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Final Edition
ESTABLISHED 1839
Reg. P. S. Pat.
Volume 165
r
.
Number 4564
New York,
JAN 31 1947
in 2 Sections
-
Section T
Office
N. Y.; Thursday, January 30, 1947
Price 30 Cents
a
By; PAUL E1NZIG *J
;
Dr.
Einzig analyzes Britain's export
predicament arising from excessive
sales to "soft currency" countries
and insufficient sales to U. S. and
!
other "hard
y"
currenc
,0^
^
ments to
"hard
money"
conn-
"
Dr. Paul Einzig
tries.
:V;'-'-)*iVr• V'%
There is
Britain
:i£•"?.% *'W't*A'
growing interest in
essentially one¬
a
in
the
sided character
of
the
much-ad¬
vertised
export drive. It is now
realized that the result of export
surpluses
to
not pay for
countries
which
do
them either .because
they have no gold reserves or be¬
cause they are Britain's creditors
in practice simply to relin¬
quish a large part of the proceeds
—is
of the dollar loan in favor of those
countries.-
For
there
can
be
no
doubt* about it that the deficit of
Britain's trade balance with "hard
currency"/countries is to
means
y ♦.
negligible
(Continued
a
by ao
extent' due v to
611)
<?n page
Vacuum Concrete
!
State and
AerovoxCdrp.?
Municipal
Havana Litho. Co.*
i
R. H. Johnson & Co,
% Established
| -* ProspectW oniretiuest
CANADIAN
1927
Bonds
SECURITIES
INVESTMENT SECURITIES
Hirsch & Co
-I
\ Members Neva York Stock Exchange
M
and other Exchanges'
^
BOSTON
V
25 Broad St., New York 4, N. Y.
Troy
HAnover 2-0600
Baltimore. ,v
:
Chicago
Teletype NY 1-210
<
Cleveland
Albany
Buffalo
Members
Syracuse
New
Dallas
s
Harrisburg
-.
Pittsburgh YScrahton
London
52
Wilkes-Bar re
WiUiamsport Springfield
:\ Geneva (Representative)
.
Woonsocket
NATIONAL BANK
of INDIA, LIMITED
Bond Dept. Teletype: NY 1-708
FINANCE
Y
Kenya Colony and Uganda
f
26, Bishopsgate,
London, E. C.
Reserve Fund
Bank
Solar Aircraft Company
SECONDARY
90c Conv. Preferred " '
r
MARKETS
Twin Coach
conducts
banking
and
every
exchange
description
business
Trusteeships and Executorships
also
undertaken
~
v
:
Gearhart
£4,000,000
£2,000,000
£2,200,000
&
=
Company
INCORPORATED
of
Members
N.
Y.
;
New York
Tel. REctor 2-3600
,
New York 5
<;
Enterprise 6015
Department
;
f
THE CHASE
i
Toronto
NATIONAL BANK
THE
OF
CITY OF NEW YORK
g
Company
Conv. Preferred
*Prospectus
on
*
request
Broadway,
Telephone:
4
•
New
York
S,
Public Service Co
§ Service
for Banks, Brokers
J
upon
request
;'-;Y
•/„
Hardy & Co
Members
N.
Y.
New
York
Members
New
York
Stock
Curb
Exchange
Exchange
30 Broad St.'
New York 4
Tel.
Tele. NY 1 -733
REctor 2-8600
Bell Teletype: NY 1-635
Analysis dated Jan. 27, 1947
,iand Dealers.
"H,
.
New England
' >
Members New York Stock Exchange
120
Teletype N. Y. 1-576
Philadelphia- Telephone:
Montreal
Bond!: Brokerage
«
•
Reynolds & Co.
Security Dealers Ass'n
45 Nassau Street
ppt Bond
York. Security' Dealers Assn.
WILLIAM ST., N. Y. v HAnover 2-0980
:
j >■ Bell Teletype NY 1-395
;
Burma. Oeylon. Kenya
and Aden and Zanzibar -
Paid-Up Capital
Conv. Preferred
^Detroit Harvester Co. Com.
India,
Subscribed Capital
>
.
•
In
Colony
The
,
Office:
"
Branches
;
'
■:
Bankers to the Government in
Head
.
^
Acme Aluminum Alloys,; Inc
CORPORATE
■y'
S
PHILADELPHIA
.
DIgby-4^800
ira haupt&co.
Members New
York Stock Exchange
and other Principal Exchanges
111
Broadway, N. Y. 6
REctor 2-3100
Teletype NY 1-2706
...N
the commercial &
590
Thursday, January 30, 1947!
\,l
financial chronicle
■" <r»rr*»
.
Trading Markets in:
"Boom orBust"
Depends
Preferred & Common
Old Reorg.' Rails
v<:
Common
1
■
■>
Amer. Barge /
KING & KING
SECURITIES CORP.
'
p.
Dealers Assn.
of Securities Dealers, Inc..
Nat'l Ass'n
HA 2-2772
Exchange PI., N. Y. 5
ifevYYAY
:
Recently President Truman
-
Members N. Y. Security
40
-
Bought—Sold—Quoted
"
i
WagesbMlMce3:Y^
rigid controls of. the economy shave long pre vented+the free exchang3 cf
'AiheriCah hietoi'y> "depre^
ices.
heve' fesulted from three rnajor
Analysis
TELE l
goods and serv- Steiner, Rouse & Co.
S:
■'
1
Members
New
25 Broad
One, an in-<^
adequate flow 3'ears. It is not and it never was
v^ithin the power of industry to
of private cap¬
^
in t
ital
i
t h
Feltman & Curme
Kendall
Com.
Co.
May, McEwen & Kaiser
MitclielUCompaiuj
120
.
Savoy Plaza
3/6s, 1956
Class "A"
i
York Curb Exchange k
Members New
York 5
4i':
SI Nassau Street, New
>■;
COrtlandt 7-4070'
System Teletype NY 1-1548
Telephono
•
Bell
.
;|
-
:
x
•/• >
4-
'
•
S.
Campbell
Common & Preferred
.
* Dazey
.
?
C eniral Fu-r.
jrope was pre¬
dicted years
before it hap¬
pened, Speng-
;
tehtion
Airlines
tVx.4f*'
•.
..J
.
jv.
•
t
X
i
*
>®||S.
- .7
MC TlONNELL & To.
,
H. G. BRUNS & CO.
20 Pine Street, New
m
Bell
York 5
WHitehall 3-1223
.
-"
■
Members •
•■'.- .X
New York Stock Exchange
Teletype NY U-184f
as
a
120
;
the
fore
BROADWAYj NEW YORK B
TeL
BROWN
1
,
4
/
liant
neered
*
V
-•
-
'r^>~ fi-a-P.
••
V*
I
of
Atlantay Ga^'JauF 16,
Bell
1-1126 &
' of
survival
'
BstabliaheU 1923
1127
•-
,
Y
NEW YORK 5
HAnover 2-B470
and
'MICHAEL HEANEY,
beckoned
women
which
Joseph McManus & Co.
i Members New
':
,.
rbdmen
and
a
Tradinsf Markets Iri
Joseph Bancroft & Sons
Christiana Secur. Com.
'became
Forging Co.
Verney Corp.
Moore Drop
of
Y -Y YY;'
:YjYY;'
*
.
:
A Change of Form'
:• .-i-'.-ci-1"' i<y--
:
:
■■
Y
Laird, Bisse»& Meeds
]
^-X"<:vj
But faced with another depress
NEW YORK 6, N. Y.
sion
in
1929-the goo<t
Teletype NY 1-672
Members New
(Continued
NEW YORK 5, N. Y.
Telephone:- BArclay 7-8506
American
on page
York Stock Exchange
120 BROADWAY,
:
{ v
Y
Central States Elec.(Va)
large industrial
and
banking 'corporations. Poor" emi¬
grant boys became great scientists.
Principal Exchanges
Teletype NY 1-1610
otberYform
farmers
'
w
New York 6
Olgby 4-3122
railroad,. presi¬
became
Sbrisv of
dents.
York Curb Exchange /
Chicago Stoqk Exchange
39 Broadway
people
more
health
better
WALTER KANE, A..t, Mgr.
.
Self-re¬
the continent,
in
.
basic
miner$' sons became ^re^idehts of
large steel companies. Railroad
& CO.
Telephone BArclay 7-0100
"
Teletype NY 1-1146
government. I n d.i v i dual
achievement
was
high.
Coal
1959
COMPANY, Com. & Pfd., S%
115 BROADWAY
' .l,
Members New York Curb Exchange
64 WATJC. ST.V
the
hope-filled future pio¬
other people under any
PAPER, Com. & Pfd., 5% 1965
4'i^loODBODY
Hanover 2-4850
Teletypes—NY
-
achievement.
across
heads
Members N. T, Security Dealers Assn.
St., N. Y. 5
Markets iri
Canadian Securities Dept.
oreenaecmiCompotui
37 Wall
a
nation
a
>
*'.S' f:
?
—
his¬
is
fought
depressions . . .
1791; 1819, .18,37, 1857, and so on
down through history : v •. and be¬
tween wars and depressions built
MINNESOTA & ONTARIO PAPER
-
★
Frank C. Mastersoo & Co.
!
overcame
wars,
by Mr. Millians be¬
Association
men
only by
BULOLO GOLD DREDGING
Employees
United Artists Theatres
<
([■:
r—
of
ABITIBI POWER &
:
Common
.
Georgia
Credit Men,
REctor 2-7815
We Maintain Active
Stpd. Pfds.
A 6 PfdY
Hotel Waldorf-Astoria
American
in the
settlement—the
individual
erijoyed
General Aniline & Film A
Railroad
Aspinook Corp.
.
higher standard of living than any
Boston & Maine ft. R.
11
•
Detroit Iht'l Bridge
Citizens Utilities Common
of individual self-reliance and
one
Paul M. Millians
Joseph Bancroft & Sons
!
'
I
historical American form had been
1947.
1
New "York 4, N. Y.
Securities
to
Plymouth
individual,
*An address
self-reliance
basic
essential
with
points out that practically every¬
thing that has/ been achieved in
York Curb Exchange
Nets
f
.
Curb and Unlisted
4xv/"'
.
|
h(uiOity
jdnd;':
c^iartiaiu*pima, if you please, which was
is allimporta nt;
and Spengler
Bought—Sold—Quoted
"X
Prospectus an. request
Telephone;
-Individual
torically
forjm
-
V
Bell System Teletype NY 1-1919 Y
form. With .the exception of ;com-
to
with
nation
an
•
Broadway WHitehall 4-8120
50
;
has lost much of its "Good Form."
forin. Y He felt
that
•.**,;^vv;v.f.•
.
Commonwealth Gas
i-* Members Nevt York lStock Exchange
} Members Neyt YorkiCurb Exchange:Y
■{And it is in this thought that we
iijnd the over-riding theme for our
discussion here "today I;-."America
ler gave con¬
a t-
4
X
IdwarilAtairiCo.
vi|drld histdryvtias been
TUjbt of living" iinitfes that Yfound
t^iemsolvesiii good form;.
repre-;
er.nmehf in
Shoe;
:
|
:4.:
the, past dozen hxxwhictrt/4l<f
American Overseas
Common & Preferred/
Stock & Rights
;
| Central $tates Electric Coin.;
new
siderable
Wells
Struthers
I
T"
'
;
Red Bank Oil
■
,
5'YV>■■■■
f
j Monmohth Park Jockey Club
628)
on page
Pelix MOrley writing in "Nation's Business" sometime' ago re¬
us that in Oscar' Spengler's book, "The Decline; oi the West,"
r
Corporation
W. L. Douglas
Common
continued
By PAUL MIU.IANS*
tentative gov-
Common & Preferred
.
minds
Wason beforO As¬
sociate Members' Dlriher" Wriim,
New School for Social TtesearcK
J
1
branch offices
v.. ■SJ
of public debt-management.
portance
*Talk by Mr.
■/'i'
our
Higgins Inc
gro\^V and iinpair purcbSsing pdweir, and yet tbey are inadequate
for sound financial planning and
bjidget balancing; Stresses im*
loss of
7:
the pol¬
political party.
election, Government
mismanagement was creating in¬
flation. OPA. by prevent'ig prothe
Until
ideologies, paVUcaiArjly tHose relating^ to individuij
-self reliance and fiscal policy, 'have caused Americai to lose its ec o- v
nomic pattern,=Mr# Millians contends two grave problems confront
the nation^ viz: (1) to find taxes] to carry present buge pijblic.
debt; and (2) to uproot false idea tbat size of debt does not matter.
Holds -present -taxes already destroy incentives, stunt ^economic •
granting or per-^
for
form
,
of either
iticians
Vice-President, Commercial Credit Corporation
Pointing out
tifrb halance within the economy.
i All three causes for depression
have1 existe^ in ^Arher^a^^ in ex¬
treme
/-
•
.
•
■
0«*wO0y,:LO4-7,
A.
,
a
j
;
Vanderhoef & Robinson
Direct wires to
1
Of Its "Good Form/#
i
petuation
of special privileges.
These grants, whether to labor or
td agriculture or to industry, dis-
Savoy Plaza
,
.
ven¬
on
by the Government rOf the* mohfey
and credit system, including the
public debt. The more money the
Government spends beyond its ineime, the less ^valuable the Gov¬
ernment'smoney. and utsj bonds
become. Money ceases. to .be a
serviceable vehicle to move goods.
] The third pause of depressions
in America is the
the Congress that governs us.
In
the last election, the people went
America Has Lost Much
capital. <)
Two, > mis¬
management
Robert' R. -Wason
.NY 1-1557
.
New Orleans, La.-Birmingham, Ala.
aware
high
other ' limita¬
tions
1-1227
BY
Teletype
! Now
ture
Baltimore Stock Exchange
Broadway, «N. Y. 5
WOrth 2-4230
4
Bell
Governmem
Exchange
farther to the right than
rhismanagement.
e
is
taxes, price
controls ; or
'
Members
This
they
Com.
Rhodes
H.
M.
only by
Republican Congress is
caused
power, elected by the protests
by
the people.. The .question ds
Governmental
restrictions oh again asked, "Are we ;headed. for
profits, '• 'be boom or1 depression?", • " "."'H
Jones Estate Corp.
v
k
a
depression. Depressions
a
created
are
ts
e ii
t "m
jobs.
Intl. Acc.. Society A
,.
a
create
in¬
into
vest in
Cassco Corp.
,
Stock
York
St, New York 4, N. Y.
HAaover 2-6700
Tre American people ere more
of our eocnpaa-c ills than
.
ir'"
Request
on
iv'
-,Y" Y..
'
BELL
""J
•"
Manufacturuig Co.
1^ x4x1
predicted -that .depression would result from ris rr
gnomic-well-being^f;;'^^^^:
:irEstablished 1920
*' '!
!
-
in 1947 unless made by 1 ther government,
NAM-Chairman declares there* will be no slump
Amer. Phenolic
&
;iT"T "r7u
m,
Rockwell
the talk
of inevitable depression being "silly." Concludes "if governmental sell-out to labor .does not cboke i
us, we are on the threshold of the most glorious period of man's lOternaf slrH^jh' to improve 'hia-eco-;;
Standard G & E
••l,
Government
on
Chairmanof the Board, NAM
Preferreds
&
"'u
*
»#-i (V
T
Electronics Corp.
Commons
Y'YYVV.
Beli, Teletype—WX trl24&,-49
624)
^Air Products, Inc. Com. & "A"
Haytian Corp.
.
••
'•
^
"
«->.
= '
"4 v
For Banks, Brokers &
Y.
k'^W:¥v;i & I
v-
^444x4/4
Dealers
;4.V-.Y.'....
vY
?
4•
BAUSCH & LOME
^.Y.,
]
i
YY.?v'Yr
*
K7'-
I
\
V-,
•
*
FARR & CO.
Members
New
York
flew
York
New
York
Curb
Stock
&
Sugar
Exchange
«i
"
.
J
j
.
' .
120 WALL
ST., NEW YORK
TEL. HANOVER 2-9612
4
t
7
-
Yv
Member Nets York. Security Deplete Association
.74 Trinity Place, New York 6, N. Y.
Telephone HAnover 2-2400
Private Wirts to
f1
Common & Preferred
f
r'Wl
" Ti.i: >
«, '
{
'* Yv" k
s "i~
Memorandum
Troster, Currie & Summers
Exchange
Exch.' Assoc; *MembBt
Coffee
'
-
»' /
on
,
:
Y;
:Y"
Teletype 1-376-377-378
Buffalo—Cleveland—Detroit—Pittsburgh—-St. Louis
X., Y'Y'' incorporated ".Y'/zy Y-'?;Y
r
Universal Winding Co. Com.
;YY-YiY;-- Prospectus on request: v
Reynolds & Co.
Jferobera
37 WALL
j
STREET
r ;
; NEW
ESTABLISHED 1890
Tel. HAnover 2-9300
^
request
J*G -White 8 Company
.
?
Raytheon Mannfactnring Co.
$2.40 Conv. Preferred
-Y.v
;':y':
;
•>
BOUGH?—SOtD—QVOTED
:Y
y
1 ,Y,H-?
' ' y;
51
*Trading Market
Quotations Upon Request
Common
i
Pathe Industries, Inc.
Punta Alegre Sugar
*Emery Air Freight Corp.
-YY:-X-YY:Y';Y
;Xr'Y"YYY
•Yi;z■ :v-''■/
YORK 5
''
'
Tele. NY 1-1815
New
120 Broadway,
York Stock Exchange
New York 5, N. Y.;,
Telephone:. REctor 2-8600 •5YY;.Y'i
Bell Teletype: NY 1-635
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4564
[Volume 165
INDEX
Articles
and
Will World Bank Securities Meet
•$' €£
Pnce
4.
Drop Probable, Declares ;
Commerce Department Official
Pag® j '
News
Accepted Investment
•
'
Standards—Marshall H. Wood——
Cover
Outlook for Income and.Spending—Ragnar Naess-^-x,—Cover
Current Prosperity Is Normal—Williafti W. Cumberland--Cover
—-
^BoOm
or
Bust" l)epcnds
Government—Robert E. Wasoft 590
on
|
Paradiso
591
Overh&ulihg the Securities Acts (Editorial)
5
Danger—Heritage of War Finance
59*
:
j
production.
Fublic Debt and Social Institutions—Donald fi,
pTices
Economic Outlook for 1947—Solomon Barkin—
the
vision,
of
596
597
Domestic Money—Robert Triffm-
vs.
599
A Federation of German States—Nicholas Murray Biitler— 602
Di¬
Office
Business
frorri
New
Louis
j
J.
to
December
York
1946,
goods
Sharpest
evening
at the Associate
Members dinner
Price ;Inereases
"Those
for goods arid services to contihijie
periods
What Price Yoricks!—Edward A.
Roberts—n
Russia—Edmour Germain
608
—
the New School f6r
at
years
the. prospects
to
of
Title Company
Mortgage Certificates
G0LDWATER, FRANK & 0GDEN
39
Broadway, New York, N. Y.
Teletype NY 1-1203
the
are
,;u
Member of
Security Dealers Assn.
National Assn. of Security Dealers, Ine.
;;
sharpest
rates
our
history* exceeding the rat£s
previous
Electric
of
inflationary
price
movements—1812-14; 1861-65; arid
1916-20," Mr. Paradiso said.
come.
for good
business defends very heavily; :bn
the strength of these
demands, the
610
Offerings Wanted
of price increase which have oc¬
curred in any six months period
Research, Mr. Paradiso said
"Since
609
;
"The Economic Outlook
strong for several
China's Economic Recovery Given Serious Setback by
The Need for Statistics—James D. Paris
1947''
Social
608
—
.
on
NEW YORK
New York
of increases in the three
forum
in!
History
•
.(Wednesday)
,
Retroactive Portal Pay
O'Daniel—
our
WHitehall 4-6551
Telephone:
HAnover 2-8970
C it y "last
Paradiso
WALL STREET,
99
of ia
prices of consumer
increased by 15%.
that he expects consumer demands
Lee
of
one
by 26%
June
Whild
A Windfall Tax
—Sen. W.
shout for joy.
you
that the average wholesale pride
all commodities rose
for
.
prob¬
will
or
instalment Loans lor small Business-^CariA. Binison-i-...- 604
"We Can and Must Have Industrial Peace"—John C. Knox 605
;
A Federal Labor Court—Is It Needed?—Donald E. Richberg 605
Critical Appraisal of Nathan Report—Jules Backman
607
on
obsolete
your
"Varga" Memo Pads
said.
dissipation of con¬
sumer incomes
by the continuation
of the current high prices in
marly
segments df the economy.
Citing overall figures on recent
pried increases, Mr. Paradiso said
Speaking in
;
Paradiso
of
•»
599
*!fho International Battk-^Bmilio G- Collado—T
means
Weakening
Commerce.
ProspectuseS-^-Edmofid M. Hanrahan———— 597 ;
—
the prevention
Economics,
Department of
■■
Food Commission's Proposals^Herbert M. Bratter
ably make
for
securities
power of
Mr.
"This
Busings
Structure
596.
^
Building Industry—Joseph L. Wood——
Obligations of Deaierk ahd Brokers in Interj(retin4f
in
bids
our
inactive
the
was
consumers,"
diso, Chief of
595 «/
Cio Union Says It Doesn't Know How Much Longer It Can
Hold Off Strike at* Irving Trtist Co.—Edmour Germain— 595
liitefnational
ing the 'real' purchasing
may
Louis J. Para¬
Air Transportation Outlook—W. A. Patterson
June to December 1946
main problem is that of maintain¬
drop in 1947,
! according. to
depression Ahead!—William j. Baxter
Outlook
that
,
Transportation dutlook-—-l94l---James C. Nelson——-—— 594
Certain
—and
and
Send for
the nation's history for
any similar time period, and many
factors
indi-<®>-^—<
• ■
:
-t
,i
594
—-—
"MONEY TALKS"
SUXX.
cate
Woodward, 593
KailroadRecessioiiAhead!—Charles Shipman—
in
592
-
consumer
The fate of price increases frorri
greatest
Securities
Yields on Government
Fixed
—d. Brooke Willis--————.
and company
.
\ u
,
Fallacies of
dissipation of
incomes by high prices.!%
history, have resulted in dras¬
tically distorted price structure. Predicts readjustment will come
about through (1) Lessening of demand for
hondiirables? (2) In¬
ventory' liquidation; and (3) Lowered costs through increased
j
•*'
-—Wooclltef Thomas
f
of
warns
licmtnsnw
-
Holds recent swings, sharpest k
AmeriOa Had Lost Much of Its "Good Forin"—Paul Milliard 590
Inflation
591
"The
:
sharp
price
movement
(Continued on page 631) :
Bond & Share
What Peace Treaty with Germany?
—Dr. Eelco N. Van Kleffens
"Eights"
610
*•
❖
:SEC and Issuers' Representatives Again Confer on Revision
of Securities Act—
——j————•
"'
on
Securities Acts
SEC conferences
able"
597
—
3§ecffetary Clayton vs.(Senator Hugh Butler
Reciptoc&i
;SEC Reported Considering Relaxation of NYSE Floor
i Trading Rules
■-iiiw-—!
600
The Real Estate Price Trend
602
——
——
The press has been
Stocks
NSTA
614
599
,
593
Governments... 622
Published Twice
Weekly
Res. u.
Park
s.
Place,
Patent Office
Y.,
Bank
Act
of
Monthly
$25.00
March
per
Company.,,...,
»
:
••
(Continued
Quotation
Record—Monthly,
(Foreign postage extra.)
Earnings
Record — Monthly,
year.
(Foreign
*
•.
We
are
Haytian Corporation'
628)
"•
'
•-
.vt:
•
....
..
.
U. S.
-
.
<
;
*Fidel^ Electric Cd.
Class A Common Stock
PREFERRED STOCKS
t
Susquehanna Mills
"
Grinnelf Corp.
La PlanLChoate
;
,
Spencer Trask & Co.
kxchAfipS
Mevribers Nets YotM Stptfc
|
25 Ilroadi
HAnover 2-4300
4
-4.
;■
DUNNE SCO.
t,..v
_
25
Tel^:-Andover 4690
»
"Worcester
Co.
INC.
Members
32
N. Y. Title & Mtge. Co.
N.
Y.
Broadway
Security Dealers Assn.
DlgbjC 4-8640
Teletype NY 1-832, 834
Newburger, Loeb & Co.
« Members New York Stock Exchange •
15 Bro.d
;
'
St, NX 5 '
WHitehall 4-6330
Bell Teletype NY 1-2033"
'
'
Pan American Bank
Telephone: 3-2137 k;
.
Textile, Inc.
J
on
request
*PubIic National Bank
& Trust Co.
Request ri:"
on
Circular
^Offering
equity in the soft dtink industry.
Circulat
Boston
**stern & Stern
*Year-end
CHICAGO 4
analysis
on
request
Teletype CG 129
ESTABLISHED'1914
Y6A-^thicago--Sl:, Louis
-
74
;
Specialists in Soft Drink Stocks
INFew^^ Ifork
Trinity
Telephone:
BOwling Green 9-7400.
-
C. E.
-/w'
;
'
N.
,•
S'.
Teletypes:
^
Unterberg & Co.
Members
BIdg., Miami 32
Teletype MM 80
National Radiator Co.
Hoit.RqseS1Rqsier
Harrison 2075
Direct Wife Service;
New
:
to
Board of Trade BIdg.
NEW YORK 4
Prudence Co.
iiv.i
Wire
Private
Redjtock Bottlers, Inc.
A growth type
Dealers Assn^
*
Schenectady
(Atlanta)
New York Security
Broad St.i New York 4, N. "Y.
WHitehall 3-0272—Teletype NY 1-956
1-5
Glens Falls
-
,
Members
;jTeletype—NY
Boston
-
*Prospecttl8 on request
Members Nep, York Ciirb Exchange
•'
•
-
135 S. La Salle St., Chicago 3
■
Btreef^ New York
Tel.:
Albany
STRAUSSBROS.
Sugar
Commodore Hotel
High Grade Public Utility and Industrial
Mtge. Guar. Co.
Lawyers Title & Goaf. Co.
v
Lea Fabrics
-
*
Bond &
WOrth $-0300
1-84
Teletype NY
Puhta Alegre Sugar
interested in offerings of
Kearney & Trecker
Chicago Tractions
CEftTlflCATiS
System
Eastern Sugar Assoc.
;
postage extfra.)
ary
TITLE COMPANY
on page
Beil
,
year.
be made in New York funds.
Copyright 1947 by William B. Dana
fo.m
&
Members New York Security Dealers Assn.
eign subscriptions and advertisements must
Other Offices:
135 S. La
Salle St.,
Chicago 3,' Hi," (Telephone:" State 0613);
a Drapers' Gardens, London, E. G„ Eng¬
land, c/o Edwards & Smith.
/
Titniai
of
t
Ke&n't&rid' dS second-cilags niattef Febru¬
25, 1942, at the post office at New
and
170 Broadway
S.
-
\,
conference be¬
iSeetirities
policy should be followed now by an adminis¬
trative body Shows a distinct Influence 6f the last election.
%The people appeared to be in no mood for trifling and
have directed by the mandate of their franchise that busi-
Note^-Ott account of the fluctuations -in
the rate, bf exchange, remittances for for¬
and adr
<vertlsing issue) and every Monday (comjjvlete statistical issue — market auotation
srecords, corporation news, bank clearings,
tttate and city news, etc.).
■
^
Company
National Shirt $hops
of
and
$25.00 per
Thursday, January 30, 1947
pews
the
Other Publications
RIGGS/ Business Manager
Thursday (general
under
a
That this
Union, $35.00 per year; in
Canada,
$38.00
per
year.
Other Countries, $42.00 per year.
Dominion
SEIBERT, Editor & Publisher
WILLIAM DANA SEIBERT, President
ISvery
subject of
the intent to develop'"desirable and workable"
pro¬
posals amending the Acts of 1933 and 1934. •
Whyte Says) .. s.............;. 634
Washington and You..........;, 593
D.
WILLIAM D.
the
was
Chffreyy
was
637
ThioJcol CorpNafional
Pan-American
Publishers
New York 8, N. Y.
REctor 2-9570 to 9576
&ERBERT
616
Salesman's Corner....
Securities Now in Registration...
Tomorrow's Markets (Walter
Subscriptions in United States, U.
Possessions, Territories and Members
1
.
Securities
Subscription Rates
FINANCIAL CHRONICLE
25
606
Drug Products
'
It is said that this
602
York, N.
3, 1879.
The COMMERCIAL and
TOILLIAM B. DAN"A COMPANI,
Railroad Securities -
Chicago
TRADING MARKETS
re¬
Exchange Commission, and President Truman, behind which
Cover
Funds
on
" y:
of what is
tween
Real Estate Securities.
Notes
Reporter
an account
Prospective Security Offerings... 642
Public Utility Securities......... 596
642
Reilly & Co.,
Incorporated
revision of the Securities
a
Our Reporter's Report
598
Observations—A. Wilfred May...
Our
carrying
612
Recommendations
Mutual
Page
Investment
Einzig—Britain's One-Sided
Export Drive
-i
Public
604
Securities,
v
setret
puted to be the forerunner of
Acts.'
Dealer-Broker
^ V
■*'
New York
'meetings, control pf
vspr^ads. Trial by competitors arraigned.
Regular Features
Canadian
ta the Securities Acts.
of,
—
Page
"desirable and work¬
J. F.
interest Inquires repeal of
Malongy Act, thus abol-
Weisenburger of NAM Opposes Compulsory Arbitration.606
Eisenhower Favors Voluntary Enlistments..^^——.:
608
Tightens Sale of Canadian Securities in U. S.
612
3Bank and Insurance
to recommend
amendments
—.———ii—_^————— 598
———
>•
*
Price Drop Probable, Declares Paradiso of Commerce Dept. 591
.SEC Expects To Report Soott On Study of September
Market Break si——————
1
597
Trade Agreements
*
f--
(
*
NY 1-375—NY 1-2751
61
Y.
Security
Dealers Ass'n
Broadway, New York 6, N.Y.
Telephone BOwling Green 9-3565
•Teletype NY 1-1666
Inflation
BUSINESS BUZZ
Danger—Heritageof
*
wy > •
War Finance
By WOODLIEF THOMAS*
mr.ACTUAL MARKETS
Director of Research of the Federal Reserve System
■
IN 250
-IB
Asserting present inflationary developments have their seeds hi
>'.;K
ACTIVE ISSUES
A
mmTYW,
war
finance/ Dr. Thomas holds central problem nf: Federal Reserve System
in future is to reestablish lost control overi bank
credit expansions.
Abitibi Power
Contends higher interest rates
would not discourage private borrowing from banks
but would cause sale of government securities 'to
Armstrong Rubber
Federal Reserve.
Buckeye Steel Castings
Pfd.
Diebold Inc.*
District Theatrest
Expreso Aereo
.
General Machinery
^Gt Amer; Industries
Woodlief Thomas
Hartford-Empire Co.* j
Higgins Inc.
Hoving Corp.
;
Majestic Radio & TeL;
Maryland Casualty
Michigan Chemical
| .Minn. & Ontario Paper
1
Missouri -Pac.
I
Old Pfd.
a.
control of commercial banks .far
the economy to the threat of seri- ®1
ous inflation.. The amounts of such
bank credit
-
all previous rec¬
Surpassed
function for
was
;
expansion—the m
which the ; System
founded—and faces the prob¬
ords, and this superabundance of lem of finding ways to reestab¬
money, unless wiped out by infla¬ lish and maintain its capacity to
tion; and revalorization, will con¬ influence credit developments.!
War is inevitably; inflationary
tinue for. many years.
Careful
monetary - and; fiscal: regulation because people receive incomes
will be needed for many years to for producing and supplying goods
which are not available for pur¬
come to avoid, at the worst/ seri¬
ous
inflation and collapse or, at chase# War .expenditures have io
the least, ' instability in prices, be financed and no country has
credit/ and interest rates. As a yet been willing to impose upon
result of this heritage of war fi¬ itself a tax - burden that will tal^e
nance, the Federal Reserve Sys¬ as much as half of current income,
tem is no longer in a position to the amount required in this coun¬
exercise
effective
control over try during the war just ended, or
*A paper read by Dr. Thomas
befdre
N;Y. New Hav.& Hart
beyond
^
•
Moxie
Old Pfd.
mean
to adopt a program of
even
Mohawk-Rubber*
.
\
N*
con
what is contemplated in Socialist Britain."
f
>l"h 4
"
r..
( J"
i OneJof
the'.inevitablevconseqtiences bf war is the creation of ia
vast supplyv of-money arid'Other liquid^aSset^ and, the exposure 6f
war
Lanova*
Long Bell Lumber
I
-
asset? created in the second world
Hydraulic Press
,
further credit
already suggested by; Federal Reserve System such
as
(1) increased bank reserve requirements;
(2) requirement, of a secondary, reserve of Treasury
shqrbterm notes equalJ,to.;a specified percent of
demand deposits; and (3) a limitation on hold¬
ings of government long-term bonds by banks.
Says proposals are not! revolutionary or drastic,
but " stresses London commentary/ "they ; would
Chicago R. I. & Pac." j
'
as
trols, additional instruments of credit regulations
Cinecolor
Old
Proposes
;
the
Economic
American
isnMMni in
"—And
(Continued on page 616)
1947.
,
Dl Willis attacks wartime pattern
^District Theatres
Taca
Airways
Taylor-Wharton*
Upson Corp.*
f! U. S. Air Conditioning
*HungerfordPlastics
*Metal Forming Corp;
Purolator Prod.*
*Dumont Electric
U.S. Truck
5, NL Y.
Teletype NY. 1-2425
Alabama Mills*
Aspbook Corp.*
N. J. Worsted, New
Textroh Wriits. & Pfd.
or
' *,
,
v
r
,
'%f(.
j>
■'
? "*
N
Corporation
ESTABLISHED 1927
Street, New York 16, N. Y.
Teletype: NY 1-2948
Telephone: LExington 2-7300
'
' V'"
is to examine the arguments for and the
implications of the maintenance of the wartime pattern of yields on
government
securities.!
The<S>
———
pattern is roughly defined by render by the Reserve System of
% of 1% on 90 day Treasury qauntitative control over the sup¬
bills, % of 1 % on one year ply of money and eventually ne¬
the
curtailment of the
Treasury certificates of indebted¬
cessitates
present day lending functions of
commercial banks. Such a policy
affords no satisfactory alternative
aid in financing the War by means
of bank borrowing at low cost.
The arguments adduced for this
policy are inconsistent and are not
convincing. The extension of this
policy during peace times/ par¬
ticularly when full employment
exists, implies the complete sur-
quantitative
1 This
policy is set forth in the Annual
Board of Governors of the
System for the year 1945.
Report of the
Federal Reserve
Circular upon request
basis
monetary
of
control which control
is made to
depend entirely upon the manage¬
receipts and ex¬
ment of Treasury
penditures.
(Continued on page 619)
*A paper delivered
by Dri WiDia
American EconomiO
Association, Atlantic City, N. J.,
before
1 Prospectus Upon Request
* Bulletin
\ »r
pattern which was adopted
fortuitously early in the War to
NORTHERN INDIANA PUBLIC SERVICE
22 East 40th
government securi¬
The aim of this paper
the
EASTERN CORPORATION
Central National
on
ness, and 2%%
on the longest
term bonds.
This is substantially
NATIONAL COMPANY
If Puget S'nd P. & L. Com.
ff Southwest Natural Gas
"
Quoted
Sold
Bought
tj Cent. States Elec., Com.
DerbyGas&Elec.
if Elec. Bond & Sh. Rts.
t
\
v
Tel. HAnover 2-8080
of yields
ground such policy implies surrender by Federal Reserve of
on
quantitative credit control. Denies fixed interest pattern is essential
keep down either Federal debt burden or excessive bank earn*,
ings. Says danger of heavy losses to banks arising from higher
rates on government securities has been ^exaggerated, and a policy
of "freezing" interest rates requires expansion of inflationary'
money supply,
Concludes extension of wartime interest pattern
leads to undermining loan functions of commercial banks and ulti¬
mately to selective controls over all types of lenders.
■■■■■■■■■■■■
Ip Standard Gas Elec.
ties
*
New York
52 Wall Street
Vacuum Concrete
" *[«£•
WILLIS*'/j/* ""1
io.
FIRST COLONY CORPORATION
I United Drill & Tool "B?'
•
J. BROOKE
,
Assistant Professor of Banking, Columbia University
PhUip Carey.
_
on
Government Securities
-.
,
Pathe Industries
x'd&Ht:
He Had a Seat on the Curb!"
He Told Me
Fallacies oi Fixed Yields
boy-
rowing put of the people's savings
the balance between expenditures
Association, Atlantic City, N. J., and taxes,.' Throughout the war,
Jan. 25,
tuna
the
Jan. 25,
1947.
,
CT8VE MARKETS
OSGOOD COMPANY
Established
1840
120 BROADWAY, N. Y. S
Detailed circular upon
REctor 2-0700
NT. Y. 1-1286-1287-1288
Direct Wires To
■'/
,,
...
*
ENTERPRISE PHONES
Ilnrtf'd 6111
Buff. 6024
Incorporated
•••'
Bos. 2100
Members
41
New
Broad Street, New
York
Industries
„
»
..
....
J.K.RIce.Jr.&Co.
•:
?
HAnover 2-2100
; -
Members
Security Dealers Association
York 4 W
Great American
request
Seligman, Lubetkin & Co.
.
Oh'^aeo As Los Angeles
Virginia Dare Stores
U. S. Finishing Com. & Pfd.
;
.
,
.
Phlla
next 1.0 years..
Di-Noc Co.
Standard-Thomson Corp.
manufactures
field looks good for
Kingan & Company
r.'
equipment for. construction, inining,
quarrying and lumber industries. /Outlook for heavy industry
Company
Soya Corp.
'
c ,"
Approximate? earnings,' 1946—$2.85 per share > '
Net current assets, Dec. 31, 1945—approximately $12.60
Approximate selling price—$8.25 per share
Members N.Y. Security Dealers Assn.
American Overseas Airlines
Established 1908
N.
Y.
Security
REctor 2-4500—120
!'
Assn.
Broadway .1
Bell System Teletype N.
SIEGEL & CO.
;
Dealers
Y. 1-714
89 Broadway, N.
Y. 6
DIgby 4-2370
'
: Teletype NY 1-1942
> k|>
Volume 165
Number 4564
THE COMMERCIAL ft FINANCIAL CHRONICLE
593
With Carl McGlone & Co.
(Special ,to
f
The
Chronicle)
Financial
*
.4
CHICAGO, " ILL.
on
Becker has joined the staff
...
McGlone
Behind ihe-Scene
Interpretations
-
from the Nation's Capital
'
&
Co.;
Inc.;
La Salle Street. He
V/| V f
y| m W
JLjL I (LU
JL Ir Uf
INTERNATIONAL
IS
/
TRADE
ORGANIZATION WORKABLE?
with Remer,
B.
Arthur
Of Carl
South
105
previously"
was
Mitchell & Reitzel. £
The Conflicts With Our Domestic Policies
.
AMERICAN
ATLANTIC CITY, N. J.—One conclusion following indirectly
:.N-m
have encour¬ from the four-day; Joint sessions, of the American »Economicand
aged Washington to be sanguine that industrial peace may become a American Statistical associations here, is the inescapable realization
reality^ in 1947.; That's important, will lure Congress toward the of the hard sledding with which our, recently promulgated Trade
center of the road in labor legislation.
Extremists on both sides of Agreements will be confronted. Thb difficulties '"
the middle will be tagged as disturbers, will find themselves futile obstruct not only the
adoption of the "liberal"
unless John L. Lewis promotes more trouble with another coal strike. trade program, but its workability after its pos¬
MADE
.v.
Friendlier labor-management relationships of late
Even
no
in
that
assurance
potentiality there's^
Lewis could destroy fog
employer and employee.
General
-
labor legislation
will /
-
agreement, by labor
and
management
spokesmen/
testifying before Senate Labor
who timidly
Committee in hearings now un¬
der - Way ; that. Congress should
avoid tough, irritating legisla¬
sought
a
"
boycott the soapbox reformers
ments
ticians.
is like
mous
mittee,
the: practical poli- %
/<
f-..v
•
-
'
i
;v5
*
•<
that
be
forestalled by the peacemakers.
Congress is convinced employers
legislate
strive
will
to
the
it
*:-
attitude of
,
A
of business organization/ Sees more dependence and
closer dependence of financial institutions on government because
of large national debt, and speaks of emergence of "a Central
Bank" controlling and planning long-range as well as day-to-day
conditions^ Concludes these developments need not be viewed
vrv
■
the ^
.V--v..■i ^
a
tioris it has induced extend pro¬
.
family, the
church, the
fusely. The debt, as here defined,
and the resulting/ inhibitions, is
having and I think will continue
to have, a marked effect on all
four of the institutions*
or¬
ganization and
the
stat e.
Around
and
.
;
•
»
of
selves for the
decisions regarding the determina¬
tion and direction of effort, ex¬
accomplish,
the
of
ends
1
four
it
is
they
seek.
Donald B. Woodward
And
penditure, .accumulation
(Continued
f around.and
through these
obvious
that
the
and
in-
unilateral; not multilateral, dumping
^
^^>1 j'
:!!Part of
ten¬
a
Woodward
read
^
American Beverage /
\
.^preferred •/
•'
'
.
;
;
"
.
PETER BARKEN
32 Broadway, New
York 4, N. Y.
Tele. MY 1-2500
Tel. WHitehall 4-6430
?
./
Specialists in
Higher tariffs to keep subsidized exports from returning
Miscellaneous /qualitative" controls
• ; /
Finely practised art of dumping
(6) Supporting of prices.
and Philippine
Mining Issues
t
Depression Will Increase Difficulties
11/
It must be realized-that
our
;
(Continued
-
...
s.'>j,-'YY
on
page
MAHER & HULSEBOSCH
625)
Brokers
<6
Dealers T-
—
Sold
—
Quoted
Virginia Electric and Power Company
As
Common—When Distributed
a
.
7
.
v
v
N. J.
Agents We Are
BUYERS
r
.
NY 1-2613
Branch Office
113 Hudson St., Jersey, CHty,
<
?
.
New York 5, N. Y.
Teletype
WHitehall 4-2422 «
■
.
Securities
Investment
In
12 William St; '
Telephone
Bought
/
V
"
populace's temper in opposition to
jtariff reduction, which is prcvalent 'enough even now, will become
greatly; intensified with the arrival of future depressions. Less full
;
/;
Domestic, Canadian
of
IRANIAN-OWNED STERLING
CHINESE-OWNED STERLING
BAR GOLD HELD ABROAD
—•
and SELLERS of
IRANIAN-OWNED STERLING
City,
of the American
Association, Atlantic
.r1
.
Albert Pick
/
Eco¬
nomic
.
Carbon Monoxide Eliminator
Annual
Meeting
semantics I do not say tentacles—
i /// T K' v<;' /
San Carlos Milling
/
by Mr.
the
paper
before
m/:
?
American Insulator'
632)
on page
:
,
Toronto
Montreal
New York
our
★
drils—in deference to Mr. Chase's
of the
/
(3)
(4)
(5)
family, after the erosion of
its role by urbanization and divi¬
sion of labor, are three: procrea¬
tion, education: arid living; These
functions motivate a variety of
so¬
HArover 2-0980
Bell Teletype NY.-: 1-395
(2) Excise taxes/,//
ern
ciety have or¬
ganized them¬
ment
52 WILLIAM ST., N. Y. 5
.
(1) Wage policies...//,,
The basic functions of the mod¬
through these
four, the indi¬
viduals
-
..
..
our
asv
.
'
H & CO.
of the
ad^ersedo free-flowing international trade, Ifous' may be summarized
.
< The institutions of society, the effect upon which of the public
debt lam supposed to discuss, have been identified by Mr. Robert B.
business
as
the beriefit of Ot^r domestic pressure group composed of the;
farriers*
Our own autarchic policies, which have become more and more
with alarm.
as
well
potato policy. We are about to dump
20 million bushels of so-called surplus potatoes to rot, at a cost to
the Government, in its price control program, of $28 million. The
government's support of potato prices at a cost > of $80 million last
year, has been part of jits domestic! policy to keep the price up^for
five concept
j
shining example of
practice is contained in
Second Vice-President, Mutual Life Insurance Co. of N. Y.
Warren
v
-
..
as
policies at home. This is par¬
ticularly exemplified in our existing production programs and price
policies, notably those ; in the agricultural field. It is the mildest
upderstatehierii'to conclude that ITO does not represent the logical
extensiom of our internal economic policies.
% * * • " ' * J
Mr, Woodward discusses, effects of public debt on social institu¬
tions/Argues large debt contributes toward delnationalization of family and of church. Holds national debt also destroys produc-.
?
A. Wilfred May
is particularly serious in
ours
inronsi^enVwith itsifc^
By DONALD B. WOODWARD*
,
'
.
in the developing
(Continued on page 626)
Public Debt and Social Institutions
•
keep displayed
restrictions, and glorified forms of dumping.
At almost every important step in the international negotiations
the "United .States' statesmanlike position^ has
unfortunately beeri
Big" issue
remain^: in ' h
.A;
we
taxation to prevent our subsidized exports from returning. We have
really never stopped the promiscuous use of quantitative =, trade
come/^:w//'* /
*
potted plant which
In the first place, agitation is appearing and
growing for raising
—not lowering—tariffs; a process which really constitutes excise
unquestioning loyalty in
pinches
that are certain
to
to
a
-
sores
majority When
Republican
such protection. But the
average lawmaker
hurtful
Company 5s, 1959
Mexican Light & Power
our-
rules, for the operations of the Trade Organization,
Monetary -Fund and the-World Bank.
needs
should be protected from this type
exploitation,
be
may
direct
be¬
the light of the preporiderating influence of the United States, both
morally and materially, in formulating both the principles and the
extending
taxes/ But'
demonstrations left
those
Portal pay legislation won't
of
excise
war-hiked
^
■
bill
the
on
Americans
contradiction f between
us
in the front window to be admired by our guests
for its ahstefe economic beauties. This dichoto-
a gag rule limiting de¬
bate and barring- floor amend¬
and ; follow
tion^^3pmountihg/ teridenOy'tO ^
with
of one observer, the International Trade Charter
were
squelched
when
steersmen
brought from the Rules Com¬
;
the
of
lies
1967
and
re-defini-
taxes
"luxury"
of
tion
:
trouble
.
pious preachings internationally on the one hand,
our seemingly
deep-rooted domestic policies
Oil the other,' In other words, there is a very?1
great gap between our very finely worked-out
drafting plans, and our acts at home. In the words,
Taft
scrowdU bulldozed through bills
[continuing the special: War In¬
vestigating and Small Business
Committees. House Republicans
-
putes;<2)
I 4%s,
;
furida- ;
Brown
cause
1 twice big-sticked when the
expect: (1) additiohalamicadjustment of labor dis¬
able
from
I
Aldred Investment Trust
.
immediate
' Republican leadership is pres¬
ently demonstrating that it can
•be tough and temporarily effec¬
tive. Senate GOP rebels vr-sre
in
arises
IN
CANADIAN
\SECURITIESy
''
i
pessimism
I
mental aiid detailed weaknesses in the ITO
Chart-;
er itself.
But the conclusion is forced on us that
|.
-amorphous
phase
antil April.Inthe interval'you;
can
no
clear idea how to advance./
this fledgling friendship between
remain
proposition, -has
the
? on
sible adoption.
Much of the
MARKETS
SAUDI' ARABIA-OWNED STERLING
puhhc debt and the inhibi- < N. J., Jan. ,24, 1947/
70 Pine
smr:
r
F. BLEIBTREU & CO.,
Street, Hew York 5, N. Y.
WHitehall 4-4970
Teletype NY 1-609
79 Wall St.,
Inc.
New York 5, N.Y.
Telephone HAnover 2-8681-2
Leading
Banks and Trust
Companies
of New York
-,4'y,- V gfrrrfe. /.//
;
.«./
'7 *
.
•
.'•*
'
?•//
v
^
**
MARKET PUCE
American Gas & Power
■■Fot:^:-» //'/ •:/:///'
Central Ohio Light & Power
;
'y.Av v.---.■
Low Priced
Northern Indiana Public Service
V V-r/,-
Mining Stocks
59th CONSECUTIVE QUARTERLY COMPARISON
Available
;• /:
Tennessee Gas & Transmission
request
/ v.//////..//v;7-
Old-Reorg. Rails
'
.
BROADWAY, NEW YORK 5, N. Y. '
Telephone: BArclay 7-5660
Industrial Stocks
"
'
■
Teletype: NY 1-583
,
'
FREDERIC H. HATCH & CO., INC.
New York Hanseatic Corporation
120
Oil Stocks
Bought—Sold—-Quoted
on
Established
GOULET & STEIN
1888
MEMBERS N, Y. SECURITY DEALERS ASSOCIATION
63 WaU
Street, New York 5, N., Y.
'
.
?
Bell Teletype NY 1-897
Members Nat'l Ass'n of Securities Dealers, lrHf.
;•/
HAnover
27
William
2-7768
/
St.,
N.
Y.
5
.
/
Tele: NY 1-1055
; V-jVfr •'$ i\
SI
US*##;-
""*•»
594
**sety, '<:>*&■■
Y i {Special to Thb Financial
Baltimore Transit Co.
:
J.; Metz has* been" added to the
Issues
All
Chambers. & ; Co.,
Inc., Union Trust Building. Mr,
JMfer? whs formerly with West-
Terminal
Bayway
D.
J.
of
staff
Davis Coal A Coke
heimer & Company. "
'
National Sash
7?vY:Y
STEIN BROS. 5 BOYCE
Baltimore Stock
Exchanges and other leading: exchanges
Members New Yerk &
BALTIMORE 2
CALVERT ST.,
6 S.
!
REctor 2-3327
New York Telephone
Dept. of Clark, Dodge
jillotson
previously vwith
Anderson
stocks
ferred
Gillis &
Co, and Ball,- Hurge & Kraus.
\y-fx
v'i
,
RICHMOND, VA.
r
the
for
.
VIRGINIA—WEST VIRGINIA
| The Parker
| Appliance Company
)
CompARy \is
j
of tube
»Outlook
MUNICIPAL BONDS
Murphy Chair Company
CRAIGIE&CO.
mBANKERS BOND ^
indi¬
served
industries
for
prospective earning*
7k''- 777
'
v
Tncprpprpted
!•! Floor, Kentucky Home Life Bldg.
LOUISVILLE 78; KENTUCKY ^
Current quotations,; comnion stock —
available- at approximately 40 %
Is
.
less
\
original' offetlng: iirlqe
tkan
j 1940,
ment
despite
in
basic
position,
and
at less than
per
share.>
v
*
Tfading Markets
.4
V.)v 1.x
%
<
\
v
du
Pont, Homsey Co.
f
v
•
V-.
Scott, Uiwhqr
BOSTON©,' MASS.
-
•.-
.
.
m
f
?-
'»>''
"
Members
on
.
;.*'^"y>'•'•♦.*'•'
I®:
:•
Exchange
W*rktrt
•;
...
.
..
Nets
Philadelphia
York Cjirp
1420 Walnut
24 Federal Street, Boston 10
%
Y
Exchange;
till.
i
ii
nini IN
iyl»»ijl.i|y.li.|ij"iLJl,L;i|»l
••r'"
on
j- Ut;
INCORPORATED
-'
'«>
-
Dealers
Light Co.
;
.
Common
11
-
Underwriters
Bought—Sold——Quoted
-w
;
p:.|"
J
iowa
i
Bell Tele. DM 184
♦*
«
j
Dairies, Inc.
Winn & Lovett
■
\
★
.«-•! ,f
"
...
and
mo¬
..
water
Analysis
James C. Nelson
;
fiastwise and intercostal services,
ipe line traffic was at
much
lbwer (level in 194-3 than in 1945
because of the closing of the Big
a
lattje. Big Inch lines shortly
VJ-Day. If labor-manage¬ carriers in an attempt not only to
problems are settled., the retain their present share of the
freight traffic outlook for 1947 passenger traffie; but also 7to ©t-»
should be a continuation of traffic tract new business. . Y;
;
:
't
Edward l. burton
& company
3'
PH 80
•
'* **•
-
t
'
'
;
.
Y.;YRail Carriers
ESTABLISHED J890
,160 s. Main Street';?:.:''.
r-aALT LAKE ClTV^f^-UTAH'^*1
BELL SYSTEM
TELETYPE SU
^
■
MONTGOMERY, ALA.
TRADING MARKETS
for
Lime Cola Co.,
BROKERS and DEALERS
Empire'Southern Gas ^
Empire Steel
UTAH MINING
STOCKS
Offerings made only
—
-Y
H. M. Byllesby &
PHILADELPHIA
—copy upon
gstablished 1898
V
Petersburg,
181
Fla.
_
1
Stock
Exchange Bldg. Phila. 2
Telephone
Rlttenhouee 0-3717
f
Company
W. H. CHILD, INC.
Members Salt Lake Stock Exchange
OFFICE
Teletype
PH 73
:
;.-:;:Yr; V BROKERS
.
7^
:
Stock Exchange Building
Salt Lake
Teletype SU 67
City, Utah
.
Inc.
Stock
(
jt
t
Bought—Sold-—-Quoted
Warner Company
Florida
Common
.
.
7
of work
.<
Nazareth Cement Co.
Barnett Nat'l Bank Bldg.
absence
7
/
Y
•
Phone 5-6172
i.'
•
/i-.,
i:.:";1.1:'
'
•
'
-.
by prospectus
request
,
A.a.'.':.'■
.
;
; .
■
-i-
THORNTON. MOHR & CO.
r
•
-
Telephone.
3-6696 & L. D. S3
-
JJohtgomery,
Alabama
Teletype
MG 84
;
stop-
(Continued on page 625)
Department of Commerce.
li
the
In
'jPbmestic Commerce," issued by
484-Y
Sterling Motor Trupk
Florida Municipal & Corporate Securities
■
duringf 1947.
However,
competition for [the - remaining
passenger traffic will be keen
among the railroads, eirline3, an4
bus ;;iines. ;New equipment,
signed with especial appeal for
the cpmfort of the traveling pubiic, and improved passenger serv^
ices will be used by each, of the
ment
Botany Worsted Mills
,
Grocery Co.
Teletype JK
automobiles
traffic
Upon Request
COrtlandt 7-1202
•
Clyde C. Pierce Corporation
Branch—St.
^
will be reflected' in further, de-?
clines in rail and bus passenger
and
restoring
n
prewar
.
further product
because "
i
in
than
higher
pears Jikely that
tion of new passenger
were
<
Long Distance 47
|
shipments.
showed a
Amalgamated Sugar Co.
-v.
PEnnypacfcer 5-8200
J|
1,
j
carriers and local transit services,
common-carrier passenger traffic
General' decline during
1946. The loss of military travel
and greater use of private passen*
ger automobiles tvere important
factors, in this decline and it ap-»
¬
experienced
mk
■
v.
Wawaset Sec, C?*
Jacksonville
.
| With the exception of the air
utilized
and
,■ ,« Jpjrfvnti Phone 4o' Tf. Y. C;v
Common & Preferred
-
of
qlif ficul ties
'Til*
Common & Preferred
i
required '
of strikes
>;
American Box Board
I Foremost
levels
fully
SALT LAKE CITY
;-
;
.
of diversion of rail passengers to ©ir lines.
years.
facilities
JACKSONVILLE, FLA.
1
,
447 ro©ds> would hav© topped $559^
(Continued on page 626)
i
1929.
transportation
'8i■
1606 Walnut St., Philadelphia
equitable building
f
>
of
not
BOENNING & CO.
.
year
the
mestic
Inquiries Invited
i
Phone 4-7159
>
have
\ypuld
after
>
9,
railroads
heehYahle^4o ;ishow a*ce
itesults^fof^^'the '?:yearYfii"'f spite Cof
estab¬
in
tor
transportation.
Do^
3.30% Preferred Stock
Moines
level
half
rail,
.
Branches at
New
•' 4'/2% Preferred
the
©Iso pf local trucking traffic. Foresees some decline I
the full utili
zation of air,
Kellogg, Idaho and Yakima, Wn.
Pennsylvania Power & Light
.
des
boom
last
* ~ *
"X-
l^enYfhYe^ect ithrpUj^
;
Although strikes and reconversion difficulties during the first
a generally depressing effect on freight traffic, the
lished
Stock Exchange
of Spokane
1
■
||x
Iowa Power &
»
had
1946,
Passenger business and a marked rise in air cargo
traffic
Pennsylvania Power & Light
1.
r
the
1$4? wkb
high
Fjloof
■■■■■■..I m.y. ■■., .
••••:'.r.■
are tealcuhated to offset about $1 billion of
this.
If the Ex Parte 162 rates
half of 1946 had
Peyton Building, Spokane
v
Philadelphia, New York and Los Angeles
■
WHEELOCK & CUMMINS
'
Brokers
>
Pittsburgh, Pa.
DES MOINES
effective 7»fan. f,Y1947,
,
I
^
Qr^erp
CORPORATION
.
System between
|6p/rfre|ght-^^7lpci^ases;:
I?arte
Tianspoitation Outlook—1947
I in
Exchanfe from
Members Standard
':fi
Street, Philadelphia 2
Private Wire
Kf
for
now.
MINING
Immediate Execution. of
and
A .; Los Angeles
Hagerstown, Md.
Y. Telephone—WHitehall 3-7253
New York
Tale. BS 728
N.
••
to
;
j.
STANDARD SECURITIES
Also Member of I'
$3.5
-
10:45 to 71:30
a.m., Pac. Std. Time: Sp"82 at
other hours. YYY,?^-
•
■
1941,
of
:
;
By JAMES C. NELSON*
,
| Chief, Transportation Pivisiori, Office of Domestip Commerce,
:) Yp'Y^''Yvl:'YU. S. Department 4>f Commerce Y.
Y *
Y;s
YYYf'!"'
v if .
,' .
I7 Government expert forecasts rail freight traffic volume exceeding
;r-" ' **•
• Y*. .YvYv'
* -T*.wv,•*•; •• 1 1' • ,3
Quotes call TWX Sp-43
or
'
that
complex -and than $2 billion of the increase
difficult. The since* J 93.9
attrffivted ; Jo; Ihf.
fact that they cjreased wage? - and higher; priee$,
have yet to be cif -materials. ■«> Howeyer,; the Ex;
.
j.
«•.
.
SECURITIES
of
Request
York,
"New
'i;;'
Walter J. Connolly & Co., Inc.
»
'*•'
YY'
.
Los Angeles Stock Exchanges
Tel. Hubbard 3790
'*•-■/
.-.
NORTHWEST
Company
•
billion
than
for are
made is bound
affect, the
■
i>
-1
higher^ th.an that of d939.\
Looks for conlinuation
BUCKLEY BROTHERS
I
1:
Shipman
19.46.
Memos
Request
on
y-X\
SPOKANE. WASH.
For
'
*
plateau of .traffic, r ;Y - | Their' expenses* are up
-
i
'V.;-
.'**
Lynchburg, Vai ,;'
Prior Preferred
Circular;
-'H
v-
•;• i
Y'V;Y V: Y
International Detrola
Maine RR.
&
A
Member! St. LouU Stock
Gruen Watck
The
>-Yv ';y^
.
i
Colorado Milling aad Elev. Co.
!
.
•••■:
?]!*'>.
^r-
Sf. Louis I.No,
•
PHILADELPHIA
'
,■
<*.
*
dllllllliilllllliilllllllllllllliuiiliiilili
Boston
YY Y
(Y;:.x,v.'
...
.
J
y
.
.•/%
Mason,
:
Teletype BS 424
-
x-
,r;Yj
.
31 MILK STREET
jHLANcock 8200
be
with 475. billion »in 1941, and
STREET
SO© OLIVE
''
.*.
i|hey^^©ra bperathig;?Qn;arvery^
SEpURlTiES
INVflSTWENT
r£>' '
::
Their passenger traffic embraced,
^ome 48 billion passenger-miles,
pillion in
^ '-Y*
I-.
y
Eiver-Milis
Dan
r
••
Stix & Cp.
Bassett Furjiituxe lnd,
PRICED ABOUT 8
i,;;i
'*.**.*
' **
their 4iigh ' plateaii«of costs. The 1
^80. • billion-; ton-miles, ^ compared Combined *. net incoriie of. class;. I *
ifj
~
American Furniture Co,
Y-
i
operacan
The railroads, today, are han¬
dling nn exceptionally large pro¬
portion of an extraordinarily large
total
transportation
movement,
Their 1946 freight traffic exceeded
uuiiniiiiuiiiiiiiiiiuiiuiiiiimiiiiii
Circular availablev jfcjwfly reqifest ; Y
v v '"Y
adjustments
railroad securities even
LYNCHBURG
s
-...
"
anq
,
net working capital
,
^lthjllion jn 1929. jn Other words',-
to
.market
ST. LOUIS
approxi-
at
Charles
BelJ Tele, LS186
Long Distance 238.-D
mately 40% - of indicated Oook value1;
-
RH 83 A'54
Teletype:
.:;;T#iiipbow:3-ti?7> Y; t
?£ M f
^
improve¬
tremendous
•>
RICHMOND, VIRGINIA
■■■.
Bell System
'
»At
'
called
->
grocery
#
Y
extra-*
considered prdinarJly tdo>
The annual ex7,
complete. The pense rate is $2.8 billion higher-,
Ytion
inan5tecj;uref
leading
cates .substantial
|P°wer-
jGlrdler Corporation
-time
CAROLINA
•
~'k"' ^
"recon¬
normal peace¬
r
couplings, .fittings and'yalves
transmission of hydraulics.
the
for
a
NORTH and SOUTH
.
rail-
version"
:
faillett
insider R.
A'
roadsvbefore
;
Y their
American Turf Ass,n
N
V,.n
'
concern
Dealers in
American Air Filter
!»
excessive in speculative
myself not so much with the year .1947 as witb 0 i
general period of adjustment^ indefinite as to its timing, that seems nrvft
Y".■'■*■.'
YYi.Y to ■ lie
ahead
-I shall
^
BOSTON
attractive, but risk is
are
issues.:.-.p
'Y
LOUISVILLE
T
States
sweeping changes in posts and rates are required for long-terni
profitable operations.
Concludes sound railroad bonds and pre¬
Co;;Mra, O'Connor was
Wood,
high relative to' normal business,
break-even point is too
f:
& Co. and Soucy, Swart-
swelter
^t.v,r • /•.
v y
railroads, who are operating on a very high temporary plateau of
traffic. Predicting a 30% drop in passenger traffic, he declares
Co. and in the. past was with
Exchange, in the research depart¬
ment, it was announced. ^
BA 893
Bell Teletype
&
;
•
Analyst holds that 1946 was exceptionally good year for the
Cleveland
Mr.
Exchange.
Donald B, Macurda is now asso¬
ciated" with Clark, Dodge & Co.,
61 Wall Street, New .York ,City,
members of the New York Stock
/
.K',eiiu^i'
w
Railroad^ Editor of Standard & Poor's Corp,
,
formerly with Curtiss, House
Macurda in Research
;
\
:••• •
the
members of
was
Weight
Preferred
.
By CIIARLES SHIPMAN
Cpnnor have jiecpme associated
with Morrow & Co., Hanna Build-
Stock
Moniimental Radio
V
.
CLEVELAND, OHIO — Rex E.
Anderson and Mrs; Evelyn's. 0%
ing,
'nt"*—w !»***£& i,' ;
Railroad Recession Ahead!
x
Chronicle)
The Financial
(Special to
Chroni&b)
CINCINNAIT, OHIO—Ormonde
y'. j
-
Morrow & Co. Adds to Staff
With J, D. Chambers Co.
BALTIMORE
.hfftfrfr.
Thursday, January 30,1942
FINANCIAL CHRONICLE
THE COMMERCIAL &
STolUme 165
Number 4564
THE COMMERCIAL & FINANCIAL CHRONICLE
Certain Depression Ahead!
Air
Transportation Outlook
By WILLIAM J. BAXTER*
By W. A. PATTERSON*
Chief,1 International Economic Research Bureau
.->"d
Mr, Baxter predicts the burden of taxation, .necessitated by con- /
tinuing huge military expenditures, will cause lower , standard of
_
.
.
living* and the
.
1
•
Ka
most
.
most serious
"snowballing" depression in
history.
our
Fully reanzing hpw unpppu
pessimists are,;I shalLanswerthis
question by saying that not only are. we headed* for certain depression
biit6
that•#/:;/;/:1
yVX;;3:v:v. <
|y
txrill
1*1
+K
T"lfnVVYI
will
be" the
makes them more
misinfprmed
^
(
in
one
tire
;
it
'
4-
\
jm*
rv»
serious
i
our en¬
history.
of
whether
face
And
to
William
look
we
economists
J. Baxter
'. I-*/" / 1
for the answer. But if you look
at the training that 99 out of 100
economists get, you will realize
perfectly why their very training
* Address
most
Schqol,
pessi¬
mistic.
-
tically
entirely
i
*
;
by Mr. Baxter at the
Associate Members Dinner Forum,
at New School for
:
^
29,1947.
.11I
.! Ill
I
»
oil
11-
I
i
'
day to suit
fu¬
of
K
riot
necessary 'to
years,
and
Specialized
welcome
express my
we " cam
.
United
j * :
opportunity Ito
views in the hope that
avoid
CIO,
reached
seem
breaking point Bank has hired private detectives
All- of
thut ttier
*
gave
submitted to
Overhead
war.
of the airlines
us
Gaumont-British
.j:,
will agree,
I. believe,
we-
>
.
British Securities Dept.
was on a sound
which
-,.>3*
Scophony, Ltd. |||" '
:
industry
*;-y./v.:.:../""/r -^/-
••
GOODBODY & CO.
;
Members N. Y. Stock Exchange and Other Principal Exchanges
118BROADWAY
NEW YORK 6, N. Y.
Telephone BArclay 7-0100
op*
Teletype NY 1-672
war,; arid Which
rise to false optimism, are" an
Impartial arbitrator. Councilman Michael J. QuiH
important facton ih analyzing this
(demands Cityl Conned
investigate use of "armed muscle-men" by J ;■ entire/subject and should be rfeviewed.'"/ K 1 ■
J.
Triist to intimidate employees. Bank
•
says it intends to feed !■ %
and shelter those of its
employees wh0^itt;«vent of a strike, want
Wartime ^eratiiig^ Conditions
an
■
■.
:
,
.
■
s
to remain at
their posts.
Hp"'
On the surface at
least, relations between
and its maintenance and
the Irving
security employees affiliated" with the Finanr
Employees Guild, CIO, would$>—
—
——^—h
to have reached the break¬ The
union, on its part, claims that
cial
Hes
point... The bank has hired
host of private detectives, as.it
says, to be on hand to guard the
vaults and other
property of the
a
bank
in
the
event;, a strike is
called by the union and the union
Itself, making all kinds of accusar
tions against the bank, admits it
has threatened to call a strike
should,
in
its
opinion,
of action
course
essary.
at first
ever
such
become
a
nec¬
It would actually seem,
glance, that a strike was
imminent
at
Irving Trust.
a
refused
before
gotiations
broken
for
down
contract
a
it
is
itself
the
union
wants
have
willing
to
submit
the
impartial arbi¬
an
do
so.
charging that the
Irving Trust Co. is spearheading
by
move
to
organize
the
*
workers
district;
has made
UNITED UTILITIES and
the bankers of
to
Wall
But
similar
(Continued
the
union
-*An
charges against
644)
on page
high
as
hours
thirteen and
day.
a
This
/
v :
REQUEST
was
a
a
day
CO., Inc.
Members N. Y. Security Dealers Ass'n
111
BROADWAY, NEW YORK 6, N. Y.
BArclay 7-0570.
For
NY 1-1026
•
Brokers, Dealers, Banks and Other Financial
Institutions /•
half
;
!
,
accom¬
plished by operating airplanes at
in
the
as
hours
Street to smash the' union's drive
financial
FOR RETAIL
of aircraft from six
The union is
ON
F. H. HOLLER &
fleet of 176 planes. DC-
a
mainly by increasing the utility
trator, the union claims.
a
PROSPECTUS
spite this reduced number of air¬
ne¬
to continue the discussions when¬
ever
to
Producing Company
which
planes,. however,
the
airlines
surprised themselves by actually
increasing
the
total
tonnage
carried.
This was accomplished
Irving Trust Co., how¬
has
matter
say
airlines
conflict, it has offered to place
issues under dispute
before
impartial arbitrator for deci¬
The
industries
Early in 1942, 183 airplanes were
taken for
Army use, leaving the
the-
sion.
other
expanded J during the war,
the
airlines were' forced to reduce
their combined fleet of airplanes.
an
•
However,
bank
officials
that though the union claims
Unlike
strike but, in order to avoid such
ever,
A
and
hangars which we
had at that Hihe were
already be4
ing taxed to their very limits.
it does not want to
strike,: that,
rather, it is the bank which, by
hiring 250 detectives and so trans¬
forming
"Wall .Street into an
armed camp," is trying to provoke
a strike.
It says it doesn't know
how much longer it can'hold olff
a
•
ai/pianeS. Tlie airport facilii*
fc^ /handlirig; these aircraft,
buildings
seem
ing
SEMINOLE OIL & GAS CORP.
/Atdhe start of the war/ the; air*
lines in the United States
operated
Trust Co
address
by
Mr.
OF THE AMERICAN MARKET
Patterson
before the Bond Club of Chicago,
<^icagQ,..IlL;Jan..l4, <1947
,
>
^\ |
BRITlSHlSECURITIES:
FOR
SPECIALTY CORP.
IN 1946
.Company Reports:.6 Mos. Earnings
.May
1st to Oct; 31, 1946
BRITISH GOVERNMENT
Gross Sales .-4955,27158
Gross -Profit
484,166.56
*—
Net Profit After
i
"v'lp
,
,
ViPl
FUNDING 4% BONDS
;
,v
.'x
-
1
••
United
.
;
'
.
'•
{
I
Currently offered H 3%
and
;
•
HAYDEN, STONE & CO.
'
.
/;
MEMBERS: NEW
;•:-
• ~
3
Kingdom Treasury Bonds
"P.
a
,
J
T'"
Compilation
British Sources
*
of
Monthly, 1946
/--v
Monthly
'.V
Dollar
;
Prices
T150 Securities Traded in both New York and
of
London
/•!»///
i
i
,
,
/,■
British Industrial Stock Average,
;p
latest Dividend... $.10 paid Jan. 25, '47
i
.
t'.':
300,000 Shares Sole Capitalization
on
i ?Tax Status of Income From
.
1960/1990
Articles
The Discount On British Securities
.
;
-
V
Copy available
on
request
,
YOR^STOCK'EXCHKWSe"
Information On Request
MODEL, ROLAND & STONE
Greenfield, Lax & Co.
INCORPORATED
Members of National'Association
,
•
40
.:
of 'Securitics' Dealers',
inc.
'
Exchange Place, New tort 5
^«OBREIP6NDENT*.|N-4''>,
;V
,
,
,
Manila/
.
'
-
Membersi
'"4>"
'
LONDON
BUENOS Al«ES<//^V^i/lBONTEVlbEO^;'v/
;AN» OTHER EUROPEAN qiTlES
ex¬
at
were
Kingdom 4%, 1960-90
^ airline
Current
conditions tinder
its vaults and other property in event of strike. The union Wants di«-l
pute—overwages,union and job security and hours'of work—to be £ crated-duriog :the
:
penses
Rhodesian Selection Trust
many years to come, in the devel*
^pment.nf' increased business. The
to guard it'
naturally.
the^idxem^k |iii;
financial footing as wc .entered
the wnr ^W9$
making
steady^j^gi^s, tjhdVifc will for
employto fiave V
travel expense was being charged
to* the cost of
the
optimistic and pessimistic evalua¬
4
con¬
income./ Directly and indirectly;
W. A. Patterson
tions of this
j._
Relations between bank and its maintenance and
security
ttt affiliated with Financial
Employees Guild,
was
days
the
praisal;-- ofr' the
situation;- -^
} By EDMOUR GERMAIN yVy*;..
365
seasonal fluctua¬
Demand
they
.
I
v
industry, but view; it
realistically with a balanced ap¬
V
were no
out of the yearMany people flew not by choice
but by necessity.-Very few were
paying their fares from personal
promote; new
camC
i
were
ja
per, cent of all passengers minimum—not alwriys by choiq
parried during the later, war years
(Continued on page 630)
'
Longer It Can Hold Off Strike at Irving Trust Co.
..
.
shipments
cargo
Eighty
It
.significance of what is happening
today."
.' :
.." v
Says If Doesn't Know How Much
There
stant
time;
arrival
or
i-
•>'
.
as
tions in traffic.
con¬
The jiassenger occupancy of our
planes increased from a high of
70% to an average of 98%; plus
for the later war years. It was
business;.
observe
Thinking Too
i patrons / for
our
venient' departure
have failed to
the amount
1
mainly booked and controlled by
military priorities offices.
our op*
desires
the
three
.
CIO Union
'1 11 1,111V1,
crating. convenience, and hot the
ago
the amount
This specialized type of think¬
Social/Research,
Wednesday, Jan. ing, in my Opinion, is just as dari•;////•;, /•/
(Continued on page 634)' J
New York City,
.I II
1 mi
times oi the
Their
going through
/
Economic
I.I
transportation
industry was
by the; amount of
public debt.
of
Illlnil.ii
pessimism to¬
price level in America during
1947 and the years immediately
ahead will be determined prac¬
money in circulation,
of bank deposits, and
I.n.1' !<■
ward
the
depression.
a
■
good times and bad times ture is no more
was answered
by the amount of justified
today
money
or ^ credit
available for than
their
business.
During the. 19th Cenr optimism was
tury, the quantitative theory ; of last year.
They
money was triught in England and
didn't observe
imported to our universities." Acr what the air
cording to this school of thought,
•
«
'
-
.
;TtieY^ry people ydio just h few months ago were most optimistic^,
^
concerning the future of the air transportation systems of our countrv a
:erning
transportation systems of our country as well
today the
f
between
generally,
-question-
ing
Business
Harvard
*,
Condemning extreme attitudes regarding future of air
transportation system, Mr. Patterson reviews j '
^
abnormal war period. Holds heavy
transportation demands of war period
crealed undue optiniism
regarding industry. Citesf increased operating costs, with illogical
expansion,;; |
as
causing difficulties, but expresses confidence, in ultimate' future of
air transportation* Looks for j I
greater, safety and improvement in air ^facilities a nd better
equipment, and recommends airlines be.j
(conservative,. m Tuture expansion: and be patient in
waiting for increased traffic volume*
are
where, like all:other universities,
we were told, that, the
difference
ence,
or
the
American peo¬
are
the
at
fan¬
or not we
PY
TVt 1 CI
the public whom tpey
studying economics 27 years qgo
tastic that you
in
this
audi¬
ple
rv^ AY^O
Awi
even
trying to advise., I remember
are
To my mind
is nothing
short
nlrttn
than
1
President, United Air Lines, Inc.
T
/
-
~
NationaliAssociation
;
of- Securities Dealers ///
New Xark Security Dealers Association
76 BEAY.ER STREET
BOwling Green 9-4623
•
.
NEW YORK 5, N. Y.
Teletype NY 1-2525
/
'
^iinnytntiiiwiwAi^'iiiitTrri iiiiiii iirivi
whttaaaw^iMiiui^iiiiiw mm
THE COMMERCIAL &
596
FINANCIAL CHRONICLE
Thursday, January 50, 1947
stallation at the
Sunbury Station.
remaining $62,000,000 is for
The
l»
Public Utility
»/'
■
■
,
4
i
•* <\
y
1
<•
V1
'
*
.
'
'V>,
1% i i
^
Securities
'
n
v
'
'
11 *'r
.
•%'"
f •
i
•
i
J
demands
This
1
-
and
33%i and J20/1Q0'of* a share of common stock of Pennsylvania Power
Light at 17% t The rights,; which, are traded on the New York
Ciirb, are designated "A" and "P,"to. indicate1 which stock; they
apply to. ' On .Monday night the<^% and the'
American Gas
rights closed
&,Electric which has had
Curb
well
as
issued
Share,
American
on
&
copies of these
mailed
were
1.65
2.26
•2.56.;
•
2.99
ant
'
2.23
.
1.60
payments
about
Share.
a
of
industrial
been
conservative
as
compared with those of
other
holding companies, and the sys¬
tem's engineering s*aff is also re¬
garded as highly efficient. Phillip
Sporn, Executive Vice-President,
has been
an
active
leader in the
The company's capitalization as
w
$25,-
,
;j:
;
Penn
4)00,000-2% bank loan "notes (to be
a
serially), 115,623 shares of
Power & Light obtained
favorable
decision from
the
Pennsylvania Public Utility Com¬
shares
of
stock.
common
of
holdings in Atlantic City Electric.
This
scheduled to be sold last
was
fall but; sale was deferred
of
market
have been
men
conditions.
as
follows
the
com
stock:
the
many
scare
seminated
t
that
un-
New York
from
catalyzed the process of postwar
relaxation andconverted it; into
a demand for the deliberate de¬
pressure
labor.
;
workers
struction
duce
,
all
controls
•
Ohd
to
exploit the shortages for high
profits, business demanded the
Solomon Barkin
con¬
removal
trols.
peacefully, settled their in¬
disputes with manage¬
through the routine pro¬
and
OPA
of
When
CPA
con¬
they were removed,
the bottlenecks
dustrial
ment
of
planned reconstruction. In a frenzy
tinued to pro¬
Frank-Guenther
Law; John F.
Donlon, Vice-President of Edwin
Bird Wilson, Inc.; W. Francis FitzGerald, Assistant Vice-President
of
Emigrant Industrial Savings
Bank; William Huckel, Assistant
Secretary of The Chase National
Bank;
Louis
S.
Lebenthal
of
our
Millions of
Directors are Emmett Corrigan,
Chairman of the board of Albert
utilizing
policy through its labor policy. It
o
der
/•
was
dispute to coerce
into granting price?
witnessed' during the year
a
significant episode of
American economic history. Big
business
fought
governmental
headlines dis¬
collapsing
1
management
industrial
government
was
"Post."
wishful
,; We
1946
belies
economy
were
made severer
skyrocketed. Each busi¬
ness sought to capture the limited
supplies which were coming from
the production line, i A balanced
expansion of our economy which
would prevent over-extension of
production of some lines became
impossible. Speculation in inven¬
tories became the order of the day.
and prices
cedures of the union
contract, and
negotiated their wage adjustments
with their employers; Industrial
disputes during the yeari were
largely centered in those places
Guests of honor at the'.meeting 29,1947.
the national officers of the
-
•
Financial
present
(as
contrasted
net
with
&
4: ^Continued* brr
;
page
629)' :
-v..
Advertisers*Association,
Outlook in Building Industry
.
With Kidder,
which is estimated during 1947*51
to cost in the
neighborhood of
the
.
were
(Special to
The
SPRINGFIELD,
;,
Asst.
troubles
fidence
one
MASS.—Lam¬
bert A/ Reavey is tiow connected
(Special to The Financial
Chronicle)
: 1
s
i
,
in
construction
industry.
Sees, need for
consumer
con¬
lower construction i costs and
in
predicts construction; of -M
million homes in 1947 with:
outlay of from $7 to $8 billions
The future in the building materials field looks bright. There In
a backlog of housing and housing improvements that
eyen
book
Stickley
.
and an additional $6 billions in non-residential construction.
Looks for increased flow of materials with new
development! and
better heating systems and more interior
improvements.
Chronicle)
value of with
Kidder, Peabody
& Co.,
plant of about $180,000,000).
Of Third National Bank
Building.
this amount, $53,000,000 is the esti¬
mated cost of a
250,000 k.w. in¬
C
By JOSEPH L. WOOD*
Treasurer, Johns Manville Corporation
Building material executive, in asserting building materiats- future
field looks bright, expresses belief; there will be1 no
major labor
Peabody
Financial
Joins Swan,
so
great
at all out rates
of
<e>-
production
it
doesn't
ap-
000,000 to $8,000,000,000 in 1947.
can safely
anticipate $6,000,000,000 in non-residential construc¬
We
-
that the
demand
c a n;
pear
Consumers Power
Public Service of Indiana
Light'
Federal Water & Gas,
...
BOSTON, MASS.—Swan, Stick-
be
ley & Company, 75 Federal Street,
supplied
for
several
have added Glara R. Ellis to their
Trading Markets in Common Stocks
Delaware Power &
where
pro-i,k
duction
prove
The company has
underway'art
ambitious ■ constr uction * * program
because $115,000,000
Earnings
on
0
data are
our
merely
frequently
are
<?>-
increases.
1946
It
(the exception -of sale of its stock¬
fact
Tlie "record
:
.
including President Swayne P.
in February, 1945. The
Goodenough, ; Vice-President
of
Commission; at that time, found Lincoln
Rochester
Trust
Co.,
that the rate base ?■ (as of Dec. 31,
is
Rochester, N. Y.; First Vice-Presi*
probable that both the bank
1942) was. over $220,000,000 which dent Robert
Lindquist, Vice-Pres¬
nand the,preferred stock will amount is substantially in Ex¬
ident of LaSalle National
Bank,
be retired later; leaving only com-' cess of the amount carried on the
Chicago, 111.; Second Vice-Presi¬
books. The Commissjion also found
m©n stock
dent Allen Crawford, Vice-Presi¬
outstanding.-The com¬
that 6% was a fair rate of return
dent of Bankers Trust Co.,
pany has virtually completed its cn
Detroit/
the electric rate base.
Thus
Mich.;, and Executive -Vic.erPresiintegration
requirements
under the "ceiling" on earnings would
be dent f.-sgtoa jl.
,
;
the Holding Company Act with in excess of the 1946 earnings.
Hf:
mission
4%% preferred stock and 4,482,737
of
<m
1946, due to refunding operations
savings. For the 12 months Lebenthal &
Co.; Isabelle B. Mur¬
Nov. 30, 1946, pro forma
ray of Hudson Advertising CO.; where management was deliber¬
earnings were $1.93 a share and
Dudley L. Parsons of Dudley L. ately seeking- to" challenge labor
earnings for .the calendar year Parsons
Co.; Charles P. Seaman, and engaged in class warfare, or Shortages existed not because of
were probably in excess of $2 so
Assistant
Cashier
of
legal restraint,/ but / because of
Brooklyn
that the stock is selling, at about
Savings Bank; Robert W,t Sparks,
*An address by Mr. • Barkih at price speculation. 11 4
ten: times earnings. The dividend
Vice-President of-Bowery Savings the
; Associate ^ Members
dinner ;* "Thia heritage beclouds our eco¬
rate has. been raised fronr:80 cents
Bank; and Edward B. Sturges, II forum of the New School of Social nomic destiny for the year11947.
to $1.20 so that the stock affords
of Edward B. Sturges, II, Inc.
;
a yield of 6%.
Research, New; York: City, /Jan. It /is a condition well known in
whole in the househeating field.
retired
w
lead.
Chase Na¬
•
ended
development of the "heat pump"
is thought to have great
possibilities for the utilities as a
of Nov. 30, 1946 consisted of
'
of
"Banking Magazine";
Secretary, Lee C. Hornney of the
and tax
which
?
.
Stiehl
dustry. The company's earnings
increased very substantially in
.
considered
;
Second ViPe-PresiDaniel. F. O'Meara, Vi<*e-
dent,
rev¬
accounting and financial
policies of American G. & E. have
Statements
or
President of Public National Bank
& Trust Co.;
Treasurer, Robert J.
from sale of electricity are
obtained from the coal mining in¬
bargaining.
always difficult to make because
deliberated
Trust Co.;
diversified, although
third
fragmentary,
was
Other ^officers:<hre: 1 First. VicePresident, Earl S. MacNeil, VicePresident of the Continental Bank
last
enues
The
Secretary of the
tional Bank.
1,90
are
propaganda
issued to mis¬
2.09
..
2.50
dividend
sales are well
to all the common stockholders of
Electric Bond and
1941
Bank,
Forecasts
the
nual meeting lit is announced;
jHe
succeeds Williarp Huckel,, ; Assist¬
,1,68
* s
tem^ It operates in a large portion
of the State of
Pennsylvania and
Electric and Penn Power & Light
end
1942
Penn Power & Light is probably
the largest operating
company in
the Electric: Bond and Share sys¬
inte¬
Gas
2.23
2.21
1.81
j
River /Savings
tralization of collective
Ex¬
;
/
thinking
1.93
-
extra) was $2.15.: At the cur¬
rent price the stock
yields about
5.7 %y and is
selling at about ten
times! consolidated earnings,;. !■
gration requirements. Prospectuses
were
2.32
1944
our
economy and has beclouded economic" destiny of
Holds prices have been pushed to exorbitant levels and
elected President of the New York
Financial Advertisers at the an¬
an
,
conform with
to
-2.31
£
$2.66
'.
year were
somewhat
irregular,
the' total for "the year
(including
the sale is to raise funds to aid in
the retirement of the preferred
as
1945 *
Calendar year 1940
Calendar year 1939
Calendar year 1938
The purpose of
slocks of Electric Bond and
North
$3.78
Calendar year 1943
of course, be separately
sold.
(pro V
*
Calendar year
Calendar year
While
P., Raymond Haulehbeek
Vice-President
of
ecutive
Nov.
1 9 4 6
forma)
Company
'Jl, it
1
higher. productivity is not being shared by lowering /prices* Asserts
large business monopolies "have a stranglehold on:■ our plants, our
capital, our resources and our political power/9 Opposes decen¬
Financial Advertisers
Parent
idated
'!{
end.
mos.
10,:
*•
Calendar year
Calendar year
t The1 offering1" period will last
eighteen days commencing after
the mailing of the warrants. War¬
or
12
1946-7
a
483/4-37y2, closed
at the low point of 37 %; similarly
Penn Power & Light on the big
board, after dropping to a low of
19% closed at 20, the range being
exercised
Year—
of
range
rants can,
Consol¬
at
||
Workers of America
extension of
Hanlenbeek Pres. of
.
Textile
Accusing "big business" of forcing decontrols to procure higher
profits, labor economist maintains this has produced an unbalanced
'
1947.
&
"P" rights at 7/16.
Research Director,
additional fi¬
pommon/stockholders when com-r
pleted.
Electric Bond and Share Company "has issued to stockholders of
i record. Jan- 17:; warrants entitling each share of common stock to
buy 16/100 share of caminpn stock, of • American ;Gas: & ^Electric' at
x
"A"
By SOLOMON BARKIN*
will
program
require
nancing, but nevertheless it is ex¬
pected to work out favorably for
Electric Bond and Share Rights
H
improve efficiency.
substantial
doubtless
■v
Economic Outlook ioi 1947
general expenditures to meet load
years to come.
tion. And to paint a picture of the
importance of the repair and re¬
modeling -market, we can confi¬
dently expect a volume in this
In addition
field
staff. '
>
'
'M ' :
;'
.
•,
Northern Indiana Pub. Serv.
Southwestern Public Service
With King Merritt & Ch.
(Speclal to thb Financial Chronicle)
Tucson Gas & Electric
JEFFERSON
D.
Murphy
CITY, MO.—John
is
now
with
King
of
additional
an
years, there is
the added fac¬
tor of popula-
I
new
ing
for
t i
Merritt & Company, Inc.
to
$5,000,4! /
of th©
important bottlenecks in the con¬
struction industry has been the
availability of materials and lest
the
Puget Sound Power & Light
builds
delayed,
so
o n
"I
that
000,000.,
We
many
increase.
all know
be charged
one
with looking at this
through rose-colored
glasses, let me tell you that every,
war we were
Joseph L. Wood
survey which has b6en made in
adding'about
the construction industry during
500,000 new families per year. the past 60 days indicates that the
1947 will probably double that materials will be available to meet
figure, which means not only ad¬ these figures.,
picture
Before the
Paiiw,
mm
Jackson & Curtis
ESTABLISHED
1879
United States Government
State
and Municipal
Railroad, Industrial
Public
Illinois Power Common
Illinois
Assuming
Investment Stocks
.
&
Co.
BROADWAY/ NEW YORK 6, N. Y.
*
1
Direct Wire to
Chicago
the
fidence
Members Nm York Stock Exchange
29
in
no ma jor labor troubles
construction industry and
especially assuming
R.W.Pressprich#Co.
.
increased Flow of Materials
Beginning in the spring there
will be a greatly increased flow of
'*
Northern Indiana Pub. Serv. Com.
Gilbert J. Postley
new housihg
necessity for modernizing,
remodeling and enlarging existing
homes.
BONDS
Power 5% Preferred
ditional demands for
but the
Utility
68 William St.
New York 5
Knowledge
•
.
201 Devonshire St.
1
.
•
Boston 10 %
Experience
•
jor Investors
Facilities
in
consumer con¬
lower
construction
costs, we can look forward to the
construction
of '1,000,000
homes
representing a volume Of $7,000,*Part of
an
address of Mr. Wood
before the National Consumer and
Installment Credit Conference
the American Bankers
St.
of
Association,
Louis, Mo., Jan. 25, 1947*
should result in
materials which
lower total construction costs de¬
spite the fact that manufacturers'
material prices are higher than
those obtained
a
year ago.
This
sound strange to you but let
me explain why I refer to lower /
total costs. In the first place, end
costs have been higher in the past
may
largely due to
scarcity of mate-
rials.
partly due to the
This
existence
was
of
the
black
market
(Continued on page 612)
/
Yilume ^65^ rNumber: 4564
THE COMMERCIAL ft FINANCIAL CHRONICLE:
Food Commission's
Obligations of Dealers and Brokers
In Interpreting Prospectuses
Tentative report
''*
'*V,'Vtfr'CV-{
'J:I/.' ■ ? *'•'*»;!v
'•«•*>.' Vt':^
v
M>*•
prospectuses covering securities -offerings, urges them; to adhere to
*
•
v
.
:
say at the oiitset that-1 ueeplyappreciate this
businessman's
7
•
'.4
with 4 the
Herbert M. Bratter
,1
the Acts administered by the Com¬
stantly arise
mission and the various rules and
in
regulations adopted under them.
I lay no claim to an intimate or
While
extensive knowledge of
the
dis¬
tribution
of
securities to
the
investing
public. Each
E. M. Hanrahan
one
am
sure,
period of
sorbed
has
or
useful
the
and
its
before
course.
More
specifically,
my
subject
(Continued on page 636)
Publish Report on Its
Study af September Market Break Next Month
and
much-awaited
rise
re¬
ably be issued to the public some¬
time in February, according to
James Treanor, chief of the Trad¬
Reports had been current in
Wall Street early in the week that
it was just a matter of days--*
in fact, almost hours—when the
report would be issued. Combined
with another report that the New
York Stock Exchange and the SEC
were in the midst of conversations
cov¬
publicize
up
on
still
speculation that the SEC
be considering tightening
the rules on floor trading
further.
view
however, plates
Inquiry,
session, Mr. L. A. Wheeler, the
objectives
sought
cannot
be
achieved by uncoordinated actiort
The
tail.
But,
quoting
(Continued
Mr.
Wheeler,
635)
on page
what
the
and
to
and
contem¬
considered
program
seek
suggestions to the
'f/
.
,
CHBONICtl)
Inc.,
Baltimore Avenue.
\: 7
Fusz-Schmelzle Adds Two
(Special to The Financial
3
,
Chronicle)
ST. LOUIS, MO.—Ralph H. Bos-
chert and James J. Webb have be¬
affiliated
with
FuszSchmelzle ft Company, Boatmen^;
come
Building.
4
•
;;;
;
SCHENLEY DISTILLERS CORPORATION
NOTE—From time to time, in this space,
there will
appear an advertisement which
hope will be of interest to our fellow
Americans.This is number 154 of a series.
we
SCHENLEY DISTILLERS CORP.
:•
•
.
We
-
pleased to
are
From Now On!
By MARK MERIT
This is the
-
ones—we
corder,
being
made
-
the formation of
announce
season
-—good
.
re-
'
exception, has
no
several
for resolutions
hope. This
resolves
which
he
hopes to carry out all through 1947;,
succeeds in making theni
If he
"stick" for an entire year, he thinks*
they'll get
;
"steady". Most of- ;
our resolutions are
strictly private•—between me and myself—and
'
we're not going to talk about them.« I
But
one
we
on
going to talk about'
are
business resolution which
'
we1*
guarantee to keep! We found our? f
inspiration for it in a men's cloth-r
ing advertisement which appeared^
in one of our daily papers—spon)
sored by one of our favorite stores.
