stockholders

holding

more than 25,000 of the outstanding shares, the
exchange offer will be cancelled. If the exchange offer

is so accepted by the holders of more than
25,000, but
less than 36,000 such
shares, the exchange offer may be
cancelled at the option of Union
Bag

by written or tele¬
graphic notice to the exchange agent given on or before
March 4, 1959.

* United Control Corp., Seattle, Wash. (2/17)
filed 200,000 shpres of common stock
(par $1).

Wilmington Country Club, Wilmington, Del.
j
*
27 filed $500,00.0 of debentures due 1991 (non in-,
bearing) and 800 shares of common stock (par

Jan. 28

...

Oct.

Price—To be supplied by amendment.
Proceeds—To re¬
duce bank loans and for
working capital. Underwriter—

terest

$25)

offered

Concord Ltd.
Co.

per

April 16 filed 2,000,000 shares of common stock (par $5)
Price — $10 per share. Proceeds
For acquisition oi
operating properties, real and/or personal, including

members

Price—$375

per

this

common

club

and

share and $1,000*

debenture..

Proceeds —. To develop property and ;
certain facilities. Underwriter—None.
.VJ

build

—

Wyoming Corp.
Nov. 17 filed 1,449,307 shares of common stock.

Of these
1,199,307 are subject tio partially completed sub-!
scriptions at. $2, $3.33 and $4 per share; and the addi-i
tional 250,000 shares, are to be offered initially to share- 3
holders of record Nov. J.,, 1958, in the ratio of one new *

office furniture, fixtures, equipment and
office space, b?
lease or purchase.
Office — Wilmington, Del. Under
writer—None.
Myrl L. McKee of Portland,

Ore.,

President.

•

it United Funds, Inc.
Jan. 22 filed (by amendment)
$10,000,000 additional face

share for each .2.33 shares held

on that date.
Price—$4v
Proceeds—$300,000 will be used for payments}
on contract to purchase shares
of International Fidelity
Insurance Co.; $325,000 for capitalization of a fire insur-j
ance company; $500,000 for capitalization of a title insur- '
ance company; $500,000 for additional capital contribu¬
tion to Great Plains Development Co.; and $300,000 as
an additional capital contribution to Great Plains Mort¬
gage Co.
Office—319 E. "A" St., Casper, Wvo. Under¬

per

amount of Periodic Investment Plans without insurance
and the underlying shares of United
Accumulative

Fund,

and $2,500,000 face amount of Periodic
Investment Plans
with insurance and the
underlying shares of United Ac¬

cumulative

Fund.

Proceeds—For

investment.

Office—

Kansas City, Mo.

United

Security Life & Accident Insurance Co.
Aug. 22 filed 120,000 shares of class A common stock
Price—$3 per share. Proceeds—To provide the reserves
required to be held in life and accident insurance poli¬
cies, and to pay the necessary expenses in producing
insurance.

Office—Louisville, Ky.

United

States

Glass

■

Jan.

(2/16-20)
1,055,000 shares of common stock. Price—
($1 per share). Proceeds
To be added to the

company's

—

general

funds

and

used

develop

Dec.
*

Power Co.

■

Pineda

(4/30)
that

the

plans the
issue and sale of $20,000,000 of 30-year first .mortgage
bonds.
Proceeds
For construction program.
Under¬
was

announced

company

—

writer—To be determined by

Development Corp.

16 filed

At par

»* ■

.-.

Office—Tiffin, Ohio. Underwriter—None.
Land

■

Alabama

Chemical Corp.
—

U. S.

Prospective Offerings

Underwriter—None

Nov. 26 filed 708,750
outstanding shares of common stock
Price—At market. Proceeds
To selling stockholders
•

share.

writer—None.

Edmond M. Smith, is President.

Calif. Underwriter

and New York.

per

—

(

of common stock, of

Price—$5

shares*

and four

stock

common

stock.

York, Inc.
(letter of notification) 300,000 shares of capital
3tock. Price
At par ($1 per share). Proceeds — For
development of oil and gas lands. Office—574 Jefferson
Ave., Rochester 11, NY Y. Underwriter—Frank P. Hunt
fa Co.,
Inc., Rochester, N. Y.

(2/18)

Insurance

class

May 6

purchase of an additional 150,000 shares of com¬
stock, to be offered in units of one share of stock

Employees

' "/'

...