The-advertisement mentioned the
;
<
excellent tailoring; in the store's^
|
clothing for
attach1 much importance to the
influence on the; trend in price
movements exerted by sales.
its
,7,-
(Special tO THi PlNANClAL
1012
mosphere of cooperation and an
attitude of } keeping the integrity
of the statutes with respect to
protecting the American public
not
findings oh the mafket break gave
37
at
W. Crockett has become affilated
with Herrick, Waddell & Co.,
report is not the last word.
probably will be changed in de¬
located
;61. Broadway,
5! KANSAS CITY, MO.—William
After study by the governments it
This report will be consid-
comments
tomers^ it is; thought, but It will
ering floor trading, news that the
to
stable
prices. As stated by the American
delegate at the Commission's final
and
With Herrick Waddell
;
and to foster
and
wilP be
Street
New York City.
against
reserves
end
of
improving the present
investor."
Exchange and the SEC was statutes." :■
Present for the conference were
the relaxing and not the tighten¬
A
"gratifying
response"
has
Haines, Frayser Jones; been received by the Commission
ing of the rules on floor trading. William
;
The SEC; report, it is* thought, and^ Donald" J. Hardenbrook of itf its? appeal for written com¬
will probably just state that the the National Association of Man¬ ments on the revision program,
September break marked the nat¬ ufacturers; Arthur W. Crawford, according to Mr. Caffrey. Meet¬
ural culmination of an expansive representing the U. S. Chamber ings with other groups will follow
tendency in business that had to of Commerce; William B. Putney and the commissioners themselves
III of the Commerce and
come to an end sometime, an ex¬
Industry are to meet with underwriters, is¬
pansive tendency that had to be Association of New York; John suers, large: and ■ small institu¬
checked eventually by the new Sheffey, Executive Secretary, and tional buyers, representatives of
equilibriums establishing them¬ Warren Moteley, counsel, for Na¬ small business and other interest¬
selves in industry in a postwar tional Association of Investment ed groups ^n^ the ; West;
Coast,
situation.. The report may give Companies.
Southwest and Midwest.
some evidence; of forced
gelling,
as, for instance,, by banks here
and there, for the account of cus¬
data which was sought and which
he implied was very voluminous
bad been compiled but it was
being checked and doublechecked.
about
food
-
)} Offices
*
Stock
.
the subject of the rules
to
might
special partner in the
a
-
revealed that the subject: of dis¬
cussion between the New York
ing? Division which has been con¬
ducting? the' investigation.
Mr, Treanor said that all the
was
vote. -^The
as an
drought and disaster
qrderly - production
.
Max Jacquin, Jr.
Ohr-
is
Wall
tablish
in
govern¬
Gladys
bach
mission; ;to discuss Revisions contemplated ; in, the^^ Securities Act of
1933 and the Securities Exchange "Act of 1934.
This was the
secoqd meeting held with members of the financial
Community in the; Comhiission's ^program aimed at revising the acts,
and was described by
James'J.fo
"
Saffrey, Chairman of the SEC, as
Mr. Caffrey reported the con¬
a
"preliminary conference to re¬ ference was marked by an "At¬
Exchanges-
port on its study ^of^the Septem¬
ber break in prices on the New
York Stock Exchange will prob¬
SEC
a
alternative
a
Representatives of issuers of securities met in Philadelphia on
Jan. 28 with the Commissioners of the Securities and
Exchange Com¬
SEC Says II Expects to
on
an
without
John Behrens.
SEC and Issuers' Representatives Confer
For Second Time on Revision of Securities Acts
relates to the desirability of hav-
Brokers, New York
City, Jan. 29,1947*
Commission's
outlines
was
William cE. >;:
Nulty, •. Oscar 7
H. Riggs, and
Bank
with you today.
of Customers
Securities
FAO's, 47 member
ments,
Dreyfus,}.
Jr.,Max :
Jacquin, Jr.,- .
of the
FAO a permanent
World Food Council to make
pos¬
sible international action to es?
FAO
week
unanimously
tali zing in made
it the basis of my discussion
♦An address by Commissioner
Hanrahan before the Association
The
released "last
.90-
ture
ington,
before
Jack 7
are
firm.
mends
conference
last September.
Copenhagen meeting
the objectives of the
laid
aL?
e n e r
firm
report recom¬
addition to the struc¬
record
n
Washington and how formally laid
Concerning one particular
phase of that work I have been
impressed
and
have
especially
actual experience
by attendance at one of the va¬
the
feport
knowledge
Commission
adopted
by its Director-General, Sir John
Orr, it did not accept his sugges¬
tion of a World Food Board.
The
work.
either through
rious schools speq
some
about
business^
been well trained in this
such mat¬
months. However,
seven
Preparatory
Commission's
document,- - which
Copenhagen
approved
that space of time I have ab¬
in
of you, I
4
at
•
page
created
was
||.G
J.
conference; when¬
that is held.
financial
three
i
;
Co.,t: effective 4
Feb.
com?
recommendations contained in the
Resolution of the: FAQ
ters, since I have been a member
of the Commission for but a brief
of
members
W ash
7
proposals there
with
months
J# following
.
con¬
connection
sat1 for
.;
'■*
.
That Commission, which
•
:
and its ypork. Consequently, I do
not propose to discuss in detail
problems
which
—
—
;
;
i In the space here available it is
difficult to do more than
give an
idea of the economic and
.Pre-
paratory Commission on
; *
.World Food
fi Proposals,
v
exfecutivO
as
pai'trtersintheV
ever
7
has passed the exacting examina¬
tions required by the Exchange..
You are all aware of the SEC
iness and with
the day-to-day
the
&
?; to->
Lewisohn %■>.&.
next full FAO
of
the
of
Stock
.
at its'/March
meeting in
Rome, and will be weighed by the
recom-
—
opportuhity.-
by 4 FAQ's
7
,
major
by
*
securities bus¬
mittee
y^mendation
--
lar
ered
viewpoint, the
'J/J^the report isv; sued
Jan.1 24
©Lspeaking" befQr0^yoiUr iass6cia^iorii;;It/is>particutarty;gratifying i;o;
>v'>y-*>.v.
talk to a groups ? U.v.•
which is thor- ioursesiin" finance.
1—■1
And ; nearly
.oughly famil- every jpne: ofypb;i I/jmderetend,
i
York
Exchange,
agreements and other
intergovernmental arrangements for individual commodities
const!iH
':'
v
tute, from the^-—»—
*
•
me
stable prices.
Development of international commodity
j :
made
.
successors
.
is
formation of Dreyfus, Jacquin
CO., members
of
the v New,! ;
grant of aid.
Calls for
annual reviews of national agricultural and nutritional
programs.
i
tWo' basic"5 customer know that he is pur-
M Let
Announcement
recom¬
against drought and
[ Holds sound internal finances requisite for
. »
-
reserves
j? disaster; and to further orderly production and
•
:
chasing interest in future earnings of a business; and (2) tell him
an investment M"a
"security 4is puttmg; mone^, at a risk/ .Outlines
procedure to-be -followed.in explaining;items in^ prospects :ai^
nays:- "Put yourself in Customer's position." ~ Points out securities business is
judged by its most disreputable representatives, and">:
contends^dealers
ha%s^iafoblig^tonx to;'^^stoTOCirs, ^ v;\:
'
of World Food Preparatory Commission
mends permanent council to establish
Member, Securities and Exchange Commission
Hanrahan, in pointing out desirability; of (having
dealers and; brokers clearly explain to customers information in
Form Dreyfus, Jacquin
N. Y. Exchange Firm
Proposals
By HERBERT M. BRATTER
i
By EDMOND M. HANRAHAN*
4 Commissioner
597
;
men and then stated*
that the fabrics were "all-wool do- • J
imestic weaves'' Please1 note that;; I
.
1
7*
~
VVi
MEMBERS NEW YORK STOCK EXCHANGE
v We
Take
pleasure
in
announcing
word "domestic".
And here is the resolution we arev
going to make "stick". Resolved—
that we are going to say and writer
the. word "American" instead of
|
that
t
777V;
MEINERT
PAUL A.
..
""'VfeVi
I
'v ■ a n
'\
• •
.
...
e-!MVr'x,,-.RussEL-
/7.7/;77;4
■&
*
kllT'
i"domestic". We believe that there
are no finer material and workman*
t
'
#■*
E. KEIER
SUCCESSORS TO
SSISl®
ship than-—Amerwon^We believe
I
7
!>
LEWISOHN « CO.
i;
that the:words *'Made in America"
or
this
general
/
'
-
1.
.
.
.
•
.
' -.
"
w
day
been
in
partners
•
•
-
;
-
'
,f
..
!
admitted
•
"
our
:
greater significance all. over .the
ever before (ask
the people in
firm
\
.
.
Oscar H. Riggs •
Nulfy
John Behrens
There is
Securities "
,-a
^ -, w
f
v.w'
w• -T *:•
February 1,1947
?
.
eign products intended—and we're
(
*'waying the flag"; But on sec[
ond thought
where is there a?.' ;:
better flag?
.
Gladys Ohrbach
.
.
.
FREE
>
.
disparagement of for-
no
not
SPECIAL PARTNER
Investment
.
instead of "Domestic"!
Jack J. Dreyfus, Jr. • Max Jacquin/Jr. • William E.
GDSHIA&CD.
7
Europe and Asia) So
from riowonit will be—-"Americo»"
GENERAL PARTNERS
.
';'
f
a
world today than
i:
as
"Made,in the U.S.A." have
'
EFFECTIVE FEBRUARY 1,1947
have
■
;
—
96-?AGE
BOOK-.Send
a
■■■
Toledo, Ohio
:
| 37 Waif St., New York 5, N. Y.
Whitehall ;3-503T
.i
.
(51
Broadway,; New York 6, N. Y.
.
,
;t
-•
Whitehall 3-4140
7
postcard
or
letter to
mark
schenley distillers
la A,
350
receive
a
of
4
Dept.
>
merit
corp.,
Fifth Ave., N. Y. 1. and
you
Will
96-pa&e book containing reprint«
0/? earlier
article# on
vaYioU# eubjecttt
i
THiirsdhy;TJanu^
TttfeGOMMERClAB^FIN^NCI^iCHRONIgll^
598/
$ Co* Inc i; 41 Byoadf Streets New
York 4, N. Y.
#
|f|\0ate^B.0qr
Fashion
Engineering;
the firms
It is understood thM
r
fa-
mentioned, will be pleased^
fQllQwfaQ literature*,...
record, financial
dividend
rnent',
of 22
current investor strength, important industry, mar¬
interest: A n a.c on d a C o P P e.r, ketability, and, profitable opera¬
tions
in
depression—Frank C.
Celanese Corp., Coca Cola; Com
Master son i &. G04 6C Wall Street;
mercial
Sol., Curtis/ Publishing
^
Electric Power; # Light; General [New/York 5, N.-Y.Foods;
General Motors;
Inter¬
Guide to-theBerplexedr—a chal*
national i
Nickel;
Irving
Trust;
enge to the barrage of pessiinisEibby,
McNeill & Libby; Ohio
ic„ statements—bulletinwith.- a
Oil;
Packard
Motors;
Phelps
ist of suggested stocks for. income
Dodge;
Public Service of; New
ind capital appreciation—Strauss
Jersey; Pullman; Republic Steel;
Scheniey Distillers Corp.;. Texas 3ros., 32 Broadway, New York.4,
Gulf. Sulphur;
United Gas Im¬
provement; Walworth Co.;: and
Leading BankSiAndi^ust, Comr
IV W*^ Woojwoxth^write for basic
analysis to Department T-9, Merr panies of New York — Compara¬
rill: Lynch,
Piercie,: Fennel & tive, tabulation—New York: Han.seatiO Gk)rporatioh»:U2QfBro4dway;
Beane* 70 pine Street, New York
♦New York 5, N.. Y,
5, N. Y.
1
i
stocks attracting
;
Ralston Steel/ Car^ Co! -^ Circu¬
~r;, Lerner & Co;, 10 Post. Office
Square,- Bostqm 9, Mass.
_
J"- lar
Lemke
Co.—Study—
&
&
Co., Inc., /1420, .Walnut
$treeh Philadelphia 2K Fa.
Paul
V Aspinook Corporation—Circular
r-Wajrd, &• Co., 130. Broadway,
New York 5, N, Y.
I
Also • available^ are; memoranda
.
.
data-^
Late
Limq.': Cola
Red. Rock. Bottlers, Inp.—Circu¬
lar—Hoit, Rose & Truster, 74 Trinity Plfee, New; York 6/ Nj Y.'
»
v':
Thornton,s Mohr M Co., FirsL^^^ai;
tional Bank" Buhdink, Montgom¬
RbckweB/ Manufacturjpg; Go;-?hawk< Rubber; and Taylor Whart¬ ery "4/ Ala.
Analysis — Steiner, Rouse & Co.,
jiII I *m'i J
■' '
v. '• /
\
on Iron &/Ste$l; Purolator Prod?
25 Broad Street,' New/ York" 4,
/
Ops Wi L. UOuglas Shoe Co.; llart-
ford; Empire;,
1
•»
Die bold,
Inc.; Pfaudeer; Corfif
■
,
<
,
New England'Public Service Co.
ucts; Upson Corp.; Alabama Mills;
^-New! analy^s—Ira Haupt & Co. ,
v
,;Nj
Ill'Broadway- New York 6; N. Y.
i!. Bausch & Lombr—Mehiorahdum
Osgood Company.—Detailed cir—J, G. White & Co., Inc., 37 Wall
cular—Seligmajb Lubetkip fy Co.;
Street, New York 5, N.
41
Broad
Street,
New
York
4,
.
Shares—Memorandum
on
three companies furnishing
Basic products—Ifneeland.
Co.,
Board of Trade Building, Chicago
Building
Nathan
Straus?Duparquetg Ino,
—Memorandum for banks, bickers
and:
dealers*-Trosterv Qurrie S&
74 Trinity Place, New
Summers,
Boston
Circular
'52
of
Walter, J. Connolly &r,
10;
Utility
5^s
Consolidated Electric
and
Pfd; •"*— Comprehensive
-
study, andi analysis in brochure
h>rm—Fred Yf% ^Fairman; & Co.,
208 South La Salle Street, Chl-
qagbtJ4J::TlL;.>
•
;r
^
Chicago
Western
North
&
rf:.W.y
—
been
the Chronicle.
Merit, in care of
Distillers Corporation,
running
Write
in
Mark
to
Yhrfc IX.
35ft; Fifth Avepue/cNfcwr
t
Paraffine
Analysis
Inc.
Companies,
—
N. Y.
J. Barth & Co., 482Street, San Francisco,
Seminole Oil &Gas Corporation
:
—Late data—F.
H. Koller & Co.,
Inc., ill Broadway, New York 6,
Calif.
-Parker Appliance?
Milk
Street^ Boston 9; Mass,
--v
;"'i V;
■
.
11....
;
COr-^Circular
^-du^ pontj Homsey Go., 31
•
■
—
'California
Public
and • Gas
York 6, N. Y.
4,
—
Co*r 24 Federal Street, Boston
Mass*;
Central
r
n.
Railroad
Maine
&
—
.Scheniey Distillers Corporation
of articles they haye
—Brochure
Scheniey
•
■
offerihgf\
(!
and
Co#l
Manufacturing; Co*:
,
: an
Stern & Stern Textiles,;/
on
Inc.
analyses o'l
are
Lumber,
BeHv
.':{r- ,v/'' '.r
1 B. L.
seiidiinterested partiesithc
Analyses— Studies
Basic
available
Also
Miller/'
available; .is
circular
•.//f -f>>*;,>*
.♦
Long
Bark, Inc.; Upson, Co.; and. Osgood
Recommendations and Literature,.
'
i
circulars' on
Also available are "
Wellman
Also
Co., 231 South La Salle Street
Chicago 4, 111.'■ :•
"
-Pathe Industries, Inc<
Sylvania Electric Products, Ine,v
;
il,
—
Mem-*
orandum—Troster, Currie & Sum-mers, 74 Trinity Place, New York
6, N. Y.
—Stu^y Y>f/ currepti position ? and/
outlook—Hayden, ?Stone &. Co., 251
Broad
w
Street, New York 4i N/ Y» j
iv "1^
t 'J
f:
J
:
,»>
"!
✓
' ;
4
«v,v;v.v:j.;v•*v'•';.J%;:--f
=-
1' 4-;
-:<\
•"
'
4
•
TitlCt^GuaranteeTrusLCm ^
study pfr situation and outlook for,
New York City Bank Stocks;— 5.%' pa^icipaUn^ preferred' stock
Fred B. Prophet Co.—Circular Featqrjes: of. 19461 Annual; Report 1
Building Stocks—Comparison of
and analysis of outlook—Amott, 1
Comparison arxd. analysis ; of19 —H. Hentz & Co., 60 Beaver —DeYoung, Larson
&
Tornga,
JohnsrManviRe Corp., Uf S, Gypr
Baker &. Co., Inc., 150 Broadway,
; "
New York City Bank Stocks with Street, New York 4, N. Y. '
Grand Rapids National Bank
sum
Co. and National Gypsum
New York 7, N. Y. «
:. ::
1946./ operating!; earnings and' se¬
Building; Grand Rapids 2, Mich.
Company—Lewisohn & Co., 61 curities.
profits—Laird, BisselL & : Cliffs Corporation — Study of
Broadway,
Yerk 6i N* Y*. .• v
situation' in* view of - liquidation
Meeds, 120 Broadway; New York
Public Natiohalr Bank, & Trus*
Cottom Mills,.
.
5,.N* Y.
Commodities—Brochure analyz.ing position* of individual] com¬
and including- compre¬
hensive ' review of the world's
commodities and markets—Bache
■&' Co:, 36 Wall Street; New York
modities
5,N;Y.
•
l.
'7.
:■■
*r:
•
'
•-
program—Gottron-Russell & Co.;
Union Commerce Building, Cleve¬
———"
land 14, Ohio.
Prefeired Stock Guide^-CJurrent
figures on unlisted public utility
Cpfeiadqi Milling; and Efey*
preferred ^ahh cpnimoh stocks
also contains a brief analysis of. —Memorandum—Buckley Broth¬
Slou^ City. Gas & Electric Co.—• ers, 1420 Walnut; Street, Philadel¬
^
70 Pine
G: A. Saxton & Co., inc;,
Esky-Pads—Memorandum. W&
available
;
?•
J
ment
*!;;"<
i' j'1 J'ju1 ii" f" ,'
V"*' *VJ.
'
Investors"—List of invest¬
"For*
stocks, selected for manage-
CARTER Hi CORBREY & CO.
Association
National
Member,
ofSegyritiefaDealer^,
Middle West
:
—
Pacific. Coast
UNDERWRITERS.
'
Bondsr-Reprints of aii
address befpro the .Municipal Fi^
Officers Association of Ohio
by E. M.
Bancroft of Stranahan,
Inc.^—Ohio : Build¬
.
1948
British Securities in
—
DISTRIBUTION
LOS ANCELES14
6$0,S.S|>ringSt.
135 S La Salle St.
Michigan 4181
LA 255
SW. 6502
C699
British
securities;
-
United;
Kingdom, Treasury bonds; tax
statiisivbf^ income, from British
sources; British industrial stock
average monthly for 1946, and a
compilation
of monthly
dollar
prices of 150 securities traded in
both New York and London
-
•
—
analysis—C. 11% Inc, t-' Circular —. Mohawk. Valr
Broadway, ley Investing, Co,, Inc., 239;.
esee
-
v
vs.Sen.BulIei
On
Reciprocal Trade Agreements
NefcYfe'k
Inc.,: 41 Broad Streotr
4, N.:Y- W Vi m
available is
Also
Foundation Co0 v
circular
a
;
-.
;
;
that the pfeposah would destroy protection.
.
on
;
—
—
; contradictory policies on
:•/ Nonsense/' : ' \
wool, c^atini.Y<iyoqderland;ot Economic.
'
SmrtQa Took Cp.rpf> Com*
*Jessop Steel
•
Pfd.
Seismograph ServIceCqrp.;,Com».
Phoenix
::
Mass.
■"
Vi r -v"
conclude
Greyhound Corp.
—
•Prospectus Available on
Request.
yaul fLDavis & Go.
".J
Established ltd16-■
Stock Exchanges
Chicago Board of Trade
Members Principal
Ipr So. La Salle §t„
Chicago 3
Teletype CG 405
Tel. Franklin 8622
Muter Co.
Indianapolis, Ind.
Rockford, III.
Cleveland, Ohio
1
SINCE 19081
Also
Circular—
available
are
j;
circulars on
i
Company, Kearney
Amalgamated Sug^r Companyanalysis and 1947 out¬
look—Edward L. Burton & Co.
on-
160 South Main
a
trade
Co. j William L. Clayton
R. Hoe & Co.—Circular—Adams
Co., 231 South La Salle Street,
Chicago-4, 111.
'Brochure-
ROC^ OILCORR.
208
H. M.
SOOTH LA SALLE- ST.
Telephone
Bell
Randolph 4068,
System
tci New York
CG 687
was re-
t
No-j |
Certainly, its-
Affairs
William- L.
would
election.
Clayton
en¬
have
been
impossible
any Vftter to suppose
that this
for
t
pro- \
.?:■
•
POWE^J CQi: 6%. & 7%" Pfds.
Byllesby and Company
-
Incorporated
135 So. La Salle Street,
...
Philadelphia.
Chicago 3
~
Teletype CG 273/
Telephone State' 8711
Newt. York,
.. -
Letter '
-Pittsburgh.
• -
had been renewed four times, each j
time witita sub'stahtial number of!
Republican votes.
On the last
re-•
hewql,/-which.- involved an in-/
fin your letter? of Dec: .19^ which crease in the authority/of. the !
Was acknowledged by my secre¬ President to negotiate
agreements/ i
tary during my absence from the -the?Republican vote in the Senate/
city, you urge that negotiations nadibeen: practically a tie; 15 for:1
upder
the Reciprocal Trad e and 16 against. The three last Re- 1
Agrements Act be suspended. You publican candidates for the Pres-/
advance four arguments in sup¬
idency—Mr. - Landon, Mr. Willkiej
port of this request. First, you and Mr. Dewey—had each ; ex- :
contend that the trade agreements
plicitly endorsed, the; principle of
prpgr&m was repudiated by the tariff reductions through recipro-!
i
^
CHICAGO 4, ILLINOIS
Direct Private Wire
vember
;<My dear Senator Butler: V
Cjmmon
BEND m,, Cqmi
CHiaqp SO.,
NORTHERN STATES
-
Hugh Butler
in
SWs.ofi'S^
our
agreements program
gaged in another exchange of cor¬ gram was an issue in the cam- ;
respondence on the subject.
.paign,. The^American people hadij
Following is a reply by Secre¬ been repeatedly, assured that there!
tary Clayton written under date was no partisanship in foreign!
Hydraulic-Press Manufacturing
Argo Oil Corporation—Descrip¬
Of Jan. 16, to Senator Butler's pre«- policy; that politics stopped at the/
tive circular—Seligman/Lubetkin C^-^Dctalled Analysis—Comstock
vipus communications of Dec, 19; water's edge. The Trade Agree- •
ments. Act, * first passed in 1934, !
Street, Salt Lake
City 1. Utah.
DEEP
analyzing these; Bonded,
*
malted by the voters in the
Mr. .Clayton^
Write for
!
No Voter Repudiation.
"First;, there, is no^ evidence to
&
Manufacturing
Rockwell
We Maintam Active Marlcet»
Utility
,
support; yqun contehtion. that; the -
research item
Financial
j; f RE||f i pAIRMJlN Cft.
Central Public
that the Administration.,
.
;;
Also available is
valueless.
intends 'to. destroy, our, system of .
tariff protection,'
1
;
"On hone of; these, points, do L.
find it possible to agree.
& \ Grinnell (Corp.—Research item
Trecker Cqrpi and- the Fresnillp —Goodbody & Co., 115 Broadway.
;■:
Company... W
.t TTlJ l,? ' New York 6, N^Y.
a
been
Third, yfth ^ompfeih. that the'.list/
of products uhdor consideratioi^ih^
connection with the, pending, iqe-.-.
gotiatiohs, is long. Fourth, you.-
I Aetna Standard Engineering Co. Street, Chicago 4, 111.
Also. available are circulars on
Late circular r-, Luckhurst &
Company, Inc.,*40 Exchange Plaice! American Bank Note Co/ and The
Bud
have
gotiations
Corp^-Study
of situation—May & Gannon, Inc.,
161: Devonshire Street;; Boston • 10:
General
Model, Roland & Stone, 76 Beaver
Street, New York 5, N. Y.
New York 5, N. Y.
;
'
;
Extepding;thein controversy over th^ significance of ilfeinogoti^;
tions und^r the Reciprocal-Trade Agreements Act; Senator Hugh<
Butler, Republican of- Nebraska^—
Fedders-Quigan Corporation —
Willi'.
th%
Analytical memorandum — Hautz,
Currency' Committee, and .Under 'pretended goal' of this 'ostensible
Engel & Andrews, 57* William
Secretary of; State for Economic program, apd* suggest that/ the»
Street, New York 5, N. Y.
concessions obtained/ih, past: .ner?
—
■
Asserts, agreements..
ffW*fe '^piftdcr,? Senator Rutle^aJticizes: lack of^ hi-partisaii., t
consultation;.; complains: about' brevity-ofvhearings;, and^ charges^-.i
1
5 Y:
Lackawanna RR.
Analysis — B;
W. Pizzini & Co., 25 Broad Street,
New York 4,"N. -Y4;' "
D. L. ^ W.
tlayfen denies; charges that November election implieJ;popular!
^Wdiatipn;| thDt negctiat|pDS; jS^ye/.bgwi valueless tu; l},
Hipks^& Price^231 South,La Salle
*Wells-Gardner &, Co., Com*
,
-
Street, Utica 2, N; Y. 'v
/Mjf,
of New Jersey
.
Review of the American Market
For
Y'! '
.
Commodore Hptelf
Inp^-CiycU^
lar-^Ugmanf; Lubetkin, & .'Co|
Strje^h
nance
on
MARKET
SECONDARY
CHICAGO 3:
Revenue
;
and
Co;
Watch,
raiis^Viias;
Contains, articles, on the discount
For
j-■
in
8$ Ujckey,- 49' Wap.
York, 5, N. Y. :V
\
ing, Toledo 4, Ohio.
Wholesale Distributors
Qruen
memoranda
are
International Detrola
Harris & Co^
w
the
on
rent developments
Co.—Year-end
Unterberg & Co., 61
New.York 6, N. Y.
phia 2, Pa.
Also
with the;forga girl on the cover-^B. S. Lichtenstein
Co., 99 Wall
Street, New York 5, N. Y.
—
- -
^Minneapolis!.
v
voters
in the
November election
arid that its continuation would be.
'a direct affront- to "the popular
cal: agreements.
"
; You may recalli *
(Continued qn page 633)
^
i Volume 165 ; Number 4564
'-•'/•I* -iVj'--
"
.-.I
,t,
*
THE COMMERCIAL & FINANCIAL CHRONICLE
]■*'*'.*"
'
I ,1
'
'•
'
"
.
•
■
.
,
.
The International Bank Internalional
By EMILIQ G. COLLADO*
:
V.. S. pxeput)[y9 Dir£ctor,bitei;natiqnal B^nk ft>r
]^ecoixstruQtion| ana Development |
7 *
,
!.
.
.
to
By ROBERT
Bend Club of Chicago
Slate for New Officers
Domestic Money
T^SFVm*
•
.
International .Monetary- Fund.
,
.
,
.599
„
CHICAGO, ILL.
on Bank's directorate gives detaUs,
of; ins^U-v '
history andorganization • purposes of itsJ Ip^n,operations; |
setting up an international monetary system implies strengthening
loai^ conditions;fipancial stature J; status.ofguarantees nndolher* Y of domestic; currencies, . Says gold standard precluded
any ihter- 5
obligations oad present loap applications. Analyzes United States*
nationaj monetary policy and waiij cause of spreading Irvisiness
capital subscription and potential backing. Mr. Coliadq qss&H .
depression^ ^frpm one nation to others^ as \yelj as n fesorfc tn
great importance<$ broadm^rketfor Bank'sobli^tions^eraphaHarmful nationalistic protective; measures. Sees remedy in estab.- \t
lishment of International
sizing vthey are safe and attractive outlet for investment fands»v
Monetary Fiind, whose poHcies, he conAssets institution* incurs no; risks/of currency depreciation. 'pef:y
tends, should be flexible to meet diversities of regional conditions, 1
dares Bank is designed to withstand most extreme economic stress
-riu"
of
PaPer> and its brevity, invite commonplaces.
The most trite of such
aqd ^
obligations would compare very
commonplaces is the once original observation
lion's
,
:
.
•
The thirty-
—
sixth annual dinner and
meeting
of the members of The Bond
Club
of C h i c a g o
Contending general abandonmeoi of gold standjaifd wa$ due
largely
to lgck of international
monetary organization, Dr. Triffin holds
'•
U. S. representative
will
be. held
in the Crystal
Ball room of
the
Black-
,
stone Hotel
'
*
that the, gold standard was in esi-®—"
favorably with concurrent record of pther securities.
sence
1
,/v.
INTROOUCTION
The; immediate and long-term interests of the United States rer
duire .the speedihgup.of the world's economic recovery and economic
.
4^
development
.through
a
continuous
,
and steady
flow- of fOJ>
.
cign
loans.
Only
*
the
by
reestablishment
-
of high
\ levels of proand
1 Ruction
trade
1 d
tvor
-
,
the
over
tractive
n.t h e.
United States
c
-
a
future
of
a
years
Emilio
sustained
level
of
G.
investment
tions
ports and imports appropriate to
high levels of
domestic production and employment.
*
-
duction
and
income
be
can
,
in-
instruments
been
International
Bank
has
of
policy, but implies,
quality of the obliga¬
and
nar
monetary
the
on
trary, the strengthening of
instruments
The
their
.
such
effective
policy
an
framework.
in
the
field
domestic ecoiiomic policies.
con¬
utilization and integration into
international
most .economists
which
Prestige of Gold Standard
The prestige of the gold standi
acd as a mechanism ensuring in^
ternatiphai monetary balance
be
traced
back
to
the
can
classical
nationalism
must
begin
in
the
ever* was
developed in terms.; of
also
-
*
.
■
the surest foundations upon which
to build prosperity and peace, m
*
j
*
The United
States has
utilized
ments Act which was adopted ip
the summer of 19451 at whi(jh time
also, the
'
,
of
vehicles
for
and reconstruction. It is its
pres¬
policy, fully ratified by the
Congress, to place principal em¬
phasis on the International Bank
for Reconstruction and Develop7 ment
as
the ^instrument
for
the
promotion of private foreign in¬
vestment and the supplemental
financing at long-term of projects
and programs of reconstruction
and development.
{
The principal funds to be em¬
ployed by the Bank in its opera¬
tions will be derived from the sale
pn
the investment markets of its
<o>vn
obligations
or
obligations
,
A. Walter
Stone &
v*.eur
Nathan D.
ster Securities
Corp,.,
Paul
and
,
McClura
Mullaney, Mullaney Ross
& Co., will submit the following-
President: Nathan. D.
McClure,
Jr., Chahner Securities Co.
Whipple & Co.
con^
For
directors to
for
serve
Leo J. Doyle, Doyle, O'Connor"
Co., Inc.; Richard A. Kebborv
ICebhpn, McCormick & Co.; John
S, Loomis, The Illinois Company;
George L. Martin, Martin, Burna
&
monsK Lee
son
M.
InC*.:'
'
Higginson Corp.; Nel¬
Utley, Halsey, Stuart & Co.
-'-
•
!j
^
■
J
Guest speaker will be Mark
A.
Bf'own, Executive
Harris Trust
-Dinner-
Vice-President, /
and Savings Bank:
cpats
will
be
m.' and dinner at 7:00
Active
worn.
6:15
p,m,
.
' *
.
the.- Secretary of the Treasury to
dozen,
s
TRADERS ASSOCIATION
brokers
represented' thft
Cleveland
Securities
Traders Association at the annual dinner of the Bond
Traders Club at
Chicago Tuesday, Jan. 28. % ;
<
;
;
In the. Cleveland contingent- were Richard Gottron of
Grotton*
Russell & Co.; Howard Eble aiid: Edward Parsons Jr. pf Wm. J.
Executive
2-
t
Co., Inc.
7-- i'i 1
Y
Y I
V "
]
'
The oldest manufacturer or
news¬
paper, and magazine printing presses
in the
country. / Now booked to ca¬
pacity for more than two years and
.
turning
out presses in record volume,
-
(Wednesday).;.
Direc-r
Mr. Eble and Mr. Gottron. are in Kansas City
today for a meeting
guaranteed by it. In many jurisr tor and their alternates by the of the
Bond Traders Club there
gnd tomorrow ( Jan, 31 > are slated to- bp
fictions various types of investors President by and with the advice im
Minneapolis and St. Paul -for a meeting, of the Twin Cities Bond
may now invest in the obligations and
consent
of
the
Senate; it Traders Association.
; "
':
'> 1
of the Bank. The New York State Created
a
National
Advisory
:i
Several days ago Mr. Quigley announced appointment as national
Assembly last March ; legalized Council' —• knbwn as the NAc
committeemen for 1947 to the NSTA of
Liston, Cayne and himself.
such obligations for investment by which consists of the
Secretary of Alternates are: Clarence F, Davis: of First Cleveland
Corp;, George
mutual savings banks. Legislation
the- Treasury as- Chairman, the F» Opdyke
qf. Ledpgar-Horner Cq. and Arthur Y; Grace of Arthur Vi
is
now
being introduced in a Secretaries of State, and of Comt
Grace & Co. - The national "committee met in the Palmer House* Chi¬
number of States to make Inter-r
merce, and the Chairmen of the cago, yesterday with more
than 3,000 committeemen from coast-tq-.
national Bank obligations. eligibly Board of Governors; of the Fed4
COastlin attendance^ Some, of thq principal; tppips UP; for" disCussioh
i for insurance
company and othe| eral Reserve System and of the
Included present and prospective legislation and working conditions
% Investment,, f wrs^Kt - ■ t7t-'
Board of Directors of the. Export-? Within the
industry.'
There are two. general reasons
Importr Bank — to- act for >the
an
'
Class A and Common Stocks
in dollars to the Bank to meet
calls Oh. the Capital of $3,n5jOdO,f IMericka & CQ,;^Cprwih Listbh of Prescott &
Co.; Jay L* Quigley of
000
subscribed by the United
Quigley & Co.; and M. A. Cayne of Cayne & Co.
States; it provided for the apf
The'group also was, present at the winter meeting of the National
pointmeht of a United State^ Securities Traders Association in Chicago
yesterday
pay
Governor and
Trading Markets in
R. Hoe &
half
"
,
ADAMS & CO.
231 SOUTH LA SALLE
STREET
/
CHICAGO 4, ILLINOIS
TELETVPE CG 361
PHONE STATE 0101
*
.
t
.
<
United States in matters, such as;
'
statement by Mr^ Collado to
the
:i
Insurance
Committee, of
Massachusetts Legislature* Jan.
the
21,
1. Assenting tdthd salq of debenr .tures^ irx this,
country, where thq
(Continued
op page
613)
!
Aeronca Aircraft Corp*
Baltimore Transit Co. Pf d.
Burgess; Battery Co. Com.
SECURITY TRADERS
*
ASSOCIATION OF NEW YORK
Michael^Jfil Heaneyi;President! of^1 the
^cdfiity Traders Associa^
tipn of rNcw; Ydrk)' announces that the
Association's, annual dinner
will be
he|d qn Friday, April- 25, at the Waldorf-Astoria Hotel,
^
Chgo. Auro. & Elgin Ry. Units
Decker
Mfg. Co* Com*
Howard Industries, Inc.
*
Co.
-
Sold
♦Long'BellLumberCompany
HYDRAULIC PRESS MFG.
R
Bought
Hydraulic Press Mfg. Co.
Old Ben Coal Corporation
BUFFALO BOLT fZ™
COMMON STOCK
Quoted
.
MATTHIESSEN
*
^ HEGELER ZINC
CHICAGO SOUTH SHORE & SOUTH
Miller
Manufacturing Co.
Oil Exploration Co. Com.
Trailmobile
BEND
*
Company
Detailed analysis available
on
ft <7
DOYLE, O'CONNOR & CO.
Members
Chicago Stock Exchange
225 EAST MASON ST.
|
PHONES—Daly S3SI2 Chicago: State 0933
135 SOUTH LA
MILWAUKEE (2)
Tel,typ« Ml
48Vj
.Tflppho^es Dearborn,6161
" )':
..
_,
Xeletype; CG
request.
",J
y'i\j
COMSTOCK & CO.
231 So, La Salle St.
CHICAGO 3, ILLINOIS
^
,
CHICAGO 4
)SALLE STREET
(2^:-
!;
Corbett, Inc.;t Richard W. Sinti-
was
A
y
&
p
;
:
on©
the above and—
Cocktails will be served at
CLEVELAND'SECURITY
4
Treasurer: William D. Kerr,Ba-
deyel6pmeh|
which the International Bank
designed ultimately to assume,
The Congress, authorized the Presf
iderit.fo accept membership in the
Bank, and undertake on behalf of
the Unitedi States, the obligations
embodied
ih
the
Articles
of
Agreement; it fully empowered
;;
>
nominations for officers and'directors for the. coming
year:
.
;
responsibilities of financing
recoustructiQU
,7:
;
,
L.
vi
the
ent
pman
& Co., P.
man
■
lending authority of the
Export-Import Bank was ex^
panded^ by4 $2.8 billion; tp enable
emergency
and - transitional fiit"
hancing of relief, rehabilitation, of temporarily ■< to undertake many
the
number
a
a
year,
a special category of
disequilibria*
prepare^
{creased. High levels of income at
*
An address by Dr.
home and abroad are the surest the Agree:ment' for
the ' Interr
griffin, bp- originating in cost maladjustments
foundations to the expansion of national Mohetary Fund. United fore v the; annual meeting of the between a single counfry and the
rest pf the world.
States participation was author¬ American Economic1*
lf waS' npve^
i world trade which is
Associatioh;,
necessary to
: us and to
24,; 1947^
(Conthiued bh page 631) -i >jthe rest of the world— ized by the Bretton "Woods Agree? AtlantielChy* M.'-Jv
Conference
C h
FarwellChap^
of
analysis of balance of payments
to In other words,
monetary inter¬ readjustments. This
analysis, how?
established;' ^pursuant
Articles of Agreement formulated
in July 1944 at the Bretton Woods
consisting
Ralph
o.f
n«
action, not against
monetary organization, but against
It is curious to reflect on the sur¬
the. lack pf any such organization.
vival of this philosophy in the
I also suggest that an
interna¬ field of
international relations,
tional monetary system cannot be
lon^ aftec its nhandohment - by
following tional
j
.v
commits
tee
fended,;' here as in other ar-pas 9f Havriman* Ripley 5? Cq. Inc.
economiq. life; a^ the sure path 1q
Secretary: George S. Channeiy
international economie balance and
equilibrium..
approached by renunciation of
Bank.
-
1947.
nominat¬
ing
general abandonment of the gold
standard in the 1930's was a re-,
^
the" International
y-i'
13,
A
an
.
^investment
History And Organization
By facilitating
the sound
economic development
of other
areas, the levels
of world pror
of
-
Feb.
■
analysis will dem^nsir^^ the high
Collado
ex¬
I the maintenance of
*
for
,v.j
It is believed that the
*
1
outlet
funds.
\ toe assured in
-
^
why it is important that the marr
ket for: the obligations of the- Inr
ternational Bank be broadened as
much as possible. First, the Bank
must
distribute
its
securities
widely if the responsibilities in
the foreign' economic 5 field ven-r
trusted ta-.it by the
United-State^
audi1 other member * governments
are to be adequately:
discharged.
Second, the obligations of the
Bank will provide a safe and atr
.
,
^
■ ■ -
international monetary sphere of ends' a^nd policies, rather
system,. and that its breakdown in'
fhanv0 means and techniques.
•
the 'interwar period
represented1
The automatism of' the 1 gold*
the triumph of
monetary national-,
^tandayd excluded any control,
ism over monetary international¬
whether national or international,:
ism. H.,,y;:
oyer
moiietary phenomena.
It
U Since your Chairman begged for
precluded,/therefore, the develop?
originality in these papers, I shall,
menf of ah international monetary
try to defend exactly the' opposite,
policy, by denying the means oi
thesis. - Paradoxical
as
it
may carrying out
any such policy. This
sound, I submit .to you that the
laissez-faire attitude w as deT
.
on
Thursday,
Dearborn 1S01
Teletype CG
955
"
of
<.
Co. headed
&
Blair
account, including McDonald & Co.
an
1933;! and the ; SEC Act of
of
held.
were
,
.
•
.
Exchange^Commission Reported
Considering Relaxing NYSE Floor Trading Rules
Secnritiesand
,
,
1934
Ohio Brevities
I";
Thursday, January 30, 1947
THE COMMERCIAL & FINANCIAL* CHRONICLE
600
V '
-
The; annual meeting and dinner
of the Cleveland Exchange is set
Feb.
for
at
19
Club.
Union
the
Both
Ex¬
York Stock
the New
might
Cleveland Corp. that won $6,500,000 Seattle mu¬
George Placky of L/ J. Schultz change and the Securities arid Ex¬
nicipal light and power 2% bonds on a bid of 99.31. The issue, which
& Co. heads arrangements; . . i. change upmnrissiori!^a d m I t ted
was reoffered to yield from 1.90 to 2.09 %, met a very fine reception,
Harvey T. Gracely, who in 1901 yesterday there was substance to
the Underwriters said, adding that the bonds were substantially all
Cleveland and First
sold soon
ofterthe offering:-
A total of
'<
;>
,
*-
"
.
took
•
.
a
job in
then
$1,500,000 first mort¬
Marion
that
Steam
conversations
Co,,
Cleveland -was in all groups, ex¬ today is Resident and General
notes has been sold by Basic
Refractories, Inc. of Cleveland to cepting one issue by Chesapeake Manager of the company. He has
been with Marion all of that time
& Ohio Railway.
,
.
the
Central National Bank of
with the exception of about five
The biggest was $14,970,000
Cleveland and Mutual Life Insur¬
years
during the
first World
ance Co. of New York.
S
t
gage
Pennsylvania
ETC's
Railroad
John
-
•
.
.
Glidden for ll/2%.
committee^ of
executive
Co., Cleveland. • /:
» •** -'i
Two weeks ago today Mr; Leyeri-
-
who completed! 25; years
with
Glidden last •_ spring, was
elected to the executive commit?
tee post and died unexpectedly
the following day at his home!
Before joining" Glidden" he^had
Jhagen,
■
equipments
1.15 to
bid of 99.401.
a
these
on
was
r.
*.. ..*
^
-.
*
-
!
'■
a
important of the. company's
operations. '
'
most
of the board of directors of Cen¬
Fahey, Clark & Co. of Cleye? j.
and First National Bank f
as
a
has
He will continue
maker for
20
Chicago,
bidders,
for
bid
102.289.
of
The bonds mature serially from
Oct. 1, 1948 to April
*
issue
was
The.
1972.
reoffered at prices to
yield from 0.70% to 1.70%.
Cleveland,
director
of
bid' 'was
best
102.13
by
th^: proceeds to construct arnew
school
building and for additions
to others.
This little story could almost
be
Railroads"
by Haisey, Stuart & Co.
One day last week, Thursday to
be exact," accounts headed by the
Chicago firm were successful bid; ders on four equipment trust cer
titled
"Financing, the
tificate
issues.
Otis
&
A
to
weekend since
office
as
Chairman
of
District *10
of the National
Association of
^Securities
Dealers,
Inc.
district
The
15
covers
most
extended to the
likely be
IE the country!;
bther exchanges
Publicly Offered!
headed
group
lerence,shares and all of the out¬
standing shares of $6 prior lien
preferred stock of Central-and
South West Utilities Co. and ex¬
changed all such shares for shares
Lehman
by
of new common.
-
,
of
Directors
The
Central
and
offered publicly yesterday
192 shares of Central arid
1,342> South West Corp. currently intend,
South subject to continuation of consoli¬
stock (par dated earnings at approximately
Corp. common
$5), at $12 a share.
the present level arid of factors
Net prceeds from the sale of the
justifying it, to initiate a policy
1,342,192 shares of Central and of paying semi-annual: dividends
of Louisville,
Ky., paid his
visit
public order
on
the SEC might consent to grant
with regard to the rules would
SEC
the
far
West
of Berwyn T.
largest in its field.
Elhas - been cldsely con¬
nected" with the can ^concern for
how
a
the basis of size.
The: Stock Exchange : believes
that whatever; concessions, if any,
merely
Brothers and Lazard Freres & Co.
& Co., Inc.
second
Ohio
arid Kentucky
and nine other
South. West Corp.! formed; through
merger of Central and South West
the
on
new
stock at the
common
rate of 70 cents; a- share annually.
and Its subsidiary, The! first dividend of 35 cents: a
both share is to be paid < about six
Corporations and regis¬ months after the filing in the
tered holding companies, will be office of the
Secretary of State of
used by the new company to retire Delaware of the
merger agreethose preference shares of the
mehgl;!
■J
merging companies not deposited
JJtilities, Co.
American Public Service Co!,
Delaware
for new common
pursuant to the merger
agreement.
Central and South West Corp.,
in
exchange
stock
Charles Lob Opens Own
Investment Offices
completion of the re¬
(Special to Tub Financial
organization plan, will have auCmomdj) ^
NEW ORLEANS;! LA^rChirles
thojrizri(t^.hnd outstanding a 2%
oth<9$"^interests, £ 4 X* FrandgV
Shervrin is the .new President .'and
secured note of Central and South Lob has opened offices in»the
*.h *2'
v h i \»'',«ri the committee;,
Frank T. Humjston Jr., Treasurer
Mr. Moore, who succeeds John West Utilities Co. in the amount
and Assistant to the President of E. Joseph of Cincinnati, has been of $348,000, and 6,600,000 shares of
common stock (par $5).
in the investment business since
Brush Beryllium Co.
Under a plan of merger, ap¬
1920. He; is a past president of
Secretary William J. Perry r
the Louisville Bond Club arid an proved by the Securities and Ex¬
represented the Cleveland Stock
officer of the National Securities change
Commission and the
Exchange at a Securities & Ex¬
Traders Association. He also is District Court of the United States
change Commission conference
chairman of the district business for the District of Delaware/ hold¬
.
security deal-
Berwyn jiX.
v
following
arifl j J>rok-
JUioore^
.
.
-
at
Philadelphia
yesterday
at
which discussions for proposed
revisions in the Securities Act
of
Co.
Stock
T. Moore President
mendorf
to
as
to give prece¬
bicf or offer by a
refuse
any
floor member over
account freely when¬
own
Central & South West
*
CLEVELAND, OHIO —Berwyn
has been elected a
Continental Can Co.,.
the
the Exchange said it
make it possible for
special
taking
dence to
.
'
Moore
sition and
they wanted to do so. There
some
speculation' on • the
"street"
Cleveland last
years.' !"!'. Harvey O. Yoder,
Braun, Bosworth & Co. of Toledo, co-founder. and Secretary^Treas¬
urer of the, 35-year-old Yoder Co.,
with the third bid 10.1,92 by Stranahan, Harris & Co., also Toledo. machinery manufacturers, has! reIt is the school district's only sighed .as ari officer' and director
indebtedness and it plaris to use to indulge in civic, cultural and
Next
was
;.
.
Berwyn T. Moore Pays
Visit to Cleveland
;
a
♦
pointed general manager of trade
sales
of Sherwin-Williams and
E. W. Windsor is the new gen¬
were
with
bonds
years.
ever
GV Gilbert Thorne has been ap¬
*
*
on
(ac¬
own
parity with a public bid of offer
to any bid by a floor member to
establish or increase his own po¬
them to buy and sell securities on
their:
parlor equip¬
first
*
stricted in their activities
Lee E.
He has
elected
Vice-President.
successful
Financial
Seen—Frank L. EL
$695,UUQ Wooster, | hiendorfVice-Presiaent of Rob*
Ohio, 1% % city school district | ert Heller; !8c
Asspciates, Inc. of
of
*
City,
director.
land
.
Cleveland!
tral National: Bank iOf
effective Feb. 1.
comment except to
Traders have; been severely re¬
floor and
hoped to
his;
for
minus-tick until the
-
floor trading: The
on
no
on
second succeeding trading c|ay*
Present restrictions also deny
verify the fact it was discussing
the rules with representatives of
the Exchange.
.
Fifty-six years of banking serf
quarter, of,a century,* > Duri
irig most of his time with Glid? vice4 to Cleveland is the record
den he had directed the Durkee established by Arthur H. Seibig
Famous Foods division, one of thd who has retired as Vice-Chairmari
Co.
York
been
had
.
eral manager of the S-W
chemical products sales,
2.25%.
1'
„
.
on
reoffering
The
Sherwin-Williams
beenr with the'
>
Ohio
&
back
a
SEC made
Co., founded in
Cleveland and now located in New
ment
$3,310,000 of Balti¬
Railroad
2% |
won
more
securities
count
agreement
an
restrictions
Nestle-LeMur
:
an
reached with the SEC relaxing the
!
...
account,; except at a loss, on
up-tick, until the second suc¬
ceeding trading day; (2) buying
own
any an¬
it did -say that.it hoped within a
or so ta be able to report
Tire & Rubbdr and
City Bank of Cleve-'
been with the beauty
Earlier this month a Haisey
group
land.
These were reoffered Nadeau,
-
yield from 0.90 to 1.75%.
to
National
the
month
another;
company," Union Carbide & Car-j
bon Corp. ; He is President and;
director of Youngstown
Steel;
Door
Co., and a director of;
Youngstown
Sheet
&
Tube,
Goodyear
on
that
been add-
ed to the directorate of
?
in
were
nouncement about the matter but
Cleve-j
McWilliams,
land industrialist, has
Grove (Ohio)
yield from 1 to 2.15%.
operations. The remaining i pro¬
The) C&O issue amounted to
ceeds will be used to pay off the
purchase price!of a government $2,300,000 and the bid wgS 99.129
for 11/2% securities, representing
plant and the rest added to work¬
a net interest cost of about 1.665%.
ing capital. Headquarters of the
The .third set of obligations was
company are at Cleveland*
- J
$1,700,000 Cincinnati, v New Or?
leans & Texas Pacific IV2S. The
Over 50 years of service with
yield price was 0.95% to. 1.80%. f
.turn of the largest paint companies
The final issue was $1,520,000
ehded ^ suddenly^ foF Richard)^ Alabama Great Southern which
Levenhagen, Chairman of! the they acquired pn a bid of 99.278
plant at the Maple
■
P.
they
really premature to make
War/v^j VVg
the company- £ which the Haisey group won on
said, about $700,000 would be used
a bid of 99.209 for 1%% interest
for the construction of another
rate.
These were reoffered to
proceeds,
the
Of
agreement on the desirability of
Street giving: the traders the right to sell
the midst of on their own account whenever
subject of they thought such action'was war¬
the- rules which went into effect ranted f>y; the condition of- the
early last year restricting the ac¬ market or to purchase securities
tivities of floor traders on the back anytime after selling. • [
Exchange.
\ The present restrictions prohibit
The Exchange indicated it was a trader from (1) selling for his
Power
Shovel
the rules but there was general
on
the report current in Wall
factory stock room
Shovel Co.,
a
with Marion
be willing to go in the
restrictions
now
direction of lifting the
shares of the
given the
opportunity by an exchange offer
terminating • Jan. 17, 1947, to ex¬
change their shares, at the respec¬
tive redemption prices of such
Staff of
shares, for shares of riew! comrnon
CLEVELAND, OHIO—The call stock at the initial offering price
conduct committee.
ers
of the preference
merging companies were
Walter Ingram Joins
Carey, Philip, Com. & Pfd.
Goodbody Co.
Drackett Co. Com. & Pfd.
Gruen Watch Com.
Underwriters and
Distributors of Municipal
and
Sport Products
Corporate Securities
securities
the
of
business
has
urged the return of Walter H. In¬
gram,, associated in brokerage, cir¬
cles for 35 years.
Red Top Brew
Land Trust Certificates
share of the common
per
to be
Charles Lob
bidding. Ac¬
'?
t.'
't-'r
..."
;;-.v!
!•;
f
.;.r$
dividends on the
Canal Building to engage in the
preference shares and the value
securities business. Mr. Lob was
; Ingram, who joined the Federal of fractional shares were to be
formerly a partner in Weil & Co.
Reserve Bank
of Cleveland in pa$ Jut cash.
Through this ex¬ in
charge of the syridicUte depart¬
1942, has come back as a cus¬ change Vriffer, 64,749 / shares of
ment.
tomers man with the New York preference
shares
aggregating
sold at competitive
'
c-
!.. i
crued and unpaid
1
4
.
..
r
-r-»
.•
.
,
OTIS & CO.
W; D. Gradison & Co.
(Incorporated)
Established 1899
Dixie Terminal
CLEVELAND
^
>
New York*
*
Netc^York
Members
Chicago.Denver
and
.
Cincinnati
.Stock. Exchangesrr-N.■ Y.„ Curb Assoc-.
i 7
-
?
Building
Stock Exchange firm of
&
CINCINNATI 2
Co., located
Goodbody
in the Cleveland
claims
of
Columbus
Toledo
•
Buffalo
Tele. CI 68 & 274
Tel.Mala 4884-
The
provided
shares
Fast
Direct
Orders
or
Service
Drackett
on
Cleveland Stock Exchange
40 NYSE and
Listed Stocks
TRADING
MARKETS
•1
v.
are
'
.
:... -
INCORPORATED,
CLEVELAND
Cleveland
14, Ohio
.
.
14
Members Cleveland Stock Exchange
,
,,
Teletype CV 594
29 BROADWAY ^
u la & Go.
ie
Union Com. Bid?.
CLEVELAND
-
NEW YORK 6
'
Tele. CV 174
Union Cent. Bldg.
>
< r
Corporation, and did business
'
an
CINCINNATI
4
Tele. CI 150
f
as
individual dealer.
receive the
authorized com¬
Two With Chas. A.
\
Day
(Special to The Financui. Chronicle)'
4
corporation
^"BOSTON, MASS. —Williatri'B.
remaining after the exchange of
Burford and Alfred E. Rand have
the new stock for common shares
mon
V^,' t,, !•>
Union Commerce Building
(Special Jo Ths Financial Chronicle)
not
Corp.," ill ex¬
change for its holdings of Central
and South West Utilities common,
WM.J. MERICKA & CO.
,
Bishop Jr. Now With
The Middle West
.
Richardson
•
A. M.
corporation's
new
stock
Service Co.
will
i,:,
1582, Union Commerce .Bldg.
Harshaw Chemical
NYC Dually
Odd-Lotted Here
the
also
authorized Staff of Larz E. Jones
the
exchanged or
NEW. ORLEANS, 'LA. - A. M.
sold competitively will be issued
Bishop, Jr. has become associated
in exchange for the outstanding
with Larz E. Jones, 318 Carondelet
shares. of
respective
common Street. In the past Mr.
Bishop was
stocks of Central and South West head of
Commodities
Receipts
Utilities Co. and American Public
on
Quotations
agreement
that
of
common
o*°l
$10,000,000 were sub¬
exchange.
merger
office, in the National City Bank
Building.
Cincinnati
,
mitted for
of
shares of the new
the
v
two
merging
companies
held by other stockholders, r
Middle West also owned
:
than 50% of the
">
more
outstanding pref-
become
Day
&
Court
associated
with
Chas. A.
Co., Inc., Washington' at
Street, ~ members of the
Boston Stock
Exchange^S.^#^^
.iKV^afiv
Volume.165^:
'
/,
a
* ^
•'■
w>r
^A'r'N*
•
Number 4564'
•
*
I
.
THE COMM]
COMMERCIAL & FINANCIAL CHRONICLE
-:■
601
Illinois Securities Dealers Mid-Winter Dinner
Ai
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■
i
A
The Illinois Securities, Dealers ^ Association held their;
Mid-Winter Dinned at the-Terrace Gardens in the Mot?
x
OeCuPities
"^ssr/
j
'
■
■
:
•■
7'
'
■
'
■
President);
James J. O'Connor, President, J. J I' O'Con¬
& Co.,
(Director)j Sigfred ^ Sahdeen, Prop., S. A.
nor
James E,
ert
r
Day/President, Chicago; Stock Exchange; Rob*7
Strauss,
Partner, Strauss Bros.; (Director).;
:
^
-
Hon. E. H. Cashin, Counsel, Corporate Finance DiviSarideen & Co.,V Rockford. Illinois /Director).
X'
members and guests werevpresent4
John .S. Loomis, ;President; illinois .Co. (President
jsion, Securities^ & Exchange Commission; .A. ,D; PlaJ*
r «*» r $if AGuest^^speakers^ Richard
7Bi^M0Britire^Ck)ht^issioner| Bond Club Of Chicago!; Harry A. xrees, par trier, ruai i mondoh, Jr., President Indiana Steel Products Co ;. How7 Seeurttie$7.and;^Exehange i:Cbttimi^siort xand|xDr;7 Ma>c^ H;vDavis:;&3 Co; (Director);; Thomas; B.( Ha
'Regional ; ard C./Morton, Partner, McMaster,; Hutchinson & Co., 3
i Wihkler, widely known economist
President Bond Traders Club of Chicago; Paul E. Con7 Exchange; Commission;
speaker on financial Adndnistrat6i^:v Securities
rads, Proprietor, Conrads & Co., President Rockford
subjects, were introduced by Owen Van Camp, Presi¬ Henry D. MacFarlane/Partner, Alfred O'Gara & Co.
Securities Dealers Association; Joseph Blosser, Partner,
dent of the Association.
(Past- President); Fred-;H.:;Mason,/President;Mason,
Mr. McEntire's subject 'The
SEC aiid 'a Free SecuriUes Market''; and>Dr. Winkler Morari & Co.' (Director) ; Paul R. NoOnan,i. Vice-Presi¬ 7 Straus & Blosser
(Director);- C; H. Redfield, • Vice-;
Tdisdii^ed^^The* Irapo
Foreign Cohimer^ "iiv2 dent, Dixon; Bretscher & Noonan, Inc., Springfield, nii- ; Presideht, Sills, Minton ; Sc ;Co., Inc. (Secretary.); fEdgar v
hois (Director); Walter1 R. Brailsford, President,'Brails* A. Peck*,; Vice-President, Treasurer, W. C. Gibson &
Our; DomesticT .Economy." ' Both speeches:: appeared in
Co. (Treasurer).
ford & Co; (Past President).
'
;'
/
^'^'CWhicle^,'Ol:Jan.vl6» y.XX:>k j -.7
- / M ;
Nominating. Committee • Illinois * Securities Dealers ; Hon; R;' BS. McEhtire, Commissioner^ Securities & Ex¬
; In his, openings remarks.MT, Van Camp stated;: that
Association—The following were appointed as a nomi¬
several new iirms, had applied for membership in this
change Commission; (Speaker);-Dr. Max Winkler, Part¬
ner, Bernard, Winkler & Co., New York
growing organisation.
(Speaker); nating committee for the next election of officers:
Guests at speakers table Were^MJ G. il. Kuechle, Vice- Owen V. Van Camp, Vice-President, Enyart, Van. Camp
George S. McEwan, Chairman, Paul: H. Davis & Co.; Leo
President, National Securities & Research Corp;, (Chair- - & Co., Ino.t(Prusident); Hon. Poyntelle Downing, Secur¬ J. Doyle, Doyle, O'Connor & Co.; Paul E. Conrads; Conrads & Co.; Joseph E. Dempsey, Dempsey &
man; Dinner
Committee Director); Wni.. 'H- Flentye, , ity Administrator, State of Illinois, Springfield, Illinois;
Co.; Henry
President, Wirii H. Flentye & Co.^ Aurora; Illinois; (Vice^ Hubert S,. Conover,- Vice-President Brailsford & Co.; sD. MacFarlane, Alfred O'Gara & Co.;
*rv,
•rison-Hotel, Chicago,von Jan, 15, 1947.
More than 200
■
*
-
-
,
>
•
•
.
Halsey, Stuart Groups Offer Four Rail Issues
Halsey
Stuart
&
Co.,
Inc.,
headed banking syndicates which
won
the
Uw^rds Jan. 23 of four
equipment trust certificates - ag¬
gregating $20,490,000. Subject to
the/approval#of the Interstate
/ Commerce Commission the issues
were/reoffered
follows^
immediately
as
'•
'/*#'"•; # /
•PennsylvaniaRR;-—$14,970,000
!
•/
1% %
Equipment
Trust
Certifi-
7 cates series R re-offered at
v7
A
prices
to yield 1.00% to 2.15%, according
x
to maturity.
ma-
tiui^
$998,000 each'Feb.: l; 1948 t6
1962, inclusive, and will be-un<X>nditionally guaranteed as topay<
ment of principal and dividends
by endorsement by the Pennsyl-:'
Vania RR.-The certificates
I
-1;
:;
an
Michigan Corp.; Gregory & Boh,
Inc.; The MiwaukeeiCd:; Putnam
& Co,; and Thiomas &. Co,
;.
Shields & Co.; .Gregory • &
Son, Inc.; The Illinois Co.; Burr
& Cd., Inc.; First t of Michigan
Chesapeake & Ohio Ry.—$2,Corp.;- Graham, Parsons & Co.;
Hayden, Miller & Co.; Putnam & 300,000 ;1 Vz %. Serial Equipment
Trust Certificates of 1947.
The
Co'.;'William Blair & Co.; Julien
Collins; & Co.; Wm/ E, Pollock r& certificates /maturing; $230,000 on
each Feb. 15, 1948 to 1957, inclu¬
Co., Inc.; Singer, Deane & Scribsive were. Te-offered/at prices to
her;< Bacon, * Whipple. & Co;; Freeing >to. maturity: : The certificates
jrnam &; Co^;" The Milwaukee Coi;
are nof redeemable prior to ma¬
Mullaney, Ross & Co.; The First
The - winning; .bid. ;was
Cleveland Corp.; Schwabacher & turity.
99.129,' an interest cost of/about
jcd.; t F.fS#Yantis ;■ ^/Co./'Inc!;
/:#/ '
" ;„#v ' #;
C. Collings & -Co., Inc.;; Masbn| 1.665%..
Associated in; the offering are; •
IMoMx
a MilFirst of Michigan Corp.; Freeman
jler •& Ce;/Alfred-.O'Gara/&.Copl¬
& Co.; Wm. E. Pollock & Co., Inc.;
and Thomas- & ♦ Co..
^:
1; J •| /
Putnam &; Co;;/Julien Collins &
{ Alabama Great Southern RR.-7 Co; ;/; The
Cleveland / Corp,;.
$1,520,000 1 ^ % Equipment Trust
Mason/ Moran & Co.; The Mil¬
Certificates series J, due $152,000
waukee ' Co/;/ Mullaney, Ross - &
annually Feb. 15, 1948 to 1957, in*
Co.; Alfred O'Gara &> Co.;. Thomas.
(elusive:; The ;certificates were; re- &
Co.; andY F; S;;Yantis.& Co.; Inc;
&
,
The certificates,
winning bid -was. 99.209/
-
-
are
not'
redeemable prior to matuityr The J
an
inter-
turity. The winning bid
prich & Co.; L. F. Rothschild &
Co.;'Julieh Coirins & Co.; First of
was
99.107
interest cost of about 1.66236%.
Associated in the offering
Fuiis
are:
Dowling Open
New Haven Office
Hornblower &
Weeks; Otis & Co.
(Inc.); R. W. "Pressprieh & Co.; I
; NEW HAVEN, CONN, —
Pulis#
L,' F. Rothschild & /Co.; Julien
Collins & Co.; First of Michigan Dowling & Co., New York invest-;,
ment firm, announces the Opening *
Corp;; Gregory & Son, Inc.; The
of a / New Haven office at 2051
Milwaukee /Co.; vPutnam & Co.;
Church St., under the mpnag^ment
j
and; Thomas & Co/
^ ■ > 7 / v
of Chance.y W. Hulse. Mr. Hulse i
Was formerly >with Cohu &; Torreyl
Robert Walker Joins
biid Craigmyle, Pinn^y>& Cpi-*
Eastman Dillon & Co.
-
;a
ii
Banquet bi Nat'I :Gity
CHICAGO, - ILL.
Robert - P, Quarter Century Club
Walker,; associated (or the: past I / The Ouarter.„ Century Club ^ of,
ITyears with- F. S. Moseley* &, Co., the"7Nationat City /Organization; f.
lias joined the Chicago office of composed of employees,and offi- j
cersa Who bave* served- 25 years j
Eastman, Dillon
Go,. as-sales
or more, held its eleventh/annual
p
,
„
•
'manager.#;#;;/./:/;
:/v'7-7#7v'
Following /his graduation from
;
the
University
-
of: Michigan:
in
banquet at the Hotel Astor.on Janil
with
Gordon^ S.
Rentschler,a.
23
Chairman
of^the
Roardjf as-hostij
'^#estc6stbfabout;i;974%#:7'#;#//; pfferefl; at/prices to yield/ from j
1936, Mr. /Walkef began his busi¬ When the Club was formed in 1937#
CIncinhatip/NeW: ./6rleans
■/.'X" -V
Associated«in;|he.underwnting jo.90 % vttf(/.according to una# ^exas#Faeific.; ^Ry/#^^1^00»9Q(r ness! career. with Harris/Forbes tei\ years ago; there .were 199. at j
;;• are;: Bear, ; Stearns & JCa;, Blair, jturitjrT-^Tiie* rwinning^
&; Go. at NeWvYork.v v When ♦that dinner;/this;year/there-^/were 8611
;•:/%._ & Co., .Inc.; Equitable Securities. 99.27fe ah/intetest//cost^bf -about
Chtes/series^^^EC-^ue^$170,OO6;ia£iihu* OOmpany-merged/with Chase = Se* guests. Including the?:; overseas t
.
*
-
Corp.;
.
Hallgartenx &/Co.;
7
Horti-
blower ; & Weeks; Otis & ;,Co.
/ # (Inc.); Phelps,; Fenn &r Co.; R^ W
-
b'3i27%.7^#f''#'
Pressprieh & Co.; LkF. Rothschild (Otis & Go:; (Inc.); R, W.
,
cufitie^Po^bf ln#T9^ he amoved branches of ; the bank total mem- \
| i. Otherx.members- of:: the offering sive; ^ The/ certificates;/wiETO; ire t^vxtte#saie&/ department; pf/^its beitship is imw,1,272, representing |
group/are: Hornblower- &- Weeks; offered; at/: prices-- tdv yield/from Chicago; office;- He joined F. S. am; aggregate/of /57,81L/;Seryice 1-
yiiy^
Press-
^b.7i^^^^d;ih5^^ci^
acccordingtoma-- Moseley/:
..""fx
\'b
V.f.fvv
■>
-V1.
7*f
THE COMMERCIAL & FINANCIAL CHRONICLE
r602
-starting to go
in
business
A f ederation of German States
condi¬
By NICHOLAS MURRAY BUTLER*
tions generally,
he believes. The
public will buy securities again in
great quantities and that not long
i
The market analyst for one of the largest dealers in real estate
New York says that ever since October the prices of
from now, he thinks.
A
Former President of Columbia
'
securely than the
prices of securities in general. A graph which he has prepared,' show¬
ing trends in the prices of representative securities, ^reveals, in fact,
that during the last three months and more price averages for real
estate
securities
have
actually <£climbed a little. The rise, he de¬ admittedly the decline wasn't too
clares, has not been spectacular, serious, being confined almost en¬
as such things are measured, but
tirely to their bar and restaurant
.
been
there has
rise and it has
a
been steady.
business, he
ments
buildings
have
shown the greatest strength, ris¬
the
ing in value higher than proper¬
ties in
other
classifications, he
points out. | Apartment houses,
however, he says, though they
have not shown much change, at
held their own, so to
least have
speak.
After all, as he sees it and
others will probably agree
many
with
him, with politicians and
political
pressures
being
what
they are, the OPA can't be con¬
sidered exactly dead so far as
apartments
mbment
would not
seem
ment-house
ward
to
as
At the
thinks
it
,
though apart¬
owners
look for¬
can
extensive lifting of
the rents which they
any
ceilings
on
charge for
can
concerned.
are
anyhow,' he
time to
some
come.
Investors,
however, he believes,
of the great—growing
—demand for housing space and
they are not forgetting that rents
are
aware
•did
go
up,
way
up,
in the
even
midst of the boom dn
hous¬
new
pessimistic
faced
the
view
they
as
manage¬
inclined then to take
were
higher
Commercial
Hotel
says.
food
lifting
were
costs
of
of
things,
with
the
occasioned
OPA
by
ceilings
food products and with the
on
actu¬
ality of having to pay retroactive
increases in wages to their em¬
ployees without any certainty the
OPA would
really lift ceilings on
their transient room rents, he de¬
clares.
Now, however, the ceil¬
ings are about to be lifted (Feb;
15) from the transient rooms and
hotels
the
OPA to
are
trying to get the
lift the ceilings on other
classes
of
he
rooms,
The
says.
break-even point for hotels is now
about 75%
thinks
of occupancy, too, he
Local
high,
he believes, based, as It must be
on; present ^volume
of business
and on the productive efficiency
kind of help they need no
longer employ) so, in his opinion,
the prospect for hotels can , be
nothing but good.
a
real
estate
estate
brokers
boards
and
report
that
selling at the same
are
slightly lower prices than last
according to a nation¬
wide sampling just completed by
the research department of Mer¬
rill
Lynch,
Pierce, /,• Fenner
&
Beane through 80 offices of the
The pressure on rents is decidedly
in his. opinion,
upward,
continue
A*'
New
for many more years.
so
construction
there
ably will be, he says.
commercial
doubtedly
ber of
and will
■
prob¬
Some new
buildings
go up and a
will
un¬
large
num¬
small homes will
new
cer¬
tainly be built, but most of this
construction will be in the future
and
the
not
cither, the
commercial
erected,
immediate
thinks.
buildings
structures,
old
must
first
future,
Before
;
new
be
can
in
many
be
and before
demolished,
they can be torn down,
old
must
cases,
to
leases
probably be
or
small
new
catch
be
allowed
up
the
years
construction
homes
with
It will
to nine
seven
before
so
first
out, he points out.
run
of
begin
can
demand,
too,
to
he
feels.
The
market
in
hotel
has also improved
securities
considerably in
tone, he points out. Last fall the
large establishments were caught
in
a
Vicious
sudden
and
squeeze
severe
and a decline in
between
rise
in
a
costs
business, though
Real
.
estate
securities,
a
as
whole, derive some of the advan¬
tages which they seem to enjoy
in today's securities market from
the fact that the managements of
the
various
properties have; used
removed from Berlin.
summer,
firm.
This does not
that
mean
There has been
same
last
as
if
j
-
a
40 %—-principally
istence
70%
has
returns
remainder. indicated
Seasonal factors
crease.
involved
Merrill
-
here
a
may
toN gome
,
"Sales
is
volume
barometer
a
dicative of a limited supply," ythe
firm stated. "With respect to res*
idential, farm and business
erties,
monthly
volume
.
prop¬
of. total
dollar /sales appears to have re^mairied about the same /as; last
Summer/ though
some
areas
re¬
how that happened!
but I carl ]
ly few words. In the summeir, the
month of July, 1921, while making
remains
more
to
be
essence
done. We have
my
aided
of it into relative- ]
1 received
i
inbring-
usual annual visit to England,
a confidential telephone?
together message from the Prime Minister*"
thought; Mr. Lloyd George, asking me td |
• the sentiment come to Downing Street at once,:
and the poli¬ but not to tell anyone that I had
n
g
the
00. TAA/,/:
Dr. H. Kl Butler
de¬
it may also be in¬
Empire.
The Story bf
is not generally known,
put the
,
cies of the people of Great Britain
^nd /lthe; people of - thteAA United
extent,
States;:1 Their .governments: have
;
Lynch said.
of demand, but
ac¬
and much
re¬
be
British
much
ex-;
descriptive of the organ¬
of what had been the'
as
complished
ported farm lands around the
same price as
last, summer, and
the
wealth bf NatioriS fcame into
ization
been
time,, the British ?
passed in history as at
phase, and the British Commons |
istence
this
that
At
Empire
at
During
period,
•
""
moment.
this
.
of the
was
impor¬
more
.
Over
ex¬
tant than
in the 10 %
range/the firm Said;/ Retail/stores;
appeared to be in greatest de¬
mand.
Pilgrims came into existence
York, nearly a half century ago, wheri
into
came
40% reported increases from!: 10%
to
time since the
the object for<&
which they 1931.
about
and
summer
no
in London and then in New
continuing downtrend may be in
evidence, the firm points out, but
it may/ indicate that a leveling
Off is occurring.
'
About 50% of the reports indi¬
cated that prices of business prop¬
erties in ^general are about the
,
ing construction back in the 20's.
;
or
,
(the 82 to 85% figure of
the hotels theriiselves is too
of
Price Trend
real
>
A
promoter of international accord advocates ' :
setting up a federation of German States on a plan similar to that
j
of the United States and the British Commonwealth of NatioitS.;
Reveals information regarding the origin of Statute of Westminster,
under which the British Empire was converted into a federation bf
independent governments, and points out Most effective means of
>
preventing revival of militarism in Germany is to unite German
j
/state
fihahcially Without creating a strong certi
tral government. Recommends capital of proposed federation be
j
Th« Real Estate
residences
Univer&itVv
Prominent educator and
securities in
real estate securities have held their ground more
194#
again, he feels.
up
Public attitudes will change with
unmistakable -signs Of progressive
improvement
Thursday, January 30,
been asked to come, or
that I was ;
going ; there.
,
I
went
at
/.
/ A.
.
to
once
.
,
\0
h
Downing
understood each other better than
Street, and Mr. Lloyd George, tak-i»
ing me aside and speaking in en- :
tire confidence, told me that he
accomplishment. What Was to have at the/Week tend,; atp
ever
before and the cooperation
between them has been significant
arid full of
remains to be done at the moment
is
to
carry
ward
and
Solution
most
these
principles. for¬
apply them to the
what is perhaps the
to
of
pressing problem of the
mo¬
ment which faces
Chequers, the country home of the j
Minister, a group of prime ;
ministers of the Dominions. They \
Prime
going to discuss questions ot ?:
political orgahization and inter•* I
were
Europe and the national relations. They* would likte
.j
ported decreases of 10% to 80%,
Whole world. That problem is the me; to be
About 40 % of the returns agreed
present in order td \
effective reorganization of Ger¬ answer
Some establishments have liqui¬
that "prices of
^juestiohS Which might j
residential proper¬
dated as much as 25% of their
ties are the same as last summer many. That great hation, stricken arise relative to the experience of t
brid bvrifcrime by War/ ikriow in a the United States. - But I was t<* *
indebledness of 1940, he says. Tn and that' dollar
sales Volume ft
some cases
state of exhausted existence.
this has meant that
doyto. Th« same percentage Indi-..
say nothing of this conference, npr
they have paid off $1,000,000 or cated that both prices ahd -dollar,
tof/ftiehtiriri Its texistentee/whb /werei. ^
Future, of Germany
more of their obligations, he
points sales have decreased.
there, or what Was Said./
;
?
The time has come to consider
out. A few properties with sur¬
On' Friday • afternoon, I drovd;
"Where, prides were reported
hriw the German people can be
pluses on hand have taken ad*
down to Chequers/ sufestantialiy^
higher than last suhimer, therfe
organized linj/putAbrick uJion the
vantage of the, 'market break to
an hour ahd a half from Lbridriri;
was -noticeable rtesistance to tha;
field of' contemporary, history in
buy up their indebtedness at low
higher/prices for residential propr order itoArOsuhie the accomplish¬ by automobile, arid I found that
rates,• tod//he ■ Says/-'
n
the distinguished guests had aH.
tefties, but/ opinion . was about
ments which they were; making
The stock market, taken in its equally /divided as between re¬
beady arrived. There were the
fifty and sixty years ago,. before Prime Minister of
entirety, is bdund to/show signs sistance and lack bf resistance,
Canada, the'
the
militaristic r impulse;
took
Of increasing strength ias "soon Ms Where, bu$in'ess.
Prime Minister of Australia, - the*
properties Were
possession of them.
the
first
concerned."
quarterly reports. on
Priirie Minister of New Zealand*)
,7,.7.
' >
/
In my jiidgmeht, this: reorgan¬
earnings are issued, he believes.
arid two, distinguished represtenta-.
ization must take the form of fed¬
Production is feeing resumed on a
tiVes:,/0f:^ thte peoi^e of India. Thd
eralism../It must; resemble
the
rather broad front with "nothing Frank E. Bliss & Co. to
rinly
afesentee was the, Priirie
like the labor disturbances %f Xa
Organisation of the American Gov¬ Minister of the Union of SoutN*
in
ernment and the American people
year ago, at this time arid, With
Frank ;E< Bliss and William W.
if
We
are! to", accomplish what Africa^ , 1-"'*0:10i00B::0A00
effective demand: for/ goods, as
The
conversation
on
Friday
Goldsborough, Jr., both /members
'awaits us.
•
great, as it is, corporate earnings of the New York Stock
Exchange,
evening was interesting, but rath-:
are bound to show improvement
There are many things which
will form Frank £. Bliss.&ACpM
er general.
On Saturday morning,
soon, he believes.
It is not the -with, offices. at 11 -Wall A Street, remain to be done Which the pub¬ ho wever, the group were takengeneral ' public whlch is; active in
lic has not yet fully or wisely un¬
by the Prime Minister to a grove
•New York City, shortly. Mr. Bliss
the stock market today, he thinks.
derstood. As a matter of fact, both inAthejbeautoriLvgafd(to^^ChSProfessionals are doing $ the, buy¬ who was formerly a partner • in me Ariierican
people and now the quers, where he introduced a sub¬
ing and selling and, with them, Bliss and Company, now dis¬ British people have become exject/which he desirej. to.haye
the hour-to-hfeur fluctuations in
solved, will be a general''partner, 'arriples thrOugh their government discussed. 'He told us all. that thes /
prices are of greater Importance
fprm^and/tot/totoi; three Prime, Miriistorg;who /wer^
in
the
new
firm. : Mr,
than the
^ Golds¬ so / far as Great- Britain is, con¬
long-range trends iri
there had told him that unless
values, he says,
Many investors, borough, Who. has been doing bus¬ cerned, is very hew and little un- some new
arrangement was made*;
as
for instance, • those who / pur¬ iness "as
"an / individual/ floor uorstooi^^^ if understood ;at ail, ;by
their, countries were .prepared td ;
chased securities last year for the
the peOple rif the United States.
'broker, Will be a limited partner.
withdraw from the British Empirp.
first time in their Jives and/ got
I Ahaye Arbference to the'federal and to Aset, up/independent ex-r
hurt^may.feel now that thektock
feystemAoL'government, which, as Istence, /through revolution/, if:
piarket is ho, place for them and
Arii^icanA;expenerices/A^ow,vt is necessary. Canada, Australia, and
fethers probably don't want to tie
HOUSTON, TEX; ~-r Dudley A F substantially; the, most effective New Zealand were not willing, to
up their funds through fresh pur¬ South, Jr. • has formed South' & possible for a nation which like remain members of the British;
chases until fhey tan be reason¬ Co. with Offices in the" Scanlon jour -own, like Great< Britain, or Eiripife. They desired to be in a
likeAGermany, Rovers a wide urea; position to maintain their devoted ;
ably sure the market is really Building.
the
high earnings of recent years
to pay off indebtedness, he thinks.
-
.
•
,
,
•
^
-'■Mr n-''
REAL ESTATE
SECURITIES
} ,-•'//'< " v
i.V
VT&fefc J
V7
SHASKAN & C0.
Members New York Stock
Bxchongo
Members New York Curb Bxchongo
40 EXCHANGE Pt„N.Y.
-
Dlgby 4-4950
>'77- V' Boll Tolotypo NY 1-953
00.
a.
California & New York
Westinghouse BIdg. Part. Ctfs. Obi
Broadway-Trinity PI. 4Yzs, 1963 ws
Broadway & 41st St. 4YzS,- 1954
Gov. Clinton 2s,
Grant
Real Estate Issues
1952 WS,
Bldg. "S«/£s,
00
;
Sherneth Corp. 5%s, 1956 WS
4s,'1956 WS
/.'/
/
1963 WS
.Savoy Plaza 3s, 1956 WS
The Broadmoor
51
,;
Bldg. 2^8,"1957 WS
Lincoln
11
•40
79
5s,
East 42nd St.
b'f
3s, 1956 WS
-
the
eco-
165
Broadway 4Y2s, 1958 \
5th Ave. 4s,
1961
7th Ave. AYiS,
WS
f[
known/ that England
adopted the federal form of gov¬
ernment
1957 WS
British
rin
succession ;
to* the
Empire,.. by Athe. great
Westminster, enacted in
{Statute of
j. S. Strauss & Co.
15S
Amott, Baker &yGo.
EXbrook 8515
Incorporated
150 Broadway
TeL BArclay 7-4880
New York 7,
N.Y.
Teletype NY 1-588
teign Office.
*/•".**r* i
*
~
"
A" * An address by Dr. Butler at
the
Annual. Luncheon Meeting of the
of the United •: States,
York City, Jan. 22, 1947, ,
pilgrims
New
'
.j
-
"w
•
..
-r*--'• •*'• ^ '
'/■■ •V
• ->•
7^.; !•
i.f
/
••''''i-'i'
••
i
•
Thrbri Commonwealths iu U. B. ;
Thereforte, ' the/ "question ; was,
""^Yhat could fee dohte?" I listened
!
with
was
intent, because I saw that Ipresent at the Crossroads)in."
the history of Great Britain,
possibly
.
Montgomery St., San Francisco 4
Tele. SF 61 & 62
MSgriai Carta, but • theyr were rioL
iwillihg to accept the cbntrofe of^
the British-Parliament or the For-
Constitution. A But it" is not
generally
;
W&
the A principles of democracy " as
worked out by Great Britain since,
goverririibht from the adoption
of our
Bldg. 4s, 1956 WS
500
870
with
A' We have had Athe federal form
1966 WS
Realty 5s, 1949 WS- { 0*
80 Broad St.
contact
feirth of British Commonwealth
West 42nd St. 4% s, 1953
Wall St.
of
kpn^rilund-iriteilri^
ihioihent^^
OFFERINGS WANTED
firm Trading Markets:
riiariy
large) population r a^
points
modern
and)
in: .the "Ahistory of the.
world. They werte search¬
harne to •. Substitute foriV
"empire.";"After listening for art/
hour or two, I called their attening for a
.
THE COMMERCIAL & FINANCIAL CHRONICLE
(Volume' 165 8s Number 4564
.tion
to
the;fact
'day evening a supper party oi six
or eight persons. These Were usu¬
question * was"•• Vein-g
ally the most distinguished minds
Germany.' ' There were great
In the
that we
American Coionies ^had had thfde
> ; commonwealths. We'had the Gommonwealth of Massachusetts, the
ly, to make this remark: I said tp
discussed eral system, which has worked so
which. led me, perhaps indiscreet
-
•
.
•in
5
scholars,
'
Commonwealth ; of
•
Pennsylvania
vbnd /the 'Commonwealth 'of
or
^ arid Prince Bismarck
statesmen
Vir¬
'there I were'} great
8 On this particular evening,
thirteen colonies. We also had the
Bismarck,
dered, "Your "Excellency,
some
that
.The group were' staggered
young
American student
should dare to ask -a question *>£
any
"I often won¬
why in
that kind of the greatest
building the German Reich you
;:Was;:therer#equent^!8;'^
ginia, anibrtg three of the original
Prince
well in the United States."
j
There
statesmen.
did not follow,the American fed¬
was
of living
complete
(Continued oil page 035)
i;
.Commonwealth., of ; Kentucky,
/ which joined the Union two or
/three years after the adoption of
the Constitution. And! suggested
'
that
they cottsider'the word "commonwealth ". This they began to
do, and diScusSed it for an 'hour
•'
h;4o£,ttoo;' ?■
1
? -'What" did ft
hiean?" Tt mearit
common
and united - interest "in
•
•
"
matters economic-, matters 'firian*cial and matteris practical, 'apart
r'from 'the fiCld "Of direct Igdvern*ment.- • - - ~
*
'
Company, Inc
{/ But what else could he ®rie ^o
show' the relationship /between
these, colonies and Great Uritaih
rind how could it be phraSed with¬
7
•
out bringing them Under the con¬
trol Of ^Parliament 'again?
,
•
Agreement
-
-
"
Unanimous
Characteristicsbf the
'
%Firially, the wb^'d fMtirins'^Was
suggested,
rwealth
♦or
British
the
of
MOTION PICTURE INDUSTRY
Common-
Nations, and after two
three hours of
discussion, with
'It is • surprisingBoW'TeW'
questions arid much critifirst, which was all anrswered to the satisfaction of the
.many
'Cism
motion
group, late in the afternoon they
-agreed .unanimously;rjto "accept
'Pew
.
British Commonwealth of Nations
/as
substitute
a
for
'a
'title. ;,
udestion|cairie^What
v"
industries. It is
the,
British
these
colonies/;
Empire
""British"
dridicatedi^hei^-lriyalty
J common interest in matters
"word
and
practical;
while
"Nations"' established
It is oine of the last industries to feel
depres'sibri. During hard ■
times, going to the movies is one df the
last-things ^pebple/care'tu ^iVe: lipk /
'
eco¬
the
their
govern¬
5When; getteCainbusitiess -starts-to
Union
of
!
;
;
Britain
unless
;;
ment,
so
IN MILLIONS OF DOLLARS
{Field's
,
novel—Phyllis Calvert, Robert Hutton,
and Ella Raines.
-
?!
>'<•
Song of Scheherazade—Yvonne He Carlo,
Brian Donlevy, Jean Pierre Aumont—
/iri Tedhmcolori
'
|1:,-;»].'
-
•
•
:
Ivy—starring Joan Fontaine, ]Patric ;
'Kriowles/lIerbertMarshalhRicha^dNey.-
affects any one of
local parlia-
3
their
to speak, accepts the act
y
I'll
1
^
Be Yours—Deanna
Durbin, Tom
"Drake, Wi]liani Bendixr Adolphe Menjou.
Therefore, they have become, as
federal organization, of
very j ingenious and
very re-
:^f*ortrait in ^iaCk-—J6att*Cfawjrordi:-;///8;': ;;
! markabie kind, mot eoncfete arid
♦definite and specific, like the fed¬
Susan ilavward, -Lee Bowman, Marsha /
Hunt arid'Eddie Albert.'
you see, a
a
Smash-Up—The Story of. a j Woman-—.
eral organization; established by
our
•
own
Constitution, but still,
a
Swell! Guy—Sbiiny
ThnTlxile—starring Douglas Fairbanks, Jr. r,
Slave 'Uiri-^ih
'i-8 Now; that has Suggested the fact
Jthat.'in facing/thetquestioriibefpfa
/the world today, which is perhaps
•of
v
-
/Great -Britain/; and the United
< States, and should use the federal
//principle under which to restate'
and, reorganize; Germany/ v- /'
<
It is exactly—I hesitate to
say
Breni.; -
.
-
Buck Privaies Come IIome-*-AbbUtt and
/ / Costello.
outstanding importance, the'or-'
//jibe guided byothe 'experiencei>6f
,Technicolo'r^ stkrring
S ,IYvonn«e Ue Gario; and 'George
'
.
'
Pirates of
Iganization of Germany, We Should
•
Tufts and Ann Blytli.
'
ntpost constructive form of'federdl-
,
Egg and I—from Betty MacDonald's
Best^seUer^ClaudetteUolb^rt "and Pred
Time 'Out bf Mind—from Rachel
great
van<j applies, it io.itself;
■•••
.
relations. No act of Parliament of
them,
v.-'V''■"»/'?0"'
The
deal.
They
independent parlia¬
ments arid their indepedent foreign
Great
thought of as highly speculative,; .'
as many factors making
for basic stability as any ether leading j,
industry, and more than most.
actually it has
UNIVERSAL-INTERNATIONAL Presents
betteri'reimmns/With;'the "Mother
.Country today triap' they were bs-f
fore/ The fact is, that in that re4
lationship :they have been able td
■
high /degree of tresiliCncy.
is often
Jor,Ycor.Inlert0lnmenti„ f
independent na¬
tions,
directly / related
to
the
Crown, but wholly free from ac¬
tion of Parliament, and that has
worked so well, that they are in
a
a
Although the motion picture industry
became
accomplish
have $ their
- >
first to respond. Few industries
"erijoy'Such
South
-
pick;
^upftheiriotidnipicture industry is among
fect, Canada, Australia, New Zea¬
the
*
,'the "effects of a
When that statute went into ef¬
and
'
./lon^ter^^rowth^i^spCcts,;^•"
the very
land
r
;
Autonomous Units
Africa
•,
of the fetv American
.
v
independence as separate
ing bodies. 'f'
one
It is a relatively young industry. It has
iriiiiativd and is aggressive. - . . •
'
/It ris Ian industry with tremendous • /
word
their-acceptance
of the fundamehtSl principles of
the British democracy. The word
/"Commonwealth" indicated their
nomic
r
;
goods throughout the world.
to the Crown and
.
|
over
were
It is the No. 1 salesmah of American
" ~"
The
t
alone
'industries whoSe fprodnct sells in every
country in the world.
Nations answered all of the needs
1
in this country
-42,000,000)000.
|The iBritish/Comffinwea^
of
*
Iteltlm'i^rfd/"/: *
-/.-/It is. rine *of America's /grcratexport'
f-:j|tyssed[iritpBistoi^^
■;;
'strictly cash business—otte of
/last ?year. World revenues
British Commonwealth of Na-
arid
a
h-/i!n Com'b yoi *-oVe' r,\
£:?I*a$sed//the^fe
/lions,
j
-
$1)500,600^600
::.
/ten years, the British Parliament
'
It is
•
'^TheAConseqrierice^'that after
* the
'
the fact that it had
■
'/ /'/. /1
over
-world,
/
been ;held, that the matter should
♦be deft io him fo ^ee What could
f
/:■'*;
"Vedin ihis country alone and
admitted essentially that
none of those presentshould men¬
tion what Bad/been ^Md^r^dprie^
;'•<> -that Ano/one/; should^inention the
or
basic
»
:
0(HOOO,OOO paying* customerS'a
upwards / ?•
rif 200,do0,000 k week throughout the * :
of
Lloyd
f George
.conference
[
Stability, ^ '
/
The industry has an established market
,
he idone about dt?.
wasto
-
?
"
^
to realize that beneath the '
seem
great
•
;« ;;Theri the
'
>
r
*
/inilit^tryr's llollywooil glamoUr'there is
existing
the
;*
picture industry 'bperMtes %s *a
•'business.
;
•
people &CemtO
real understanding of hoW the
"have any
at
v
Monterey—in Technicolor, star-ring Marty Montez and Rdd /Cameron^
tory.
Under the
new
Universal-International
banner, top-ranking stars are appearing in
productions with outstanding story values,
including best-selling novels and Broadway
stage successes. These pictures are being
directed and supervised by directors and
producers who have to their credit some
of the most successful pictures turned out
in-Hollywood. •/ ;
_
-
J. CHEEYER COWDIN, Chairman
N. J. BLUMBERG, President
premium ;hetiinvestment income
and Federal income taxe£ a
in total admitted assets..Surplus, lower. Total net operating proms,
however, shows a decline and so after Federal- income Jaxes^ anc
do; liquidating values.
The de- other adjustments indicated above,
TOLEDO, OHIO—Goshia & Co.;
cline. in surplus resultsfrom a are approximately 21% w°ve-ibsd
By E, A. VAN PEUSEN
—
(Phio Building, announce the adcombination of two factors, vi2.: for Continental and 29% for rim ission of
.•
the drop in the stock market, and delity-Pheuix.
.
.
;
' -1
.
,
This Week -— Insurance Stocks
^} ^
the transfer of funds from surplus
Comparative .figures from ,tfte
Continental Insurance
to unearned premium reserves tp 1945 and J,946 annual, reports or
Company and Fidelity-Phepix;, Fire In¬
surance Cohipany are .always about the first tpf the stock fire com¬ meet the large increase in pre- both companies are given_in ■ tne
panies to send annual reports to their stockholders. / This year is no' miums written. Liquidating val-t accompanying tabulations. Figures
exception;- for their reports for the year ending Deb; 31, 1946 have UeS; are ' affected | directly: by thd are , on ; a parent, company. basis,
full decline in surplus hut by only not consolidated. Consolidated net
already been received.
»
^
"
-Both companies; report a substantial expansion in ^premium 40% of the change in unearned earnings in 1945 were $3.61 for
premium;reserves;
v
j Continental and $3.93 for FideUty; The-reports also show a decline
Phenix.
It is interesting .that
in ; underwriting profits on a
stat-j; parent company net pf both comutory ; basis for
each v company panies • is not only ^higher : than
volume
-
and: unearned ^
and a moderate* increase
reserves,
Bank and Insurance Stocks
-
t
.
-
„
;
.
.
.
Installment Loans for
Small Business
^employ
Goshia
.
increase < on a net. net on the same basis in
basisafteradjustmentfOr.;theinH,butis also higher than con solicrease in premiumre^iveequity5' dated-net. >
-V rr<-; _n '«
but
a
^sizable
of ++:;v?+,•
Fidelity Phenix Fire Insurance Co.
Paul A. Meinert
Co.
&
J *>' V $
Aug.
15,
"
ij945. Mr. Keier first entered the
securities-business on-; Sept. 15,
11926 in the employ of Collin, Noritpn & Co. and joined his present
ffrrm on June 15, 1945.;
12-31^ )
———$134,769,676'"
Capital
15,000,000.
Surplus (at market)-—-11L——
84,171,500
Unearned premium reserves
21,564,068
Liquid value per share———i
$71.87
Premiums written
—;——.—.— ,
25.448,911
Kobbe & Co. Inc. Is
Statutory underwriter's profit...———
Premium reserve equity——
——
$655,776
+750,651
formed in New York
Net underwriters' profits...——.^.—1-
$1,406,427 -'
tpn
Formation
;
f
;
share
Per
mm.
Net investment
Penshare
Alexander and Charles F. Rudifeff. The firm will do a general
.*■'*
:v
income—....
—
...v"
•
»
b,
——-
$794,385
■;
■
i•.j
■
;• continental
insurance Company
Forces,
Total assets
recently in
is President
93,632,643
Premiums written —l—
Secretary,
Premium reserve equity—
Liquid
33,479,804
^f3s $64.95 V
value per share———.
$62.99
31,935,122
Statutory underwriters? profit.
~
$1,612,000
'
;
«
Net^underwriters^'d^fitsi-^^«i^^^«^$2^3^pp;
$3,098,445
"1'
*vr
— ■■■
$4,204,700
.Rer ■ share..
Financial
—
-#$2.60
$1,429,220
$962,948
^1t0.71
$048
Per; share,
Chronicle)
Robert
&
Co.,
141
v In
and
^Vest Jackson Boulevard, members
and
'
"
?pSital net operating profits———^$3.04
■
Bros.
<
—
———
'i't- •'i
H.
associated
become
$2.50
Federal income taxes—'——-—-
&amson Bros.
the New York
^ ~*
;Net;4hvestmeirt;incomje^^--^+-i^+^+i$4,9§9,700.
'Robert H. Gardner Joins
has
*■' .y**' '"'. v*
'/'M ■+ ff+''''''
VWith Lehman Bros.
Lauison
;}■"
•
Pfer*ahare:-' -l—--.---i—
yieears :and recently was associated
bwiCAdo^^^
v $970,397
+2r128,048
.
ywifh houses in - the street for. 25
The
37,141,306
t
+901,000
3Mr. .Rudloof has been connected
Gardner
•
•
(Special 40
$163,382,552
; ; 20,000,000
92,596,017
28,159,684 -
premium reserves-.
Alexander, formerly^ with
(feeorge B. Wallace & Co., special¬
ising ;in''industrial'i and: utility
securities,:. |tf; VicerPi^esident ^arid
<gf
'
Surplus (at market
com-
Mr.
^if|th
,
20,000,000
•
Capital
•
new
jppny.
?
12-31-46
$162,690,479
(at market)^—
Unearned
jgpd Treasurer of the
•
b
12-31-45
^
Armed
+ $0.37
i^Total net;operating profits—$3.16
^pd officer of .Kobbe, Gearhart 8c,
tthe
$557,251
1
;
ii Mr.' Kobbe, form erly * a d
more
;^$1.53
+ ^ ,§0-53
i——-
.c-v<,j.j.-..'-'..■
$2,286^12
;
'
■
Per -share
——.i.
-J-1,809,112
$2.75
..
—
':;>v-h' *
30,149,010
.
$4,130,720
.
Federal income tax—.—..
as
dealers, with banks
sppd insurance companies.' Offices
%will be maintained, at 55 Liberty
street.
and
Inc., and
26,086^846
+ $0.94
-
—
of the firm of Kobbe
iipvestment securities business,
7 12^1-46 K
$135,233,185
15,000,000
*78,693,847
r
-
Co., Inc. is announced today by
^rustave Kobbe II, Douglas C.
brokers
i'
.
Total assets (at market)
a
year
of excessivo-fire losses j panie^.-are > enpouraging
operating costs the operating re^|
suits achieved by these two com-;
v.- ^..mV
i
Chicago
<&tock Exchanges.
and aig-
generally higher payroll and nificant.
h
'
'
.
t
Australia and New Zealand
S.
t
t#
m
baniTof
COMPARISON and ANALYSIS
new south wales
(ESTABLISHED 1817)
Paid-Up Capital .1
We
/ +•
specialize in and offer
'
'■»£
U
;
/
1
V
V,
iV '
y
i'.-/ t'.'. '
r
for
;J'V ''
* "v. '
■>
[\\y
'
^
our
-
1
^
the'purchase and sale of
£8,780,000
6,150,000
Reserve Fund
facilities
Reserve
Liability of Prop.i 8,780,000
ir?K " JI
+
+ }/">
.
£23,710,000
-
Operating Earnings.
AVAILABLE
<
Afyregat®' Assets
Sept., 1945
Securities Profits
•
' ;
^.i.-£223,l«3,«a;
SOtb
THOMAS BAKER HEFFER,
General Manager ; 1
ON REQUEST
Head Office t George Street, SYDNEY;
BANK, STOCKS
Laird, Bissell & Meeds
Members
New
York
Exchange
Stock
■:!'
l^llpto^iDpN.}idl^CES^v§^#;|
Tbreadneedle Street^ Ei
Our year end comparative analysis of the country's leading
banks is now in print. A copy will be sent to you Upon requests
(L.
A.Gibbs, Manager Trading Department)
'fj. 1.'
29
j
YORK C, >(. Y.
Tel.: BA 7-3500 Bell Tele.-v-NY 1-1248-49
I.
ISO BROADWAY, NEW
>#i* Berkeley: Square, W. 1
Agency
'
arrangements with Banks
^.^^.^throaghoa^+ba
INSURANGEBANK STOCKS
+V
COMPARED :
Booklet! Service -to- Dealers & Broken
BoughtSold
—
Quoted
REVIEWED^
ANAYMED
Special Bulletin and
-
^l+^Tradiifc
Inquiries invited; Orders
14
Wall
Street
^ 'fi■
BUTLER-HUFF&Ca
OF
^Telephone REctor
'solicited*:
2-igoo
CALIFORNIA
210 West 7th St., Los
■■
--
:New fork
■■
+ i-r • ••,'
Angeles
PRIVATE WIRES
.
Chicago
—- i San Franelsea ; .^
;VTELETYPE L.-A! tl9 '-r-f h* A* ««• >
Seattle
v
>
Volume
165
Number 4564
THE COMMERCIAL & FINANCIAL CHRONICLE
-
Sellersand Nourse Are
V.-Ps. of Illinois Co.
CHICAGO, ILL.—Paul A.
ers
and
been
Clifton
elected
L.
Nourse
b
"We Can and Must Have A Federal Labor Court
dustrial Peace!"
-Is It Needed?
i^By
vice-presidents
:|||By DONALD R. RICHBERG*
;|s Commenting on plan of Judge John C. Knox for
JOHN C. KNOX*
Judge, United States District Court, New York
noting laws have been already enacted to curb busiand abuses points out labor has been left free "to
great."; Says there is nothing sacrosanct about "
either labor or capital,' and recommends compulsory' arbitration of
labor
v
f
':
disputes in serious
i
nomic power essential to
.
arbitration
and establishment of special labor
proposals by both labor aiid man-
cases
Foresees opposition to
courts.
j except in
court.
In
-'/■.v/V://•i ;/H-,^/y V
coming before
you
a
labor
j
of the views that I
some
supervise proceedings.
; ;
/
;
also enmeshed
somewhat
matter
; thoughtful
my
relationship to
ant
referred may
Secretary
State
of
for
Eco¬
nomic Affairs, Vice-Chairman of
the Executive Committee on Eco¬
nomic Foreign Policy;
U.
S. Delegation
to
Member of
the Paris
Conference,
where
he
served as Special Adviser on Eco
nomic Matters, he also served in a
similar capacity at the New York
meeting of the Council of Foreign
Peace
Ministers.
which
level
gestions.
O
•
n
■
ant to the President of the U.
hot
blood
I
contrary, '•
after many
years of study
forcefully presented
that afflict; our society
ills
!;
work
in
the
field
of
find
it
tions.
devised
obligated to speak
mind, and for these reasons:
am
tive. I
the
and
in
not
am
shall
passion.
hold
ever
than the
lently await the events of tomor¬
row.
Upon my part, certainly,
no wish to offend against
I
one
any
am
other because
office
and
must
we
organiza-?
labor
of
others,
and partly :
government
has
the
'
seek
find
and
Now
labor, I
Associa-j
c^iscord,
tion, New York City, Jan. 24,1947;
suggest a means
can
and# ^economic
loss
the
Federal
Government
two-fold'
a
privileges
and
duty:
Special
immunities that ;•
unduly favor one economic class—
the industrial wage earner—mitst;
be either withdrawn or so modi-
to
by
as
of
Mr; Richberg
before Annual^ Meeting
of New
York State Bar Association, New
York City, Jan. 24,1947* Mr. Rich¬
berg is a member of the law firm
of Davies, Richberg,^Beebe, Busick
and Richardson, Washington, D. C.
(Continued on page 622)
>
has
fied
♦An .address
whereby this land may possibly
♦An address by Judge Knox be¬ be relieved of* soihe of the Strife,
fore the New York Bar
free economy but also of de¬
a
the preservation not
mocratic
responsibilities
more,
commen-
surate with their power for
S.,
Moscow, rank/ of U. S. Minister,
1945: U. S. member, Economic &
Employment Commission,
Eco¬
nomic and Social Council, United
Nations, 1946. Elected as Director
of the A.S.A. for
1947—to
MELLON NATIONAL BANK AND TRUST COMPANY
serve
fpt a S-JrOar term.
incoiiiihg
Chester
tural
I.
Vice
-
Presidents
'
;
Bliss, Conn. Agricul¬
r*..
.
y
v
•
'
'-'y"
'.r
.
*-'t-
■
'
«■
■
*
*
"
•
;•vVu'*:'1 *
.
h"
:
•.
■.
Experiment
Station, Philip
M. Hauser, Department of Com¬
merce, Stacy May, Radio Corp. of
America, Jacob Marschak, Cowlcs
Commission
for
Economic
Statement
at
the Close of Business, December 31, 1946
Re¬
search! J efzy. Neyman,-University
of California, Frank W. Notestein,
Princeton University* George W.
$nedicor, ^ Iowa;. StateU: College^
Aryness Joy .WickenS* Bureau'of
Labor Statistics, Helen Walker;
RESOURCES
LIABILITIES
>
Sh
Walter
e
anld
wh a f t
Sam
Cash and Due from Banks
.
ijirectors—(for
$236,356,638.39
Capital
;;
3-year terms),
Isidor, Lubin,, Confidential_Re¬
U. 5^ Govt. Securities 1
i
ports Inc. and Lowell J. Reed, The
«
»
(
Undivided' Profits
$ 60,100,000.00
«
.
Surplus
"
/ 542,283,819.61
i
♦
90,000,000.00
;%l^s;Hopkihs University;Direc*
tor:
tfpf ^the^ balance .of>Mr.
Thorp's term)
Odier^Securities
S. Wilks,
Samuel
Princeton Uniyersity.; yl
f ( Secretary-Treasurer —Lester S.
Kellogg,' Bureau of Lhbor Statis-;
'
»*
■
-
■
•
*
94^555:351.86
.
:
•
'
■
••
•
•
13,134,946.60
«;v-
:
;
ttes.^.,.
"
;
^
^
%
T
•
'i.»/
'i i*
Bank Premises
F^llowingvthe:
;
election, of .offi-.
cefs the American Statistical: As¬
announced ;the
ciattyriy'YSelected^ for;;: their "dis-f
tipguished workinStatiatics/They
include:
.
•'
228:198,608.24
"'""
-
■y-V:-/.'/
>
Reserves
,
r
- *
-
28,593,503.29
#
i,'-!
I-1*4
*
v
t*'
-
-• -
-v
.
j
;
.
S
;=
-
/
(
".1
<t
t
.A
Due Depositors
.
Other Liabilities
,
,
3,091,854.57
y " Y"
-
«
/'-v.:'
.
►
f\
•■'. ' .-V
■
•
'
-
t:
918,021,603.56^;;
;
Other Resources
r
<•
5,708,337.42
.
it
*
•/MP"'-''
'
•5
.«
?
...
election
Of riine new Fellows of the Asso-
-
"
/v/''"--'
'
sociation
Loans and Discounts
♦ V
-
-
'
-y ^
.
1'
* *
■
.
■'4 "
*
•....v-*y»l
.v
r
..
'
,
V
\
4
-v
y
*
-■
:
>.
■
'
■
344,556.64
k
//
\
"
V £Y,'
'
''
.
$1,110,194,610.09
$1,110,194;6I0:09
;^ ^alyert L. .Dedrick ;of Washfate-:
,
ton, p. C.,
Stephen M. DuBrul of
Detroit, Mich., Meyer A. Girshick
"of,Washington,
D. C., Irving Lorge
of; :New; Yorki: City, William/G;
United States Government Obligations carried at $88*777,280.90 are. pledged to secure deposits of public monies
YX'^
Y.;Y' Y-YYY.'Yr
;YY;'-
and for other purposes; as
---Y
required by law*.
j*
Y-Y Y
.
;
:.;' '
J-;"', t;.
1
\
-•
'Y'
-
YY -V Y.'..Y'?YY?
(
/
Madow of Sao Paulo, Brazil, for¬
merly
of
Washington,.r D.
C.;
Howard B. Myers of Washington;
D.
MEMBER FEDERAL DEPOSIT INSURANCE CORPORATION
MEMBER' FEDERAL RESERVE SYSTEM
C., Gladys Palmer of Philadel¬
phia,. Pa., Faith -M. Williams,
Washington*
D.
C.
and
of
Joseph
Zubin of - New York
City...
\
*
good'
evil,V should be imposed on
labor unions, just'as such respon(Continu'ed on page 621) v, r
or
Reparations in
on
only
government. / Further¬
1941-45; U. S. Representative, Al¬
lied Commission
be¬
great;
fostered the growth and authority
of the unions by granting them
occupy.
of a
long' experience with the
problems
of
both
management
there is
;
rights
because
not
effec¬
prove
in
of
correspondings
neglected to impose legal obliga¬
tions upon labor unions to respect!
rem¬
will
or
•
public and private interests, exist
partly because the government has"
edy for exist¬
ing evils will
sometimes
growth
through - which
unwar¬
injuries have been done to
ranted
intelligently
a
*
the
These powers of collective'
action,
very 1
assure
myself that any
every
the
without
••
responsibility
v
labor relations,
I
of
cause
powers
and
hard to
:
•
•
casions
relief in the lavy from the intoler¬
Beyond
Under such circumstances, some these
considerations, may I add, I able injuries which are; now in¬
of you may entertain the belief shall
never again practice law. If, flicted on the public by lawless
that a judge should stand aloof
therefore,
with
malice
toward methods of settling labor disputes.
from the forums of debate, and si¬ none and
Judge Knox has on various occharity for all, and out
♦
Commissioner of Labor Statistics,
1933-46; Special Statistical Assist¬
easily descend to the
rancor,
upon
the
only Donald R. Richberg
politics, vand never
special privileges and immunities.
expect to be. Furthermore,; I have vigorously op*
neither hope nor thought that I posed to a do-nothing program; Must Remove Special Privileg&s
I
Judge John C. Knox
have
of
violent
j
Outgoing Pr e s id en t * Isador
Lubin, > New York City, U. S.
I
views
agitates
now
citizen,
think that I
,
,
Incoming President, Willard L.
Thorp, Washington, D. C. Assist¬
y
definite
that
v'/
/
;
attack his sug-
■.
Announcement of the election of in partisan
Officers of the American Statis¬ politics. More¬
tical Association on Jan. 25, is over, any dis¬
made as follows: ' ■
cussion of the
'
a valuable contribution in current efforts
way to industrial peace.- It is not
my desire or intention to '
■
'
:
[v j^dge .Knbx has made
to.find a
en¬
tertain with respect to the relationship which exists
among manage¬
ment*"' labor ,r--t-.;; • ;
\
y
and the> pub- ;
iany canon: of '■ judicial propriety,
l.';*"Paol^A/:Sellersv lie, I . have a
and, were the situation one of or{' %»}■ / ■'/
: /•
Y J 'r' '■ ■
>
'4■ Y.';* *
slight measure
jdiiiary significance, I should hold
the 'Illinois Company; 231; South of
diffidence.
; my peace, and permit labor mat¬
LaSalle : Street* members of ' the The/
ters to take their course. The fact
subject
Chicago : Stock ' Exchange. Both matter on
: is, nevertheless, that 1 am a citwere
previously assistant vice- which you;izen, as well as a judge, of the
presidents of the organization.
have asked me
United States, arid an avoidance
to t speak
of industrial warfare—if it can be
is
highly contro¬
Amer. Statistical Ass'n
brought about—concerns me quite
versial.
It is
as much as it does
you. Holding
Elects Officers
*
cases
vote, merely to'
<
to express
or
-
'
free economy.
Objects to compulsory
judicial. settlement of labor-management relations,;
a
where disputes cause public distress.
Sees difficulties in applying economic
principles by a law court, and suggests in arbitration cases, a
judge preside, without
agement, but stresses labor's right to strike should be overridden1/
by right of individual to work and to live.' Outlines plan of
•
Federal Labor
Court, Mr. Richberg contends such institution would not remedy
industrial unrest.
Holds Congress must remove special
privileges
unduly favoring one economic class and restore balance of eco-*
a
/;; f
•./; ;•>' >' .v:
*v
'
>,
/"
#HE
606
,/
COMMERCIAL&
;"': T"'"";V'i" :'
\
'■'"' ",V
T hursday/January-3
FINANCIALiCHtiiQi^
"":" *"«,
r"v ,6-,v." ,ri' 11
I,
,1 iti
„■
mm
"ii'ii in
0,-1947,
..,
,
fRaradie^ Sims4Speej
Formed in Los Angeles
ANGELES, GALU^For-,
nation of the fir.m -of Marache,/
LOS
&
lims
One of the
most
that turned
dustry during 1946 was
For
in by . Southern Pacific.
rail analysts have looked;upoh; the system: as having
emerged from the marginal status it -occupied in - the: middle 1930s,
and as having particularly bright post-war potentialities.
The road
has /a dominant position iri one of the • fastest growing sections of
the icountry- California. - Thus,
«■• v»; ■'' ■■1
considered a threat to the road's
highly satisfactory traffic trend
credit, has largely been elimi¬
was
anticipated. The substantial
nated, Finally,'"the debt reduction
sums spent oh property improve¬
and low coupon refunding result¬
ments during- the-last 10 years,
and
the large
amount of new ed in a cut*of -almost 40 % in lah-
years many/
equipment installed -during the
period "were expected to re¬
important operating econ¬
nual fixed charges. -
omies.*
£vail last year.
None of the
same
sult in
/Aside from the favorable
outlook /and/impro vem e ntjin / the
physical conditions of the proper'r
ties, a constructive 'attitude was
considered
warranted
by " the
progress" made by the managed
ment in easing the debt problem
and reducing fixed charges. Ex¬
clusive of any " open" market * pur¬
chases
-
of
that
bonds
may
have
been made last year the road has
retired more than $230 millions of
hon-equipmeiit debt since the* be¬
ginning of 1941. /The hoh-equip1ment debt outstanding' with the
•
investment
securities with
iq
offices
..:v
xing,
T
,
An-
L.OS
f"':
•
|eles,
•
- is
nounced.
basic improvements
..
an- v
'Li
are
-
of
The road has/ex-
Paul
Mr. Marache
been
In
i
.
a
.
Corp.
Interiiatiolial
Ocean
-
Telephone
and
various
Sena-/
Atlantic
On
Telegraph
able in 1947.
M
operating
If confidence in the
of, and prospects for,- the
road's securities is to be retained
status
1927
Cons. "A" 5s,
the system was not
"These subi
itantiah credits will not be avail¬
109*7
C-
credits of $45,152,104.
own,
able to cover bare
posts' fot the full year:
Chicago Railways
.«/!»
its
even
i
better
Ernst&Co.
MEMBERS
New
York. Stock
Exchange and other-:
Security and Commodity Exchs.
; leading
[l26 Broadway, N ew York 5, N.Y/
I 231 So. LaSalle St., Chicago 4, 111. r
I
j
I
•
J/./.;'/..-: // /
,
Rubber Co. -•
j Armstrong
American
Optical Co.
,
Talon, Inc.
penses
"fairly quickly."
H. H. Robertson Co.
j
.-
;.
./
,
VAN TUYL &; ABBp
72 WALL STREET
\
NEW YORK 5
Telephone
HA 2-6622
y-?;P
Teletype
NY 1-1499
DL&W—Lackawanna RR N
f
Perhaps
the"high¬
freight rates are in effect.
Surprisingly the 1946 earnings
this will' come now that
er
deterioration ha? not had anynpar-
ticularly adverse affect on the
junior system bonds. The deben¬
ture-4 ^Sr are still selling reason¬
greater declines from the
highs of last year. It may be that
there will be a sharp furn for the
Broad Street
New York 4, N.
Telephone BOwling Green 9-0400
Teletype NY 1-1063
-
arbitration
lies
government's jdustrial /operation/ and industrial:/
to compel stagnation. *
..
•-'/•- •
f-
in
0uqdling-
-
.
'
agency:then/has
Building tn
condition?
jtleg. Mr: fimidhng iwasithor^
terms,and
of employment that have hot bees
formerly a partner in Knapp and
agpeed-uponvoluntarily-bybotb
Company." Associated with- the
sides.,/■ > /
; "
1 •' I
hew firm will be Beulah Detwiler, cashier. Miss Detwiler was / Attempting to dispel some iUuf?
sions about special labor courts
previously in the trading depart¬
and^ "othez doyip^as a curf-aij
ment of Knapp & Co.,
/ ^ ;
for industrial strife,!' Mr. Weisen-v-£
i'———1
•
" *'
burgei^ said that ^fschemes ! fof
SEG Sets Hearing
compulsory- arbitration may1 be
/The Securities and Exchange disguised by varying terminology,
Commission has ordered a hearing but all of them are substitutes for
at the Chicago regional office on voluntary
collective bargaining,
Feb 10, tq determine whether to and, in greater or lesser decree
revoke; or suspend the broker- impose
settlement by judicial
dealer registration of Behel, Johii- degree or by board fiat."
|Th|
sen & Co.,
Inc., Chicago dealer, NAM has steadfastly opposed; th»
for aUeged yiolatioiis of the se¬ principle of compulsory arbitraition in labor disputes. "
curities act."
• ; "
It was charged that during the
Compulsory arbitration has Ipzer
period about May 18,1942 to about known
under
such
innqjeenit
May 7, 1945 the firm ■; "induced sounding
titles
as
mediation
certain of its customers to engage boards,
labor
tribunals, jtadt
in transaction of purchase "and
finding commissions arbitration
sale iof rsecurities)-which -were boards, labor.sourtsjmd industrial
excessive in size and frequency* in commissions: Mr. ■ Weisenbuk'gejr
the light of the financial resources jsaid. While compulsion is not al¬
personal and social z relation^bips
•: f■:
cited by ;
pViri. Waisenburger/as; dangerous toibe found in\compulspry* arbitra-^
tidn he said that "experience has
^?well/^S/;W
>.>■
■
■
NowaPartneirship
BALTIMORE, MD. —J.
.
c;
Dorsey
ways
systsm
arbitration If It
continued, ^^Is' actually; a
for
Mr.
1. h. rothchild &
Member 0/
co.
National Association
inc. ■
of Securities Dealers,
S2 .Wall
«Anover
strait
<
2-9072
n. y. c.
5
Tela. NY 1 -1293
parties will tend to by-pass*
negotiations
at- the
bargaining
table ihorder to get an. issue be-^
jfore the board or court, Thus, the'
effectiveness of genuine collective,
bargaining is destroyed when a:
Iway" is provided ip short circuit.
•
process;/The basic*
Incenffve/^bargaia is lost."
;
the bargaining,
Calling compulsory arbitration:
"contradiction -of terms," Mr,;
I
a
Weisenburger5 pointed
out that'
arbitration has. always signified:
the agreement of all parties to;
{submit a dispute-to dn impartial,
ithird party of their own choosing/
IWheii: this Is Mkde cbmpufebry;^
is
no
longer arbitration.
To preserve
compulsory
permanent mediation bpardj
department,
Weisenburger said, adding:
government is concerned a"
is. required*
which will have for its basic prin¬
ciples the "equal obligation' of/
iboth labor-/and management i ;tpi
bargain in good faith and then to,
{carry out'the terms of the. con-»
tract/ and: the. ehminatton/of irre^*
sponsibility
and
monopolistic;
abuses by^ labor;pr: maiwgemenf.^
ifar as
national labor policy
/Voluntary arbitration is the log¬
extension of the underlying//
ical
principles of collective bargain^/ /
"Mr; ; .Schyyellenbach
is exactly ing, Mr. Weisenburger concluded,,
right when he says that such b in that the parties involved act in,
board would; hamper effort's ho
accordance with the purpose of.
achieve industrial peace."
I
collective agreement/* by laying
Organized labor is "understand¬ down jointly the rules of arbitral
ably opposed" to compulsory ar¬ tion for adjustment of their dis¬
bitration, he added, because many
putes and putting the agreed-upon ;
of the primary functions of labor
plan into operation.
,./ {
unions would then be taken over
/ "On the other hand, compulsory ,
by the courts, and it would be dif¬
arbitration in Australia and elseficult, if not impossible, to union¬
where abroad has NOT succeeded• i
ize unorganized workers, since no
in eliminating strikes//he said.. ://
union could get any; better terms
1
f/U>A '
both
free collective bar¬
gaining^ government intervention
thanv-induce"] this
jin labor /disputes should^ be re-*
disputants Lb1 agree*/he argued. I diiced to an "absolute minimum,"'
"Any such system, no mittejr
^ deplaned, adding that to attain
what its name,"..the'NAM offlcia1
and maintain industrial peace, so
labor
inside or outside his
f- /,
|for/voluntary;
"order" rather
of /a.
SEABOARD
substitute*
collective /barji;.aitir*'
ihg/tra^i^en established; dne/or'
shovth that wherever a
implied by .these so-called {
courts, they are prone to
.
ISSUES of the
Among, other reasons
i
.
//■
^^^'FRISCOi
Y.
;
legislative /authority
better than 0 % %
CUARANTEED RAILROAD STOCKS-BONDS
jepmes increasingly Important as
a
IGWAr~<both employer and employee fo I "When; government ^fort^s!peo—
has - formed-] submit their conflict ta.an outside iple/tb; aacept^hidtistrial /relatiohGundling investment 7 ibihpariy agency forHrbitration and award iships that are -contrary :to: their!
Mr.Weisenburger pointed out. The
wVH offices " ih "the Atherican:
{respective wlshes/we^^ha^ moved*
Henry
DENVER
25
to sub¬
•/'.%
CEDAR R APTDS,
i
Offerings wanted in all OLD
on Request
the final step in a
economy.
involves ;/therd£term^
better^inthesystem's ^mings re¬ Brow^i &; CoV. 2ld E. ^edwpod
third party of cohdi'tions govern¬
sults this year. In the meantime, Street, is now a partnership. Part¬
ing the relations between manage¬
however, many, rail-analyst? are ners \are James" D. Brown, Jr.,
ment: aiid labor."
j
j !
of the opinion That many better
That fact was recognized clearly
formerly proprietor, and S." J.
investment opportunities exist
this week by Secretary of L4bor,
Brown.
elsewhere on the list.
Lewis B. Schwellenbach. in) his
statement opposing the setting up
Bond on Main Line
Properties of Strategic Nature
/
Analysis
jvvage rates^^aftd^thejebYdne/pbs!-^
lion to set prices. That would be /
{how hiuch he shall be /paid^ then j
{liberty hr America i?dndeed/dpad.;
[Wbrkerhhd employer hlike would;
{be enslaved. To surrender to the voluntary servitude which even¬ jcourts the power to decree d the *
tually would lead to sabotage oi; jteihis, under //which nxeri shall!
violence."
v
work, would lead. to. government-:
The : principle
of. compulsory controlled economy, rigidity in in-:
Company
First Mortgage
Priced to yield
WeisenLur^er
enburger said. "It is unconstitu¬
tional, unfeasible .and impractical
for attaining the ends d- sired, and
it would create a condition of in¬
HenryGundiing Forms
J
1st Mtg "A" 4a 1993
B.
political solution in place weapon for both management and *
of free collective' bargaining, I.: :
{labor.
If politically , appointed:
-"Compulsory; arbitration" is a {boards" can decide where a mdn
contradiction of terms, Mr. Weis- jshall work,, when he shall work/
stitute
ably' cloS6 to par and the Oregon
Lines 4J/2s (considered by many
analysts as being little, ifx any,
better iii quality than-the deben¬
tures)
are
selling above par.
These recent prices are only 6V2 in such customers' accounts." The
to 42 Y2«points
below- itie < 1946 firm *is * also acctisecf of taking
peaks.
There are many higher
secret profits" at the expense of
quality ;railroad" bonds
where certaih^plafs"j(^tbihers./,
,,
earhings have been far morb sat¬
isfactory that have registered ma¬
terially
•**.• •*.
*•?•£,vZ-StjgR.•*£•■;***■. It
will
W.
tration which would- tend
,
Missouri Pacific RR. Sl/^s
4'
obviously have to be
control exerted over ex¬
there
;
wholly-planned
.*/
.01 s and
Congressmen Have pro-.1
"With working conditions regu- •
:x>sed legislation j to provide for iated ,py: Goyeybment authority:'
various forms of compulsory arbi¬ political influence and power be-,
:
income tax
Southern
s/;:/s i
free enterprise system, ;as-well las*
Of collective bargaining, by put- *
itihg the Gdverhment ih eontrol of'
com¬
Truman
(November) /the trans¬ {Southern* Califotnia b r 0 keria g f
circles;
Mr. Sims, foritieriy>
portation ratio was 46.9% and for
che 11 months through November IPhoenixj Ari^., is active in ;.>avlatioh and" automotive circles and
lit v was / 43.4%/ The. latter* was
•was associated^ with Sims liivest^more than 11 points higher than a
ment Company. Mr. Speer, prin¬
jyear earlier. \ §§0 //; {/ /-/•.. / ///
-The «breakdown bfoperations cipal of Paul D. Speer & Co*,
Tor the final month {of the year is predecessbr -of Marache,< Suns '&
cverrwas-4nade-possible^.-only
through the medium of Federal
would
death .knell of; the
ernment
Paul D. Speer
{available
Own Inv.
"Compulsory;' arbitration
}
also sound, the
pulsion in setting labor
disputes,
i President
j nearly fj>10 millions. -Not throughthe
depression years," -and/
pidbabiy- hot - in dts* history,: tias
Southern Pacific experienced/such
a poor month.
| - For the year as a. whole system
i net operating income amounted to
$41,524,526 which taken.at its face
value would not be a: bad showing
under
the readjustment condi¬
tions of 1946. This showing'how*
\
|varfare/
11
considerable degree to jthc brbkerkge :
business- for
•the precipitous drpp in passenger
the ' past
yea:rs - in New ' Ybrk
business that got' under way in
the second quarter. 'In the"latest {and Lbs«Angeles. ^Fbr the/past 26
imonth
for
which •details
are years he has- been active in
least to a
lout
Consolidated
in
a
therA
forms of Gov¬
„
Dearborn
Unsatisfactory to the union,
jvould be unrest and j strikes
Against the Government with tbe
possibility of large scale industrial -
statement
opposing
.
Preferred
I "Furthermore," he said, i "if /the
arbitration board's decisions were
of
19
Jan.
on
public is how indicated at just
iSpeer;. was a Commander, USNR
slightly more than $460 millions, i not" yet "available but the net" re- on active duty from March; 1942.
i suits were particularly bad. Net
jflkt the same time^ the fornndable
'until October; *1945. Prior to that
| operating income was reported at
maturity problem that ohce/was
$3,915,505 but' this was, after a ihe whsr'ipartner of. H. C. Speer .&
Federal income tax credit of close ! Sons Co., / Chicago, oldest- mumcI tb $13,609,000. Before Federal in- iipal bond house of that city.'
Arden Farms
: come taxes there would be ah inIdicatedvnet operating deficit/of
Common &
an^ ypluntary arbitration. are i the
declared
ers,
Marache, W. L R. " Sims
and "
Paul D. Speer.
getting transportation cdsts un¬
has
der control/ which may "be due .at
IVI-.
•
Manufactur¬
J.
'
r^Free^ collective; bargaining ■>
ci ation
firm
the
proving compulsory arbitration does
dent o f t h c/
National Asso-
...
j Principals
of
gaining. Cites experizncs as
not prevent strikes.
only democratic methods for attaining- industrial peace, Walter? B:
Weisenburgbi,~ ■ "■
'<•
E x ecutiv J
for/the workers than an arbitra¬
tion board would award.
/
} < ft
V ice- Pre:i- j
/ in the
Rowan Build-
-t
-
-
■
dral;| business '
considerable' difficulty
traffic perien ced
in
-
.
conductagen-
company's position were
in the
of the
Speerv members
in the railroad in¬ ^o««. 'Angeles r Stodk/ Exchange,", tc-
disappointing performances
NAM^^ ejxeculivi^ |oins with- unions In >
Walter
icondemniiig compulsory arbitration: either through courts or other
mechanism. Says compuIsory arbitration does nol remedy industrial unrest, or settle disputes; as {satisfactorily as collective* bar-
v
THE COMMERCIAL &
Number 4564
JVolume 165
A (1946) and
Critical Appraisal of Nathan Report
FINANCIAL CHRONICLE
direct result of
as a
::that break."
607
the fact that profits are used and
represent an important source of
This does not mean that all price purchasing power to a business.
increases
resulted
They are used to build new plants,
from
higher
JULES BACKMAN*
wages. ' But such wage increases and to buy new equipment which
;
Associate Professor of Economics,. New. York University i
did help to break the dikes' which contributes to greater productiv¬
Economist attacks basic data, reasoning and conclusions of Robert
had been holding back prices.
>.} ity; and hence makes, possible
V, 11.
In some industries, 1194$ higher wages and* lower prices.
Nathan's recent report made for CIO on possibility of raising wages 1
Profits as well as wages represent
without increasing prices. Says new round of wage increases will ; profits reflect the effects of tax
rebates.
For
example,
George purchasing, power. a;Aa.;;a-;;V A"::
mean price rises incrnciaf segment of economy, and contends, be* r
Romney has announced that duri- .13. With its
emphasis • upon
1936-39 profits as the basis for
cause 1946 profits reflect tax rebates and some inventory
i ing the first nine: months Of 194G|,
the automobile industry suffered measuring "excessive profits," the,
they should not be adopted as basis for estimating future earnings. 4:
an: operating loss of
$135 millions Report ignores the fact that high
Criticizes emphasis placed on global estimates and averages#
, '{)/*
Which was reduced to $5.5 mill- profits and high wages go togeth¬
1. Peak level profits which are temporary in nature do not pro* lions after tax refunds. In 1941, er. Moreover, it has been demon¬
vide any basis for nation-wide wage adjustments. Any decline in tax refunds will no longer be sig[- strated that in years of high na¬
nificant. Similarly, rising prices tional
volume from *
income, profits u s u a 11 y
t h e
peak (Department of Commerce reports have probably been reflected in have been
Vk. to 8% of the total.
would lead to last year.
Estimates in *OWMR some inventory profits. While the
widespread Report of October 1945 were wide magnitude of inventory profits is During 1946, the ratio was 7.3%,
®!?fBy
,
...
.
■':;g
r
profits,
''
Rawson Lloyd was elected
President and
Vice-?
Secretary.
•
,
In addition to his other admin¬
istrative
duties, Mr. Lloyd is in
charge of the investment research
department
and
Secretary
of
Wellington Corporation, the
man¬
agement company.
;;
Mr. Welch is also Treasurer
and
director of Wellington
Corp.
He
is principally engaged in the ad¬
ministration and operation of the
Fund and is in charge of per¬
sonnel.
.'.
<'
NASD Announces New
...
of
Past
losses.
That
mark.
the
esti¬
report
Gross National Product at
mated
economic his¬
:
not
known, George Terborgh hqs
"they appear to have
been accruing since June at an
the National Association of Secur¬
Wellington Fund
mates the 1946 total at
*
lions
Elects Officers
1
—
Jules Backmari
•
/
*
-
"
-
low level of profits at that time—
.and
prevalence
widespread
of
7.
losses. More than half the compa¬
A
creases
new
will
of
one-quarter
accounting for
sales had
losses
from
to
.gives a substantially different
jpicture. For example, for 193639 profitable corporations made
$7.5 billions after taxes but all
•corporations had profits of only
$5.1 billions because of losses of
from
-
3. There
in¬
-
lends
idea
no
toe
■>i
in
A?ar^ widely amohi industries; arid
TV-
^
more
profitable companies. For exsimple, in the first nine months of
1946, profits were more than twice
as high as
in the corresponding
period of 1945 for wholesale and
retail trade and paper and pulp
: To be
•
they were 70%
or
lower for automobile, elec-
TV, I
*Y
<:
.
fts!
•
j.
th'\ -.
,
V'' ;V v v >'^ A? ■■•;"•
^ 1^194|
annually
unconditionally guaranteed
the marginal firm, not
firm which deter¬
These
topaefcrif:highercbstis
'
■ •
'V
;..'
as to payment
tb i%2,:ihclusi:ye
ofprincipal ahd dividends by endorsement
report.
Large
be issued under an Agreement to be dated as of February 1,1947^
for the issuanceof $14,970,000 principal amount of Certificates to be
stahdard*gaugerailrbad' equipment to cost not less than $18,712,500;
are to
.
:.
Secured
by
new
in¬
wage
"across the board"
Certificates
which wili provide
inev¬
MATURITIES AND YIELDS
(Accrued dividends'to be added)
1948
1.00%
1949
1.15
1954
1.65%
1953
?
'
1
,
i'JSJ
•,
1.75
1958
2.00%
1959
r
2.05;
I960
1950
1.30
1955
1.80
1951
1.45
1956
1.875
1952
firms closed their doors and prof¬
itable firms discontinued the pro¬
companies;
1.55
1957
1.95
i
2.10f
1961
2.125
1962
;
2.15
duction of unprofitable products.
Issuance and sale of these
9. Throughout the report, com¬
parisons are made with January,
^rical: equipment: aud railroads,:
1945
The
conditions.
Why should we
expect a* continuation of that ear¬
4. l£ profits are tooitogh, they lier situation when weekly wages
can. be more appropriately re¬ were at their wartime peak? The
duced by price competition than virtual elimination of war pro¬
by further cost increases. In some duction, .the shift to peacetime
•.fields theye is already evidence* products; the reduction in the
•
in
.
/
7A
■
A
To mature
itably will create difficulties for
many marginal firms. With many
prices already too high, it will not
always be possible to recover
these cost increases by raising
prices. Some unemployment
would inevitably develop as some
cannot obtain the funds required
Competition Reduces Too High
Prices O
;
this
creases
companies. Low profit companies
more
"
(Philadelphia Plan)
upon prices. This is a basic criti¬
cism of the entire approach used
profits out of which all companies
pay higher
wages.
Profits
■
membership
Equipment Trust Certificates
average
mines the*
pool of
increases from
to
Association. •'
pastime4iri:to^bast :fe#
years. It is
can
to meet wage
•
that
riatioriril
of profits has de¬
prices.
common
admitted
Equipment Trust, Series R
industry. Past experience
encouragement to the
large wage increases
every
result of higher
is no
Weil & Co.,
and
Va.;
of New Orleans, have been,
such price increases
affecting the entire price
dustries affect costs in practically
to allow for the fact that the pur¬
<
Inc.,
prevent
structure because those three
.
power
W.
town,
$14,970,000 A
$2.4 billions by unprofitable cor¬ can be made without an impact
porations. Profits take a smaller upon the price structure.
proportion
toesrileri
1946* eveh" on the basis; of ML
Danger of Global Estimates and
Nathan's estimates (5.7%)
than
A Averages A'v
,7 A
.
they did for profitable companies
before the war (6.0%). Compar¬
^EmriKasis^upon glbbaL estiA
isons with prewar profits also fail mates- rind" averages has bedoihe a
as a
Boston; J. V. Everett, of Williams-
■
segments of the econ¬
particularly railroads, coal
and steel. It would be impossible
omy,
1939;* The - use of data for profit¬
chasing
&
of wage in*
price increases
in crucial
1936 to
able firms in the prewar period
clined
that
Mann, Inc.;
McGi-nnis, Bampton & Sellger;
and Toppell & Co., all of New1
York; The Crosby Corporation, of
Smith
round
mean
^
nies
ities Dealers, Inc., announces
Hartman,
and in production next spring or
summer materializes.
of. the
cause
WASHINGTON; D. C.—Wallace
Fulton, Executive Director of
H.
estimated
Now Nathan esti¬
$190.7 bil¬ annual rate (for corporations
(p. 17)—an error of almost
$4-&; biUiohs; leavihjg
20%. The OWMR' report forecast something like $3 billions on an
can be
sud¬
den as well as earnings before taxes at $17 bil¬ after taxes basis." Such inventory
PHILADELPHIA, PA.—At the
substantial, j : lions. Now Nathan estimates they profits haV0 always been
temoq- directors' meeting of Wellington
have been over $20 billions in rary in the past and will be offset
J 2. Compar1946 (p. 59). Such wide margins
isons with the
futorO inventory tosses: They Fund, held on Jan. 21, 1947, Jo¬
1936-39 peri¬ Of error do hot provide a basis furnish no sound basis for higher seph & Welch* former Secretary,,
od show large for confidence in the present esti¬
wages.
' •'
-A.: A A-'A^AAi - was elected Vice-President and
particularly if Nathan's
percentage in- mates
Heport ighpreri Tfeastoeri of XhiCompany and
$ increases be- forecast of 20% declines in prices
billions.
$160
tory demon:strates
that
these declines
Members Admitted
Certificates are subject to authorization by the Interstate Commerce Commission.
Ojfering, Citculap may be ohained in any Slate in which thirannouncement h ■ A r*
circuldtedframt omy suck of the undersigned and other dealers as mays
.lawfully offer these securities in such "State<-, - <• /
*
'
,
•
,
in the emphasis^ en buyers mar¬
number of hours
kets, that price: competition is be*
coming more important. Reducing
profits by raising wages will make
of part of food costs from the tax¬
HALSEY, STUART & CO. INC.
BLAIR & CO., INC.
BEAR, STEARNS & CO.
,
EQUITABLE SECURITIES CORPORATION
worked, the shift
(subsidies): to the consumer
(higher prices), and related fac¬
tors distinguish the end of 1946
price reductions impossible, and in
bnany cases>' will mean ' higher from January, 1945; Moreover,
prices; Those with fixed incomes, January, 1945 wages could not be
government workers, etc.; will fully spent; because of highefr
andA shortages'. of goods:
market. Wage increases would di¬ Comparisons with that month,
rect these profits to one segment therefore; qre. meaningless. While1
HORN BLOWER & WEEKS.
HALLGARTEN & CO.
payer
t
R. W. PRESSPRICH
~
,
'
COi'
CREGdHVSfe SOir
CtTl£S, CO.
PHELPS, FENN &. CO.
(INCORPORATED)
r
L. F. ROTHSCHILD & CO.
FIRST OF MICHIGAN
SHIELDS & COMPANY
.
THE ILLINOIS COMPANY
BURR & COMPANY, INC.
GRAHAM, PARSONS & CO.
CORPORATION
continue to be priced out bf the taxes:
he seeks to reestablish
•of the economy: price reductions
would' diffuse: the benefits widely,
highest level ever attained,
profits are usually measured from
the unsatisfactory and low prewar
Nathari^:Ws:!fbmast-;fJ^T!d^
Magazine,"' Nov. 22, 1946) a de¬
cline in prices and production; of
cdecline in prices and
tivity?
!
with
such
business
.
10.
ac¬
on an
of
for
the
Nathan blames
breakdown of
In its* "Labor's
vey" for August,
Dr.
analysis made by ; stated;
him. for American" Iron and: Steel
!
Institute, The Nathan Report' ap¬
peared in , "The Chronicle" : of
Pec. 19, 1946,, p, 3209 A
: ». ? :
t
THE FI RST CLEVELAND
CORPORATION
C. C. COLLINGS AND COMPANY
F. S. YANTIS&CO.
SCHWABACHER & CO.
INCORPORATED
!
•
Monthly; Sur¬
1946" (p; 31; it
\ /-A
:
.
m
■
.
'
cost rise has* occurred since the
A steel workers; forced the price
ceiling break to F ehru ary
;;:
.
E. W. & R. C. MILLER&, CO.
THOMAS & COMPANY
ALFRED O'GARA & CO;
-
"Practically the entire living*
MASON, MORAN&CO
INCORPORATED*
*
price control,: the AFL places the
responsibility on the steel work¬
ers;
Backman
Although
business
Nathan
observations,
FREEMAN & COMPANY
MULLANEY, ROSS & COMPANY
Rises
a
.
♦General
INC.
■
repeats, the: tech¬
niques usecfinthe; OWMH^and
6.
WM. E. POLLOCK & CO.,
BACON, WHIPPLE & CO.
THE MILWAUKEE COMPANY
Responsibility for Recent- Price1
profits of 50% above the wartime
be reconciled
SINGER, DEANE & SCRIBNER
level.
:20 to 30% next summer. How can
peak
JULIEN COLLINS & COMPANY
at
COMPANY
WILLIAM BLAIR
PUTNAM & CO.
the
'
•V.f/5,
wages
HAYDEN, MILLER & CO.
To be datfed February It 1947. Principal and semi-annual dividends (February 1
or New.York City. Definitive Certificates, with dividend warrants attached, in
and August 1) payable in Philadelphia
;
the denomination of $1,000, register-
principal. Not redeemable prior to maturity. These Certificates are offered when, as and if received by us. It i:
is; expected tliat Certificates in temporary or definitive form will be ready for delivery at the office of Halsey, Stuart
& Co. Inc.*, 35 Wall St., New York 5, N. Y. on or about February 20, 194Z. Theinformation; contained hereinr has
been carefully compiled fromSources considered reliable and, while not guaranteed as to completeness or accuracy,
i
j
we believe it tb. be correct as of this- date,
wV :
able
as
to
,,
Jstniiary24;J947.
*
,
.
......
...
*
*
...
-
the
THE COMMERCIAL &
What Price Yoricks!
Thursday, January 30r 1947
FINANCIAL CHRONICLE
Eisenhower Favors
Voluntary Enlistments
A Windfall Tax on
A mm
WW
■nliliialfliafli
Ha
Mali
w^aiA
Retroactive Portal Pay
This
as
advertisement
an
offer
to
sell,
is not and is under no
or
as
a
Securities herein mentioned.
circumstances to be. construed
of the
the Prospectus,
solicitation of an offer to buy, any
The offering is made only by
50c Cumulative Convertible
Preferred Stock, Series A
(Par Value $5.00 per Share)
Price
$10.00
per
Share
Copies of this Prospectus, may be obtained within any
State, from the underregularly
signed, only bV persons to, whom the undersigned may
distribute the Prospectus
in such State.
25 Broad Street, New York
5V.SS,
4, N. Y.
,
165
Volume
Number 4564
-
Ghma'sEconomicRGCoveryGivenSeriousSet
Back by Manchurian Industrial Loot by Russia
;
By EDMOUR GERMAIN
Authoritative
'
reveals
source
much
so
land.
Be "Van
vjA puffy, Jr., member
Co.,. 52
J. Huffy & Co., Ill
Broadway, New York City- mem¬
ner
in
Stock
•;
with
the firm
on
ment
and
take
their
industry to a high* level of. devel¬
opment after the war, but now, it
them only 10 years to bring
,,
•
.
.
if;,.
■
believed that the Russians
are
the
re¬
of the territory. ; In all, the; miter
To be due
To be
case
require about: $2,000,000,000 to replace, it is said.
Russians
Photographic: evidence-
up
In
something of£ an*
act
which
for
have to give
annually $152,000
equipment missing
amount
.out of Manchuria includes 71% of
of
machincry^between 50 and
100%
I- In
0.90%
1949
1.05
1950
of
the
ma¬
chinery iirthe chemical industry,
practically all the rolling stock
to
China
that
1.20
1952
,
Pacific
1.70
1957
1.75
1.55;
1.60
1.65%
1955
.1956
.
fflf
V '
.
a
lx/z% Equipment
To be due
state
annually $170,000
1957, inclusive
' ''>
^
v
i,
•
s.
i.f"
.
MATURITIES AND YIELDS
(Accrued dividends
something
1950
1.20
decades
to
be added)
1951 ;
1955
1.45
1956
1.75
1953
ww
1.35%
1952
■
1.55
1957
1.80
hesitated to
TK;r
.
-It must be
tiJ
'j-
Certificates are to be issued under an Agreement to be dated as of February 15, 1947,
which will provide for the issuance of $1,700,000
par value of Certificates to be secured
by new standard-gauge railroad equipment to cost not less than $2,140,000.
LIO
never
to
These
1949
take up thb rails.
each February 15, 1948
guaranteed as to payment of par value and dividends by endorsement
by The Cincinnati, New Orleans and Texas Pacific Railway Company
0.95%
they have
on
.
To be unconditionally
for mili¬
three
■
-Trust Certificates
(Philadelphia Plan)
>
.
over
:
Railway Equipment Trust, Series K
1948
McMaster Hutchinson
¥f;
1.45-
The Cincinnati, New Orleans and Texas
any
now,
.
•Vv;;$i,700;000:|ffi
:■;
country tary equipment in the numerous,
adequate almost annual local wars for
Henri NrerWilk
|p
be added)
to
1.3 5 %
1953
a
lacks
K- ■>.
each February 15i 1948 to; 1957, inclusive
1951
,
which China has been famous for
like
j,.y.t#;
->y
con¬
the facts that
steql rails which tives have wanted steel
To
on
1954
event, however, it is
common knowledge that sudden
and mysterious removals of the
rails along the tracks in Man¬
churia is nothing new in Chinese
history. Every time bands of na¬
of".the.- machinery in the iron and
■
.J
(Accrued dividends
1948
of war actually does exist- today
mining between
the two • countries.
all of the
:
MATURITIES AND YIELDS
the
account-r-or
some
imagination
clude from
the electrical power machinery in
the area, 90% of the coal
the railroads had.
:
with McAlister,
,
f The Yalta Agreement is under¬
it. is said, that the Russian armies
the Soviet Union the
took the very best equipment out right ^to -occupy Manchurian soil
as long as,.she is
of thqilapd. •'
ip> a,statep%war
The statistics reveal, for in¬ with Japan.; Some observers feel,
however, that it takes a vast
stance, that the
and
"
was
Certificates are to be issued under an Agreement to be dated as of February 15,1947,
provide for the issuance of $1,520,000 par value of Certificates to be secured
by new standard-gauge railroad equipment to cost not less than $1,907,000,
stood to give
65%
Smith & Pate.
unconditionally guaranteed as to payment of par value and dividends by indorsement
\ •
•
byutbe Alabama Great Southern Railroad Company
;
^
' --
should;
job at selection, it is pointed out.
In fact, the proof is
incontestable,
industry,
Mr. Townsend
which will
un¬
Soviet Government will probably
shows
\
excellent
an
is
conscionable
.
steel
syndicate depart¬
Co., Inc*
is without doubt seriously
vestigating group has dug
or
will
that the Russians did
&
These
this matter, is that this "gutting"
of
Machuriari industry, by
the
removed
Manchurian-industrial
the
Pate
Smith
(Philadelphia Plan)
,
sponsible for the fact that most of open to questions
The implica-;
the best equipment is missing out tion of the
landings that .the id*
from
McAlister,
Frank's. Smith
and
1%% Equipmeiit Trust Certificates
.
area
with
as
Equipment Trust, Series J
actually bombed.- -many matter how, but also be in apo¬
buildings' and .mines after the sition ;todayfactually to be able to
Russians .had taken alt .the iirta? resist effectively any such, move
chineryj and
other A equipment as the Russians and, for that mat¬
they wanted out of them, and that ter, some of its own nationals have
there "was general looting by the been making.
Chinese whenever and wherever
Many will agree, however, that
the Russians withdrew, still it is the propriety of Russian action in
destroyed
and
the securities
was formerly
foreign representative.
*■ v,;
reason
either
Silcox
formed
The Alabama Great Southern Railroad
is, estimated by those who-have the fratricidal strife that has di¬
studied the situation^ the job will vided and weakened the country
for so long -early in the, war, she
take ail of Jp-y&arsc
Whiledhe Japanese themselves might have been able - to make
probably destroyed much valuable greater contribution toward - the
equipment
before
withdrawing winning of the war and so not
from their beloved Manchukuo, only be considered more deserv¬
and though it is known that the ing in the eyes of the world of
Chinese .Communists for
some consideration in the Manchurian
rial
time
C.-^X. Hey-
John C. Towns-
Street to engage in
business. Mr. Silcox
on
has been
some
and
Townsend with offices at 36 Broad
$1,520,000
when, if she had takeii the|ini^
tiative herself in developing the
vast resources of Manchuria, the
State of Manchukuo might never
have., cofne
into
existence.
If
China could have put an end to
that it would
figured
for
have
end
York
Exchanges,
CHARLESTON, S.
have
trial empire intact that the* Japa^
nese had build up in Manchuria,
had
New
Pearsall
manager of the
Jan.
■
..
been steel industry which could have
produced more rolling
necessary otherwise, it has been quickly
learned
from
an
authbritative stbck ^ahd fjUS,vcqmeS as' a really
source.
(In time; the official re¬ serious blow, it is pointed out.
port on the subject will probably j Of; coursej,; perhaps it should be
bd published in full.)
pointed but here, that there is
00
The Chinese, who had hoped to some irony in the fact that China
be
bemoaning her fate
come into possession of the indus- should
would
than
Curb
and
y.
The Soviet Union has removed so much machinery and other
equipment from the factories and mines in what was the Japanese
puppet state of Manchukuo in<S>Manchuria that it will now take transportation facilities, the loss
China possibly
as
much
as
20 of the rolling stock, the steel rails
years longer to build up her in¬ and the machinery of an iron and
dustry
Street,
6th'. Mr.
part¬
a
;Kean, Taylor & Co., from
which he will withdraw
Wall
Feb.
previously
I
ward Silcox
City, members of the New York
bers of the Exchange, on Feb. 1.
Mr. Duffy was
fllstyne Partner Form Investment Firm
partner in Van Alstyne, Noel &
a
partner
a
Silcox and Townsend
Gilbert B. Pearsall will become
in Edward
31,
"''
Gilbert Pearsall to
Admift'NewrPariBerf
Edward
Exchanges, will become
machinery from factories and mines of Manchuria that it will now :
take China possibly as' much as 20 years flonger to build Up her
industry than would have been necessary otherwise. Material '
either destroyed or removed from the Manchurian industrial urea
Ivill require about $2,000,000,000 to replace, it is said. Photo¬
graphic proof shows Russian armies took very best equipment '
out of
To
Duffy & Go.
of the New York Stock and Curb
Union has taken
Soviet
Edward J.
rec¬
1954
.'
1.70%
|
1.65
ognized that Asiatic politics have
CHICAGO, ILL, — McMaster
HUtchinso#
:C6.y .105 South, La certainly been in
Salle St., members of the? Chicago for
Stock
;
f1-
Exchange,
•
.
•
■
"
a
long time.
chaotic#j»tate
a
ated
S.v yer
v
.
ness
been
r
in
the
h
o v e r
e-
busi-
counter
.
with
Mr. Pul-
has
active
*-;■
in v.Chi-
/ cagp for many
1
.
(
"
*'
'
arty^ect to aphifiizatidHbf tiieTntitotdfefo
;>
Cock, Rushton-
V%u-C'.e' e
s
»•
veys
V >-recently
man-
~ ■.?
.
:
■
"
^
,
to
HALSEY, STUART & CO. INC.
Chinese standard of
The
living has ;been nothing to
brag
HORNBLOWER &. WEEKS
''i
about, everyone will
If
Japan
has
lost the war,:
.
•
•
-
OTIS & CO.
r
-
lost
Manchukuo
China -is losing
L.
F.
W.
PRESSPRICH & CO.
JULIEN COLLINS & COMPANY
ROTHSCHILD & CO.
Fl RST O F MIC HIGAN COR PO RAT I ON
Manchuria•because
;; condition,
yy.INCORPORATED ;t-**■.;
PUTNAM&COA
:
THOMASAiCOMMNY
quite. < *ob*
she;
ean't*
alone^figaihsr IRusSia.
is ProbaMy anyone's guess what
powers
GREGORY & SON
^
■■
somq
yiquslyyhe^divided^ahdQsb
Western
R.
(INCORPOMTCD)'
agree.
and all that, was* in, it because she
trading department of * the
^
<•
\
the' -situation will have
admit.:
so.r| weakened
P.- Pulver
if -j
Offering Cifetflarmay be^fibtained in any State in which this announcement is*
circulatedfrom only such oj'the undersigned and other dealers\as may r- . •
r'^'"
;"
t; lawfully offer these securities in such State.
~
*
:
.
^ftfeMltWAUkEBiOTM
#;&:Co.:and;its
ager of the
.
Henri. P. Pul- East has been in a chaotic state
^y.\'
i'» s.1
t'e-Z**/.
i.Y. Z?
*>'
;,verKhas;vbeV;come.» ; associ- ijorsdrhe ti^eiias1: aidypi?.er
-ihem.
Henri
The
that of course, that the economy of the
announces
•
:
Issuance and sale qj'theseCertificates
This has meant,
can
do,
if
To be ,'datbd Febrnary; IS, T947."
value 'And semi-annual dividends (February-- IS'^an<L-Augus£ IS) payablc4n»* ^ *1
*.^Nfew- VdtkiXdty. Definitive Certificates with dividend WM,rants-at-tached..tTrthe-denomination of~$U00Orregistdri
able as to par valuer iSiot redeemable prior to maturity. These Certificates ate offered when, as and if received by as.
is expected that Certificates in temporary or definitive form will be ready for delivery at the.office-of
.Hals^y,^.v
Stuart &-Cd. filed 3S Wall St., New York 5, N. Y( on or about February 20,*1947. The information cdntained
herein ^;vi
Jv'yii has been carefully compiled from sources considered reliable and, while not guaranteed as to completeness or accu-7' ffr >
7:'7,y •'
y
January 24, 1947. !'?>-
,
racy, we
f
1
believe it to be correct
'
1
as
of this date.
••
•••
•'
s-- .'.y
;
-
What Peace Treaty with
magazines in a way to bring to the
attention of executives, adminis¬
PARIS
By JAMES D.
Research Associate,
Metropolitan Life Insurance Co.
conference concludes that demand for competent sta¬
tisticians will be increasingly demanded 4>y industry and commerce/
market research agencies, research laboratories; universities, Arid
trators; had the more intelligent
magazine reader' the .concept of
statistics and statistical method
Atlantic City
and
-
their
use.
benefits
derived from
These articles
By DR. EELCO N. VAN
;
.
'
Affairs
Former Minister of Foreign
\
i
international
supervision for /Ruhr and Rhine industries constituting Germany's *
war-potential. Dr. van Kleffens also proposes decentralization of
her political structure, de-concentration of her economic power,1
Netherlands' UN Delegate advocates special regime of
;
i
should
point out that statistics includes
much more/than merely figure
•
government
the
Germany?
KLEFFENS *'
Netherlands Delegate to UN Security Council;
;r
:
A /ATLANTIC CITY, N. J., Jan. 26—At a meeting of leading statisand continued occupation of at least key points.
manipulation, that it is in fact a
lcians, held under the auspices of the American StatisticaloAssocia-method of logic and a scientific
It is not a matter of peace treaties alone, I do not think a peace
ion and preoperations that aided in the de¬ way of thinking, whose utilization settlement could be called complete without a scheme fdr the collect
ided over by
*•;-? / *: /, r..■ hve reduction^
" 1 L"":
1 //
''■/'/ .'r- :
velopment of the atomic bomb, as can contribute to progress in many
r.
Helen M.
of armaments pend./It is, in fact, the central >
It was suggested
well as many other advances of a untapped fields.
alker, Pro¬
and
armed difficulty.
. n
.•
" m
also that a series of monographs
less dramatic character. \
;
fessor of Staforces,
and
; In one terse sentence, the Neth- :
In
underscoring the need for is needed which would indicate
tistics
at
memorandum expresses ^
that in itself orlands
statisticians it was pointed out that the type of statistics needed, the
eachers Colis a vast and the opinion that a solution/ will ;
of the various professions listed in potential jobs which may soon be
*
.
;■& Colum¬
ege,
Universi¬
the
ty, here this
morning, th e
for
bia
discussion.
J. D. Paris
Ik;wa s if; the
well
as of
the audience; that there is
great need for statisticians at all
levels and that with the growth
of
discussants,
the
of
(industry
and
the
commerce,
based
surveys
as
of the need for market
awareness
sampling,
and
upon
control in industry,
quality
general management control, the
continue
will
need
to
for
grow
time. : Also needed are com¬
some
petent
of statistics in
teachers
order to take care of
the increased
in colleges and uni¬
versities. Not only are top mathe¬
enrpllment
matical statisticians needed but an
larger number of statisticians
a(n intermediate level is wanted.
even
of
facilities
The
for
available
will
<of
equip himself-for.
instructors
and
teaching
most
the
follows:
r
quite
a
time to come.
Let
me
Decentralization of the political
structure and de-concentratidn of ^
there¬
fore limit my¬
self to
one
economic power. - These two rnaiii ;
elements deserve a little closer :
im¬
portant aspect
that
I
•consideration.
com¬
*
many and diverse interests from
E. N. van Kieffens
plicated whole
of opinion
government, universities, arid
Centralization Not Needed
which is to be
that a standing committee be ap¬
business. Among those
actively the peace settlement, and that is
pointed by the American Statisti¬
i As^erinai^biecame^ceo* J
Profess or the peace treaty to be accepted tralized, shesaw more possibilities ;
cal Association to stimulate fur¬ participating were:
' ■
I: : /:/: for aggression and conquest./ In. !
ther consideration of the matter Helen M. Walker of Columbia, by Germany. ! ;
of courses in statistics. Among the Chairman; Chester I. Bliss of the
j You
know' that initial; talks fact, Bismarck and Hitler, the two '
items
which such a committee
Connecticut Agricultural Experi¬ qbout that U%aty~t6-be are at pres- main artisans of German., tinity,. ^
could cover are such things as the
nt taking place in London. Quite carried
put a imification prograni
ment Station; Francis J. Brown,
use of visual education and other
atunally, the /^ Netherlands: Gov- before embarking on, aggression/1
American Council. on Education
teaching and learning devices so
orriment; has asked to'Wake,Its But if Germany is, from now. on, .
well developed during the war in and Executive Secretary of the
VieWs /JkrioW#
^ ;thi< subject tio abstain from aggression, / why \
the training of < members of - our
a
strongly .
President's Committee on Higher which for Holland is of very great should, she remain
armed forces and of the industrial
centralized state.
Consisting as i
importance, j Y t /
Education; Francis
G. Cornell,
workers behind them.y It might
I Gonsideriiheppliticat,side:/Gej> Germany docs of an aggloraera- 1
also try to corral the many such U.:S. "Office of Education; Stephen
ton of smaller units, each with a "
many is our immediate neighbor.
devices which have been devel¬ DuBrul, General Motors; Harold
An old, impossible, sinuous fron¬ history and tradition distinct, to .
oped in universities and colleges, Hotelling, North Carolina; W.
a
greater or lesser degree, from i
tier, based on completely out¬
government agencies and business
those bf the othefo, she might well ;
McNamara, International Business moded .considerations 'of a feudal
firms throughout the nation.
natlire /and: facilitating;; Gewnan become/ for ;the common ;goodr of .
The -statisticians ^also
thought Machines; Jerzy Neyman, Califor¬
the world and of her own, a fed- .
t
,
jf.
*■
aggression, .separates ,us from that;
eration of these units. For that,"
dangerpus neighbor.; We arc vi¬
tally /interested in the Arrange¬ all" requirements are available: ;;
ments to be made for curbing there is one/language; onst/geri*
eral putlook, one compact; ferri-/;;
Germany^ inveterate and often
demonstrated lust for conquest.
customer,
which we
offering of these securities for scile,
or as a
buy any of such securities. The offering is made only
,
tary^ Tbe/lppser that federation,!
the better for all of us; a feclera,
Germany tjidn
second-best
our
and
arid is Under no circumstances to
.
:M?
the country from
was
TJxis advertisement appears as a Matter of record only
to
.
fo
} Gdnsider- Clso te
pect. Before the war,
as an
man economy;
engross
It was the consensus
advianced topics of statistics are that articles which would propa¬ nia; James D. Paris, Metropolitan
still inadequate, largely because of gate the idea of statistics and Life; C. V. Taylor,'U. S. Civil
which would indicate the need of
the great strides made in statis¬
•Service Commission; and Samuel
tical
progress
during the war, statistics in all fields should be
S. Wilks, Princeton.
I
which include the techniques ana prepared for the more general
loe construed
of Gerdecentralization of
fhe political structure, and. de~ '.
Concentration . of economic power
are carried through consistently.'* .
able degree of. recovery
attention
our
wil, parallel to a reason- >
be found
difficult
very
subject, which
laboratories and others.
qired in an
sense
somewhat
such -positions.
Such monographs might be en¬
couraged by the Association in ijts
professional function of advancing
the field of statistics and applying
the developments in these fields
leges and universities but also
fe
from government, industry, mar¬ to progress in other fields.
The Panel included persons of
ket
research agencies, research
informal pan¬
el
cropping up, .the training,involved
and* how the statistician .could
the demand
few of them was
physicists, 5 per 1,000
registered; mathematicians, 20 per
1,000 registered; and statisticians,
more than 30 per 1,000 registered.
Calls had come not only from col¬
as
topic on "The
Training of
•tatisticians,"
fas thorough¬
ly
National Roster
a
of^^states;wbiild be^^muclvbet-* :
ter than
as
a
single federal state such
Germany
Kaiser.
was
Germany
under the old
should not, of
x
*
part bought more than
course, be entitled to change |hat .
from- any other.
Since the war,
federal structure at will, for it is
Germany's economic prostration
to be imposed on her in the gen- •
has seriously delayed our com¬
on
solicitation of CM offer
by the Prospectus.
our
eiAl>ihtere^L/t^veri«ly/WA the*
-
1,342,192
*
plete. recovery/ In our own in¬
Allies,
terest we are vitally interested, in
•
^be^made for
rebuilding the Accnbmic pro^e^
ity of Germany.
;" ;
:
For these reasons, jwe have last
week put on the conference table
in London a memorandum which,
iin keeping with- bur liking for
publicity in politics :/^enevef
possible,- hasat Once been- re¬
the arrangements to
Shares
_
Common Stock
'
(Par Value $5 Per Share)
Central and South West
(to be known
until
Corporation
Central and South West Utilities Company
merger agreement;becomes effective)
and
especially the major >
Allies, should, if necessary,
the
bud
any
mip in
German attempt to *
modify that structure in contra- »
vention of the treaty and in con- r
flict with
the general interest* ;
^rolongeid pccupation, Which &ee<i ?
not, however," in pur bpihipq; jb^ *
than an; pecupation^'"pf"?orhe
briareas; wili therefore '*
ipprp
key points
bp necessary. Right-thihkihg Germans may themselves welcome it,
and Its/bost will be, a 'small preNetherlands Government-concern^ mium for safety compared to the
ing the peape/settlement to be suffering and cost of yet another
made with Germany." I
should
leased
publication/That mem-.the views of the
for
orandum -gives
'
»
-
:
'
*
something about
miich in it j So far for the decentralization *
which: is. in accordance with' the qf the political structure ot Gevf /
like
it.
.
tell you
to
I believe :there is
many.
American• view.
Price
|
$12 :peir Share
memorandum -squarely
main difficulty. That
difficulty lies in two seemingly
I Th
je
faces : the
conflicting
writers,
requirements ./
which
interest you as much as they in¬
terest us, and which must be recr
he ^tai^w pny
including the undersigned, as may lawfully offer the securities in suik State*
Copies of the Prospectus indy
The one is the
onciled.
economic
of Germany, a prerequi¬
site for the economic recovery of
recovery
Europe and for a
Lehman Brothers
A.
if!
G, Be,ckcr i/.Co.
'■■ //'«.
;
ftfeorporatcA
economy.
hazard Freres €/Co
Eastman, Dillon & Co.
V/c".// //■X///':
/:////:'"•
fodder,Peabc^wGo, LeeHigginsonCorporation LaurenceM.Mai-ks€5?Co.
Merrill I^rich,Pierce^ Eiriiner £/Beaiie
*. f. 1
I |
■
,*:■:££<
.
.
• v
Paine,Webber, Jackson £/ Curtis
•;v//;/ : V;:^;^-v^,Vr
Shields
Company
January 30, 1947
White, Weld £/Co.
healthy world
The other requirement
is, that adequate safeguards must
be devised in order • that the res¬
Goldman, Sachs & (Co.
/////'; ////•-//:
i
toration of
Germany's war-ipptennecessarily result
tial which will
from, her economic recovery,
hot endanger world peace/ On
solution of this
cess
do
the
problem the suc¬
pi^ the pdace treaty/Will de?-
,
/ v/i;■ yn:-■■■
j * Address by Dr;
at the
dinner
van
With regafd to de^concentration :
German ecpnomic. power/, the 1
Netherlands' memorandum contains a number Pf important , and, .
\Vbbelieve,/useful/suggestions."/j:
J Thq Ruhr has been, of old; thet f
principal arsenal'6f Germany/the *
Riiineland'(think of I. Gt Farben) t
Also/contains > Very dangerous in- |
dustries: The/Netherlands mem- •
orandum / recommends
that, in I
yiew of the • general' interest all j
natiqns have that, these regions
do not /once again become the j
sjtartirig-point of German aggres- T
sion, both be governed by an in- i
ternafional body on which we j
naturally would wish to be rep¬
resented.
The left bank of the
Rhine; sis:'U well klioyvh, has been
a
festering sore in the body of
Europe" for more than 1,100 years:
ever1 s« nee the notorious Treaty
of Verdun of 843. No solution of
what I might call the old-fash¬
ioned kind: a solution placing this
area
under- one state,: has : ever '
given satisfaction; Why should we
not attempt to find at last a soluof
Ihe Twin Difficulties ^
Kief fens
in his honor given
by Netherland-America Founda¬
tion, arid N/Y. Chamber of "Com¬
merce, New York CityJam- 22,
1947/
"* ' •
■
-
THE COMMERCIAL & FINANCIAL CHRONICLE
-tiorr on modern lines r an interna*
tional solution for an internation¬
proceeds of exports to France are
likely to become frozen while
those of exports to the U/S. yield
Britain's One-Sided Export Drive
ally, important and supersensitive
as in the case of Trieste?
■
l'
-■*
'
>■'?.•./
:
■
\1
v"
v*
")r>
m,'» .i
the
For
Iii addition—and this too
:
seems
importantsuitable safe¬
guards should be devised in order
to prevent the concentration of
too much economic power in too
few
|
of
German hands.
These are, from a general point
view, the main points we advo¬
cate.
They seem to us all impor¬
tant, and we ask our friend s an,d
allies
to
ponder them carefully.
know the Germans' all too
We
well. Based on that,
unfortunately
too intimate knowledge, we sin¬
cerely believe these ideas offer
'
a
real and, what is more, a prac¬
ticable solution/"
t-Vr?
J;#,
■
Economic Measures Suggested
;
number of other
a
points.-- There
are
observations
referring to the German customs,
monetary system, ana to a
sensible policy ,to be followed
When loans to Oermany will once
more have to be
are
the Western
in
exchanges of
currency" countries
The
forts
5
"soft
It
.
';
currency"
•
considered. There
observations concerning the
need to prevent German
dumping
economic discrimination
in
the
real
of
sense
the
term, so that henceforth only
sterling derived from current ex¬
ports to Britain would be avail¬
able for the purchase of British
moderate
premium, undertakes to
the amounts due if owing to
goods, pending the funding of the
old balances.
.'•
Ctransfer . difficulties the exporter f, This latter suggestion is of par¬
should be .'unable to receive
payticular, importance,: as it would
njent within the time limit fixed' materially
strengthen
Britain's
in the insurance
policy. So it is none too strong bargaining posi¬
the government and not the ex¬ tion in
the coming negotiations
porters that has to carry the bur¬ for the funding/of sterling bal¬
den of the delay in
receiving pay¬ ances. ; So'long as' holders * can
ment.*
As for - countries holding
spend "their balances "freely on
sterling balances, they simply pay Britain's goods there is little in¬
British
exporters* out " of " these ducement for, them, to make im¬
pay
concentrate their ef-i
"hard
to
tries.
only block¬
currencies out¬
side the Sterling Area) could be
the
Export Credits
Guarantee Department, a govern¬
office, which in return for a
coun-'
doubtful) - however,!
grossly whetlief rs'uch appeals if dr/volun¬
most
are
endeavor to
Herhi-j
are
that they, cannot
sense
risk"., with
I is
sterling;, tary action on the part of export¬
It is therefore very easy to export! ers has produced, or will produce,
v. ...
to such countries at a substantial1 any effect."/
overvalued in relation to
.
"I As for countries . with r*; During the war the- British pybblocked sterling balances," they go; licVwaj* asked ito make voluntary
balance^/":;'
1
portant concessions for the sake
out of their way to buy British efforts of many kinds- in the inter-i
Wha\ ere the measures that the of coming to an early agreement.
goods within the limits of possibilrj ests: of, victory- in spheres wherej
government may ' conceivably ap¬
the government was reluctant toi
Moreover, by ceding indirectly to
ity, in order to reduce their bal¬
ply in order to divert exports countries holding sterling 1 bal¬
Upply .cwnpulsion.
In most in-;
ances before the conclusion of the
stances the response ;was;sati;sfae-i towards "hard currency^ coun-' ances the proceeds of the dollar
funding agreement
• j
tries?
The following are a few
loan, the British Government has
But then, there was a war
The "hard currency" countries; tory.
profit.
_
.
neglected. in consequence byj
are;
and survival- depended
on,
on
tentative suggestions: (1) The sys¬
tem of licensing exports might be
materially reduced the amount of
dollars it can afford to. cede di¬
restored,, and licenses Vvould be
the!
cumidatiye effecia of the individ-'
many exporters.
The deficit in
relation to those countries has to
rectly in return for a scaling down
ual -efforts of^'43,000,000
of) do their bit. Most people con-i
the U. S. and Canadian/loans.* sidered .it their patriotic duty. toWere it not for the "success/ of assist, the /goyernmerit m
their;
the- export*- drive
to countries small way in ibis task of winning
which do not pay for the British the wur) That spirit no longer ex¬
granted
freely to "hard currency'(n countries; ' (2) Allocation
more
of the debt and
to manufacturers of fuel and raw
material—in so far
line"
it is in the
as
is
,for other major
The
concessions.-
sooner a, "red
* drawn in the books of
government's hands —- would be the banks, to separate existing
made conditional upon the export
.balances from-the proceeds
of
export surplus; the rate at which; ists, at any rate not to anything; of
a certain percentage of the outthe proceeds of these loans are like. the same cxterit/ iti-pairticu*;
current trade, the better.
y
:
"V
t■
lar merchants and manufacturers "put; to "hard currency" countries /
and
and
them
the
blocked
years.
insure the "transfer
can
in
be converted into
ment
be covered out of the proceeds
I.. Hie Netherlands memorandum
contains quite
sell
sphere.
they
for
currency" countries; (5)
sterling
balances
blocked
(which at present
ed
impossibility -of- obtaining
payment from/France
'
s
very
The
muoh-needed dollars. The exoorters themselves are not effected
by
<Continued from first page);
from1 countries
Special Supervision of Ruhr-Rhine the surplus of its; trade balance!
But neither he nor
with "soft,currency" countries and; tor. them.
Industries ! - - - ; r ' : ■;"
With/ countries ; holding blocked others dealing with the subject,;
A special regime of interna¬
whether in an official position orsterling/balances/; The /volume^
tional supervision for, Ruhr and
goods available for export is not nqt, have put forward iq public!
Rhine industries capable of in¬
unlimited,). _and the ease with any constructive suggestions as toi
what measures, if any-, they have*
creasing" Gemiany^ war-potential which they can ; be sold; on
thej
Would/ of course, seem to be in¬ continent, in the Empire and in in mind. The government has so
dispensable if we are not to be the
Middle
East
undoubtedly1 far I confined itself to expressing!
fooled again,
slackens the exporters' efforts toj the r desire-that-exporters Shoula;
area,
'•
to "soft
used up,
would be much slower.
.
,
have
"
All this is now realized in Brit-i
no
~i$) tinder
be. enthusiastic;
reason to
^
v,
the
Suppiies
L. B. Eberhardt
1^fti|]#th^SbciaIist; ^Gov-; icesjAci.the government could is^:
export; ■ drive f towanfc )erhm^)^enif^^cloirig ij "th^eyi -sue: orders ..directing;. particular
would be^ assisting'also ^the
cbuh-j
ain, -and the necessity for divert-!
jng
:
the
;
.
..
*.;*>'■) ;i/:
und 'Serv-
Opens |
WILMINGTON; DEL.—L. Beach.
companies to export t6w the de- Eberhardt is engaging in the ser
private-firm can make
-against/other countries/ There are
ly admitted. Even such a firm sup¬ 25% profit^ by s?ellmgr to Tyanee! sireddestinations;- (4). Tbe Export curities business as an individual
thoughts! on r^ucihgt the cost;of
•occupation; -on- denazification and porter of laissezrfa're as F*pfessor _iiid rpply - 5% .by .selling, to. the GJredifs5 Guarantee ' department ;. dealer from offices at 612 West
the contribution Holland could
make towards Germany's spiritual
and cultural reconditioning: Most
'on
.especially, c the need is stressed
ifor Holland to obtain some more
economic; compensation from Gerl
many than the paltry average of
.not quite 5% allotted, iii. theory
at;, least, to the Netherlands as
.their share in German reparations
"hard currency" countries is free¬
try."* If
a
;Hiutedl States,a it is -not. inclined ; could discontinue or curtail the
to direct ife limited suppR^ to the Jssuing' of Vinsurance rpolicies to
qly because the cover the transfer risk on exports
exports latter countryv
Lionel Bobbins admits reluctantly >
"doing J
the necessity
-
thing"
b
•
diverting
about
.
Mr.
Street.
Eleventh
cwas
Eberhardt
previously president of Eber¬
hardt & Co., Inc.
.
;
theJ outcome' of which will show
a
.'. glaring disproportion to the
damage and looting done by Ger¬
many, and will/leave* u«? nmte
"
■'
•
'-i-f.
■■
..
r
••
v
/
//1;: .of goffer tO;buy/«ny pC?uehT^fitures^:The offer is made only by
i
*
'
.•
-w
'■
>
'
J
■
W
' '*•
'
'
'
!
'
\
'
■
••.A.
,.■£*
*•'
•-
••
*
"
^ **
r •:? r
'
v
•v-.
-
'
means
cf the Offering Rospectu^*.:
VT
-*
-i
*
'
20 -
'■
Ji
•"',1.1.
• * -■
-
j
v
*
-
A
A..
.
?
.
r
v.-''•
.
.•'v-:.; V"-
•/
f "* •-^
-
-
frontier, as I
partly for ec64
^ahdg^atti^tfor' ;'htrategi<j
reasons; what we would like, in our
own and in the general
interest, is
.a
modern, straight, streamlined
frontier, such as the frontier be-<
,tween ycu and Canada.
the worst,
:case
.£
our
have alrea<%rsaid/
nomic
-it
St'
*
'
$25,000,000
when full Consideration is
given to German needs. ; We also
.
'
.
:
<
New Issue
hecdssarily/poGf/ iurinecessarity
.
n
4
even
.wish to rectify
»
•
•
■
In
Twenty^Flve Year. 2%% Debentures
any
Dated January 1, 1947
aggression-invit-
.ing bulges should be
-
Due January 1,1972
■
cut out..
But, however important, these
only the details.
The main
thing to remember is that we ad*
vocate:
.
»
are
.
'
■<■■■:
.
The
economic
recovery
of
and adequate safeguards against renewed German
aggression.
,
*
,
Chiefly through:"'
■'
-
Decentralization of Germany's
political structure, deconcentrai
tion
ofGerinany's economy
Power, and continued eCcupai
tion, be it only of key-points cr
V
*
r
/We are: not
^eas;////*-•./ t' ■>
people.
prising
*
-
'
*
i
a
highly
Ship...
.
-
heed: it in
of-constructive
the same
.
„
.
...
"
£of£. A major, surgical operatioii
is necessary. Let us then perform
mcoolly, judiciously
les^ly, not merely for
.
.and
fearj
the good of
the patient, ,but, also, .and in par*
*
tieular/for the good of
us
community of nations, as
States /
t
.
**>
Hai^riman Ripley & Co.
^Incorporated'
■
Halse^StuatfcIric
J
Otis &
Blyth & Co.,: Ince
Stone & Webster Securities, Gdrporatipn
,
\
://■
./.
;
Th0 First Boston
Glore, Forgan & Co»
Lazard/Frere^
Co.|
,(Incorporated)
j!
Corporation'
Kidder, Peabody & Co.
Lee Higginsoii Gorporation
;
We do not;- wish to- be vengeful;
But we also !do hot : wish to be
f
.
b$j&(U&i'M..eompiikh6e
statesman*
•;
.
'
emotienai
generally desirable solutions. Of
mjnd,,, the~Nether*
landsrmemorahdun* bears the ina4
print.\ We hope* that the major
Allies will
,
seems sur->
considering
in
w h a t
beastly manner the Germans havq
treated my compatriots for five
long years, how detachedly HoI4
landers can talk about lust and
spirit
A ■
v"""' i,--...
"
•; - ;—• >■ iii.j •
'
Copies of the Offering Prospectus may be obtained from only such of the undersigned as may
!
It sometimes,
that.. state
,
Price 100% and accrued interest
Germany
-
a
all: the
whole.
Morjrill Lynchjf Piclrce, Fenner & Beane
Hfiyderi^ Stbn«*& Coj.
White^ Weld & Coe
Hemphill^ Noyes & Gd,
W« El Hutton & Qoi
Faine^Webbfer^ Jacfeson &/Ciirtfe
»,•
'M
Hayden, Miller
Co
Spencer Trask & Co*
^-Thursday^January 30, -1947
THE COMMERCIAL 4 FINANCIAL CHRONICLE
ultimately offset capital liquida¬
tion and bring the free rate more
in
with the
line
dian
official.
Stock Exchange
Educational Film Sponsored
By Merrill Lynch on WCBS-TV Jan. 30
Cana¬
generally dull
but steady buying in golds per¬
stocks "Were
"Money At Work," a film prpduced under auspices of the New
York Stock Exchange for use in its' educational-program, will be
shown over CBS Television, Thursday; Jan. 30, under sponsorship
sisted.
WILLIAM J« McKAX
By
It is rio
exaggeration to state
that the Dominion of Canada of
would not exist without the Canadian Pacific Railway Co.
Indeed the original purpose of its formation was .to. link ;the : West
COast with the East and thereby permit the effective entry of.the
Province of British Columbia intok the Canadian Confederation.
today
•
"
tin\e its ramifications have extended not only into
of the. Domjiniph but<&
of Immigration and Colonization
throughout the entire world. With
and its /Department of Natural
over 17,000 miles of line the Ca¬
Resources this unique organiza¬
nadian Pacific ranks among the
tion
has
rendered
inestimable
greatest of the world's railroads
service to the Dominion in at¬
but this is only part of its activi¬
;
Since .tbat
every corner
tracting and assisting a large body
the specific commercial
field its direct enterprises include
of
operation of airlines, ocean
steamships, hotels of in¬
ternational repute, commercial
tivities
ties,
y
In
the
and lake
telegraph and. express services,
^and dealings in its extensivp land
holdings*
The ownership of land
and com¬
properties especially in
,the Western provinces provide an
asset of incalculable importance
mercial
which augments in direct
the rate of development
tremendous
of
'.area
ratio to
in this
virgin
re¬
In addition to a proprie¬
sources.
tary interest
in farms, lumber
"mills, and coal mines, the Cana¬
dian Pacific has recently leased
important tracts of land in the
Turner Valley area for oil explor¬
ation purposes,'.
^
Canadian
The
achieved
more
Pacific
has
than the mere ex¬
ploitation of its great economic
empire. <s Through its Department
of Industrial Development it has
immigrantsH
A survey of
is not
the company's ac¬
complete without
in¬
mention of the C. P. R.'s 51%
terest in the Consolidated Mining
Smelting ' Company^'wWchi op¬
erates, < among other widespread
mining properties, the Sullivan
mine
in
British
Columbia,
the
&
Tightens Sale of Can.
Securities in U. S.
Foreign Exchange Control Board
at Ottawa
ties
restricts
sale, of securi¬
payable in - IJ. S< dollars to
of
maturities
-years'
less
three
than
j
and requires funds be. re-\
sold to Canadian banks.
^
:;v.-• .v-"*'j>r."
According to a despatch of :Jan.]
.
v.
24 of the' Canadian Press the For-;
eign Exchange Control Board has
announced a tightening of restric¬
tions
the sale of Canadian
on
curitifes
se-j
United States-riiarkets;
on
by residents of Canada.
zinc- and
largest producer in the world of
lead.
With the recent
relate to Canadian
payable, or optionally
payable, in United States dollars
which mature or have a call day
sharp boost in base metal prices
within three years.
this; interest becomes of even
greater importance. Consolidated
Mining & Smelting has also an
extensive stake in newly discov¬
ered gold mines in Canada which
are likely to loom larger on Can¬
ada's mining horizon if the Do¬
minion Government takes the ex¬
pected but greatly overdue steps
to assist the Canadian gold-min¬
ing industry.
The sale of such securities
be
for
demand
will
permitted only if the United
sale
resold to
are
a
the
from
obtained
funds
States
bank in Can¬
(left), Managing Partner of Merrill Lynch*
signs ' contract with Frank Stanton
(right), President of the Columbia Broadcasting System, for the
Wirithorp H. Smith
ada,
or are re-invested in another
Canadian
foreign
security
of
Pierce,
equally short maturity.
first television show sponsored by a
re-invest
to
the proceeds
States securities.
in United
Beane,
&
.
.;
financial house.
Exchange
change
Merrill
of
Lynch, Pierce, Fenner & Beane, the country's largest
brokerage firm.
(WCBS-TV, Thursday, Jan. 30, 8:30 p.m.).
Thjs
will be the first time a financial house has commercially sponsored
a
the
stated
Board
external
Fenner
it was per¬
the present
Up to
mitted
The Canadian Foreign
the week there was a
^During
sustained
The changes
securities
television program.
was
made because there has devel¬
bonds which remained unsatisfied
encouraged and assisted the mi-, in the absence of adequate sup.-: oped a tendency to use the pro¬
-gration of foreign
industry to ply. The new Alberta 3%s, how-; ceeds from the sale of Canadian
Canada.
Its finest performance,
ever, traded in some volume at
ner
Preceding the film showing, Winthrop H. Smith, Managing Part¬
of the investment firm, will outline briefly the purpose of the
Exchange's program of educating the general public about the
Stock
securities business.
"Money At Work" delineates the mechanics and behind-theperhaps in its self-imposed task iy2 premium. Internal Dominion's
scenes operations of the New York Stock Exchange.The film, which
has been long-term 3s were very strong the purchase of foreign securities.
was produced by the March of Time for the Exchange, also seeks
in the field of immigration.
Al¬ and rose a full point to 99% be¬
to make clear to the investor the safeguards which the various ex¬
though the lack of population has fore profit-taking caused a reac¬
changes, as well as State and Federalf governments, have erected
always constituted
the greatest tion. -These bonds still appearvatto protect his interest.
I
;
drawback of the Dominion, the tractive for
long-term investment
i #. i.
Prints of "Money At Work" are being made available for show¬
Federal Government has never arid it will not be
surprising to
initiated a positive policy.
The see early action on ,the part of
ings at schools, churches, service; clubs, etc., by the Exchange. .
C. P; R., however, has long rec¬
the Canadian authorities with the
BOSTON, MASS.—Wilfred
ognized the urgency of this prob¬ purpose: of removing the recent Godfrey, formerly Comptroller of
lem and through its Department
causes of weakness in the free ex-., Key.sto.pe.Custodian
Funds, Inc.,
securities
markets for
outside
on
of national development,
Wilfred Godfrey, Treas.
Of Keystone Custodian
phange:rate^aripfhe£^
internal
-
(for
bonds', which
Dominion
Outlook in Building Industry
Cpngress.;SStreetr ;was ^elpcjeq,
50;
Treasurer-and
,
has reflected detrimentally on the
Canadian credit standing in this
§
Jan.
20;rkeyr£|
country^; Free 'funds,
CANADIAN BONDS
D i
stone
Custod-vJ
Fund's,/.
however,
strengthened during the week and
ian
the
Inc.,
mounting flow of industrial
capital .:*?»: v'? -sv.fr'~i. £• *'.&
{.to the Dominion should
i
vi.V
v
•
*
/
••
i
tor on
r e c
acts
OFFERINGS
V
WANTED
reqriired^n^averagefof seyeitl i^j velopedVin
Alberta 3s,
3*4$, 3%$
assets are sub¬
British Col. 4$, 4%s, 5 s
CORPORATION
Manitoba 4s, 4]/2st 5s
New Brunswick 4%s, 5s
Nova Scotia
4y2$, 5s
Ontario 4s, 4%s, 5s
CANADIAN STOCKS
Quebec 3s, 3%s, 4s, 4%s
Saskatchewan 4s, 4*4$,5$
A. E. AMES & CO.
excess
Ernst® Co.
fi .C
New
MEMBERS
York
Stock
It has
120
and
other
Broadway, New YprkS,N.Y.
<r
■
get
this
tion with
Comptroller
I
Mr. Godfrey.
with
tion '
to
Prior to his
^''y
Chicago 4, 111,
CANADIAN DOLLAR OBLIGATIONS
connec¬
sistant
Treasurer. to'
Commercial
of
the1 U.
the
S.
an
af¬
Reconstruction
Fi¬
Corporation,
i
filiate
-
Corp.
Taylor, deale
& company
Dominion of Canada
64 Wall Street, New
York 5
WHitehall 3-1874
Markets, in terms of United States funds, furnished on request.
CANADIAN
Wood, Gundy & Co.
•
1
,
14 Widl
Toronto
Montreal
Incorporated
Vancouver
SECURITIES
Municipal
Government
Street, New York 5
Winnipe|;
a
common
I
|
experir
for
his
producing nothing. The mjinj
succeed imizing of material shortages will
Custodian
Keystone
nance
231 So. L&Salle St.,
:
;
been
an operative builder, to
foundations in and 'his
framing up, only to be obliged to
Wilfred Godfrey
org anization,
stop work because he hadn't re¬
M r.
Godfrey
When he
was
with The United Fruit Co. ceived his sheathing.
and
previously was associated got his sheathing his mill work
was missing, then he had diffi¬
with Peat, Marwick, Mitchell &
culties with hardware, plumbing,
Co., Public Accountants. Mr. Ed¬
etc.. All the while be had -his]la«f
gar M. Brister, formerly Assistant
bor standing by and being paid,
to the Comptroller, has been ap¬
ence
to his associa¬
Funds, Inc., Mr. Brister was As¬
.