Jan. 20 filed 150,000 shares of common stock and warrants

United

(par $1) to be offered in units consisting

common

Utah Oil

or mort

•'

shares of com¬
share). Proceedi
—For mining expenses. Office—305 Main St., Park City,
Utah.
Underwriter—Walter Sondrup & Co., Salt Lake
City, Utah.
'
v.

acquire other life

Blyth & Co., Inc., New York.

stock

stock.

mon

chemical processing plants using the Bruce - Williami
Process to beneficiate manganese ores.
Underwriter-

Union

(letter/of notification) 9,063 shares of class A.
stock (par $1) and 27,162 shares of class B

April 11

lor the

At par., Proceeds—For
working capital. Office — 3172
North Sheridan Rd.,
Chicago 14, 111. Underwriter—None

one

Utah

—

Strategic Minerals Corp. of America, Dallas, Tex
$2,000,000 of first lien mortgage 6% bond*
and 975,000 shares of common stock
(par 10 cents). Price
—For bonds, 95% of princmal
amount; and for stock $S

Of this

V Y." ;

For working capital. Office—4080
Underwriter—None.

Gulfport,
Co., Gulfport, Miss.

warrant.

Proceeds—For exploration-

Utah.

insurance companies. Address—P. O. Box
678,
Miss. Underwriter—Gates, Carter &

it TV Junior Publications Inc.

per share).

of class B

Kendrick,

Proceeds—To erect and operate one

common

Life, Health & Accident Insurance Co.
July 9 (letter of notification) 50,000 shares of common
stock (par $1).
Price—$5 per share. Proceeds—To be
invested in stocks

Underwriter—To be named by amendment^
Albert Griswold of Portland, Ore.,
is Prefer

common

State

one

Processes, Inc.

it Utah Business Acceptance Corp.

Sign & Signal Co.
Dec. 17 (letter of notification) 300,000 shares of com¬
mon
stock.
Price—At par ($1 per share). Proceeds—
To promote and expand the development of the Safety
Shelter

Graham

Standard

mon

Universal Oil

purposes.

inventory; and for working capital. Office—1100 South
Central Park Ave., Chicago 24, 111. Underwriter—Plym¬
outh Securities Corp., New
York, N. Y.

and

Proceeds—;

share.

per

Uranium Corp. of America, Portland, Ore.
'
April 30,1957 filed 1,250,000 shares of common stock (pai t
16 cents).
Price—To; be supolied by amendment (ex¬

Sheridan-Belmont Hotel Co.
Aug. 19 (letter of notification) $250,000 of 6% convertible
debentures due Sept. 15, 1963 to be offered for
subscrip¬
tion by common stockholders on a
pro rata basis. Price—

150,000 shares of common

Price—$2

common

St., N. W., Washington 7, D. C. Investment Advisor—In¬
vestment Fund Management
Corp.

cent).

one

(2/4)
shares of capital stock. Price—To.:
supplied by amendment. Proceeds—To purchase fromj
Guaranty Trust Co. of New York, as trustee of the?
Petroleum Research Fund, all of the outstanding
shares;
of capital stock of Universal Oil Products Co. Office—30<
Algonquin Road, Des Plaines, 111. Underwriters—Lehman j
Brothers, Smith,/ Barney & Co., and Merrill Lynch, r
Pierce, Fenner & Smith, Inc., all of New Y'ork.
■'■"i

Standard

share.

(par

Southwest Shares, Inc., Austin, Texas.

America, Inc., Washington, D. C.

Dec. 12 filed 50,000 shares-of common stock.
JPrice—At
market. Proceeds—For investment. Office
1033-30th

•

1,000,000 shares of common stock (par $1).
supplied by amendment.
Proceeds—To¬
gether with $6,500,000 of borrowings, will be used for
the acquisition of Spur Distributing Co., Inc., and for
general corporate purposes. Office—Eighth Ave. South
and
Bradford Ave., Nashville, Tenn.
Underwriter —
Equitable Securities Corp., Nashville, Tenn.

per

Corp.

Jan. 13 filed 2,900,000

Preston

Pool

(letter of notification)

Lyon & Co., Inc., New York.

Spur Oil Co.

6130

may

For working capital and general corporate purposes. Of- ?
fice—27 Haynes Ave., Newark, N. J. Underwriter—Ross,

Dec. 15 filed

School

properties that

it United States
stock

Arenas
(Delaware)
Inc.
Nov. 18 filed 461,950 shares of common stock (par one
cent). Price—At the market (but in no event less than
$6 per share). Proceeds—To selling stockholders. Office
—33 Great Neck Rd., Great Neck, N. Y.
Underwriter—

Jan.