Exchange
leading Security and Commodity Exchs.
NY-1-1049
'cally.
Prior
pointed
NEW YORK S, N. Y.
n
of $150
million.
but
INCORPORATED.
TWO WALL STREET
i
stantially
London, England
Provincial
war.
production^:Will >
reach the consumer market. These
beqauseof interruptionsinthe !re-j wijil include fabricated building
ceipt of materials. With materials! boards as replacements, for lum¬
flowing ; freely, «' contractors pan ber. ■ Among them are insulating
build faster and more economy boards, plywood,;J gypsum boards
total
whose
MUNICIPAL
nine months to complete a house)
funds:
ment
PROVINCIAL
RECTOR 2-7231
a_
group of -mu- \
tual invest- >
GOVERNMENT
;
which -will tend tOrdisappear vjitri prospect for radical developments
the freer flow of materials.
Con¬
Jih; tbCPSaar
struction . Costs Were>: largely iri-j future; .within; the. next1 yeal. or
creased because of material short¬ two imprpyements in fariiilipr.innages. Iii the. past contractors have terials, many of which ^Wefrifde^
as
trustee vfpr
(Continued from page.596)
?
"r
..." /
Corporate
costs. ;
availability of labor
will still leave something to be
desired, there is no question that
more labor will be available in
1947. - A year- ago many men Were
still in the process of getting out
of uniform and it has required
time in the interim to train new
cut
these non-productive
While
the
7
sheets."
and asbestos cement
;
effective heating
systems
are in short range prospect, as are
better designed and more colorful
bathrooms and kitchens.
There
will be a wider use of glass in the
More
providing of more light and air*
public is becoming increas¬
ingly conscious of fire hazards and
there will be increasing demand
The
for
fireproof-.?and
fire
i
resistant
materials for both interior and ex¬
terior use..-;! ;• i,
.u
i,;
'.
.
The trend is clear and the banks
have
with
good opportunity to move
it; to perform a real civic
in community improve-
a
service
merit and-td profit through home
improvement financing.
It's like
one which the bartender
that final
pushes across the
On the House.
mahogany—It's
v
people in the* construction indus*
try. A great deal of progress |ia$
been made and is being made in
MIAMI BEACH, FLA.
-
>
Lawrence R. Leeby
augmenting the construction labor
pool.
" -
Will
Engage in Inv. Bsiness
—
Law-
| mentioned ence R. Leeby will shortly engage
consumer
confidence
in
lower in the securities business under
costs as a condition to attaining the firm name of Lawrence R„the projected construction total. Leeby & Co.
Mr. Leeby in the
There is every likelihood that the past was in the investment busi¬
public will have more confidence ness in Washington, D. C.
—and earlier—in modernization
and repair costs, if for no other
X V; Everett Opens ;
reason than that its investment in
WILLIAMSTOWN, W. VA.—X
this type of - construction is con¬
V. Everett is engaging in the se¬
siderably less than that in ; the
curities business from offices at
building of new structures.
A few minutes ago
While
there appeals
to, be no
707 Columbia Avenue..
Volume '165 * Number 4564
THE COMMERCIAL &
FINANC1AL CHRONICLE
cial,
"
*
(Continued from page 599)
approval of the Goyerhmentpf
United
the
States
is
ductive purposes,
Restoration
required.
stroyed
the
To give policy guidance to the
2.
representatives of the United
lyi'the Bank andFurid; ' \
,
*
i
and the.
I
States
of
United
the
States in. these
financial institu¬
international
tions with the
:
*
v
4.t
1
*
of guar¬
antees or participations in Joans
and other investments rriade by
.private investors; and when
-iStatesv
agehOies; such as i the ExporjtImport Bank, the Treasury,* etc.
render pMidic^irepo^ts iahd
recQjrimeridationS ? tQ3 tl)e
gre^s regarding thei operations
pi the gaph .hhd
-
|
ment- private'
|
cer*:
tain status, rights, and immunities
to the Bank
for example, the
Bank may sue and oe sued in
district
States.
arid
r "
f
countries
Other
followed
into effect. The Bank
Four
members.-
now
"
I
riext month
"The
or so.
.
has 40
Directors who
Governor
5.
conditions
of
For
of
Governors
may
their
first
regular
the
is
member
tors,
one
five
12
seven
tions.
or
a
na¬
Among
2.
The
Bank
that
otherwise
as
board under
chairmanship of a President
they have elected and who
under
no vote except in case of tie.
They have been meeting regularly
twice k week since May 7 at the
offices of the Bank in Washington.
the
tors is based
on
Executive
the
Direc¬
subscriptions
.
sunder the direction of the Execu-
4.
tiye Directors, conducts the ordi¬
nary business of the Bank. Subject
the
general control of the
Executive Directors, he is respon¬
for
the
Organization,
ap¬
pointment and dismissal. of the
officers and staff of the Bank.
r
■
and
a
.,
to
enable
the
that
the
United
the
be
States
•-
8%
in
the
local
in
j
- are
)
obligations of the Bank.
in the
In
cer|r
may be possible by fl
administrative
by Feb. 25,
1947,
payment
the Bank
and
has
announced
its intention to
call up another 5%
by May 1947.
In this manner the Bank has al¬
ready received
representing
which
it
$150 million
-2%
portion
invested in shortsome
the
has
obligations of the
Treasury. By May of next
will
have
available
U.
S.
year
it
about
$720,-
000,000 of U. S. dollar funds, some
$80,000,000 pf Canadian arid other
funds immediately usable in loan
rencies
not
current
such
readily available for
loans although usable for
administrative
the
Bank
The
may
incur
in
or
interpretative
j
will
thus
have
own
per¬
funds
larger amounts, and in order
replenish its working balances,
it must have
to the pri¬
recourse
vate capital markets. It is antici¬
will
that
eventually
market
its
the
securities
Bank
in
a
number of
make it
to
$48 billion,
jurisdictions
acquire
corporated ixi the instruments es*
tablishing the individual trusts,
:
i The Bank has determined
at all
times to maintain
a
high
of
,
degree
liquidity against its commit¬
ments to its borrowers and to in¬
vestors in
its
obligations. Thispolicy will require the holding! of
ca^h
and
other
liquid assets, de¬
rived from paid-in capital,
bor-;
rowings, and earnings, sufficient
to cover undisbursed loan com¬
mitments and to provide resources
;
to meet interest and amortization
requirements
on
Obligations
its obligations^^
of
the
k-f.
Bank
Although' the Barik may guafi"*
antee the direct
obligations of its 7
Bank
pated
in most
are
the obligationri of the International; Bank t
unless specific restrictions
are in¬
such
available for loans. For operations
to
Trusts
permitted
expenditures
haps $800,000,000 of its
in
i
cur*
rency of each member. A further
5% has been called for
International
the
of K
ait / iriiimrfarit
insurance5 assets,
tjain others if
T
;
many
iiow^ barred frpm investing
members, it is not believed that
at the outset at
least, this will be
the principal method of
financing %
reconstruction
and development. ;•
expected that the prin- f
cipal business of the Barik/ will bte :
the direct lending of its own funds
It may be
and funds raised
by the sale of its j
obligations.
|
Sucjti securities will be general |
obligations "ofv the* Bank, secured i
by the general assets of the Bank t.
own
•:
rather than by the pledge of
specific assets.
|
The
emergency long-term loans for re¬
construction
and
development
transition period of reconstruc¬
tion, arid therefore the Bank must
tiom
look
or
and
projects. The Ex¬
port-Import Bank has been so in¬
forming applicants for this type
In the making and implement¬
at
outlets
unlikely that
the
in
outset to
the
United
perhaps Canada.
of financial assistance.
,
of
th^ I
was enacted at
Irist fessiori of the legislature.
cant volume of securities may be
placed in such markets in the
programs
are reason¬
making or guaranteeing a
loan, the Bank shall pay due
called up' papital; it hris.received
regard to the prospects that tjte
and ris considering
certain loan
borrower, and, if the borrower
is not a member, that the
guarj antor, will be in position to
2t-is; in short, a going concern.
meet its obligations: under the
loan; and the Bank shall act
Loan Operations
'
| prudenfjy |n;tjhe Jnteirpstsiboth
The principal
purposes of the
i|y legislation
general to
withdraw the Export-Import Bank
from
the
business
of
making
the
the
-i'opii"
additional
as
would
obligations-
in
action to place the
obligations of |
quirements of its own obligations
the Bank in
legal investment cate¬
to private investors.
'
'
-I
gories.
,J/;//;;
i The first
2% has already been
H
a^sets^ of life insurarice i
paid in gold or dollars and an
companies run to some
The
any
signifi¬
investment
States and
~
authorities
of
the
United
States have interested.themselves
broaden
potential
applicant, has submitted ing of loans' the "Bank is 'pro¬
U. S. markets for the obligations
a written report
recommending hibited by its Articles of Agree¬
the project after a careful tech¬ ment from interfering in the po¬ of the International Bank. Legis¬
litical affairs of any member, nor lation legalizing such
obligations
nical, engineering, ; and eco¬
nomic study of the merits of the spaljl it be influenced by the po¬ has been' suggested in the
JTederalslitical character of the member or State legislative program of the
proposal.
^embers concerned. Only eco¬ Council of State Governments and
In the opinion of the Bank the
nomic
considerations shall foe the Department of Justice. The
rate
of
interest, and
other relevant to its
decisions, and these NAC has recommended action to
charges
are
reasonable
and
considerations shall 'be weighed legalize the
obligations of the
such
rate,
charges and the
impartially in order to achieve Bank for investment by insurance
schedule for repayment of prin¬
the 'purposes of the Bank which
companies
in
the
District
of
cipal are appropriate to the
have been mentioned earlier.
Columbia.
Action in
this field
project.;
7, • ' 7 7. ; '
5. In
The Bank has organized; it has
as
foreign markets—espe¬
cially European — which have
traditionally
financed
interna¬
effective operation of the Inter¬ tional investment.
Exchange and
national Bank it is the policy of balance
of
payments
situations
loan
representative
Export-Im¬
in
of the
'
The President Js the .chief of the
operating staff of the Bank and,
sible
bank
The
be called only
immediate minimum needs of the
competent committee, in¬
cluding members of the staff of
the
working funds.
may
borrowers. With the coming into
able for the borrower.
of individual countries.
to
the
the
ternational Bank, the Export-Im¬
port
Bank
has
extended
such
credits limited necessarily to the
3. A
Voting in both .the Board of Gov¬
and
obtain
opinion of the Bank
has
ernors
to
conditions which in
of
nish on. reasonable terms. Pending
the* effective operation of the In¬
the prevailing market conditions
the borrower would be unable
whom
as
operations, and the equivalent of
almost $800,000,000 more in cur¬
principal
agency to make foreign loans for
reconstruction and development
which private capital cannot fur¬
in
tive Directors act
serve
currencies.
Bank
or
financial institutions. The Execu¬
the
-
a report to the Con¬
of last March the NAC in¬
dicated-
is located
borrower, the
satisfied
attention
Vestment
to call'
volume' of
of its subscribed capital
20%
gress
members. Such
the central bank
is
the
these, i
total assets in-
tjrio Istates haying
The Bank is authorized
port Bank. In
other charges on the loan.
the Executive Di¬
rectors are many who have served
in high posts in public arid private
<
the
the Bank, fully guarantees the
repayment of the principal and
the payment
of interest and
subscribing nations
by the Gov¬
committees
A number of these applications
had previously been brought to
project
itself
Loan
i
f
billion, J
exist in 17 states. In four of
^£n|urance coriip^anies in
term
'
member which is acceptable to
elected
for the other member
ernors
Bank
comparable agency of the
some
Executive Direc¬
representing each of the
largest
arid
not
developmental
>
coming weeks.
1. When the member in whose ter¬
ritories
reconstruction
of maturities of from 10
range
• r
with I
having 62% of the
re¬
.
lowing conditions:
•
are
own
d
permitted.
^
^
Mutual
savings
banks,
total assets of about $17
i
meet interest and amortization
deci^ipp^ majyjf
or participate in direct
guarantee in whole, or in
loans made by private in¬
September.
There
war¬
Conditions
purposes-the
benefit of its
a n
to
ap¬
are
actively
applications of
France,
Denmark;
and
Chile,
which have beep supported by ex¬
tensive documentation, and loan
or
annual meeting at Washington in
;
:
loans shall be subject to the fol¬
>
held
a
both
cover
considering
vestors through the usual invest¬
ment channels for the exclusive
tors, and elected the seven elective
Executive Directors.
The
Gov¬
ernors
these
part,
initially in Savannah last March,
provided organizational and ad¬
ministrative procedures and regu¬
lations, delegated full operating
authority to the Executive Direc¬
receipt of loan
the
rise
to
amortization.
make
loans
met
terri¬
earlier,
would
Bank
12 to 25 years. All loans of the
Bank will be subject to regular
bus¬
on
the
mentioned
subscribed
needed
or
peacetime economy.
a
Loan
heads of their central banks.
Board
in
a
capital
an¬
projects. They cover only the fi¬
nancing of acquisitions abroad of
materials and equipment and not
local currency financing of labor
and other local costs. They cover
more
and, in the
postwar years, to
bringing
about
a
in
time to
their Ministers of Finance or the
The
that the
smooth transition from
appointed
already
letters of intent from
or
programs
through
members
immediate
tary of State for Economic Affairs,
Mr. W.^ L. Clayton. Other coun¬
-
so
quests
and
assist
his alternate is the Under Secre¬
generally
the
has
Denmark, France, Poland,
the Netherlands,
Czechoslovakia,
Luxembourg, and Iran. These re¬
their
To conduct its operations with
due regard to the effect of in¬
tories
the
have
loans
countries
other 80%
Bank
now
tions of the present 40 members the -International Bank is now !
qmount.to $7.8 billion. With the peririitted^ The principal one is, of j
addition of the.' four additional course, New York, \yhere eligibil- *
Up
to
nounced
To arrange the loans mode or
guaranteed by it in relation to
iness
Secretary of the
Treasury, - Mr. John Snyder, and
tries
in
ternational investment
and Fund. The United States Gov¬
ernor ' is
labor
capital of the
Bank is $10 billion. The
subscrip¬
about $8 billion..
The
dealt with first.
the
Uhited States of appointing the
same
persons to bpth the, Bank
be
borrowers.
urgent
projects,
large and small alike, will be
countries
most
and
will
Chile,
useful
have followed the practice of
of
£
'
authorized
erally invest up to 10 % of their
capital arid surplus in securities
of investment
quality of a single
issuer. No legal barriers exist in
the- case of national banks; pro¬
vided that certain requirements <
of the bank
supervisory author* i.
ities /are met / But in 12; states
representing some 6% of the total
capital, arid ;surplus .of all; hariks. ;
no investment
by state banks is v
.
and
provisions will result in
plications
other channels
are
the. service
Financial Structure/
The
tivity in the member nations, and
to facilitate repayment by the
international investment for the
of
::'i u
granted
purposes of
carefully. considered loans of a
productive character designed to
increase levels of economic ac¬
of equilibrium in balances
payments -by - encouraging
international
Governor and Alternate
a
These
territories.
4.
was
maintained.
•
conditions
-
-
loan
TP insure that
the
loan, can
assisting, in raising productiv¬
ity/the standard of living and
responsible for the conduct of the
general operations of the Bank.
Each
member
government
ap-
jpoints
3.
•
Bank is
Executive
'
1
the
accomplish the
the loan.
•development of the productive
resources of members, thereby
governed by two
bodies, a Board of Governors in
which is vested all powers, and
the
which
will
ance
of
Turkey,
nations,
•urposes
.
-
promote L the
long-range
balanced "growth
of intetnational trade and the mainten¬
suit
Syria, Lebanon, and Italy, were
recently made eligible for mem¬
bership and may be expected to
complete the formalities in the
1
pfihe-parik and the- re*
aymerit of its loans; such policies
aind 'such economic
copsequences
Uiereqf ;must be - given careful
corisideration in
passing ob the
a
«
investmentf by
*
resources J
accepted the Arti¬
Agreement to put them
of
I: ..To ensure that the proceeds of
the loan are used
efficiently
3. To
countries- had
cles
the' satisfactory attainment' of the
j funds raised by it and its other
Dec.' 27, 1945 sufficient
by
or
loan shall make
the .United
of
courts
politi¬
cal activity. But where
policies of
any
land\only for the purposes for
Which it was granted,
v v;
' : application..."/
2;'; -for ensure" that the prpject for
providing,' on suitable- conditions, finance for productive
purposes out 6f its otvn capital,
'
—
•
private capital is not available
on reasonable terms, to supple-
j
shall be sound and shall be
repaid.
The Bank must avoid
of
a
boRrp^ye^
importript ecq*
development.
"^Moreover, the Bank in the ad¬ nomic consequences bearing on
reconstruction
i
by 'means
vestrnent
repayment of ; the loan. It is in¬
tended that the loans of the Bank
purpos^ of specific projects
'4
ministration of
| developed countries. I
To'promote private foreign in- arrangements:
*The Congress ajsp provided
v
encourrigpmentVpf the
2.
foreign financial
jpperatioiisr
by
;^pial:i circuinstances^ bri • for tfte
development of productive facilities' and resources
in less
r
guaranteed
the Bank shall, except Jn spe-
;
p.eacehirie; needs
to
be briefly summarized.
Commercial banks in the United ;
States, with- capital and surplus *
of well over $7 billion, may gen- may
(^perisa^iori' tbri project and^ the- prospects- of
ri^h.
7.: Loans made; or
reconversion of productive
facilities
!
for its
The present status of eligibility
the borrower
fejcejve^. suitable':
including the
of economies
disrupted by war;
or
investment
and
policies of
as
the latter might
affect the useful catyyirig but of
The International Bank
>
613
I Among the principal
purposes
pf the Bank is the promotion of
long-range balanced growth
of | international
trade end the
the !
efforts
forms
grams
a
"to
part
of
a
of the legislative
number
of
pro¬
national
and state associations of financial
Bank, though not strictly f
speaking a corporation since it is ;
not incorporated under the corpo- •
ration laws pf any U. S. jurisdip- ;
is a • legal entity with most
the usual attributes of a cor- ;
porution bestowed by interna*
tipnal agreement implemented^ by f
the doriiestic legislation of the
members.
The
Bank
may make loans or
only to the extent of
100% of its unimpaired subscribed
capital, reserves, and surplus—at ■
the present time $7.8 billion. This
automatically fixes the amount of
its own obligations which the;
Bank may usefully issue. This
;
guarantees
also ensures that the Bank at all
times will have at least twice
as
obligations to pri¬
vate investors—its loan portfolio
plus its cash, segregated reserves,
and unpaid capital subscriptions.
The Bank will apply for regis¬
many
assets
as
tration of the Bank's bonds with
the SEC, qnd it will apply for list¬
Finally, meetings
ing of thevbonds on the major ex¬
riiaifitenance of eqmlibruim in have been held-with the principal changes. A first draft or pros¬
balances of payments, conditions investing institutions and state
pectus and registration statement
yhiph are important if the bor¬ authorities in many parts of the is now
being discussed with the
rower
is to be in a position- to country; It is, of course, too early
SEC.
'
"
-.-v — V1 I'
M.
meet its obligations-to the Bank. to predict the final- outcome but r
The-bonds may be issued in the
Thpl Executives Directory jpft the present indications suggest that United States only with the apBank must, therefore, in passing action may be
expected during
Brink are:
r;
j
whose territories the project is'
pyovar- of - the NAC. They -will
the- course- pf -the
IjT ;Tp 'assist" infthe reconstruction j located ;ari4 of I the >member# as On on individual loan application," tive sessions for -present legislaj- probably be issued. in< more thai*
f
many of the prin¬
giyp --careful attention riot only tq
arid development, of territories fit a "whole./
^ v- - "
one
jgiatiirity • ranging from- per-*
&0 idetails of the particular, proj¬ cipal classes. Qf :investors in the
ofraeriaberi^by rfacilitatiri^the 6. -Inuguaranteping
p loanmadeby ect but must consider their re* states in which/ large investment hrips 10 "years to 20 or 25 years*
investment of capital-for pro¬
other inwsto^s, thp
gank re* lotioh to the broad trade, finan,^ .funds exist.(Coptlliped pa page 615)
.
institutions.
5
.
-
-
■
'
-
-
.
.
THE COMMERCIAL & FINANCIAL* CHRONICLE
which show the best relative
con-^
servation of asset values—Fidelity
Fund and Broad Street investing
In figuring net -asset value de¬ ferred stocks; arid 51.81% in equi¬
for 1946 in the following ties. This compares with Dec. 31,
table, asset values as of Dec. 31, 1946 ratios of 24.29% ill cash and
i
cline
1946 have been adjusted for total
tively; of their assets in cash at dividends paid during 1946. Div¬
the year-end.
Consequently, the idends, both ordinary dividend in¬
evidence indicates that manage¬ come and capital gains distribu¬
rial ability to select better than tions, were generally substantial,
on
average security groups and situa¬ thus affording high returns
tions had a great deal to do with asset values at the beginning of
---had only .6% .and 2%, respec¬
By JOHN DEAN
ft
v
-
1946 Results
....
Additional reports
continue to indicate a
received; covering full year 1946 operations
superior showing by investing* companies as
the favorable
1946
compared with the general market.
Eleven open-end funds tabulated below generally did better
than the general market, as measured by the Standard-Poor's 90Stock Average, which showed a decline of 12% for 1946.
By comparison, asset values of the 11 in¬
vesting companies showed declines
averaging 5J/2%, with seven of the
11 companies showing declines of
INDUSTRIAL
Particularly outstanding among
the funds showing lower than av¬
erage declines were Fidelity Fund
and Broad Street Investing.
Both
of these funds
end
of
Group Securities, inc.
-v
,
•
A1
'-v.
'i
k A CLASS
.
known
as open-
funds, yet their asset
values declined net of only 0.8%
for Fidelity Fund and 1.4% for
Broad
Street Investing.
This
would
compare
very
favorably
with the open-end balanced funds,
which are generally credited with
comparatively high stability of
SHARES
yy
are
stock
:>•••'
OfjT
SIB
asset
values
because
of
propor¬
tionate
investing in defensive and
aggressive securities.
Other funds showing much bet¬
ter than average fluctuation in as¬
set values were Dividend Shares,
State Street Investing and
Se¬
lected American Shares, with net
declines in asset values ranging
from 2.3% to 3.7%.
There is no mystery involved
in the consistently better showing
by investing companies as com¬
pared with the general market.
Beginning in September, security
-
A PROSPECTUS ON REQUEST
U
from your investment dealer or -
Distributors Group, Incorporated
63 Wall
Street, New York 5, N. Y,
markets in 1946 had a wide range,
and
therefore
managements had
full
•
-
Prospectus upon request from.
your investment dealer, or from r
SECURITIES
NATIONAL
RESEARCH
&
CORPORATION
120 Broadway; new york s,
n.y.
and 56.07% in equities.
Dividends
Investors Stock Fund—Dividend
of 12c per share
of record Jan. 31,
Asset
1946
Asset Value
American Business Shs.__
Broad
Street
Dividend
$4.08
20.64*
1.54
;
24.73
now
available summarizes the tax
0.14 —2.3
article
time
1.00
0.33*
0.80
Invest.
14.18
16.77*
Incorporated Invest.
23.80
30.44
26.02
29.34
1.10
0.70
15.67,
0.50
2.40
2.90 —7.5
all
{The
views
in this
expressed
do not
necessarily at any
with those of the
Chronicle. They are presented at
those of the author only.'] •
coincide
1.80 —5.2
11.59
Fundamental
Mass.
Invest.
Trust
Mass. Invest. Second
1.13 —8.7
on
£
series.
2.00 —0.8
1.00
dividends
1946
of
status
2.11—1.4
26.95%
1947.
Stocks — Bulletin
York
New
1.38
-
.
1946
Spec.
$0.25 $0,399—9.1%
0.73*
1.72
Dec.
Total
Reg.
$0,149
$4.93
18.25
Invest-
Shares
Value
Dividends
Dec. 31, Dec. 31,
1945
1946
has been declared,
20, 1947 to holders
payable Feb.
Experience—11 Open-End Funds
Fidelity Fund
less than that group average.
\
MACHINERY
the year.
experience.
governments; 19.64% in Invest¬
bonds and preferreds;
ment grade
2.10—14.9
National Invest.
10.68
11.90
0.30
0.41
0.71 —4.3
Selected American Shares
11.76
13.88
0.35
1.25
1.60 —3.7
Street Invest
44.49
53.90
State
*
Adjusted for 2:1 split-up.
News
<
8.00 —2.6
Views
and
Affiliated Fund—Net asset val¬
Building Shares points out that
building material shares have ad¬
vanced
from
more
the
October
Move to Exempt News
From Trust Laws
Representative Noah M. Mason
(R.-IU.) has reintroduced a meas¬
ure, which he first proposed in
the last Congress, designed to ex¬
empt
news
gathering
agencies
from the anti-trust laws, which
he says is necessary to "clarify
and nullify" a Supreme Court rul¬
ing that The Associated Press vio¬
$4.G5 per share Jan. 8, lows than the
general market.
1947, compared with $4.34 per
Investor Stock Fund—Net assets
share Oct. 31, 1946. Assets Jan. 8,
1947 were 96% invested, with 4% were $8,316,013 Dec. 31,1946, com¬
being in cash and government se¬ pared with $3,693,809 Dec. 31, lated the Sherman anti-trust act*
ue
was
1945.
curities.
Broad
Street
Investing—Liqui¬
of
Number
shareholders
through by-laws which limited its
Dec. 31,
membership, Washington Associ¬
1946, compared with 2,250 Dec. 31, ated Press advices stated on Jan. 8.
to
increased
has
4,964
dating value was $18.25 per share 1945.
31,
1946,
compared with
Keystone — The
10
Keystone
$14.27 per share Jan. 1, 1930, after
payment of capital distributions Funds had net assets of $159 mil¬
of $2.90 per share and income dis¬ lions Dec. 31, 1946, compared with
tributions of $8.76 per share for $160,776,000 Dec. 31, 1945, after
the period.
paying out $10,362,000 in special
distributions and $6,751,000 in reg¬
Dec.
Dividend
Shares—Nation
Securities—Latest
issue
of
Wide
"Per¬
spective" reviews 1946 and con¬
cludes forecast for 1947 with fol¬
play for initiative in adjust¬
ing portfolios or building up cash lowing observation: "Although se¬
lectivity is always important, it
position or defensive securities.
Taking refuge in cash was, of promises to be particularly so in
1947. While we cannot rule out
course, justified at certain stages
the possibility of a second leg of
of the market last year, but it was
the bear market as a reflection of
by no means the principal reason
the economic readjustments lying
for the excellent 1946 showing.
Some companies listed do report ahead, we doubt whether this will
be severe in degree or prolonged
a fairly large cash position at the
in time; and we believe that care¬
year-end, the notable funds in this
respect being Fundamental In¬ fully selected common stocks at
The
Chairman of the House Ju¬
diciary Committee, Representative
Earl
C.
Michener
(R.-Mich.),
stated that the legislation would
receive early consideration by his
committee.
advices
same
held on the
It was ap¬
proved by a judiciary subcom¬
mittee, but it failed to clear the
Hearings
ular dividends.
The
added:
were
Mason bill last year.
Manhattan Bond Fund—Number
of
shareholders
13,000,
now
with average
220 shares.
totals
over
holding of
Sales of the Fund are
full
before
committee
adjourn¬
ment.
reported to have been remarkably t The chief section of the bill
well
sustained
during recent provides that the anti-trust laws
months. ; •
shall not be construed to; bar any
Investors — From "press service company" from us¬
ing its own discretion in picking
31, 1937, when this com¬
its customers, e >
pany became a mutual fund, to
Dec. 31, 1946, a $1,000 investment
in the shares has appreciated in NLRB Rules in
National
March
value to $1,472, including $108 in
Foremen Case
capital
distributions.
Investing
in relation to the
The National Labor Relations
Dec. 31, 1946; and Massachusetts
policy favors growth stocks.
prevailing yields of high grade
Board on Jan. 10 issued a unani¬
Investors
Second
and
Selected
National Securities & Research
bonds shoujd, provide satisfactory
American Shares, with 18%
mous decision on the foremen's
of
—Not,; available to dealers is a issue, ruling that the Foreman's
assets in cash. But on the other investment experience"
,Vl
Group
Securities—Bulletin on complete suggested mail campaign Association of America, an inde¬
hand, the companies tabulated
vestors, with 23% of assets in cash
current levels on the basis of their
favorable yields
offering three different programs
of National Series,
each providing
monthly income. New folders also
available
on
Selected Groups
Union Bond
Fund A
Series, featuring favored
shares, and Industrial
Series, featuring growth
Prospectus upon request
OF INVESTING COMPANIES
•
Shares—Bul¬ quote:
"James J. Reynolds, Jr., wrote
Fund's 6.3%
net decline in asset value for 1946 a separate concurring opinion in
(adjusted for capital gains divi¬ joining in, the decision with Chair¬
compares
of 18.1%
the
with average decline
dends only),
,W,
Dealer or
Lord, Abbett & Co.
INCORPORATED
HUGH W. LONG & CO.
New York
(NCOSfORAUO
48 WALL
to*.
STREET, NEW YORK S.
—
Chicago
Wellington
Fund —Assets Jan.
14, 1947 were 28.63% in cash and
government securities; 19.56% in
investment grade bonds and pre-
Chicago
snoftts
Exchange, and average decline of
45% for 50 other well known
stocks for 1946.
Los Angeles
N.Y,
actively
the N. Y. Stock
for the 25 most
traded stocks on
Prospectus from your Investment
industry City, the Associated Press stated
Stocks in a dispatch from Washington.
stocks.
From
these
press
advices we
Selected American
letin
■
pendent union, was a proper bar¬
gaining group in a Detroit plant
belonging to the Chicago Pneu¬
matic Tool Co., Inc., of New York
SHARES OF CAPITAL STOCK OF
man
Paul M. Herzog and John M.
Houston.
"In
his separate opinion, Mr.
Reynolds said that while he sup¬
ports recognition of independent
unions to bargain for foremen he
union representing
is against one
and
foremen
both
ordinary
workers.
newest member
board, has dis¬
sented in a recent foremen's ease
for that reason—the union in¬
volved ^represented both super¬
visory and rank and fUe workers.
"Mr. Reynolds,
of the three-man
eystone
"The Chicago Tool case
NLRB on the
Custodian
came' to
independent union's
petition for an election to deter¬
mine if the company's Detroit
plant
F
from
pour
may
he obtained
Prospectus may be obtained
local investment dealer or
your
TLe
represent them in collective
bargaining.
"By its unanimous decision the
NLRB granted the petition and or¬
%
Prospectus
Prospectus
supervisory workers wanted
it to
Keystone Company
of Boston
50 Congress Street, Boston 9, Mass.
THE
fronJ
local investment dealer, or
PARKER
CORPORATION
ONE COURT STREET, BOSTON 8, MASS.
may
be obtained
from authorized dealers, or
SELECTED INVESTMENTS COMPANY
135 Sooth La Salle Street
CHICAGO 3,
ILLINOIS
dered the election
Jheld within a
month. The Board
said the case
decided before it put into
effect a
suspension; of - consid¬
foremen's cases while the
temporary
ering
Packard
preme
case
Court."
is
_
before the Su¬
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4564
Volume 165
515
highly improbable
The International Bank
-V
"
>
sisting of its outstanding loans
plus the securities in its reserve
funds, plus the amounts due from
member
governments on their
capital subscriptions —would be
quite certain; at all times, to be
more than sufficient to cover the
and at least the longer maturities
will be subject to amortization.
The bonds of the Bank will not
be United States bonds, nor will
they be guaranteed by the United
States. They will be very well se¬
cured by the substantial assets of
by
of
ing
the
the
subscription of the
United
States Government,
amounting to $3,175,000,000. The
capital
Bank's
other
also
will
resources
important backing
obligations, as the follow¬
ing discussion will show. v..
Perhaps the best way to analyze
the security behind
the Bank's
obligations is to set forth, in an
over-simplifed
manner,
a
pro
contribute very
for its
quality and fully suitable for in¬
by
institutions
and
vestment
trustees in the United States. The
statement
forma
Articles of Agreement were there¬
fore drawn in such a manner that
the
of the Bank will be
resource
the
it would issue should be of high
the' resources' of
outstand¬
Bank's obligations. One
conservative
Articles£ of
Agreement, and by the compe¬
tence of the management.
In setting up the International
Bank to operate in the manner
outlined above, it was recognized
as essential that the securities that
Bank,
provisions
to the Bank's
^
position
prospective
vifX'"''
hence:
Bank—coij-
years
some
S-
■
•
*!J
(Millions ©f Dollars)
Cash and Investments on Hand
900
$
Investments
Cash and
/
The remaining
is subscribed by the re¬
maining countries,
and
among
these are quite a few whose debt
history is very good. On the basis
of past performance, the Bank's
capital resources appear to be of
high quality.
The uncalled 80% of the
3,175,000,000 capital subscription of the
United States is available without
further legislative action to meet
such calls as may be issued
by the
Agreements Act) reads
"The
is
—
time
when payments are
re¬
quired to be made to the Bank.
For the purpose of making these
payments, the Secretary of the
Treasury is authorized to use
as a public-debt
transactjion not
to exceed $4,125,000,000 of the
proceeds of any securities here¬
issued
bn the folloy/irig
statement rests
assumptio^:;;; £
members have been
admitted, increasing the capital
subscribed by $500,000,000.
2. Sufficient time has elapsed
to
reach
a
for
mature
loan
position with loan con¬
continuously amounting
90% of the loan limit and a
tracts
small lag of $500,000,000
in loan disbursements. It is un¬
that such high figures
for loans committed, and dis¬
bursed will ever be maintained.
likely
3. Special Reserve has been com¬
puted at legal minimum of 1%
Surplus has been
of
are
that Act
overall world condi¬
tions, the Bank might work the
matter out over a period of time
with the borrowing nation, and if
be at
should
settlement
the
a
cents
100
on
that it
minor nature
could
be
disbursement
relatively fast,
say
over an
eight period, or much slower,
15 or more years.
say over
defaults are incurred on
—
a reasonable assump¬
4. No
loans
period in which
being disbursed.
tion during a
funds
are
amount of Canadian
other
currencies •' arising
small
5. A
and
paid-in capital has
employed
in > making
from
the
been
'
loans. v,
;
•
•
issued
except in the United States. To
the extent that foreign currency
obligations are issued the se¬
curity behind the dollar ob¬
ligations of the Bank is increased,
■
v"
iu- £.
;
£j
v,-
;^ter the
Bank has reached this
stage, it may encounter periods of
strain involving possible defaults
by borrowers. It is, therefore, im¬
portant to look closely at the
various forms this strain will
and
take
analyze the ultimate effects
the Bank's securities,;
upon
In the first place, defaults
to the
International Bank are unlikely to
be
complete. Amortization may be
postponed or interest may be paid
only in the local currency of the
borrower. Arrangements of this
nature for three-year periods are
contemplated in the Bank's
Arti¬
cle^ Of Agreement. If the defaults
repay¬
be
treated
shall
thereof
ments
and
public-debt transactions of
as
the United States."
to
member
the
on
capital
its
subscription
the
of
the
as
is
Bank
capital must be main¬
by the members at the
equivalent
in U. S. dollars of
1944.
It has been the purpose in the
foregoing paragraphs to conceive
of the worst situations, both in
terms of global amounts and in
terms of time. The factor of time
priate amount of the Bank's own
outstanding obligations. Suppose,
however, that
there is
number
substantial
Even under these
cannot
a
persistent
occasioning
condition
world
a
of-defaults.
conditions,
one
that all borrowers
assume
members fail to respond to a
their
ion
may
contirhie to* iftake
calls,
up
capital
call
the Bank
subscriptions,
rata
pro
to the full amount of its
subscribed
unpaid,
and
would default, or that all defaults
until the amount received by the
would
Bank is
be
complete.
tion
interest
amortization
and
it
and
commissions would be drastically
reduced. During this period, dol¬
or
and
call
a
of
Bank
in
the
the
of
and
Bank's
analysis
posi¬
the
that
assume
capital to meet current
does
not
can
be considered
realistic.
'
However, a balance - sheet
analysis omitting the time factor
can
be made.
Summing up the
assets shown in the pro forma bal¬
ance
sheet previously set forth,
it
is
that
seen
special
U.
and
the
S.
total
of
International
the
dollars
on
loss.
hand, plus
S. dollars without
recourse
will take
50%
the
of
of
care
Bank's
obliga¬
investors, leaving $3.4 bil¬
obligations to be met in
other ways. Against these obliga¬
tions, the Bank would have its
loan portfolio of $8.1 billion, $4.2
of
billion
Perhaps not sufficient attention
has been focused on the very
This is
which, for this
total of $12.9
a
of
capital, (Certainly, this would be
the measure of complete success.
The Bank and its members ex¬
billion in
members
to
dollars. In other words,
pay
pect this to occur, and'operations
in
based
promises
Bank's
would
obligations by
far, beyond
ture
mature
another
loan
at
way,
pQsition
other
of only 26% on loans and
than
the
United
States
cipal
provide the Bank with
propriate staggering of maturities
Bank.
and
long-term
with
this
fact
a
consider¬
able amount of liquid assets with
which
meet
to
debentures
payments on
guaranteed
and
its
In the pro forma state¬
ment above, the total of these two
assets amounts to more than 10%
Bank
total
obligations of the
For example,
(interest and amortization
charges)
on
$5 billion of the
Bank's obligations could be main¬
tained;■•without; calling on' the
Bank's unpaid capital, for a period
of ithree years.
Let'.it be assumed- now that the
depressed world conditions refer¬
red to earlier have continued and
that
the Bank's gold and dollar
liquid assets on hand have been
largely exended. At this point, the
Bank": would
ton
but
to
not
its
capital
paid in. The
debt record of the member
tries provides
rion
by
of
United
which
an
which
soundness
The
prospect
have
coun¬
example,
stability
dom
capital,
if called
$65,000,000
or
Canada,
45.6%
of
the
billions
significant matters; and
the Bank will lose
the
on
in the
"for¬
suffer
re¬
'
m,~
quired to meet the Bank's prin¬
In
significance of
'*
'•
.-ie .'•••••
■,
•
v.r"
by
reference
y
:
to the probable size of the
in
foreigners
?
*
f *
% M.
:.§|j.
DoHarshic-
(In Billions of
;i,
,
..
OF THE UNITED STATES,
1920-40*
\
i
•
investments
-
Net
,
tabulation show¬
1920-40.
-
What the United States put in:
'*■.
Estimated investments abroad at end of 1919—
British
payments
to
a
Direct
(Stocks,
1.
'
.
*
.
'''V-V
experience of the United States,
PRIVATE FOREIGN INVESTMENT EXPERIENCE
,
*
:?
Following is
;
this great margin of coverage for
v
financial loss.
ing the private foreign investment
?
the
assessing
part of its
obligations should
Bank's
no
V '
'.
cipal obligations.
some
capital. Nevertheless/the investors
Portfolio
high-lighted
•
the
failure in these fields may mean
loan
Bonds, Etc.)
ther
to
organizations named
directly concerned with them.
These are
point
of
eign" assets of the Bank is
The
any one year.
new
Investments
\
V...
'
2.6
Toital
16.5
3.9
investments abroad from 1920 through
1940
(gross new investments abroad of $11.8
less amortization receipts on foreign
dollar bonds and net resales of foreign se-
the
billion
postwar period, which it is esti¬
mated will run around $8 billion
annually.
gium's
Similarly
5%
subscription
in
amount
amounts
United
the
some
to
Total
1,000,000
U.
Income
$694,000,000.
if
highest called
,
,
v
ill
any
one year,
but it is
■-
from
Total
Excess
of
what
what
on
the
United
States
investments
in
got
States
put
out
«
'
'
-v-
-A.-'Vj.1.
r
6.9
i3;.4
s.
•
,
,x
over
;'.i
7.0
0.8
[
"
4.9
v-'..I....
1.5
in—::
Canada.
7.4
12j 3
14.4
m
K'4- V -"Vr'S
•
7.2
8f.7
.......
/n
Source;
Testimony of Wayne q. Taylor
mittee on Banking and Currency. .
»
-
to 03
7.7.
Vrr
—i
the United
"■Includes
3.3
7.2
!
•
investments
1920 through 1940—1
—
;
6.2
received
payments
abroad
States
S. "dollars,
3.6
—
of investments abroad at end of 1940_:—
Value
Honduras might well fail to pro duce
_„i.
%
million)—
What the United States got out:
2.
Belgium's
while
to
curities to foreigners of $4.9
Bel¬
of
.......^
enjoy
five
whatever
recovery
one
any
ex¬
,
3.
and
subscribed
in
are
the
unlikelihood of such-can- be fur¬
assets
States
capital sub¬
unable; to deliver
5% of her capital
subscription in
to
the
intermediate
an
about
Wh':
"she would be
$11,250,000,
theBank's capital.
King¬
but it is most unlikely that
year,
of
of funds raised in the market, no
calls.
might be unable to pay 1.3
scription)
At
obligations
countries
United
billion in dollars (her
the
important
are •
Bank and the
commitments and say $3.6 billion
meet these
the
of
the
increases
member
For
~
the
that
be able to
Interesting crite¬
measure
and
obligations,
greatly
will
to investors.
service amounting to 6 % annually
subscribed
an ap¬
se¬
curities.
the
given
organization.
change stabilization, and political
is
ceed 5% per annum,
lending
Proper world trade policies,
uncalled subscriptions of members
in the special reserve fund would
hand and the investments
closely related to
the Bank as an in¬
of
success
ternational
re¬
a
•
are
the
in
required to. meet in full the prin¬
on
;the
Of- '
ganizatidn,
sary.
Expressed
Nations,f the
proposed International Trade
would lead one to believe neces¬
the
the United
of
International "Monetary Fund,
future expectations
or
the
world economic scheme. The fu¬
would go
anything which past
experience
with
however, is merely a part of the
ratio of
a
3.8 to 1. Such coverage
not agree
spirit of the institution. The Bank,
the
cover
anything less than this
on
goal would
of members other than the
States
real
prospects that the Bank may op¬
erate with few, if any, calls on its
the members have agreed
promises
strength
the Bank's
of
curities during the same period.
capital subscribed by
other countries, and $0.6 billion
of other currencies
inherent
make would compare very favor¬
able with the record of other se¬
of
purpose,
this
obligations. Certainly, should any
such condition as those premised
in this paper occur, the record
the securities of the Bank would
tions to
lion
•
sought in the fore¬
holders
to
means
than
more
total
to
:
.
what
and
other government. Omit¬
ting the problem of interest, this
any
sum
order
going paragraphs to demonstrate
the
great economic 'stress tlje
Bank is designed to withstand,
tion,
amounts
to ! $3.9
billion,
definitely and certainly available
to
...
It has been
80% of the U. S. capital subscrip¬
in U.
in
Bank
protect its bondholders from ar y
fund investments
reserve
even
an
the excess in th|s
amounting to $7.2 billion. A
table containing additional details
on
the foregoing
is appended.
Even though the records on port¬
folio
investments : during
this
period was hot brilliant, a return
of even these proportions would
be far more than needed by tfye
case
debenture needs would hardly ex¬
lars
recent
better showing,
securities,
which
have, made-
Americans
in¬
this factor into account
no
take
covery
guarantees made by it.
on
is reasonable to
It
strengthens
of the
vestors
sufficient to meet its ob¬
ligations for funds borrowed by
A
assumed.
.
materially
United
members, and in case some
sometimes
study by the Bureau of Foreign
Domestic Commerce, cover¬
ing the period from 1920 through
1940, provides the basis for esti¬
mates on the subject.
To sum¬
marize this study, American in¬
vestors have gotten out of theft
portfolio investments (stocks,
bonds, etc.) $1.5 billion more thain
they have put into such invest¬
ments,
Direct
investments • bjy
and
currency
other
appro¬
is
local
its
future.
Nevertheless, it may
pointing ; out that the
record of returns On these past
foreign loans is hardly as black as
tained
and
an
Also
written
are
worth
be
any
currencies
same
debentures.
reserve
retiring
incur
would be convertible into dollars.
Furthermore, the obligation of
each
the
not
nominated in the
to pay
of
6. No securities have been
Bank
the
or
will
risks of currency depreciation. Its
loans out of the proceeds of the
sale of debentures must be de¬
independent of the obligations of
tions that the Bank's income from
reached
under
Bank
by charging the special
is
and
mitment
be
Payment
purpose.
Depreciation
The
handled
whether the rate of loan com¬
would
extended to include
are
subsection of the subscrip¬
Fund
less
the dollar, the
loss to the Bank would be of such
than
Second
tion of the United States to the
casioned by
Certainly, it
would
be
only
after
repeated
years of depressed world condi¬
estimated conservatively. These
this
isolated nature, not oc¬
an
the
under
Liberty Bond Act, as amended,
and the purposes for which se¬
curities may be Issued under
7,300
500
$17,400
This pro forma
totals
the
the
pay
subscription of the United
such
annum.
to
$950,000,000 of
of
the
United
States to the Fund not provided
for in subsection (a) and to pay
6,800
-
Total
per
of
States to the Bank from time to
Undisbursed Loan Commitments
very
authorized
subscription
Obligations on any Guaranteed
Loans
to
Secretary of the Treas¬
balance
after
Bank
follows:
as
guards and limitations
into the Bank's Articles of Agree¬
ment to prevent any recurrence in
No Risk of Currency
on
obligations.
$ 9,600
Debentures Outstanding and
f
the
$ 8>500
600
500
Capital Subscribed
Surplus
Special Reserve
the
group
of
record
same
17.2%
LIABILITIES
new
This
24.0%
$17,400
Total
1. Some
to
their
the
$2,540
4,260
Other
internal.
or
subscribed
capital, have the
-
U. S.
South
capital. Western European coun¬
tries, with 13.2% of the subscribed
600
8,100
500
Loans Undisbursed
Uncalled Subscriptions
sterling
Bank's
bonds, it is useful to
analytically the record of,
the foreign loans in the past. The
errors
of foreign lending in the
twenties are unlikely to be re¬
peated; not only are the lessons
to be learned from that period
still fresh in mind, but many safe¬
a
debts.
has
of
ury
Holdings in Currencies other than U. S. Dollars
(including any guaranteed loans)
the
consider
external
The
(United
group
$ 1,400
Loans Disbursed
could
Kingdom, India,
Africa,
and
Egypt) has never defaulted on any
of its
publicly-held obligations,
in the world.
Union
500
Set Aside for Special Reserve
it
large majority of the Bank's capi¬
tal is subscribed by countries that
are not
likely to be borrowers or
by countries that are very un¬
likely to be in default on their
credit
Bank in accordance with its Arti¬
cles of Agreement. Subsection
(b)
of Section 7 of Public Law 171 of
the 79th Congress (Bretton Woods
I
ASSflETS
that
payment of $50,000.
a
It should be observed also that
.
*(Continued from page 613)
the
not muster
A* ^
^
.,
.
before House of Representatives' Cam
>■»■->;
Li
V i'r * *4 -f, v§ ;
THE COMMERCIAL & FINANCIAL CHRONICLE
616
Thursday; January 30,1947
•
_
Inflation Danger—Heritage of War Finance
.Secwriries Satesfitaw's Corner
removed ari important distinction
(Continued from page. 592)
(Iriflationar^ developments that
efforts were made in this
<cbcrnt^ between long and short-term se¬ have been evident during, tho past
to raise as much of its cost bytst^ curities, and this policy, together year and are now approaching a
•
By JOHN DITTTON
ation; as whs feasible ddd .td •fi¬
his. customers. Mos nance the rest so far as
possible
i
of the time however,-a rsalesman has to accept the customers Rha
by tapping the savings of the peo¬
he has on his bbbks. AOrily a ikwi are so fortunate a? to be able |o ple. Fiscal and
monetary authori¬
?
keep the" customers that' represent the most, desirable -accounts; ties were agreed that .financing
&S Human nature being what it is,! there are always those- wh04 take an through thanks* Whlch^resultsi
fn
>
unreasonable' attitude when1 markets' decline.: Sometimes in order the creation of-new
money, should
to hold .softie~clients In line,^ yoh Have to' open jtheir eyes to reality
feo^kept ;tb the*
It is
a
fortunate salesman that can pick
•
:
•
;
:
Otherwise you'll lose out
:':
.
:
Every salesman knows his eusfomers.
You can' tell from a wore
or two just what you* are .going to be up against the next time you
have a talk with a customer ;who seems to be desirous of placing
;
r
•
•V.
the defensive; regarding some recent purchases that have
When yotr get your first hint that this
is about to happen, then it is: a good idea to do some pencial anc
paper work in your own office before you have your next session
with- such an account, • If you have' to hunt- foSJ bear, go loadec
for bear.
JI, *•
\ o
^
•
'
Vj
;
r
Go back to the first transaction you had with this account
Check up all purchases and sales. Record profits taken in one col.'••? umn, and losses in another.
Put dividends received during the time
held in another;; ShowAputrenL market prices of securities still- in
the account.
Show paper: profits and losses. Sum' up the renfirri
Operation and
The chances are -that the
• recofd is good.; Then, -whon ;Mr. Customer greets you with some
?<;cheery remark such; as "Well, I didn't make much money dqihg?
business with you last.year," you can reply, "Let's look at the
record."
You can make a much stronger case without placing, your*
self on the defensive by explaining that you have been making-an
analysis of a number of your accounts- and .that his. was included iri
this survey. 'Then take-your pencil and go over the whole thing
Step by step.
By the time you get through you will be able to show
that recent paper losses .are only part of the story and: that the over¬
fall situation is good.
,hr;•:
"
- <
you
on
declined in market value.
•
•
,
■
v
'
.
.
:
-
liere
r
is another very
'You mustget?^thd ideld
important thing about selling securities
across io
small, -it "pays
that it'is the
your customers
Whether
whole which-are important.
as a
'
result's
account is Idrge or
to set itrttp in black and white and - show, a: customer
an
necessary
mum.
mMr
Nevertheless the banks had
be relied upon to a:.large
to
ex¬
tent, and also policies had to be
followed to assure a high degree
has been' accomplished.: In this • way, you present losses- in
curities, but also to provide the
increased money supply needec
by the expanding and abnorma"
paper
where a Customer Can
iee what has been done, clarifies this
security in the portfolio iff
its proper relationship to the entire fuhd/
Your customers should be encouraged to look upon their entire
?'
I investment fund
When this viewpoint is firmly
entirety.
ail
as
established profit-taking
arid
"NECESSARY
LOSS-TAKING WHEN
longer considered as individual or
isolated operations but as
jpart of the whole investment objective; which is the general im| :provement of the entire account.
" '
'" ■" IV '
When customerg-ure:incihied to look upon their last flew pur*
ram no)
•
as
the Reserve System stood
ready fects
prevailing
at ?
could
rates
declined.
These
low -long-
serious
adjustments for life iri
companies and other sav¬
ously acquired issues to banks and
subscribe
for
new
sold
sufficient
securities
the
to
meet -? the
Federal
for them to buy
higher reserve rquirements. The
riet result was a gradual expansion
securities.
ernment
funds
Total
billion dollars." Over 40%
billion
came
dollars
,
lion
amouht
by borrowirig,
100 billion
about
153
About 230 bil¬
obtained
was-
which
of
this
of
from taxes.
or
came
in
bank
Reserve
to
holdings of-government
securities throughout the war pe¬
riod;
Commercial
their
holdings
banks
of
increased
United
States
Government securities by approx
imately 70 billion dollars. At the
time their loans expanded to
same
the highest level since 1930. As
a result of the growth in assets,
bank 'earnings Increased substan¬
tially during the war and in rela¬
tion to capital- fundi were at the
highest level on record during
1945.'
?
.
.
from the banking
Banks
were
able
to
system, includ¬
expand
ing commercial banks, Federal their holdings of securities by any
Reserve Banks, and mutual sav- amount they could obtain because
additional reserves were almost
ipg$ banks*
chases thatmayhavedeclined in market value during a -period -of
Another policy adopted during
automatically supplied by the Re¬
generally depreciating vpiice^ j and; MIover-emphasize thbs#papei the war to facilitate war finance serve System m following its pol¬
; losses,, it; is time you put:their thi^ing • back on the right fraefc. was the maintenance of the in- icy of keeping down short-term
terest-rate structure-at approsiir rates. The volume of short-term
Remember it is not what you-have 'tbday that counts When ydU-are
mately the; level - existing at the securities outstanding was suffi¬
? investing in securities; but where you Will be next year and the year
beginning of the war. This policy cient to permit a much further
i after that;
Investing money is never a static operation. Don'tallOw served a three-fold purpose: (1) it expansion of Federal 1 Reserve
any customer to put you on tHe spot because a few securities hhve kept down the interest cost to the holdings.
In effect the banking
Government; ' (2)
it - encouraged system was permitted, in a sense
declined in price.; You are not going to* be able to help him'
vejry
prompt buying of securities by in¬ encouraged, to expand its earning
inuch if this is his attitude toward his investments. It is the healthy
vestors, who might otherwise hav.e assets, and the necessary reserves
over-all condition of his entire investment account that is the irii- awaited
higher rates; and (3) it were supplied. ; Banks incurred
fcept -;the - growth in lbank. ahd additional expenses -in servicing
Aportant consideration at all times.
> r
other investors' earnings to mod¬ the
greatly
increased
wartime
erate amounts consistent with the
-pr
purposes
The
*DenmanTire & Rubber Co.—Common
A
4
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*Alrline Foods
•
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,
•
'
-
.
'
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,
'
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.
,,
%
f
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'
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1
'
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,
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* Prospectus
A
.%l
Corporation—Common
on
fti
v;
request
u.v.:
of war finance.
interest-rate structure
ex¬
monetary demands, but were ade¬
quately compensated by the earn¬
ings received.
aftermath
taxation.
without
We
•
avoided
inflation
during the War
by the maintenance of controls,
as
well; as- through the public's
exercise of voluntary restraint. ♦
1
Currerit fiscal developments and
monetary policies are riot now
adding to inflationary pressures.
The
budget
issues,; thus Treasury's
securities
raised by the Treasury in the pe¬
riod from the middle of 1940 to
the- end Of 1945.' amounted to 333
its
and
war
stringent
suranee
by di¬
demand, sup-
over
'
stantial
_
.
controls
term rates have necessitated sub¬
,
to
must be counteracted
rect
UlteS,' arid; prices,) which cannot
The longelr-tertn possibly be* in equilibrium
during
not rise.
rates
securities
these rates
economy.
couraged banks to purchase moire
than it was necessaiy
unquestionably had their
indicated,
however, war and its finance are
necessarily inflationary. Their ef¬
to purchase short-term
helping to attain quotas; Banks
during the drives had excess re¬
Although some expansion in the serves because deposits against
which
reserves
werie
requirec
money supply and in banks' hold¬
ings of government securities was were drawn down in the purchase
of securities, while Treasury de¬
desirable, the amount that actu¬
ally occurred was no. doubt ex¬ posits, against which no reserves
cessive. "in retrospect," to quote were required, increased.
This
from the Annual Report of the shift of funds resulted in a re¬
Federal Reserve Board, "it is evi¬ duction in member banks required
dent that more vigorous policies reserves.
should have been adopted in order Z As a result of these operations,
to raise more of the cost of the bank holdings of government .se¬
curities
iftcreased
war through taxation and to re¬
substantially
strict bank purchases of goyern- during drives. Between drives, as
ment securities.'' Many of the fi¬ deposits -were reshifted and re¬
nancing procedures adopted eh- quired reserves increased, banks
war
climax
seeds in war finance. As
encour¬
facilitate:the general salle of sp bank mvestors cbrild sell ;previ*
..
whole subject of losses and places each
securities,
aged holders ;to shift from shorts
term to long-term issues.: As long
the public,. Purchases by banks ■;.* The method of handling the
war. loan drives also Was a stimriWere needed
pot onlyj to help
maintain ah .active market ahd |o lus tp barik'credit expansion; Norii
thisbusinejss
.
short-term
on
liquidity for securities Sold io ings institutions;
of
and thus helped
complicate the problem of post¬
v j
their pioper light. . You must^have losses.
Anyone who thinks you war adjustments. ; - As a result of policies adopted
l ean investmqpe^ywU^
is looking , at
to facilitate the financing of the
-from an entirely warped and unrealistic viewpoint. Bui losses that
Government's needs« during the
are offset by profits" where tftd
general/bhlaiice is favorable over; a war, there was a ; tremendous
period of years," thai;ls|ahptfeSr fstdry?i;' ^ putting a record^ down? 6h growth in bank holdings of .Gov*
what
with maintenance of the low rates
gram^ is
is
balanced.
debt-retirement
exerting
and
reserves
end
•
over-all
The
pro-
drain on bank
brought to an
expansion in bank
a
has
credit.
Bank holdings of govern¬
securities and loans on Se¬
curities have been considerably
ment
contracted.
There has
true,
considerable
bank
loans
been,: it is
expansion
to businesses,
on
in»
real
estate,
arid to consumers.- These
loans reflect in part needs for the
expanding production and distri¬
bution of civilian goods, but prob¬
ably also reflect some speculation
and
excessive commitments.
The
important inflationary pres¬
sures, however,; are ;the result of
past developments and are beyond
the realm of any short-term mon¬
etary and credit restrictions' that
could now be imposed.
The superabundant volume of
money has already been created
through expansion in the public
debt and * can be reduced "only
through contraction in that debt
or by a shift from banks or Other
holders who regard their securi¬
ties as liquid assets .'to more per¬
manent investors.
Such changes
more
can
only slowly.
occur
!To bring
them about and in the mearititne.
maintain
a
stability
in
curities
reasoriablefc1degree of.
the government se-.
market
the
are
major
problems of fiscal
monetary administration.
and
postwar
The Problem of Postwar
Monetary Policy
view
In
of wartime develop¬
the central problem thatwill face the Federal Reserve Sys¬
ments,
tem in the future is to reestablish
and
maintain
control
•
bank
over
credit expansion—the main func¬
tion
for
founded.
which
The
the
System
increases
of
was
more
than 50 billion dollars in commer¬
cial, bank holdings of government
securities and of 100 billion in
holdings of businesses ahd indi¬
viduals, which can be readily sold
to the Reserve Banks and thus
create
additional
bank
reserves,
make it
difficult, and perhaps im¬
possible for the. System to exer¬
cise
effective' control.
The lre~
feerV£s that cbulid bb i^e^ied Would
provide the basis for a teri-fold.
ex'parisiofi iri bank crodit aria bank
deposits. J
; 'A
)■
It has been Suggested that credit
expansion could be prevented if
he Reserve System would refusenshal - iihterest^rate r relatienghife by 100 billion dollars to.2% times
to purchase additional govern- ;
came into-being,during.the yedrs thfe
prfeWat I6veh The inflaticmaijry
of depression wRen ]fe*re . . W€!re potential in this expanded money ment securities or would purchase ;
isting at the beginning and gen¬
The result of these develop¬
erally maintained throughout the ments was a tremendous expan¬
war consisted of very low rates bh sion in the
liquid asset holdings
short-term? money, with" a wide of the
public. The holdings of
spread between "them* and rates deposits and 'currency, by indi¬
on long-term securities.
This un- viduals and businesses increased
..
-
HERRICK,WAODELL
& CO., INC.
55 LIBERTY STREET, NEW YORK 5, N. Y.
hem 6nJy:at higher rates..
rue
that a;?nariowing " Of
It is;
the imports and unused bank* reserves.- value 'of the country's total pro¬ sprbada between ? th0, yields , oh.short£term rind loftg*term securiMaintenance of the wide differ* duction of all goods and services.
reddced
and
^emdhds^frbm^b^b^ers;
at the same time large gold
ential
between
,
short-term
and
the
teteals^lift 'ItSEv ratio; to; the aririiial
supply is roughly indicated by
This
ratio
is
now
ab6ut
80%
;ies
would remove the
incentive
:'or banks and other, investors to
interest rates during compared, with 70% or less in the
shift-short-term Securities to the
he war, hbwevery encouraged dx- ? ate 1930's, a period of considers
Reserve, System in order to' pur-]pan^i6n - of bank credit because able unemployment and unused
onig-terni
American
Arden
Fruit Growers
Inc..
Own,
it "\Vas
possible for banks • to? sell
short-term
Farms Co.,
Fulferton Oil
PfcL & CotitL
Co^ Com*
SP&ttiG
LOS ANGELES 14
,
Ttletypet LA 68
QvotaftoM and Informatfoa
M
*8 CaQTorala TitiiX
to
Fedetal
resources, and with a little 6Ver
50% in' the 1920's; a period of de¬
lve business and full emptoyrriehL
??leserye Banks and .buy lorigeri
In' addition to the greatly ex¬
;erm issues bearing higher rates
df' interest, which iri tiirn- were panded holdings of deposits and
chase longer-tenri ones.
A, policy
erm
;
Of: permitting
rates to rise, however,
<
;
•
shdrt- ■»
wotild
increase the cost to the Treasury
of carrying;: its short-term debtv
arid. Would complicate thO Treas¬
individuals and busi¬
created by sales of securities to nesses have nearly 100 billion d61- ury's refunding problem. It would also increase bank earnings, which p
ars of government" securities, 'or
he Reserve Banks provided the
are already more than adequate.jasis for a deposit expansiori 4at eight
times • the / prewar level.
t has been frequently stated that all banks in the. country? dff ten* These can be readily converted
he System's refusal to follow this
rito cash as long as the Federal
imes the volume of such sales.
cOrirse bf actibiri is based entirely;;
Another result of these policies Reserve Banks stand ready to buy
ex- >
hem. : This is an aspect of the upon ^ these " considerations,
was a decline in long-term inter¬
est -rates.?? An implied assurance jreseni situation which - has rib pressed in its commitment to tthe •
reasuiW to maintain a low level
jifccederit in economic history and
lat prices of long-term securities
of interest rates. It would be more
s of incalculable significance.!
1
would not be permitted to decline
stabilized.
Jfembers Loa Angeles Stock Exchange
securities
The
new
bank reserves
currency,
say
coiriniitment
view
i
tions
;
-
,
is
.
<
rates
■
desired result of preventing credit
-
ernment securities into additional
would
induce
commercial
banks
bank \ reserves arid/ this must be as a group to retain their present
accomplished without;widely flucr holdings of / short-term goverriment securities—probably around
/
tuating interest rates.
Solution of this basic long-run 20 or 25% of net demand deposits
.fuse to; purchase government gewould bri sufficient; Subsequently
;. curities offered for sale and not problem can be assured only by
the percentage should be suffi¬
taken
by others, then interest giving the Federal Reserve Sys¬
jrate^^<mld: be ,subjee% to. /wMe tem additional instruments of reg- ciently high to assure for such
securities a commercial bank de¬
:
fluctuations. With 260 billion dol- ulatibn such as those! suggested In
mand large enough to maintain
lars of the public debt broadly diS- the 1945- Arinual Report of the
the desired level of rates without
■
tributed among individuals, busi- Federal Reserve, Board.
j.
Federal Reserve purchases.
The three basic plans proposed
t messes,.
and, investment institu¬
To. facilitate transition to the
tions, the possible effect of fluc¬ by" the Board • for consideration
new plan, as well as regular ad¬
tuating interest rates upon the by - the Congress may - be desig¬
justments of bank positions re¬
financial position and the actiohs nated by the following terms:
)
quired ' by interbank • flows of
of these holders is difficult
to
(1) A primary reserve plan. ; :
funds, banks should be perriiitted
predict. The; corisequences; of /at-'
(2) ;A secondary reserve plan.'
to hold cash (including reserve
tempting to use such a remedy
(3) A bond limitation plan.
balances) as secondary reserves
i
might be more harmful than the
These
three
proposals
have in place of bills and certificates.
disease.
/ ;...:/■ /./ /
This feature, which distinguishes
The System would have to pur- mririy/ Similarities arid also iMporIn each case this plan from that proposed by
•. chase
government securities ht tant differences.
Lawrence Seltzer,t is essential to
some rate.
It is not possible ..-to adoption would require legisla¬
make the plan effective as a limi¬
;
know how much of a rise in in- tion, which should permit consid¬
tation on bank credit expansion.
terest rates would have to occur erable administrative flexibility,
:
expansion and might have harm-
:
ful effects.
v;/ /
> Should the Reserve System re■?
t
.
.
•
•
„
•
.
.
-
•
..
stop sales to the Reserve Sys- because of the wide differences
individual
banks
and
tern. Any rise in short-term rates between
might be accompanied, by a rise groups of banks. It would also be
in long-term rates. If short and necessary that they apply to all
medium-term, rates should rise, commercial banks, riot alone to
the pfemium to investors for mak* member banks of the Federal Re-,
Irig Ibh^rterm cOTamiimieids would serve {System/ These powers could
be reduced and shorter-term jn- be so applied as to leave banks
adequate ability to take care of
•
to
;,
•
'
•
.
made; correspondingly
Vjestment
.
industry, com¬
agriculture but would
lis /agdnst long-term, investment give the Reserve authorities some
because of ' the possibility that control over excessive expansion
long-term interest rates might of such credits.
The primary ieserve plan.—This
eyentyally alsd rise. Higher/short
arid/' medium-term rirites, would plan is simply a further increase
/more attractive; /NeW investment
funds would prefer shorter-term
.
v.
,
,
thus generate
the
Course
of
mhceHainty
,
as. to
the credit needs of
merce/ arid
in; commercial- bank
lohgrterni interest quirements/
In
reserve' re/
order to keep
rates.
It might even bring about short-term interest rates from ris¬
shifting, by .investors; from ■ long ing, it would have to be accom¬
to shorter investment, with such panied
by Federal Reserve pur¬
shifting itself acting as a .force to chases of securities. The amount
raise long-term rates.
If long- of such purchases would probably
term rates were permitted to rise, correspond closely to the increase
:
one
effect of uncertainty might in requirements. To assure ade¬
/ be TO ' jeopardiie the savings .bond quate: powers td absorb a large
Z Sales program and cause whole¬ portion of short-term securities
sale redemptions.
held by banks, the law should
1
While /some degree of uncer- authorize an increase to twice the
tainty may be desirable, particu¬ present statutory maximum, but
larly when bonds are selling at any
increase
in
requirements
substantial premiums, there is a probably should be applied gradu¬
,
.
.
.
limit
far this can be ally and might never reach the
seriously upset¬ maximum.;a/,
;
The
ting the market. The events of
principal effects of this
recent months, when long-term measure would be (1) to shift a
bond prices have fluctuated certain amount of earning assets,
within a range of 4 points indi¬
presumably / short-term
govern¬
cate that purchases of these bonds ment securities, from commercial
at premium prices are not with- banks to Federal Reserve Banks,
Out some risk.
and (2) to reduce the ratio of
It. is doubtful whether any rise multiple credit expansion on the
in yields on government securities basis of a given amount of re¬
would discourage banks from sell- serves.
It would, therefore, di¬
as
carried
how
to
without
.
,
;
,
;
trig those securities in order: to
minish the amount of short-term
make
;
517
that the System,s reasonable stability in the pried* ondary reserve of Treasury bills mercial, bank demand for short- an expansion in credit which
y based /upon
its of-the large: volume of govern¬ and certificates equal to a speci¬ term government securities large would depress the level of inter¬
fied percentage of net demand de¬ enough to maintain present rates est. rates
unduly, as was the case
that ; under present condi- ment securities outstanding* Therie
Federal / Reserve : pur¬ early in 1946.. ,./rT/ /•/ •
a rise in short-term interest must be limits: to the ability df posits. /This percentage might be without
1
would not /accomplish the banks and others; to convert gov? placed initially at a level that chases. ;//,/;
Nor would
these instruments
correct to
'
-
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4564
'Volume 165
securities -available to sell to the
private loans
or
to invest
in corporate bonds, if attractive Reserve Banks and also reduce
loans and investments were avail¬ the potential credit expansion on
able.
Experience shows* that the basis of any reserves that
changes in Federal Reserve dis- might be created by> such sales.
This -measure could be applied
i count or buying rates alone, have
not been sufficient to stop or even to put the -banks under pressure
effectively restrain a speculative to liquidate securities and thhs
credit expansion. These changes discourage further, purchases bf
woul*i bfe.
less Effective/in a long-term issues, while Federal
situritidri Where their primary ef¬ Reserve support would keep in¬
fect would be upon prices of out- terest rates from rising above, the
V standing/ government
securities, established
pattern.
It
would
rather than upon private borrow- correspond
to : present banking
p
.
-
■
,
This limitation should apply to
all bonds, or probably to all single
•
unduly restrict banks in making
loans. - Their purpose, of course,
securities is to
give the System authorities
having a final maturity of more power to limit credit expansion—
than one year at time of issue, or
a power they were created to per¬
it might be more limited in scope.
form but can no longer exercise.
It would have to crivef obligations
Any limitation on the supply of
of state > arid/ local : governments
bank reserves, however applied,
and
of
corporations;
otherwise or on the
ability of member banks
United f States securities would to rediscount is in some
degree re¬
have a disadvantageous market
strictive on bank lending.
position. Bonds within a year or
:; It is hardly impressive to raise
perhaps within five years of ma¬
the "bogie" of restricting bank
turity might be exempt from the
lending at a time when many
limitation, but such exemption
would cause sudden adjustments types of bank loans have just ex¬
rapidly and have
in the market and in the banking panded more
risen to higher levels than at any
position as large issues came out
time in history.
If banks want to
from under the limitation/
payment
marketable
-
'
take
care
the
of
needs
of
their
This measure would not restrict
customers it would be better for
bank lending activities arid might
the maintenance of a stable credit
even encourage them.
It would
structure if they would sell securi¬
leave the various sectors of the
ties that non-bank investors will
short-term market—Government
and
private—on
a
comparable
absorb
and
riot those which will
be
purchased only by the Federal
Through-the one
for the Treasury to supply bills sitions between banks would not Reserve /Banks.
process there would be no net
or
certificates to banks needing be
particularly complicated/ by
credit expansion, whereas through
them to meet their secondary re¬ this plan, although some reduce
the bther there would be a growth
serve
requirements against ex¬ tions In bond portfolio/might be
in
bank
reserves
which would
panding
deposits.
This
would necessary if banks lost deposits,
permit multiple credit expansion.
mean
further
credit
expansion particularly time deposits, and in¬
Application of these new powers
and deposit growth.
creases would be permissible in
by the Federal Reserve could, and
This plan has the advantage of case of additions to deposits. This
should, be so regulated as to pro¬
permitting banks to retain sub¬ plan would be less restrictive than vide banks -with
adequate funds
stantial
holdings of short-term the others because it .would not fori
meeting all sound needs t>f
Government securities, but lim¬ restrict banks' in shifting froiri
short-term securities into loans, commerce, industry, and agricul1*
iting their ability to sell these to
ture<
It is the task of the Federal
the ReserVe Banks in orderi to although by lowering the amounts
Reserve authorities td supply the
make other loans and investments. of bonds bsink^ fcould/hold, the
banks with enough reserves to
This plan is essentially similar to authorities could force liquida¬ meet
those needs, as well as to
the primary reserve plan, except tion of bonds, rather than short?
prevent expansion in the available
that under the secondary reserve term securities, to offset any loan
supply of reserves beyond the
plan the commercial banks could expansion.
amount needed for sound credit
Any of these various plans
continue to hold the short-term
demands.
It has adequate capa¬
government securities whereas in could, once established, be fairly city for
permitting expansion but
the
primairy plan the Reserve rigidly maintained, v/hile tradi¬ practically no power to prevent
tional Federal Reserve bpen-marBanks would hold them.
ket and discount rate policies expansion.
The secondary reserve proposal
In summary, it may be said that
were relied upon for current pol¬
has: been criticized because it
icy measures. Alternatively these because of the large money sup¬
would purportedly require the
new schemes could be flexible in ply and the greatly increased Ca¬
banking system., to increase .hold¬ their
application, with require¬ pacity 1 for f u r t h er f expansion
ings
of
government securities ments
and limitations being varied which is the heritage of "war fi¬
every time there was an increase
nance, the credit situation in the
as bank credit and monetary de¬
in deposits resulting from expand¬
velopments and /prospects might postwar period is likely to be an
ing loans. It ia, of course, triue
unstabilizing influence upon the
justify or require.
that credit expansion would in¬
economy.
The money supply, ac¬
/ It should be made clear that
crease the amount of required re¬
tual and potential, is large rela¬
these proposals are not revolu¬
serves, as at present. Banks would
tive to current output and in¬
have the alternative, as they do tionary or drastic nor would their
comes, even at present inflated
now,
of liquidating some other application interfere unduly with prices. Additional measures may
the detailed operation of banks.
asset or of borrowing from the
be needed to exercise more effec¬
Reserve Banks, nder the proposed They are not devised to Save the tive control over the
Supply and
plan they could not reduce their Treasury interest or to keep down use of credit than would be 'pos¬
bank
earnings* Although they
holdings. of Treasury bills and
sible under existing powers.
could have these results, but are
certificates, unless they had an
In concluding, it might be ap¬
primarily to make possible the
excess,
but would have to sell
use
of
effective controls over propriate to quote the London
long-term issues out of their port¬
credit expansion. They are in ac¬ "Economist" regarding thOBOard'S
folios.
The plan would establish
cord with the traditional Federal proposals, as follows:
short-term government securities
Reserve
instruments
of
"it comes as a surprise to
openin a preferred market position
learn from the 32nd annual riemarket
operations, reserve re¬
over
other types of short-term
port of the Governors of the
quirements, and discount rates,
paper. An important disadvantage
Federal Reserve System that thd
and are essential for the effective
of this plan is that the double set
use
of those instruments in' the
highest banking authority in the
of
reserve
requirements might
future.
United States is submitting for
complicate adjustments necessary
the corisideriation of /Congress
The use of any of the new inOtherwise it would
be necessary
basis.
Adjustments of
reserve po¬
-
.
,
,
in the
case
of interbank flows of
funds, but it is possible that such
a
scheme would be
no more
com¬
plicated in practice than the pres¬
ent system.
strurnents would
mean
structure of
be
/proposals for the control "of
/American: /commercial, banking,
ri°^ hecessarily
rigidity in the level arid
interest rates, It
said that
some
the/like
may
even
such measure
which has
never
been contemplated
in So¬
of
cialist Britain."
is necessary before policies can be
The "Economist" then adds the
hold¬ adopted which would bring about
further significant comment:
ings of bonda to no more than an changes in interest rates on pri¬
/ ers.^/^./,,^-/.: // /.;//../ £////,//W practices, be relatively simple to
vate debt.
-: "Before
These measures are
pushing the paradok
amount
corresponding approxi¬
/ ;
JLbrig experience. With .bripkers' operate*^ adjustiriertta^
too
far, allowance should be
mately to savings deposits and designed to set off a large part of
loans shoWS that banks will with-. in the market, because of : interr
the /public debt and of bank in?
made for two factors. The first
capital accounts plus some per¬
draw
funds ' from, the / central bank flows of funds to be! Carried
vestments in a way that would
tis .that the United States is - ri
centage of its net demand depos¬
money market in order to take out as at present.
"• V,fried" them froiri the influence bf
^
its.; In a sense this plan /would
country ^iih a written Consti¬
care bf the/demands 6f thjeir cps*:
The proposal/ wbuld; tend to/r$?
tution where every executive
merely extend; the policy pursued changing interest rates. Savings
tomers'and that they will hot be duce the
bonds and even a large portion of
action and every policy must,
earnings of commercial during the war of restricting bank
discouraged from doing so by high banks and increase those of the investment in long-term
marketable obligations held by in¬
if possible, receive the garb of
Treasury
money rates, In. the case or brojt- Reserve Banks. If this
stitutional and other permanent
precise - legalism and statutory
plan were bonds. At the outset these per¬
ers' loans the loans called had to adopted it
enactment.
What many other
might be desirable fori centages might bri established at investors are ordinarily not seri¬
/be shifted Jtq ot h e r /lenders, the' Reserve Banks to have power levels. that would prevent rioih/ ously perturbed by variations in
countries prefer to achieve by
/ whereas/in the case or govern- to
informal consultation and by
pay some interest on reserve mercial
banks from adding
to interest rates. That portion of the
The bond limitation plan
a
commercial bank's
would
limit
,
,
.
,
,
,
t.
,
•
irient. Securities the banks,'; need balances, in
l
only to sell them to the Federal
Reserve End thus create.adaitiqrial
±eserve£
.
Some pbweri other, thcin
that
of- higher interest rates is
needed to deal with, such a devel¬
opment.
.
.;//;/ /
•
•
their present holdings of bondsm¬
an average of about 50 % of net
itLegismiqn huthorizirig*Ehfe,ac^ demand deposits: or maybe evari
tion might also include, provisions higher would- cover the bulk bf
for amending various aspects, qf the commercial banks.
Eventu¬
the present requirements, such as ally the percentages should be
permission to count vault, cash sufficiently low to assure a coiriand greater adriiinistrative flexi/
bility in ^imposing different re¬
fLawrence H,
Seltzer,
"The
quirements on different types of Problem of Our Excessive Bank¬
deposits and in classifying banks ing/Reserves,"
Journal' of the
for reserve purposes.
American Statistical Association,
; V VV V
The • secondary
reserve
ptkii Vol. 35, No, 209 (March, 1940),
would establish; a required sec¬ pp. 24-36.
earnings
should be unduly reduced.
case
bank
,
In view- of this, heritage of war
finance/the Federal Reserve Sys,
I
tem is faced in the
;
postwar period
With a two-fold problem:- to prevent speculative or. otherwise excessive expansion of. bank credit
</
and
-
.
.
at the
same
.
time, to
assute
.
debt Held /in the active
money market, a$ well as private
debt, could be traded freely and
permitted to fluctuate Without the
public
gentlemen's agreements must iri
compulsion
■
America receive the
.
The sec¬
and sanction of law.
factor
ond
that
is
the moral
danger of these fluctuations caus¬
ing widespread repercussions.
ascendancy of the central bank¬
if the economy should be in po¬
sition where investment demands
States is not quite
ing
in the United
comparable
authorities
with its Counterpart in Britain
Act
of
Congress
exceeded the available supply bf
and
that
savings, then interest rates might
be/ permitted to rise rather than
have an inflationary expansion in
bank credit.
On the other harid,
may
be heeded to do less well
it would
be possible
to prevent
what
a
can
nod
an
often be achieved
from
Threadneedle
country."
'Old
Street'
the
;
by
Lady of
in this
Thursday* January 30, 19471
THE COMMERCIAL & FINANCIAL CHRONICLE
618
the
Will World Bank Securities Meet
intent
is not'to
pour
out
a
vast flood of United States dollars.
additional
An
source
of strength
of
oversimplification,
Bank's
means
the
since
sheet will by no
tell the whole story.
The
balance
country is over and a reasonable
of political stability restored. One may hazard a guess
measure
lies in the fact that loans will be
Accepted Investment Standards?
(Continued from first page)
in such a man-1 practical matter, however, no subner that, barring an
almost total | stantial loans seem possible if the
United States is vigorously op¬
breakdown of international finan¬
cial- transactions, it will remain posed thereto.
Primarily the loans made by
solvent.' '-y.
.
A
can
||
be conducted
,
Numerous
technical descriptions
and organization of
the World Bank and the Interna¬
tional Monetary. Fund (which can¬
not be disassociated) are available,
of the history
the Bank must be for productive
The
ect.
specific proj¬
of
Agreement
can
meet accepted
standards.
Such an
approach is also useful since the
this country, will
investment
'
essentials can be
-
are
not
lost in a
emphasized and
maze of minor
! ' detail.
'
'
''
-v
Bank's
Fundamental Conception
Fundamentally the World Bank
conceived for the purpose of
was
invest¬
ment and to provide funds for the
promoting private foreign
international
.
flow
goods for
of
productive ♦purposes, when such
funds could not be obtained other¬
wise at reasonable rates. This is
'
made,
before the loan
written report
a
be submitted by
must
be
a
compe*
clusion.
the
tween
lending
lected by
the Governor represent¬
ing the member in whose terri¬
States
tory the project is located and one
or more members of the technical
members of the Bank jointly and
has
loan
been
approved by the
committee, the Bank itself must
pay due regard to the prospects
that the borrower will be in
obligations
tempted
is
a
group of coun¬
than by the United
unilaterally. " Accordingly,
rather
tries
defaults will be against the
any
der the loan. Once
a
severally to the extent of their
capital subscription and not against
the United States alone, The bur¬
collecting the debts will
likewise not rest entirely upon
the United States and other mem¬
bers of the Bank will at least be
paid up capital subscriptions.
Probable
un¬
Defaults
•
,
itself would in no way stipulate
the purchases would be
where
-made, but the borrower would be
required
i
to specify in the loan
contract the currency or curren¬
cies in which payments would be
-made,
Creditor's Veto
Power
] 4' Reversing, to. the other side, of
r
t'such
a transaction for the moment,
the country-whose currency was
,
loaned^ would have Reto
directly or indirectly over
146
'
power,
-the loan.
ticularly
•
•-"*
-
This protection is parr
important With respect
largest
to the United States as the
prospective lender, since it not
only enables this country to pass
t- upon
dollar; loans independently
v., but also is
ait effective
[ preventing the *
•
?
which
If
a
means
of
export of goods
might be in short supply.
loan is to be made out of capi-
viola¬
tion of the Articles of Agreement
if the Bank for political reasons
were
to support
the currency of
loan were restored to
ing,
or
good stand¬
liquidated, the procedure
could be reversed.
LIABILITIES
AND
The
Special Reserve
protection against moderate
losses, provision is made fox* the
accumulation of a special reserve
As
charge of 1 to Vfi% commis¬
annually
on
outstanding
loans. This reserve must be held
by
a
sion
in
suming that the Bank over a pe¬
1
,
member of
the World Bank and it is accord¬
now a
ingly pointless at this time to dis¬
16.5
CAPITAL
what
cuss
effect its participation
should it eventually
have
join. However, because of the
es¬
sential
ACCOUNTS
the
differences
between
Debentures and other obliga¬
tions
8.0
economic' system of that country
and the rest of the members of
Special
Capital
0.5
8.0
see
reserve
—
the World Bank, it is difficult to
how Russia could effectively
function as a member in the
16.5
of
the
avowed
light
objectives of the
Bank.
Illusion About U S. Responsibility
Unless
accepts the premise
will be a complete
one
there
breakdown of international trans¬
behind the debentures will be the
capital subscription of the United
States is false.
Simultaneous, 100% default on
all loans is unthinkable. However,
at some point several members
as
case
its
own
extent
necessary to meet
obligations. In any given
year, however, one would not an¬
ticipate that over $1 billion of the
Bank's
World
concern
not
prospective
holders
only
to
of its obligations but to the tax¬
in
payers
the
United
States
as
benefit of both, it
will be vital for the Bank to make
well.
For the
full and complete
disclosures
re¬
While there has
opposition to the de¬
juris¬
any consequence.
been
some
bentures coming under the
diction of the Securities and Ex¬
for the Bank to call upon the
80% balance due on subscriptions,
the
the
matter of
change Commission, this require¬
sary
to
of
a
their loans
on
to both interest
in which
operations
and principal,
it would be neces¬
be in default
may
The
Bank will be
garding each and every loan of
ment may prove to be a blessing
disguise in respect to the re¬
of
pertinent information.
This should not be interpreted as
in
lease
implying that the Bank would
deliberately withhold important
facts, but it must be admitted that
would
debentures
there is a tendency on the part of
governmental agencies, particular¬
ly those active in foreign affairs,
to release a minimum of informa¬
tion. In the case of the World
Bank, it is obvious that its balance
quirements would probably not sheet and
operating
statement
exceed $500 million within any 12- alone "will not be sufficiently in¬
month period. Assuming, however, dicative of the investment calibre
a
two year depression in which of its obligations beyond a certain
the Bank had to meet $1 billion point. In other words, the pru¬
of principal requirements, it will dent investor will wish to judge
own
mature. That is
probably extreme,
since the Bank will presumably
stagger its maturities or issue long
term bonds with provisions for
amortization, so that principal re¬
be observed from the above table
that one-half the amount could be
met from reserves set up
for the
The remaining half could
be met by a call of less than 10%
of unpaid subscriptions. / Of this
amount $254 million would be re¬
quired from the United States and
the balance
divided among all
purpose.
Certain members
other members.
Bank Obligations
and Legal Lists
have
savings banks
and trust funds in New York and
The
Bank's
obligations
been made legal for
presumably be made legal for
purposes in other states.
They will be legal for commercial
will
various
able to meet their
banks in limited amounts. To date
obligations in addition to the mem¬
publicity has been ex¬
The resignation of
Mr. Eugene Meyer of the United
States who was elected President
of the World Bank last June has
been a further disturbing factor,
as has been the failure to find aw
acceptable substitute up to this
time. Thus to date the way has
been paved none too well for the
first offering of the Bank's deben¬
tures. Initially it is expected that
the Bank will test the market
with a relatively small issue at "aw
attractive^ price.*^ Sufeh ^in; is^ae
will find ready acceptance, but the
real test will come later.
not be
would
bers in default
on
loans.
The
un¬
paid balance would then become
an
obligation of all the rest. As
happens,
other
the
debt
of
members
record
the
Bank
of
is
fully equal to that of the United
Canada, with a capital
subscription to the Bank of $325
States.
million, enjoys the best of credit
rating and will continue to do so
if it is humanly possible.
The
sterling group, composed of the
liquid form for the meeting of United
Kingdom, India, Union of
chargeson the Bank's-own obliga¬
tions* In addition to the commis¬
sion the Bank can charge a higher
rate of interest than it pays. As¬
Russia's Status
Russia is not
would
it
a
country where the policies of a
new regime were
causing an ex¬
odus of freightened private capi¬
tal.
Moreover, in the Monetary
Fund Agreement there is a stipu¬
lation for the withholding of funds
from countries where capital flight
is in progress. One can see, how¬
ever,; that; considerable piressure
might be applied to cause the
Bank to make just such a loan.
Too much emphasis should not,
however, be placed on loans- ;of
this character since* in any eveht,
investors would not be likely to
consider them as suitable security
against which debentures of the
•
actions, the assumption frequently
made that the only real security
•
a
3,86
—————
required to share losses with the
United States to the extent of
loan has been
example, it would be
6.4
their
'
for
Other
i
that
v
The Bank
,
2.54
-
of
den
Articles of Agreement.
borrowers own borders.
S.
at¬
that foreign lending
Despite the many sound and
I of the
The Bank granted the Bank acts in much the conservative features in the Arti¬
same manner
as a trustee
since
will provide both the foreign excles of Agreement, and regardless
the borrower shall be permitted of the
ability of the management
change and the credit with which
to draw down from a speciul fund,
of the Bank, it seems inevitable
capital goods can be -purchased.
set up to the credit of the bor¬
that defaults will occur. This is
Capital goods will undoubtedly be
interpreted broadly to include not rower, only the amounts needed particularly true since the Bank is
to meet expenses in connection
denied the very cream of inter¬
only building materials, machinwith the project as they are actu¬
national lending and its loans will
| ery, transportation equipment and
be essentially without any margin
the like; but such items as salaries ally incurred.
These provisions should effec¬ of protection. Thus, even though
for technicians payable in the cur¬
rency of their home country. To a tively prevent the making of in¬ the borrower contributed towards
limited extent, and presumably on discriminate loans and a sudden construction costs of a project, the
I a Relatively short term basis, large drain on the dollar resources Bank would have no direct lien
'.working capital in the form of raw of the Bank, if nothing else.;
on the project ftself.
A consider¬
The Executive Directors of the able degree of protection will be
I materials would also be included.
.In respect to the latter, in particu¬ Bank have
afforded by the fact that loan
agreed that the Arti¬
lar, it is to be expected that the cles of Agreement permit the maturities will be spread over a
Bank to make long-term stabili¬ period of years and there can be
i* Bank will proceed with due cau?
collateral
Vtion, since its. loans will be on a zation loans for the reconstruction a
staggering
of the
fjpon-marginal basis, and will also of montary systems. Since inter¬ Bank's own obligations* When a
not permit political considerations national
monetary stability is a large borrower fails to meet its
to enter the picture (the Agree¬
prerequisite if the Bank is to func¬ carrying charges, and appears un¬
ment provides that only economic tion
successfully, exception can¬ likely to be able to do so within
considerations shall be relevant to
not be taken to this
provision. a reasonable time, the Bank, with¬
y decisions of the Bank)
Furthermore, as noted above, the in certain limits, may retire a cor¬
One.pf. the; more .vital protepUve jWorld-. Bank is-tied directly to the responding amount of debentures,
features; of the? Articles of* Agree- •International Monetary Fund and thereby reducing its own charges.
} ment is that the Bank must not any member of the ? Bank that Following through this procedure,
it
will be
seen
that the Bank
make loans, other than in excep¬ ceases to be a member of the Fund
tional circumstances^ in the cur- shall automatically cease to be a would thereby automatically
v rency of the borrower.
Thus, for member of the Bank. Neverthe¬ freeze that portion of its capital,
example, if X member country less, the power to make such loans since unpaid capital subscriptions
seeks a loan from the Bank to will have to be used with extreme would be called for, to the amount
construct an electric power plant, discretion and the Directors of required, in the currency involved
the Bank would provide funds for the Bank may at times find it dif¬ —presumably dollars—to meet the
all the necessary materials which ficult to avoid action that will required principal amount of
were to be purchased outside the have political consequences.
Thus, debentures. If subsequently the
clearly set forth in Article
currency
'
capital
heretofore
lending
a po¬
sition to meet its
a
—
subscribed
(80%)
U.
the World Bank and any interna¬
will be done by
After the
Uncalled
principles of
project after careful study of the
proposal. Such com¬
mittees shall include an expert se¬
technical staff.
nature of
.
foregone con¬
A further difference be¬
a
merits of the
Thus, not only
must the top management of the
Bank qualify on the basis of broad
banking experience, but the Bank
will be equipped with a highly
f
may
.
tional
skilled
cellent source)
W--——
tent committee recommending the
staff of the Bank.
in .the
be of help in stabilization loan; While it is pos¬
a period of years and with provi¬
visualizing where the Bank may sible to be unduly optimistic, it
is at least conceivable that the
sion for staggered amortization stand some ten years from now.
International Monetary Fund and
payments. Most certainly, in the
(In billions of dollars)
the World Bank may become the
early years at least, any borrower
ASSETS
most important factor in bringing
will do its utmost to meet its obli¬
Cash and short-term secur¬
to China a sound monetary sys¬
gations to the Bank, since other¬
ities
1.1
wise additional credits would be
tem,-thereby permitting that coun¬
Gold and U. S. dollars
0.4
denied.
try to attract the investment of
Morover,
unwillingness
Other currencies
0.7
to pay frequently has its roots in
vitally needed capital. Obviously
the government of that country
inability to pay, Snd if the Bank
R Loans, incl. gtd. loans— 8.5
will have to be a type conducive
gives due weight to this latter
Spe.cial reserve (prime secur¬
to such a result.
factor—as it is required to doities)
*
0,5
tries, in different currencies, over
defaults are not
Furthermore,
be
that the initial loan to China will
with this author but from, an ex¬
—
stances."
ysing the probable operating pol¬
icies of the Bank in. an endeavor
to determine under what condi¬
tions the debentures or other se¬
curities the Bank may issue in
-
a
Articles
permit other types of loans only
"under exceptionaI circum¬
this study will be
directed primarily towards anal¬
and accordingly
"
and for
purposes
following statement (not original
made to different member coun¬
Africa
South
defaulted
never
held
or
and
obligations,
internal.
on
have
publicly
Egypt,
any
either external
Several
the Bank's
tremely weak.
♦
,
European
Summary of Favorable andj..
members 6f the Bank have a com¬
rate
Unfavorable ' Factors\'
parable record. Until this record
of interest of 3 %, and charges an
In conclusion it may prove use*
is broken* these countries should
average rate of 3^4%, and the
be ;i treated- as being, willing. ,to ful to summarize what .seem to, be
commission is 1%, the operating
Bank could properly be issued on margin would be lJ/4%. The Bank meet their share of any likely call the favorable factors and those
less, favorable. On the favorable
a large scale, and one is warranted
is completely, immune from taxa¬ by the Bank;
side there are: (1) the avowee!
in assuming that any such loans tion,
Initial operating expenses
Delicate Situation With China
purpose of the Bank is to make
probably would be limited to the are estimated by the Bank at
„
riod of time pays an average
,
problem with loans for productive purpos6s^~)
find itself (2) all loans must Re recom- /
can
directlycontrol, individual The Departure From Policy After pand this will be increased. Over faced is in handling application mended by a competenKpommif-^
First World War
■p loans.
If the loan is made from
for loans from. its third largest tee; (3) the .Bank must, give due
a ten-year period the Bank should
The above is sufficient to indi¬ be able to accumulate a very sub¬ member, China. China can logi¬ regard to the ability of the bor¬
{ funds obtained from the sale of
rower to pay; (4) the Bank's pol¬
R debentures, the United States can cate that there is a vast difference stantial reserve.
cally be expected to be one of the
icies must be based entirely on»
block their sale. Theoretically, if between, the
largest borrowers from the Bank.
concept of the World
!
-ATro-Forma
1: Without wishing to prejudice the economic considerationsjrf 5) rthe
a series
of, loans is to be covered Bank 'and v the type of foreign
United States has veto power over
by a given debenture issue', the lending that was made after World
The prospective future financial case, it seems unlikely that any
all dqUar loans; (6> the credit
[i
United States has no direct means war I. The World Bank is
designed condition of the Bank can, be pro¬ substantial loans - can. be made to
record of countries mentioned is
of blocking any single loan. As a to be a
China until the civil ^war- in that
continuing institution and jected; although there is a danger
u
tal the Unitedr States has to au-
j thorize the
use
of the dollars and
20 %
operating capital of the Bank.
$1,200,000,
that
as
but it is anticipated
the Bank's operations ex¬
The most delicate
which
the
Bank
may
'
.
'
•
V*v.**:
1
i-V$%it*'A;■'*'h
V1;
Volumje
■
THE COMMERCIAL & FINANCIAL CHRONICLE
165/ Number. 4564;
519
.
:
excellent; (7) staggering of loans
the Bank's own obligations
and
,
prelude the danger of heavy
can
capital calls at any given time;
<8) the capital subscription of the
United States will give 42 % pro*
lection to debentures with maxi-
.
indicated loans.
muqi
'
*
-
unfavorable
the
On
finds:
(1)
side
one
of political
possibility
pressure; (2) numerous loopholes
for unsound loans "under excep¬
tional
circumstances"; (3) possible
abuse of the power to make stabil¬
ization loans; (4) the Bank is de¬
prived
of
the
foreign
of
cream
loans and chance of defaults there¬
riod, 1935 to 1945 does not reveal
by enhanced; (5) the unsettled
question as to the Bank's manage¬
ment aind the. poor publicity to
extraordinary gains by. the banks.?
date; (6) possibility that adequate
information will not be .made
return
net worth of banks with
on
non-banking corporations floes not
show that banks enjoyed excep¬
Regarding this material from
the standpoint of the usual secur¬
ity "analysis," the opinion is ventured—most humbly you may be
sure^-that the favorable factors
outweigh the unfavorable^ by; a
wide
margin.
This opinion is,
however, rendered "subject to
change without notice."
tional
earning
in
except
power
1944 and 1945.8
The effect of
rise in yields of
a
government obligations
bank
ture
earnings
with
foretold
upon
fu¬
be
not
can
certainty.
On the
assumption that the present vol¬
of
ume
earning assets of the banks
remains unchanged, or is allowed
to
on
One of the main
the
ings.
the
wartime
rate policy concerns the carrying
charges on the debt. It is said that
higher rates would impose a heavy
burden on the Treasury's budget
and upon the economy as a whole.2
The available evidence is not con¬
vincing
debt, the burden ; as measured by
leakage conceivably might disap¬
pear. On the other hand a policy
financing the Treasury at arti¬
since
has been described
the debt are
burdensome in several respects:
<1) effort is involved in the col¬
.
'
lection of taxes
and in the pay¬
the keeping
ment of interest and
spurious
bank
larger proportion of the
a
obligations
government's
•
1
,
records; (2) one class may gain
at the expense of another since
bondholders and1 taxpayers
are
not identical; and (3) national in¬
come may be adversely affected.
reality of the leakage at¬
to
bank
holdings is
to question.
Wallich ob¬
Advocates of
cheap money and
spending have argued
on
both sides of this question,
Those who preached the "we owe
of
v
deficit
It to ourselves" doctrine held that
the debt
was
not burdensome be-
'
cause
the payment of interest from
j taxes
represented merely a trans-
'
This presupposes
,
income from the absence of ser¬
of Government
tinued and ignores the possibility
possible 4 Similarly Han¬
and Greer maintained that the
debt is in
reality
cleared
perfectly
against the interest, the rate of in¬
terest on the government's debt
would be irrelevant. A 20% rate
,
would
than
be
burdensome
more
no
2% rate. Moreover, if t&*es
to collect interest were based upon
tributed
even
Incentive
.
I
for
investors
to
standing debt with new money.
To tax existing debt on this basis
question in a
■capitalistic system based on pri¬
vately owned wealth. Since taxes
v seems
of
out
transfer from taxpayer to bond-
\
;
±:
omy
as
a
a
burden upon the econ¬
ipqre
than
the payment of
interest increases
total income, a
"net leakage" re-
suits in ''slowing down" of total
:
banking
the
sonal income taxes
^interest
f
progressive,
are
balance is paid to non-
because' of vthie concentration of
institutions
debt: holdings among
j
i
on
consuming sectors of the economy
;
•
and
high income receivers. Wal-
lich has estimated the "net leak'
age" involved in paying $5.7 bil2 See Board of Governors of the Federal
«
Reserve
,
4-5
System, Annual Report, 1945, pp.
and Marriner 6. Eccles,
"Eonomic
Conditions and Fublio Policy" address be¬
fore
*
*
v
■
I
of
the cost
be covered
curities
been
the
Sixteenth
Management
Council in
in
the
1946.
New
Conference
England
redound
of
New
England
Boston, Oct. 25, 1946, reprinted
retary of the Treasury for
$nded June 30, 1944, pp. 6-8.
fiscal
.
year
capital
the
creasing
banks.
already
excessive
bank
earnings
should result from
there
of
correction,
taxation.
a
rise in
various ad
are
that
chief of
which
why
been
not
at¬
factor has been
of
values
market
respond to the in¬
earning
bank
of
values
the
of
power
to
appear
resulting
have
from
risen
in
retention
the
earnings, but, rightly
means
of
wrongly,
or
have failed to give further weight
is
7 Harris
1939-43
so
Per
Bank earnings do not appear to
of
for
that
the
years
banking has not been
Cent
WarAmerican
Economic
Re¬
view, September, 1945, pp. 668-69.
/'
other
>
as
follows:
8.82;
1944,
1941, 6.73; 1942, 6.34; 1943,
9.73 and 1945, 10.87. In 1945
the rate reached
capital requirements.
an
all time high but pre¬
liminary information for 1946 indicates
levelling off In the rate of return,
A comparison of the. absolute
9
rise, in net profits • of the: banks
a
in the past two conflicting forces have
been
at
work.
The
earning assets of the
government
obligations)
with the rise in net profits "of all
banks
corporations of the ten
tended to increase relative to capital funds
but at the same time the
yields on
Income
C.
Wallich,
Flow,"
year pe¬
"Public
Debt
greater
than
to
be
earning
and
Postwar Economic Studies,
otherwise by
paid on the
the
amount
debt.
to
lesser
a
extent
i
than
other
of
of
91, n, 8.
21-23.
See
"Outlook
azine,
Sept.
Resources," Fortune Mag¬
November, 1942.
6 Alvin Hansen, "A Symposium on Fiscal
rate
of
re¬
assets is
an
important
Bank of New
Full Use of Our
:
the
10 For an analysis of some of the con¬
flicting forces at work see Federal Reserve
York, Thirty-first Annual Re¬
port for the year ended Dec. 31, 1945, pp.
Gov¬
and Monetary Policy," The Review of Eco¬
because
determinant of the supply of money which
in turn affects yields.
5 Alvin Hansen and Guy Greer,. "Toward
nomicStatistics, May,1946, p. 71.
was
the volume of bank
Payment
kinds
This
per unit of assets was dependent in
part upon the total volume of assets since
expenditure.
4 /bid.—p.
1945.
turn
of interest is relatively burdensome only if
such expenditures support consumption to
ernment
(mainly
assets relative to total assets fell. Net cur¬
rent earnings after taxes as a
per cent of
total assets declined
every year from 1937
No. 3, December, 1945, Board of Governors
of the Federal Reservte System* pp. 84-100.
The
calculation ^assumes that' taxes ' are
interest
services
already
means
has access to
of production it
through
the
the tax power
the printing
of
power
presses,14 (2) the issue of
•is
Government and not
a
a
money
private
function,
and
(3) in acquiring
obligations of. the Government in
Point
one
of the
ment would
preceding
argu¬
apply equally well to
other holders of Government
debt,
i.e., to insurance companies, sav¬
ings banks, or individuals.
The
fact is that the Government did
■
tax
not
heavily when it
so and, more¬
more
have
done
it was not authorized by
Congress to use the printing press
over,
to sell its
nor
obligations directly
to the Federal Reserve Banks
ex¬
cept to a limited extent.
The question raised by point
two is not whether banks are en¬
titled to receive interest on Gov¬
ernment securities, but ■ ■ whether
priyate banks should be allowed
to engage at all in the money
is¬
function, i.e., whether the
granting of deposit credit against
sue
loans
and
abolished.
investments
The
should
question
be
in point
three involves the basis
on
which
.
3,
also
for
Bankers
Bank
Trust
Earnings,
,
The
complete divorce of the
granting of deposit credit from
the lending and investing activi¬
!
Company,
1946-1948,"
1946.
11 Henry. C.- Simons, "Debt Policy and
Banking Policy," The Review of Economic
Statistics, May, 1946, p. 87*
*
■-.
■
•
••
.
f.'
•
,
.
'
.
i
:
of Government- securities.
It
is
only on this condition that Gov¬
ernment obligations become
equiv¬
alent
to
as
tender and,
involve no risk of
loss to the holders.
Moreover, it
implies that there is no cost con¬
money
consequently,
nected with
the deposit accounts
which have been "created."
If
the prices of
Government
obligations are guaranteed by the
Reserve System the case for high
or
100% reserve requirements is
greatly strengthened, not because
bank deposits are costlier crea¬
tions
but
basis
of
because
the
reserve
bank
credit is uncon¬
trolled. To avoid indefinte expan¬
sion of bank
credit it becomes
necessary to limit the discretion¬
investment activities of banks.
The argument for
divorcing these
ary
functions however relates to con¬
trol of the money
supply and not
to bank earnings.
>
,
A
high
very
or
100%
reserve
requirement would limit the loans
and
investments of banks to the
amount of their capital and earned
surplus. Banks could not continue
perform their present lending
functions if they were made to
depend solely on their own capi¬
to
tal
and
surplus. Are the present
lending functions of
banks desirable or
necessary? A
number of writers consider these
functions obsolete in view of the
decline in the relative importance
of commercial loans ancl
the-al¬
terations which have taken place
in* the basis of bank credit.^
How¬
commercial
the absolute amount of bank
loans has not altered
very greatly
ever,
and banks
still today the chief
are
suppliers of
commercial
and
in¬
dustrial customer-loan credit. De¬
spite the large volume of accumu¬
lated liquid assets held
by
corpo¬
rations and their ability to finance
themselves from internal sources
they still rely upon bank fi¬
nancing. In the past year business
firms increased
by
several
their bank
billion
debts
dollars
even
though they also obtained several
billion additional dollars from the
of
Government
securities.
The other institutional lenders and
sale
the
securities
markets
are
not
equipped to handle the kind of
customer-loan credit which is the
specialty of the commercial bank¬
ties of the banks has been advo¬
ers. Competition for
private loans
exists among the various
lenders,
but it is mainly in the case of
cated for many years. Fisher' and
earlier writers'1 desired' ■ this not
standing arid^h the fields
of in¬
termediate
credit
of
because
excessive bank
ings, but because it
was
earn¬
desired to
control variations in the supply
Some of the
money.
more
of
recent
advocates of high reserve require¬
ments appear to object merely to
large^borrowers-'of
and
high
credit
long-term
for fixed capital purposes that the
lending activities overlap. In the
short-term working capital loan
field, particularly in the case of
customer-loans
to
medium
and
granting of deposit credit on small firms, Other lending institu¬
the basis of Government as op¬ tions have not been able to com¬
posed to private obligations on the pete.
ground that banks are not en¬
The. essence of modern com¬
the
titled to interest income since
they
mercial
banking
lies
in
separable
quality than, that which they re¬
ceive. The strength of this argu¬
the
in¬
of
do not provide credit of a higher
the
lending function with the
depends
the
upon
assump¬
combination
banks forced
continue
their
own
costs
of
12 One
would
prospective
shares
System will
guarantee the prices
to
suppose
earnings
that
were
if actual
excessive
or
bank
would
sell well above book values.
Not only did bank shares fall to participate
in the last two
stages of the general bull
May, 1946, but
they failed to rise above book valued The
surprising thing is that during the War
years when the rate of: return on bank
capital
rising the ratio of stock prices
City banks
at or less than 1.00 whereas during
pre-war
years,
1934-1940, this ratio
was
to book values for 13 New York
was
the
below bosk value in only one year,
1938, when the ratio was 0.93, and ranged
as high as 1.42 in 1936.
See Standard and
was
Poor's
Industry
Surveys,
Pt. I, No. 96, Sec.: 1,
Weighted average
ratios of bank stock prices to book values,
based on high and low prices arc charted
in "Banks," Vol. 113, No. 3, Sec. 1, April
Vol
114,
1946, p. B2-2.
29,
11, '1945,
and Vol,
114; No.
96,: Sec, %
■April 24, 1946.
13 Harold L. Seligman, "The Problem of
Excessive Commercial Bank Earnings," The
Quarterly Journal of Economics, May, 1946,
P 369.
■■■■>
14 Ibid., pp. 369 and. 374.
C
*
"
15 C.
R.
Whittlesey, "Problems of the
Monetary and Banking System,"
Domestic
American Economic Review, Vol. XXIV, No.
1,
Pt.
services
2,
Lawrence
ment of
March,
Seltzer
1944,
"The
p. 251;
Changed
see
also
Environ¬
Monetary-Banking Policy," Papers
and Proceedings of the American Economic
Association;
Fifty-eighth Annual Meeting,
Cleveland, Ohio, Jan. 24-27, 1946, p. 75.
*
to
confine loans to
capital and surplus, the
present
day
banking
can
not
be covered.
To
impose service charges upon de¬
posits to cover these costs would
have regressive effects and would
shift the cost* from the, taxpayer
to the
user
ably with
of bank deposits
no
social gain.1?
prob¬
Con-
16 e.g.
Among many others, Henry C.
Simons, "Debt Policy and Banking Policy,"
The Review of Economic Statistics, May,
1946, p. 88.
Corporation,
"Banks,"
Nov).
money
function. If these functions are to
be
separated
and
commercial
tion that the Reserves
market which culminated in
8 For insured commercial banks .the rate
of net profits to total capital accounts was
enterprises nof in relation to bank
3 Henry
to
the grounds that (1) the Gov¬
ernment
are many
and
have."
earnings
found
most business enterprises,"
as
why their gains should be kept
possibly even more than they
See Seymour E.
Harris, "A One
reasons
down
the
also
"in general,
profitable
although he observed that "there
means.
with
on
ment
In any case bank earn¬
have been excessive in compari¬
son
earn¬
keeping with the growth in equity
yields,
hoc
of
Market
stocks
earnings.
excessive
has
bank stocks to
the
to
en¬
capital has
no new
one
failure
creased
If
This
almost
through the sale of
tracted, but
benefit of the banks by further in¬
Bank
Federal Reserve Bulletin, November
See also Annual Report of the Sec-
raised
new
argument holds that
their
securities.
resulted
stock. It is by no means clear
would
relation
deposit credits.
has
ings. Virtually
some¬
rise in yields on government se¬
a
capital
tirely from the retention of
bank
Excessive Bank Earnings
second
in
banks should be allowed to grant
growth
other ."6
or
A
incbme/ 1 Although Federal per¬
;
that
services must
how
large
and, perhaps, ought to
be eliminated entirely. This
gen¬
eral viewpoint has been defended
Government
burdenless
"is
system
sense
too
rendered
to total assets other than cash and
the community as a whole in
on
Because taxes
whole.
I' reduce total income by
<
ent to maintain the ratio of
More recently Hansen
bolder and the debt is burdensome ings are not a proper criterion of
to the taxpayer.
monetary policy and the problem
The payment of interest is also
if it arises should not be solved by
said to be
t>
tutions.5
the
are not based upon bondholdings,
the payment of interest involves a
i
representing risk transac¬
tions.
ing and income receiving groups,
The
they said, indirectly become iden¬
growth in bank capital
tical because of theservices the since 1934 has been
barely suffici¬
hold
] of borrowing and to redeem out-
Government
than
rather
debts
largely by institutions. Tax pay¬
no
government obligations.
Conse¬
quently, the government would be
forced to dispense with the fiction
bank assets
vate
a
V bondholdings there would be
con¬
consist more largely of pri¬
may
widely dis¬
though held so
very
has asserted that debt held by the
tax
securities is
that in peace times
makes
levied in proportion to bondholdings, so that in each and every
the
that the present
policies of guaranteeing the prices
public receives from these Insti¬
,-case
obligations.
vice charges which the bank's in¬
from government securities
fer of money from one pocket to
another. Obviously, if taxes were
„
of Government
come
sen
or
position
of
the
cheap
money school seems to be that the
present "contribution" is certainly
could
kind of negative
a
earnings."11 The belief that
ness"
served that holders of demand de¬
posits derive
excessive
for
less nature" and "ultimate sound¬
tributable
open
payments
The
"a plausible,
as
apology
is adequate is based on the "risk-
1
of
via interest
otherwise."1^
1
the debt, as
the capital of the banking system
would
have to be sold to banks.
The
banks
exchange for their own banks
well as bank costs, wages, service perform a costless operation and
can
hardly be said to provide
charges, etc.io
credit of a higher quality* than
The inadequacy of bank capital that which they receive.1?
in the retirement of
the
increase in the
the debt as ficially low rates of interest would
make the calculated leakage great¬
er
than it would otherwise be
intolerable.
ex-
the Government should contribute
to the income of the commercial
and
less System and the Treasury's policy
tax. system combined with a
concentrated
ownership of
per¬
According to Seligman, "the crux
of the problem is just how much
requires
assets,9
are
bank
rived from Government securities.
factors including
of
of
earnings as
such than with the fact that a
large part of bank earnings is de¬
earnings
on many
volume
the credit policy of the Reserve
on
Interest charges on
Whether the current rate of
which, in turn, is influenced by
as
might result from the removal of
ceilings or interest rates would
prove
obviously
cessiveness
whatever
the
great as generally supposed.
With a more highly progressive
of
that an
charges
annual
«
billion.3
The "leakage" does not seem to
be
assets
securities
concerned with the
depend
$310 bil¬
lion annual interest on a
arguments for
of
maintenance
those
on
re¬
Government
haps less
net profits can be maintained will,
lion debt at $0.9
Debt
higher, rate of
a
would result in larger gross earn¬
(Continued from page 592)
On the
increase,
turn
Government Securities
The Burden of Interest Charges
actual or prospective
earn¬
ings.^ ■. , ■
V?
Tbe advocates of low yields on
..
the rates of
WA-f comparison of
available until too late.
Fallacies of Fixed Yields
to
17 On
this point Hansen, Seligman, and
seem to be in substantial agree¬
Poindexter.
ment.
on.
See Alvin H. Hansen,
"A Symposium
Fiscal and Monetary Policy," Review of
Economic Statistics, May, 1946, p.
old L. Seligman, "The Problem of
71; Har¬
Excessive
Quarterly
Journal of Economics, May, 1946, p. 376;
J. Carl Poindexter, "A Critique of Func¬
tional Finance Through Quasi-Free Bank
Credit," American Economic Review, June,
1946,
pp.
314-15.
On
the
other
hand
Simons maintained
that the services of
"warehousing
and
transfering
private
funds" should be paid by "appropriate"
service
charges,
that
banking
services
should not be free only to persons with
large balances.
See
Henry
C.
Simons,
Commercial
Bank
Earnings,"
"Debt
The
of
1946,
$1
Policy and Banking,"
Economic Statistics, May,
(Continued
on page
Review
p. 88.
620)
THE COMMERCIAL & FINANCIAL CHRONICLE
increase
Fallacies of Fixed Yields
re¬
because Pf higher reserve require¬
the adopted
ments commercial banks: are pre?
automatically*
to pressure
sponse
on
on
Thursday, January "30, 1047
in
•
rate pattern anp increase regard¬
less of the. /condition? that' give
rise to that pressure. The impli¬
mercial
cations of this
debt
from
Vented
vm
national incdme but ii caii hardly '
be so regarded > dnce - physical and •
bdman resources : are fully: em- ;
-
loans and
investments,: non-com¬ jployeji iif, itAiriain effect i? ^ m* '
'
holders
of the flate prices. ^ | ■
be induced, to seil •/"Whhre : 'expenditures' are ' Tisecurities to" meet the demand naneed by money creation, the
following section.
•; <./
(Continued from page 619)
for funds; The 'Reserve Banks only quantitative control possible >'
sequently, if these services are de¬ are payable on demand and be? Implications of Maintaining the must purchase these securities is over the timing and amount of
sirable no clear advantage is to cause deposits often shift from .:,Wartime Pattern of Yields on
to
maintain
rates.
No / power expenditures. The: advocates at V
one bank to another or from one
be served through basic altera¬
Government Securities
i*.
arrangements
their cost is partly or
eyen mainly covered by interest
payments on the debt. If ; the in¬
come which results from the Gov¬
ernment's
policy
of
financing
£ through the banking system is re¬
tion
area
of the present
garded
system
as
losses would not arise from
a
solution is to tax these
remains invested and which is
likely
to
suffer
a
deposits,
lose
un¬
to
i.e.,
of
rate
outpayments
which exceeds the rate of inpay-
deposits, or require the banks to
present service charges.
reduce
rise
interest \ rates since the banking
system is a going concern which
restore the
that merits; barring a general demand
"excessive" earnings will be paid for currency or a forced contracThis
away to cover rising, costs, * par* tion-in' total 'bank credit^©
tfcularly wages. •
> : 'M prgUmeni implies that the bank¬
It will probably turn out
:
system is an enclosed and
consolidated whole, a single giant
bank which is able continuously
to reinvest maturing securities at
higher rates and thereby more
than compensate in; the course of
ing
Rising
Losses Resulting From
Rates of Interest
a
r
wartime
the
of
Maintenance
pattern of rates is also defended
on the
ground that higher rates
would reflect depreciation in the
market value of outstanding Govf
ernment securities. The fear is
expressed that, if the price de¬
clines were sharp, public confi?
dcnce in .the solvency - pf jbanks
aijd other financial institutions
and possibly in the Government
.credit itself might be sbaken.fC A
related consideration is; the diffi¬
culty that would be faced by the
Treasury in refunding-, maturing
securities.19 These arguments
are
difficult to reconcile with the con¬
tention
discussed,
already
that
the
Mghdr rates , would ; enrich
could
enrichment
this
occur
higher rates also forced banks to
take heavy losses; on their securi?
ties and it banks were unwilling
to reinvest maturing funds in the
new
.Treasury issues.
in
j This proposition does not hold
true
for
banking system
a
posed of 15,Q0(> separate
com¬
independ¬
which clearance
i$ far from perfect. The individ¬
ual bank is unable to estimate
ent units among
with much certainty the timing or
probable" amount of deposit with¬
drawals
either
seasonally pr
cyclically and, consequently, may
have to sell securities before ma¬
turity^ arid probably at less than
cost in a period of ■ rising interest
rates.
bank is
the treatment of book losses. For¬
tunately, the average maturity of
bank portfolios is relatively short,
about
four,
five
to
yeans,-
Government securities
book or actual
losses arising from price declines
in Government securities depend*
(1) on the extent of the rise in
ratesand(2) upon the : circum¬
stances which govern the invest*
ment. program of each investor. "
and
change in interest fates would be
ljmited. i "/'■
will be harmed by
; Although under present condi¬
tions the withdrawal of Reserve
p
The fears of
be suffered
.
potential losses to
fey debt holders from
in
yields no Government
securities seem to have been ex¬
aggerated. The losses would be
greatest in the case of the specu¬
a
rise
lative holders and in the
those
institutions
which
case
of
manage
their investment portfolios with¬
J Bank support would t probably be out regard to the probable amount
followed: by a /rise in yields on and timing of outpayments' and
Government securities, it is not to which, in attempting to maximize
be expected that rates would- rise current income, have overinvested
to inordinate heights. The extent; on the assumption rates would not
of the rise would depend upon rise. Wholesale liquidation of Gov¬
securities
with
conse¬
•many factors including .the op¬ ernment
portunities for falternative; em** quent sudden and sharp deprecia¬
%)loynient of funds, the current
of
rate
savings, and
money
management
of
the
by" the
Reserve System.
'
In individual cases the losses in
asset values resulting
would
rates
frpjh rising
only
not
depend
tion in values will not eventuate
ttm unless induced by inflationary de¬
apart*
debt
from direct price support
upon the necessities of each in/ vestor with respect to the amount
is
an
more
vulnerable
vestors
because
18 Woodllef
Problems and
the
15-30,
Experts,
their
liabilities
"Postwar Monetary
Policies," paper presented at
Conference
Mexico
City,
of
Central
Mexico,
Aug.
1946.
19 Woodllef
Thomas, op. cit., p. -9 and
Eccles, "Economic Conditions and
"Public Policy," address before the Sixteenth
New England Bank Management Confer¬
ence of the New England Council in Bos¬
ton, Oct. 25. 1945, renrinted In Federal
Marriner
Reserve Bulletin Nov.,
yields
limits
availability
the
upon
pf
Bank purchases of Govern¬ *fered ;any clear '. cut criteria for;
securities. Recent proposed controlling: expehditlares/ The ; in- ;
versions
of
the ' 100% ' reserve ferehce is ?tiiat ^Gpvernnient met:
bank reserves and; renders; ;the
central bank powerless to:: control
/surplus^
plan2* could prevent the supply cash / expenditures;
pf money from expanding in re¬ would be made to vary in such a
the supply of4 deposits. It; there¬ sponse, to the. discretionary lend? way as, on the one hand to pro¬
fore, leads v to the" adoption .x>f ing and investing activities of mote full employment, and, on the
high reserve; requirements, to the commercial bank? but could not other hand, to prevent inflation of
underlining of the loan functions prevent deposits from - expanding commodity prices.;
The continuance of a policy of
of the commercial banks, and ul¬ in response to growth in total re¬
timately to the imposition of se¬
lective controls over all types of
reserve
lenders;'
the
If rates are pegged high
requirements merely alter
on which deposits ex¬
maintaining the wartime pattern
marked
view t>f the Reserve Board Chair?
term
man
flexibility and
probably ,, would
not afford this flexibility without
serves.
/
.
disparity between shortand long-term rates would
about if it had not
come
been for the bank demand and the
fact
the
that
bank
of
maturity
purchases was shorter than the
maturity of the supply of market¬
liability
1046, pp.
because
the
maintenance
are
would
in
motion
which
more horizontal
this were not prevented
produce
if
curve
a
absorption of short-term
Banks.21
the
by
set
securities by the Reserve
The Government securities held
by commercial banks are consid¬
ered by many persons to be in¬
flationary because they can be
exchanged for reserves. Govern¬
ment securities are therefore re¬
garded
"excessive"
reserves
which afford the basis for a po¬
as
of. bank
expansion
tential
de¬
debt
is
demand
a
that
the
rates must be maintained, with the
Board's view that a rise in total
ers
consequently,
and,
deposits
should
•
be
needed to satisfy liquidity
money
the
desires
with
cessive
money
that
result
holdings
may
ex¬
be
spent. The ex-post equivalence of
savings (as measured by the dif¬
ference
between
disposable in?
therefore (raises
the
and
comes
consumer
of
grant
autonomous powDisagreement
to the Treasury.
•
<
.
is widespread regarding the timr
ing and the proper technique of
controlling Government. cash ex- ;
.
penditures (or surplus)—whether .
by varying taxes or by varying *
expenditures or by both/ More1?.
over, there J? little agreement ♦
upon
debt management; and as
relatively little attention has
given to the technique of
employing Government cash surpulses in the retirement of debt, a
device which might be used if
•
of cash is to
*
yet
;
been
■
Government hoarding
be avoided.
policy of maintaining the
The
wartime pattern of rates does not >
in itself afford
any solution to •
problem qf monetary control
though bank reserve require¬
ments are raised to high levels. - i
On
the
contrary,
this, r policy > •>
the
even
merely involves the surrender of;
existing central bank control and .
forces still greater reliance upon
fiscal controls, which are. neces¬
sary in any event.
.
^
*
...
,
expendi¬
tures) to money plus Government
securities plus
equities
of
private debts and
individuals gives no
clue to the functional
of
the
other
relationship
quantity of money to the
factors
in
the
equation.
equation would be satisfied
at any level of total expenditures
and regardless of the proportion
of savings in the form of money,
the prices of securities,- or the
level of commodity prices.
This
posits.22 Because of this it is pro¬
posed to raise reserve require¬
ments or to impose special re¬
serve requirements
in the belief
that these devices would prevent
further
expansion of bank de¬
of
conditions
Under
full
em¬
ployment the maintenance of a
fixed pattern of rates becomes es¬
device by which an in¬
crease in private investment ex¬
penditures plus Governmeqt ex¬
penditures is financed by the cre¬
Government securities but upon
ation of money. The method by
Reserve Bank purchases of Gov¬
which aggregate expenditure is
ernment securities at guaranteed financed is of importance because
prices, i.e., upon the maintenance it may affect total incomes and
of the rate policy. The sale of
total expenditures.
sentially
a
Edward
L.
of
President
McKendrew, ViceArmand Schmoll,
dealers, was elected
President
of
Commodity
Ex^
change,. Inc. of New York on Jan.
23 at the organization meeting of
hide
Inc,.
the
E
x c
h
a n g
.
:
:
securities
Government
now
held
e's newly?elected >
He succeeds
Board of Governors.
of Harris,
served in .
Presidency during the last »
years.
One of the founders '
Philip B. Weld, partner
Upham & Co., who has
the
four
of the New York
in 1929,
tive
in formation
Exchange
solidation
of Commodity
through conof the-Hide Exchange,
in 1933,
21 Once
are
and
_
Metals >Ex-
National
because
can
a
bepomeg shorter.
22 Board
Reserve
of
/"//,/
Governors
System,
Annual
of
financed by the
ing or by taxation since the new Orvis Bros. & Co;, was re-elected
represents a net addition Treasurer and ; four Vice?Presito; total income payments. Money
dents were relected to head groups
creation does not involve .off¬
setting effects upon total income Vrithinthememboyshipjyiz.^
tjhatr may accompany taxation or ard F. Teichgraeber, - Commfsson
borrowing from non-banking
source?.
Inva'depression/inoney
creation
be a .desirable
of stimulating a rise in
method
' may
be realized
of Government securi¬
lower yield basis and rise in
prices
ties move to
are
money
realized from "riding
These profits
the
Generally speaking if expendi¬
tures
rates are frozen gratuitous prof¬
certain to be
curve."
price as the period of their life to maturity
,
the
Report
Federal
for the
-
of Governors of 'the ' Federal
Reserve System,, Annual Report, 1945, p. 8;
Lawrence' Seltzer, • "The Changed Environ¬
ment of Monetary Banking Policy," Papers
and Proceedings of the .American Economib
Association, Cleveland, Ohio, Jan. 27, 1946;
i'
House QrouB^
Milton/
•
•
.
-
Hr
Y^ehnck^ JHetals; Tradp Group
and
?3 Board
Paoiino Gerli,
Crroup.
Silk
5
,
;
Trade-
Si^iWembers pf the Board
-
Goyernors were re-elected in /
the annual election; and two new :
of
1945, page 4; Committee for Economic
ter
of,
CoV
/'
r :
.
>
Katzen-?;
members; Albprt. ^. .Garthwaite,
Committee -for
-Economic
Development,
"Jobs and Markets,Jan.-4, 1946; Simeon
"Jobs and Markets,Chap¬
President,. Lee Rubber- & Tire
VI, Jan. 4, 1946; Henry ;'C. Simson:?, B.^Leland, "The Government/, the Banks
"Debt Policy and Banking Policy,'.'
The and the' National;: Debt,".1 Commercial ■ and Corp.' andv- Spencer W. :Frank,
163, No. 4456,
Review of Economic Statistics, May, 1946, jnhuncial Chronicle/ Vol,
S
_
P. 86. .
.v;rh/ Sec/1, Jan. 17, 1946, p, 28 B-4^v./// May; Borg &
year
.
J^erg,: Hide. Trade Grpup;rMa^^
Development,
Samuelson, "The Effect of In¬
terest Bate Increases on the Banking Sys¬
tem," American Economic Review, March,
.
,
Evihber/National
Nesv>
Silk
Hide Exchange,
Mr. McKendrew was ac- '
changes.
On the Board of Govbanking ernors continuously since 1933, he
system, i.e.* by the creation of was twice elected to the Presimoney, total incomes will rise by
dencyin 1941 and 1942. a greater amount than if expend-,
Floyd Y. Keeler, partner of
itures were financed by borrow¬
•
pansion in the supply of money,
To maintain arbitrarily low rates
20 Paul A.
•
;
.
of low rates reqiures further ex*
requires that the supply of money
the
t
Forces
the
rather
that
prevented.
However, some writers attach no
able debt. The maintenance of this importance to the fact that freez¬
maturity pattern of yields is de¬ ing of rates requires a rise in the
pendent upon the continued ab¬ quantity of money.-They imply
sorption ~ of Government securi¬ that further increases in the sup?
ties by the commercial banks or ply of money will merely be held
by the Federal Reserve Banks, i.e., voluntarily by individuals in lieu
upon the continued expansion in of Government securities as, it has
the supply of money.
often been observed, was the case
; A curve in which yields ascend
during the War years. They fur¬
with maturity carries ydi*1 it the ther imply that the quantity of
implication that rates will rise. It new money would not exceed the
is illogical to select such a curve amount needed to satisfy the li¬
for freezing. If the market is gen¬ quidity desires of the public and
erally convinced that this struc¬ would have no effect upon the
ture will be maintained, maturity demand for private securities, for
becomes a matter ,of. indifference capital
goods, or for consumer
and, consequently^ investors will goods. - lu
h :
>
purchase the longer maturities ■;i The fact that rates are frozen
which afford the higher yields.
may decrease the proportion of
its
but
^yields
basis
'
effective
inflation,
of
question whether we can/ rely
pand, but do not insure that the upon fiscal controls oyer the vol¬
ume of
money
in placet of the
deposit expansion will be any less
than it would be without high former qqaptitatiye controls of/tbo: •
banks were very large and when reserve
requirements in a free central bank.-At this stage of
the Government was relying heav¬ money market; ,
velopthent fiscal cohtrol? do pot 'f
It is difficult to reconcile the appear
ily upon bank borrowing.
The
to
offer the, necessary
;
The present type of rate struc¬
ture came into being during the
1930's when excess reserves of the
able not because higher rates are
against
-
^
on
desirable/ A pol¬
than other in¬
icy of freezing rates is pbj ection-
Thomas,
Inter-American
Bank
'
investor appears to
freezing rates on Government se- ;
curities/ or ibf: further xeducmg I
those rates have not, however, ofr ;
serve
by commercial
banks for the
Government securities
purpose, of making n^w loans or
be adequately protected by the
has been opposed because higher
investments willlnflafe total bank
cash redemption feature attached
rates would not prove effective in
deposits only if the securities are
to E, F and G bonds. The nature
combating inflation.
Essentially
purchased by the Reserve Banks.
of the contractural liabilities, of the
argument is that the rate of
This will not happen if the gequjr?
insurance companies enables them interest has
only a limited area of
to predict with accuracy their influence. Since it is a miner ele? ities are Sold^fo;BQnrbahkl>uye^
Even if higher reserve require¬
probable rate of outpayments, and ment in cost calculations it is not
consequently, to plan their invest¬ believed to exert much influence ments are imposed, the Reserve
ment portfolios in such a way as onf investment or
Banks can not/prevent an expan¬
sayings, Assum?
sion ; of commercial bank deposit?1
to avoid the necessity of having
ing this to be so it does not neces?
to sell securities prior to maturity.
if rates are pegged in the face of a
sarily follow that a policy of
widespread demand for funds. If
Individual commercial banks are freezing ratejs is
The small
nan
ment
it removes all
velopments. To avoid this outcome
continued market support of Gov¬
posits. Such measures can not
ernment-securities through crea¬
prevent deposit expansion if the
tion of money should be aban¬ rates are pegged at low levels. The
doned in periods of active busi¬ need for such measures rests not
ness and full employment and the
upon the mere circumstance that
rate structure should be made to the banks hold large amounts of
depend for its support upon in¬
and timing of outpayments in re¬ telligent management of the budg¬
lationship to inpayments, but also et and the debt.
upon the discretionary actions of
Ineffectiveness of Higher Rates of
each" investor in the management
V /' :•
' :4':^, Interest
ar .y
"
of his resources.
'
The removal of ceilings from
requirements
prevent a rise in. commercial bank
deposits which results from Re¬
bank policy because
not have
therefore, losses attributable to a
.
The extent to which various in¬
vestors
book
values of old
Moreover, the individual
compelled to observe con¬
if ventional accounting practices in
how
difficult to see
It is
banks.
the/ depreciation in
investments,
tjme;
securities
Government
on
* reserve
over
f
The wartime pattern of. yields
bank
may-
unsatisfactory criterion of central
.
whole Samuelson has argued that
earnings,
payment of interest on
ftevermuenj Securities
another, and, (consequently,
force the sate pf securities
unexpectedly,
For the banking
excessive, the simple
as
to
may
whereby
discussed in the
are
;
;
ri
hg.it ■+<■■■
^Volume l 65 "Numbetf4564 ^ ^:
THE COMMERCIAL & FINANCIAL
CHRONICLE
V?"?*"V•"
'W
;: 'v1\ *!3»o
>';?S • V:**'_
ards for judicial decision of labor
A Federal Labor Court—Is It Needed ?
disputes, that, in
'such
*
(Continued Jfroiii page. 605)
! private injury will result from an
-sibiuties Have been imposed upon unsettled /dispute pver the conr:
the
owners
and' managers
of tractual or legal rights ^nd obliga¬
properties .which ; can be used tions of employers and employees.
either to serve or to exploit the There should be no more difficulty
in establishing the principles and
|Ej public. %f
4 "prp:'rif '.v'* /
judges instead of
on
i..(
the basis of
established principles of economic
justice. A labor court, by a suc¬
cession of decisions, would
proba¬
bly become offensive to
large
the
a free economy
hope to preserve," all
elements of cost, price, and
as
we
profit
or compensation
can
only
determined with approximate
be
521
.* ^ -.;•;[»*.;••./ ( *»A
w.vv=_
arbitration? for the
purpose of de¬
ciding the immediate
If such
case.
decision has unfortunate results
and is subject to
just criticism by
either of the parties or
by the
public, there will be at least the
a
fairness by free and fair competi¬ assurance that
when the next con¬
tion. Thus, before any arbitration
troversy arises calling for a com¬
both business .man-* tribunal should be
called; upon to pulsory
At" the
"same",tzme?, the' govern^ standards for,, hiaking ; decisions, agers. and; labor; leaders and/be decide a :'v labor dispufc, there nal ;wi}l;settlement, a new tribu¬
be/created, thus^keeping
"ineht, has' a duty' to establish the and the methods of enforcing de¬ subjected
to
political
attacks should, be
available prevailing alive in all concerned the
hope ©1
jways^and .wans for the'peaceful cisions, in these labor Cases "than which would destroy it if the gen¬ Standards which' have been deter¬ eventual
justice. ,V V
end just settlement of economic in; a multitude of case's " decided eral public manifested
;
♦
only a mild mined by the interrelated opera¬
'conflicts of interest. If powerful every day in the courts.
One of the great
interest in its preservation, ;;
] tion of competition and voluntary a jury trial is that advantages ©£
There is a second class of labor
It would
also
combinations ,: of' labor:: and of
litigants are not
be; difficult to agreements^
^'•,required to submit their contro¬
capital are left entirely free to disputes which could not be " as make sure of the appointment to
'
*-•/
versies over and over
; pursue
easily settled by a law requiring sdeh a court-of men., of true
again to a
self-interest, ~ the result
Compulsory Arbitration Should
.
numbers
of
'
-
.
.
,.,v:
j
whl not be
a:
workable, competi*
their submission to
a
partiality and broad Vision; with-|
disputes which arise in out pronounced economic
prejudi¬
the making or revision of a con¬ ces. There would be
undoubtedly
gigantic'private forces, out of tract between management and heavy political pressures and poli¬
/§ yriiich private gains will be small labor or in dealing with the ex¬ tical campaigns waged, to
bring
and temporary,- and public losses ercise of managerial Cdj^rols in about the
appointment of men whd
pwill be large and irreparable, The such matters as discipline or op¬ would at least lean to one side
:
civilized y/ay .to ; avoid such con-r erating methods which often can¬ or the other,
and|whose ideas of
pilicts has alWa^ been tor establish not be regulated by precise con¬ the public^interestmight be based,
an administration : of
justice and tractual obligations. Many of these on the one hand, largely on a
to make it the duty of law-abiding disputes ere of a minor character, desire to
preserve a free economy
citizens to use the peaceful means and. should not be made- the subr and to protect
capital investments
;rat their- disposal for the eventual ject of a petty lawsuit. A litigious or, on the other hand,
largely on
settlement of all serious disagree- person, on either side could use a desire to move toward a social¬
f ments.:' •' such suits as a means of continual¬ ized
economy for the supposed
ly
harassing and ~ coercing the protection and promotion of the
Public Tribunal Better Than
other party.
interests of the wage earners.
On the other hand, major dis¬
Compulsory Arbitration
;tiye economy; The result will be
continuing^; warfare•; betweeri
Those
■
•
.
.
•
a
common
misunderstand¬
ing that any compulsory arbitra¬
tion of labor disputes must mean
political restraint upon the free¬
dom employers and employees' to
establish
their
relations
by
a
«i
s
voluntary
labor
agreement.
relations
Of
should
be
course
estab¬
lished on the basis of
voluntary
Agreement if that is possible;- But
wheni one ; jpartyto* a proposed
bargain is permitted to coerce the
•
-other party into
making
an agree¬
ment
to which he is bitterly opposed, there is in fact a compulsory
arbitration by private force. Cer¬
tainly the decision- of an impartial
'public tribunal vwould provide a
•
better
.
form
of
r-;
/
Then' there
putes % over
what
agreements
should be made between manage¬
ment and labor are those most
Difficulties in Applying Economic
likely
considerations emphasize
importance
of
the
second
question which I would raise, and
are*
;>fn which
A- •
m«fhy Situation^
result
to
lockouts.
I
will
in
strikes
assume
and
that the
Federal Labor Court
r
Principles
matter of serious public con¬
cern.
:
/
\.-tz.
Courts
^
For
-s>vs*- '■
Should
Be
\
■*
»
-
•-
No Substitutes
Voluntary Agreements
'Stanees,.thepassage;ofanemer-
substitute d judicial
voluntary
decisions
agreements
These
as^ I
said, that compulsory arbitration
be the exception and not
the rule, When compulsory ar-v
bitration .becomes the rule, there is
ho; escape. fropi; the .result,of :;a
planned;, ecdndmy-^-iio't a; pl&nned
economy resulting fromi the plan¬
ning of industrial managers, sub¬
ject to restraints by organized la¬
should
.
mitted
in
order
to
a
and
standards
be
es¬
formless ideas of economic justice
which impressed the court in the
The great difference between a
judicial judgment in the ordinary
civil
or
criminal
case
and
the
for
op¬
case
of
lies in the fact that the courts
today
enforce
principles
and
standards laid down either in stat¬
utory law or ip the coufse' of the
long development of the common
law; and they are aided by vol¬
umes
of judicial interpretations
and applications of general prin-i
ciples and standards made in spe¬
cific
alone
cases
or
either
by
the
courts
with the aid of adminis¬
'
-
-
not run counter to.
any principles would ; be
-which, in my: judgment, must be prevailing
strongly opposed by revenues all material costs, a fixed
opinion.
The idea is return on capital, taxes, etc., and
adhered to in order to maintain still commonly held that
then to divide the remaining rev¬
persons
the freedom;of enterprise or the possessing
economic
powers enue among the workers as com-+
freedom of labor. /
should be permitted to use them pensation for their contribution.
■freely to.»advance jheir; private But the mere statement of such a
Classes of LabOr Disputes Should
interests, even? virheh considerable formula indicates the impossibility
Have Separate Consideration
damage is done to the public in¬ of its exact application, prices in
There are, however, tvto classes terest and to other private in¬ a free economy are supposed to be
of labor disputes which should be terests.
regulated by supply and effective
; considered - separately; One Class
But,- assuming that only major demand and by the competition of
v consists 'i of: disputes over the" in¬ disputes would be
presented to a other, products for the consumer's
terpretation " and application of federal labor court, two further dollar. Fair wages involve a de¬
%
•
,
entire
life
of
people
a
; the
repression
which
has been inspired
by the
plan of Judge Knox, but for which,
he
disavow any
responsibility.
might consider the establish¬
can
We
ment of
a
permanent judiciary,
a,
of which would be the '
member
presiding ;rc^cer;of-\atty'/arbitr»-'
within the limits of its
jurisdiction
and has properly
presented for its
consideration
all
the
pertinent
facts and arguments helpful to a.
decision.
;*' '
'
■
_
This suggestion is advanced be¬
cause
I realize the value of
a
competent and permanent judici¬
ary In the ^hnhistraticm; of; jus^;
tice. At the same time, I realize
,
the difficultties in the
way of es¬
tablishing
' permanent; edurts
fo**
the
settlement, of economic con^
troversies .which involve in their
of individual liberty,
most serious,
aspects, not the de¬
only
be - maintained
termination of what the
rights of
through the use of ruthless force
men
are, but rather; .the: dete*-*
by a ruling class who inevitably,
mination
of
what
their
rights
according1 to human nature, wilt
should be. Or, let me put it. this
be guided by their own interests
way:
These
economic
cpntroand by concepts of the public in¬
yersie^Tequire^^^ a decision^^ not
terest with which large fractions
what justice is, when well-estab^
of the public will inevitably dis¬
lished principles and; standards
agree!':- :; 'J-:;-"
are applied to what was don©
yes^
;::.:: Conclusions
terday or is being done today.
And so it seems to me that, first,
They call for a decision of what
compulsory arbitration of labor justice should be in what. is
go^
disputes should be limited to those ing to be done;
tomorrow, a Je«and
can
-
_
industries
and
«- -
those
disputes
;:ciripn;£itJfpf%o#rabl^^n^
clearly estab¬ the records of our eternal
comproU;
that stoppages of produc¬
mising betWeeri what 'caught
bfr
.
wherein it
lished
can
be
tion and distribution
public health
will
menace
safety and be de¬
general welfare.
Those who engage in such indus¬
tries, " whether fhey are investorsi
structive
of
or
the
managers,
or employees,
should
understand that, if the scope of
their
operations
monopolistic
that
is
so great
and
the public be¬
xiohe, Or #haf"we"/^dld like^todo, and what we catfdoK MA
-
Gottron Named to Head
Cleveland Stock Exch.
CLEVELAND, OHIO — Richard
for
A.
the necessities of life, they must
of
comes
dependent
upon
them
Gottron, a partner of the firmt
Gottron, Russell & Co. and
take the responsibility of either active in the Cleveland Securities
resolving their
disagreements Traders Asso¬
peacefully, while maintaining con¬ ciation, is the
"
tinuity of operations; or they must only nominee
submit to a temporary fixing 6f for the pres¬
the terms of their cooperation by idency of the
impartial public authority. If such C1eveland
was
established, it Stock : Exfor
operate as a positive de¬ change
terrent to * industry-wide controls 1947. Mr. Got¬
of production, prices, or wages by tron * now
is
Presi¬
either management or labor.. Un¬ Vice
der such a doctrine, both manage- dent
of
the
meht and labor i woiild be com¬ Exchange.
pelled td choose between restricts IK The follow¬
ing their activities so that they did ing were nom¬
not become a matter of public con¬ inated by the
cern; or accepting the responsi¬ Exchange's
bilities which must be imposed by nomina ting
a
doctrine
Would
-
law
on
those who, having acquired
,
-
and
termination of the monetary value the. power to do a great wrong,
contracts, or disputes over the ap¬ questions arise: v^'V-v v
plication or; enforcem
of a worker's contribution, a conr cannot be left free to pursue selfof ' a
legal obligation. The law should Objections to Permanent Tribunal sideration of his subsistence needs interest without due regard for the
provide; for a judicial decision of
and of an existing and an attain¬ interests of others. Under such a
%
First* would a permanent tribu*
such disputes.
able standard of living, and of cus¬ doctrine, neither management nor
nal be preferable to the
establish¬
There would be advantages in ment of
tomary differences in a just re¬ labor would be left free to main¬
temporary boards of arbi¬ ward for
having at least a trial court estab¬ tration to deal with
skill, experience, educa¬ tain their : disagreements to the
separate or
point where their failure to agree
lished with a special and
clearly related disputes One obstacle to tion, and many, many other factors
in serious- public
which defy exact determination. would; result
defined jurisdiction to handle such the
success of a permanent
tribu¬
injury.
labor cases. The law of its crea¬
nal would be that it would almost Furthermore, wages must be di¬
Second, when it is necessary in
tion
would % then ' make
rectly related to production meth¬
labor inevitably incut the
hostility' of ods, to the efficiency of employees, exceptional cases to resort to the
organizations plainly suable and one
party,-, if its decisions were
public decision of; an industrial
and to the hours of work.
capable of ' being Sued, It should usually
satisfactory to the other,
It is my conclusion; without go¬ controversy,, there should; • be; a
provide also for the bringing of and be
charged with deciding
machinery for establishing a tem¬
suits by public •
authority- or by cases on the basis Pf the economic ing too deeply into this difficult
porary
judicial tribunal, com¬
tbird y parties
when
public or and-social predilections- of/ the. problem of
ascertaining the stand¬ monly referred to as a board of
.
as
venture.one suggestion,
me
stay3
a
social pro¬
that is: How should the economic
trative bodies.
Thus the decision
poorvform of compulsory arbi4
portunity for peaceful settlement
/ compared;
with' the • en4 were available. A very human is given the weight of a judgment
of society instead of being handed
-^orcemeht• -of -a judicial decision
tendency to "pass the buck" in the
♦bounded upon a judicial
down as the judgment of one man.
hearing making
of
difficult
decisions
®nd ;a1 cool1 consideration of
all would certainly incline many rep-*
But,
in seeking
to establish
public and private rights involved. resentatives of both labor and principles and standards for the
For centuries, the most
decision of labor disputes of great
impor- management to stick to a proposi¬
**anf conflicts' of interest iri ouif tion
completely
satisfactory
to public concern, we find that the
society
have
been
determined their constituents and to
evade wage - price - profit
relationships
through processes of compulsory the
It
responsibility of making a are exceedingly complicated.
§ arbitration which are approved compromise decision, if this; re¬ might be posisble to adopt stand¬
and exalted as the administration
sponsibility could be transferred ards of profit related to current
of justice.
to a court. Furthermore,
any such returns expected from capital in¬
>
And so, at the
outset, let me say drastic limitation upon the powers vestments in accordance with the
bluntly, that, so far as the plan of employer and employee rep¬ risks assumed by the investors.
-of Judge Kriox provides for the resentatives
alike
to
fight out Then it might be possible to de¬
compulsory arbitration of labor their differences, when no great termine a total allowance for
disputes of public concern, it does public injury is likely to result, wages by deducting from gross
•
out
carry
Such
greatest good of the greatest num¬
ber. But we have had convincing
principles
Let
tion tribunal, but without
vote.
He would aid the
arbitrators in.
bor and by' government, but-an the same
way that a; judge afcte
economy directly planned by the but does not
participate in thegovernment for the purpose of de-r deliberations or
decisions; of a
termining what; products should jury. This would provide skilled
be produced, by what
methods, men trained in the law to main¬
and what wages should be
paid, tain
orderly/procedure^ and to see
and
what
capital returns per¬ that the arbitration board
gram in a socialized state would
be ostensibly designed to serve the
Miration
-
have often
the
•
.
fepeat/
me
social program.
judgment sought in £ labor dispute
which
/V^pf -^ecutive/Ttaefs;fs;;ceriainly plight bpj/reached if ^o vo}thet
•
Let
consideration of particular cases?-
a
*£ehdy ^aw; ;ofythe:^dictatorial
;*
body which may be regarded
prejudiced or incompetent.
^
Not Be the Rule
<
..
is
■
use
:-
demonstration of the fact that, a
tablished
which
a
labor
court
government-planned economy is a
could apply and thus avoid mak¬
politically-planned economy, de¬
ing
rather : arbitrary
decisions signed to serve the interests of a
based apparently on varying and political
party in power. Suc]p a
uncertain
standards
and
arising goyeriimeht control of industry
out of the somewhat rough and means a
government control of the
^'stoppage of production
If we are to preserve the value
distribution will; inflict such of
collective
bargaining proce¬
intolerable hardship upon a com- dures and
voluntary agreements,
-munity that government 'in self- the parties to a multitude of
" protectionAmusfr ^end A economic
minor disputes which may affect;
-warfare and, by executive, judici¬
interstate
commerce
should not
al, or legislative action; decide the be invited by law to transfer their
•controversy. £ In
these' circumresponsibilities to a court and to
'or
:»
envisaged by
Judge < Knox
would
be
given
jurisdiction over, first, unsettled
disputes involving the interpreta¬
tion and application of contractual
and legal obligations,-and,
second,
unsettled disputes over the mak¬
ing or revision of agreements, but
only when a failure to settle such
disputes threatens a stoppage of
production or distribution which
compulsory arbi-
i^tmtioh^thah-^this^^'- A/;/;
,
are
.
It is
v
..
im-j
labor court.
,
committee
board
the
A.
Richard
A.
Oottron
for
of
governors:
Morton
Cayne, of Cayne & Co.; Lloyd
O.
Birchard,
Frank C.
of
Prescott
&
Co.;
Gee, of First Cleveland
Corp.; David G. Skall, of Skalf
Joseph & Miller; Edward E. Par¬
sons
Jr., of Wm. J. Mericka & Co.;
Clemens E. Gunn,
of Gunn, Carey
r
&
Co.; Guy W. Prosser, of Merrill
Lynch, Pierce, Fenner & Beane,
now
completing his second term
as: mart
III.
head, and Daniel Baught
Election will
occur
nual meeting Feb.
19,
at the
;
an¬
At*
made a ganized labor or organizedvcapi- i
tal. Each of them is a powerful
accounts,
economic; force; and usually, each
of them. wants all ihat it can get
The larger New York City Institutions took on the longer
by fair means or foul. But
restrieted issues, as part of switches out of the eligible obliga¬
whatever be their desires—what¬
tions.
Quite a bit of shifting of holdings among non-bank
ever be their demands—whatever
very important, <,»
V
J.
• '
'/V'S
V
1
"Our Reporter on
7,,-i '
V1'
1
*
.
The partially exempts were in demand and
good showing... . ., The ineligibles were bought by trust
pension funds as well as smaller institutional investors. .
'
Governments"
By JOHN T, CHIPPENDALE, JR.
.
Prices of government securities continue to hold near the top of
the recent trading range, despite differences of opinion on the pear*
term outlook of the market.
Some hold the opinion that prices
.
.
investors
,
seems
to be going on now...
<v
over the level at eignty, are matters that transcend
securities are sellingi price advance since the end and outrank th^ih all.
The United States of America
has been rather moderate. . . , It is this price increase
since the year-end, that has been largely responsible for the cautious is itself a Union. It is made up
attitude among some money market followers. . . .
of forty-eight indestructible states,
ward trend of the market and some
of last year
While sensitive to news, particularly to statements from the
monetary authorities, it is not believed that the market's present
balance will be upset or any important change in the trend of
The best showing of all issues
;
Such an offering is not expected for some
i.
this group.
•
rfvff--
^
*
^
,
.
r*
•
i*
'
{
' ;
r*»
.
<
•
-
♦
v
JH '4
•
*jj
*'■
'
time to come by
:-i// :
T
r
"
,
•>»
was
The 2%s due 1960/65, showed only a slight price rise,
intermediate maturities still seem to be the most attractive
r
GOOD DEMAND
,
,
.
place in which to live, our Union
—
The
of thes*
...
cited about.
restricted obligations for income.
As for the hank
time.
for
.
.
yond calculation. But, we did far
more than that. We sacrificed the
lives;
we
ruined
shattered the bodies and
health
the
Are
vain?
in
are
dead and gone,
due
STAY
1952/54; the 2%5/due 1956/59, and the 2s
1951/55, the 2s due
1950/52.
due March 15,
Increases
the 2V2S due 1952^^/^vNext came the 2s
^ of
a
point.was registered in the
t
Zy2s due 1956/58 and the Zy2s of
dictators
the
the
of
those
longer, encumber
no
earth?
My answer to these ques¬
tions is in the negative.
I hope '
be the same.
yours may
...
of less than
supplant
who
blood and kindred
their despotisms will
that
—and
.Hitler
while
.that,-
men—our own
the 2V4S due 1952/55, and
under¬
to
we
and
their
places have been filled by other
eligible taxables as a group made-the most limited-gains of
advances only about V\ of a point. . . . The leaders
the 2s due December 1952/54, the..2s. due Sept. 15, 1950/52,
were
hundreds
of
thousands of
the^ flower of American
youth.
Are we now to be told that all this
of
hundreds
Mussolini
The
.
PATTERN TO
in our effort to as¬
poured out
freedom,
our
wealth and treasure that are be¬
stand
1
...
all issues with top
invest¬
the market much more on an
sure
was
.
OTHER LEADERS
they would probably not be disturbed, irrespective of price trends:
Also the end of the inflation fear,, which seemingly takes along
,
.
gain of all was in the 2V2S of 1967/72.
The smallest
Purchases of government securities made recently have been
almost entirely for income, and holding to maturity, which means
.
;
.
»v
.
of speculators last year; put
ment basis.
1 '
' *\
RATE
i
due 1959/62 and the
the Zy2s due 1965/70, the 214s
Zy2s due 1966/71.
This movement from shorts to longs, and viceversa, should not have a noticeable effect on the market. ., . .
Changes in positions made so. far have resulted in price move¬
ments, have been pretty much of a standoff, < .. The elimination
some
1962/67, 1963/68, 1964/69 were the best actors,
The Zy2s due
followed by
eligible issues, the shift in holdings, which
have been the most important, market factors, should continue
the land and,
upon
take up the issues that are being sold by institutions and individuals
that wiltneed funds for; their own business and other purposes.» . .
recently,
—
...
This will
...
mine
and
yours
waged war against the, enemies
of mankind. In that struggle, we
massed the collective strength of
Although the floating supply of securities will increase as prices
1
advance, particularly the bank eligible issues, demand is and still fire.
should be ample to take these offerings without affecting very much
INELIGIBLES
the general level of the market, v / . Absorption of the larger supply
of securities improves the whole position of the market, since not all
The ineligible bonds made the next best showing but here again
of the funds realized from the sale of eligible issues wilt got into cash
increases have not yet exceeded % of a point, nothing to get ex¬
or short-term securities/;\ VTherb
hre^ and "Wilt bdntihUe to be, pur¬
chases of long-term
14,0
children.'
In order to make the world a safe
bonds..,. While these securities to advanced since the close of 1946*
the largest gain was only V2 a point, not enough to set the market on
v
membership of
a
million men, women and
the
in
it has
and
from the end of last year, to
partially exempt bonds, with the
due !
1955/60, the
due l958/63, the
due 1954/56, the 2s due 1
1953/55, and the 2%s due 1956/59, the leaders in that order.. . . i
date,
prices take place until there is a new issue of long-term bonds.
■
apprehension
which government
S
i
discussion about the up¬
Although there have been considerable
although there might be minor act*
justments from time to time,.V.. Periods of hesitation, or unimportant
down swings in prices, have turned out to be areas of consolidation,
which have cleared the market of temporary over-bought posi¬
tions. •" >
rights—the
respective
of this nation to live in
peace and security, together with
the Government's right to sover¬
right
MODERATE PRICE INCREASES
...
not vulnerable at these levels,
their
be
.
.
are
1947
Thursday, January 30,
THE COMMERCIAL & FINANCIAL CHRONICLE
622
;
;
speaking as I have, \I trust
I have not been violent.^ If so, T
In
apologize. Nevertheless, the pres¬
.
The IV2S due Dec. 15, 1950, were practically unchanged, which ent situation as respects manage¬
of the greatest
threats to a change in interest rates, as well as the equilibrium of thci gave added proof to reports of trading out of this security into better ment and labor, requires that men *
speak plainly and forcibly: Other
government bond market.
The rate pattern will not be changed yielding issues of about the same maturity.
men, upon similar occasions, have
despite opinions to the contrary, until there are more data available
with it the prospects of a boom,
.
.
.
basic economic trends;
on
.
probably
removes one
.
somewhat.
conditions should deteriorate
.
.
.
•
done so. One of them
Woodrow Wilson.. When he ,f;
certainly
If anything should happen to money
.
rates, it is more likely they will. ease a bit, particularly if
business \\
<,\yas
was
-
confronted with the prospect
of railway and
INVESTORS WARY
v
^
,
,
,
;
.
he
In^ridfeac^
,
believe that
/
;
r"l ;" /■
-SV v>
■ "
too long, be-f
(Continued from page 605)
cause investors are. becoming more skeptical; about putting funds: to
which it is now perodically sub¬ reply.. It defies the government
work at these prices.
It was also pointed out that institutions
jected, I should have no hesitancy and treats its officials with con-^
are not showing a tendency to follow prices up, with this particularly
tempt. As and when it wills, labor
in doing so.'
true of the restricted bonds.
establishes a picket line and is it¬
Over the
On the other side of the picture, there are those - who,
•
I-•;••••
flf.V
...
Where positions have been taken on by insurance companies
(especially the big
been because .they
little
funds
new
/sources.
ones)
going
into long
restricteds
.
.
.
Volume in
from
these
tion of that establishment.
objects of felonious assault. Upon
such occasions, the law—yours and
issues has tended to decrease sharply at recent
trading sessions as prices hovered about their tops of the present
trading range.... Sales must be made in most instances before pur¬
chases will be undertaken, because investable funds are either being
kept part in cash, and pari in short-term issues, and are not being
put into the market at these levels; v
ests, developed mines, built rail¬
ways, improved technologies and
showed us a way to comfort, lei¬
MONETARY POWERS WATCHING
who dare
many
prosperity and happiness. At
their worst, they mistreated each
other, acted unfairly, breached the
peace,
and brought insufferable
sure,
of over-bought positions in certain issues*
although so far this has not been substantial enough to mean very
much,... It is* felt that the monetary authorities are ready to inters
vene either directly or indirectly if the market should move up very
are
much from
appearances
current
levels.
.
.
.
The threat of intervention
on
the
part of the powers that be, will tend to hold the market in check, and
keep prospective buyers out of it, until it moves down to lower
levels.
...
.
Although, .economic conditions will be all-important in deiey1
}
'
mining future financing policy; it is held iii some quarters thai
there could be an offering of long-term bonds >to non-bank in-
vestors^ at any time, particularly if needed to halt an upward
>
in the market*.
surge
issues.
.
«.
This -would mean lower prices for all
I
.
-/J/
■
Offerings of securities by other investors, especially. those by
business concerns and some individuals' in order to meet the needs
for working capital and allied purposes, will increase and there will
(not be sufficient demand, at these levels to absorb the;new supply..u
Also a trading market is expected in the financial district and a trad¬
,
H
ing market was never a one-way affair in either direction;... There
are many holders of government securities that have profits*, that will
be taken as soon as there are signs that cthe market is. topping out.
These sales would tend to bring the level of prices down.
„,
.
.
.
.
STRONG ARGUMENTS
Those
appear
on
to have ample arguments to support their respective views.
as good shape as some seem'to think it
is/ and those that are looking for lower prices are doing so in order
to get
back into the market again, because they are sold out bulls,
something that time alone will tell.
It should, however, not be
long before the answer is known.,,
.
.
.
.,
MARKET ACTION
The market pattern is still about the same with buying of the
eligibles going on for the purpose of building up income and, to a
lesser extent, rearranging; maturities. Shifting of maturities is still
mine
that line are the
looks
frequently the
gives
acquiescence,
on
with indulgence.
—
-
and
The
pickets often take possession of
property to which they haven't the
slightest claim, and it is sometimes
burned and destroyed.
But,
and years, to be more
become
this is. not
all, labor has
arbitrary,
strong, and
so
dictatorial, so in¬
specific, capital was rapacious,
selfish, bold and domineering. Its considerate and monopolistic, that
policy was to have and to hold it dares declare—to you and to
power and to grasp for more.
It me—and to the public in general
—that we shall eat and drink—t
exploited labor, practiced extor¬
tion on the public, and corrupted that we shall be warm or cold—r
that we shall travel or remain at
government. Its strength was so
great, its prestige so vaunted, its homer-that we, shall, tn a sense;
live or die, as and when its leadarrogance so bold, a§ ta make it
appear
that plutocratic wealth ers-r-drunk with power, and filled
with the
opiate of authority—|
was Invulnerable; to attack from
so
any: sourco^ whatever;
But/ how
are the mighty fallen!
The Inter¬
state Commerce Act, the Sherman
Anti-Trust
law, and the Security
legislation,
statutes, and ^ like
have
effectively
checked^tho;
|iredntory^raid^bn
and
Exchange
capital formerly engaged,
Which
concentrated wealthchastened and humbled-^bolds -a
<2Up in its hands, and asks for gov¬
and today,
ernmental alms.
-.
,
', /
-
Labor Waxed Strong and Great
the bullish and bearish side of the government market
Whether the market is in
is
For years
cross
butts of insult, and
harm to us all.
There
of the justifica-i
Those
management at their best, and at
their worst.
At their best, they
were
a
boon
to
all
mankind.
Very
.V//' V
♦
self the sole judge
Working together they felled for¬
have sold out eligible obligations.
are
had
in the longer-term ineligibles, it has
past 30 years, I have
occasion
to see
labor and
Labor, in the meanwhile,
Congressional enactment, a
by
4
n
courf decisions, waxed strong and
Under shibolleths,
strike, the dig¬
nity of labor and a higher stand¬
ard of living, it has been granted
an immunity that is not only un¬
justified/ but positively danger¬
ous
to public security and wel¬
became
such
fare.
as
great.
the right to
It
now
dictates to manage¬
ment, and management dares not
ruthless and
sound
the
to heaven
.
bell that summons
or
us
to hell.
coal mine strikes,
"There are
moved to say:
sbmeC^hirigs^^^14 i^<fe'kiciety.
•'
J V'v
the market is moving bp to levels that it will not* hold
...
was-
profoundly interested that its''
take precedence of the
any group of men
so
interests
interests -of
He further remarked:
whatever."
"The
difficulty
like that
this
is
about
situations
*
have passed through
we
that
the
main
partner is ?
left out of the
reckoning,; These A
men were dealing
other as if the only thing to set¬
tle
between
was
whereas
was
the
real
themselves,
thing to settle
what rights had the 100
mil¬
of the United States*
lion people
The business of government is tp
that
other organization
is
itself, to see that no¬
body or group of men, no matter
what their private interests, may
come
into competition with .the
authority of society."
see
no
strong
as
as
Another luminary of America—
Holmes—once
Mr.
Justice
in
similar vein. He said: "I have
a
no
doubt
either
that
when
of capital or
serted in such
the life of
the
spoke
power,
labor, is
a way as
as¬
to attacjk
thf commtottYfc those
who seek thto private interest bit
such cost are public enemies: and
should be
dealt With
as
;such/*
*,
*
,
Froip this quotation, my vehe-r-
if any,, would appear to
something less, than that of/
Mr. Justice Holihes. T wish to take/
ing the sins of management, I am
not the enemy of management; vengeance upon- no leader*—either
of industfy qb of, labor: Lhave no
wish to destroy,: or'indeed: impair
notwithstanding the sins of labor;(
I am not; the enemy of labor; It the power., of any well disposed
is my wish: and: desire; it is in¬ labor organization, ; The; purpose
deed my earnest prayer/that each I haye -ih mind, is "that leaders
of these groups should thrive and both management and labor, to¬
gether with the groups over which
prosper, arid that each of them
should hiave every right and priv* they exercise authority, shaH be|
ilege to which it is entitled. At subjected to the, obligation, that
the same tipie; there is one thing rests upon each and ^ery citizen1
oLthe tlnited. States., That obliga-^*1
that I emphatically insist, must
tion is that when a citizen exer¬
cOme to pass. It is that neither
cises his rights and privileges, he
capital non labor; whether acting
shall do so in, a manner that will
separately or together, shall have
not inflict undue injury and suf¬
the power to deprive you and me
fering upon his fellow men. If this
of the necessities of life.
obligation be not observed^ the
Nothing Sacrosanct About Labor persons or the communities,- that
are aggrieved, can 5 resort to am
In my judgment, there. is noth
./American court, ato: there obtain
ing sacrosanct about«either or¬
In making these
me assure
you
statements, let
that, notwithstand¬
•mence,
be
,
.
Volume 165
the.
protection
{THE COMMERCIAL' & FINANCIAL' CHRONICLE
Number 4564
and
redress
upon the ability and capacity
of the judicial process to render
feasibility of what I suggest, and
one of them, a prominent Senator,
has been supplied with the text of
a bill that is designed—if it should
be enacted—to put the plan into
operation. This bill was drafted
by my friend, Nathan April, of
justice whenever it needs be ad¬
New York.
in the way
of supporting my pro¬
Of what
For what he has done
which they
may
to
be entitled.
of the Judicial Process
Capacity
-Dpori this theory,- and in reli¬
ance
ministered.
I propose that when
labor disputes bid fair seriously
to 'affect the normal channels of
interstate
and
commerce,
found to be
posal, 1 wish publicly to thank
him, and here and now, I express
my gratitude.
are
incapable of solution
Just
through
what,
will
anything,
if
doms
good are the four free¬
about
which
prate so
loudly if the contending factions
of management and labor instant¬
ly, and without provocation, can
deprive us of each and every one
we
other
Still
persons
will
say:
4fUnder the plan you have in
mind, labor would be deprived of
its right to strike." "This
right,"
they will declare, "is so vital that
it
must-
By
be
never
surrendered."
of reply, I wish to remark
that labor's right to strike is in
no way superior to
my right, at
all times, to be supplied with the
eventuate, I am unable to say.
I
hope, nevertheless, that something
battle.
necessaries of life.
Nor, in my
judgment, is labor's right to strike
Above And hcyond the right of a
By so doing, it is conceivable that
man to work. And
then, too, as we
you may lend assistance in see¬
give thought to labor's right to
ing to It that your country and
mine—once and for all not; only strike, we should also remember
your
make
arid
impartiality, prevail toJ, a
greater than in the; Federal Judi¬
cial estabishmfent, J also believe
that If courts of the Uriited States
were
authorized to exercise juris¬
justice to all concerned.
If
so,
a
but henceforth will ex¬
the rightful authority of
recovers,
ercise
diction Over such labor1 disputes;
they could and wpuld determine
these controversies with right and
percharice, should also be
attitude, I trust you will
bold to declare yourselves.
this,
Tt is "iny; belief that* nowhere
else in all the world does fairness
If
the American
'
i-?
„•-.!••.
O
t
,v..;" '■
members
who
go
on
strike—not because of their wish
I have
reason
to
be¬
lieve, can be counted
by the
the thousands. If any one of them
refuses to strike, or dares criticize
the leader who calls an unwar¬
:
court's
clerk. shall, treated
fairly; and by which this
city.
country can be relieved of the
Fifth—Three
of
the
Associate
The
labor—but the country as a whole.
'As bearing upon this statement,
let 4s glance at the economic
loses that strikes bring about.
Ac¬
cording to the Department of Labpr, this country, in the first six
months of 1946, suffered 85,500,000 man days of idleness.
This
lqss amounted to. 259% of Oil
working
time.
The
resulting
irionetary loss to the workers' is
reliably estimated to be $770 mil¬
lions or $250 per man.
measures
be
Conviction.
this: when irre¬
It is
to be his
portion." When this
sponsible power is possessed by
Any man, or by any group of men,
of
tjhat power, whether or riot it be
exercised, is a constant and threat¬
be his if he
ening menace to the peace, order
and welfare of organized society.
That
such
curs,
the
oc¬
worker will be deprived
his job, and prevented from
getting another. Indeed, luck will
mayhem,
be
and
not
subjected to
torture.
And yet,
whatever happens to the worker,
has been fre¬ he is from a
practical standpoint,
quently exerted, and is today be¬ without the
slightest chance of re¬
ing exercised adversely to the dress.
power
Repressed
American people,
is. within the certan knowledge of
interests of the
in
their
Let
remember
us
with
Mr.
Justice
like liberty, though immune under
the Constitution from destruction,
divisions, and be the
permanent judges for each such
The two remaining As¬
sociate
Judges shall be designated
Judges at Large. They shall be
resident in Washington and shall
as
perforin such duties
Judge assigns them.
as
the Chief
shall
have
jurisdiction to. evoke, hear
and
determine all labor disputes hav¬
ing to do with Interstate Com¬
merce.
I
:•>;,<
Seventh—The
court
shall
be
equipped with such facilities and
clerical aid
required.
as
It
reasonably be
may
shall
also
be
vided with the services of
a
pro¬
Mar¬
shal. "
union who
labor
court
or
utter¬
First National Bank
Of
Memphis Promotes
f MEMPHIS, TENN. — Hugh
Sinclair,
Assistant
Manager
the
Bond
tional
the
Department, First Na¬
of
Memphis, was
settlement
be
filed
respondent and the
of
judgment rendered, at
least two of the judges must con¬
ary.
Such decree
as
may be made
Mr. Sin¬
Janu¬
native
a
of North Car-
olina,
j
M
became
associated:
with the First
'
N
t i
a
o n
al in
as
1940
Mis¬
sissippi repre¬
sentative.
He
entered the
Navy in 1942,
Hugh F.
and
Sinclair
was
leased
any
cur.
in
clair,
each
stand at issue. A time and place
for the hearing of the controversy
shall then be fixed. The
merits,
thereupon, shall be heard by three
judges of the Labor Court, and,
f
o
institu¬
tion
will then
case
Vice
President
that
thereof,
behalf
on
As-;
an
sistant
party to
petition, the
may
F.
of
Bank
which is
dispute
for
shall
in
Process".)
labor
or
re¬
three
years
later with the rank
lieutenant in the U. S. N. R.
of
In
ances, dominated in their actions, shall embrace a specific direction January,-1946-he-was made ^As¬
and victimized frequently by of¬ or
award
on
each
demand
in sistant Manager of the Bond De¬
in this room. For our ficials who should
partment.
give them pro¬ issue.
mutual
protection, and for the
The bank also advanced four
tection, the lot of many of our
: These figtu:est unfortunately, do; maintenance and dignity of our
Ninth—In deciding a case, the
workers has about it some of the
other members of its personnel;
not take into : account, the losses
birthrights, it is essential that characteristics of serfdom. These court shall be guided by these James F. Hunt to Assistant Vice
that came to workers
who,, not those who hold this power should
principles:
conditions should, and ultimately
President, Howard'i Brermer io
being on strike themselves, were be forced tq relinquish it.
(a) No settlement decree shall Auditor and; ;J. C».
must end.
Wyckoff and
forced into idleness because of
i The
be inconsistent with any law of
opposition that I anticipate
Robert D. Lambert to Assistant
their employer's inability to .obr
the United States which regulates Cashier.
will. Apme froiri *both: labor And I Right to Strike
Allen Morgan, Executive
ys.gight to Live maximum
*
tain ^ jsupplie^j on: Which :their
hours of labor or mini¬
management. A dozen leaders of
Vice President, was elected a di¬
But, reverting to the matter of
workers could operate.
every person
union
labor
have
already
ex¬
'
The
Impact of Strikes
.But, there is more!
well
as
as
You and I,
wage-earners, feel the
impact of strikes.
They tie up
our supplies of
goods, deprive us
often of; milk,
groceries, coal,
drugs and
medicines.
Being un¬
things that are
needed for health, comfort and
convenience, our living standards
must necessarily fall.
Being re¬
quired to pay abnormal prices for
the things that can be obtained,
able
to
get
the
the
purchasing
power
of
our
money
is
correspondingly
re¬
duced. If, due; to a trolley or bus
strike, your children are unable to
attend school, they are subjected
to a loss that is beyond
redemp¬
tion; And if, because of a rail or
coal strike, you cannot properly
heat your home, and someone
dies, as a result, the responsibility
may well lie at the doors of labor
or capital, or both.
If labor
into
courts
were
to
come
existence, and were,to gain
the respect and confidence of both
employers and' employees, many
strikes might easily, be avoided.
Ponding ;the settlement of a dis¬
pute
a
be
expected and is welcome. It is
desire
that private might
their
shall take
precedence over public
right, and that they may continue,
as and
when they choose, to en¬
gage in warfare against the citi¬
zenry of the United States. Their
attitude
should
if
of
our
convince
leaders
bread
lirie^but at' their,
ma¬
chines; they could- live in - peace
instead of being engaged in
war;
they could
retain
their
selfrespect "by Acting as law-abiding
cifizehs, ^md;in refriining: from
becoming" thugs and ruffians; their
families^instead of Acdri&irightened, anxious and distressed as to
.
*
to
cumulative
(d) No employer shall be re¬
quired to pay an employee any
preferred
and
mutual
adjustments.
adjustments of your rights
mine are the reasons why
tually been replaced by something
better, viz., the attainment of jus¬
tice through the
medium of law,
interest
is paramount. I refer to
carriers, such as railways,
him
for
any
unless
reason
prescribed by a law of the United
monies other than
(e)
not be
as
wages;
Confiscatory
awarded;
shall
wages
(f) No settlement decree shall
contain
clude
er.
the
award
an
that
will
pre¬
fair profit to the employ¬
Neither shall it be made upon
a
premise that
employee is
entitled to share in the profit of
the employer.
an
(g)
Consideration
shall
be
given to prevailing rates of wages
the
in
industry involved and to
the effect of a
upon
the
rise
or
fall in wages
the general economy, and. to
adequacy
of
existing living
standards.
(h) 'In fixing wages, the court
take into account, an em¬
ployer's past, present and future
shall
profits.
Tenth—If
settlement
a
decree
awards
employees a
rate, of
Wages i that ,is v:higher than that
^ previously existing, the new rate
.
Common
shall be retroactive to the time of
beginning
suit,
and
such
Eleventh
—
Settlement
decrees
labor Aourt Would be
r
guided: *
shall be enforced by injunctive
Fir§t~-Tlie. 'establishment of a decrees, receiverships, and other¬
assurance
t
Ahall he held in New York, Chi¬
;
along with the public, would have
steel, and the manufac¬
cago, Sari Francisco and Washing¬
justice, under the law of the land. ture* Of Automobiles. And
finally,
'These are some of the objec¬ let
ton, D. C.
me-say* that the public is vi¬
tives for which I strive. It is en¬
tally interested ift the production ;i Third—The Court shall have
couraging to note that, across this of' milk;' butter and r other; food three'divisions, to be known re¬
land, thousands and thousands of products:^As respect these mat¬ spectively as the: Eastern, Central
and Western.
I
of the items to which I
ant
have
re¬
ferred. What I have said is merely
suggestive. It is my hope, never¬
theless,: that some -of you may
meet together and evolve a feas¬
^ Fourths—The Chief Judge shall
ible and
preside
dustry may thrive; by which la¬
bor
and
management may be
con¬
the
never
velop into
a
be
permitted to de¬
war against society.
that
are
over
sessions of the court
held in
Washington. The
fered
to
pany
for
employees of the com¬
a period of 30 days at
$9.50 per share. The balance of
20,000 shares, plus all of the stock
not
subscribed
for
by employees
is
being offered to the public, at
$10 per. share. The company;
formed in 1928, is the nation's
largest manufacturer of beauty
parlor supplies and ^equipment;
Proceeds
will
be
of
this
added
to
financing
the
general
working funds of the company. It
the present intention to use
these funds to finance carrying of
inventories, to pay operating ex^
penses and to finance accounts re¬
is
ceivable.
*
The
;
series
new
A
preferred
stock ;is redeemable on 30 days'
notice at the option of the com-*
pany at any time Jn whole or in
part at $11 per share plus any un¬
paid cumulative dividends.
The
preferred stock is convertible into
two
stock at
shares
of
an
initial rate of
common
for
each
share of preferred.
When organized under. Illinois
laws of; 1928, the company was
known as The National Mineral
Company. From Nov. 27, 1945, to
Oct. .26,
1946,
it operated under
the name of National Industries,
Inc.,
and
on
the
latter
date
its
irrevocably committed to aiiy one
me,
should
Congress have
respect to
with
par)
advantage of the good-will estab¬
to
tweenf^Aianageri^
of
me
($5
present name was adopted to take
occurred
Members
sulted
be-
convertible
stocky series
A, of
Helene Curtis Industries, Inc. of
Chicago. Of the total- offering 40,000 shares initially- are being of¬
not
has
persons—workers-f included—hope
that these ends may be attained.
ters, certainly,- the- quarrels
Simons, Unburn & Co., on Jari.
28 offered 60,900 shares of 50-cent
common
sums
shall carry interest at six percent
telegraph and telephone facilities* Federal Labor Court to consist of wise.
I refer; too, to the productiori Arid a Chief
Judge and eleven Asso¬
that, whatever be distributionbf^<ioal;'• Oil, igas ;drid
( This,
gentlemen,
is
a
mere
ciate Judges. |
the merits of the
::
controversy in¬ electric curent. I further refer to
sketch of the jurisdiction and pro¬
i" Second-rSessions of the court
volved, each of the participants, the production and fabrication of
cedural details of the plan that
with
Market
on
States;
Such
to
fight labor-^nd to do so
Outline of * SLabbr "Court
deaths Management seems to fdrf I
get that many of the industries, 15N0W;At the risk Of coirimitting
Of which it has control, have to do A
trespass iipmv^ourtime* let me
\krith essentia! services and that, give -yott a^ brief outline ofisonie
with respect to them, the public of the
principles by which my
what may happen to them, could
have a sense of security, together
Placed
jected
be not curbed, they may,
to
unto the
Helene Curtis Stock
from
labor
reason, ; management
prefers
maintain its present privilege
rector.
whenever they are about to col¬
lide with each other, must be sub¬
that
us
of
rates of
mum
pay;
the right to strike, the right to
(b) No decree shall require that
live, and the right to work, it is to
be observed that no right is an any employee be
or
remain a
absolute. Theoretical right is one union member;
thing; actual right is quite an¬
<c) The wages payable to an
other.
And, theoretical rights, employee shall not be withheld
you and I—day in and day out—
can live our lives—not only with¬
conceiv¬ out friction, but in
peace
and
ably, wreck industry, destroy the amity.
For like reason, labor's
capitalistic system, and change right to strike
may possibly have
our form of government.
Within to
undergo qualification, and be
my own courtroom, a communis-, curtailed. For
my present discus¬
tic labor leader has openly de-;
sion, however, the right to strike
clared that if the court could not
is hardly more than an academic
find the money to meet his de¬
abstraction.
Under my proposal,
mands, it would be well to per¬
partiality in labor disputes would
mit ,the company whose affairs
give way to impartiality, and la¬
Were under administration, to be
bor, having
obtained
a
better
operated by its employees who, method of
obtaining its just ends,
he said, were the true owners of
would be without the necessity for
its property.
strikes. The right to strike is of
j Management, too, will not will¬ value only when some proper end
ingly submit to the judicial super-* of importance is thereby to be at¬
Vision of its" ^relationship to laboxv tained. If that end may otherwise
Management' says that, if' Jthis be attained, and with more like¬
Wore to come about, it would im¬ lihood of justice, the right to
pose re^rictiphs upon tlie right of strike has lost its value—has ac¬
some
;betw.een>;management i and |ree enterpriser For; this alleged
labor,5workers; could; stand-^-riQt
in
pressed themselves as being an¬
tagonistic to the scheme I have
outlined. This opposition was to
just
-
means
by which in¬
■
(Benjamin N. Cardozo, in
Nature
of
the
Judicial
.made
Eight—Any employer
a
that—"Property,
that regulation
shall be,
every
generation must work out for it¬
self."
court
Cardozo
is not imune from regulation essential to the common good. What
"The
Sixth—The
I have in mind
with the exception that if a
party
vigorously—perhaps bit¬
is represented by a
would descend upon this pres¬
bargaining
terly—opposed. Those who are in ranted
strike, he is a marked man agent, such agent shall be before
ently tortured and troubled land.
possession of irresponsible power, from that
day on. By one pre¬ the court. The Chief Judge shall
; Tpe
riattd .Teconproic.
seldom wish to relinquish it. In tense or another, suspension or ex¬ determine the prima facie suffi¬
gains, would be of inestimable
any such situation, I hold a firm
pulsion from the union is likely ciency of the petition. An answer
bpnefit-^-not only to, capital and
;
blessing—devoutly to be wished~ Will
v
travail of civil War.
of the three
so—but because they must.
These men,
Opposition
v
union
to do
people.
Foresees
:
the
the
Judges shall be designated to each
way
negotiation, mediation,
arbitration or other peaceful pro¬
cedures, 4hey be settled by?judi¬
cial decision, and not
by gage of
worth while will come to pass.
of
also be located in that
division.
them?
of
office
T23
lished
under
its
trade
name
of
"Helene Curtis."
In addition to the manufacture
and
sale
of
beauty
supplies,
beauty equipment, and furniture
for beauty shops,
the company
also manufactures 16-mm film and
sound
projectors.
THE COMMERCIAL 8c FINANCIAL CHRONICLE
624
ilif
America Has Lost Much of Its "Good Form
590)
ot ixs national
(Continued from page
form, tne pattern
existence, began to change.
{Taking advantage of a deep de¬
pression that troubled the minds
"bet¬
their
Ideas on credit and
a clash of economic
nation, torgers of a
of life" began to put
■pf the
ter way
ideas4o work.
debt mixed in
ideologies.
We began
at windmills with new
definitions of credit. We sought to
find an easy solution to economic
and social problems through lib¬
and social
tilting
eral use of public credit.
public and the alluring prospect of
solution for our problems through
government spending found ready
acceptance. Our national concept
turned from its historical form of
individual. self-reliance to one of
looking toward Washington for
help. Every class of society—the
unemployed,. the
worker,
the
banker, the business man, the
—
called upon the.
Federal
Government for services or bene¬
fits
or*
both. Chambers of Com¬
for Federal .aid in all
merce asked
kinds of civic
rolled
projects. And out
Federal treasury
from the
the thrift and savings of past gen¬
erations/gathered
in
public
by
borrowings.
{
We used government credit lib¬
'
erally without regard to cost or
economic value.
of financial history
inflation Of public
credit we sought solution of prob¬
lems which the inflation of private
credit had inspired. Recall with
me
that
in the late. twenties,
sound principles of
credit . had
The paradox
is that through
ignored,
been
we
brakes down hard on* business and
ft
industrial -effort.
used; private
credit liberally without regard to
economic value, we organized cor¬
porations and we buiri/ buildings
for the purpose of selling stocks
and ; bonds,
instead Of : selling
ate, rational. We cannot feel about
Will Budget Be Balanced?
public debt, we must think.
still ' inadequate
least, whose ability to pay is taxes' are
for
And this brings us logically it
For without financial stability;
sound financial planning by the
questionable,
in government there can be no
seems to: the second problem we
Such is the background of our Federal government on the basis
of projected income and expense mentioned—creating the political stability anywhere. If the govern*
present national debt, which on
will
for
a
balanced
Federal ment of the United States, respon¬
net balance after high" taxes, is figures. ■
sible as it is for monetary sta¬
Forgetting for the moment va¬ budget.,
around $260 billion. In addition
In our democratic process the bility,
keeps living beyond its
to this direct liability, contingent rious bills for benefits or services
only way to stop deficit spending means and makes up the differ¬
liabilities of government on guar¬ to special groups totalling 30 to 40
billion dollars that have already by government as an instrument ence with new money, the inevi¬
antees and subsidies of one sort
of public policy is to develop the
table result will be a gradually
or
another run into
uncounted been introduced, the 80th Con¬
political will for it among those rotting currency;thal will destroy
billions
more.
Examples:
The gress just convened has received
who hold voting control. It may all thrift, all savings, all dollar
a bqdget bill recommended by the
government
obligation to
sup¬
be
that
the process is
already rights to veterans' claims, social
port farm prices
any losses on present Administration calling for
underway — conversation around security, and everything, else.
foreign loans
losses on opera¬ expenditures of 37.% billion dol¬
;
In the end the inflationary
While on the other side of Washington since the Nov. 5 elec¬
tions of the 41 or so corporations lars!.
the budget, tax income is esti¬ tion gives some indication that worst would happen—national in¬
qualified to make loans and, un¬
sounder approach to public spend¬
solvency,/frustration^ national de<»
der, statutes setting them up, to mated at very little below war¬
ing is in the offing. But can we be struction.
float billions of securities. These time levels, although the prospect
Could this happen here? It could
sure about this? The indications
losses as they occur—as they cer¬ of declining taxes, even at present
are not at all clear, the bills to¬
of course. But as an incorrigible
rates, seems clearly visible ahead.
tainly will in some amount—be¬
believer in the intelligence of the
Optimistically the Administra¬ talling thirty to forty billion dol¬
come a direct charge on the Fed¬
introduced in the majority of the American people
tion hopes to"* have a surplus of lars already
eral credit.
}Jr
new Congress are disturbing.
—-their tendency to "ultimately do
$100 or $200 million.
'
"How much owest thou?"
On
What we need to do its to build light"—I don't believe that it will
With uncertainties ahead, this
the direct debt alone?
The aver¬
among the sensible majority of happen here* We could, however*
is very close estimating
there
age citizen does not realize what
voters in this country a sounder
seriously damage for several gen¬
comes to
mind the story of the
the amount of the public
debt
understanding of, and a greater erations the bright future that is;
bookkeeper who at the end of the
meahs to him. But breaking it
support for proper management of before us by failing to put our
year
produced his
ledger and
down helps.
The amount of the
Federal financial house in order—!;
proudly told his employer that public credit which cannot bp
present debt means $1,800 for there was a
undermined by pressure groups or now. ■
/J,:i,./w.
profit. "Very good,"
every individual; $8,500 for every
vested
Toward this end there is a na*
interests^, now,
or
by
said the employer, "but you've put
family. The people of Baltimore, the
"pump-primers"" who will move tion-wide educational job to be
profit in red ink." "Yes, sir,"
Maryland,
owe
as
their share
in
later
when the going
gets done, and I am presuming in con¬
replied the bookkeeper, "but we
$773,190,000.
clusion to/say that in helping to
didn't have any black ink and had tough. !•: ,7
You may ask at this point why I
Easy? Not at all and for several get this job done aU pf us share ,0
bought black ink, there wouldn't
reasons.
so
much familiar financial his¬ have been
high ^responsibility.
any profit." *
In our own ways, let us all work
Henry Hazlitt in his interesting
tory? And the answer I give is
Relatively in amount this story
book "Economics In One Lesson" toward
an
America better in*
that this is the background against
fits the small margin of surplus
formed on the whole question of
Which problems of the present
projected in the Federal Budget points out that the great fault of
the
spend-and-spend-by-govern- public credit and public debt, so
appear; we need this history as just submitted to the
Congress—a
prologue because, to quote a clas¬ margin dangerously below I that ment school is that it fixes its that the political will of the na¬
tion will support in government
sic: "To understand our tracts, we needed for
safe financial planning gaze on immediate benefits and
must find their roots."
completely overlooks * - secondary men' of courage needed to solve
on so large a scale.
It is danger¬
Mr.
Hazlitt had grave problems which the; present
ous
because we have reached a consequences.
;
Fiscal Problems
something else in mind, but cer-. high debt poses; Those we have
point in the fiscal affairs of the
Two grave problems face this
nation where we should no longer tainly one secondary consequence discussed, others you will think of.