1959

be acquired. Under¬
York, and Roman
Johnson, Ft. Lauderdale, Fla., on a best efforts basis.

Jan. 16

March 31 filed

Sept. 26 (letter of notification) 3,567 shares of common
stock (par $1). Price—$18.75 per share.
Proceeds—To
go to a selling stockholder. Office—400 W.
Vickery Blvd.,
Fort

Sports

Price—To

Thursday, January 29,

writers—Aetna Securities Corp., New

None.

Diego Imperial Corp., San Diego, Calif.
Dec. 9 filed 845,000 shares of common stock, to be of¬
fered in exchange for all of the 45,000 outstanding shares
of capital stock of Silver State Savings & Loan Associa¬
tion and 3,000 shares of capital stock of Silver State In¬
surance Agency, Inc.,
both of Denver, Colo.

new

Island and other

two

the number of

San

one

installations, fixtures and equipment; $85,000

expand

None.

Products, Inc.

250,000 shares of

other

competitive bidding. Prob-}
Halsey, Stuart & Co. Inc.; Lehman Broth-;
ers; Eastman Dillon, Union Securities & Co., Equitable
Securities Corp. and Drexel & Co. (jointly); Harriman,
Ripley & Co., Inc. and Goldman, Sachs & Co. (jointly);
able bidders:

Volume 186

Number 5816

The Commercial and Financial Chronicle

Morgan Stanley & Co.; Blyth & Co., Inc. and Kidder,
Peabody & Co. (jointly); The First Boston Corp. Regis-«<

Dec/

tration—Planned for

(591)

following

ceived

Bids—Expected to be

April 3.

Great Atlantic &

on-April 30.

American Airlines, Inc.
Jan. 13, Wililam J. Hogan,

Executive

Finance, said this corporation
ket with

♦./,

•

be in the

mar¬

done

■-

•.

.yv

may

soon

Co., «lnc.
stock

voting

Peabody & Co. and White, Weld & Co.

outstanding

;

—

Gulf Power Co.

Dec. 10 it

*r'<\

was

Co.,

(4/2)

the

:
has filed

company

determined

application with the SEC for the issuance of 486 325
additional shares of common stock (par $25) in the early
an

months of 1959 to stockholders under

rights

Smith, Salomon Bros. & Hutzler and Drexel & Co.
(jointly); - Eastman Dillon, Union Securities & Co.:
Equitable Securities Corp.; Kidder, Peabody & Co. and
White, Weld & Co. (jointly); Blyth &, Co., Inc. Registra¬

the basis

one new share for each 10 shares held
(with an over¬
subscription privilege). Price—To be determined just
prior to offering. Proceeds—To be used as the equity

tion—Planned
ceived

base, for the

for

March

Bids—Expected

re¬

April 2.

•

Monongahela Power Co.

Dec. 29 it

(3/31)

reported that the company plans the sale
$16,000,000 of first mortgage bonds. Proceeds—
was

For

announced that the company plans to issue

$7,000,000 of 30-year first mortgage bonds. Pro¬
construction program.
Underwriter—To be
by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Merrill Lynch, Pierce, Fenner

-;-y

(jointly). Regis¬
Bids—Expected to be re¬

tration—Planned fOT May 29.
ceived on June 25.

of about

ceeds-—For

,v'

that

announced

was

Pacific Tea

common

and sell

".American Natural Gas Co.
Bee.

-new

Underwriters
May include: Blyth
Inc.; Lehman Brothers and Smith, Barney & Co.

Vice-President,

equity type offering.; This will be

new

the

rumored.

•

privately,'

10-for-l split was listed on the New York
Stock Exchange.
A large secondary offering has been

re¬

construction program.
Underwriter—To be deter¬
mined by competitive bidding. Probable bidders:
Halsey,
Stuart & Co. Inc.; Eastman Dillon, Union Securities &
Co. and Salomon Bros. & Hutzler
(jointly); Harriman

Ripley & Co., Inc.; Equitable Securities Corp.; W. C.
Langley & Co. and The First Boston Corp. (jointly);
Merrill Lynch, Pierce, Fenner & Smith;
Kidder, Peabody
& Co. and White, Weld & Co.
(jointly). Bids—Expected
to be received
•

National

Heublein, Inc.
Aug. 25 it was reported that the company plans earlj
registration of 400,090 shares of common stock; of which

Uhe First

100,000 shares

March 31.

j '

Bank, Newark, N. J.
stockholders were offered 80,000 shares of

Jan. 27

financing of substantial expansiomprograms
system companies.. Underwriter—To be -determined
byacompetitive bidding. Probable bidders: White, Weld
& £o. and Drexel & Co.
(jointly); Blyth & Co., Inc.;

State

com¬

York.

Boston

Corp.

stockholders,

Broad Street Trust Co.,

Jaft;

21 it

Philadelphia, Pa.

(2/2)

was

stockholders

of 16
then

shares of

new

record

common

held; rights to expire

share.

Proceeds—To

Jan.

22,

stock

16.

149

^California Electric Power Co.
21

per

issue and

(3/31)

the

that

announced

was

plans

company

the

sale of 300,000

ceeds—To repay

shares of common stock. Pro¬
bank loans and for expansion program.

Bids—To be received

March 31.

■//

r/''

t-:.

Bell

Telephone Co.

was

and sell

announced

(2/25)

•

125,000 shares of common stock. Underwriters—
Co., Inc. and Walston & Co., Inc.

Japan

Jan.

(Empire of)

that

stated

was

$30,000,000 of bonds

Central Bank & Trust Co., Great Neck, L. I., N. Y.
Dec. 31 it was announced that the stockholders will vote
oh' Jan. 31 on approving a proposed

issue

soon

may

of approximately
publicly offered on

the

^Central Power & Light Co.
it

.y/ /

& Co.; Merrill

Lynch, Fierce, Fenner & Smith and Salo¬
Bros*. & Hutzler (jointly); Kuhn, Loeb & Co., A. C.
Allyn & Co., Inc., and Bear, Stearns & Co. (jointly);

sell

was

System,

Inc.

reported that the company may issue and

additional

common

stock

the

first half

1959.

Proceeds—To repay outstanding bank loans..Underwriter
—To i be determined by competitive
biddipg.
Probable

bidders; Lehman Brothers and Eastman,ZQillori,: Union
Securities & Co. (jointly)^.Merrill Lynch, Pierce, Fen¬
ner

Smith, White, Weld & Co.,. Shields &> Co. and R.
(jointly); Morgan Stanley & Co.

W. Pressprich & Co.!

Denver & Rio Grande Western RR. (2/4). v "'
Bids will be received by the company at 1531 Stout
St.,
Denver 1, .Colo., up to noon (MST) on Feb.' 4. for the
purchase from it of $2,190,000 equipment trust> certifi¬
r

cates,

series X,

maturing semi-annually from .Sept. 1;
1959 to March 1, 1974, inclusive. Probable
bidders: Hal¬
sey,. Stuart & Co. Inc.:; Salomon Bros. & Hutzler;
'
■
t

Eastern. Utilities Associates (3/4)
Jan. 5 the trustees approved an
offering of 96,765 addi¬
tional shares of common stock to common stockholders
of record about March
4, 1959 on the basis of one new

share for each 12 shares held

(with,

privilege); rights to expire

March 19. ,Underwriters—

oversubscription

To be determined by competitive
bidding. Probable bidbers: Kidder, Peabody & Co.; Stone & Webster Securi¬
ties

Corp.

(EST)

Bids—Expected to be received
March 4.
~
..

to 11

a.m.

that the company expects later
in the year to issue and sell additional
securities, prob¬

ably preferred stock, to

secure approximately $5,000,000
Proceeds—Together with $7,000,000

from private sale of 4 */>%
bonds, to repay short-term
bank loans and for construction program. Underwriters

Chairman, announced that com
pany plans to sell some bonds originally scheduled foi
mid-year of 1958. The proposed sale was subsequently
deferred until early 1959. Proceeds — About $8,000,000
for construction program/Underwriter—To be determined
by
competitive
bidding.
Probable
bidders:
Halsey,
Stuart & Co. Inc.; Kidder, Peabody & Co., and Merrill
Lynch, Pierce, Fenner & Smith (jointly); LehmaD
Brothers; Eastman Dillon, Union Securities & Co. and
Stone & Webster Securities Corp. (jointly); Glore, For
gan & Co., and Goldman Sachs & Co. (jointly).
Laboratory for Electronics, Inc.
July 3, Henry W. Harding, President, announced that
the directors are currently considering refinancing $790,000 of outstanding notes ($658,750 held by a principal
stockholder and
nent

$131,250 by

This may be done through
vertible debenture financing. Office—75

Louisiana
Dec.

29 it

and sell

Power

was

Light Co.