But whatever the problems be*
of Federal aid is that reliance
country today in connection with take chances on
incurring govern¬
hind the curtain of the future, if
fiscal affairs of government, and
ment deficits. "Inflationary fluff upon government by so many for
so
much has been partially re¬ I may return to our theme, let us
upon their solution rests every¬ in the form of
government deficits
them
in
good * American
sponsible for the national fatigue meet
thing we hope to achieve as a should be
stopped now—indeed
that is hindering industrial prog¬ form. They will be easier to meet
nation in the future. One of these
must be stopped now—for a. bal¬
that way.
ress at this time. Eighteen months
problems is to find enough taxes anced budget is the
only road to
Let us get back more to depend*
after
to carry the present public debt
war, when
production is
sQcial'arid economic progress. Jt
heeded to stem a -tide of Inflation ing upon the
and the current high costs of gov¬
historically basic
is the Only way to prevent pro¬
that is running, »absenteeism is at American form of individual self*
ernment without destroying revgressive accumulation of public
an
all-time high. Unemployment reliance arid individual resource^
enuerproducing activities.
The debt which must ultimately en¬
rolls are padded while work waits fulness.' Let us get back to self-*'
other problem is to uproot teach¬
at
-
,
..
.
.
.
.
stocks and bonds for the purpose
.
.
.
'
-
pf organizing economically sound
corporations and building needed
danger the Government itself.;
buildings.
ings of the false and futile school
This is no private opinion of
Sooner or later a reaction had that debt doesn't matter and to
mine.
It is the lesson history
to set in. It did. Values collapsed* replace it with a broad political
teaches.
'
The nation lay prostrate. But that will for a balanced Federal Bud¬
was private credit, we were told.
get.
'I)'''
Public credit was different. Public
The solution of the two prob¬
.'•*//,
debt didn't matter.
substantial
A
opinion
,
^at that
time supported this new school of
credit7 arid debt and with Federal
funds
in
freely flowing we revived
the ancient cult of
America
worship for the state.
lems
will
elaborate,
On
taxes
the
not
be
easy.
Let
me
t
prridueing; activities:
...
Effect of Present Taxes
Up until Pearl Harbor nothing
Without another dollar added to
had
happened.
Nothing the Federal debt to increase ;the
much except an increase in pub¬ cost of
carrying it and with cur¬
lic debt of roughly $50 billion and rent costs of
government
any¬
through government absorption of where near present levels, the
savings large areas of our finan¬ tax-take
already
stunts ' the
cial
economy
had been trans¬
growth
of
business,
especially
formed into a system of State
small and medium-sized business,
Capitalism.
which must plow back profits in
Came an unavoidable war with order to flourish.
For business
and
inescapable need for billions, and the individual, taxes at pres¬
additional
billions
were ent levels undoubtedly destroy in¬
spread properly to our Allies un¬
der lend lease agreements. But at
no
time shall we be discussing
war debt.
The war debt is a debt
we incurred'to protect again the
"good" American form we are dis¬
cussing;
I
'
Effects of Peace
«
i
i
centives to
gain. A business or a
man
who
ventures
and
gains
$50,000 only to owe half of it to
the government is under no great
urge to take all the risk and all
the problems that go with earn¬
ing. large incomes. In addition,
taxes
at
present levels
chisel
from, weekly pay envelopes bur¬
densome amounts, much of which
represents the channeling » of pur¬
public debt
still did,,not {matter for the new
school of debt {continued in ses¬
sion, and.therefore there was little chasing
TCame
peace
.
.
.
power from support of
productive activities ot: commerce
ernment.
Requests- for benefits into non-productive activities of
/ahd "• services ;to
special classes government.
or no
:
-
demand for economy in gov¬
A .thouand dollars paid in taxes
to new heights, subsidies of
various kinds and credit guaran- by
a
man
of average ■: income
tees /of various kinds■; multiplied.' means a thousand dollars less for
grew
/JEIvery/hatipn /of/the {world/that purchasing automobiles and. re-,
found itself unequal to the task frigerators'-and radios and/ other
of solving its own social and. eco¬ things. And inasmuch as an aver¬
nomic5 problems -looked to
the age of 80% of the sales-price of
TIni ted- States Treasury for finan¬ these products is labor, a thousand
cial
aid. / We
less
delivered surplus dollars
purchasing
power
goods abroad running into billions; means $800 less employment for
We liberally extended additional those who make automobiles and
billions of foreign credit in - ex¬ refrigerators ahd radios and'other
change for promises to pay and things.'4. >
;
very little else from some debtors, • {-Even i so^ these damaging'- high i
for millions.'
Reliance
:
Burke,
history, gives
us
definitions
the
of
back
the
sion.
If
perversity
primitive
of
dividual initiative and individual
resourcefulness has been numbed
danger of
ex¬
be¬
to
excess
governments
provide for
these debts by heavy impositions
they perish by becoming odious to
their people."
arnong
and refresh the
of-AfriericSri/ pioneers!
turn our habk^ on coliectivisnnl in
government and revive more of
the voluntary
collectivism that
characterized the growth of this
/theof'$ho--bee$! 'the
quilting, bee, the husking bee, the
faith;
"renew
courage
laziness has been encouraged, in¬
of their subver¬
means
/
;
Federal Aid
of the best
one
likely in their
*
on
in
way
cessive public debt: "Public debts
come
The
•
Edmund
are
of finding
without destroying revenuequestion
much
its
Federal treasury.
About public
debt;we must be cold/ dispassion¬
.
.
and credit throughout
history have always been an easy
field in which to sell magic to the
Money
farmer
Thursday, January 30, 19471
ipilHons/,either by direct
government aid or by the expec¬
tation of government aid.;,;! ... /
Federal funds are being paid to
an
estimated 20,000,000 Federal
collectivism which plowed a;
sick^
ne.ighbp.Fs acresfVcollective ■ log^
ging to build a house, or a bani*
us
safeguard the financial
physical health of America by
one kind or another and it will be
working at building the moral and
f Put another way, this merely difficult to get large numbers of spiritual "'fPriridatidns^Pl: indiYld^
means
interested
in
a
balanced uals, for they are government,
that as taxes become so¬ these
cially undesirable in a free gov¬ Federal budget if it means less
My last line I have borrowed
employees
ernment
they become politically
inexpedient.
Those
who
levy
and
beneficiaries
of
Let
arid
for them.
Everyone likes government pro¬
tection, government aid. There is
no record in history of any human
from another.
the nation will
be precisely what
Paying Off Debt by Inflation
being who wanted to be "wearied"
away from government aid. Many
they are."
'
The
years
odious
taxes
are
voted
out
money
of
office.
lesson
history teaches is
; that
this leaves government debt
to be reduced or paid by the most
vicious form of all taxes
inflar
tion—a tax which falls heaviest
upon those least able to bear it.
But that is history you may say.
Lack of greater sensitivity to
present high taxation has been
due up to now to an increase in
—
real
income
groups
unnatural
income
lower
among
wage
during the temporary and
war
economy.
declines
lower'wages
or
due
As real
either
/
to
ago
former
United States
one
here
is
without
The* conclusion
which
I
have
lic debt is debt, to be~ treated as
vSiicK" ?to' be renewed, extended,
i
arid refunded from time to time as
sound-
returned :
thirik
veteran,
,
with*" still deeper
emotioi}
and
{halt this must be
about
weep.
their loved
ones
who
The hunger and" despair of
accomplished within > limits, of a' peoples 'in war—devastated > na7
tions of 'the world—pull at our
compensating? ,tax -program/ that hearts. '/.
V*•/"'>//' //
(
for
Trade
proj-»
tin, lead, zincg
edible vegetable oilsr
petroleum, sugar and rubber are
producing
now
eligible to secure scarce ma¬
beyond the commercial,
terials
Certification
quotas.
given by the OIT
essential
to
must
that they
be
are.
the foreign projects
concerned.
■
■
*
*
—'
'
'
-
James Carrigan
!
Joins
Francis l.itoPonl &Co»
to
we / <?an
/
hard - fibres,
to
aboutthose/wfc^
management,of*j public
predit- dictates:
bout' the rnation's -obligation
the
•
'
The Office of International
ects !
violate ria one's self respect. 'We
can all think with
deep emotion
tried to reach so far is that pub¬
nation and
a
has announced that foreign
sym¬
floor fpr /these/high; enough
r.
es¬
Foreign? roducers
sensitivity to high taxes will be¬ pathy for' the I social'unfortunate
and we are all "willing to pbbvide
come, more apparent.
a
>
the
are
OIT Raises Quotas
Robert ,L.
Owens
of
Oklahoma speaking on this point
told the story of a six foot, six¬
teen year old boy chasing his
; mother
through the com field,
howling, "Damn her hide, she's
trying to wean me."
Please understand, however, we
are not condemning all governriient aid; There are great and
deserving needs which govern¬
ment must support; Many de¬
mands for publicaid have strong
emotional appeal;
No
"•>
' ;
women
elements of
sential
Senator
to inflated prices;
and
"Men
:
3 Francis I. duPont. &. Co.j mem¬
Ex¬
bers of the New York 'Stock
change
v
and: ; other
leadingex*
.thariges^ ahhounces3that3Jam
Carrigan has joined the firm and
.
will not reduce
revenue
producing
) But national/ ^iVency r bomes
activities; that/wilt; not; slam the ;9head*?of 7; all
jK
v. v
fit /. * '■
Avenue in
cdrijuhctiorv
with DeWitt H.. Roberts.
•.
•1
;'j!
630 Fifth
>•
•**
i7/^
r'-x'•
-W"'". t:/'
Volume 165
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4564
625
large proportion of the total air-
v-
-
franspoHatioii Outlook—1947
(Continued from page 594)':
■pages to the degree experienced
'in 1946, the 1947 rail freight vol¬
'
ume
'
in ton-miles should be
offering through sleeping-car
and
service from coast to coast.
but gradual improve¬
ment in car supply during 1947
expected,
will be
more
than 10%
of
these
delivered before the end
of the year.
Motor Carriers
some-
"what greater than in 1946. Coritinuation of car shortages may be
'
but not
cargo
An even less favor¬
able report was received regard¬
intercity for-hire trucking ing delivery of other busses.
The outlook for passenger
industry carried more tonnage in
The
1946
some
and there : is
indication that local truck¬
than
in
1945
tomobiles in 1947
seems
business has
been
handled
by
au¬
encourag¬
non-scheduled
and
contract
carriers. During August,
1946, for
example, five of these lines alone
carried nearly three-fourths as
rapidly, at least partially through
diversion
from
surface
miles amounted to more than
sixth
of
rail
and
14.4%
freight services.
end
of the war.
ing.^Registrations in 1946 exceed project the outlook
for the growth
one-
coach traffic, and
about 40% of rail Pullman traffic.
These ratios compared with 6.5 %
?
many ton-miles of traffic as did
all of the scheduled airlines under
both their
air express and air
It is difficult to
carriers,
particularly the railroads. During
August, t; 1946, airline passenger
respectively
data relate to
a
as
of the
Since the recent
period when air¬
of 1945 by approximately of
the
nonscheduled
services, line capacity was still short on
1$00,000 funits^ ;and the industry partly because so little is known many routes, it may be expected
their
proposes
to; construct 4,000,000 about
present
economic that some further degree of' di¬
with loadings rising to a peak o;; of industrial production and the cars during 1947. Many of these characteristics, and partly because version may take place in the fu¬
cars
will
replace
automobiles of the uncertainty regarding pos¬ ture f unless, of course, there ds
;D42,000 late in October (highest demand for trucking service, the
which will- be discarded during sible future regulation of their some
'level since 1930).
change in the competitive
Revenue ton- entire trucking industry stands
1
•
*
•
year,
but the ; production operations.
to benefit from whatever increase the
miles during the third quarter fel
£ situation brought about by a sig¬
In recent months, airline pas- nificant
should" result in substantial in¬
change in. either rail oronly 5.6% short of the level in in the output of goods occurs in
crease of new • equipment. •
senger traffic has been increasing air fares or quality of service
1947.
'. • v
the corresponding period of 1945
v
Estimates of the Public Roads
•compared with a decline of 25.3%
Intercity common and contract
!■In the first six months of 1946 motor carriers Of prpperty suf¬ Administration indicate that in
from the same period of 1945. The fered a slump in business for the September, 1946, total travel on
rural roads exceeded that in Sep¬
heavy freight volume in the late first few months after- the war's
In
Summer and Fall of 1946 was ac¬ end as a result of reduced outpuJ tember, 1941 by almost 3%.
the West a sharp rise occurred
%■■}#£
(Continued from page 593)
companied by severe car shortages of
1
ing likewise made a gain during
likely.
Because of the
Freight traffic increased sharp. the past year.
ly from July ' through October close relation between the leve
seems
;
those
.
.
-
Observations
'
-
goods which rnove in large vol¬
which
reached a
peak of* 39,089 ume by truck. The recovery in
bdx) > durfng i the week the second and third quarters of
ended Nov. 2.
:
1946, however, was pronounced
^ Class J railroads
installed^4^127 Class I truck -tonnage* hi the firs;
hew freight cars in the first ten
quarter, of 1946, based on a large
months of 1946, but destroyed or sample of carriers analyzed by
dismantled 23,968 cars and other¬ the American Trucking Associa¬
wise disposed of 26,424 cars. Box tions, was 7% under the first
Cars comprised 15,293 of those in-?
quarter of 1945, and mileage was
^stalled and 12,747 of those ; de- down 5.3%. In the second quar¬
istroyed or dismantled.
ter, tonnage was 1.9%, and mile¬
•
<24,839
'■
-
-
while in the East there
V
The total number of serviceable
age
;
jelined from 1,687,499 on Jahy
showed even more favorable re¬
1946, to 1,676,103 on Nov* 1, or by sults, with tonnage 9.8%, and
•11,396 cars, according to data from mileage 12.1% over 1945.
thC: Association of American Railtoads.'w Despite this decline of Vn;/™Index of Tonnage
4J.7% in serviceable freight car
The ATA index of tonnage car¬
supply during the first ten months
ried (1938-40 equals 100), based
of
1946, there is reason to think
that the downward trend may be
halted, and
3n 1947.
may even
be reversed.
The rate of delivery ot
by builders showed
tendency to increase in 1946. Dur¬
ing the third quarter, an average
of 4,123 cars (1,888 box) were in¬
stalled monthly, compared with a
monthly average of 3,043 cars
<1,281 box) 'in the first half of
mew
1946.
cars
New
cars
on
order Nov.
totaled 62,145
(29,176 box), com¬
pared-with only 37,1-30 (17,219
ijbox) on order Jan. 1.
The maintenance of industrial
#nd
agricultural production :*at
high levels will require continued
maximum
utilization
of
car
sup¬
on
With
in operation in
that total
1947
seems
as
compared
almost certain
highway travel will be
above prewar levels.
Water Carriers
Shipping operations by. Ameri¬
can carriers in the foreign trade
field will continue at record levels
5.3%, above the corresponding during
£ cars owned by class I roads de- period of 1945. The third quarter
;
some
the increased number of vehicles
with 194-3 it
.
,f
was
decline from the 1941 level.
a
smaller number
of
carriers
than in the foregoing sample, was
182 for the first ten months of
1947. Fast, modern ships
available to United States citi¬
zens at low cost under the Ship
are
Sale Act. Cargoes from the United
States are still heavy and there is
increasing amount of inbound
freight.
Foreign shipping com¬
panies have' acquired some addi¬
tional
vessels,
including
some
American-built vessels,.but their
an
fleets
are
smaller
There
still
than
substantially
before
continues
the
war.
employment than.Js now exceptionally existing, will surely increase1
thd opposition of uhion.4abor against greater importing, m The unions
know that, apart from the* over-all. broad economic factors that
ore:
involved, only crude rubber and a very, few other items of comparatively, minor^impoiftattce are at all heeded by bur extraordinarily;
self-sufficient economy. - With. our" imports geared to the present
extraordinary nature of our home economy (extraordinary not only
.
because of the very high level of activity but also because of carriedover
wartime shortage of durable goods), we should realize that
in the coming years, with a return to more' normal domestic con¬
ditions, imports—far for rising-^will fall. In that case our. so-
called international trade must entail export subsidies Of-visible or
disguised nature, such as we have been employing since the time
of World War I to furnish our
foreign customers recurrently with
the
chips to "pay for" our exported goods.
Seemingly the most
likely alternative is a socialization of international trade.
Implications of the Election Returns
Of course,' the great immediate problem is a domestic
political
one, arising from the coming-to-power of the Republicans.
Their,
wholehearted support of the nation's bipartisan policy for
political
internationalism is running directly up against the narty's traditional
tariff-protection philosophy; But it must be realized that there is
intra-party as well as inter-party disagreement on the economic
question.
In the GOP some, of the leaders are following the tradi-;
an
actual
1946, compared with 179 for the
first ten months of 1945, an in¬ shortage of shipping, not includ¬ tional whole-hog, pro-tariff line; while the attitude of others' runs
ing the huge Government-owned the gamut all the way down the line from mild, to no opposition
crease of approximately 1.7%. As
to tariff reduction;
Senator Taft is following a sort of middle-ofan indication of the high level of fleet which has been placed in re¬
operations in recent months, it serve by the Maritime Commis¬ the-road policy of letting? the present Trade Agreements Act'run
Accordingly1, ^freight faie$ until June 1948, provided that Secretary Clayton acts reasonably
may be noted that in August and sion.
Others like Representatives Knutsott; Reed' and
October, 1946, the index stood at and shipping profits in foreign about reductions;
204, the second highest monthly trade are likely to continue at Jenkins, contend that our export business is responsible for Only
a very small
high levels throughout most of
indexes ever recorded by ATA.
part of our employment. '
Senator Butler, the most voluble legislator on this question, how
the year.
With these facts in mind, it
In the domestic trades, freight
complains that the hearings in connection with the negotiations are
seems
clear that truck tonnage
rates remain relatively low de¬ being unduly "rushed through" in three weeks; that the demonstrated
has reflected increases in produc¬
tion since the first part of 1946 spite some measure of relief re¬ hardship cases will not be protected; that the State Department is con¬
ducting the negotiations in a spirit of partisanship; and that the
and will continue to respond to sulting from increases authorized
by the ICC to become effective country should stop * its free-and-easy giving and appeasement
changes in the level of industrial
Jan. 1, 1947.
C
Accordingly, high throughout the world.
output. What is less clear is the
extent of any divfcrsiofr to' the operating costs, labor unrest, loss
Faults in the New Charter'"'0
'?
"Mii A'
of traffic to the rails during the
trucking industryvi which 1"might
Also irrespective of the particular United
States,elements^ ; the
take place as & result of increases war, and the unsuitability of many
to
be
■
.
ply, Delivery of ears presentiy on
•order, 'however, may reduce' or
'"eliminate - current shortages and
may permit some slight relaxation
of existing controls on car utilization.
..
of
the
war-built
ITO is getting off on the wrong foot.
merchant
ships
rail freight rates, authorized
In the Charter itself we see that the
constitute major obstacles which
commodity agreements
by the Interstate Commerce Com¬
will < tend to discourage former embodied in chapter 7 constitute a chief fault, being capable of being
mission, effective on Jan. 1, 1947.
considered almost an instrument of defeat.
Negatively, it is a de¬
Revised Estimate
A rise in local trucking business ship operators from resuming op¬
eration in the coastwise and inter- fensive weapon, joining in the over-all neglect of cyclical unem¬
seems
likely because of traffic
T! The railroads1 revised estimate
coastal trade. With the exception ployment problems.
Positively, we will be engaging !in the pro¬
Of 1947 passenger traffic shows a arising from transfer of goods to
of the bulk traffic in petroleum, miscuous use of trade restrictions; and trying to supnort prices by
decline from 65 billion passenger- and from the terminals of other
quantitative controls. Affirmatively also, the commodity agreements
coal and sulfur, water services in
miles in 1946 to 46.3 billion in carriers, and a larger volume of
the coastal trade may be discon¬ represent a kind of joint legitimatized conspiracy for grand-scale
retail and wholesale deliveries as
1947, or 28.8%, Whether this esti¬
tinued unless substantial changes cheating of the consumer through world-wide unkeep of prices.
£
consumer goods become available
mate proves to be precisely cor¬
are effected in rates or costs.
The
in greater quantities.
rect, it seems probable that the
Enforceability
;
\
only alternative appears to be
1947 level will be considerably
Also importantly, ITO faces the same problem as fundamen¬
continued operation at a loss by
Bus Picture Mixed
below 1946 despite an expected
tally confronts the-entire UN Organization; and which has been a'
the Government.
Intercity
bus
transportation
high level of ^economic activity
cause of evident and hidden crisis ever since its incubation at Dum¬
Full | scale ai industrial
activity
and consumer Income available presents a mixed picture at the
will result in another year of barton Oaks, Yalta, and San Francisco—that is, the absence of teeth
moment. Some companies report
for travel.
fpr enforcement. In its subservience to national sovereignty pre¬
bat their volume of passengers leavy traffic on the Great Lakes.
Revenue
passenger - miles ; of
Traffic on inland waterways will rogatives, the ITO Charter is necessarily stripping itself of enforce¬
class I roads were estimated by las continued practically at warment-power, as is every other UN unit, including even the Security
ime levels while others have in¬ probably show some increase over
the carriers at 55.7 billion for the
1946 as inventories rise and the Council with its emasculating veto provisions for barring outside comfirst ten months of 1946, a decline dicated that their traffic has lev¬
economies of cheap transport be¬ pulsion. f||f| " '
*
£'~x ££
eled off somewhat lower
than
of 19.5 billion, or 25.9%, from the
Theoretically, the Organization does have a measure of power
^
1945, Taken as^Ja. whole, the vol¬ come more important.
corresponding period of 1945. Of
ta^see that members live up. to their obligations, beyond merely heat¬
this decline, 4.1 billions were ac¬ ume Of traffic during 1946 lias
Air Carriers
ing charges of non-compliance, Jiolding hearings/ making complaints,
continued
at
a
slightly higher
counted for by the decrease in evel than
It may be expected that there and conducting investigations and studies.
; But its method of bring¬
anticipated since the
organized troop movements. No
will-continue to be a marked rise ing pressure is limited to a sort ' of ostracism and excommunication
•doubt much of the rest of the de¬ production of private passenger
in air cargo traffic during 1947. in the tradition of the Greek city states which were practised in
crease is attributable to the falling cars has been below that expected
Within recent months air freight medieval times.
It must be remembered that ITO is a voluntary
off of service-connected travel at the beginning of the year. The
irograms have been inaugurated association of nations, each of which has undertaken to observe cer¬
other than organized troop move¬ industry expects that its traffic
by all but a few of the scheduled tain principles, and to obey various rules in the conduct of its trade
ment. In 1947 this type of travel volume during 1947 will decline
airlines which did not already relations with other countries, in consideration of reciprocal con¬
jeiow the present volume, but
Will be less than in J946,.. *.
lave ; such programs.; Steps are tracts by. them.
In the case of a broken^ agreement, or failure to
Besides the loss Of most o£ the will be somewhat, higher than
now being
taken to provide a negotiate with; other members for tariff reduction, or persistence in
war-created military travel, rail¬ that of 1941.
] hrough air
freight service on a maintaining quantitative restrictions,, or engagement in harmful exroads are-faced with the loss of
£ Passengers carried by city and nation-wide
basis;; Direct air; exr port subsidies, the Organization' directors can release its member?
«n increasing share of the traffic
suburban lines in 1946 held at apr
press
Service will also become from their obligations to the offender. It can bar them from most-;
diverted to them from other agen¬ proximately 1945 levels, and the
favored-nation privileges, and. impose discriminatory duties on the
more widely available during the
;ransit industry expects to maincies of transportation during the
coming year as the newly certifi¬ offender's trade,s of employ quantitative restrictions.
ain a high volume of traffic dur¬
war.
"Intercity a nd :' suburban
The trouble with such sanctions, however, is that if they really
cated feeder airlines bring this
buses, airlines and the private ing 1947.: A principal difficulty service to additional communities. do carry weight in
enforcement,' measures are entailed which mean
automobile will offer formidable
rom which
this industry suffers
Considerably greater capacity for economic warfare; and these—it has been found—can only be: applied
competition .for passenger traffic s shortage of new equipment. On
cargo will be available over the when a real military conflict is deemed riskable,
And even only
fn 1947. The railroads, however, Sept. 1, 1946, the industry had on
scheduled airline system during halfway punitive measures, are bad in undermining the spirit and
are taking steps to meet such com¬ order over 1,400 P. C. C. cars of
947 as the result of planes re¬ purposes of the Organization; because, of its basic attempt to abolish
petition. Improvements in service which it may receive delivery of cently acquired or scheduled for discriminations and restrictions on a world-wide scale.
are
being made by adding new 30G to 400 units during 1946; trolHence-it would seem that in' the last analysis enforceability
delivery within the near ftiture.
equipment, speeding up schedules, ey coaches on order exceed 3,500
Since the end of the war, a will rest on the twin pot-shots of publicity and exhortation!
•
r
in
,
...
t
,
,
,
i)Hyr*'rr,uyjx»w-*.'«ig«w
Thursday, January 30, 1947
THE COMMERCIAL & FINANCIAL CHRONICLE
626
freight traffic should, be substan¬
Railroad Recession Ahead!
tion of these factors) before, it can
dency,. big depletion has become
tially larger than that' of 1941y not
be said that the railroads are ad¬
a
-
only because of the higher pros¬ justed to profitable operation cn
In the mean¬
pective agricultural output, hut a "normal"? basis.
(Continued from page 594)
also, because a larger proportion time, the market may be expected
least approximating the record to¬
000,000—as compared with slightly
capitalize railroad earnings
of the industrial output is; likely to
under $500,000,000 net incomie in tal of 1946.
to move by rail. Moreover, rising very conservatively.
Suppose we assumes; that agri¬
The general economic outlook
1941, and $524,000,000 net income
automobile production is unlikely
cultural traffic is; to. remain un¬
in 1930.
tofind full reflection in deflection beyond the forepart of 1947 is ad■1946 Exceptional
changed from 1946, but that all of
There' is as
passenger business from the 'ihittedly uncertain.
other freight traffic is to decline
railroads until the condition of the yet no- reliable indication that the
As we have indicated, 1946 was
20%,
On that assumption, and
bear market in securities is- over.
an
exceptional, year.
It was a after allowing for the Ex Parte highways has been improved. The With
the 1946 wage difficulties
chances are that the railroads will
year in which the national income 162 rate increase, aggregate rail¬
still fresh in thememory Of the
approximated $164 billion and the road freight revenues would ap¬ gross at least $7.5 billion to; $7.8
billion this year, if hot more, and investing public, the possibility of
Federal Reserve Board's index of
proximate $5.5? billion — versus that
new*- retroactive wage boncesstorik
they will have combined net
industrial
production
averaged
roughly $5.7 billion estimated for income in excess of $300,000,000, looms up before the railroads. Un¬
170—a year when agricultural
last year. .
der the circumstances, the risks
If new concessions to labor can be
output was of record proportions, .vr",v.;;•
:
are excessive in speculative rail¬
avoided, the earnings will be im¬
when the railroads had negligible
,
postwar reality,
*
buying ship service: store supplies
directly from manufacturers.
In
fact, the Admiral* may expand
this deal to other purchases. War
Department may say, me too, , It
wouldn't be surprising if whole¬
salers carried their complaint to
Congress.
competition from coastal and intercoastal waterways, and when
in
Passenger
Travel
proved
of other develop¬
highway competition was far be¬
low normal. It was also the last ments, railroad passenger business
Regardless
is bound to. drop
of EPT carryback credits.
year
course.
High Break-Even Point
The
While
we
sharply in due
allow for
must
population increase of perhaps
8,000,000 since 1941, it should be
borne in mind that in that year
a
However fine a showing is pos¬
sible under the new rates on 1946
traffic, it is evident that the rail¬
road break-even point is too high
for successful operations on nor¬
mal traffic. Declining traff it would
bring declines in expenses more
or
less automatically, but such
declines would not be sufficient.
the
for
railroad
rates—or
in
a
are
required.
announced
their use of labor
are
i
A 30% drop in passenger busi¬
limited. A great deal is
ness
from the 1946 level would
possible with increasing mechanimean an $890,000,000- annual rate
| zation, but that takesr time. Mean¬
of
passenger
revenues.
With
while, railroad labor is. reported to
freight revenues at $5.5 billion,
be preparing new wage demands,,
passenger revenues- at $890,000,and the prices of materials im¬
000, and an allowance of say
portant in railroad costs- are still
$500,000,000 for miscellaneous rev¬
rising. Weighing all factors, the
enues, iotal operating revenues
railroads apparently need half
would coma to j;ust $6.9 billion.
again as much gross: as they had
That figure is 9.2% less than the
in 1924 to produce the $558,000,000
$7.6: billion gross estimated to
class I net income of that year.
have been realized last year.
tively
Prospects for Gross Income
The
What sort of gross
is in pros¬
pect? Within certain obvious lim¬
its, that will be determined by ; the
shifting fortunes of our national
economy
and
the
competitive
status
of
the. railroads
vis-a-vis
of transportationhighways, waterways, airways. In
any event, sooner or later we shall
have to: get down from the pres¬
other
ent
,
means
plateau.
*
Allowing for business gains in
initial quarter and a fairly
the
.
sharp recession late in the year,
m
the Administration
whether
(when the net income
ap¬
has
been
industrial production will be off
somewhat less than 5% for 1947
Costs Is Unsound
whole.
relief to domestic concopper
should be
granted via. a slash in the 4-cent
copper
tariff.
They disagree
with the status quo advocates,
tion feel
the
argue
present
town.
'
a new
or
0
„„
*•>.
the possi¬
Don't underestimate
•
.r;
one.
this
'-m,.'
one.
sessment
government's $25 billion airways
improvement program. Policy¬
makers agree toe carriers should
help pay but can't do It now*
Congress will discuss, the costsharing theory, won't invoke it
this session.
same
Communicate not later than Feb.
15
ally thrust ti through; to
.
ment.
........
,
0
sjj
Secre¬
***£> 0
"
Centralization of all Federal
project activities/!# one
government agency has caught
the fancy of free enterprise ex¬
power
ponents in Congress and there's
the proposal may
before the House for dispo¬
a: good chance
go
sition^ House interstate and For¬
eign Commerce
hold
hearings
Committee will
on,
may
out favorably the bill by
report
Illinois
Republican Representative, Dirkson merging Federal power ac¬
the
redemption date, has introduced!
enabling legislation, may actu¬
production index is
Dubois,
Orval L.
1
.
Congress
sional bloc would advance
override the veto.
with
of
uped
arrangement!
powerful
At
Exchange Act of 1934.
and
ties
terminal
hence.
like
ideas on how to perfect the
Securities Act of 1933 and Securi¬
leave securities^
scheduled to mature five years
will OK it, too;
;.. ^.
to have
0
,
still
your
Treasury
the
*
•.'<■
would
SEC
Depart¬
ment wishes ripen. Banker5 cdr
operation in cashing war bonds.
has
been
sor
effective
that
Treasury-Secretary Synder e»j
on
*
y~+-
redeemableaf
throughout the country;
visions
about any near-term asto
help finance the
worry
maturity will be
iftentative
0
tary, SEC, 18th and Locust Streets,
Philadelphia 3, Pa.
World' War H veterans,:
banks
0
0
Commercial airlines' need hot
v
.
bonds
leave
Terminal
in review.
Hill and pass
bility that an increase in exemp¬
be substituted for the
Republican campaign gospel of a
20% across the board personal
tax cut. Lawmakers who would
hike exemptions have been doing
missionary
work,
quietly and
without the 20%
ballyhoo, but
nevertheless effectively. Fulmin¬
ating 20 percenters won't capitu¬
late but may take a drubbing on
(3) the
President will veto it; (4) after
that-^ohft risk ybtir money on
whether Congress will sustain
House
0
.
.
...
Capitol
Board Governors to climb
tions may;
system,
vote
;
0
Chairman Eccles and his brother
'
S|!
.
.
Sugar, controls will be retained.
If the courts invalidate the exist¬
ing
0
'j!
Lawmakers will kibbitz on the
un-
'l- ❖
0
V
.
.
emergency
■
certain
caver
0
would justify a rate cut.
\
'
•
SECmayreturn to Washing¬
ton by late summer, perhaps
not until later, pnding office spacefor the. agency and hous-,
ing for its employees will re¬
quire fancy legerdemain in this
of
sumers
:
ing from.
workers^- ■ Congressmen Federal Reserve System's credit
don't agree, are little disposed to control performances, but it's still
tinker with this type of reform ton early to guess how or when
until the direction of a peacetime this meddling will be undertaken.
Either Senate or House Banking
economy has become more ap¬
Committee—or both—will invite
parent.
-
000
In short, the F. R, B,
vet¬
from monopolistic intru¬
sion. Congress may give a look
to see where the money is com¬
covered
will
I I do not mean to imply that the
Export-Import Bank, will bend
expected to time is past when the railroads
could be expected to Show any loans in accordance with national
average 161 or 162 for the year.
Interestingly enough, the latter significant profit oft gross reve¬ foreign policy if new Secretary of
figure is identical with what the nues of $6.9 billion or less. I be¬ State Marshall fixes policy. The
lieve they can make a decidedly Secretary believes the Bank, just
F. R. B. index averaged in 1941.
As. I have
said, the railroads good showing on such business— as reciprocal trade pacts, should
handled 475 billion, ton-miles of but not with the indicated 1947 be utilized to brace our political
and economic ideology abroad.
freight, in 1941, which compares relationship of rates to costs.
I trust you .will understand that Bank President Martin disagrees,
..with an estimated 583 billion han¬
some
security
for his
dled last year. Thus, if industrial I am not actually predicting a wants
^ * v * '
production should; average the $6.9, billion Class I gross for11947. handouts. *
0
0
$
i
same as in 1941, ai)dt railroad tonStruck by the fact that, the esti¬
mileage should bear the same re¬ mate of: industrial production for ;
Whole issue between Mar-f
shall
and
Martin philosophy}
lationship to industrial production 194? was the same, on the F. RV B,
as
it did in 1941, the railroads index, as the production, recorded
may be undtaped by a conwould be handling 108 billion for 1941,/I made, use of the 1941
gressianal inquiry. Instrument j
of the
investigation could be
fewer ton-miles than they handled parallel in its; application to rail¬
H.R. 665 requiring the Exportlast year.
That would mean a road operations. But I did so only
drop of roughly 20% from last for one purpose; to point up the ; Import: Bank to secure on all
loans. over $5,000,000 risk par¬
year's ton-mileage.
fact that the "reconstruction prob¬
ticipation up to 25%. by private*
Industrial production is an im¬ lems*" of the. railroads,; far front
banks. Such safeguards would]
portant factor in railroad freight being, over, have still to be facedj.
as a
a
•
benefits, would
Is
talkathon
trade
reciprocal
.
1929
Small Business Unit to pro-
(Continued from pag,e 593)
then Congress will
Housewives' im¬
portunities for unfrozen supplies
It is obvious that the railroads are offset by warnings from in¬
as a group would
have a hard dustrial users that the junking of
time showing any earnings after rationing
would bring lopsided
fixed charges this- year on gross: distribution, hoarding and kited
revenues of. $6.9 biUion—-particu¬
prices. Decontrol remains remote.
*
*
*
larly if new* concessions should
Here's today's outlook for leg¬
have to be made to labor.
Yet
islation
immunizing railroads;
$6.9 billion is not a low figure in
from antitrust^ prosecution for
comparison with the prewar rec¬
ord of annual rail gross. It is in¬
fixing
rates
with Interstate
C o m m ere e Commission ap¬
deed
fa* above the peacetime
norm.
It compares with less than
proval: (1) Senate will write
and pass the bill despite Ad¬
$5.4 billion gross realized in 1941,
ministration
opposition;
(2)
and with less than $6.3 billion in
estimated that the proached $900,000,000).
Federal Reserve Board's index of Present
Relationship? of Rates; to
it
of
^
t
Justice
tect little fellows, especially
.
•
asked more money for
Department's Anti¬
trust Division, said that agency
would? devote it» time and expenditures to "major violations"
of the monopoly laws. East week
the division unveiled creation
Washington And Yon
billion
compara¬
;
eran^
handled only
passenger-miles, han¬
dled about 6 billion last year—
which is equal to more than 20%
of the railroads'' total 1941 pasn
senger-mileage.
The railroads
themselves are estimating a 25%
decline
in
passenger
business
(from the 1946 level) this year.
v!.
the
private automobile accounted
nearly 85 % of all, intercity
lines, which in 1941
y-
0
message,
public will be well served.
combina¬
0
ers view as a "major violation."
President Truman, in his budget
,
railroad
are
The fact remains that sweeping and; special situations among the
changes
will be required
(in. common stocks. But railroad se¬
wage-scales, or, in prices paid curity analysts should place their
for
materials,
or
in operating emphasis upon quality. If they do
this the interests of the investing
methods, or in technology, or in
•.,r...
,
Congressional ^ppropriators
are wondering what trust-hnst- ;
attractive^ and so are
the best of the preferred stocks—
The
compromise its tariff paring plans.
in De¬
Answer as of today is—No. House
cember that it was reducing the
Republicans may logroll through
number of its employees from
a resolution urging the President
50,000 to, 45,000. The B. & O. has
to postpone new tariff reductions.
talked of cutting 8,300 employees That
The Senate could be expected to.
may prove liberal or con¬
from its payroll, Whether or not
servative—depending to a considh ignore this maneuver. End result
this is to be done at the expense erable extent of new automobile would be more starch for State
of maintenance has not been inti¬
production, A drop of well over Department reduction policy.
sjs
0
mated. Apart from "Savings* on 30 % is
clearly indicated within a
maintenance, the economies the
Some members of the Com¬
faii^y; short peripd, Arid that will
railroads can makje, - quickly/ .in not be the bottom.
/ "
mittee for Reciprocity Informa¬
Special steps
Union Pacific
Sound
securities.
bonds
Sweeping Changes Needed
passenger travel.
It should be
borne in mind also that the air¬
1.4
road
correspondingly.
—>
❖
.
Prospective Drop
inten¬
Navy Department has no
tion of torpedoing its new policy
of bypassing the wholesaler and
tivities,
The
would,
measure
eliminate bureaus* fire bureaus
ehaetV
crats, reduce the payroll.
\<
.
,
'*
Chas. Gill Associated
Secretary Snyder is inviting toe
banking fraternity to enlist its
employees and ^patrons in the
struggle against theft and forgery
CHICAGO, ILL. — Charles ft.
of government bonds and checks.
During fiscal year 1946, the Se¬ Gill, untd recently with the Office
cret Service received for investi¬ qf the Alien Property Custodian
Willi Wayne
checks and anci previously with., the HeconIn nearly esvery in¬ strUctionFihauce (^rporatidh/hhs;
stance the forged instruments had become associated with Wayne
to be traced back through one or Hummer & Cb., members of the
several banks^ Secretary Snyder New York and Chicago Stock Ex¬
changes. Prior to his government
says that anything; bankers can
doto impress contanuaUy pn^ em^; service, Mr. Gill was for 12 yeaVs
associated with Frank C,. Rathje,
ployees and customers the neces¬
former President of toe American
sity of careful handling of govern!-
gation nearly 3O?OO0
12,000• bonds,
r.
.
,
"
ment
obligations will be of
in the Mu¬
of Chicago and*
is well-known ta bankers all ovpr
the Central West.
.
/
John Allen Siberell has also be¬
come affiliated; with, the firm.
Bankers Association,
great
tual National Bank
help.
0
0
0
.
traffic but it is nob the^ only fac¬
Insofar
as
1947
itself
is
remove
con¬
and
tor., We must consider production cerned, the. production?, index may
on the farms.
Farm output* cer¬ well prove too conservative.
If
tainly will not drop to the % 1941
level this year. Crop prediction
f; is far from being an exact science,
C'lt never will be. The results will
depend on God and the elements.
-I All the same, on the basis of the
:
| actual and prospective acreage of
| plantings; the chances seem ; to
favor
1947 agricultural output at
general business; reces¬
(and the. railroad
car supply situation improves soon
enough), 1947 rail gross might
conceivably run well over $8 bil¬
there is
no;
sion whatever
lion—in which event rail earnings
would be quite handsome.
Even
if the estimate of industrial pro¬
duction proves
Accurate*;1947xailr
might
chance
warfare. It has!
adoption but!
of
centralize; attention
forest elands!
Currently. we|
growing 35;3 billion!
serveand
more
Changes in. basic social security
law this session are ta be. limited
v
are
j
make
Geo. A.,
productive.
(1>
A.: Bailejris?
destroying;
53.9 billion feet; (3) thereby ac -1
cumulating ah annual deficit of
Bailey, Jr.
ally;
■
r
(2)
cutting: or
18.6 billion feet,
A prewar
Bailey Admits:
PHILADELPHIA, PA.^--George
board feet of sawtimber annur;
to freezing the
ployer and employee. The Presir
I dent .would liberalize; certain .
danger
tematic Ur S.. program: to con-*
on
the Bank's operations.
old age insurance
tax at current level of 1 % on em¬
.
of a mounting;
timber
shortage, to authentic,;
can he overcome: only by a sys¬
The
the Bank from political
economic
little
t.
Hummer
.
admitting George A,
to partnership. i,n the
firm,, which: maintains office^ jai
1518 Walnut Street.
ten¬
<
.
1
I:
'\.i:
'
y
«
'
»
THE COMMERCIAL & FINANCIAL"
'Number' 4564
Volume 165
CHRONICLE
know that the trend of Federal
Outlook lor Income and Spending
Meetin Chicago
is^et
Consumers Godds t Industries
(Continued from first page) •
very litttle reduction in the next
decline labeled as • anything trom qxports of goods and services, the YYy-Y Becoming Much More
Employee and public relations
twelve months.
Some increase in
Jmodest readjustment to a senou? outlook for net exports of goods
Vulnerable ;.
;;.._
state and local government spend¬ and costs and revenues will among
depression. Never before dtoririg and services during this .year is
Until last fall the position of
others constitute the major dis¬
a period of intense prosperii^/ was
less easily; determined, . On the the consumer goods industries as ing is bound to occur in view of
the heeds of municipalities and cussions of the 33 members of the
there so much talk about a busi¬ one -hand, we • know .the enormous a whole was
extremely strong. States
to make up for deferred Board of Governors of the Asso¬
ness recession or depression. This heeds abroad that will continue
Large wage increases early in the
maintenance during the war years. ciation of Stock Exchange Firms
talk reflects a lack of confidence for severapyeafs; but, on the other year came when consumer
goods
at its Winter meeting to be con¬
Federal, state and municipal ex¬
and a fear of the future.
Even the hand, we also know the difficul¬
shortages were still acute. Wide¬
penditures, for. public works are vened in Chicago on Feb. 5 for a
conservative trend in politics and ties that we are faced with in
spread strikes made it impossible
increasing but are still relatively four day meeting.
the evident intent of Congress to order to translate these needs into to effect a
-
•
Stock Exch. Ass'n to
Spending; will be downward al¬
though the reduction is likely to
be ; gradual and there * may be
"
627
■N
a
attempt to resolve some . of the
political conflicts in favor of busi¬
ness does not seem to instill any
sustained ' enthusiasm or. confi¬
dence
pn
This
■
the part of capital.
of affairs has led to
state
business
industry.
American
for
Both
political and. economic fac¬
tors are of the greatest importance
The temporary stim¬
in this field.
ulus
through
tivities
lend-lease, the ac¬
UNRRA
of
and
some
in¬
predictions of wide¬ crease" in imports resulting ; from
ly divergent content and quajityi our high, rate of activity ;at; home
vreniinding; one of^ the/^y/erCPf are' the most important factors
alleif jhe|
Babel in the confusion tney en- that whl m ake; for p
| gender.
v
".V "^- ''' - ^.1^ export balance of goods and, serv¬
ices during the remainder of this
I This
psychological • 'and; emo¬
year.
Considering all aspects, it
tional state flows from the very
does not seem likely that this par¬
ah outburst of
.
situation
which
in
selves. On the
find
we
our¬
hand, our econ¬
omy is supported by powerful fac¬
tors that are still operating fully
to
give
us
the unprecedented level
activity
of
one
On the other
income.
national
and
hand,
of these
many
factors are necessarily, to -a
considerable degree, of a transi¬
very
tory nature and once -some of the
major positive forces are,partly
or fully exhausted it is clear that
we will be faced with many dif¬
ficult problems.
■'
-
-
-
~
At this time
to
economy
our
f
y
Foremost
the
is
>
*
"
V
intense
•
factor in capital formation that
jbas gleatly contributed to the rise
business
in
has
tion of inventories.
the
accumula¬
At the end of
been
inventories
war
of
civilian
products were low and a whole¬
sale transfer of war inventories
took place from
private industry
6t the Federal Government. Since
time
inventories
a very
have
in-
rapid rate. About
half the increase has been due to
v
price increases ;arai: half a result
f
demand
the
situation
basic
changes
this
will be reversed and will
negative influence upon
plant and equipment.
Expendi¬
our
economy
rather than the
tures for producers durable equip¬
strongly .positive influence that
ment at the present time are run¬
has prevailed, particularly during
ning almost three times prewar
recent months."
and '
: highe^ than-4 in
1941.
;
These three important elements
Among the important elements
In the present situation--4he ex^
that provide strength and force
to a rising and high level of busi¬ tremely high rate of capital ex¬
penditures by industry, the large
ness
the expenditures for plant
net export balance of goods and
and equipment by private indus¬
services, and the rapid accumula¬
try < surely .ranks riiear'r the top.
tion of inventories—are so impor¬
Among these expenditures it is
tant because of their peculiar lev¬
difficult to pick any! particular
erage effect on all other sections
field as outstanding.
Practically
Of our economy- They, all provide
every field—ranging from factory
a
large volume of employment
machinery, electrical equipment,
and incomes withoutanyoffsetih
office
appliances, through farm
consumers goods and services that
implements, , t.r.u c k s,
railroad will have to be taken off the mar¬
equipment, and to commercial and
ket within our domestic economy.
industrial construction-r-is enjoys
In all three a peak is likely to be
ing unprecedented activity. Per¬
reached some time this year. For
haps the machine tool industry is
the year as a whole their com¬
behind the parade but, if so, only
bined, contribution to our economy
because;. itr is, not running at, the
should be about the same as last
enormous rate of Jsome Of: the
year.
:* YV *-/-•••,
Vv.
on
the
part of industry for new
process
exert
a
.
-^mong, Ihese * industries
it
is
important to note that air¬
Release of Consumer's Spending >
3
craft
manufacturing,
including
Dominated ^Economy Since
military aircraft, is a relatively
End of
War--';;^
new, large-scale contributor to. the
i ^When We
economy and that the demand for"
S;ons of our economy we find con¬
producers (iur^le equipment fpr ditions of
activity perhaps even:
'
.
.
military-needs -must also be rec¬
koned with
as
tant factor in
a
new
and impor¬
postwar world.
The expenditures for producers
durable
equipment
during
the
our
■
1947 will exceed those of
1946, but it is doubtful that; the
year
current rate
will increase
to any
degree, Orders in this broad field
of activity are no longer increas¬
ing and. if anything,
showing
are
declining tendency. Unfilled or¬
ders are still very large and ac¬
a
tivity will continue at a high rate
for some months,'with the peak
likely to occur during the first six
months.
,
~
c
"
.
rate of income
relation
number
The second stimulating factor in
to the
other
to
national
of
income
industries,
industries
The end
other
of
At
a
while
in
subject
to
labor and materials become avail¬
cago
able, and
if
business should
probably
increase
expenditures
substantially. 'This year, however,
public works expenditures are
unlikely-to be significant." Oh the
whole, therefore,
governmental
spending is likely to " remain - of
about the same importance during
the year as it is now.
^
Our Economy
At the present
time, therefore, on
the basis of the current output of
Close to
An
be
which
these
partners
considered
and
Chi¬
managers
of
have been invited
to participate for the first time.
"It is hoped by this innovation,"
said James F. Burns, Jr., Harris
de¬
cline the Federal Government will
war
payments to individuals im¬
proved at a relatively slow rate.
at
member firms
Upham
&
Co.,
Association
President
of
Stock
of
the
Exchange"
Firms,
"to enlarge our functions
sounding board of member
firm opinion for the; stock ex¬
change industry.; In addition to
the background of member think¬
ing our governors have obtained
as
price controls and
controls changed the
drastically.' During the
fall, prices rose sharply and in¬
sessions
subjects will
.
not
the
low. States and municipalities are
planning large expenditures once
..
in
strikes and shortages profits were
far greater than normal.
*
a
from
Immediate Postwar Peak
cial
Looking' at the composite of all
of those various basic parts of bur
pearly
center
every major finan¬
in
the
nation from
which
they xome, we will have
the benefit of midwestern thought !
economy, we find that at the pres¬
ent time we are running, at an ex¬
directly..
Judging
to
sponse
froip the re¬
invitations
our
there
consumers' goods and services at tremely high level that can only will be a
gratifying attendance to
the prevailing level of prices, it is be riiaracterizedhas an abnormal these sessions."
becoming clear that
ther rise in income
a large fur¬
payments to
individuals is necessary in order
to prevent a glut in many con¬
sumers' goods markets. The posi¬
tion, of the consumer goods indus¬
tries is now rapidly becoming vul¬
nerable. This is perhaps the great¬
est change that has occurred in
our
in
economy
months.
V
-
'
-
the
'
last
Y
.-.•••
boom and that in
•
practically all of
segments of the economy we
the
developing elements t>f insta¬
bility. The boom is so great and
fact,
if
had time to
we
The
wideSpread mark-downs in soft goods
are
merely
vulnerable
would
are,
of
These mark-downs
in part normal at
course,
this time of the year and may not
necessarily reflect the beginning
of
a
in
or
find that many
downward trend in the entire
some
cases
as
better
the year 1946.
v
Private capital forma-tion
Consumer
more
ment
general downward
will
It
occur.
is
Consumer
that income payments to individ¬
uals will increase enough to en¬
able the market to absorb the in¬
38
35.
#
29
30'
164,
17
•
purchases-- 125
130
21
96
——
17
•
ICO
creasing flow of consumers' goods
These
estimates for 1947 are
at present
prices, even with a obviously bound to be in error.
larger-than-normal rate of spend¬
They are based bh the assumption
ing out of income, somewhat lower that the position of consumers
personal income taxes, and a con¬
tinuation of the rising scale of the
use
of
consumer
credit.
Further
wage increases and some moder¬
ate further increase in employ¬
durable
goods
housing
and
is
strong enough to stimulate the use
of
a
great deal of additional con¬
credit and that the con¬
sumer
sumer will - spend a larger-thanincrease national in¬ normal part of his income.
come
payments during the next
On the face of it these figures
few months;
but on the other
are highly favorable and
suggest
hand, lower farm prices will mean
that the year 1947 will he one of
somewhat
lower
farm
income.
great prosperity. It is likely that
Price weakness this year in con¬
these figures will prove to be mis¬
sumers'
non-durable
goods and
ment
may
later in the year in consumers' leading for it isn't the level of the
durable goods seems a very likely year as a whole that is important,
but the trend during the year. The
development ^ • \
•
„
As fh^'thfeJ case
of
consumers'
year 1946 was one of
Exchange
Firms
SidneyAdams, Paul Brown
Co., St. Louis; Harold L. Bache,
York; Geo. E.
Barnes, Wayne Hummer & Co.;
Chicago; D. j. Bogardus, Bogardus,
&
Nashville,* : Sydney P. Bradshaw,
195
147
Consumers' savings-
Stock
Frost & Banning, Los Angeles; J.
C. Bradford, J, G. Bradford & Co.,
130
146
Retail sales
of
Bache & Co., New
purchases.. 125
of individuals——
move¬
unlikely
Governors:
~
1947
price level.
In fact, commodity
Gross nat'l product- 192
prices as a whole are still rising
despite the decline in prices of Income payments to
individuals —v-- 165
farm products and the increasing
disparity in - the . movement of Personal taxes & non¬
tax payments --—19
prices of individual commodities.
It is clear, however, that the pres¬
Disposable income
ent trends cannot last long before
a
; Following is d list of Associa¬
tion
5
$ Billions
1946
Governors
Exchange, will attend the meeting.
in
Govt,
expenditures for
goods and services—
the
to
Friday
Coleman, Adler, Coleman & Co.,
Chairman, Board of Governors,
arid 'Edward IG Grayv Firsts
President of ihe New York Stock
go
of the
than
addition
arid officers of the Association of
Stock Exchange Firms, John A.
good as,
1
-.M
;
an indication of the
position'of this part of
Our economy.
In
into details of the analysis of na¬
tional income and expenditures
we
Business sessions of the Board
be held each morning and
Wednesday afternoon,
morning and afternoon.
only be spent gradually and,
therefore, there is but little doubt
that the, year 1947 as a whole will
be highly prosperous.
can
In
.
afternoon.: Open sessions will be
has such momentum that its force
strongerthtethiat of Consumers' figures will be almost
honourable " goods.
■
will
are
six
I Gbvioiisly, the: positioft of con¬
sumers'
durable
j*o6dS ; is'- far
sharply ris¬
■
Clark, Dodge & Co., New York;
Springer H. Brooks, Piper, Jaffray
& Hopwoodj St. Paul; Gilbert U.
Burdett, Laidlaw & Co., New
York;" Wymorid - Cabell, Branch,
Cabell
&
Co., ' Richmond, 5 Vs.;
Lyon Cartel Estabrook .& Co.,
Boston; William W. Cumberland,
Ladenburg, Thalmann & Co., New
York; Richard P. Dunn, Auchincloss, Parker & Redpath, Wash¬
ington, D. C.; F^ Dewey Everett,;
Hornblower & Weeks, New York;
Albert D/ Farwell, Farwell, Chap-;
man
& Co., Chicago; Harold P.
Goodbody* Gdodbbdy & Co., New
York;
;Donald Grant, Fahne-
stock & Co., New
York; Benjamin
Griswold, III, Alex. Brownj& Sons,
Baltimore; James E. Hogle, J. A.
Hogle & Co., Salt Lake City; Wil¬
bur G.
Hoye, Chas W. Scranton &
Co., New Haven, Conn.; William E,
Huger,
Courts
&
Co.,
Atlanta;
James M. Hutton, Jr., W. E. Hiitton & Co.,
Cincinnati; George R.
Kantzler,: E* F.- Hutton & Co., New
York; Thomas F. Lennon, Delar
field & Delafield, New York; Lau¬
ing gross national product, income
goods and services generally, resi¬
rence ,:
Marks, Laurence M.
payments to individuals, produc¬
dential bttildirig1s also iri a much
tion and prices.
Thb ^year 1947 Marks & Co., New York; Leonard
less favorable position than a year
greater thandhose that character-; ago. Here again, the cost: factor may easily prove to be one during D. > Newborg, -Hallgarten & Co.,
Ize the sections already; discussed. is proving" to be a real obstacle. which the trend of these items New York; Joseph M. Scribner,
will be: downward for a consider¬
We are all familiar with the d^' Housing on a vast scale, as desired
Scribner, Pitts¬
able part of the year.; At the pres¬ Singer, Deane
and demanded in; many quarters,
velopments in the field of conent time gross national product is burgh; Laurence P. Smith, Ben¬
is impossible under present cost
surhers goods since the
probably running at between $215- nett,
oftfte conditions. Even with the
Smith
&
Co., Detroit;
favor¬
$225 billion a year, national in¬ .Wi n th r
war.
The outstanding develop¬ able credit .terms,
op; H. Smith, Merrill
available it is come
payments at" between $175ment, in its impact on national unlikely that residential construc¬ $180 billion, and total retail sales Lynch, Pierce, Fenner & Beane,
tion can' improve from present
New York; Walter W. Stokes, Jr.,
Income, Was the release of spend¬
between $105-$110 billion a year.
.
levels without substantially lower
These figures are all substantially
cost of building materials and a
The heed for i goods;' reduction in other costs, of build¬ higher than the average level sug¬
gested for the year 1947.
This
the accumulated savings^the Sapid ing that are now so abnormal,
ing; for goods and services; by the
Stokes,
consumer. *
Gardner
year may
Increases iniriebnie paWhent^'^d
go" down
in history
as
Hoyt
D.
&
Co., New York;
Stout,
Dominick
&
Dominick, New York; C. Newhold
immediate post¬ Taylbr,: W. H. Newhold's Son &
business. I If that Co.; ^Philadelphia; Hqirier Ai VhaSi
should happen, it still remains to
rate of savings, brought about an
Cyrus J, Lawrence & Sons, New
Finally, the last element to be be seen how severe any business
increase in. consumer expenditures discussed in
appraising 1947 is that decline will be that may start dur¬ York; John Witter, Dean Witter
of almost 30 % within 12 months. of government spending.
& Co., San. Franciscp?!^;^
"We all ing the
; :
the "sharp
reduction in the eurrent
Government i Spending Will Be
r
"
*
the present rate of cabltal forma¬
tion which has contributed much
in relation
national product. Corporate
profits were far below normal in
gross
come
which
.',*,•* *•••
reconversion.
great increase in
inflationary pressure in our
economy.
The consumer was, in
effect, subsidized by an abnormal
is powerful as it is now.
The third important economic
Creased at
dealing with
for_,1947
prospects
a
the
will continue throughout the year
of an increase in physical stocks.
Much publicity has been given the
^greatly eases and facffltaFesvihe inventories. A rise in inventories
t^sk of diagnosis. This is because
in itself is K' normal during any
iwe enter the year with such pow¬
period of rapid business expan¬
erful economic forces that for a
sion; It is only' wheh a ^ basic:
considerable portion of 4he year,;
at least, the economy as a whole Change takes place d in {the «cqridhiic:trend Ithat ^hyenihries^be^
will continue to develop along the
come bhrdensOmer Inventories are
same lines as during the last part
"high" or ""loV depending upon
Ipt ,1946.##M
n. - ViY' V the economic situation as a whole,
^••'V*.'^t %'
•*"
tj* ■- '
'
'•
'
and not upon their absolute level
Capital Formation .at a Very
at any given time regardless of
other considerations.
It is quite
•We are all more or less familiar
clear that the process of building
with'these powerful forces. I shall
inventories is - temporary. < Once
ideai; with capital formation first;
the
i'.
we are
stimulus
was
picture
that
Powerful Economic Forces Still
Dominating Economy r'*.
ticular
speedy
The result
:
Moderately Lower
the
war
year
of the
peak " in
THE COMMERCIAL & FINANCIAL
628
"Boom
Overhauling the
Securities Act
\
^
r,
I
'**'• ? •
I
L
.
-
' •' '
-w
'
•
V
,
I
'
'
'
'
M
'■
4 VUV'' '"'"'it "v/'' '■Stf
^
VT'
(Continued from page 591)
or
Bust7'Dependson Government
that will free venture capital can of countless hew products, that:
(Continued from page 590In¬
duction of goods, accelerated in¬ be doubted. If it fails to reduce will create completely new in¬
taxes adequate to increase the dustries. '
flation's spiraL %
!
The present risk in America i$
When OPA ended after Election flow of venture capital, it auto¬
that we shall have, a shortage of
Day, many white market prices matically invites the depression,
the Congress and all of us seek to labor, a shortage of capital and w
rose to black market levels.
In
be unburdened, that free and open markets proceed
unhampered and that administrative hamstringing of indus¬ the interval, production has in¬
creased; resistance of buyers to
try be terminated.
high prices has grown greater;
This mandate was recogized by the OPA in generally
and prices now adjust themselves
discontinuing price ceilings.
toward lower levels;
It was recognized by the. President through his lifting i The economy is now working
of restrictions heretofore existing and xieclaring the cessation out frohl Under- controls into a
ness
of hostilities.
,
The turn has been
;
free
;
called in the securities field and it
recognized that the time to act is now. y
a vital recommendation.
1
Section 15A of the Securities and Exchange Act of 1934,
is Well
'V
We have
l^mmbnly designated
'
as
the Maloney Act, has been a thorn
of Securities
which shows
ho sign of subsiding, y'
Let us touch briefly on but ia few of the evils engen¬
dered by the Maloney Act. \
First and foremost, we flay the monopolistic provisions
which under the rules of the NASD make it mandatory for
its members to treat non-members on the same basis as the
.
,
general public; thus preventing the sharing of commissions
and preventing participations in underwritings among mem¬
bers and non-members except on an inequitable basis./The result of this inequity is that brokers and dealers
as a safeguard to the earning of a livelihood are compelled
to join .the NASD, while at the same time despite this com¬
pulsion, regulatory bureaucrats argue that the NASD is a
voluntary body.
Another, evil is the absolute control of the NASD by
the SEC, the power of life and death which the latteivhas
over the former.
A reading of the statute makes it plain
that any hope there can be independence of actiotr by the
'
NASD is futile.
The SEC must
*'
competitive
.
market.
.
This
transition will continue as long as
coritrols remain on the economy.:
|
As always, the price shakCout
visible.
ivas actual before it;was
Industrial
stock
had reached a
last May..
market
prices
peak at the end of
!
interlocking bodies, these auxiliary policemen
who act en camera, are urgently in need of divorce.
The welfare of the public and of the securities indus¬
tries requires this! S
^ \ ,
Yet Another evil is the attempt to control spreads and
'
placed in operation, without submission to NASD members
fot approval, will always be an ineradicable black spot.
Without going into detail, it is sufficient to say at this
time that the interpretation disregards the profit motif in
business and creates an antagonism of Main Street against
,
menti prevented
.
72c under
sub¬
sidy/ is selling freely in the 60's
when pasturage is not available.
The reduction of specialty prices
is in the interest of all the peo¬
ple.
The
economy
has
helped
and not hurt by
shakeout, up to now.
Hard Goods Price
been
this
Declines to
willing
no longer
price reduction on
hard goods can follow specialty
and soft goods by the difference
in months needed for fabrication.
always,
became the servant
of purchasing
theories, fair profit was de¬
competition. Un¬
til the purchasing power theory
took over, the public never saw
automobiles, refrigerators, radios
plowed under by restrictions on
production and on profits.
Industry is now working its way
toward higher levels of produc¬
power
termined by open
tion
which
can
generate
high
purchasing power and also a
profit for the production. The
economy is still in a healthy, vig¬
level
orous
ment
condition if the Govern¬
it function.
will let
[.'technological,
until it is the most important
America
in
of
impression that they will be paid
by somebody else. The public now
knows that it pays for these Wage
increases itself. The public under¬
stands, as it did' not understand
conservative
y
>
;
-
No Need for Depression
1
life
today.
;
choke
toV s£y that;If ;Goy^4
threshold of the most: glqriqus
imprbvh^^ hig econoMid; ^
In America; there is everyr re-*;
source
to[ prevent depression ex-* •
cept an understanding' by the
'
Government of the factors inter-*
;
v'
fering with management decisions
that now cripple management's
ability to carry them out.
•
> °
,
,
the fringe
President
corrections
Truman
suggested. The Republicans offer
about the
same
The closed
program,
shop is
are
working our way
not
work¬
ing our way out into a fully com¬
petitive market.
If depression is to be avoided,
taxes on venture capital must be
reduced
and
labor's
monopoly
must be ended.
"
.
-
:
ends
which it '
Unless this new Congress
the labor and tax abuses
was
to
elected
correct,
we
can
depression in 1947.
There will be no depression in
have
1947
,
the
unless
Government
makes it.
it is
satisfactory to the union
bosses who
use
it control men.
The coercion of the Government
by industry-wide bargaining un¬
der law appears equally as satis¬
factory to the Republicans as it
it will
1948. If it does
reelect them in 1948, it will defeat
them in 1950 and 1952 and reelect
was
to
the
Democrats if
reelect them
Harrimait
in
Ripley Offers
Firestone Tire Debs.
satisfac¬
as
tory to politicians of both parties
as
a means
of controlling votes,
as
We
toward depression". We are
produced.
Labor will accept
i
pe-1
riod ^of man's/eternal struggle to:
i
I
fact
It is '
sellout : t0; labor [does •
us,
we
are>,:on the.
ernmehtal
not
in this
not
Follow
As
of
rate
change [in industry hasr increased;
1 The public is
There is ho need of depression
country, but inflation will
surely, produce it. With Govern¬
ment
approval, feather-bedding
prevents the production of goods.
Labor receives two days' pay for
one day's work. That is inflation.
The forty-hour week with con¬
tracts requiring more than forty
hours' work so as to get overtime
pay, is both coercion and inflation.
Union rules
that require work
done by one union to be dupli¬
cated by another, cause inflation
because money is paid for goods
Butter which sold at
The
„
to grant wage increases under the
price and more. Department store
markdown sales began the day
after Christmas. Liquor prices de¬
clined and quantity increased.
OPA, with a concealed 15c
.
technological expansion that now'
beckons ' the ; people
to higher* !
standards of living. "• -; '
\
in
production
.
the
labor government can prevent
1946.
only inflation,
^
profits by the SEC and the NASD.
-The "NASD l>% spread interpretation* is a wicked,
sehSelOSs and alb-American thing. The mantiOt of its being
that helped so much to win the
war in 1945 is not yet permitted
to function in 1947. The continued
favoritism to labor by Govern*
off
20%
as
measured
by
cancelled equity
bonds. Furs are offered at half
is
entertainment
the existence of a National Therefore, prices of refrigerators,
must approve its format aiid automobiles, may be down late in
1947 but only (if labor costs are
It may compel, .the passage qf cer¬ stabilized .and*^ newr tooling for
tain rules, and under certain circumstances, it may suspend lower costs can be achieved.
Before the American economy
or terminate the existence of a National Securities AssoThese
Only the ineptitude of America's
great[ production machine
,
It
ciation||fEl^
The
i
As:
approve
Securities Association.
?rules and regulations.
of savings.
avoid.
even one year .agqr that wages are
v.,,.;..always, specialties ; turned prices. Realwages and [the stand¬
down before staples. Furs, jewelry,, ard of living rise together. Recent
liquor and entertainment literally wage increases without equivalent
create
fell from their peaks. Professional ihcreasesv iriV production,
!
'
It gave birth to the National Association
Dealers and has created a storm of controversy
Thursday, January 30, 19471
CHRONICLE
A
group
headed by
Harrimai
Ripley & Co., Inc. and Otis & Co.,
offered publicly Jan. 28 a new
issue of $25,000,000 25-year 2%%
Debentures' due Jan. '!, 1972 ox
The Firestone Tire & Rubber Co;
at 100% and
f
accrued interest. The
proceeds from the sale of the new
debentures are to be applied to
the redemption at $105 per share
and accrued dividends of 250,000
shares out of the 414,000 shares of
41/2% series preferred stock pres¬
ently outstanding.
Capitalization upon the com¬
pletion of this financing will con¬
Ffee&ttii Kot k i^odiry
sist of $25,000,000 hew debentures,
Freedom is not a luxury that
$40,000,000
3% debentures due
can be indulged only in stabilized
May 1, 1961, 164,000 shares of
times. It is the chosen instrument
41/2% series preferred stock (par
the collectivists and force a con1*
trolled economy upon us.
of free men in getting
fused times.
/1
out of con¬
of com¬
$100) and 1,950,834 shares
stock.
'
' y
which the
new 25-year debentures* are is-* •
Wall Street, because, as must be plain, firms doing a large lative correction. The Gallup poll for all Americans. Liberty is an
sued provides :for a sinking fund [
business can operate at a smaller average unit cost than does not supply it. Political prom¬ indivisible whole. It does not frac? to retire $750»000 principal amount
J
tionalize. into four freedoms or
the little fellow..
We have enumerated
on
to many
'■ r'
only
a
V
"
^
":SI8Sl
few of the evils and could
others if space permitted.
Some of the defenders of the NASD have referred to
By
their
protests,
the
have called for a program
ises of 1946 are in
people
of legis¬
For
fourteen
watched
the
years
mon
-
industry
forty freedoms. It is integral and
complete. Liberty is Magna Carta
hot for labor alone but .for all of
us.
When
a,
man; must
under the
dues for a job his
liberty is lost. When the right to
5"
That insulation should be necessary is a ysad.vcomHsk;arid v#ture is reduced; mah-s
liberty is lost. When taxes are
iheritaryv^bn the lack of effectiveness of SEC operation.
[used to punish those. wher have
;yAdministat^
properly functioinng^andf com
savings, liberty is reduced. When
scious of their responsibilities to the people, need no "in¬
money is collected from industry
ple.
sulators."
'The present, fears of the people jtchcreate^Obs to keep: politicians
>v >Tf
[others administrative bodied were to adopt an atti¬ are that thd new Congress will jn power; the liberties that made
5
^.1
tude like that of the SEC^ and create for themselves* statu¬ balance the budget at $35 billion Us are reduced*-instead of $30 billion in 1948. That
That Congress Jp.teficls io restore
tory- insulating; organizations, what a silly picture it would is better than President Truman gequaj«^y before the law for em*
present and what; an unnecessary ymess of wheels within proposal to balance the budget by ployers with employees, can be
wheels.
$200,000,000, which would require doubted. If it fails to end labor's
In this intended. SEC program, of presenting to the thirteen centuries of time to pay present monopoly by i outlawing
the debt; Tax receipts from indi¬ the closed shop and industry-wide
Gdngress "desirable and workable" proposals for amend-- viduals with high income should
bargaining, it Ckh create depres¬
inents to the Securities Acts of 1933 and 1934, the Commis- be increased
by reducing tax rates sion.
WtM;'rM-'sR>h could render
20%. as was done after the First
^o^bette^ service than to recommend: the
:
The facts of
it as
an
"insulator between the SEC and the public."
law pay union
'
■
The indenture under
reduction of liberty
mothballs now.
politicians have decided to
protect themselves in 1948 instead
of the people in 1947.
National, leaders have forgotten
that in fourteen years/ peace 'and
war, the Government added six¬
teen separate tax increases, each
higher than the other. In. 1947, it
debates whether it should restore
even one tax reduction to the peo¬
The
;:
of debentures in each of the
first;
15 years ahd^$l,375,000"principal;
amount of debentures in each of [
the next - ten years. This sinking
fund is sufficient to retire
tire
issue
the en-»
by-maturity and will
result in an average life of
slights
ly' less than 15 years tor the new;
debentures.
Sinking-fund pay-;
ments
may
he made ;in\ cash or
debentures.
The .debentures
subject
call .for,
to
r
are;
the^nkmg ; oh; ShyS
fund on
JjHiiary" 1 Thereafter ubo'n not lesi than 30 days published notice. The
sinking iluiidxcall price starts at >
101% and is subject to successive .
reducUons during the life of the;
debentures.
f*
^
•
repeal of the Maloney ActSuch repeal would enable a hampered- and restricted
industry to breathe with a degree of moderate freedom and
to be released from that messy system which provides for
technology and the
World War.
visible production out of it; mako
Tax Outlook
alsofl
subject: to caii at the option
.
The
new ^debentures
the ^Company. as. a
are
whole or in >
part by lot .at any .time upon not;;
less than 30 days published notice,;
if redemption be made on an in¬
terest date,, and upon not less than i
45 days published notice, if made ;
on a date other than an interest.
date. The general call price starts ;
silly the talk of inevitable depres¬
taxes should re¬ sions. They have already made
main unchanged in ; the .calendar
obsolete Keynes' ' talk of '"Eco¬
year 1917,; The excise tax part of
the trial of alleged offenders by their business competitors
nomic
maturity/? In the presence at 103y2% and is subject to sue-the law should be enacted imme¬
cessive reductions during the life;
who sometimes may exploit such a situation by acquiring
diatelyto, prevent depression: in of technological potential it is reof the debentures/
•
"
the luxury industries.* Taxes on diculous to talk Of over*saving
;;,ihei.business:qf thepne.onTriab-^
J • Thecompany has agreed to
furs and jewels and liquors can be
and
under-investment
w hen make
j ;; If. the mandate
of the people is to be observed, the
'application to list the new
paid by those who can afford to
Maloney Act should go, and nothing would please us better buy them. That the Congress in¬ American industry is utterly "un¬ debentures' *on - the New York
Stock Exchange#
than to act as one 01 its
tends. to. reduce taxes, in a manner, able. ta.tpoLup for the .production
honorary pallbearers.
Corporation
,
■y olume -165
-
"•>'.«THE COMMERCIAL &-FINANCIAL CHRONICLE
-Number 4564
A Windfall Tax
"«2>
Economic Outlook for 1947
on
A
Retroactive Portal Pay
f (Continued froni page 596)
bur
^ ;
We have 'lived
booms and busts. We
economy.
through
our
lion
according to the President of
the United States for the full
year
1946? Are not the
inequalities oi
vidual
only
employer units can spell
tension and conflict. "Lbey
of $>ai-
will await the development
(Continued from page 608).
have learned
that the day
of Income resulting from such a terns for guidance. Industrywide
spent in productive labor or time that they gmay owe in subsequent reckoning may be delayed
by one highly inflated corporate income collective bargaining has producetl
spent in going to or from work years.
scheme or another; but it will level likely to be the materials fro
stabilizing effects in practically all
where the employer
agrees in ad¬
Of course, these portal-io-portal come. We may 'employ consumer an explosive collapse? :
industries where it has beea/pracvance
to
furnish, transportation suits are just plain legalized high¬ credits, or foreign' investment, or ; Foreign loans, expanding gov¬ ticed. /Moreover r every industry
shall be included in work-time. As
even" public works 'financed
liy' ernmental expenditures, expand¬ observes some degree " of wage
jacking. The CIO are simply
a matter of
fact,- of course, this is ing them as a club to hold over public debt; but bur basic eco¬ ing consumer credit were the fac¬
leadership even where there is no
all Congress ever intended to in¬
the bead of industry to; try to nomic imbalance will fake its toil. tors which delayed economic col¬ industry - wide agreement.
The
clude, but this bunch of New Deal force industry
; to
do what they Our bconomy demands a total bf lapse during the 20's. We must agreement with the United Btatea
lawyers who are on the Supreme want done: in making the next money expenditures; which will employ more successful techniques Steel sets the
pattern for the steel
Court apparently had other ideas.
contracts.
The
Supreme-Court keep production going. It must during the forties and fifties in industry; the understanding with
While Congress cannot. under
when it rendered its decision in be equal to the output of industry. face of the great challenges from the American Woolen Co. sets the
the Constitution pass a retroactive the Mt/ Clemens Pottery
abroad and the reliance which the
It
pattern for the woolen industry;
Com-j a does^ not/work when A there A is;
law to; stop the filing of suits uriworld.- is placing ' upon our co¬
gap.,/ OA//"'-•A
General Motors for the automobile
pany case opened up the ■ flood-'
; der this SupremeXourt- decision*
.'-V.C i operation and assistance. :
gates for these damageAsuit law/
industry; the ;Big Four for / the
? there is; one thing they .cain?do and
.Cannot Look. With Confidence.! A/The large "business monopolies rubber
yers and highjacking labor rack¬
industry; Burlington MiJ63
*that is, they; can take all of the
/ ■
to the Future
hayb a great grip on our country: and Cannon Mills for the cottc»»
eteers tofilerthese suits. It is im¬
profit out of f|ling suits--my perative. for Congress to do some¬
They have greatly strengthened and rayonr weaving industries; tfche
Unfortunately, we cannot look
; amendment to the Internal Rev¬ thing about it:
their hold during
/and since the American; Viscose Company fp^
forward with any confidence to
enue Code will do that because it
war A. The large/corporations /got
the synthetic yarn industry; antd
Congress cannot say that there the future. Most significant/prices
levies a 100 % income 4ax*on> What¬
the war contracts; they operated DuPont for the chemical
is not anything they can do about have been pushed to exorbitant
industry*
ever the unions
most of the government owned
may recover.
it because if anyone will read sub¬ levels. Industries which had few
But the issues are hp longer dee/ : My second Amendment^ which
facilities; they enjoyed the greatest stricted to the individual indus¬
conversion problems enjoyed lus¬
is to the Internal Revenue Code, chapter D of chapter 2 of the In¬
share of money spent for scienti¬
ternal A Revenue Code, especially cious profits through the generous
tries. The demarcations are quickly
: reads as follows:
fic research. Since the war they
-vV
sections 700 to 706 inclusive, it is OPA
margins
which
reflected
fading. The industries are merg¬
have bought up the smaller cor¬
A; "H. R. 71, Amendment intended obvious that Congress has exer¬
prewar mark-ups and exploited
ing. Individual corporations suab
to be proposed by Mr. O'Daniel
porations for
attractive
prices as General Motors also set the
cised an^: the epurts have sus¬ the shortages when the OPA was
patTheir grip has been tightened. We
to the bill (H. R. 71) to amend the
tained: its right to recover money repealed to push their prices up
terri for the automobile parts and
Internal Revenue Code,
Act of collected by persons where no to unjustifiable levels. Industries know that they never have en¬ its kindred industries. These pro¬
Feb. 10, 1939, viz: IAt the end of
service was rendered. This is a which had conversion problems joyed engaging ia free competi¬ ject into the entire metal grosup.
tion. They practiced price leader¬
the bill insert the following new method
they adopted when the demanded profits on their low
Dominant plants in these indus^ w:
sections:
ship ; price understanding; market tries set the
JSupreme Court declared the Ag¬ volume of output and have main¬
patterns" for loca®
arrangements; and the multitude industries.
"Sec* ( ). The Internal Revenue ricultural Adjustment Act uncon¬ tained these
exorbitant
The wage levels «f
prices of
other private and secret under¬
Code is amended by adding after stitutional and it forced the pro¬ when volume increased.
these industries provide a point
They for¬
standings which; abuse, noblesse of reference to
section 15 the following pew sec- cessors to either return the proc- got that the
completely locdt
government had
oblige : among, producers.
Price
jtion:^"
cessing taxes they had collected underwritten their operations by
plants.
We are now integrated!.
'* ■'
'''?•■
' 1:'..' •'/
v
cutting is not engaged in, They The War Labor Board
from their customers or to pay a
crystallized
carry-back provi sibns and the re¬ have
a stranglehold on our
plants, this movement.
;■ " Sec. 16 Tax
onUnjust Enrichment. tax to /tee Federal Government peal of the excess i profits tax.
The
post-war
our capital, our resources and our
which: would put back in the They were going toAcash in On the
'economy must recognize, it as jk ;j
"(a) Imposition of Tax—There
political power. They control the
fact.
Treasury the amounts they had opportunity.; rnther. -than gamble
Shall be levied, collected, and paid
National Association of Manufac¬
collected. So there is a precedent ;0ni4he
We
must
establish voluntargr
for reach, taxable > year .upon the
turers, .its pronouncements and
already" established, for levying ernment. I They were too long
imachihery for guiding the devellyindfall income of *every individ¬
policies. :
this kind of a tax and just com¬ steeped in the prewar practices of
ual a tax of 100% of the amount
opment of the level of Aiheriqaa
mon equity requires * "that
if an low- •; break-qvenc :i points.-v.They
wages. This is not compulsion. A
No. Labor Monopoly
ipf his windfall income.; /
■
employer is forced by judgment kiieWi thnt it iB^As^e^Albiprice,
set of. patterns will ^ allovv, indf*
-l
A; It is they who are distoriing tlie
Windfalllncome—For the of court to pay out hundreds. of as the steel
^idual ^ plants, • ' industries /and
industry had done, at tale on
.purpose of.'this.chapter/the term thousands of dollars or
monopoly. They are trying
millions, 43% of capacity, >and the, auto¬
localities to measure their own
to get the: public to believe- that
^windfall, income! means amounts
he should be allowed credit for mobile at 57%. They were there¬
|-wage adjustments/: Siich. patterns
.received by any individual
during 4hi& judgnieht;against any $ax he by protected against depressions. ,there is a labor monopoly.. They can. be
evolved " through
free
:fhetaxablcpyearvas wages,^penal¬ might have accruing in the future. The WPB reported in May 1945 hre abusing language and divert/ natidnal cbUective
Ing attention. Labor organization
ities, or. other damages |acfual, licouncils
can
also
In: other words, -Mr. Chairman; that jdurahle consumer goods > inhelp. eyolvp
used to be called a conspiracy: But
quiaated/pr f exemplai^lunder^m
my amendment to S. 70 amends dustyies,-v wer% ^reconverting:^ .at we soo»
learned f that free hied agreements for such significant is*
vbrder^of va^outt^pfcbmi^
tho -Fair Labor- practice/Act >>so ^pncesAwhich^/would^ assure a ^2 %
have a right to bargain for their sues :as methods of distributdqg .^19
iisdictiorrj in * accordance with the that there will he no
grounds for break-even ' level; They were go¬ terms of employment. Free men gains of productivity; the mini¬
provisions
of - the. Fair: Labor
mum wage rates/and; other £oaa~
portal-to-portal
suits
on Work ing to sell America short to pro¬
organized in a union still have
/Standards/Act .of 1938/iLHabbittf
tect themselves^ against all reces¬
troversial
issues.
P ri n c ipI
.tot" the-payment ^of suchamounts not performed afteir the date of its
that right. The use of that right
enactment and my amendment to sions.
They defied the .govern¬
Would not have been incurred had
cannot he a monopoly. They bar¬ voluntarily developed by our leadthe Internal Revenue Code pro¬ ment and labor when the latter
•ing employers and unions througlh
section 7 (e) of such Act been in
gain with only one article, namely
the break-even
discussion provide the most.hospevides that if the. unioa gets a judg^ demanded that
their free labor. The monopolists
points * of
American
industry areraerd you take it :away from them
holding tip • the country /with? ;$i) solution for our controveraea.
by, taxation and' put the money in should be raised to levels which
:f|AThe i^American} middle^lags ,La«s
will assure low prices, high wages high/prices,: restrictive trade pHo,"Secc(); The^IntenjahRevemie the Treasury. Then it also pro¬
tices, Iqw production levels ^hd ;a special responsibility duringtb?3
high
volume.
Everybody are
Code is amended by • addipg after vides that you reimburse the em¬ and
withholding raw materials, imoment of stress/^^ It is 4he ihua®>:
that
high
break-even
section 22 the following new sec- ployer who had to pay the, judg¬ agreed
plant and capital which they own, .ing part of our community. It la
ment by allowing him to have poihts were a prerequisite to in¬
tion:
not as truly free agents, but only not under the stress of the vaniabdustrial prosperity and full em¬
credit on his income tax.
ing. bread basket. It knows 'tbe
as trustees for the American peo¬
Sec. 22A. Additional Exclusion
I certainly trust that both of ployment, but American industry ple who demand optimum use.
value of full employment at hfeb
/ ■would not take the chance. They
From Cross Income.
my amendments will be adopted
True, labor bargains in larger levels of income. Yet it. has
priced for the depression.
//'Amounts received during 'the promptly. *
acted freely. It has not found 5tunits. It is true because
;• -?
I
.
,
„
.
,
•
•
.
•
,
■
•
i
.
.
•
.
.
v
,
-
■
,
manage¬
Ths pricing policy still prevails. ment has; built
larger plants.; It
is our most serious challenge.
bargains with larger corporations;
There is no evidence that it is because
management has devel¬
taxable year as: windfall /income
shall not be included in
gross in¬
-
;
-
New York Stock
It
Exchange
come/ r ;
"Sec. ( ) The Internal Revenue
Weekly Firm Changes
Code is amended by ^adding, after
The NeW York Stock Exchange
section 35 Ihe following mew s60- has annOdhced: the
following firm
;tionr.^iP#€:I«:
;
Sec. 36 Credit for Windfall
Income Payments. '
■
i credit
,
likely to change for industrial oped larger corporations. It bar¬
products. The; first indications of gains with larger
industries; be¬ business. It still obligingly assents
a downward spiral in.
food,prices cause they have grown. :True the "to the rulings of the NAM. v
resulted in conspiracies by milk stakes are
great to the workers,
The middle class has been the
changes:
.producers, the dumping potatoes management and the public. But bulwark of American liberaliaw*.
Transfer of. the Exchange mem¬
and the invocation of fhe guaran¬ the
employers. offer; only a code It must reassert. its position. Hfc
bership of the late Milton; J. tees of
90% of crop prices. The drop i cf
anarchic
relations
between must find the tenets of its new
Beirne to Edmund A. Rennolds,
in raw cotton prices has been ac¬
labor and management as repre¬ position. It is founded on the wor¬
Jri; will bo considered by the Ex¬
companied by price increases for sented by the last NAM labor
ship of the principle of individual
change on Feb^ 6. Mr. Rennolds
grey goods, prices from 25 to 60% code. They plead for restrictions
freedom; enterprise; and the pro¬
will continue as a' partner in
over OPA leyels. .The: price in¬ on labor
organizations so that they tection of private property a®#.
creases,, it is suggested, by inany will be less able to
bargain. They Individual Irights.* It
riow heW~*
Elmer G.-Samish will withdraw;
producers, are necessary td help are not/ interested in securing ever ^serving the cause ofbig biosifrom limited partnership in Friedthem/; weed out their .nxarginal equality because they now enjoy ness. Its temporary profits, Its
man, Brokaw & Samish on Jan. 31. customers.
superiority. They are determined opportunities to enjoy speculative
Francis B. Gilbert will retire
Increased productivity is not to get greater superiority and de¬
from partnership in: Clinton Gil¬
profits, to overcharge, to raise
being shared through lower prices. vitalize the unions through restric¬
bert & Co. on Jan. 31.
prices, to enjoy high volume ixs&
The government paid for the war-,
tion, bleed them through litigation,
Walter G> de Berg, general part¬
deprived it of its own faculties ^qr
time expansion of industry through
ner in HaUaday
and frustrate them through great¬
& Co. will be¬
self-criticism 1 and Its ability Jik
come a limited partner, effective building plants and by;
accepting er internal conflict.
test the functoning of our Society
Feb, 1.
*
v
accelerateii
depreciation.
These
The American middle class has
Opposes Decentralization of
Sergius Klotz will retire from have reduced costs.
Have
we
Collective Bargaining
partnership in Charles Slaughter;
a responsibility to find a definitwwn
witnessed price reductions in the
& Co. on Jan. 31.
The essential issues remain. We of its own place.
It must build
industries?
'<
.
"
'There shall be .allowed
self.in jhe^new era of high orgazir
of management and iincreasing organization of labor. It
is still being whipsawed by te"gP
ization
as
a
against r. the • tax,- £ amounts
.paid. during the; taxable year as
.
.
,
T
/wages, penalties/, or .other ^dam-ages
^actUalrh^uidated^^^em-:
.plary) under ah : order of A court
pf
.
•
competent jurisdiction in. accordance with the .provisions of
the Fairv Labor .Standards Act: of
1938, if liability for the payments
of
such
amounts
would not
have
:/ beep incurred ;hadr section 7 <e)
•
of such act :beeh;4meffect ;o® Pnd
after the effective date of such
Act/
•"
*
.
,
^
"Sec.
,
1-V
1
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^
'1
X
1 1
*
v
,
( )
The amendments to
the Internal -Revenue Code made
v:
by section ( ) 40 ( ) shall anplv to
.
taxable
years
s
Dec. 31, 1946."''
commencing
after
/V-v' r-V.
I
■
must
Now McKee & Jaeckels Inc.
:
v
This
amendment
also
protects
the
if
employers by providing that
they are caught withV one of
these suits and judgment is ren¬
dered against them, .they can apply what they have to pay to any
Income tax they
owe
in
1947
or
APPLETON,/WIS. — McKee
Profits Excessive
&
What faith
Jaeckels, Zuelke Building, is now
doing business as a corporation.
economy: -to
can
we
have in this
adjust, itself auto¬
bargain, to
secure
a
better its philosophy on the recognition
balance in the diriribution. of our
income
tinued
which would insure
markets for
goods.
that personal freedom
is gained l>y
con-
individuals only through economic
That
security, full employment, high be¬
McKee, Pres¬ matically at a level of full employ¬ means incomes ready to buy the come and "membership in economic •/
ident; Gertrude W. McKee, Vice- ment, when profits continue to be total American output. The de¬ groups which .participate in the Presideht* and John; N. Jaeckels, earned at the rate of :$25 billion centralization bf the collective development of publicly signifLOfficers
are
Carl S.
'
Seoretaiy^Ti^amr^:/:
in-the fourth quarter-or^ $20 bil¬
cant%,;
«n
»>
•
THE COMMERCIAL & FINANCIAL
630
well
Air
Transportation Outlook
(Continued from page 595)
but because of
mechanical personnel to
;
Shortage of man¬
government contracts threw the;
full burden of overhead on Com¬
mercial operations. New; airplanes
have reintroduced the Item Of
assure a
high standard df safety. No aifline
Government contracts for would have undertaken this rapid
-special services for flying 'and expansion tiaci It ndt been for that
-certain "phases • fttf -actti^izkg, :|aet./®^
.
/;/ //,.
Additional airplanes had to be
%ave further Spread of an already ;
acquired. New airplanes had been
abnormally low overhead cost. In
order
for
years,
but
we
addition, many fully depreciated on
^airplanes were
in use.
Wage wouldn't wait the 'necessary two
stabilization prevented wage ad¬ years for the airplane factories to
justments Which Were justified stop military production and build
and this had further effect on low 'our new planes before we made
operating costs. These "conditions any effort to break the bottleneck.
The
were the most perfect that could
only immediate source of
ever be expected to produce air¬
supply was from war surplus, and
from
that
source
we
acquired
line profits—but they were ab¬
power.
•
•heavy depreciation as a /cost lbf
operation. Inefficiency of newer
'employees,; of ^whom • 50% ;have
been In ;'the Airline fbusiness less
than one
year/ coupled /with in?
Adequate Working Tacilities,/have
Resulted in 'atf efficiency of 'pnly
70%;6fThat^^taiiied'Jii^rid^A"
'times.'v
all
in
Thursday; January
:,'
CHRONICLE
instances.
This
proved -all -expansion and,
fore,Ttius^
dur-»
ing thA public some concern
ing the past few weeks appears to
be working out to a satisfactory
em¬
phasize^ The danger Of aggressive;
expansion under -abhoi^mal condi¬
tions. It is true the airlines initi¬
ated All but foreign expansion-and
furthermore that no expansion has^
been forced on any carrier; neyertheless,
the
Civil
Aeronautics
Boafrd, Which I 'again 'emphasize is
charged With the responsibility Of.
establishing a isOund and ACon6m4
iCal -transportation
aystem, fap4;
30, 1947
conclusion for all parties <£06Cemed.
& Some Af vtiA who have oeen
layed in our
expensive to
alty i& justified
if We can be-AfsAreAThat Sothe bad habits 'have
been shaken out of thC Jbu»iiess.
there-?;
us
tnhnagemCrit the weak4
heases in' the Ond tesUlt.' - % SmallerCarriers Wereconstaritly
making the plea -that they Oould
neVer be ■ a /success Unless'they
Were made larger. The • Ussuttip4
tiOrt was automatic That If they/
became larger they would become
stronger. Things do not necessarily.
WOrk Out That way; Those airlines
in Airline
financing may find
be slightly more
obtain, but that pen¬
that money may
4^ The Future
?The basic difference of
.
oAfm^
between'thA^con^ervatives'and The
1
involves/the
of air
transportation.rThedifference is
strictly in The 'matter-of Timing. |
normal in every respect. There
I believe that 'regardless of;the
will never be another repetition
potential market, the ; product
build all airplanes received from
oof those conditions except-in case
; Now we-must - consider - the fac-i
must be Tight. /Today the public
surplus at a cost almost tor of revenues. The bottleneck in
of war which none of us ever war
Wants fsaifety aboVe all. They /do
travel was brokbh' Shortly after,
■Wants.
.;:'V
equalling the prices we were pay
Want ; dependability/ pf ;*sch^dufe
ing for new airplanes of the very Labor Day. The demand IS now; eOuld Tiot Aelarger Oil
;
During 'this entire period,
performance and regularity of ser¬
Same types prior to the war. Be¬ more
in! line : with
sure
we will all agree that the
supply;
T any stronger than- the population
vice, but >when We advise Them
airlines .rendered the most out¬ cause of the new postwar air¬ wouldn't isay that 'the demand iias they serve would justify without
that at this stage of development
subsidy.
>
standing service in flight'and oh planes on order and to be deliverd been exhausted, but irregularity;
we
cannot - offer that regularity
within 18 months to two years
5
These
-
are;
^bme '/of :IKe
/factors
affecting costs. This is a^period Of
adjustment over that of wartime
four-engined transport airplanes. And is reflected *itt; the *unit/cost
It was necessary practically to re¬ of operation.