$7,500,000 of preferred stock (par $100). Under¬
bidding. Prob¬

able bidders:

Halsey, Stuart & Co. Inc.; White, Weld &
Co., Blyth & Co., Inc. and Shields & Co. (jointly); Mer¬
rill Lynch, Pierce, Fenner & Smith, Kidder, Peabody &
Co. and Harriman Ripley & Co., Inc. (jointly); Salomon
Hutzler, Eastman Dillon, Union Securities & Co.
and Equitable Securities Corp. (jointly); The First Bos¬
ton Corp. and Glore, Forgan & Co. (jointly). Bids—Ex¬
pected to be received sometime in April.
•

Mercantile National

Bank, Dallas, Texas

Weld & Co., all of New York.,

increase

;

Bank & Trust Co., Tulsa,
were to vote to approve

stockholders

plan to

offer 100,000 shares of additional
capital stock (par $10)
on
about a one-for-six basis to stockholders of record
Jan. 13, 1959. Price—$27
per share.
Proceeds—To in¬
crease capital and
surplus.

(9/10)

announced that the company plans to issue
$18,000,000 of 30-year first mortgage bonds. Pro¬
was

program.

Underwriter—To

determined by competitive bidding.
Probable bidders
Halsey, Stuart & Co. Inc.: Blyth &. Co., Inc., Kidder, Pea¬
body & Co. and Shields & Co.: (jointly); Lehman Broth¬
ers;

The

First

Boston

Corp.;

Morgan

Stanley

Co.;

Equitable Securities Corp. and Eastman Dillon, Union
Securities & Co. (jointly); Harriman
Ripley & Co. Inc.
Registration—Planned for Aug. 14. Bids—Expected to
be received

Sept. 10.

Feb. 6.

stock

the

basis

on Jan. 20; rights
share. Proceeds—To
Underwriters — Rauscher,

Price—$26

capital and surplus.

Pierce &

Okla.

common

share for each 10 shares held

expire

per

Co., Inc. and First Southwest Co., both of Dal¬

las, Tex.
•

Miami Window Corp.

Dec. 15 it

reported that the company plans issuance
$2,500,000 6%% debentures due 1974 (with
attachable warrants—each $1,000 debenture to carry a
warrant to buy 200 shares of common stock at $3 per
share). Underwriters—Cruttenden, Podesta & Co., Chi¬
«nd

sale

was

cago, 111., and Clayton Securities
Offering—Expected in March.

Mississippi Power Co.
Dec.

was

issue and sell

announced

Corp., Boston, Mass.

(6/25)
that

this

one

of Jan.

North American

Dec. 1 it

new

for

each

23; rights to expire

six

Feb.

Equitable Life Assurance Co.

announced that the company plans an of¬

was

fering of 950,000 shares of capital stock. Price — $10 per
Proceeds—To increase capital and surplus. Un¬
derwriter—John M. Tait & Associates,
Cincinnati, Ohio.
North American Van

Lines, Inc.
20, James D. Edgett, President, announced com¬
plans early in 1959 to make a public offering of its
stock, and has applied to the Interstate Commerce Com¬

Nov.

pany

mission for

company

authority to do

Northern
Dec.

plans

Illinois

Gas

so.

Co.

reported that the company will sell in
1959 about $35,000,000 of new securities, including some
was

first

mortgage bonds, in addition, there is a possibility
preferred stock issue and raising of some funds
through common stock financing, "perhaps in the form
of convertible debentures."
Proceeds—For capital ex¬
penditures. Underwriter—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Hie First Boston Corp.; Glore, Forgan & Co.;
Blyth & Co.., Inc.
of

Northern Indiana Public Service Co.
Dec.

was
reported that the company plans sale
$25,000,000 to $30,000,000 of first mortgage
bonds due 1989.
Underwriter
To be determined by
competitive bidding. Probable bidders: Halsey, Stuart

from

—

& Co.

Inc.; Equitable Securities Corp.; Lehman Brothers
Stearns & Co. (jointly);. Eastman Dillon,
Ccr.; The First'Boston Corp.; White,
Weld & Co.; Dean Witter & Co.; Blyth & Co., Inc. and
Merrill Lynch, Pierce, Fenner & Smith (jointly); Harri¬
man Ripley & Co., Inc.
Bids—Expected to be received
before April 1.

and

Bear,

Union Securities &

• Northern Pacific Ry.
bids

was

(2/10)

reported that the company will receive

Feb. 10 for the purchase from it off $4,850,000 of

equipment

trust certificates. Probable bidders:

Stuart & Co. Inc.;

Northern

States

Power Co.

(Minn.)

3, Allen S. King, President, announced that the
company plans about the middle of 1959 to put out a
common stock issue and possibly a $15,000,000 preferred
stock issue if there is a satisfactory market. Proceeds—
To repay bank loans and for construction program. Un¬
derwriter — To be determined by competitive bidding.
Probable bidders

(1) For preferred stock: Blyth & Co.,
Ipc. and The First Boston Corp. (jointly); Lehman Broth¬

& Co. (jointly); Merrill Lynch, Pierce,
Smith; Harriman Ripley & Co., Inc. and East¬
Dillon, Union Securities & Co. (jointly); Kuhn,
Loeb & Co. (2) For common stock: Lehman Brothers
and Riter & Co. (jointly); The First Boston Corp., Blyth
& Co., Inc. and Kuhn, Loeb & Co. (jointly); White, Weld
& Co. and Glore, Forgan & Co. (jointly); Merrill Lynch,
Pierce, Fenner & Smith.
and

ers

Riter

Fenner &

man

•

Our River Electric

Dec. 22 it

was

Co., Luxemburg

reported that this company plans to offer

$10,000,000 of bonds in February or March, 1959. Under¬
writers—The First Boston Corp. and Kuhn, Loeb & Co.,
both of New York.

Pacific National Bank of San Francisco
Jan. 14 the bank offered 74,511
common

stock

the

rate

additional share of

new

(par $20) to stockholders of record Jan.
of one new share for each three shares

held; rights will expire on Feb. 3. Price—$42 per share.
Underwriters—Blyth & Co., Inc. and Elworthy & Co.,

Francisco, Calif.

^ Pennsylvania Electric Co.
Jan. 12 it was reported that the company is planning
the sale of about

derwriter

—

$17,000,000 of first mortgage bonds. Un¬

To be determined by competitive bidding.

Halsey, Stuart & Co. Inc.; Equitable
Kidder, Peabody & Co.; Eastman Dillon,
Union Securities & Co., Merrill Lnych, Pierce, Fenner
& Smith Inc. and White, Weld & Co. (jointly); The First
Boston Corp. and Harriman Ripley & Co. Inc. (jointly).
Offering—Expected this Spring or early Summer.

Probable bidders:
Securities Corp.;

Mexico
that the directors will meet on
Jan. 27 to discuss the issuance of 50,000 shares of pre¬
ferred stock. Proceeds—For construction program. Un¬
derwriter—May be Allen & Co., New York.
Public Service Co. of New

Jan.

12 it was reported

Rockland-Atlas National Bank of Boston,

$5,000,000 of 30-year first mortgage bonds.
Proceeds—For construction program.
Underwriter—To
be determined by competitive bidding. Probable biddors: Halsey, Stu«rt & Co. Inc.; Eastman Dillon, Union
Securities & Co. and Equitable Securities Corp. (joint¬
ly); Merrill Lynch, Pierce, Fenner & Smith; Kidder,

Halsey,

Salomon Bros. & Hutzler.

DCc.

both of San

Jan. 20 the stockholders authorized the issuance of 125,-

additional shares of

construction

con¬

Pitts St., Bos¬

writer—To be determined by competitive

new

and sell

perma¬
or

reported that the company plans to issue

ceeds—-For

equity

ton, Mass.

one

Georgia Power Co.

on a

basis.

Co.; Merrill Lynch, Pierce, Fenner & Smith;' and White

Dec. 10 it

bank)

basis

Price—$50 per share. Proceeds—To increase capital
surplus.
Underwriter—Clark, Dodge & Co., New L

Jan.

March 31, G. W. Evans,

—May be The First Boston Corp.; Kidder, Peabody &

First National

Kansas Gas & Electric Co.

000

Jan. 13

works

Bros. &

Equitable Gas Co.'.
July 18 it was announced
/

of additional funds.

public

Eastman.Dillon, Union Securities & Co. Bids—Expected
to be received sometime in
April.*,. : '
"
Columbia Gas

For

—

City Power & Light Co.
was reported that the
company plans to issue
and sell $20,000,000 of first mortgage bonds. Proceeds—
For construction program.. Underwriter—To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; The First Boston Corp. and Blyth &
Co., Inc. (jointly); Equitable Securities Corp.; White,
Weld & Co. and Shields & Co. (jointly); Kuhn,- Loeb &*
Co., Salomon Bros. & Hutzler and Eastman, Dillon, Union
Securities & Co. (jointly); Lehman Brothers and Bear,
Stearns & Co. (jointly). Offering—Expected in May or
June.
-■
■
■.'
"
/
-

mon

Dec. 1 it

Proceeds

Kansas

reported that the company plans to sell
$1'1,000,000 of first mortgage bonds. Underwriter—To be
determined: by competitive bidding. Probable bidders:
Halsey," Stuart & Co. Inc.; Blyth & Co., Inc.; Lehman Bro¬
thers and Glore Forgan & Co. (jointly); Kidder, P.eabody
was

market.