1
the ground
that
of
being offered
was
surplus planes were put in
•/Jt was a main subject of conversa* service, it was only natural that
lion among experienced travelers.; their periods of usefulness would
after
-in the entire transportation field.
operation:dias Agafat^brought
The
There is no-disgrace in subsidy
airline serving a territory
about seasonal fluctuations.
to An
present; average airline capacity;
is approximately 74%, while The:
breakeven point during this coh-j
version period is approximately
80%. Increases in passenger fares
or in mail rates or in both Are in¬
that needs service but yet
is riot;
Sufficiently populated TO 'permit;
the -airlinO to be self-supporting
^extremely limited.
hs^'Teason; ^of thej^restriction
Meanwhile, a three-fold expan¬
»of airline space by military prioriHowOverj in certain -cases, Thej
course
^ties, many who would dike to have sion of personnel was necessary.
j was Taken .TO.
Traveled by -air during} the War Thorough training was given all
small q'r companies itito more;
new employees and the cost Was
evitable, United /Air Lines 1s de¬ heavily populated areas In'compe-i
years could not get seats.
extremely heavy because our new laying Its action on apijiicationc Titioh with companies That were
Misinterpretation
employees were like the new em- for such adjustments because we inherently larger because of the
As is frequently the case, during ployees in other industries. They redognize that fares Will, have; territory They served. All airlines
".it
r'• ■
such abnormal periods, particu- were not too Au*e just What they -much to do with attracting new can't serve The same Territory
Jlarly when they -are periods of wanted to £16, arid The resulting business, and whateveriinprdase wl T h ojurt complete duplication
success, people lose their sense of, turnover ran 'As high as rA%
& we recommend will be the Very Some -of them must be Satisfied/
minimum in the face of condi
to be '-small and successful. '
;
judgment./ They fail to/ analyze i moh'th.
current Conditions,, although if one
'Our employees are Tmfhah 'be- tions.
It seems obvious that The vair-f
wanted to take time to view the ingS) and 'like all others, they 're- *
Today We know that There are lines having the greatest difficulty
circumstances objectively, it was iaxed slightly from the strain of certain inefficiencies and expense
today are those which were ex-<
fairly easy to -see that everything war pressure
items within !our ;Pohtrbi ■ ^^Which
paneled With the -idea of making
-be
-But
...
__--i
:
.
was
abnormal and that the
,exist-|
impossible to obtain ■should be 'oorrefcted before- wp
ing 'situation could t)y rio means working space overnight for these penaHieThe public And diirselVes;!
pe used *s a measuring stick Tor new employees. It was . necessary I mention the possibility of
the future.
| to double up iri quarters that were penalizing ourselves because I fedl
It is not difficult for- outsiders to inadequate in 1941, when the on- it is a very important point. Tf
reach wrong conclusions about the set'of the warTroze the expansion we
should
charge* PuV. way,!
-airline business, particularly 'those 1 of plant facilities. Additional tele- regardless <&^rhieri^ TO- a ifiorej
; who do not have any responsibiUr j t>hone 'equipment >' could
not be profitable operation, the manage¬
Tytfor the success of The Airlines.*' supplied immediately. Although ment of our company will become
it
was
pression of an unlimited, airline
future by their own optimism. In
addition, the Civil Aeronautics
Board, by statute charged with
the "responsibility for developing
fa sound and economical air transportation system, must, also have
"permitted enthusiasm to outweigh
better judgment.
Otherwise, I.
of
ultimate -future
-
and still be
consistent with safety,
they are satisfied.
v „
'
:
Now, why am I so optimistic
concerriing' the ultimate future of
air
It is because
result of rwartime de¬
transportation?
now, : as
a
velopment, we are getting
specific facilities 'which offer
The
-foir
potential regular¬
ity and dependability of service
regardless of weather that will
compare with>surface trlahsportation, The inability To fly At fVery
high altitudes, with fuel supply ta
deviate
substantially from bad
the first time a
cancel¬
unfavorable
weather areas, now causes
lation/ of flights when
V^athcr^^^/PoAditiOttk^/"dev
route.;
1
;
'■. '
^bstv^r'aA^lAnesAiA T>Aftig
bigger; and r^trohger, and^ iivered today with pressure cabins
instead, it Idoks as Though They! that will permit airplanes to fly
may have been made weaker.
at high altitudes over bad, weather
;/ The big question no\y is: are we areas -and yCt Will IrisurA ^tdmgoing to look at otm ipymtmistakes pleie' Abmfort Tq Screwand go back and correct them, or
sengers. Heat -type anti-icers, ^adate we going To continue to. -asl^
yanced by The necessity T>f lefty- •
the Civil Aeronautics / Board to
them
el^e we Think
satisfied with wartime andpresent-| We
may want Which may possibly
day
inefficiences
as
<a
new remedy; earlier
mistakes? ; This
standard Tor the futurei I say that
might only be A case of piling ihis-i
we will
only settle for The pre-/ take on mistake and lead to final
war standard of efficiency as our
chaos in the industry.
several million dollars of new
construetion wbrk was contracted
for a year ago; because of shortage
of materials and manpower, no
complete new facility is yet available. fr ^
The industry how has about 600
planes with 16,000 seats compared
HoWever, during the
many of the. operators themselves
further encouraged the public-im-
enthusiasts in no way
•extent
goal frum which to Work, 'and we
will not be satisfied with less.
Day
of Reckoning
lantic7duHftg;the
War^Will^mdljfe,
possible Safe HyihgThrough Icing
Cphditlonsv TJong-Tahgp -gasollritei
supplies, Tvill - permit1 deviations
around storm areas.y. *■
.
;
Cancellation
tepfailings
of flight? at
hiinals results Trom low
and inadequate visibility.
The hu¬
The period we ate now passing
Expansion V
man pilot can do /ah excellent 3ob
to a prewar high of 359 planes
through is a day of reckoningi
in bringing an airplane down To a
False optimism has caused some
with 6,734 seats, and a wartime
alse impressions were created by
low of 176 planes and 3,416 seats, illogical expansion. False enthu¬ war operation, including the mis-i general airport location With adWith Tew exceptions, 1941 facili- siasm has caused unrealistic fore¬ aken idea that we could expect curacy. However, he does require
believe- the Board
would have ties, which were hardly adequate casts of the volume of business to unreserved public acceptance be- proper ceiling and visibility tp
make final observations during his
been more 'conservative in some for handling the volume of traf- be forthcoming in the immediate
ore we could complete perfection
These
forecasts
r&nge
approach for final landing. Today
of the decisions made during this fie five years ago, are all we future.
of Our product/TVe can look dtThis
the development of the automatic
from .ten
and
one-half billion
period.
| have to work with today.
experience, in a way, as a most
We in United Air Lines who
These circumstances combined passenger miles in 1949, which fortunate occurrence. The public landing pilot, identified by the
•
w
-Were
^omjany,along
sound arid
constructive lines recognized that
the trend being followed Was not
conservative
Tas
as
should
it
.
be. •
views were cast
aside lightly as coming from peo¬
ple who have no faith in the airHowever, ' our
a case
were
dence
Llti:*
■
ness.
Ou?%ews
.
"*r%
-
•*
■'
•
•
of its
Because
wanted
to
fprogress was
J. VKJ
see
kept
'"
"" '
" *' '
C-at
great lUtUl c
future
that airlines
C.X
oh
a
sound
foundation.
their philosophies brought for^
ward many complaints even ftorn
our older and
patient patrons. In
addition, it became quite popular
write
Immediate Postwar Conditions
The honeymoon ended on V-J
-
Day.
First, the psychology of the
^traveling. public changed over*
night. The public considered that
the
end
of war; ^automatically
^brought the end of inconveniences.
The tolerance of people to war¬
time conditions evaporated over-*
; night.
.
.
,
Although demand for travel was
greater than at any time during
the war, all transportation 'restric¬
tions
were
-eliminated.
removed and
This
priorities
resulted
in
the
airlines facing the necessity over^
night to handle
*
an
uncontrolled
demand for air travel.
■.had to be done at
We
articles
what
on
was
thc'uirlines, in
..
.
f'
wrong with
,
organization
w
had
Everything
once.
advantage from
which to start; it was our good
"fortune to have a strong pilot and
one
and
find
the
VAiV
tions
of
material
postwar
labor
and
excess
of
same
UUJUV.
over
sup¬
ply. I feel that although what was
said was true, it was unfair that
in the airlines business
we
..
I feel confident from my own ex-
perience'and observations in other
fields that the airlines have done
and
are
the
doing
face
The fact
an
outstanding job
of these
difficulties.
is that by the close
of
flying al¬
many seats
1946 the airlines were
most three
as
times
as
during 1941.
Postwar. Cost >of Operation
;
Airline employees were under¬
paid prior'to and during the war.
Wage stabilization prevented ad¬
justment. One of the first actions
was ' to
increase
salaries I-and
wages,
wage
in which
to
an
layman as the
can
electronic pilot, will
ex¬
observa¬
were
expected to be the only Houdinis
in .business generally.
Considering all these problems,
in
agrees,
?
conversion,
difficulties,
demand
company
,
Problem created by the combina^and
:
our
Routine problem and a lack of
knowledge Of the companies and
to
one
be assured that airline man-;
permit the
entirely automatic
agement will be more realistic in
tremely .optimistic
forecast of considering the immediate prob- landing of an airplane.
Mechanical devices need checks
twenty-five bi 11 ion passenger- ems and in correcting the inis«*
miles.
The 1946 volume is esti¬
and
double-checks. The ground
akes of the past. This is where)
mated to have been approximately
control approach system, a type of
he commercial and investment
six billion passenger-miles. When
banker is performing an outstand-f radar, will permit observation Of
we order new airplanes, we must
the
plane by -monitors on the
ing service. It has been mado
start estimating our requirements
tnown to many in The-business ground to avoid any discrepancy
'from our. own forecast of the Vol¬
that .there is no interest in mak-j in course which might result from
ume of business.
Therefore, we
hig;;|oans or providing additional/ maladjustment :of a mechanical
find that the number of new Air¬
device.v lmsddition^ there is the
capital until illogical- decisions of
planes ordered by The different
the past have' been corfdeted,
' i opportunity for the installation of
airlines differs as Widely as the
It is fortunate that any Weak-/ radar An the ground; for general
forecasts Of the Various companies;
observation of all airplanes in any
nesses in our; business became ob-i
Eventually the new airplanes vious before we went too' far in' particular sector. ; Finally,.. Witli
will be put to ihaxlimum use, but
financing our future-progfain.
j airborne radar in the airplane It¬
we prefer to; make
commitments
T, ' believe That two years agoj self, there is the opportunity for
for capital expenditures only for- a
the pilot to make ground
any airline
could1 have 'gotten
reasonable
tions through overcasts.
period
in
advance.
/;
Inaccurate ihfonnation
*5"^
spite
j
,
ld
influenced by real confi-, of the fact that .any ot us couia
walk into almost any business
in the future of our busi-j
*
of lack ot taitn. Uur views
—-V/4.
we
happens to be the
to result in poor service to the
trying to guide the future
-of bur
-particularly in the lower
groups.
Termination of.
practically What it asked for in
The carrying charges for surplus
rieW capital or loans. Corrections ; These are not speculative possi¬
airplanes may prove to be ex¬ would nbt then' be in process As bilities. They represent the major
contribution from all the technical
pensive.
i
they are now. We1 ihight haVe Aeenj
The wide 'difference of opinion bankruptcy in a relatively new;! development forced by war. But
lib airline is goirig to start tb Ase
among airlines on future volume business, which would Aave Served
of business has influenced 'ma¬ as a permanent stigma. Instead* all -this equipment ifnmediateiy.
terially their expansion ideas. We there is now the opportunity toj There 'will:^^toriie first the^^^ TtAirtcan "only
judge the Wisdom of make.some adjustments and start/ ing, instalation of proper ground
some of the expansion which has
off on a sound basis, assuring in-; equipment, and an adequate test
taken 'place by the financial rcbn- vestors and lenders of a construe-; period -pl Tlying; present weather
minimums with the '? mechanical
dition and the credit standing of tive
and. conservative program;
the different companies in differ¬ during the/next Tew years,/ If the; devices To insui;A Their ireliability.
These devices, which are being/
ent categories. I am certain that Commercial and investment rbank-;
installed on airplanes on. which
some are having a rude awakening
ers are strict "enough in their Con-)
We'Are pqW/receiving delivery,
as
they look at their : balance elusions, there vis no question in
can be a reality and in routine op¬
sheets and seek necessary firtanc-; my mind in ^regard to the future
eration: in not more than three'
ing to icarty Ant: Their earlier financial success of this business.
dreams.,
1
1
Many airlines have already done years if the preliminary steps ai^e
taken / properly.
Meantime,., they
heir financing.
Their * problems
-Expansions which certain air¬
will make their contribution to
lines sought are not working too are not serious. One that was caus¬
-
.
Volume 165
Number 4564
THE COMMERCIAL & FINANCIAL CHRONICLE!
-
greater satety and regularity
under present conditions; but their
full effectiveness will be felt in
will have the opportunity to make
up
lost time by
of
from three to five
years*
Construction of ground
ties is moving much
reserve
a more
Price
flexible use
power.
the airlines themselves will
facili¬ benefit from; the lessons of this
faster,- We past period and be more conserva¬
.
If
Diop Probable, Says Commeice Dept. Official
(Continued from page 591)
which
has
occurred
1946 has resulted in
tile
June
since
a
mediately r will be the establish¬
greatly dis¬
tive in their future expansion and. torted price structure with the re¬
show a little patience in; waiting sult that many prices have risen
fpr increased volume to justify in excessive amounts while many
such expansion. I would say that others have recorded little or ho
this industry is "over the hump
change." Vs
"
;
We have all learned valuable lesMr. Paradiso cited three factors
feohs and we are making use of which he said indicated that a
them.
readjustment of the price struc¬
t A business which makes possible ture might soon be in order.
shrinking the United States and
Factors For Readjustment
the rest of the world to a fraction
ment of more practical
of the distances measured in past
Jhopethat
much: of
by
the
mid-summer
hangars, buildings and
other
plant facilities will have
bfeeh completed ;ahd in .usC. Air¬
port construction and improve¬
ment
; has
'
practically
;
,
been "decided upon in
every strategic city in
the United States. All this work
is on the.mOve.
One other thing we Will do im¬
.
.
planned
for
the
schedules,
maximum
con¬
Relationships
1. While 'consumer expenditures
now in line with
disposable
are
will
which
and
631
and.
leather
cement,
shoes,
10%
.
above;
relatively
small
number
of
changes. In general, flexible prices
and
15% above;
and pharmaceuticals and
fats arid oils, 20% above. In con¬
drugs
are
trast, the average price of only
two maj or groups of commodities,
petroleum
products
and worsted
goods,
and
position of these groups of prices
in the period of 1926-29, when
they were in approximate balance,
the recent price movement of the
flexible prices away from the in¬
flexible has represented a distor¬
woolen
are now
signi-
cantly below the long-term past
relation
of
general
price
products
these
prices
level.
about
are
to
the
Petroleum
25%
the
while
market-dominated
inflexible prices are more or less
administered. In relation to the
below
tion from the 1926-29 balance.
and woolen and worsted
goods are
20%
are
below. Other
groups
slightly below
ship
the
Sustained Business Ahead Over
which
relation¬
Long Term
,
iron and steel, non-fer¬
are
Thus it
appears from these de¬
iiiOomes, On the basis Of the jpre- rous metals, plumbing and
heating velopments that the pressures will
sacrifice; some utility of equip¬ bn the social and economic habits Whr relationships, consurtiers are Equipment. The
remaining groups be for a readjustment of prices
ment to give better service. For bf all
people, wherever they may spending a larger proportiOri Of bf commodities are in general in
this year which should bring the
their
incomes
example, adequate reserve air¬ be, cannot fail to flourish.
on
nondurable line With the
relationship.
price-cost relationships into better
planes must be stationed at points
We are just passing through a goods and. this has contributed to
3. An analysis of the wholesale balance.
to minimize
de^s whicm migW bhakedown period.) Rather than the boosting of prices of such price changes of 600 commodities mands of However* the basic de¬
both consumers and pro¬
arise from minor mechanical dif¬
Viewing this period with pessi¬ commodities as food and clothing. in the period from
June, 1946 to ducers will still remain strong.
ficulties. Instead of basing air¬ mism, I look upon it as an experi¬ As more durables become avail¬
venience Of the traveler. We must
therefore
have
a
profound effect
•
plane schedules
the maximum
on
ence
able the pressure of demands for
that will make air transpor¬
emising speed of the airplane, we tation stronger and greater than
will set schedules so that the pilot
bny of our earlier expectations.^
nondurables will
result
that
soften
lesson with
prices
in
this
will
tend
segment
of
Current Prosperity Is Normal
The
to
the
?
economy.
2.
the
recent
high rate of in¬
ventory
(Continued from first page)
accumulation
amounting
to about
$1 billion
month has
resulted in
a
per
channeling of about
Nov. 30,1946 shows that the
prices
Demands for many goods such as
of the inflexible commodities in¬
creased on the average by
average by 20% and the flexible
increased on an average of 35%.
Flexible prices are those which
automobiles,
houses
and
other
hard goods will not have been
entirely met by the end of the
year. It is expected that after the
readjustments in prices, costs* in¬
ventories,
and
the
consumer
spending pattern have taken place*
recorded
the basic demands will become
10%;
commodities
not
inflexible
or
her
of
clearly
increased
flexible
onv
the
ia relatively large hum-f
monthly
re¬
changes in a
provide the basis of
$15 billion. mark. At such 8% of the output of goods into
given long period of years while sustained business volume for an
eral are sanguine;1 Merchants and
eye! therewbiild PCdifficulty ih inventories. Thus, the flow of the
inflexible prices recorded a extended period. V
.financialmen are urieasyy; and" :ully financing the requirements finished
goods to consumers dur¬
industry. Manufacturers ^n gen¬
•
he
some are badly frightened.
Cer- bf an expanding economy. Even ing the reconversion
period has
tainly-it is difficult to Cftvisage.a at present ; available funds for been
low in relation to total pro¬
depression as rlohg M fulboutput"
jneW issues Jdo: not encourage duction and to incomes received.
bjr pur heavy industries is main¬ equity financing or Sale Pf me¬ This
?rate;of Inventory^accumula¬
tained. This i hasnever; occurred
irtoUr eCohbm
dium-grade
obligations
to
the tion eanriot go on
indefinitely. As
bublic;
Instead
of being
con¬ total production increases many
cerned about over-saving, it can
M x Alihost bhe ' t^
producers will -be able to achieve
: tiohal
ibSottie^ is:hfeihf 'extracted be questioned whether the pres¬ h balance in their aggregate in¬
ent rate of savings will
ftortt thepubli^
support ventories and will curtail their
*: Pliimeiit.
SetvicW rendered by permanent prosperity*'
demands foR goods for further in¬
V^gbverhftifeht are
! £uCchasihg power is a Concept ventory building* At the same
cost/
Prosperity cannot endure Which readily rehdS itsMf to; mis¬ |ih^?ihe;Ratie^^of:^^ Hnishedegbods
When 66 Areat a bRbpdRtitfh hf bur understanding.
Many persons ap¬ to total goods produced will in¬
working force is employed on parently believe that expenditures crease.
'
'*f ^
lion-productive or quasi-produc- for direct consumption are more
[ 3. Production ot many goods has
tive Work, at the expanse- Of the important in
sustaining the econ¬ been
extremely low in relation to
f remainder ofcour populatibri^ and omy than other
types of expendi¬ demand. Increased output is ex¬
whOn taxes are imposed by gov- tures.
Financial history demon¬
pected in many lines this year.
ehuhent topay foR services which strates that
prosperity is attained There is evidence that produc¬
the taxpayer does hot want or and continues
only When capital tivity per worker is on the in¬
cannot afford.
goods are ih vigorous - demand. crease in
\
many plants. This should
; President
Truman's proposals Profits are as important as wages
.
-
■
•
'
for
•
federal
during in
expenditures
a
healthy
economy,
and
for
■
during; the;Whr,; Whereas federal.
goods and services, and each
> expenditures ; for. the
third year1 type of demand is equally essen¬
after the first world war. were tial.
19% of peak disbursements.
Republican Congress is
only
Yet
High Consumer Demand Constant
the
l
merely
making gestures toward
*
chtting the Federal Goyermheht
dowh t6^ appropriate^aize - &ttd.
^ lieving taxpayers'from the pres^
v ejit crushing load?? This
one Of ^
the ? hiajor reasons' for present
.
Over
ra
Ibhg period of years
Retail sales have constituted about
56% - of national income.
That
Relationship
prevails
fact retail, sales
higher than
today.
In
are; now Slightly
53%
of
national in¬
hesitation in business.
r:
:v
:
1
;•
;
Dutlobk for interest Rates
tiX:.
♦
No
'
»£•
'i
'V.*.-■■■.'ZiT-
^vV-V
significant change is likely
;
to bcciir in the interest structure
;
during .1947.
Short term Rates
inight be sorhewhat firmer,, but
;?
yields on l'ohg term fbonds Of good
quality,.; including; .governments,
giVe no indication of rising much
abbve the historical, lows Which
have recently- prevailed.:
>
-
;fCommercial loans, increased
iapidly during. 1946. .This was
largely due to unbalanced inven¬
tories and to rapidly risirig Com¬
modity prices.; Similar
are not
likely to prevail in equal
degree during 1947. No substan¬
tial increase in commercial Sloans
is expected, and total commercial
loans
well
at
be
the
close
1947
of
may
lower than those of the
previous
years.,
-National
$.
;
Stock Market Not High
abnormal
-
"Because
of
the
,
distorted pat¬
buying in the
past year and the large demands
stemming from inventory needs,
the price structure is now out of
balance," Mr. Paradiso said.
Price Structure Out of Balaiice
Three
developments
by Mr.
this.
Paradiso
in
citsemoDMoney
.sv
(Continued from
iritend'ed to
apply
to world-wide
savings have declined
annual
level
of
the
Some
phases of
ness
th6
international
busi¬
'
'
s'
.
tetary Fund. The Fund quotas will
disequilibria assbciati&d ^ with thfc decrease the
an
need
for, and offer
alternative to, national restric¬
The classical analysis, tions on ??exchange; transactions, ^
gReatly distorted in The quotas, however, may be in¬
the famous "rules of sufficient to maintain free and
the game" school of monetary and Stable exchange in cases of acute
PCnt.ral hankint*
central banking hdvisers. 1
disequilibria in the balances of
In thb case bf cyclical world? payments.
In this case, interna¬
Wide disturbances in balance of tional consultation will help select
payments, the resiilt of both the the measures most appropriate to
Standard
automatism-? and
the the! situation, v Fundamental. "dis"Rules of the game" policies was equilibria * cannot
be
corrected
to ensure the propagation of the through exchange control meas¬
cycle from the centers of cyclical ures, but ball for lasting measures
disturbances
to
outlying
geo¬ of readjustment, one of which may
graphical areas: In doing so, they be a modificatioA of the currency's ?
On the other hand,
acbentuated, rather than corrected, par value.
the mtbnsity of cyclical fluctua¬ changes in parity Would generally
be inadvisable as a; remedy for
tions the world over.
tfemporary disequilibria, since they
Facts proved stronger than theWould actually disturb the inter¬
bri&s and hiost nations finally ^ national balance of prices and
thrbw orthodoxy to the winds, and costs, once the temporary factors
have teased to ;act. As a measure
iembarked instead upon' compen¬
of last resort, hbn-discriminatory
satory monetary policies, behind controls
may then prove the lesser
the pRotbetive wall of CuRrency fevib from the international as well
cycle.
moreover,
was
the 1920's by
devaluation and of exchange or
were cited
These measures,
support ot trade controls;
hastily devised, and with purely
1.
Many commodities were in hationalistid bbjectives and cri¬
relatively short supply and prices
teria
of
administration,
were
of
these
as
from the domestic
viewpoint.
Will pre¬
; The task of the Fund
cisely be
Other
to
examine
alternatives
these
in
order
arid
to
agReehmht* id each toncrete
cast, as to the most suitable pol¬
biteh internationally harmful and icies, the extent to kwhich action
2.
From
1921
to
the
middle Of
situation calls for exorcism rather
reach
must go,
and the ways to minimize
harmful
effects
on
other countries.
The Fund's philosophy should hot
be frozen, especially at this early
stage,
ready-made*
into the rigid,
are
convertible into
cash. Finally, the markbt has thjus
tar been uninfluenced
by the Nn-
jvember
This would increase exchange
steel, with 8 points; in the avfer* bbjectives.
contRbls, changes in
age price of dairy products, 14 their
national
effectiveness,
as parity arid other similar measures
elections: If the Republi¬ points in the average price of well as ensure their international deeply affect the ecohomy of other
legislature reverses New Deal
policies of heavy federal taxes,
pervasive controls and punitive
administrative practices, then the
can
Outlook
would
sustained
bb
favorable
employment',
tdr
improv^
elficiehcy; moderately decliiiihg
prices? and
corporate
profits which will reflect
cotton
ships
goods.
Similar relation¬
usefulness.
be worked out for other
The
prices
■
>
of
the
following
groups of commodities are at pres¬
ent apparently high when cbn-
sidered
long
countries arid
can
commodities.
in
perspective
term
between
the
relationship
movement
with
the
existing
of
Objectives of fcUerhatibnal
Monetary Fund
prices and the general level of all
level of industrial productibn. lh
prices; Meats and dairy products,
approximately
25%
above
the
relationship;- cotton goods
10%
above; paint and paint, materials
and lumber, 25% above; brick and
of vital concern
are
to the international community as
well as to the particular country
Prbgrbss alohg this path will be Which seeks their adoption. Iiimade incompaRably easier by the ternational monetary order cannot
creation of the International Mon- be achieved by a
standard
these
high
a
$40 billion during the war. Prob¬ such case the present position of
ably sayings may fall somewhat the stock market: could not he
further and may stabilize around
considered -as dangerously, high.
,
599)
page
than for excommunication.
The formulas, which have So often
[at .1946, a period bf about 25 years;
present high. Only in the la:te wholesale; prices of major groups new Weapons should not be scrap- contributed to the sterility of pre¬
of comhiodities
have
shown
a
20's, in 1936-37 end in 1946 have
pbd indiscriminately — an bbjec- vious -efforts at international eco¬
they beem higher than those whifh )do6e^ degree; of corRelation with
tive on which general agreemerit nomic collaboRation and organiza¬
how prevail. However, they are the movement occurring at dif¬
hot; particularly iiigh in: relatibh ferential" rates: For example, a wouid, anyway, be impossible— tion. The infinite diversity of re¬
IQ point iiicrease -in, the general but harmonized and integrated, gional and other conditions which
to tiurreht industrial
earnings, the
yolunie of -industrial output^ pr Whoiesalb price index (1926== 100) through
international
consulta¬ shape up a Country's problem
has been! associated on the -aver¬
the presbnt levels of
outstanding
tion, into the •implementation o! should be fully recognized. On
icurrency, demand deposits and age With an increase of 5 points
in the average prices of iron and internationally defined monetary the other hand, the imposition of
securities readily
HistoRically, stock prices
commodity
by more than; one-half from
.
'
tern of Con
International
Profligate come. Hence there is no evidence
items
increased
very
spending by governmeht has be- that cpnslumer demand >'is falling
khairrfy—some by more than 100%
so ingrained that possibly to
keep pace with; current incohie in
the 6 months period from Jiine, mutually
self-defeating. Thfe y
depression or runaway; inflation payments. Neither is there any
1946 to December, 1946. In many
or bbth must
have, however, enriched the ap¬
bg endured before; support for the thesis that wage
leases this is a
temporary situation paratus through which
this
wasteful advances are
monetary
necessary if deprejs- and
prices will decline as more
government expenditures create bicm is to be avoided.
| Supplies become available.
policy can be made effective. The
pbyerty; hot purchasing. poWCr.
-{-
•
Which in turn would allow many
a reduction in prices without
impairing profits.
bases
come
'
;
permit , lower costs to producers
there
the -fiscal year 1947-48. were ac- is no more evidence that profits
tually greater than those for the are hoarded than is the case with
present fiscal year. They aggre- ivages. Each of these elements of
gated sbme 38%; pf peak; costs. hational tpebrae results in demand
'•
•
..
activated and
X 11
elaborate r or
substantiate
and must refer the
reader to my forthcoming paper "National
Central
Banking
and
the
International
Economy" in The United States in World
-
these
Trade
cannot
statements here,
and
Finance :(No.
Postwar Economic
ernors
7
of
the-
series
Studies), Board of Gov¬
of the Federal Reserve System.
:
ideals
laisseztfairt.; It
return to gold
of
international
implies
positive
action and policy, but, as distinct
from the
1930's, through interna¬
tional cooperation rather through
international anarchy.
r
THE COMMERCIAL &
632
hopes of its founders and early
directors, despite statutory provisions, despite a sometimes pot un-
;
Public Debt and Social
J (Continued, from page 593)
/
tiesigned; wisely or
unwisely, to accomplish the fam-
vestment, all
iJyA ends.
J/tlpori these decisions the mass
.
of contracts called the public debt
tfte induced inhibitions exer¬
cise., rio w, and may in future exer¬
and
cise even more greatly, significant
influence. Tuat influence, small
or
great as it may be, constitutes
a
Institutions
and
parts of respuiiSi Dili ties now
hitherto, lodged * with" the family.
of contracts called the
mass
debt, and the inhibitions induced
by it,; is the further defunctionali-
Currently most striking is the fur¬ ^ationAf the productive
of business Organization.
ther transference to the business
Organization and the state of the
responsibility fornecessary finan¬
cial* liquidity; But other responsi¬
function
administration func¬
institution en¬
The claim
tion of the business
compasses.
what are usually called
institutions,
together
bilities being more or les^ rapid- financial
ly "parsed on to other institutions, with the large financial activities
Within the production function, or¬
at least partly due to the debt- and
(TheTfesUItmg Inhibitions,;include ganization,
and together
with
provision for personal catastrophe,- labor, unions, farmer and- veteran
:
credit-worthiness1 to"
assure
rea¬
financial
sonable
flexibility
(a
term; incidentally, being more and
'more1 made '"synonymous With'
tieed); maxifnization ; of-income,
provision of education and train% ing arid investment of savings and
rthbu'dsulti ng^^ administratibn of in-;
vestment,
In all of these instances—-arid
AtudyWill doubtless reveal others
yf—the mass of contracts, and the
resulting inhibitions,
are
.
bilities proceeds beyond a certain inevitably compels government to J important advisory influence, deintervene- more and -more inn the ; spite the responsibilities nominally
point—and some believe we are
being passed to it, - is essentially
already near that point—the re¬ economic system." I should only
compelled by the debt, the; inhibi¬
sponsibility for the volume of like to add the words of Sir Hen¬ tions induced by it and the forces
private production, distribution, ry :Clay regarding another -'era: thereby generated, to pass on the
and employment itself will have "I myself now believe any return
ultimate 'responsibilities in large
passed on from the production to pre 1914 conditions to. be wildly degree. And the Federal Reserve,
function as initiative is diminished improbable. I believe that the pre
despite an' imposing facade,' de¬
by rising evaluation of risk and 1914 epoch, far from being nor¬
spite the-intentions of its founders;
falling expectation of profit. In mal, was a unique experience in despite literal .provisions - of statessence, as in the case of the fam¬ the economic life of the race in
ute} despite being" nominally the
ily, the church arid the eleemos¬ historic times, a sort, of golden age recipient of many responsibilities
which no one now living will ever
ynary organization^; the effect of
passed on to it by the family, the
see
passing on, a trans¬
institutions of so-;
|he
ciety, Of some responsibilities, or
for
pressure
ference, to other
•
Thursday, January; 30,
FINANCIAL CHRONICLE
influen-:
;tial...; Sometimes they accentuate
again."
might be amplified, re¬
garding' these three institutions,
;that nowadays the- hands are-still
those Of Esau, but the voice is in¬
creasingly Jacob's.
19411
6400, and it uses
the . Treasury,
is Executive
Stationery: of
the
and:
the^ Trqasury^
deceive us.
bank rif the
United States is different / from
any of its predecessors, or- any ;
other Institutions this ( society .ha&.
Constructed.
It ,has greater re-sponsibiiities, it has greater pow-;
pearances should; not
This fourth central
ersi it has greater resources and ^
(techriiques, it has,directly and in* 1
directly larger personnel, it has :
larger and wider:
influence—and;
mot yet even : been con*
kciously organized or begun con*:
sciously to function!
it; has
methods and re*
fourth central bank
ment
organizations, ' despite
a of the United States have not any- ;
sometimes not unimportant ad¬ where that I know been listed, t6
visory influence; despite a collec¬ say nothing of being systemati¬
tion :of personnel of competence cally outlined and explored. Such
probably unequalled at any Time exploration will," I venture th'
I
: :U.
or
place, despite a well merited prophesy, be the focus of atten¬
; -Formally; ilieiiumLerous respon¬
tion: for many yeSrs to come; of
sibilities; transferred: ^
being jand very, general regard widely students who heretofore have con-,
and-justly amouriting to admira-.
transferred to the state from the
tion, is essentially compelled by centrated upon such pieces of theb
family, the-church and the busi¬
tion, as well as by other govern¬
the debt, the inhibitions induced
the mass of contracts and by it, and the forces thereby gen¬
groups, which iri essence are or¬
erated, to pass on the ultimate
the inhibitions^ they; induce .'have
responsibilities in large degree. It
ganizations dealing with past,
passed or are passing to the Con¬
now is but an effectuating agency,
present and f u tu r e ' financial
gress. So far the Congress has in
claims of their members/
This:
a
complex mechanism, the im¬
no
sense
been indecisive as to
claim administration fun-ctiori. is
what to do and the very essence pulses; Tor whose Avery, action
arise, elsewhere. In the volume
the destination of mapy of trie*re- of this" thesis is
that, since society
Sprinsibilities > being. trarisfeffed wishes to, or must,, pass on these entitled "Banking §tudies," pub¬
from ■ the family, the; production
lished by the Board of Governors
functions, Congress is and will
function and to a degree from the
in 1941, two explicit statements
continue to be the instrument for
church and eleemosynary organi¬
the formal transfer to the adminis¬ appear of the purposes for which
zations: parts of their responsibil¬
the system was founded (pp. 25
trative agencies of the state. "Tf
and
ities for financial liquidity, provi¬
233): "excluding
repetition,
the thesis of this paper has any
sion' f for
personal
catastrophe,
Validity, the action of one party pvd^ purposes dreTiste^: f<better
creditworthiness, 'maximization of
ness
^organization by the; influ¬
Of
ence
,
from
protection "from over-expansion
of Aredit"; 74igfeater availability
the -other In these^egards
essence differ less than the
The
powers*
sources
of this
business; institu¬
church arid The
This
r
central banking; iri"
savings and invest¬
ment, fiscal policy and the like..;
Structure
as
the old sense,
There
are
many-pieces,, as"7df;Tr
j igsaw: puzzle and it will be the
work of many students and iriucli
time, to put them together to see
at
ail;.clearly; what this;00014^®
^
central bank really is.
fourth
of the
structure Fhaye seen la 4 descrip* i^ion in "The Economist" in e
The clearest outline
discussion
of
Australian finance:,
"In most highly
developed mod*
erh communities the; administra* ?
tion of finance has come to rest;
on * three
tiers. First comes r 4h©7
necessary"; ministry bf finance^ which; deter*-1
actions' of'Tweediedee aM Twee¬
and
training arid charity, em^
"a more elastic currency"; "better mines general policy; next comes
dledum, for the tresis is'that this
facilities for handling government the central bank, which adminis- ;
pioyee compensation, determina¬
mass of contracts' called the debt
terk the rpolicy; finally*^there;ar0;
funds; without credit disturbance
The,; necessity < to rely upon that tion x>f rate earned- on Triyested and the
resulting "inhibitions are
and "a more, effective supervision the commercial banks and spe-.
professional perihelion of un¬ capital, ;and: pricmg of goods and
hard, eriduririg- mrid Irrevocable
ciaiized institutions speeding the
hf banking inTh4:Uriited States?"
reality "other' things being equal?' services.
facts^^oriii;which ^pressures;
other influences,
sometimes they
counter others, sometimes they
.are alone,
But I believe they can
.be stated;as positive, even without
,
In essence, .the influence of the
.jdebt
toward; furtherAefuric-^
income,, investment and invest- will
administration,,
education,
rinent*
The influence of the
v-•
these claim
debt upon
-in
of bank reserves when
for
certain
administration groups,
tionalization of the institution of h owever,. is: the same as the other
functions which we have exam¬
The family.
ensue:
■
consequences
inevitably
-\ A;7
At 7../■
;".v.
The Moving
Finger writes; and
having writ,
'
institu-? ined : the.responsibilities are beingMoves (On;: por iirill yrour - Hety ' 5;;
tiops identified by Mr, WUrren is passed on,.in this case, to the state.
? 4he,; church.
Leaving aside the Both the responsibilities passed- to i-':M Shall lure it back to cancel ^spiritual}: the basic temporal func¬ claim administration from other
tions of the church are education groups, and as Well those hereto¬
Nor all your Tears wash out a
And charity. Upon these functions fore regarded as its own, are being
Word of it.
the, debt; appears to be exercising passed on. Indeed, in many re¬
In the broadest sense many of
substantial
influence" from .two spects, the • process of transfer is
sides: the church's mearis to per- even further advanced and more the executive agencies of the state
will be involved in receipt of
4orm.y the responsibilities are comprehensive in the claim ad¬
shrinking, and the demands upon ministration function than in any rthese responsibilities in one way
However, most of
it are being reduced as the family of the other institutions. For there and ; another.
them perform only clerical or rou¬
transfers them to the business of- has passed* or is rapidly passing
tine administration duties in rela¬
TjganizaBpm and the $fete, tiThevk* to the-state, the responsibility for
tion^TO^ the 'responsibilities whidi
suit
.iSj tnai the- church igf being fhe cost-bf service,; the^rate of re¬
are
prassirig.
Examples 'ot such
further deiuhetiopalized; as to turn, the liquidity, the nature and
temporal activities; it is. for others administration of assets, the scope agencies are the Social Security
to say whether its spiritual func¬ of function—virtually every key Board, the National Labor Relations
tion will be affected by. this de¬ responsibility, both in domestic Board, the Department of Agricul¬
and as well in the international ture, the' Reconstruction Finance
velopment. '
V/
As Miles Colean has re¬ Corporation, the Department of
Business organization, Mr. War¬ sphere.
Labor, the Federal Housing Adden's third institution, contains cently succinctly stated it: "One ministrationwthe list could be ex¬
th r e e functions: eleemosynary, thing is evident/; The financial in¬
The passed responsibili¬
stitutions and the monetary sys¬ tended.
; j productive, and claim administra¬
ties
do
not lodge
with them,
tive, .These functions are some- tem are going to, have to live with
though they perform clerical an£
times, mixed in the same corpora- government in an association that
The second of the four
,
,
.
.
'
.
:
■y.-; lion or association, sometimes not;
But whether or not mixed in or-
ganization units, the debt has a
t
marked influence.
The eleemosynary
function is in
the same present and. future posi¬
tion as the temporal functions of
the church, and the
?
v
influence of
the debt appears identical. Some
rerharks of Dr. Vannevar Bush are
'Illustrative of this group:
during vthe .past TO 4 years
endowment to
/amount; ot new
i
V .
the
medical schools has
great dimin¬
makes
their
past
intimacies
ap¬
Platonilc."
Indeed, it would not be difficult
.
same time the inpresent endowment
£lias"- been cutby one Third ? v , * other places and at other times*
Another source of research furids In any event, as in the other-insti¬
is the foundations* but* as in the tutions and functions, a process of
ished^- At the
come
.
from
.
discharged
or
Upon
defaulted;
depend the va¬
lidity of The claims which are in¬
their wisdom will
how
essentially passed on to the
Responsibilities since prissedTo it
By pther private oripublic; iristitu-
magnitude
is evident fftom con¬
contracts
which is the debt, and of the great y
Truman has stated scope of the; graniterlike inhibi* j
the matter a little ambiguously but
tions; which have been Tnducedi
with a meaning crystal clear when of the humerousland Tar-reaching ;
he said: "The Treasury and the
resbrihsibilities iwhichjhave(beea c
Federal Reserve System mill cohpassed oh to it." Something ,of it c
t'nue their effective control of in¬
can be seen; by :the variety of the .
terest rates
Interest rates will
toe^Tirith?which
has ToCWork# /
be kept at present low levels
Arid^(something;
en7;
through
continued
cooperatidn visioned by the riumber of points
tions.
I
*
sideration of the mass of
President
.
.
.
between the Treasury
Department
"and the Federal Reserye
System."
•"*'
(Italids mirie.)
Whichits / manifold ,; operations
touch in economic
theory/ A-5 *
members of any of the
|; It is another of history's ironies schools 'stemming from-the quan-* that an organization whose estab¬
tity theory? 7 Thef fourth [ central,
lishment was widely Apprised Top
bank'wilh determine thequantity ,
fear it would come to; possess too
of money, the convertibility be*:
jmuch. pow^r, has come instead, in- tween
money and other assets,,
less than four decades, to have al¬
will
influence
the; velocity of most none. The Treasury is riot
money^-and do so with or without
in fact one of the trinity, nor yet
deficit financing on the one hand;
primus inter pares: The Treasury
or debt retirement on the other.
is the ultimate destination of all
-Are'we*members of^any^of the,
of the passing on, the "transferKeynesian sects? Th0 fourth cen¬
rence—it, and it alone.
tral bank will influence and per¬
For the mass of contracts we
haps determine the rate of savings
call the debt is an imperious cre¬
and its quantity, the conditions,
ation, an unitary thing. It controls
which influence investment, the'
the assets and the actions of the
effect of liquidity preference, the
Federal Reserve just as of other
financial organizations, and it de¬ propensity To cpnsume^-and do:se
with, or without deficit financing
termines
the
decisions
of the
or debt retirement.
Budget Bureau, not vice versa:
Are We members of any -, of the
Its requirements—as set forth.in
this paper,i though- not as- more equilibrium groups? ' The fourth
central Aurik TwU greaUy Tuf1^ *
narrowly
conceived— determine
Federal Reserve' policy, and net; ericdTTmot AetermineThe level of:
the reverse. And it has but one prices And: of costs. And the rela- 'i
semblance of a iriaster, is shaped: tionship^Tbetween Them, fhe. bal-rr
jbyi ekteni^I influence in one place iapce of payments,, the supply of
;
alone,the Treasury.
Are
we
'"
arid^dd^AWM^A^^wi^riut^ ;def ic$ f
retirements; I
persuasion That J
But yet, among these three- I
prefer, refunctionalization—is oc¬
some-one fspechic: economic oper-t |
curring aSThe result of ' the mass believe the influence of the debt, 3revolution of the 1930's and the
is decreasing."
V /./
;
atiriA-sbiris^OUblheThreadsA^AuV:T
;Of contracts Aalledtthe; debt^Ahd causing a transference; of r func¬ legiacy bf .the fimricing bf :the War
fr From the pibductive function of
fate?' This fourth central ba;rikwil|7
yfee: inhibitions resulting; froni it. tions—both of those received from of-the Totalitarians, a mew ^ andbusiness organization; a
greatly influence if not determine .*
the family, the church and the different central bank, has been
The
-
*
.
administrative services.
The agencies more squarely re¬
cipient of the responsibilities ; be¬
to argue that, conceptually, the ing passed on from the family,
claim administration organizations the chuch, the business organiza¬
tion and other government organ¬
are within the institution of the
state instead of within the insti¬ izations are the Bureau of the
tution of business organization. I Budget, the Federal Reserve Sys¬
am
not yet ready to go so far, tem and the. Treasury. Together
though the direction of movement or separately they determine the
of the
is inescapably apparent: I should extent and the method
rather interpret; the development exercise of;" the transferred
re¬
as an extension of business organ-?
sponsibilities. Upon their deci¬
ization some distance into the area sions; their means-and their tech¬
which many wish the state to oc¬ niques
depend the degree to
which the responsibilities will be
cupy and which it does occupy in
pear
functions have flovii ot^^ommerceA^thinThe to
its of general poliey (determined by itbe:;minisbry ;of finance ;an<i Treasury, and the remaining one
is essentially mechanical Nor has administered by th
it retained The large number ot f^-SojnethihgAfThbTbur^^^
Four of these* five
base- of the universities, the incomeTrom foundation endowment
family, certain responsibilities are
being, in part or in whole, passed
the influence
An, " under
of
the',
These include the responsi¬
debt.
bility for liquidity; the- responsi¬
bility,
or
pensation;
rate
type, of employee com¬
.
determination, of
earned
on
invested
and the
the
capital;
pricing of products." Clears
ly^if the transfer of the responsi¬
if
jdefunctionalization.^— or,
you
volved. /
-
j
;
:
which
constitute what is
referred
of
to
as
usually
the-private sector-
society,Aanbe summarized in
the words of Elliott V. Bell, Super¬
intendent of Banking in
of
New" York:
the State
"The- important
thing, is that a debt of this size
business
organization
and
iihancing
From the materials of the social v ' Are\we of the:
•
point about- these- three in¬
stitutions—the family, the church
and
the' business
organization—
III
those
United States. It
Pennsylvania/ Av¬
in Washington. It is cur¬
erected
in
the
.
the
propensity
to: consume,; the;
construction, the ;income
previously lodged with these three
of agriculture,1 the functioning of
enue,
government' >* organizations( — is
the4 capital markets,- the, level and v;
(operative* "Perhaps it is operative; rently housed^in-what; we call the structure of interest rates, the bal- j
with greater force and compre¬ Treasury Building.;, It is -staffed
ance of payments,: the (efficiency I
hensiveness than at any point yet ;by; personstregarded-^and, who,
Of"'
A ?/'■£
*.*
examined.
For the Budget Bu- regard : themselves—as-l beings on
we^asriribe!^'ecbndiMcl causa*!
reau, despite residence under the the payroll Of the; Treasury Detiom to some other; set of forces *
) Whiter House5-; rriof-:Respite:* the partanerit.' :Tts^
is
located
on
te!ephone:mumb^!
level of
■*'Kr
m-
>*><■'
-■
'3$ //■/
: -!f>.*■•'
:•
■
■'■■
y plume 165
Number 4564'
fihan .those, mentioned/thus
but the sanctions, if it
be brutal and appalling.
shall be surprised, indeed, if the
fourth central bank does not exert
considerable
a
them.
influence "
ails, can I
We shall all, of course, " inter¬
The hypothesis that/we; do not
necessarily need to view with
great
alarm the
developments
the creation of the fourth
bank in terms of personal eco¬
bank will not be made .easier by
the shrill cacophony of the econo¬
the optimistic hypothesis until
has been proved wrong.
We
do well not to fear the future too much."
Policy formulation by the fourth pret
i:
'J,v
^.:V*
Jjshall
IV
upon
on
it
.
'
;>:
■,;
THE COMMERCIAL & FINANCIAL
CHRONICLE
///&*•
far?; I
'."•,v:':"rV
'
;-*>
'?£ Vd Wy'r-
633
such- evidence you will under¬
stand why it is difficult for me
to give weight to the
vague fears
of groups who have nevOr been
hurt and who, I am
he Trade Agreements Act
changed the program
materially. Nor is it entirely true
to state that all interested parties
are
being offered a full opportun¬
ity to present their views in con¬
confident, will
be hurt by the operation oi
never
this Act.
nection
nomic
predilection.
Some will here' recounted is based in turn
^'1 am glad to learn that
you be¬
mists, both-professional and ama¬ doubtless view it as akin to the on another hypothesis. This is that lieve that 'our foreign trade should
teur^ regarding virtually every mbnster created by Mrs. Mary the fourth central bank:
be expanded by
securing advan¬
basic consideration. Our various Shelly, while others will prob¬
Can and will extend analysis tageous concessions from
foreign
causation
sects
of the facts about this mass of nations without
urge
different ably be confident that it will be
doing substantial
to the annals of economics what
premises for policy, and each is
contracts
to
illuminate
vast injury
to domestic agriculture
Mrs. Ann Radcliffe was to the
areas now
raucously critical of the others.
hidden from sight and industry.' This is the
way in
The role of interest rates is the English novel.
which the Trade Agreements Act
by lack of information;
For myself, the classic com¬
subject of most extreme conten¬
That it can and will utilize, has been administered in the
tions: low rates stimulate invest- ments of Lord Macauley regard¬
its instruments tol deal with past. This is the
way in which it
/ jment, rates are not an important ing the debt of Britain seem very
long-range conditions as well will
be
administered
in
the
investment
rates
high
de¬
relevant:
"Those
who
confi¬
so
in¬ dently; predicted that she (Eng¬
vestment; low rates stimulate sav- land) must sink, first under a
; ihg,; rates are not important in debt of: 50 millions, then under a
the motivation pf saving, high debt of 80 millions, then under a
rates /stimulate
saving.
Bank debt of 140 millions, then under
credit can appropriately be used a debt of 240 millions, and lastly
as capital, such use is inappropri¬
under a debt of 800 millions, were
ate. The rate of savings may be beyond all doubt under a twofold
expected to decline, to remain
stable, to rise. There is little need
to extend the catalogue of evi¬
dence that the analytical tools of
the profession have not been de¬
of babel.
The
statutory
is
position
of
vastly
the
fourth
bank
fused.
Powers and authorizations
also
con¬
spread about in a thoroughly
are
manner, some are lav¬
in their scope while some, I
haphazard
ish
suspect, will be found quite nig¬
gardly.
v
In
view
•
?
this
of
beware
the
of
trap which Mill
Observed when he said: "Institu-
1930.
narrowing
proach to
It often results in
a
public man's ap¬
national problems to
considerations with which he has
familiar
become
and often not
a
in
a
particular
representative set
of circumstances." But at the same
time the fourth bank should not
caution
Keynes'
Lord
forget
to
destroy
the
it would tar
brush
of
itself
economic
lationism is
with
isolation¬
liability rather than
asset in contemporary politics.
an
Past
a
Value
U.
rary economists that the classical
teaching embodied some perma-?
nent truths of great significance."
Nor should it ignore Churchill s
injunction that, /"It is only from
the past that one can judge the
At 'least
lack
:
•■;;/"
'ostensible'
in
Agreements
1934-35
the
Act.
I
and
should
not
have
creased
1938-39
trade
12%%;
nition
does
not
conform
to
con¬
I have said
earlier that the
mass
of contracts we call the debt can
be
validated,
or
that they can be
defaulted by; inflation arid/or'ret¬
rogression-in the standard of liv¬
ing. -To say that the fourth bank
can satisfy or fail in its responsi¬
bilities is but to say the same
/.thing in different words.: The reawards to society for its creation
of
the fourth
bahk
bank
can,
if the
succeeds, //be/J cornucopia?*}
imports
our
any
and
can
will
de¬
action
no
in
result
in
My
taken
announced
techniques/useful to
society in its exercise of the
"certain inalienable rights" in¬
cluding "life, liberty and the
pursuit of happiness."
that
agreements
all
will
contain
extraordinary.
briefs
submitted
which
in
sev¬
have
opposition, fa
;
not
particularly reassuring in the
light of past experience.
The Case of Wool
President
32%;
we
did
to / take
appropriate
protect any industry
or
agricultural activity which is
seriously threatened by the op¬
"Economic'$
Nonsense"
to
V{t
Wool
presents
a
particularly
good example of the Wonderland
of economic nonsense into > which
eration of such agreements.
"Far from intending 'to destroy
same
trade
our
which
did have
we
increased 22%.
period our exports to
we
agreements
did not
increased
exports to countries with
we
increased
had
63%.
part of a larger program of in¬
ternational economic cooperation
which stems from the Atlantic
one
Charter and includes
partici¬
our
pation in the Economic and Social
Council, the International Mone¬
tary Fund and the Bank for Re¬
construction and
and
Development, the
Agriculture Organiza¬
and
trade-agreements
It
trade.
If it
ative
which
taken
in
we
-
have entered.
seems
to
our
matter,
the
■
of
administrative
%
s\.
to the
'
Concessions Will Be Flexible
"Third; it is true that the list of
products
sions
on
which tariff
conces¬
interests
of
the
"These
are
ne¬
a
prerequisite to the estab¬
cessary
the
fident
negotiations
of
the
International
Organization proposed
United
States
and
this
by
Or¬
ganization in turn is essential to
the whole structure of interna¬
tional
cooperation in
economic
and
political affairs.
The trade
negotiations and the ITO are part
and parcel of a
program that is
designed to promote the prosper¬
ity of the United States by ob¬
that
reverse :
tries of the world against closing
their markets to our
goods. It is
also
designed
to
"We
are
vation
of
fighting for the
the
sort
of
tem of tariff protection.' It does
riot seek to do so/now. Changes
in tariffs havo; been made
pnly
after
full
thorough investigation" and
hearings.4 During four suc¬
cessive
renewals
of
the
Trade
are now
being considered is Agreements Act, both houses of
long one. This list was issued Congress have built
up a volu¬
for the purpose of assembling in¬ minous record
that covers, in de¬
formation
on
to
'these products /and tail, every criticism that has been
give all interested raised concerning the operation of
parties a full opportunity to pre¬ the Act. If you will examine this
sent their views; But it should record
you will find that particu¬
not be inferred that the tariff on lar
groups have expressed their
all of these products will he re¬ fears
concerning what might hap¬
duced or that
the, tariff on any pen to them .at. some future time.
particular product will be reduced But you will find no demonstra¬
by the full; amount permitted by tion /that; thesp fears have/ ever
the law.; It should be noted, more4 been
justified,;; If ,#ny industry; in
over,
that the
countries
with the
United States has suffered
order
which;
we/are
planning to negotir serious injury
ate represent not only a substan¬
tial percentage of our imports but
also
a
substantial .percentage
as
a
result of the
operation of the trade agreements
program, the record does not dis¬
of close
it.
In
the
absence
of
any
non-partisanship; [ arpuxidt
this program is likely to deceive
foreign
was
policy
ment
on
developed
invitation / by
to
as
the
Qui1 bipartisan
peace
a
treaties
of
result
an
State
Depart¬
to Congressional leaders
pf
both parties to join in
framing it.
No such policy has been followed
•by the State * Department with
we
to
respect
tions./
preser¬
world
a
of
very few people.
this; trends Without vithaf
in
ti'ade 4 treaty
negotia¬
,/;„'/v/ ■•/
If Mr. Clayton really desires to
keep partisanship out of the trade
agreement program, it would, be
which Americans want to live—a
world which holds out some
prom¬
ise for the future of private en¬
.
appropriate for him to invite the,
responsible
Congressional
com¬
terprise, of economic freedom, of
rising standards of living, of in¬
ternational cooperation, of secur¬
mittees into" his confidence.
As
a
minimum, it seems to me,'! (he
Seriate Finance and House Ways
-
ity and
The trade agree¬
ments program is an instrument
peace.
achieve
we
these
if
need
we
are
"W.
L.
be
Committees mi^ht well;
informed, in confidence, of the
successive decisions and
contem¬
plated steps in each stage of
; the /
negotiations, including those .tar¬
iffs recommended to be
reduced
by the committees of experts,
CLAYTON,
"Under
Senator Butler's
Butler's
and Means
to
ends.
"Very truly yours,
Senator
Destroyer of Protection
able
there-is little hope that
should be able to do so.
" »*
promote
the
by substituting consultation
and cooperation for
aggression and
conflict in international econom¬
ic relations.
a
be
en¬
f-
United
•power,
peace
Not
shall
we
with
The attempt to throw the man¬
tle
States.
Through a judicious ex¬
agencies which ercise of
the bargaining power
both parties in Congress have al¬
which the Trade Agreements Act
ready approved by overwhelming
has placed in our hands, I am con¬
votes.
tion,
a
in
con¬
hardly tell you tha
such
a
development would be
seriously prejudicial to the es¬
sential
market
ment is deliberately
attempting to
undercut the Agriculture > Depart¬
ment's price-support program',
I need
Secretary."
prior to the actual bargaining;
In recent months the
Rejoinder
reply
dated Jan. 21, follows:
Mr. Calyton's letter
"Fourth, the Administration has
through trade agreement negotia¬ never sought 'to destroy our
sys¬ miss
tions have been valueless
woric
through the imposition
detailed
trols.
wool
department, which is
gaged in encouraging imports. Tt ;
would seem that the State
Depart¬
would be- headed i straight toward
the deliberate strangulation of its
commerce
American
another
government has
other
Food
me
that this disposes of your conten¬
tion that the concessions obtained
the
not for the initi¬
were
this
in¬ taining international agreements
whose aid
imports from which will commit the other coun¬
agreements
In the
It should not be overlooked that
the projected negotiations
pre but
Anp.eri.can
thereto,
seems
to
a large part of the
principal
point at issue. He speaks of "in¬
people
temper
have
exhibited
a.
jiew
their outlo'ok on issues
,
on
involving
relations with, other
The direction of;
our
countries/
(hat'
feeling has not been toward^ eny
policy of "isolationism." This- new
temper, I would say has beeq. di¬
suring that tariffs, rather than dis¬
criminatory import quotas, ex¬
change controls, and bilateral bar¬ rected more toward a greater real¬
ter deals, shall be the accepted
ism, a disposition to insist that in¬
method by which nations regulate ternational cooperation be a.
twotheir /foreign trade." -This> trade way, rather than a
one-way street.
agreements program had already It has been expressed in opposi¬
failed to do just exactly that, even tion tQ further
appeasement of Rus¬
during its earlier phase.. It is sia, in opposition to the free and
admitted that the trend toward easy lending and
giving of Ameri¬
discrimination
since the
states
we
war.
that
he
has
accelerated
When Mr. Clayton
is "confident that
Shall be able! to
trend," he is taking
reverse
on
a
this
can money to
foreign nations, in
opposition to again contributing/a
major portion of an international
fund which can be wasted and
large mismanaged by others in the
order.
of relief.
Denies GOP Support
Just/to.'clear the record/ there
several errors in Mr. Clayton's
statement,: Contrary" to his state¬
ment, Republicans as a whole
have not
but
have
supported his program,
urged amendments to
name
;
.
Protection against
/
flood of invports is of equally v.ital -import¬
,
are
■
these products will be reduced'* is
es¬
cape clause similar to that con¬
tained
in
the
agreement
with
Mexico
which
will permit the
action
certainly
hundred
The statement that "it should not
be inferred that the tariff on all of
trade
an
no
the present program, a great manyhave submitted proof of injury.
industry
future
is
Deen
agricultural activity.
More¬
the Department of State has
or
His statement that
information is that in the
eral
over,
erational
been
tions
injury to
grave
essential -American
Clayton's
the results
domestic producers have suffered
serious injury from tariff reduc¬
1945,
be
on
agreements
pointed out before in
Congressional hearings and are
Trade Agree¬
would
Mr.
trade of these
our
lave
during his Administration which
velop from its mass of tools and
materials informational and op¬
agreements
our
countries with which
trade
like,
attention to
fact.
Between
from countries with which
a
sistency the bank will have .to
worry about that deficiency.
Trade
your
indisputable
one
on
discussing the
of
however, to call
fourth bank will
the
would
discover and
Trade
of the words 'pretended'
your use
and
administration
United States.'
specific objective of
operations as the third bank seems
almost throughout its life to have
wanted. The objective is to maxir
mize and regularize real income
at'full employment. If "this defi¬
not
S.
"Second, I shall not comment
countries with which
•v
that
guided cen¬
tral banks in the past;
That, in short, it can and will
lishment
to
have
^
customarily
the time when the
of
By our .low tar¬
our
system of tariff protection/ iff levels we have given most of
our
government is entering into our domestic market to foreign
(Continued from page 598) f
^
the projected trade negotiations wools; more- recently, by h: gov¬
that this principle had been ad- our
exports and that the list of for
the purpose of insuring that ernment
subsidy
program,
we
vanced, many years before, by products on which we
plan to seek tariffs, rather than
discriminatory have tried to give it back to do¬
President
McKinley,
President concessions from other countries
import quotas, exchange controls, mestic wools, We have reached
Theodore Roosevelt and President will be
quite as long and as impor¬
and bilateral barter deals, shal
the point where one department
Taft.
tant as the list on which we would
be the accepted method
by which of the government,- with a sub¬
"It is not without significance consider
making concessions in re¬ nations
regulate
their
that the Reciprocal Trade Agree¬ turn.
foreign sidy, is in direct competition for
myself moved, not for the
first time, to remind contempo¬
future."
which
Secretary Clayton vs. Sen. Butler
On Reciprocal Trade Agreements
the moderns in his last statement:
*T find
.
standard
gold
fallacies
still valid.
ments Act was extended
the
have
They greatly overrated
on
President Tru¬
Speaker Rayburn, at
assured
HI
The
"indisputable facts"
come.
man
of
the pressure of the burden: they
greatly underrated the strength
by which the; burden was to be
borne." So, too, does another pas¬
ism and it is well known that iso¬
training human beings for
'.file f old, long after; the new has
'come;'much more when it is only
coming," which the "Economist"
called "piety to a principle learned
in youth but the reason for which
has been forgotten"; and which
Dr. Goldenweiser described when
he said: "There is real danger in
SO .on
/experience.
months to
careful
-
like
bank,
day-to-
develop
usable criteria to replace those
situation, the
Crusoe, will
need to exercise a great amount ments Act' was not
raised as a
indeed of ingenuity, and, like him national issue in the
campaign.
too, quite a bit of expediency. Before the last renewal in
1945,
But, then, ingenuity and expedi¬ the extension of the law with ,Iri«
ency are requirements
imposed creased power1 was specifically
upon
aiiy human organization, supported and vigorously urged
young o!r old, so the fourth bank by
leading organizations repre¬
is at no greater disadvantage than
senting American business, farm
any other in what Dr. Conant has and labor
groups.
This program
called "the delightful chaos of has
always had, and it continues
American democracy."
to have, a broad basis of popular
'
The fourth bank will have to support. Any party that sought to
fourth
•
and
and will
can
negotiations.
many months
study / that preceded
he last general tariff revision in
of
"As you know,
That it
veloped
far
enough
to
bring sage from Lord Keynes' testa¬
agreement even among the closest ment: "... the best policy is to act
students, nor to argue farther that
the job of the fourth bank is not
made easier by this lack of de¬
velopment and resulting counsel
>
cyclical
day;
,
mistake.
those
as
stimulate
these
compared with the
•
cision,
with
Hearings on them are being run
through in only three weeks, as
.
consideration / in
which
would have
a
to our national welfare, bOn
question likewise, I believe
our people are disposed to insist
on a program that is more
truly
ance
this
reciprocal,
:
;
/
<
.ThurSflay;^ Jan^aryl3Q^
634 V
little
strikes or strike set¬
on
Only
tlements.
Tomorrow%
buys apd
„
the
sellsp#bPfeil
nature.
Markets
question probably up¬
permost in mp^t TOhds %
Says—
when
Market
The
3
verge
on
now
this
do
market
would be
hoped the answer
But
pf forthcoming this. week.
When
It takes its own time.
it is ready to
place.
;v
moved up
to about 176, is still; prpspnt
at this writing,
The uncer¬
tainties we wrote about in
after the averages
column are like¬
In fact the only
thing changed in the past few
days is that time has elapsed.
And in this passing of time a
few things the market leans
wise present.
£95)
*
i'fi
i'fi
,
At this waiting the
you
kidney
world
constantly in terms of kidneya
therefore, isr in favop of fehipving
the kidneys pf,'thf ;:ehtire;lpopuj?
lace. The prpyehle'lacf.-'ls' that the
monetary factors play but a minor
part in determining good and bad
times, or the general price for
commodities and securities." Try
rents seem to be in the direc¬
(Knutsem plan) down
tion of decline.
continuation of the status
board
a
quo
(Truman plan). I
have no
lems
■
■
are
due
the same
to over-indulgence.
sign of the
■
tial part of the national income
wept tp pay the ubkeep of mili¬
of other
establishment|-;that di& nqt
produce
a
people
there ar^ many
in uniform,
either in the Army or Navy, aud
you
peacetime taxation.
An¬
phqse, which we recently
entered, is the beginningv of the
break in necessities, such as food
products, textiles, building mateother
It is
the pioneer days of
standard of living.
true that, in
World War in one generation has
changed all that. Today, and for
years to come the biggest single
factor in the financial lives of
of you here will be what
everyone
getting
aye
record
will find a country with
lowered
luxury lines
Sicker end sicker as the average
family finds it just does not have
single dollar of actual the
iponey for luxuries hfter payFind a country, where ing for the cost of
necessities, plus
riarls,< ete. Through some strange
reasoning, 0ie broker who sees his
client
owning textile shares out¬
right, believes that nothing seri¬
ous
happen ta such q client,
can
though tb^ m&hagemeht b£
even
mill
textile
the
itself
has
beOn
gambling and has the mill at the
point where it can't stand even
four or, fivedeclining
business
and
declining prices. "
Will
Depression
Snowball
•
.
In
conclusion, I would like to
two things about the nature
of business depressions. First, that
say
will pay annually for "the
they develop a very high velocity;
policemen." Economically, the in^once they start, being similar to a
dividual with two policemen to
snowball rolling downhill.
Sec¬
protect him while he sleeps is no
ond, if those who believe that
different from the country with
there is big business in producing
a
two ocean navy and a record
$5,000 homes to sell at $10,000 arid
you
military establishment all
around.
where depres¬
Disastrous Taxation
sions in other countries are due
to shortages, crop failures, etc., we
The United States today, paying
liaye never had a depression here one-third of its entire national
caused by scarcity, but rather by
income to the various tax collec?
over-abundance of almost every¬ tors is in a far different position
In
first
with the break in the
§!tandard\of3L|yj|pr|
the pilgrim^ a substantial number
condition
that furs
and citrus
have worked themselves fruits cannot possibly go into a of small, communities could hpt
produce wealth,, but had to stano
into a corner forming a kind
constantly on guard outside the1
depression.
of a coil. At least that is what
stockades. Bid, as, the country
chartists call it Usually this Over-Spending and Over-Eating developed TO grow tq a ppihit
With the limited facilities for where the amount of money spent
kind of action preceded a vio¬
for "the military policemen" got
lent upswing. TJieye is noth¬ prpdiiction in Europe and other
so small, that during the- '20s, for
parts of the world, if the supply
ing, however, certain about of money is increased drastically, example, it was only 1% of the
future performance^ And past it, of course, has an immediate national income. The Second
all the way from a couple of days of temporary
straight 20% cut across the strength first, hut basic cur¬
The
3,
wealth.
range
.
;; security market late lest summer.:
mV)A••• / '
V!'v' ''X>\
The second sign was, the beginNow, just how did the previous
mng of the collapse of -the luxury"
generation of i Aricrica, have ^thje
industries, \yhich obviously^ are
highest standard ^ living in thje me
1° go.. ^ Furs, cosmetics,
.tyorldj
In the older - cpuntrie^, night
clubs, jewelry, wines and
from time imme.m<ria), a substan¬
liquors, perfumes and a long list
:L 0R£
fruit grower, both
frequently
203.
crisis came
tary
is a effect on the price level.' Now, if
ypU would know' hQWffiffflrefrt k
poor yardstick to measure the the American economy from that
pening.
*
*
*
future by. From what I can
of the other 79 countries of the
H5
The most important coming recognize of the action, it world, study the science of medi¬
looks as if the breakout will cine in these countries. Whereas
3 event, at least the majority of
in Europe, Asia and other con¬
come
out of a confusion of
stock market - minded look
tinents,; practically all the basic
good and bad market days, medical problems are due to mal¬
upon it as the most important,
and will probably be on the nutrition, in the United States, on
is the tax picture. The guesses
down side. There might be a the contrary, most medical prob¬
of what the new tax will be
to
late
'
-
ages,
hap¬ performance
have come closer to
on
hre, as goo<I- as a "gonner" al- were^n g ; gambling spree , in the
.c«uy.
if you will and explain tpday tp
the fur merchant or-the. citrus
of whom arp
among the increasing number uhfit any able to get back even the cost ojf
production- for their product—that
the
amount of money
'cir¬
culation oi the other monetary
factors are in such a favorable
aver¬
talk, it talks.;
prodding it doesp't gef
"do^n."
The dullness which set in
pushed-
the market can't be
pf dfirec
tion not settled. Surface si^bs
say "up," undercurrents poipt
last week's
will
something. Last week I had
break-out. Question
(Continued from page
gerpus; §8 the specialized •
doctor v/hq looks at the
Walter
==By WALTER WHYTEs
Certain Depression Ahead!
publip
'
1^7
way,
$11,000
or
to sell $900 cars at $1,-
400 or $1,500 are in store for the
shock of their lives.
Not. only isthe business depression coming,
it is
but
absolutely necessary if
to begin to maintain
the standard of living of; the mid- •'
we
are even
would
Last week and the week thing. Those who have been warn¬ from the America of the past. You die classes,^^THey-were^wiped but
that it will be before the downside support ing the public that inflation was can't write the same check twice in practically every"ot%r counter I
coming, with lis. Resulting scarci¬ toautomobile dealer* the radiq as a result of wars so costly, that
about an 8% cut on th^ upper
point was around the 170 ties, are', in strife, for serious dis¬ manufacturer or for any other civUizatiop; could riot' pbsribly a|- •
brackets with higher exemp¬ level. Now it looks as if the illusionment frpni the greatest, in¬
gadget and at the same time write ford them,; Frorq here bh; we pay4
dustrial and agricultural machine
tions in the lower ones.
it to pay for veteran's hospitals, and pay and pay. r
support point should he at the world haa evey seen.
$
■; *
*
armament and a
police force
fhe 174 point. On the up-sidc
I am going to try to put in sim¬ spread all dver the world,
Another coming event the resistance seems seems to be
ple tertns the reasons why Ataer?
Let us turn to another phase of Los
market has been looking for from 176 to 180, Should the ica faces its most serious depres? the outlook.
Where normally it
sion Vyith a lowered standard of took great ability to succeed in
was
the management - labor
averages go through the up?
Elects New Officers
living. Let us suppose I am a real American business, during the last
;
; discussion. If the recent set¬ pep ranges} the qut|ppk Wpl
estate salesman and 1 succeed in several years, one had to be a
LOS ANGELES, CALIF.-r-B. P.
tlement
between the steel have changed. But in trading
selling you a home in a. given veritable genius to fail in almost Lester, Lester & Company, has been
workers and Big Steel is any it is wisest to expect the
neighborhood. After you paid your any form of economic activity; elected Chairman of the Board of
yardstick, the chances are worst; at least be prepared money and moved in, I tell you We have then built up a great Governors of
backlog of hundreds of thousands the Los An¬
that the auto companies and
for it. If it doesn't material¬ that the neighborhood is infested
of high cost inefficient fanqcrst geles Stock
electrical outfits will also set¬
ize, fine and good, you've lost with murderers and arsonists and retailers and manufacturers whq Exchange,
tle their differences on the
su cceedimg
that if you do not hire two police? can no longer ipake bptq ends
same basis. Naturally a three- nothing by waiting; if it does,
meet now that; the hothouse, pros-j McClarty
men to stand in front of the house
perity is over. Mp^t businessmen Harbison, Har¬
month deal isn't the ideal set¬ you are still secure.
and in the back of the house while
and most individual citizens have bison & Greg¬
%
sfi
i'fi
up.
But it is better than
as yet as to the ory, who was
you are asleep, that you will be a no conception
V)
nothing.
enormous
financial burden they elevated to that
There is one thing to say "gonner." Odiously, you will say
*
*
*
must carry for the rest of tliei^ position re¬
that with such a financial burden
lives.
Instead, we find thpy arq cently with the
From a market standpoint, about recent action, and that
for protection on your back, that
going to different loan agencies *9 appointment
strikes, actual or potential, is that prices can't stay in the
borrow money actually to pay of a paid presi¬
hpve little influence. Main present zone much longer. So with a stop at 37 and Dresser taxes and for living expenses
dent.
* '1
reason
is that somewhere the chances are that before
though by soma miraCle things
W. G. Paul
at 17, stop 18. I should like to would, change completely in si^
was
reap¬
along
the line somebody
many days you will have the add a few more issues.
But months or a year. Frdm commer? pointed presiB. P. Lester '
knows what the monetary re¬
cial banks of the country alone; dent of the
/
answer
to "when will they until I can see
more, I'll have we see loans already at a new all4
sult will be and has acted ac¬
Exchange, a position he assumed
do something."
time high and jumping at the rate
to hold back.
recently when the membership
cordingly. It is therefore a* par?
of
over
100
millions weekly authorized the Creation of a posi¬
*
*
*
More next Thursday.
tial answer why stocks do so
through this one Channel.
tion of paid president^ " You are now long of but
—Walter Whyte
Other,
officora riambS
inside information but
venture to say
•
:■
•
•'———
„
■
).
Angeles Stock Ex.
•
.
„
two
.
stocks, Anaconda at 37
Pacific Coast
Established 1858
Securities
H. Hentz & Co.
Orders Executed on
Members
New
York
Stock
Exchange
New
pacific Coast Exchanges
York
Curb
Exchangei
New
Schwabacher & Co.
t':,'
Member8
New
New
.
York Cotton
ConpmocUty
Chicago.
Exchange,
$oard
New Orleans
' '
York Stock Exchange
Exchange,
0f
New York 5. N. Y.
Teletype NY 1-928
COrtlandt 7-4150
Private
San
Wires to Principal
Francisco
Monterey
—
—■
Offices
Oakland
—
Sacramento
STREET
NEW YORK 5, N. Y.
|;1I SUGAR ItSS
h"
N". Y. Cotton Exchange BIdg.
33
3:333
DETROIT
PITTSBURGH
GENEVA, SWrrZE|tLAND
'•
i :y?
Exports^Import$-~Future3
NEW YORK 4, N. Y.
CHICAGO
tutions
During that period,
Crowell,
5? Co.|;Yioo-Chaiimo.ri;
Sr.J*
Shropshire, Mitehum, Tuliy
Co.,
oa
Hopkins, Harbach
tary,
-
•
,
^
bert
there
were
PIgby 4-2727
;
1
;;
and
financial
.
*
;
r
-
'
1
.
.
(Specif to Tug Eutwmif Ch?6nici.e) ;
ST.
LOUIS; MO. -—George
*
O.
Jones has. become" associated with
and
Newhard. -Cook & Co.? Fourth &
finally,. large scale receiverships,
American businessmen and indus¬
trialists have been on a gambling
in recent years, just as
•
Joins Newhar^ Cook Staff
financial depression but a busi-f
depressiqn,! accpmpa^ted
cancellations of orders, the declin-r
ing value of inventories, the; disi
spree
banks
•
■
renamed Assistant
Secretaries.
ness:
of cash resources
Co., Secre¬
V v' "r
Inez Vermillion and A. R. Gil¬
qot a single nationally knowr)
commercial or; industrial receiver^
ship. What we face now is not. 4
appearance
0opkinB,
Treasurer;, apd D. Roger
permanently plosing their
doors.
A^epe:
Horace E.' Martin^
Was
-
Santa Barbara
'-"3> Fresno
99 WAH
Cotton Exchange
York Curb Exchange (Associate)
Chicago Board of Trade
!
14 Wall Street
IAMB0RN & CO.
Inc.
Trade
And other Exchanges
'
The Two Kinds of Depressions;
[The views expressed in thi$
Now, there are two kinds of d^t
article do hot. necessarily at any
pressions. First, the financial de?
time coincide, with those of the
pression, and second, the business
Chronicle. They are presented as
depression. " Tliq depression frohj
those of the author only.T
1929: to 1933 Wai largely a finahT
ciol depression with severol thou-r
sand ' Mxiks,
investment. trysts;
brokers and; other financial insti-f
Olive
Street^
,
members
of
the
New York and St. Louis Stock Ejt-
the
institutions changes and other exchanges.
,
c
■
Vblume 165
Number' 4564
THE COMMERCIAL & FINANCIAL CHRONICLE
ward
intellectually* and' to: bring
back, their great universities to the
position that they occupied before
Instalment Loans for Small Business
'
(.Caritniuedy from,
all your . commercial, loaning' offir
page 604)
cellent position to. advise iinf mat¬ they, too, were wrecked.
ters regarding business location,
If this could- be
done,
4ers /to/bdritiriualljt
few years been,looking tathe^fiield
of consumer credit, to:, supplement
f'
tnein eerninga anditu better take
the
rieedsi; of; their
lease
le
day.
:
:■
.
terms, ;• rental;, payments,
working capital needs, capital ex¬
I Higher
than,, average commer* penditures, proper insurance coycustomers and communities, It is cia^ loatvTfdesare imorder fori the- Crage, and? the: need; for keeping,
amalley; loans, atdbast^ because-the. an adequate set of books, etc. This
;;;/netwrab: that the:^
because actually; when we atop' to greater amount of servicing and shows, up;;
continually in various
consider the type of loans we have cost of ricqriisiridit;itequired^ the
:
avaUable. to us; it isapparenfthat; higher the necessary rate.
v..-V" '
'v
i
When
inatalmentdoans offeree average
you. are
dealing; with, j We must. realize that times.have
bank; an excellent opportunity for husinesses^ the largestiipercentage
changed; and that/the whole, trend
increased earnings., and/at: the Of which have a. net worth of less of bank credit is definitely toward
care M-
635
carrying out the
Pilgrims. We shall be extending
over
wider,
a
that influence
area
;;
than
time offer, a; wide] diversifi-
$5,000 and are staffed .with *
i three employees
or. less,■! yovu are
obviously dealing with a type that:
will have the highest mortality
rate, ther least capital funds, and
the poorest bookkeeping system,
if any; Tt will have the greatest
vulnerability in; the event of sick¬
riaUpm e^riSk ;ih^
with the highest degree of liquid¬
ity.'
:■ /■/;?.;; /
'tr
.Crop loans and. livestock, range,'
/©ri feederdrians mayralso/oHerian1
important
addition,
f;\ loan portfolio*;
.
to
?. .{■■
bank's
a
:
;
;
.
You may have some warehouse
loans in your portfolio, but these
are
limited in
very
volume
IP, most banks..
:
/
;
banks
ally available in volume only in
consequence, are not an important
addition to the loan portfolios of
-
securities
on
have
and
been
is
pretty much curtailed by govern¬
off ip s&;months,,and 73% within
Interest Rate and Charges
an
.
gov¬
loan
under $50,000
which
328
loans represented one-sixth of the
active loans of this type on our
51.54%,
were made to
businesses established after 1942;
or
we
so,:
nCeds
K
ness
of medium to large busionly, and not. the needs of
small business.
/
;
;
//•
:i*/;. '■/- :•//'
;The. reason, for this is easy, ta
see when we stop tp.analyzeJustr
what
is
by
meant
small
husi-
nesses,.and whatgoes,to. makeup
•f/ their total; numbers... % : 1; //v;:v
Seventyrthree and1 three-rtenths
;
percent
of
all
active
commer¬
cial^ arid; industrial firms, in. the.
Uhited
States in 1942 had
a
tan-
;//gfble.net worth or $5,000 ,or less*
;
arid^ l4^5%; ha<f ar tangible net
worth, ot less than $1,000. A large
percentage of these businesses
are
one-mari/orgariizatipns with 82%
of them, employing, three persons
ot less. As a consequence, many, of
your. personal loans to these in¬
dividuals
are
for
cantV business
use in the aPPliarid' their ,repay-
ment is, jnade pujt of, profits from
lathis.business^;?./;
//
.1.
'•!
.
'These businesses, for the most
Phrfe :c^iri<|:;notlmEdn^
a
financial
statement which would justify the
extension of. muchi if
cured
v-,
.
any, unse¬
credit, in the opinion of the
ayerage commercial; loaning offir
corj .and; yet many, of. these same
businesses would, be, entitled, to
credit, in, the opinion, of any well
informed, experienced, instalment
Iqan .credit man; and furthermore,
mpSi of.: the loans. So, made wpqld
paid brick satisfactorily and
with
e
v
a. higher interest rate to
bank than WQuld. be asked; or
ceived, if, thq same Credit were
tended: as a commercial' loan.;
f
.
:
Instalment
the
re¬
ex-
j'!!
Loai) Technique
^IpRcqtrirftd?
"r? /•/
To make, this type of loan suc¬
cessfully and in volume requires
an instalment loan technique, and
certajritytheS/smalleri loans of'thig
type (and they will be in the ma¬
jority); should by''allmeans t be
made - and
serviced
stalment loan
by your -in¬
department "where
•
the loaning officer- or officers. re¬
sponsible. for the approval or dis-
aoprovall of these loans can get
the feel- of them, instead of -asking
Speed Imperative;
But wq must act without! delay,
for; if. we do riot; other forces will
be
at
work
and make
th§ Pilgrims, They
either im¬
the. aims
are
iri which we profoundly
believe,
We have witnessed them
go for¬
ward in the United
States and in
we
know
it have
.
be-;',
gun to rebuild. Central and West-
.
ern
English-speaking peoples./:!':f;!/,/
Believe me, my fellow Pilgrims,
are
living, in. an age, when
problems are so imperative and so
pressing, that one cannot, afford
■;
we
to
wait.
We
quickly.
rebuild
and
The
should
and
act
time
has
come
peaceful and
a
act
to
economic
intellectual: Germany and
to
sed to it that the militaristic ele- /
ments,
Wh^ch haye
so
/ damaged /
that people/and. brought, them. to/:
wrack; and; ruin during the. past /
two, generations are no longer al- '
lowed to be-effective. That is the
next step/ for: the Pilgrims,to, ta^e>,
Food Commission's
Proposals
(Continued from page 597)
"There, is reason to hope—indeec* international wheat agreement are
to expeetr—that! the- essential fear! sqt forth; in considerable detail.
tures
will be made the, basis
Different Course! Than. Orr
of action."
.
.
Recommended^'
Bruce
Sees
Farreaching
Effectsr
Role For World; Bank.
Germaii; States:
(Continued; from: page 603);
Speaking not, as ap: Australian
but as the Commission's chairman,
the Rt. Hon. S. ,M« Bruce expressea
.
interest rate for these loans, be¬
policy of too low interest
the- smalt ^ busiriess borrower
cause a
.
for
.high)ypprganized.'gpverriment,v
From
the foregoing- ib will
be
seemthat the/ sessions; in "Washing- ;
ton point the craft of international
agricultural/ cooperation down a.
sornewbat; different- road than was
recommended- by Sir Jobn Orr at
program^
terriatiOrially^financed7 sort/ of ag-*
expan¬
stability iri! agriculture riculturat adj ustment admiriistraject/was/dropped;
Wbiehr will; hayev profound reperA tionl the present; report is; strictly
; .That, is.a lorig time
ago? but Bis-? cussions upon industry and, the limited to projects which can be
put the pipe back; and the
marck stated; the
specific
sub¬
reason
opened the way to
a
new
<
sion; and,
whole economic structure.
nationally financed. While it was
something o^ a: job fop the: Amm>advanced- countries will involve
ieans/ to/ convince: some- of the*
the :
prpvisi°n; of, great capita! ofher delegations in Washington
sums, Lord. Bruce said.; Finally he
thatf an internaboriaUy-financed;
and' 5%-per aririum; andf
and •shpuld^ald^
sfressed/thp/need fpb the- closest food^ board'- would/meet/the ap-/
4% more on borrowed funds has )/ The German people are a very cooperation
among - existing
UN. proval neither of Congress! nor of little or no bearing on the success
;remari^blQ>P§op(|e)t; They hay% an organizations, and voiced'the: per/! various?' other; /Courifeiesi: which
is
not
a-'Sound-one;, lnstead: of
!y^iy? wA shoiAd j\Gt riom reor^an^
!ize ; Gerniany on that basis.
all government .agencies/ as well ^Clpirig^SsihaH
We
^basiriass# suchr a
bankSr bave in/the. past been policy/ actually/does it an. injus^ should reorganize. Germany on a
largely, glared \torcare; fori, the lice; TheJ differential between; 10+ federal' basis» and/ it riari anc
••
unite-together for this
constructive purpose, we shall al- /;
heartily, believe.
.
A Federation of
can
.
achieve- vr
economic
in. which!,
amount; or 42 % of ; the
total; One; hundred and sixty-nine
loans,
ments,
and
Europe and put those people/:;
back on a peaceful footing, where,
they, too,v can share the. benefits
of what, has been so great to the f
devoted and.
books in this particular office. The
impor¬
Dp not be stampeded by such
talfe frito establishing too low-art
months to five years4 with nearly
bf. hufelbahS .ha^m^,a^!Qri^*
.
which
I
•
"six
trial hiaturity of; 36, months;/;/ //:
ThA;pri$l^:/ak3/ se&Sfc is that
of
as¬
lectual
tant point is made off the fact that ^ileriqo/ BteJrikrck/ took' bis; ^ii>e to that body the view that the re¬
small business needs a low inters trojp/his- rriouth, arid jbrikirig: at
port's^ recommendatiori /ot an arir the time of' the Copenhagen con- /
me, saMi "Germany, for military
est rate to compete with large
niiab reyiew*!. E^riatipnal::
agficuS ferenqe* Whereas Sir ' John Ad;reasona, 'requires a strong nnq
business. 1
1
v
turah and> riutritionai
vised: the- riations tri create ari in-.
(ope. year;,, this* in. spite of ;th^fact
ranging ;from
>
aid to small business,
stopped making.loans at that time,
would have had a 48% run¬
n^turiites,
risk
In all: propoganda by the
ernment regarding Federal
we
.//thatlloans!
the
of
•1
bad
,
loans made to. businesses with
area,
their
huge population,.their, great intel¬
are
in
being taken than is possible for
I
;
oUr in¬
we
selection
diversification
In
stalment loan portfolio, and this
that; ifr
wide
or other agencies.
spite of all? the headaches
which go with this type of credit
extension, the results, in my opin¬
ion, will greately outweigh them.
regulation, and? even when
available, represent; a very low
interest earning type. v:
«
1939; Ave;mude.a:;Studv o|
a
governmental
ment
:The degree of liquidity offered
by an. instalment loan portfolio is
frequently overlooked,
Late in
is
it
English-speaking peoples,
their: immense
ain to which "we
niture, household appliances, com¬ possible or greatly delay the remercial and private aircraft, loans Construction which is so impera-r
five and' so desirable,,
tor doctor bills, or terms instal¬
ment loahs;to;busmpss. ? There, is the situation as I see
*
These are the aims of
In our office, we studied 328 ifc today.
and, sets
owner,
credit,; whether
loans to finance automobiles, fur¬
,s
most before
Chqat Britainj; and- while there is
much still to be; done?' yet, every¬
outstanding total of'these loans
their own communities where; the
thing is well under wayy.and the
amounted to/$652,308; Of these
loaning? • officer's "knowledge, c?f 328
loanSj/ ill; Were instalment
local conditions and neighborhood
loans, or 64.32% of' the total by
and community needs permits the
number; and $274,740 was the
use of greater
wisdom, discretion, total
dollar;
;A
manufacturing ^nters;2andv as?a
Loans
the
curity to offer. On the other hand,
this type of business loan offers
Accounts receivable are gener¬
most banks.
of
the most, conglomerate type of se¬
for
:
death
or
ness
instalment;
con-
of the. fundamental? principles of.
the United. States! arid Great Brit¬
.
same
If the
with
;;/
we shall
aim of the
be
dominant, spirit is effective,
structive.and. helpful.
Butte
achieve development* of ; the less
.
.
or
failure of
a
business.
Extraordinary^^ ampuntr--pr degree,-
sonal
view
that EGOSOC
should
I Low interest rates alone do not
create
volume.
perhaps- is better—of intellectual¬ take: early arid effective action to
ion two generations; they that end.
The only way-I ity.
know of to obtain volume in small
bayg^'baen^urider^cpntrol
and;
business loans is through • advert direction; of. the Prussian militartising, publicity and understand^ istiq spirit* andi that bas, got to; he
ing and friendly attitude toward checked* /;ii;;!my?yiiudginenti we
your loan requests, and the proper should proceed without delay to
SqqUities. for the: making arid- serv¬ the federal reorganization of Germany,
icing of them.
Mortality Rate of Small; Business
The operation of a business is a
bard competitive struggle, and the
yearly mortality
rate, is
high.
r:
Nearly one-third of. all
ness
new
busi¬
enterprises fail in their first
year; another 14% to 15% fail in
their second year; and. very nearly
70% are gone by the end of five
years,
This high ratio of business failr
and discontinuances is a ter-
ures
The: official summary of the
Commission's, report, in dealing
with finance, cites as; a
requisite
of international aid that the coum
try concerned must put its na¬
tional finances
lion
and'
;. I made these recommendations
five years agp; to President Frank-
part of its
Jin/^osevedt^arid? tq Primo
handle
Min¬
states
that
on
a
provide
firm foundar
a
own needs;.
the
most
of
World
the
If
.
.
we
_v,.
are
ganization,:
Vj
.
to have
COnTOP^; ^bri^* Whfl% the bufr
fer-jslopk/icEat suiwiyes/frpm the/
Orr
recommendation, its financing
is3q he: strig^y; on
•
One of
s- national
basis.
th$ most* important rec-/
ommendatiops of the; Preparatory.
Commission is that/caliihg for an
substantia]
annual review,. at! the FAO
The repori
ference,
Bank
wil
developmen
ister; Winston Churchill. Both ac¬ pro j ects requiring international tcepted, them with • great enthusi¬ nancing. It: adds: "Thp Bank!s! re¬
asm and
said they • were having sources haw not yet been stretch¬
them studied by their govern¬ ed, but it will be
disappointing if
ments;; I take it fpr granted that development does not gather such
that study is still going on.
momentum as to make the
pres¬
fs
^.i-v'5'i _•
.'
ently available resources quite, in¬
Prussia Danger Spot
adequate." To lending countries,
.
WOllbl bp; expooftp put^ up funds
therefore, in the end/they were ,
Con¬
agricultural
riutritiopal//pjx)grams/ f This;
of; national
arid5
recommcridation, which;originated
with
the
U.
S,
Department
of
Agrictilturei is expected/ to iron
out ^conflicts and; minimize the
dangers/ of/" regressive measures.
The emphasis, indeed, is on expan¬
sion.
Annual/
r e v
i
e w
involves/
.
a
federal
or¬
"some of
which have
sensitive and
should- make sure unstable economies," the Commis¬
make it impossible for sion recommends—doubtless toe:
we
something
more than pas'sing nicesounding resolutions, officials explain; it constitutes a concrete
.
program of action.
that we
source ofn waste* At the turn
Similarly, in recommending in¬
Qf the century^ there wcye l,174,r
control of optimistically—that- international,
com modity
OQO independent: business;, enteric the whole German people. It is investments bri timed as- far ar tergovernmental.
prises in thi§ country. By the end the large land-owning element of practicable to mitigate rather thar agreements the Preparatory Com¬
mission- seeks, to move/in the di^
of 1940, the number had increased Prussia and East Prussia, with aggravate/business
cyqle fluctua¬
to 2,156,000. To achieve this net zest for war and for conquest— tions.
rectiop1 of expansion. Under past
commodity agreements, officials!
gain of less than-1,000,000, a total and for territorial conquests, of
Believing that only by intergov¬
state, the tendency; was. toward;
pf 16,000,000 new business enter¬ one kind; and: another—which has ernmental
cooperation can agrir restriction of
production and sales.
prises were established during the Wrecked, the! German, people, in
pulturai price stability be achiev¬ The "alternative to * the
course rec¬
10-year period, or an average of these! wars,*, and. would wreckthem
ed, the report recommends; "for
ommended by
the Preparatory
100.000 per year.
agaimifs ft;^Werq pernutted?toi!gci many commodities'?
......
• ■;
intergovern¬
Gommissiririr ik an, extension ofv
i
We should not allow these fig¬ forward:;; unhampered, and/ i uri?; mental commodity arrangements,
unilateral action, necessarily re¬
ures
to discourage, us,
-/?
n:r;'
•/.; /':
with in appropriate cases famine
however, Checked.
strictive. As one delegate/ to the,
because there are; many reasons
i If my influence were to exist, I reserves of basic foods held na¬
Commissioa- * explains, it to. the
why businesses go out of exist¬ shpidd/see to it that Prussia /as! it tionally for use internationally
writer, the. question is not one of"
ence; and in reality only a; small is today was/ divided, into; two or and buffer stocks of; commodities
commodity agreements versus free
percentage- of this number repre¬ three states of the new federation, subject to seasonal and cyclic?;
trade, but rather of internatipnally
sents actual failures, as indicated and T should see to it that the
These stocks would
cap¬ fluctuations.
cpbrdiriated, intervention versus
used
't>y: the; fact that;; iri 1921y for ex4 ital of the new Germany was be
under
internationally
unilateral national action,
ampl^, business failures; totaled moved from Berlin to some one of agreed rules. ;
h'.