Dec. 29 it

Jan. 26

American

projects, etc. Financial Adviser—The First Boston Corp.,
New York. Registration—Expected this week.

subscription of¬
fering of 38,503 additional shares of capital stock. Price
—$20 per- share. Proceeds—To increase capital and sur¬
plus.' Underwriter—None. '
'

the

then held

share.

company

A. C. Allyn &

(jointly); White, Weld & Co.;. and Kid&er; Peabody

& Co.

16.
and

Underwriter—

Offering—Expected in

Interstate Motor Freight System, Inc. (Mich.)
Dec. 1 it was reported that the company
plans to issue

Underwriter—To be determined by competitive bidding.
Probable bidders: Merrill Lynch, Pierce, Fenner & Smith
Inc.; Carl M. Loeb, Rhoades & Co. and Bear Stearns &
Co.

expansion.

plans to issue and
sell $50,000,000 first mortgage bonds dated March
1,
1959 and due March 1, 1994.
Proceeds—For improve¬
ments, etc. Underwriter—To be determined by competi¬
tive bidding.
Probable bidders: Halsey Stuart & Co.
Inc.; Morgan Stanley & Co.; Glore, Forgan & Co. and
Eastman Dillon, Union Securities & Co.
(jointly). Bids
—Expected to be received on Feb. 25.

Un¬

derwriters—Hallowell, Sulzberger, Jenks, Kirkland
Co. and Stroud & Co., Inc., both of
Philadelphia, Pa.
Jan.

Illinois
Dec.

Price—$35

capital and surplus.

Proceeds—For

1959.

the basis

each

for

Feb.

increase

1958,

be sold for the account of selling

Glore, Forgan & Co., New York.

announced that the Bank will offer 32,000
additional shares of common stock (par $10) to its com¬
mon

are

stock

mon

Jan.

Mass.
given

21 stockholders of record Jan. 20, 1959 were

the right to subscribe for an additional 40,000 shares of
capital stock (par $10) on the basis of one new share
for each 6V2 shares held; rights to expire on Feb. 4,
1959. Price—$38 per share. Proceeds—To increase capi-

Continned

page

€rt

The Commercial and Financial Chronicle

(592)

Continued

from

page

Technology Instrument Corp.
13 it was reported that the
company plans early
registration of 130,000 shares of common stock via an
amendment to an earlier registration statement. Under¬
writer—Shearson, Hammill & Co. and S. D. Fuller &

59
The First Boston Corp.,

—

New York.

Ryder System, Inc.

Co., both of New York.

reported that the company plans the issu¬
150,000 shares of common stock (par $5).
Proceeds—For acquisitions.
Underwriter—Blyth & Co.,

Jan. 12 it

was

Offering—Expected

Inc., New York.

Electric Generating Co.

Southern

sell

(5/28)

of 30-year first mortgage bonds.
program.
Underwriter—To
competitive bidding. Probable bid¬
ders: Halsey, Stuart 8c Co. Inc.; Eastman Dillon, Union
Securities & Co. and Equitable Securities Corp. (jointly);
Merrill Lynch, Pierce, Fcnner & Smith; Kidder, Peabody
& Co. and White, Weld 8c Co. (jointly). RegistrationPlanned for May 1. Bids—Expected to be received on
May 20.
he

construction

determined

Southern Pacific Co.

Bids

Texas
Jan.

that

this

Gas Transmission

market followers,

money

bidding. Prob¬
Merrill Lynch,

appears

which is still under the issue price
le issue
price
99. There is no question but

what this 21-year bond is having
appeal to certain institutional investors and they

re
continuing to
because, in comparison with corporatcs and tax
free
bonds, the return on the

make

■

purchases

Government issue is attractive.
The near-term demand for the
most

liquid

sizable, but evidently not
it

was

Some

governments
the

the

Bank

offered

would

Higher

The

terms

the

There

the

for

the

re-

owners

might

also

There

gimmicks

other

could

this

the

hand,

those

many

the

trition

market.

money

at-

sizable

that

done

issues

their

own

since

owned

since

securities

will

that

issues

continues

defensive

noT.v

until

for

•.

the

offer

with

Government

would

out

1962 May He Reopened

The

budget

have

been

any extent
refunding
made
public.

the

Whether there will be greater

Jess will
pressure
Jket

the kind of

upon

issues that will be made available

by the Treasury
-It

to take

February maturities,
obvious

that

care

;

part

the
a

obligation, which will

used to meet the needs of the
Central Banks that are owners of

approximately

$6,000,000,000

the securities that will have
to be

tion
11011

whiclf^-rmll'^m^11 the
+?bliga~
would meet

wmcn

re-

quirements of the Federal Reserve
Banks would most

likely have

maturity of

wllCICU VlUvAIIVlVKH 9
Avco

Manufacturing

one

year, give or take

eis

ttle

Treasury
more

growing

inclining

the

and
section of

the near-term

ap-

that
more

the market for the other
security
securities that may be offered

into the shortest

+/-k
to

/->P

mrnorr.

the

owners

February

offering to holders of its common

note, such

three

Common Slock Offered

question

underwriting

Janshares

offer
of $1

publicly
value

par

350,000
common

the

short

spot for

while unless

offering has been underwritby a group of investment

debentures
,

stockholders under the
chase

additional $68,100

per

share,

debentures

will

common

shares,

were offered primarily by officers and directors
and will reduce their combined

than

the

(42.4%)

The net proceeds from the sale
the remaining 100,000 shares
to go to the Arnold Altex Co.

are

and

are

to be used to

repay

funds

pany

and

force. Along with
this, is
the demand for funds from busi-

taking

meet

the

•

rruttenden

^ loarJable fun^s
some
bankers
an

upping

the

firmation

share.
of

money

restraint

the
of

policy
the

are.

The Johnson,
Plymouth

Lane,

Bond

$11.50

They will have the benefit

required

retire

company

$750,000

debentures in each year and may
at its election retire up to an

ad-

clitional

For

$750,000

annually.

sinking fund

the

debentures

will be redeemable at 100%.
Net sales of the company during the fiscal vear ended Nov. 30,
1953 totaled $282,930,000 and net
inc0me was $9,556,000.
The major portion of the com-

Saunders,

Stiver

Co.;

Frank B. Bateman, Ltd.; Erwin &

and

production

defense

Westheimer &

Co.; Carr, Logan &

for

agencies,

in- Co., Inc.; Livingston, Williams & the fields of
rate. Co., Inc.; Nolting, Nichol & Co.; nology, ICBM

Central

government

principally

space

flight

tech-

nose

cones,

elec-

tronics, aircraft engines, airframe

Co.; A. M. Law & Co., Inc.; Lloyd structures and missile components.

conof

Arnold & Co.; R. F. Cdmpeau Co.;

In 1956 the

Clayton Securities Corp.; Mann &

powers

the

the major portion of its consumer

company

secu-

Co.

climcal

iocated

includ-

syringes
oIirCT,>Qi

xnermomeiers,
and

culture

surgical

media.

principal
n1„nf„

pthei domest c p a

discontinued

The

plant

East Rutherford,

n+llol,

pro¬

extensive line of medical

in„ hypodermic needles

in-

capital,

surgicai instruments

will

and

debt

Dickinson

Becton
an

financing

retire

working

™

N. J.

s ai

Connecticut, Nebraska,

Ohio,

Maryland and Pennsylvania. Foreign subsidiaries operate in

sinking fund beginning Feb.

the

Corp.;

bank

convertible

are

stock

common

would be further
that

uged

crease

duces

of
by

& Co-'Inc-' Baker> Simonds & Co., voted, to research, development
Inc.;

increase in the

Co., Inc.;

to0~

rate, but also
the discount

EberStadt & Co. negoti-

piacement of these

Proceeds
b

prin-

Share Corp.; Varnedoe, Chisholm pany's plants and facilities is de-

bring about in time not only
higher rates for borrowing, which
could result in

Podesti

Space
by

J
'
^ ,7
,*
Fust Securities Coip., Fuiton Reid

needs

improvement
which
is
place in economic condi-

expected

during the first quarter of

Associated in the offering with

tions.
is

1959.

in full

of-

provide part of

The debentures

into

senior

rjties.

$1,000,000.

market so that the policy
of "active restraint" will again be

order

company's

equip and stock with inventory
five
new
warehouses
which will be opened by the com-

Doteg>

equipment of the Avco Research
Center at Wilmington, Mass., on
which the company has expended
approximately $16,000,000 to date
and anticipates the expenditure of
approximately an additional

Of the 350,000

the year-end demands have been
taken care of. This means that
there will be a tightening in the

the

$1,400,000

purchased