/ /?■.
! 4 third* feature- of the- current
only only .1% of the total business the half dozen cities available for ! The
report contains conclusion* recommendations is that
of special'.;
the purpose in, central or. southern and
; n existence,
recommendations concerning
'
price sales tied/to surplus; situan
Probably' thh best, wav .to• enr Germany. I would spe to it that various
commodities^ including tions^ explained below. While thisqourage the^small busiriess man is !alir
emphasis-, was. lalA pn/thp. in^ wheat;'sugar, rice, livestock prod/ was part of the Orr proposals at
to invite him to talk over his
ucts^ pils arid' fats,' fjsh-,. tea ari^
bust tellectual and
Copenhagen, the. Preparatory,
productive side of,
nessprpbleifts' withr yriu1 as: his
coqoa, cotton; wool and timber.' D
Commission : has
dropped
Sir
banker. The average* smgll-towri. the Qennau' people, to have them suggests furihen
s;tudy off maiz^
John's plan for international fi ¬
banker is very close to the affairs go forward economically and in¬
rye, barley,, other, grains, tobacco nancing, thereof, and; leaves/the;
of his community -arid- is in an ex¬
dustrially, to have them, go for¬ and: coffee. The principles of an sales to the individual nations.
rific
-
THE! COMMERCIAC & FINANCIAL CHRONICLE
€36
experienced management has been
succeeded by one without experi
ence
a
glowing record' of pas
return on his investment.
1
He should be made to under¬ earnings might well go glimmer
stand that securities are intricate ing and the capital investment
iherchandise which is' not to be risk be substantially increased.
From the foregoing the investor
bought blindly and that the data
requirements of the Act, I
■> the
resulting
benefits
would inure not only to/ the cus?
tomer's; but, to your owii advap-i
may judge whether the. condition
of
the
business ' is sound and
education of investors. I know of
whether the company's prospects
may
a
the greater the risk
and
risk:
entailed, the greater should be the
Obligations oi Dealers and Brokers
In Interpreting Prospectuses
Commission's
(Continued from page 597)
contained! in the prospectus are
recent announcement concerning
Ing brokers and dealers clearly
a
revision of registration state¬ placed there so that he may, be¬
explain to their customers the in?
fore; toyingan interest in W-busi-/
formation contained in prospec¬ ment Form S-l and the elimina¬
tion of 'two pre-existing forms, ness, evaluate its future earnings
tuses covering offerings of secur¬
and estimate the risks involved,
A-l and A-2. The new Form S-l
ities under the Securities Act of
and -then and ^ only- then decide
is part of the Commission's pro¬
;1933.
Whether to buy. "Before you 'in¬
N The general'purpose of the Se- gram to see to it that registration
statements and the prospectuses vest—investigate" is by rnow a
c^irities. Act; as you well know, is filed with them are clarified, sim¬ hackneyed phrase; but to' my mind
to provide full and fair disclosure
it? is one; whichlnot only i bears
/ ©£ material; fajpts' concertong;;the plified and stripped of surplusage.
You may rest assured that, if, at repeating but one. which should be
character of securities./* This dis¬
instilled into the mind of; every
closure is accomplished by means any time, we are satisfied that the
investor ::until^^like! the: alphabet;
-of registration statements' which public interest, and the protection
'it:-, becomes: part;of- his; .mental
of investors will be adequately
must be filed with the Commission
served by a further reduction in ^quiptoent;:.;: *. > ,i' n
prior to the public offering or sale
j If : I were myburJpdsition; dis©£ any security by use of tbiemails the quantum of information re¬ bussing the contents of a: prospec¬
©jp in interstate commerce.
The quired in a registration statement tus with a customer. I. would be,
or prospectus, such reduction will
iegistratioh^taleP?eut ©obtains
inclined - to adopt the following
formatton ^ith''respect to the is- be effected'
noticed
have
Thursday} January 30, 194?
the
•
'
.
:
for future
.1
earnings
are favorable
:^VY>V'!
j.-r.t Capitalization Items
i I would-next/refer- to the genejral' capitalization and :a; detailed
description of the security being
offered
by
the prospectus./T;
should i be: explained: to:: the inv
.,
yestor.; whether
> a'a debti>* or
/ah
equity security is involved and'
whether, in the event her pur¬
chases, fe he will become: at creditor
of the company or a part owner
of the
business subject to the
tus
believe
tage
as
the
well. You and I know that
securities
benefited
no
way
be
business
would
immeasurably
in which
such
by
be
the
education
better achieved
than by
this process of sitting down with
the investor and
explaining to himi
thev basic;: necessary facts concerningi proposed dnVestments.v I
feel certain that if such
tion
program
an
educa-*
were
adopted and
actively practiced by members of
the" * securities; business generally/
,
the gains which: would accrue to
it- in good- will alone would be
h:emendbus;;
You
;
and/' I/v; hav^
learned by: riow that a satisfied
customer. is the best customer and
one
who will return; to do >busi-»
risks X thereby. entailed./ If rait riess |n the,< future. eWe have also
learned that their more securities
equity security is offered, his at
.
tention should be directed to the are held by informed
procedure. -XX.6'• i/.:
investors,
securities, its
dividend record of the company the less danger!there is of panic
Efforts At Simplification f
Procedure; in Explaining:
management ' and the manner in
and it
s h o u 1 d;; be
explained sales and manipulation,.:1 > /■ f
:
Very likely you will recall that
which: the securities are to be of¬
r' *7.11 Prospectus ^££7 7- whether his rights to' dividerids
in 1940 the Commission and rep¬
fered; This document* is a matter
A Word of Caution
After considering and explain¬ are contingent * upon the prior
v.^¥;:
resentatives of the securities in¬
©f public record, available for in¬
ing
the information concerning payment of; dividends or interest
Now,, before relinquishing the
dustry got together and worked
spection at the Commission's of¬
the offering appearing on the fac¬ on? other securities which have
rostrum; :10t mo. stress a! word^
out certain proposals to amend the
fice^ Of greater significance, how¬
ing page, I would turn to' the fi¬ been or are being issued by the caution. I appreciate that you men
Securities Act of 1933 and the Se¬
nancial statements.
ever, in providing a prospective
Despite, the company.
represent a very high type in the
curities Exchange Act of 1934.- On
Investor with ready access to ade¬
To the extent that such a dis¬ securities business
reactions of some few persons to
and that you
many points pomplete agreement
quate information, is the require¬
the contrary, these statements are cussion is pertinent I would indi¬ are intent upon lifting that busi¬
ment that each purchaser receive was reached while on others al¬ furnished not to baffle or conceal, cate and explain the voting rights
ness to a lofty professional plane.
ternative
suggestions were of¬
a copy of the statutory prospectus.
but to clarify and reveal the fi¬ given to a holder of the security, All of
you, I am sure, aim to make
fered.
These recommendations
nancial condition of the issuer as and whatever conversion, redemp¬ and
If these objectives of the Act
keep the business one in
were
submitted to the Congress
of the time of the offering.
I tion or liquidation features the which only the highest standards
are to be attained, it is desirable
but the hearings were interrupted
would explain that these state¬ security may possess. I would
that the information in the pros¬
of commercial conduct are ob¬
because of the war emergency.
ments are the keystone
of the also point out any provisions served between brokers and their
pectus in every instance reach You
may have noticed in the pa¬
which might permit dilution of
the prospective investor before he
prospectus and that all other in¬
customers. Like the Commission,
pers recently that this .program formation
in the
prospectus is lis interest in the business and, you must realize that abusive
buys so that he can make an in¬
has now been resumed. Some of
built around and is explanatory of in any case where a debt security
formed judgment as to the risks
practices in the sale of securities
the problems confronting us in
them. The balance sheet, the prof¬ is being offered, the manner in should
involved; in the purchase., As
stop and that uninformed
1940 and 1941 have been solved by
it and loss statement and the state¬ which his investment is secured customers should
Chairman Caffrey indicated in his
be effectivelyamendment and administrative ac¬
fher's business, its
.
,
Investment
ment of surplus should; be ana¬
have arisen
lyzed and explained. A compre¬
must be con¬
hension of each is necessary for a
1946, this end can best be achieved
sidered in the light of present con¬
full understanding of the financial
if you customers' brokers will lit¬
ditions. Representatives of the in¬
condition and operations of the
erally sit down with an investor,
dustry, other
interested parties
enterprise. Each portrays a dif¬
open the prospectus for him, exferent part of the company's fi¬
plain what it is, what it contains' ?nd the
are nqw
and actually guide him through it. I tog
nancial picture and a study of each
serious study to ways
The
information the customer rcieans of arriving at a cojnmon •is necessary fob a complete'un¬
agreement as to changes, where
needs is nearly always to be found
derstanding of the others. From
in the-' prospectus and your ex- possible and
them alone the investor can learn
whether the company is currently
planation
should make crystal ^1C interest and consistent
clear to him just what the offering protection of investors. Among
financially' sound and operating
major problems to be considered
is about.
on a profitable basis;
will be some simplification of the
Next we would turn to the sum¬
0oal of the Prospectus
registration process and the use
Of course from an ideal stand- of a preliminary limited prospec- mary; of earnings for past years,
point, the prospectus to be fully, tus to be circulated among mem- because the investor should know
before the
Association
address
Bankers
on
Dec.
4,
while
tion,
others
giyand
Commission
desmable imthe pubwith the
the
informative should be written so
simply and concisely that any inVestor cam unders^
technical advice^ ^
lain? Only: materia® infbimatibrf M
summarized form; All irrelevant
data should be
excluded. As
vre
all know from the experiences we
bers of the investing public during
the "cooling period" between the
filing and effective dates
of the
registration statement In the not
too far distant future it is hoped
that
appropriate and workable
proposals will be submitted for
consideration by the Congress.
have had, this ideal is not always
Since the Commission is inter¬
possible to achieve. However, it
Is -a goal to which the SEC, is¬
ested in tht views of all persons
suers,
counsel
and
their
constantly direct
underwriters
must
their efforts.
At the
Commission
we are
do¬
ing all we can to make this ideal
# reality; We have undertaken a
who1 feel
they
contribute
can
helpful comments, I suggest that
you men, who know the securities
business and the needs of inves¬
tors so well, cooperate with us in
this endeavor.
Any views you
may
present, either for or against
as they
stand, will receive careful
program "to simplify our forms.
And, to facilitate the registration
amendments to these Acts
process, the, staff is always avail¬
able for conferences with issuers
consideration;
and underwriters before and after
this
registration statements have been
out that
constantly urged
fhO use of a concise and readable
document. Unfortunately, our. ef¬
forts in this respect have hot al¬
ways been as successful as
we
Wish them to. be. Frequently, the
prospectus is an almost complete
copy of the text of the registra¬
tion
statement and contains a
filed.
We have
number of irrelevant items which
tend to becloud rather than reveal
the salient, necessary information!
I am thoroughly convinced that as
now >
When
speaking of investors in
discussion let
me
now
point
I have reference only to
who buy securities to hold
for an indefinite period of time,
persons who are interested chiefly
to the protection of their capital
investment andi the receipt of div¬
persons
idends
or
interest. I do not refer
in any way to the so called gamr
bier who buys for a short-swing
than sound long-term
ings have made offerings of secur¬
ities to the " general
public and
have " boiled down the data' in the
1
prospectus to approximately that
///,: number of pages and less, i
In this connection yoii
1?
subject to the prior claims of
security holders.
I would indicate what the terms
senior
the offering are, and in this
connection, I should think the in¬
vestor would be particularly in¬
terested in and should, know just
how much of his capital invest¬
ment ; is going into the business,
as contrasted to the amount that
will be absorbed by payments to
underwriters and selling group
of
members
and
by other expenses
protected against the overreachings of those who are familiar
with the securities market. If this
is
not
should
your
viewpoint,
It
be.
must
I
not
say
be
it
the
Commission's responsibility alone,
but yours as
all
well, to see to it that
unworthy representatives ot1
the business
field.
/
<•
are
!
removed from the
•;:?•/^
-t
We all know that, like the
with the weak link,
chain
the securities
public,"
respectable as its
most disreputable representatives.*1offering price of the security is
If sharp and abusive practices are,
leing stabilized during the dis¬
engaged in by your members, not
tribution period, this fact should
not only whether the company is
only the reputation of the crookedbe noted as well as its significance.
making money at the present time
salesman is involved) > buftthr rep*Lastly, I would refer to the
but also whether it has a favorable
UtaUoh>©;£t^
;
statements concerning the pro¬
history1 of
successful operation
: For at'leastf
posed use to be made by the is¬
over an extended period
and its
die Commission has taken the*;
suer
of the proceeds from the
present earning position is not
view that, because of certain in¬
offering, so that the investor may
merely a fortuitous circumstance.
herent characteristics in the se¬
know whether his money will be
The past earning record, how¬
curities business, special obliga- ,
spent upon new financing and
tions are owed by dealers to their
ever, is again only a part of the further development of the en¬
customers/ The dealer, by holding ,
story. The investor should know
terprise or utilized for the pay¬
limself out to be a person skilled
the background of that record so ment of
past obligations. If the
that he will be able to judge
in security and investment mat-,
offering is made: on behalf of
whether there is reasonable prob¬
ers,
cultivates« his customer's
selling stockholders, the investor
ability of its continuance.
By should be advised of the impli¬ rust and confidence. From, this
turning to that part of the pro¬ cations of a bail out, if such may confidential relationship rises an ,
:mplied representation that::he;.¥
spectus covering the history of the be inferred.
business he will receive some as¬
will deal fairly with his customer. .
The foregoing represents but a
sistance on this score. There he
The Commission's conclusion in /
brief review of the elementary
his respect was affirmed by the
may learn what part of the earn¬ factors concerning a security of¬
ings record was based on ordi¬ fering; in which I believe every United- States Court of Appeals /
nary
peace-time production as investor is or ought to be vitally for this Circuit in the case against ;
contrasted with war-time opera¬
Charles Hughes & Co.*
In his /
interested. As
entailed in the offering and dis¬
tribution
of the
security.
you
If the
appreciate, it
other extraordinary con¬ constitutes
merely a skeleton out¬
He will also find infor¬ line of such factors and the ap¬
mation concerning the company's
tion^
or
ditions.
and/structure; the
organization
proach which I would take, if I
business, in the eyes of the
is often only as
dpihion/ Judge Clark
said that in
propounding this theory, the Commission had
"correctly interpreted
is responsibilities to stop ¥ *
abusive practices, in the sale of
securities" Nbwr if a dealer can
tential purchasing customer;
ie said to have.this, obligation to
Place Yourself In Customer's
deal, fairly with, his customer, in
principal. transactions}., certainly a
Position
iiroker- acting as? his customer's
I When you sit down with your
customer, try to place yourself in agent, and occupying, a. fiduciary
his position or,; in other words, relationship vtd. hint: owes at Ihe
put yourself on his side of the Very least * a duty, to .deal fairly
myself were; pxplaintog the .con*
nature and* diversification'? of its tents of thd
prospectus rtoA po¬
activities,
plaiits
source
of its
facilities,.' its
description
a
and
other
of materials,
the nature of
in which
distributed, its proposed
its products, the manner
profit; and who is primarily con¬ they are
cerned with inside "tips" rather activities
and the extent of com¬
same field. With a
of these, factors,- he
investments. petition in the
knowledge
:
;
/
:
Z
.
f:
/
L
of the1 table;: * By trying; to think from ^ith/ him;/ •
profit¬ his point of
If you and: your compatriots
view, you will: be
ably in the future.
sure tor offer: him only what is Will recognize and strictly adhere
After discussing the history of suitable for his portfolio. It might !o the obligation of fair dealing
the business, I would turn to that be well, at that time;; to ask your¬ which each of you owes to his cus- /
omers^ you Will perform a public >
portion of the prospectus covering self these* questions: What type
the management and control of of security would I want if I were service^ for investors, greatly eniance -the standing of your frain. this- fellow's shoes?.
the issuer.
If the company has
And; ; is
ernity and, incidentally, lighten Z
enjoyed a favorable record of :thig particular/security the one
which I. would buy under the beyond measure the administra- X
earnings of a business; a general earnings, it is important for the
ive and enforcement burden now
interest if the security is a com¬ investor to know whether the offi¬ ;same circumstances? <- it'
If such a procedure were fol¬ borne by;; the; Commission.Mi Wi
mon stock and a restricted interest
cers and directors who
success¬
if it is a preferred stock, a note fully guided the business in the lowed by brokers and dealers in
^*19a*F (2d) 434,(C.C.A. 2.1943)^
or a bond.
(2) A persons who in- past are to continue to- direct it offering to customers securities
Basic Principles
the material facts ! When sitting down with a po¬
Concerning almost any security, of¬ tential investor. I believe that you,
fering can be digested: in a pro¬ as customers' brokers, might well
spectus of. not/ more than; .20 keep in mind two basic principles
printed page s. Within recent which should be made clear to
inbnths you have seen examples him: (1) The purchase of a secur¬
Cf this type" where a few large
ity is the purchase of a general or
corporations with extensive hold¬ restricted interest in the future
0. general rule
or
since that time and
no-doubt 1; vests. in
may make; some estimate?
issuer's ability to operate
,
'
a
security puts money at
in the future.
If a successful and
which afO subject to the prospec¬
ikLdon^2t^S.; t68?(1944)^
Number 4564
Volume 165
Si
THE COMMERCIAL & FINANCIAL CHRONICLE
Securities
■■Xm
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Now
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in
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Registration
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delphia. Proceeds—For additional machinery, working
capital and other corporate purposes.
($1 par) common stock.
Underwriters—Herrick, Waddell & Co., Inc., and First
American Colortype Co., Clifton, N. J,
Colony Corp.
Offering—To be offered publicly. at $5
a share.
Aug. 12 filed 30,000 shares ($100 par) cumulative pre-*
Proceeds—Company will receive proceeds from
the sale of 68,880 shares and four
ferred stock.
Underwriter—White, Weld & Co. Price
selling stockholders
the proceeds from the sale of 63,660 shares.
by amendment Proceeds—Net proceeds initially will
Company
also will receive proceeds tfrom the sale of 20*000 war- '' be added to general funds, however, the company antici¬
rants for common stock to underwriters at an .aggregate
pates it will use the funds for its building and expansion
price of $200.
Of the net proceeds ($292,940) $50,000
program. Offering date indefinite
will be used to pay. current bank loans; about $20,000
American Locomotive Co., New York
will be used for,machinery and equipment, and the remainder for working capital,
July 18 filed 100,000 shares each of $100 par prior pre¬
3,
■ ' ';£
of common will be purchased by ##
Price—Public offering prices by amend¬
Proceeds—Net proceeds will be used to retire all
Unexchanged shares of $6 prior stock and to redeem it#
outstanding 7% preferred stock.
1
'
underwriters.
ment.
George Eastwood, President, in letter to stockholders,
Dec. 22 said "we have
come to the conclusion it
not be necessary to issue
any additional shares of com¬
mon stock" as part of
company's refinancing plan. I
,
Artcraft
ferred stock and
$100^ par convertible
second preferred
burger & Hano, Philadelphia. Price—$25.50 a preferred
share and $12 a common share.
funds, will be used to redeem $20,000,000 of 7%
Proceeds—Company w£U
cumulative preferred stock at*$115 a share plus accrued r, jreceiye proceeds
front^the;^salelpf all of athe preferred;
dividends. Indefinitely postponed.
and 100,00 shares of common. The
remaining .50,00#
due
other
fered publicly. The common shares will be issuable upon
the exercise of stock purchase warrants for purchase of
common stock at $2 a share above the bid
price of such
common on the effective date of the registration. Com¬
March 30 filed 2,343,105 shares of common (par $5) plus
an additional number determinable only after the re¬
pany will sell warrants, for 25,000 common shares to .the
underwriters at 10 cents a warrant. The remaining war¬
sults of competitive bidding are known.
Underwriters—j
To be filed by amendment.
Probable bidders include
rants will be sold to officers and employees of the com¬
Dillon, Read & Co. Inc., White Weld & Co., and Shields
& Co. (jointly), and W. C. Langley & Co. and The
First Boston Corp/ (Jointly). Offering—Price to public
by amendment. Jan. 23, company filed with the SEC
use
$1,025,000 of proceeds of debs, for payment of an
Indebtedness to Bankers Trust Co., New York. Balance,
will be added to working capital.
An application is
expected to be filed shortly withdrawing statement from
the issuance of
Air Lanes,
Holding Co. for each 20
Community outstanding.
" ,r'
of
Oct. 9 (letter of notification) 15,000 shares each of pre¬
ferred and common.
Offering price, $10 a preferred
common
C. Adams & Co., Boston. To complete plant and equip¬
ment and to provide working: capital. \
offered^ tor subscription to
,
Inc., New York
For retirement of indebtedness and for working
| capital.
#
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-
Mechanical
School
•
Inc., New
(2/4)ft
I Jan. 28
(letter of notification) 300 shares of 6% nonstocfc~(par $100). No underwrit¬
ing.; Price, $100:per^share;: For purchase of materials
for aviation school^ including
pickrup truck, office furSuitura, aircraft, handtools/power machinery and shop
supplies. ""
convertible preferred
"
"
#
Alban Health Foods
Jan. 28
stock
•
.
Airvet Aviation
York*
•
-
per
transportation arid marketing facilities. Offering tempor¬
arily postponed.
Bachmann
(
•
& Co. Proceedsr^-Wm go-to selling stockholders.
Pricp
by amendment.; Offering date indefinite,
Basic Food
Materials, Inc., Cleveland, Ohio
(letter of notification) 5,000 shares (no par)
common, to be offered to stockholders; 295 shares* ug
($100 par) preferred, 4,750 shares (no par) common an4
$50,000 10-year 5% debenture notes, all to be offered to
the public. Prices—$5-per common share to
stockholder#;
$10 per common share to public, $100 per preferred sharo
and debentures at face.
No underwriting.'^ To Increase
Nov. 26
•
^letter of notification) 20,000 shares of
common
(par 100).
,
$5 per share. Balance of 9,300 unsold are to be. offered
concurrently with present 20,000 shares.
working capital.
•
Arapahoe Basin, Inc., Denver, Colo.
?
i
^
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'
lnc^ New Y»rR. ; gi, gf'J
Sept. 27 filed 180,000 shares ($2J0 par) common.
writer — White, Weld & Co., New Yoric. Price — 'By
Junendment. Proceeds—Of the total, 140,000 shares ar#
being sold by St. Regis Baper Co» New York, and Hip
remaining 40,000 shares are being sold by I. Rogosbi,
President of Beaunit Mills, Inc.
Jan. 21
(letter of notification) 46,658 shares of common
35,759 shares of 6% cumulative preferred. Price-r
$1 per share for each.
No underwriting.
To construct
and
unit consisting of 5 shares of preferred and one
No underwriting. For erection of new
bakery.
American Broadcasting Co., Inc., N. Y.
June 27 filed 950,000 shares ($1 par) common
Arkansas Western Gas Co.
June
81.
The remainder will be offered publicly. Price
by
amendment. Proceeds—To prepay notes payable to ac¬
quire radio station WXYZ^ to construct broadcast transjnitter for station KGO at San Francisco and for
working
capital.
16,197 shares of
stock (par $5).
Co. Inc., and E. H.
Rollins & Sons; Inc. Offering—Stock will be offered to
the public. Price by amendment.
Shares are being sold
by six stockholders.
common
Underwriters—Rauscher, Pierce &
•
Benson
(N. F.)
Optical Co., Minneapolis, Minn.
Jan. 21 (letter of notification) 1,500 shares
"stock,
Price, $100 a share. No
equipment, establishment of
expansion of business.
July 12 filed 350,000 shares (no par) cumulative first
preference stock, Series A; 300,000 shares of convertible
second preference stock, Series
A, and 1,355,240 shares
common stock
(par $5). Underwriter—Kuhn, Loeb &
Co,, New York.
Offering—The 350,000 shares of first
preference stock will be offered in exchange to holders
of its 532,996 shares of $6 cumulative convertible
prior
preferred stock at the rate of 1.4 shares of first prefer¬
stock for each share of $6 prior preferred. Shares
of first preference not issued in exchange will be sold
to underwriters. The 300,000 shares of second preference
stock will be offered publicly. The 1,355,240 shares of
of B preferredi
underwriting.
Armour and Co., Chicago
stock.
Underwriter—Dillon, Read & Co. Inc., New York. Offer¬
ing—A maximum of 100,000 shares may be sold by com¬
pany to persons, firms, or corporations with whom the
corporation had network affiliation agreements on Match
5 filed
r
,
■
Bedunit Mills.
winter sports resort.
common.
Uxbridge Worsted Corp.
Nov. 27 filed 45,000 shares of 4%
preferred stock (par
$100)-and 200,000 shares of common stock; (par $l)u
Underwriters—Kidder^ Peabody & Co. and Bear, Steam#
Bakery, Inc., Norwood, Ohio
(letter of notification) 1,000 shares ($100 par)
6% preferred and 200 shares (no par) common. Price—
$505
shares.
No underwriting. Price, $5 per share.
Proceeds will be added to working capital.
Company
has sold 15,700 shares of
25,000. filed Aug. 23, 1946 at
Jan. 20
share of
(2/4)
i
A; at $1051 a Vsha*5ft.
ft
•
ft
The balance will be added to general funds for corporate
purposes including repayment of obligations, acquisition
of additional production, and expansion of refining^
Offering In-
,
share
one
—A maxirnum^^ of $15,540,000 of 4he net
proceeds will tod
applied to redemption of the company's cumulative pre»ferred stock, convertible 4% Series
Prlcef^By
Jan. 20 (letter of notification) 1,000 shares ($100 par) ,5% V
amendment.
Proceeds—Working capital.
cumulative preferred and1,400 sharesi($l par) common :
definitely postponed.
j
V • |
to be sold in units of five shares of preferredand seven ,
•
shares of common;, v prlae—$500 per unit. -No under¬
Apollo Records,
the basis of
on
preference stock'for each nine shares held.
Unsub- <
scribed shares will be sold to the underwriters who will
reoffer it to the public.
Price by amendment. Proceed#
stockholders la¬
common
Underwriter—Smith, Barney & Co., New
Offering—Stock will be offered for subscription
to common stockholders
the ratio of une additional Share for each two shares
held. Unsubscribed shares will be offered ior
subscrip¬
tion to officers ahd-directors of the company
.
Airport Advertising, Inc., Washington, D. C.
writing.
York.
'
(
,
a
Philadelphia
erence stock.
new
American Zinc, Lead & Smelting Do., St. Louis
Sept. 6 filed 336,550-shares coxnmon stock (par $1), Underwriting—No underwriting. Offering—Stock will be
common share.
If offerings are made
Maine, they will be made by Frederick
in the State' of
share of common stock of the
Water Works
Inc., Portland, Me.
.share and 1 cent
one
Atlantic Refining Co.,
Oct. 29 filed 293,000 shares ($100 par) cumulative
pref¬
$2,200,000 to cover the call premium on the preferred
stock; increase in terms to Community Water Service
Co. and Ohio Cities Water
Corp. preferred stock to
$180 and $159 a share; respectively, plus accrued divi¬
dends at 7% annually from Nov.
1, 1945, compared with
$135 and $120 a share offered in the original plan; and
Agau Mining Co., Carson City, Nev.
#
Offering date indefinite.)
.
of
Jan. 20 (letter of notification) 295,000 shares of common.
Price—$1 a share. Underwriters by later notification. For
mine exploration and development.
being sold by three. stockholdera.
Estimated net; proceeds, of; $2,300,000 will be
used; toy
the company to pay off bank notes of about
$1,100,00$
aiid to purchase additional
machinery; arid equipment
in the amount .of $1,200,000.
amendments to its recapitalization plan as suggested by
the Commission.
These provide for escrowing the sum
registration.
:♦
shares of common are
American Water Works Co., Inc., N. Y.
pany. Price—Debentures at 98. Proceeds^-Company will
!
|
convertible preferred and
150,000 shares ($1 par) com¬
mon. It also covers shares of
common reserved for issu¬
ance upon conversion of
preferred. Underwriter—New-
stock. Underwriting—Union Securities Corp., New York;
Price by amendment.
Proceeds—Net proceeds, with
Aug. 22 filed $1,500,000 of 5% sinking fund debentures,
1961, and 50,000- shares ($1 par) common stock.
«vUnderwriterr^Ames;; Emerichf & Co., Inc., and Dempsey
& Co., Chicago.
Offering—The debentures will be of¬
Hosiery Co., Philadelphia
Sept. 27 filed 53,648 shares ($25 par) 4%% cumulative
,,
Aerovox Corp., Bedford, Mass,
.
scribed .shares
132,740 shares
,
■
is-
.
'vftft;
T('J
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A'""'
INDICATES ADDITIONS SINCE PREVIOUS ISSUE
Acme Electric Corp., Cuba, N. Y.
June 26 filed
637,
;
For
new
locations and general
new
'
'
Berbiglia,lnc., Kansas City, Mo.
Sept. 12
(letter of notification)
41,000
cumulative cbnvertible $6 par preferred.
$6
a
shares
of
Offeriiig
5%
price^
share. Underwriter—Estes, Snyder & Co., Topeka,
Kans. To pay outstanding indebtedness end expenses and
to open five additional stores in Kansas
City, Mo. Offer¬
ing postponed indefinitely.
<v
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.
ence
; American
Building Corp.,
Dover,
Del.
Nov. 5
(letter of notification) 20,000 shares .each ($10
•par) 5% cumulative preferred and ho par common, Price,
$10 a unit consisting of one share of preferred and one
share of common. Underwriter—E. M. Fitch & Co., Phfla-
offered for subscription to common
stockholders of the company in the ratio of one-third
of a new share for each common share held.
Unsub¬
common
will
be
Berg Plastics & Die, Casting Co., Inc. (2/3-7
Oct. 31 (letter of notification) 75,000 shares (10c par|
t-
icomhiori.
Price—?$4 a share. Underwriter—E. F. Gil^espie & Co., Inc. Proceeds—For acquisition of machinery,
tools and raw materials, and for working capital.
(Continued
on page
638)
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Corporate and Public Financing
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SPECIALISTS IN—
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United States Government Securities
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Securities
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C.J. DEVINE
FIRST BOSTON
CORPORATION
New York
CO.
.
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Kidder, Peabody 8f Co.
Founded 1865
48 WALL
Pittsburgh
Chicago
Chicago and other cities
&
of
Corporate and Municipal
Bonds
WsiMXThe IS
Boston
.
*
ST., NEW YORK 5, N. Y.
Boston
•
Cincinnati
☆
Philadelphia
•
St. Louis
•
HAnover 2-2727
Pittsburgh
•
Members
Cleveland
New York
a
•
San Francisco
☆
,
of the New York and Boston Stock Exchanges
Boston
Philadelphia
Chicago
THE COMMERCIAL & FINANCIAL CHRONICLE
638
Proceeds—Net proceeds, together with other funds/Will
be used to pay the company's 2% subordinated note in
the principal amount of $5,268,750 and accrued Interest.
a.
NEW ISSUE CALENDAR
Bowman
($1 par) common; .Under¬
writer—Van Alstyne, Noel & Co., New York. Price—By
amendment. Proceeds—Stock is being sold
by share¬
February 1, 1947
v?;..:.*;/;
Berg Plastics & Die Casting
Colonial Sand & Stone
.
Braunsteln
|February 3, 1947 ,rA
^
,
holders who will
—Common
U.
Graybar Electric Co.-.™.
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stock. Underwriter
New York. Price
Southwestern Associated Telephone Co.—Preferred
: f\
y
— C.
K. Pistell & Co., Inc*
share for preferred and $11
0 share for common. Proceeds—7,000 preferred shares
are being sold by company, the remaining 5,500 pre¬
ferred shares and all of the common are ^eing sold by
common
—^—Common
Pittsburgh Coal & Chemical Co.^-wi—CommoH
Signature Recording Corp.—Capital Stock
%
receive-proceeds.?; ^
(Harry), Inc., Wilmington, Bel.
Sept. 25 filed 12,500 shares ($25 par) 4% % cumulative
convertible preferred stock and 50,000 shares (200 par)
Co., Inc.——.Common
{JordomFoods, Inc.—;
\
Gum, Inc., Philadelphia
Sept. 27 filed 268,875 shares
Conditional Sales Agreement
Eric RR.
150,000 shares ($4 par) 30c cumulative
convertible preferred stock, convertible into common
stock in the ratio initially of 1 % shares of common for
each- share of preferred. Underwriter—Floyd D. Cerf
Co., Inc., Chicago. Offering—Company offered 59,585%
shares for subscription to present common stockholders
of record Aug. 6 at $4.50 a share in the ratio of one share
of preferred for each share of common held. Rights
expired Aug., 20. Stockholders subscribed for 735 shares.
The offering to common stockholders excluded the two
principal stockholders who waived their rights to sub¬
scribe. The remaining c 90,414%
shares and 58,850%
shares not subscribed ? to by common stockholders .will
be offered to the public through underwriters. Price—$5
Offering date indefinite.
January (30, 1947
t
—
$25
a
of Federal taxes; $250,000 for payment of Lincoln-RFC
loan; $50,000 as a loan to Palmer Brothers Engines, Inc*
a subsidiary; balance for purchase of machinery and
equipment and working capital. •
/
present stockholders. Net proceeds to the company, es¬
timated at $147,500, will be used to prepay to the ex¬
tent possible outstanding $149,300 mortgage liabilities.
Inc.—Preferred
Airvet Aviation Mechanical School
Apollo Records, Inc
—
Common
Chicago & St. Louis RR.—Eqpt. Tr. Ctfs.
—
New York
New York State
,
Offering date indefinite.
Electric & Gas Corp.
§~ Noon I (EST)—
—
Brooklyn
Preferred
-
Two to Six Inc.—;. f———
Common
February 5, 1947
.—Bonds
Norwich & Worcester RR.^.———
Capital Stk,
—Equip. Trust Ctfs.
Common
"
•
(letter of notification) 45,509 shares ($2 par)
Price—$8 a. share. For pro rata subscription
by commdn stockholders: Southern Natural Gas Co; will *.
purchase any unsubscribed shares for investment.
For
additional working capital.
15
common.;
•
Corp., Cleveland, Ohio
Blumenthal
(Sidney)
& Co. Inc., New York
Aug. 30 filed 119,786 shares^ (no par)
and sub¬
shares thereof.
* common
scription warrants relating to 30,000
Underwriting — None. Proceeds—For
Continental
Capital Silver-Lead Mining Co., Wallace, Idaho
reimbursement
Fidelity Investment Co.
of mining properties.
Carscor Porcupine Gold
Ontario
;
.
Car-na-var
Corp.
;
(letter of notification) 132,500 shares ($1 par)
common and 35,000 warrants for purchase of common
one year after present public offering.
Price—$2 a com¬
mon
share, one cent a warrant.
Underwriter—L. D.
Sherman & Co., New York. For working capital.
Nov.
4
*
Ifiled
.150,000: shares;
writers—Aronson, Hall & Co. Price $8.25 per share.
Proceeds—To repay demand loans and for general funds.
(Originally company filed for 80,000 preferred shares
par $25 and 350,000 common shares.)
^
Aug.
2
I* City, N. Y.
Crawford Clothes, Inc., L.
filed
9
Aug.
For development
300,000
par)
($5
shares
common
Mines, Ltd., of Toronto,
' V-
1'
*
!
*<£
....
_...
June 24 filed400,008 shares of common stock.
Under¬
writer—No underwriters.
Offering—To the public at
$1 a share in Canadian funds. Proceeds—For a variety
,
,
Cristina Mines, Inc., New York (1/31). &>'.
.
Dec. 9
in connection with exploration, sinking of
shafts, diamond drilling and working capital.
redemption on Oct. 1 of remaining preferred shares. Al¬
though it was proposed to offer the stock for subscrip¬
tion to stockholders at $10 per share, company on Sept
20 decided to withhold action at this time.
Central Boya
(letter of notification) 270,000 shares of common
explorations purchase of machinery, working
•
Co., Inc., Fort Wayne, Ind.
(no par)
rate of
one
shares will
capital^etc.
be
sold to underwriters.
Milk Co., Inc., Binghamton,
23
Unsubscribed
preferred stock of company now
Price by amend¬
outstanding.
i>
ment.
Book-of-the-month
Proeeeds—Working capital, etc. Offering indefin¬
itely postponed.
Club, Inc., New York
Oct. 28 filed 300,000; shares ($1.25 par) capital stock.
Underwriter—Eastman, Dillon & Co., New York. Offer¬
ings—Of the total,? the company is selling 100,000 shares
/and six stockholders, including Harry Scherman, Presi¬
dent, and Meredith Wood, Vice-President,
the
remaining
200,000
Price
shares.
by
are
selling
amendment
Proceeds—Company will use its net proceeds for work¬
ing capital to be used for expansion of inventories of
paper
Boston Store of
writer—Auchincloss,
Sept. 10 filed 30,000 shares
Parker
&
Redpath,
selling agent. Price—By amendment. Proceeds—Net pro¬
ceeds will be used as capital for company's subsidiaries
Washington,
by
engaged in the small loan or
($50 par)
off
...
$550,000 loan to the Continental Bank & Trust Co.
of New York; purchase equipment and development ex¬
penses of Bermuda route. The balance will be used to in¬
crease working capital.
a
Cyprus Mines, Ltd.,
Offering—Preferred
& Co. and Stroud &
will
have
Co., Inc.
non-detachable
purchase warrants for purchase of 30,000 shares of
stock of the total common,
stock
com¬
375,000 shares will be
offered .for* sale for cash. 30,000 shares are reserved fox
Issuance upon exercise of warrants attached to preferred
v*nd 95,000 Shares are reserved for issuance
of
outstanding, warrants.
(letter of notification) 10,904 shares ($10 par)
Price, $10 a share.
No underwriting.
For
Price—By
upon exer¬
amendment
Colonial Sand & StoneCo., Inc., N. Y.
filed
balance will be added to working capital.
Hemphill, Noyes CS. Co.
Members New York Stock
NEW YORK
PHILADELPHIA
-
ALBANY
PITTSBURGH
Exchange
CHICAGO
r
TRENTON
INDIANAPOLIS
WASHINGTON'
preferred stock.
Underwriters—Central Republic Co.
(Inc.), and A. C. Allyn & Co., Inc., Chicago, and E.,H.
Rollins & Sons Inc., New York. Pricc^By amendment.
Proceeds—Company will receive proceeds from the sale,
of the debentures and 2,000 shares of preferred stock.
The remaining 1,750 shares of preferred are being sold;
proceeds to
sinking-fund
bonds due 1956k and apply any balance td general cbr-|
porate funds.
Business—Manufacture of quick-Trojfceri
by a stockholder/
Company will use*• its
redeem its outstanding first mortgage 4%
a
short term bank loan.
Proceeds from the sale of
preferred, together with other funds,-will be, used to
"postponed.
'
repay the bank loan. Indefinitely
:
C^ Detroit Mlelu^
filed 70,920 shares ($1 par) common. Under¬
C. G. McDonald & Co., Detroit. Price — $5.5G
Proceeds
Stock is being sold by:
shfure^
a
Sept. 25
holders who
by
foods.
-^Detroit Typesettings^
Underwriting noiie.
writer —
Price—$100 per share. Workings capital, acquisition) of?
a- share.
land, buildings, machinery, etc.
.....
i'f
Co., Donvoiy Cello.
Aug. 20 filed 70,800 shares ($50 par) cumulative con¬
vertible preferred stock.
Underwriter—Union Securi¬
ties Corp., New York.
Price by amendment. Proceeds
—Prior to the proposed issue of preferred stock, the
company plans to call its $3 cumulative convertible pre¬
ferred stock for redemption at $55 a share plus accrued
dividends.
Funds for the redemption will be supplied
Bridgeton, N. J.
$2,500,000 3%%
canned and dehydrated
N. I.
Colorado Milling Bt Blevator
Municipal Securities
-.
shares
is sell¬
ing the remaining 125,000 shares will receive proceeds
.from these shares.
The company will use its proceeds
for payment of mortgage notes/open account indebted- r
ness and for purchase of additional equipment.
Any
Industrial, Public Utility, Railroad
and
-
will receive proceeds from the sale of 125,000
and Generoso Pope, President of company, who
Jan;?20' (letter ofnotlfieitiM
lative preferred stock (par $100).
stock (par $1).
sinking fund debentures,
1962, and 3,750 shares ($100 par) 4%% cumulative
due
(2/3-4)
250,000 shares ($1 par) common stock.
Underwriters^—Emanubl, Deetjen & Co., and Allen & Co.,
New York.1 Price—$5 per share., Proceeds-*Company
15
Deerfield Packing Corp.,
Jan. 29 filed
Colonial Packing Co., Merchantville,
UNDERWRITERS—DISTRIBUTORS—DEALERS
e
acquiring additional plants.
Aug.
V"
Underwriters—Sabiston-Hughes, Ltd., Toronto.
Offer¬
ing—Shares will be offered to the public at 75 cents a
share.
Proceeds—Net proceeds, estimated at $300,00CL
will be used for mining operations.
Colonial Poultry Farms, Inc., Pleasant Hill, Mo.
24
£
Montreal, Canada
May 31 filed 500,000 shares of common
common.
5% cumulative
personal finance business.^
amendment. Proceeds—Net proceeds will be used to pay
preferred and 500,000 shares ($1 par) common. Underwrlters-^Paul H. Davis
cise
22 filed 250,000 shares ($1 par) class A common.
Underwriter—Hodson & Co. Inc., New York, will act as
D. C. and Hornblower and Weeks, New York. Price
•
Chicago, Inc.
••
Corp., Wilmington, Del.
Jan.
Colonial Airlines, Inc., New York
Oct. 25 filed 150,000 shares ($1 par) capital stock. Under¬
Jan.
mon
Crown Capital
and other raw materials and book inventories.
Offering date indefinite.
N. '..T^
(letter of notification) $75,000 5-year 5% de¬
benture note (authorized $500,000).- To be sold privately
without underwriting, at par, about *Feb;-1./ Proceeds
will-be used for the purchase or exchange of $75,800
common.
share for each 7J/3 shares held.
Crowley's
Jan.
Under¬
writer—None.
Offering—Common shares initially will
be offered for subscription to common stockholders at
,
^
stock (par $1). Underwriter—Newkirk«& Banks, Inc.
Price-~$1 per share. Proceeds-^Propert/improvements,
of purposes
Aug. 21 filed 90,000 shares
stock.
York. Price by
amendment.
Proceeds—Go to Joseph Levy, President,
selling stockholders. Offering date indefinite. •
;
Underwriters—First Boston Corp., New
x
ferred on; April, 1, and for funds deposited in trust for
|
Continental-United Industries Co., Inc.
-
Jan. 21 (letter of notification) 1,00,000 shares of common.
Price—15 cents a share.
Underwriter—Standard Securi¬
company's treasury for funds, expended in re¬
demption of ,3,907 shares of 7%
cumulative pre-
;
Blyth & Co., Inc., and First Boston Corp.
ties Corp. and
24
(letter of notification) 1,500 shares ($100 par)
8% cumulative preferred*
Price, $100 a share. • No
underwriting.
To purchase royalty agreements and to
purchase manufacturing tools and supplies,
of
stock (no par).
bidding. Under¬
common
bid of $28.33 a share, and Harriman Ripley & Co. bid
of $24,031 a share.
Stock will again be put up for sale
when market conditions improve.
•
15,000 shares of common.
For development
Price—$10 a share. No underwriting.
of mining properties.
writers—Names by amendment.
Probable bidders in¬
clude Blyth & Co., Inc.; The First Boston Corp.; Harri¬
man Ripley & Co.
Offering—Stock is being sold by
Standard Gas and Electric Co., parent of California.
4^
Connecticut
$110 a
Mining & Milling Co., Bristol, Conn.
•
Jan, 22 (letter of notification)
„
Bixler
Jan.
Ripley & Co. and Mellon
dividend.
In¬
definitely postponed.
satisfactory.
Birmingham Gas .Co., Birmingham, Ala.
Jan.
;
a
Securities Corp. bid 100.779 for a 4.40%
May 24 filed 312,000 shares of
WJs.
basis, plus cash adjust¬
be sold to underwriters.
amendment. Proceeds—To redeem at
share, plus divs., all unexchanged old shares.
Bids Rejected—Standard Gas & Electric Co. rejected
June 25 two bids for the purchase of the stock as un¬
(Continued from page 637)
H,
Harriman
bid of 100.06 for
Stock will be sold through competitive
Hercules Steel Products Co.
U '
dividend.
a
on a share for share
ment. Shares not exchanged will
preferred,
Price by
California Oregon Power Co.
February 20, 1947
I
Union Gas Co.
ley & Co. and associates submitted
Telephone Co.,Madison,
Sept. 23 filed 16,071 shares ($100 par) $4 cumulative
preferred. Underwriters — Paine, Webber, Jackson &
Curtis and Stone & Webster Securities Corp. Offering—
Shares will be offered for exchange for $5 cumulative
r
of cumulative preferred stock
($100 par). Underwriters—To be filed by amendment
Bids Rejected—Company July.23 rejected two bids re¬
ceived for the stock.
Blyth & Co., Inc., and F. S. Mose-
| February 13, 1947
Wheeling & Lake Erie RR
.
Commonwealth
Ilay 3 filed' 70,000 shares
4.30%
February 11, 1947
New York Central RR. (noon EST)
(N. Y.)
;
share./Proceeds—^Approximately- $50,000 for payment
a
^
February 4, 1947
/
.ColumbiaAIrcraftProductslnc.
June 26 filed
Jato of offering)
Showing probable
Thursday, January 30, 19471
Boston.
•
I
will receive proceeds.
capital/
For working
Dividend Shares, Inc.,
New York
shares (250 par) capital stock/
Underwriter—Calvin Bullock, New York, selling agent
Price—Based on market price.
Proceeds—For invest¬
ment.
Business—Investments.
'
i? J
Jan.
27 filed 5,000,000
-
?
Ivj
Brooklyn, N. Y,
j i
Dec. 31 filed 5,Q00 shares ($100i>ar) 5% non^cumulatlvc
preferred. Underwriters—None. Offering—To be offeree
Edelbrew Brewery» Inc.,
Number 4564*
Volume 165
at par to
THE COMMERCIAL & FINANCIAL' CHRONICLE]
customer#, officer# and employees of the com*
•tit*-■'■&$£•-5^:^.jtif
••
Jan.
."'if
-
Edwards Brothers,
•
Inc.,
-'f;
Ann Arbor,
• :■
•.
Mich.
21
(letter of notification) 20,000 shares of 5%%
convertible preferred.
Price—$10 a share.«
Stock not underwritten hut to be
spld through- WatUng,
Xerclien & Co., Detroit. Of the total the company will
cumulative
refeeive proceeds from
12,739 shares and J.-W. Edwards,
g an officer of the
cfceds from
>
company, and family will receive pro-
7,261 shares.
The company will
working capital.
its pro-
use
•
i
Electric
;
sV
>
Steam
-V
.
Cleaner
Cheyy phase, lyid.
.
'
1
.
•
Manufacturing
;
and Allen &
Co.> New York^ are principal underwriters. '
Offering—Company will offer 125,OOp shares to the pub¬
lic at $6 a share and the remaining 25,000
sharps will be
sold to the principal underwriters for investment at $5
purchase the Driscoll Food Products.
Cincinnati, O., from its co-partners, John J. Driscoll and
Clarence ft. <Wolfe, and approximately $400,000 to fi¬
nance an expansion program of its new
Louisville, Ky.,
•
preferred
No underwriting.
Falk Mercantile Co., Ltd.,
Boise, Ida.
Oct, 21 f letter of uotifieatipnl 3,090 shares of 4$ % py§*
ferred/($100 pay)^ dMce^lQO/i sharer
Richard Meade Dunlevy Childs, Boise, Idaho. Proceeds
,i
td retire debentures and for expansion purposes.
'
Farquhar (A. B.) Co., York, Pa.
Sept. 28 filed 30,000* shares <$25 par) cumulative con¬
vertible preferred; 45,000 shares ($5 par) common; and
To de¬
unspecified number of common shares to permit con¬
version of the preferred. Underwriter—^troud &* Co*
'
Inc., Philadelphia. Priee--By amendment. Proceeds —
Proceeds wjllbepsed Jo teaeeni $355,350 4^4% < sinking
<
rights
will be
issued
to
employees
1, 1957, to pay off
certain contracts and ehattel mortgages of $72,000 and
$800,000 to reduce principal on outstanding bank loans.
notification)
ffsur Yoclr
shares of
*dell
common
Underwriters—Kalman A? Co., Inc., S$, Paul,
a share.
Proceeds — For improvement and
modernization program. Offering indefinitely postponed.
common.
Price—$25
Grolier Society, Inc., New York
July 2$ filed 18,5p0 shares at $4,2$ cumulative preferred
stock ($100 i>ar)« - with rndn-detachable
common-stoc^7
purchase warrants, entitling registered .holders Of shares
of the
$4*25 preferred to purchase at any time 64,750
shares of common stock at $16 a share at the ratio Of 3%,
common shareS foir each
preferred sha7a held! And 120,*
stock.
Underwriters—H.
M, Byliesby and Co., Inc.
Offering—Underwriters to
purchase from the company 18,500 shares of preferred
and 20,000 shares of common; and from Fred p.
Murphy
and j, c, Graham, jr., 100,000 shares of issued and out¬
common, prices, preferred $100 a
$14 a share. Proceeds—To retire $6
preferred,
poned.
pay
*
Gulf
^
V
notes, discharge
V"
-
•
•"*
a
-
share;
,
stock.
.stock and
one
Underwriters—Herrick, Wad-
unit consisting of one share of class A
share of common stock.
Proceeds—$201,-
0Q0 for retirement of 2,010 shares ($100 par) preferred
Inc.,
.
Hammond
Aug. 5 filed 60,000 shares ($15 par) cumulative preferred
Underwriters—Eastman, Dillon & Co. Price by
amendment.
Proceeds—To be used to redeem 15-year
3%% sinking fund debentures, due 1959; and $2.50 cum¬
ulative preferred at $53 a share.
Balance will be added
to working capital.
Temporarily postponed.
■'••
Foreman
•
••
"
••
'■
'
'V
...
,
4".'. •***
V
•
•
.
Fabrics Corp., |fOW York
Hartfield Stores,
July 29 filed 110,000 shares ($1 par) common stock, all
outstanding. Underwriters—Cohu & Torrey, Price by
June
Fresh Dry Foods, Inc., Columbia, S. C.
Aug. 30 filed 450,000 shares (100 par) common. Under¬
writer—Newkirk & Banks, Inc. Offering—Of the total
company is selling 350,000 shares and two stockholders,
Roland E. Fulmer and Louis H. Newkirk, Jr., are selling
the remaining 100^)00 shares, Price—$6 a share. Proceeds
—-For purchase of sweet potatoes, plant expansion, addi¬
tional storage facilities, research and development work
working capital.
Offering date indefinite,
27
filed
Inc., Los Angeles
100,000 shares
15 filed 120,020 shares
($1 par) common.
Under¬
writers—James S. Borck,
Bridgeport, Conn.; George E.
.
-
1
Drake, Pittsburgh, Pa.; lYjlliapi E. Stanwood, Rostop;
ar(d Seaboard Allied Milling Corp., also pf Rpston. Offeringrr-rOf the totjal, $hC;Cpmpauy wih pffer 45,020 sMrcs
to pffjeers and employees of
4he company for suhscriptioh at $8.59 a Share. • The balance of 75,,000 shares will
be offered fpr subscription at $8.59 a Share tp poipmph
Glensder Textile Corp., New York
stockholders on the basis of one-fourth pf a pew com¬
Aiig, 28 filed 355,000 shares ($1 par) common^
WWd*
mon share for pach share held and
tp holders of certify
55,009 shares are reserved for issuance upon the e*er-?'
cates for preferred,. Class A And Clas^ 3 stpeks Pn tho
else of stock purchase: wairahts, ,u®derwriter-— yan
basis of one-fourth of a hew " comnxon
share for each
Alstyne, Noel & Co. Offering—The 300,000 shares are
Issued and
outstanding.and being sold for the account
ofrCertajn stockholders.
common
^
10 eents
The subscription offer will expire
Feb. 28. Unsubscribed
shares will be sold to underwriters at $8 a share, The
company said the underwriters do not presently intend
share.. Proceeds^-Proceeds will be used to pay a portion
Glen Industrlea lnc., Milwaukee, Wis,
01 the costs of
constructingnew bakeries in Boston*
Jiily 31 filed 50,000 shares of $1,25 cuiuulative convert!^ ;
Worcester, Mass.; Cohoes, N. Y.; and Providence, R. I,
ble preferred stock series A
($20 par) and 150,000 shares
Business—Baking business.
(10c par) common, all issued and
outstanding and being
sold by eight,
selling stockholders, Underwriters—Van
Health Institute, Inc., Hot Springs, N. Mex,
Alstyne Noel & Co. Price by amendment. Proceeds—
Dep. lx6 filed 50,000 shares ($10 par) ,5^% cumulative
To selling stockholders.
Offering temporarily postponed.
Prior^preferred nnd( 40,000 Shares >($19 paf)';cpmmonf'
Underwriting—None. Offering—All preferred and com¬
# f- C^olconda
Mines, Inc., Denver, Colo.
mpn^^ will be offered; publicly. /Price—$10.15 a pre¬
Jan^ 27 (letter of notification) 299,000 shares ($1 par)
ferred share and $10 a common share. Proceeds^Procapital stock.
Price—$1 a share. No underwriting for
ceeds will be used to build and
equip hotel and health
mine
development,
facilities and to acquire a mineral water
supply.
.
Illinois fewer Co., Decatur, III.
,
Probable bid¬
ders include Blyth & Co., Inc.; The First Boston Corp.;
W. E. Hutton & Co. Proceeds—Net proceeds from the
sale of preferred wlU ]b© used to reimburse the com¬
pany's treasury for construction expenditures. Net pro¬
ceeds from the sale of common will be applied for re¬
demption of 5% cumulative convertible preferred stock
not converted into common prior to the redemption
date; The balance will be: added/ toi treasury funds.
Company has asked the SEC to defer action on its fi¬
nancing program because of present market conditions.
•
International
Pigeon Fanciers,
p.
JgU; 29 (letter of notification) 109 shares ($10 par) pom* /
mon and 600 share# ($5Q par) preferred.
Price^$10 a
Congress of
Washington,
share and $50
common
a
No under¬
preferred share.
writing.' For normal business operations,
y
International Pres$ <;o., lnc„ New York
:
Aug. 28 filed 140,000 shares pf common stock (par $1),
Underwriter—Otis & Co. Offering—-Pricp $10 per share,
Proceeds-—Selling stockholders will receive proceeds,
QgeriPli,
e
v
;
Interstate Mining Corp., Carson City,
.
Nev.
Jan. 24
(letter pf notification) 65,000 shares of capital
stock. Price, $1 a share.
No underwriting.
For minq
and null equipment and for'pperatipg expenses.
>»..
Kaiser-Frazer Corp., Willow Gun, Mich,
-
;
,
„
Jan, 29 filed voting trust certificates fpr 4,750,000 shares,
($1 par) common. Offering—Exchange of voting trust
certificates for outstanding common.
The trustees under
an agreement to be dated Feb. 10 and to expire Aug. 10,
1949, will be Joseph W. Frazer and Henry J. Kaiser.
•
Keystone Custodian Funds, Inc., Boston
#
Jan, 28 filed" 400,000 shares
certificates of. participation.
($1 par) represented by
Underwriter—-The Key*
stpne Co. of Boston.
Price—Based on market price.
Proceeds—-For investment, - Business—Investments,
•
Keystone Custodian Funds, Inc., Boston
Jan.
28
filed
certificates
stone
Co.
of
of
1,000,000 shares ($1 par) represented by
participation.
Underwriter—The Key¬
Boston.
Price—Based
Proceeds—For investment.
•
on
market
price.
Business—Investments.
Kingan & Co., Inc., Indianapolis, Ind.
($199 par) 4% cumulative
Jan. 24 filed 6,564 shares
ferred
and
pre¬
174,625 shares
($10 par) common.
Under¬
writer by amendment. Price by amendment. Proceeds
—All of the securities are being offered by stockholders
proceeds.
dustry.
Business—Meat Packmg in*
r/i-///\^
Kiwago Gold Mines Ltd., Toronto, Canada
Dec. 3 filed 1,000,008 shares (no par) common.
UnderKahn, New York. Price—70 cents a share,
the underwriting discount will amount to 21 cents a
writer—Jack
share.
Proceeds—For exploration and
development of
mining prpperty and fqr administrative expenses.
•
Louisville
Jan.
Soy Products Corp., Louisville, Ky.
22
(letter of notification) 20,000 shares ($5 par)
common.
Price, $6.30 a share.
No underwriting.
For
additional working capital.
%
share into which their shares has been changed.
Comp.ahy has also issued 55,000
purchase warrants to the selling stockholders at
a share
entitling them to purchase up to Aug. 1, ■ to
make a public offering of the shares at this time but
1949, common stock of the company at $11 a share; Price :
that when
they are so offered they will be sold at the
by. amendment. Qfferfpg temporarily postponed.
market price.
The underwriting discount is 50 cents a
stock
preferred share and 2 cents a warrant.
notes and for working capital,
Jan.
'
Mining Co. Ltd., Toronto, Can*
Oct. 2 filed 3p0,000. shares
($| par) stock, Underwriter-—
Mark: Daniels
Co.* Toronto, Prlce~?40 cents a share
(Canadian Funds); ^eceeds-ijrby -tpine development.
a
Underwriter—Amos Treat & Co., New York.
To exercise options for purchase of five variety stores, to retire
who will receive
Hathaway Bakeries, Inc., Cambridge, Mass.
Glencalr
f
Co., Chicago
($1 par) common stock.
Underwriters—Van Alstyne, Noel & Co., New York, and
Johnston, Lemon & Co., Washington, D. C.
Offering—
To be offered to the public at
$8 a share. ProceedsCompany is selling 60,000 shares and stockholders are
selling 40,000 shares. The company will use its proceeds
to pay the costs of
opening additional stores and to ex¬
pand merchandise in its existing stores. Offering tem¬
porarily postponed.
amendment.
and
Instrument
Aug. 8 filed 80,000 shares ($1 par) common.
Under¬
writer: Paul H. Davies & Co.,
Chicago. Price by amend¬
ment.
Proceeds—Net proceeds will be used to rddeera
its putstanding 6% cumulative
preferred stock at an
estimated costapf? $213^358, uexclusiye of accrued divi-r
dends.
It also will use approximately $402,000 toward
the purchase of a manufacturing plant in Chicago; bal¬
ance for working
capital. Offering date indefinite.
Philadelphia'
stpck.
"•£r
Under¬
the Commission.
stock at $100 a share; remaining
proceeds, together with
other funds, will be used for production of educational
Food Fair Stores,
Rouge, La.
1,009,96$ shares (no par) commpn,
writer—None. Offering—The shares will be offered for
subscription to common stockholders of Gulf States'
parent, Engineers Public Service Co., New Yprk.
The
subscription
will
^
State# stock
for each share of Engineers common held. ;':Price~r$ll,50
a share.
Proceeds—^Purpose of offering is to carry out
a provision of dissolution
plan of Engineers approved by
a
Palp Alto, Calif,
Dec. 3 (leter of notification) 54,350 shares of cum. conv.
preferred and 50,000 common stock purchase warrants.
com*
cumulative
loan. Indefinitely post¬
States Utipties Co., Baton
Jan. 20 filed
dfrfJo., Ink, NewY9r&
,publicly at $8.10
Co., Tucspu, Ariz.; JV Earle May
Underwriters—By competitive bidding.
13,009 shares ($l j>ur)
•
films
notification) 119,500 shares of ($1 par)
capital. Price, $3 a share. No underwriting contract, how¬
ever, 55,000 shares to be issued to or through H. R, O'Neil
of Buckley Bros., Los Angeles, will be sold by one or
more of the following firms: Buckley Bros.; Durand 8*
June 17, filed 200,000 shares ($50 par) cumulative preferred stock and 966,870 shares (no par) common stock.
Griggs, Cooper & Co., St. Paul, Minn.
■
Sepf. 3 (letter of
mon
June 25, filed lQ0,000 shares ($5 par) class A stock and
300,000 shares (10 cent par) common stock, of which
200,000 shares reserved for conversion of class- A. Each
share of class A Stock is initially convertible into 2
Hollywood Colorfilm Corp., Burbank,Callf.
Oct. 16 (letter of
without
For general corporate purposes.
standing
ftind mortgage bonds, due Aug.
(2/1)
Jan. 23 (letter of notification) 14,600 shares of common
stock: (par $20).
No underwriting. Price, $20.
Sub¬
000 shares of $1 par common
an
midland Trust Cov New Yprk,
Price—$5.50
Graybar Electric Co., Inc., New York
consideration.
(2/20)]
Corp.; N. Y.
Hy-Grade Supply Co,, Oklahoma City
(letter of notification) 200,000 sharps ($1 pay)
scription
Products
(10c par) common.
Under¬
writer—Dempsey $ Co., Chicago. Price by amendment.
Proceeds—Net proceeds together with a $650,000 bank
loan will be used to repay indebtedness to the Marine
N. Mex.
•
-
i
•
Price, $1 a share.
velop mining properties.
stock, (par $25) and 150,000 shares of
common stock
(par $1). Underwriters—Van Alstyne,
Noel & Co. Proceeds—Corporation will receive the
pro- ceeds from the-issuance
of 50,000 shares of the pommon^
stock which will be used tp
increase productive capacity..
add hew lines of products arid expand, the business.*The •
remaining 100,000 shares of common stock and the pre¬
ferred shares will be sold by present stockholders.
.?
f
Mining and Milling Co., Inc., Winston,
common.
Aug, 28 filed 50,000 shares of $1,25 cumulative convert!-,
ble
■'
Grafton
Steel
Jan. 16 filed 180,000 shares
the
net proceeds to
Jan. 22
Empire Miilwork Corp., New York
T/
Proceeds^-Company will apply $350,000 of
share.
a
t.
.
Hercules
($ 1 par) common. U:nderwriters—rJohnston, Lemon & Co., Washington, D. C.,
Corp.,..
Jan. 21* (letter' ofnotificati<)n) 450 shares/no par) com¬
mon.
Price—$100 a share. ■ No underwriting. ^To fi¬
nance
manufacturing costs. - J •
\ '/X—'
,
<2/3*7)
Jan.' 14 filed 150,000 shares
plant.
ceeds for additional
i':¥irTA}'
Gordon Foods, Inc.^ Atlanta, Go*
:
pan^/Froceedr^ For cOrporated purposes Including /
and improvement of the manufacturing
pjant and machinery and equipment.
modernization
-
839
Mada Yellowknlfe Gold Mines,
Ltd., Toronto
June 7 filed 250,000 shares of capital stock (par 40c),
Undewriters—Mark Daniels & Co. Offerings-Stock will
be offered publicly in the U. S. at 40c a share (Cana¬
dian money). Proceeds^-Proceeds, estimated at $75,009,
will be used in operation of the company.
Maine Public Service Co., Preque Isle,
June 25 filed 159,000 shares
Underwriters—To
be
Me.
($10 par), capital stock.
determined
through
competitive
bidding.
Probable bidders include The First Boston
Corp.; Kidder, Peabody & Co., and Blyth & Co., Inc.
(jointly); Harriman Ripley & Co; Coffin .(& Burr and
Merrill Lynch, Pierce, Fenner & Beane. Proceeds—The
shares are being sold by Consolidated Electric and Gas
Co., parent of Maine Public Service, in .compliance with
geographic integration provisions of the Public Utility
Holding Companv Act "
(Continued on page 640)
.
f
Thursday, January 30, 19431
THE COMMERCIAL & FINANCIAL CHRONICLE
640
'
5?!';
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.•?•••.. •?:v.-
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Mass.
.
•£-'•• \j.JAi V#3r:V* ,..;>.vv.-,T •-.
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(letter of notification) $225,000 6-year* -4%%45,000 shares ($1 par) common. To be offered
initially for subscription to stockholders in units of $50 V
"of: notes and 10 shares of common to record holders of
40 shares of common. Price—$66 per unit.; No Under¬
Jan.
27
notes and
writing. To acquire additional vessel and other
ihent and to provide additional working capital.'
Michigan Gas & Elec. Co.,
equip-.
Ashland, Wis.
$3,500,000 of series A first mortgage bonds,
June 24 filed
14,000 shares ($100 par) cumulative preferred
stock and 120,000 shares ($10 par) common stocK.
Un¬
derwriters—To be determined by competitive bidding.
Probable bidders include Blyth & Co., Inc.; Kidder, Peadue 1976;
bonds and the
receive for each share
Jan.
For
Northern Engraving &
For development of oil
Underwriter—Cruttenden
Class
B
•
Miller
notification) 90,000 of$l par Class A
no par stock.
The'Class
$3 a share. No. price was stated
stock.
No underwriting. f To operate
>iV>-
&
Rhoads,
....:
j
($100 par) cumulative pre¬
Dec. 20 filed 26,000
Business—Department store.
Standard Gas & Electric Co. and conthe company's outstanding common.
by
stock.
common
to 2,000,000
Service Co.
Probable bidders in¬
use
I
June
21
85,000 shares
filed
vertible
National Aluminate Corp., Chicago
and Lee Higginson Corp.,
;
($1 par) common stock.
•
Price—Par.
purposes.
National
No
v
Tank Co., Tulsa,
i, 7
■
j't
!r
'ij-
^ "a
.
^
preferred. Underwriter—Van Alstyne*
Noel &
first pre-J
sold out¬
,
'
connection with recent
cocktail
and San
and proceeds will be used in
o
Pittsburgh
(Pa.)
Coal & Chemical CO.
(letter of notification) 20,000
(no par).
No underwriting.
Jan. 28
stock
;
•
(2/3)1
shares of common! (
It is proposed to
at the
sell the stock on the New York Stock Exchange
market.. Proceeds for working capital. :
Plastic Molded Arts,
shares ($20 par) common. Underdetermined by competitive bidding.
Probable bidders: The First Bostoh Corf).; White, Weld
& Co.; Lehman Brothers, and Blyth & Co., Inc. (jointly);
Harriman; Ripley & Co.; Kuhn, Loeb & Co., and,Smith*
Barney & Co/ (jointly).
Off ering—750,000 ; shares will
be sold by Standard Gas & Electric Co., parent, and
149,000 shares will be sold by the company. Standard's
shares comprise its entire holdings in Oklahoma■. Gas
common.
Price—By competitive bidding.
Proceeds-
writers^To
underwriting. For general
' !
f *4", ^
purchase of four Chi Chi restaurants and
lounges in Long Beach, Riverside, Palm Springs
Diego and for working capital.
Dec. 23 filed 890,000
15.(letted rif Notification)* $250,000.15-year $Vz% In¬
.notes.
?•"
/ *
Oklahoma Gas and Electric Co.
supplied by amendment.
corporate
pany
Chicago. * Price—By amend¬
National Plumbing Stores Corp., New York
come
\
Dec. 26 filed 50,000 shares (par $7.50) cumulative con¬
vertible prior preferred $2 dividend stock. Underwrite#
—Ok Brashears & Co., Los Angeles.
Price by amend¬
ment.
Proceeds—23,481 shares are being issued by com¬
$197,000 for other corporate purposes. The pro¬
from the other 3,000 shares will go to selling
stockholders. Offering temporarily postponed.
outstanding and
is being sold by shareholders. Names of the selling
stockholders and the number of shares to be sold by each
Jap.
'X
**
Pig'n Whistle Corp., San Francisco
its proceeds to redeem
Co., Inc.
ment. Proceeds—The stock is issued and
will be
■
right to Stroud & Co., Inc., Butche* & Sherrerd, and
Glover & MacGregor, Inc. .w^d.WiU; sell, same, to theit
customers at market but at not exceeding $102 per $hare
Proceeds—Will be used for working capital.
•
;
ceeds
York,
i
Philadelphia Dairy Products Co., Inc.
ance
unspecified number ($2.50 par) com¬
shares. Underwriters—First Boston Corp., New
" I '
•
Dec. 26 (letter of notification) 2,907 shares of
ferred stock. Underwriters—Stock "Will be
Price, $6.75 a share. Proceeds—Net pro¬
ceeds to the company from 62,000 shares, estimated at
$350,200, will.be applied as follows; About $111,300 for
retirement of outstanding preferred stock; $41,649 to
purchase 100% of the stock of two affiliates, and bal¬
Proceeds—Redemption of outstanding 4%% pre¬
share plus dividends. Indefinitely
postponed. '
/"i
)••.
New-York; Price—$20 $ '
of loans and to replace
working Capital expended in purchase of building frond ■
RFC and to complete construction of a building. *
the company is selling
Price by amend¬
ment.
'
Sept. 27 filed 100,000 shares ($20 par) cumulative con¬
Underwriters—Newburger & Hano, and Kobbe, Gearhart
ferred stock at $109 a
''}
^
^
share. Proceeds—For payment
June 13 filed 250,000 shares of common stock (par $1).
&
-1
Co. and G. L. Ohrstrom & Co.,
Nugent's National Stores, Inc., New York
Murphy (G. C,) Co., McKeesport, Pa.
the
Pilaris Tire & Rubber Co;, Newark, O.
sold
will
shares and also authorized the issuance of
stock. Ap¬
proximately 70.9% of the common stock is held under
a voting trust agreement of Aug.
15, 1945, which it ia
expected will be terminated upon the acquisition of the
Taylor stock.
V/r' -•
:.v'i
110,000 shares and the remaining 300,000 shares are being
by Bear, Stearns & Co. Price—By amendment.
-
Proceeds—The company
an
Stamford, Conny
present offering in exchange for the Taylor
old. preferred stock;
mon
equipment*.
change for entire outstanding capital stock of Taylor Re¬
fining Co., consisting of 8,946 shares (no par) commo:
with an underlying book value of $2,458,224 as of las
Sept. 30. At a meeting of stockholders, D^c. 23 company
authorized an increase in common stock from 1,000,00®
Offering—All shares
derwriters. Of the total common,
bids for the purchase of the stock. On Sept. 4, but the
•ale has been temporarily postponed.
.
;
912,464 shares ($2 par) common. Under¬
writers—None. Offering—Shares will be offered in ex¬
$100) 7% cumulative preferred and 6% cumulative pre¬
ferred, on a share for share basis. Only first 26,000 shares
offered in exchange will be accepted. Unexchanged new
shares and all of the common shares will be sold to un¬
of
Sept. 27 filed
other
and
machinery
Petroleum Heat & Power Co.^
shares ($100 par) 4%% cumulative
Sale Postponed—Standard Gas & Electric Co. asked for
Underwriter—Smith, Barney & Co*
drilling
purchase
preferred and 410,000 shares ($3 par) common. Under¬
writers—The First Boston Corp.
Offering—New pre¬
ferred will be offered in exchange for 39,852 shares (par
stock (no par).
Underwriters—-To be determined by competitive bidding.
Probable bidders include Blyth & Co., Inc.; Kuhn, Loeb
& Co^und Smith Barney & CO. (jointly); Harriman,
Ripley & Co.; The First Boston Corp. Offering—Shares,
56.39%
For work^-
'
Sept. 3 filed 600,000 shares of common
writer—Sabiston Hughes, Ltd., Toronto, Canada. Price-*
60 cents a share.! Proceeds—Net proceeds will be used
Northwestern Public Service Co.
June 6 filed 140,614 shares of common
owned
No underwriting.
Canada ,;J
(par $1). tfhdes*
Co., Inc. (jointly). Of the shares registered, 182,667 are
being sold by Midland Realization Co.; 54,426 by Mid¬
land Utilities Co., and 146,923 by Middle West Corp.
JMountain States Power Co,'
stitute
t
Peninsular Oil Corp., Ltd., Montreal,
clude Blyth & Co., Inc.; The First Boston Corp.; Stone
& Webster Securities Corp., and Harriman Ripley &
Underwriters—Scott & Stringfellow and Richmond, Va.
Price by amend¬
ment. .Proceeds—Net proceeds, together with a $2,500,-.
000 loan, will be used to retire $1,387,750 of mortgage
Indebtedness and the balance to reduce temporary bank
are
par)
($2
Co.
offered under competitive bidding.
.
& Co., Inc.,
loans of $4,375,000.
underwriters*
scription to stockholders.
ing capital.
-
(2/4)
Aug. 28 filed maximum of 384,016 shares of common
stock. Underwriters by amendment as shares will be
ferred stock.
Galleher
&
Public
Indiana
Northern
Inc., Richmond, Va.
Jan. 22 filed 30,000 shares
as
•; Peninsula Broadcasting
account
Price—$16 a share. Proceeds—To
selling stockholders. Offering temporarily delayed.
A stock will be sold at
the
r
Washington, D. C.
operating- capital.^ 'Undeirwriter^eTeHier
Co. withdrew
issued and outstanding and being sold for the
are
racing track.
be used' as
a
of present holders.
stock and 500 shares of Class B
for
with
Mfg. Co., La Crosse, Wis*
Aug. 29 filed 70,000 shares
Midgut Stadium, InCi, Baltimore, Md.
Jan; 20 (letter of
:
,
Dec. 30 filed
wells and for working capital.
•
new common
;
bidding. Probable bidders include Blyth & Co. and Smith,.
Barney & Co. (jointly); First Boston Corp. and Glore,
Forgan & Co. (jointly); Harriman, Ripley & Co. Bids
Invited—Bids for the purchase of the preferred stock
will be received up to noon (EST) Feb. 4 at Room 2601*
61 Broadway, New York City.
common.
Colo.
;
Palmetto Fibre Corp.,
Oct. 30 filed 150,000 shares of ($100 par) cumulative pre¬
ferred, Underwriters—To be determined by competitive *,
Co., Casper, Wyo.
(L Perry & Co., Denver,
held 8 shares of
preferred would
New York StateElectric A Gas Corp.
(letter of notification) 750,000 shares (10c par)
Price-^25 cents a share.
Underwriter-^-Jojln
17
drawn.
Co.^: Salisbury, Md.
j
original plan* but determination as to which will bq used •
Jan. 23 (letter of notification) 2,422f ^ shares ($10* par*
will be left to the SEC and the court!
Hearings on the
common,
Price, $20 a share/- To be offered for sub*
alternate plan are scheduled by the SEC for Dec. 19.
i
additional working capital.
Oil
Inc., New York
par) capital stocky
Inc.
Offering--*;
225,000 shares are outstanding and are being sold by 1Q
stockholders, and 2,500 shares are being sold by A. L.
Marlman to all salaried employees. Issue may be with^
rights to subscribe to 5 new common shares at $9 per
share. The .present ■ plan, Ooekihot^affect >the • statijs: of
% Michigan Molded Plastics, Inc., Dexter, Mich.
(letter of notification) 30,000 shares ($1 par)
Morton
67,009
.
par! for pac basis. Pie,sent
Jan. 21
No underwriting.
Pal Blade Co.,
shares (par $8). Under the
common
lower:dividend rate the -
June 28,1946 filed 227,500 shares ($1
Underwriters—F. Eberstadt & Co.,
stock which were to be received
common
a
August 16 filed ;4,000,000 shares (100 par) preference
proposed plan consolidated funded debt would be prac- C
stock.
Price—50 cents a share.
Proceeds—The com*
tically unchanged from that provided in original plan,
pany will use estimated riet proceeds of $1,473,000 for
the Association to issue $22,425,000 coll. trust bonds.
purchase of a new factory near'Punta Gorda', Fla., at
These bonds and preferred stock may be sold, subject
a Cost of about $951,928.
It will set aside $150,000 for
to an exchange offer, to the holders of present deben¬
resfcaich and development purposes and the balance wil$;
tures-oil a
prior lien, $6 no-par prior lien, 6%
preferred and $6 (no par) preferred. Of the common
stock being registered, company is selling 40,000 shares,
Middle West is selling 57,226 shares and Halsey, Stuart
& Co. Inc., New York, is selling 22,774 shares.
Proceeds
—Michigan will use net proceeds from bonds to redeem
$3,500,000 3%% series A first mortgage, bonds, due 1972,
at 106.75 and interest.
Net proceeds from sale of com¬
mon and from shares of new preferred not issued in ex*
change will be used to redeem $375,000 3&% serial de¬
bentures, due 1951, at 101.2 and interest.
It also will
redeem at 105 and accrued dividends all unexchanged
phares of prior lien and preferred stocks.
share.
(bonds
only), Bear, Stearns & Co. (stock only), First Boston
Corp., White, Weld&Ca.-Kidder, Peabody & Co. (jointly).
Offering—Bonds and common stock dre^being ..offered in
connection with
a
compromise recapitalization plan
approved by the SEC, on June 24, 1946, which among
other things provides for> the elimination of all out*
standing debentures and preferred and common stocks,
and for the issuance of $22,500,000 of bonds and 2,300,000
of new common shares. Bids for the purchase of the
company Aug, 13 were withdrawn Aug. 12.An alternate plan filed Nov. 25 with the SEC provides
for the issue of 77,625 convertible preferred shares (par .
outstanding 7%
a
Bidders may include Halsey, Stuart & Co. Inc.
at
outstanding preferred shares o£ Pacific and the 47,80(1
preferred shares of Northern Electric Co., in connection
with the proposed merger of Northwestern into Pacific.
In connection with the merger, the outstanding preferred
stocks of Pacific .and Northwestern: will be exchanged ■
share for share, with cash adjustments, for the new pre¬
ferred stock of Pacific, the surviving corporation. Offer¬
ing price—To be supplied by amendment* >
by/the
(Inc.); Merrill Lynch, Pierce, Fenner & Beane, and Ira
Haupt & Co. Offering—New preferred will be offered
on a share lor share -exchange basis to holders of its
Price—$2.50
nose -of-refinancing"
r
fund Series A bonds, and a maximum of 1,568,980 com¬
mon
shares ($5 par).
Underwriters—By amendment.
Harris, Hall & Co. $ $100) and 1,246,011
body & Co.; The First Boston Corp.;
common.
England Gas'and' ElectrlcAssoclatfoiY
July II filed $22,500,(500 20-year collateral trust sinking
Lines, Inc., Boston,
Massachusetts 'Steamship
•
>.r'•*•:• 'h;
New
-
(Continued from page 639)—
11
-
Okla.
be
Oklahoma will
Proceeds—The shares are being sold by Jay P.
Walker, President, who will receive proceeds. Business--#
Manufacture of equipment for production fields of the
petroleum industry.
for property
its
ment.
use.
Bids—Expected call for bids
Preferred, $10
Oro Yellowkitife Gold Mines
Newburgh Steel Co., Inc., Detroit
7
filed" 2,000,000
shares
Underwriter—Tellier &
Aug. 2 filed 30,000 shares of 6% cumulative convertible
preferred stock (par $10), and 30,000 common shares
($1 par).
Underwriter—Charles E. Bailey & Co., De¬
a
share. Proceeds—For
•
other corporate purposes.
N. Y.
notification), 5,528 shares of class B
Prosperity Co., Inc., Syracuse,
Jan. 23
(letter of
Price, $16 a share.
additional working capital.
,
common.
No underwriting.
For
Quebec Gold Rocks Exploration Ltd., Montreal
filed 100,000 shares (50f par) capital stocks
Underwriter—Robert B. Soden, Montreal, director of
stock. ;
Nov,' 13
Price—60 cents
and exploration and
Co., New York.
expenses
share; common, $4 a share. Proceedspreferred will be used to purchase
equipment, pay bank loans, and
Ltd., Toronto, Can.
($1 par)capital
a
Proceeds from sale of
early in February.
Jan.
Offering—Company Ifl
Herrick, Waddell; & Co., Inc.
its net
additions.
stock ($10 par|
Underwriter--
Offering thie jprefcrred-:stock^td!the^^ public,^while
common is being sold by certain stockholders.
Prices-
proceeds to prepay part of
outstanding serial notes. The balance -wU^
used
Jan. ,27 filed 139,700 shares ($1 par) common. Tinderwriter—Paul H. Davis & Co., Chicago. Price—By amend¬
Inc., New York
Aug. 27 filed 60,000 shares of preferred
and 75,000 shares of common (par 50c).
^
company.
development.
Price—500 a share. / Proceeds—For explora¬
of mining property.
,
tion and development
Pacific Power & Light Co., Portland, Ore.
Realmont Red Lake Gold Mines, Ltd., Toronto#
July 10 filed 100,000 shares ($100 par) preferred stock, r
Canadav
§ selling
Underwriters—By amendment. Probable bidders includeT
Nov. 20 filed 800,000 shares of common stock ($1 par).
15,000 shares of preferred and 15,000 shares of common.
Blyth & Co., Inc., White, Weld & Co. and Smith, Barney & |
Price—$10 a share for the preferred and $6 a share for
Co. (jointly); The First Boston Corp., W. C. Langley & Co.; > Offering Price^-$0.60 a share to: public.; Company has
the common.
$204,047 of the proceeds shall be paid to f Harriman Ripley & Co. Offering—Company proposes to !li not entered into any underwriting contract, Proceeds—
the company to discharge their indebtedness to it.
nissue the 100,000 shares of new preferred for the pur- ; Development of mining properties and exploration work.
r' "ft i',«'
L- 11* C
A
<\
troit.
Shares
are
issued and outstanding and are being
sold by Maurice Cohen and Samuel Friedman, President '
and
Secretary-Treasurer,
respectively,,: each
•••*•:• • ***$. •>.?
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THE COMMERCIAL &
:
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...v
FINANCIAL CHRONICLE
641
■Alii
p^!f|ltegal/|$h<*^^
itnon
behalf of John J.
on
Daly; President. Price at
.ywarket,^ Underwriters—Van Alstyne, Noel & Co., and.
"5 Cohu & Torrey, New York.
rv, .•-■■
Reiter-Foster
^
Oil
Corp., New York
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postponed.v
•«.
9
•'
Offering—The shares will be offered for
subscription to common stockholders of record on Jan..
will be. used to augment' capital by an
additional $300,000 and surplus by an additional
$800,000
■M for business expansion purposes.
—The proceeds,
.
(
RepublIcPIcturesCorp.,NewYorJc
Registration originally filed July 31 covered; 184,821
shares, of ;$1 cumulative cojwertiblepreferred, ($1Q par);,
and 277,231shares; (50cpar).common stock, with Sterling,;
;
;
Grace & Co.
underwriters.
Company has decided to
",'Isstie 454,465 shares of common stock; only,, which will be
as
offered for subscription to stockholders of record
Sept
6 to the extent of one share for each five held. Issue
will
:
J not be underwritten.
I
•
Rose
Jan.
>
(Paul H.)
expansion. ;
'•
28
25,000 shares ($10 par)
a share.
For business
Price—$12.50
•.
-
;
v
(Calif.) Water Works
Union Securities Corp. (jointly); Blyth &
Co., Inc. Price
y *—By competitive bidding.
Proceeds—To restore work¬
ing capital and to finance part of the cost of future
y
expansion.' Business—Water works business.
Underwriter—Paine,
Santa Chiz
Spec.
(letter
6.
(Calif.)
•
•
capital.
Jan.
•%.
:
v.
•
'?
July 17 filed 197,500 shares of
Sky Park Airport, Inc.
of notification). 53,000 shares
»
underwriting.
For
Jan. 20 filed
common
stock.; Under-
consolidation; to redeem at $105 a
share, plus accrued dividends, 10,000 outstanding shares
of 4%% cumulative preferred of Denver
Dry Goods
Co., which will then be a wholly-owned subsidiary. Any
balance will be used for corporate purposes. BusinessOperation of department store.
The company will be
organized next month by the consolidation of a prede¬
cessor corporation of the same name and
Neybar, Inc., a
subsidiary of that corporation.
Supplger (G. S.) Co;, St. Louis, Mo.
'Juanufacturing and selling phonograph records.
ment
21
*f
;
by
share.
will
a
Proceeds—From 45,000 shares
applied to working capital
be
company
Offering date indefinite.
(O.)
Oct. 25 filed
and
Edison Co.
Offering—The common shares are to be offered
The options for purchase of the 175,813 shares
of common are to be offered to
original subscribers of
the company's stock.
It also will issue dptions to em*
ployees for purchase of 69,875 shares of common. Price—
$10 a share. Proceeds—For purchase of equipment and
for working capital.
'
\
\
j
' r
j.}
I ri I [
;
*'>
^
A
^
^ '',
••
*
r
.
/<.
r
y,
^
-
Manufacturing Corp.
writers—Van
Alstyne, Noel & Co* Price by amendment.
Proceeds—Net proceeds will be applied for the
redemp¬
tion of outstanding series A convertible
preferred stock
which are not converted into common stock.
Such
>
also
will
be
used
for
additional
pro¬
manufacturing
facilities in the amount of $600,000; for additional inven¬
tory amounting to $400,000. and for additional
working
.capital. Offering temporarily postponed.;
various
($100 par) cumulative preferred.
Underwriters—To be determined by competitive bidding.
Probable bidders include The First Boston
Corp.; Halsey,
Stuart & Co. Inc. (bonds
only); Blyth & Co., Inc.; and
Smith, Barney & Co. Price to be determined by competi¬
tive bidding. Proceeds—Net
proceeds together with $4,500,000 bank loan and if necessary, the $5,000,000 to be
contributed by its parent, Cities Service Co., will be used
to redeem outstanding debt and preferred stock, involv¬
ing a payment of $56,906,590, exclusive of interest and
bank
if
Lines, Inc.
ment^
Proceeds— Offering consists of an unspecified
being sold - by the company and by
William A. Coulter, President and Director. The amounts
beiqg offered by each will be stated definitely by amend¬
number of shares
ment
and the total
number of shares presently
now
equipment and facilities expansioit
under way.
Inc.
preferred stock' ($20 par) and 50,000 shares common
stock (par $1).
Underwriters—First Colony Corp. and
Childs, Jeffries & Thorndike, Inc.
Offering—Company
is offering 75,000 shares of preferred; the 50,000 shares
of
common
are
outstanding and being sold by four in¬
own account.
Price by amendment.
Proceeds—Proceeds from the sale of the preferred stock
will be used to provide funds for a
wholly-owned sub¬
dividuals for their
sidiary, retire loans from banks and from White's Em¬
ployees Profit Sharing Trust, and for additional working
capital. Expected to file new financing plan at early date.
;;r
Tung-O Paint & Varnish Corp. of California,
Los Angeles
24
(letter of notification)
2,500 shares
•
General corporate
Two to
Jan. 28
-
(letter of notification) 14,772 shares ($5 par)
Price—$5
vide additional
:''-V
**
X
•
For promotional services and
transfer of copartnership business to company.
•
20
common.
~
:
Wilson Rubber Co., Canton, Ohio
Jan.
($10 par)
stock to be offered: at'$10" a share and 5,018 shares to
be issued to Arthur N. Taylor and Gerald J. Ellis,
derwriting.
stated
will be reduced if the offering consists of a smaller num¬
ber of shares. Company will use its proceeds estimated
at a minimum of
$6,500,000- together #ith a $7,500,000
batik 46ahf^^ toA^rd^^a^nieEft^bi its
White's Auto Stores,
13
Jan.
-
Aug. 29 filed 75,000 shares $1 cumulative convertible
Transgulf Corp., Houston, Texas
•
loans^
27 filed 1,200,000 shares
($1 par) capital' stock.
Underwriter—Dillon, Read & Co. Inc. price by aniendr
program
;
;
of
■m
■
m
to finance company's
160,000 shares of
dividends.
repayment
expenses,
'•
a
share.
No underwriting.
To pro¬
working capital.
'*'•••?>
v
'
V'
y
.
'••••'
'
'■
'
.
Wisconsin Power & Light Co., Madison, Wls*
No un¬
purposes.
MaT 21 filed 550,000 shares ($10 par)
be
Six, Inc., New York (2/4)
sold
at
competitive
common
stock
Underwriters—^By
bidding.
amendment.
(letter of notification) 40,000 shares of
Probable bidders include Merrill Lynch,
Pierce, Fenner & Beane; White, ,Weld & Co.; Glore,
Forgan & Co., and Harriman Ripley & Co. (jointly);
The Wisconsin Co., and Dillon, Read & Co.
ProceedsPart of the shares are to be sold by Middle West Corp.,
top holding company of the System, and part by pref¬
erence stockholders of North West Utilities Co., parent
common
stock
(no par).
No underwriting.
To be offered to
stockholders of. record Jan. 1 in ratio of four
shares for each share held. Bights expire March 1.
Price, $2 per share* To pay expenses, etc., of publishing
a magazine.
i present
new
of Wisconsin, who elect to sell such shares of Wisconsin
June 14 filed 80,000 shares of $1.12% cumulative
con¬
vertible preferred stock, series A
(par $20).
Under¬
ceeds
of
prdi^issoryfhotes
$32,000,000 first mortgage bonds, due 1976,
None.
publicly.
>
Nov.
195,000 shares common stock (par $1).
Underwriter—C. K, Fistell & Co., Inc.
Offering—Com¬
pany is selling 45,000 shares, and eight selling stock¬
holders are disposing of the remaining 150,000 shares.
officers of the company.
Dec. 9 filed 500,000 shares ($10 par) common and
options
to purchase 175,813 shares of common.
Underwriting—
.
^
Airlines, Ine., Seattle, Wash*
purchase of equipment and for working capital.
Co., Trenton, N. J.
(letter of notification) 30,000 shares (no par)
Price—$10 a share. Underwriter—South & Co.,
Houston. For development of oil and gas properties.
Airways, lnc.f San Antonio, Texas
f*t{
••..
Sept. 2 filed 245,000 shares ($1 par) common. Under¬
writer
Auchincloss, Parker & Redpath, Washington,
D. C. Price—$7 a share. Proceeds—Will be used fompay-
.
common.
Signature Recording Corp., New York (2/3)]
>r.»,»«-•
^ ^ y , -
^
•
West Coast
—
•
Jan.
Jan. 27 (letter of notification) 295,000 shares of capital
stock (par 250). Underwriter—Willis E. Burnside &
Co.,
Jnc. Price—$1 per share. Proceeds—General
corporate
purposes and working capital.
Business—Recording,
A
40,5,000 shares ($1-par) capital stock. Under¬
:
^
,
Toledo
an
to company's plan of
'
4
?
_
St. Louis,
(2/6)
Co., St. Louis. Price by amendment. Proceeds—To sat¬
isfy the appraisal rights of shareholders who objected
\
*
Exploration, Ltd., New York
Western Air
—
,£\;
41
,
'
>
unspecified number of shares of $4.50
cumulative preferred stock, Series
A, stated $100 a
share.
Underwriters
Union
Securities
Corp., New
York; Boettcher and Co., Denver; and G. H. Walker &
«
.
!:$§M
Verde
represents a part of the holdings of the present stock¬
holders. Indefinitely postponed.
:
initially.
Solar
*'
' 1
f
writers—Glore,^ Forgaa & Co. ) Offering—The offering
sold
yyy
*'
writer—None.
Offering—TO/ be offered privately; to
Under¬
small gropp of subscribers to the original syndicate and
Chicago. Offering — Of:" to stockholders of the Clemenceau
Mining Corp. Price—
the total, company is selling 200,000 shares and stock¬
At par.
Proceeds—^To effectuate -the -purchase agree¬
holders are selling the remaining 100,000 shares. Price)
ment with the Clemenceau Mining ;Corp. for acquiring
by amendment. Proceeds—Of net proceeds, company will!
mining properties in Arizona.
use
$1,225,000, plus a premium of $12,250, together with
j'
accrued interest, for payment of a bank loan, and
$493,500, together with accrued interest, for discharge of its
Victory Gold Mines Ltd., Montreal, Canada
10-year 6% debentures. Any balance will be added to
Nov. 13 filed 400,000 shares ($r par) capital stock. Un¬
working capital.•
;
] derwriter—None as yet. Price--25 cen|g a share. P^o-i
ceeds—For developing mining
property.
Business—"
Street & Smith Publications, Inc.
Price—$10.50.
')y
m? ?l:?;
'
*
■ -
Stone Container Corp., Chicago
operation of airport business.
7
I
-
Oct. 24 filed 300,000 shares of
($1 par) common.
writer— Hornblower & Weeks,
and Wayne Voigts for their interest in
Cruz Flying Service, which is a
flying field and
jairport, and 6,000 shares would be issued in cancellation
of partnership indebtedness.
No
••'v. iv
'
..
''
.
(letter of notification) 2,000 shares ($100 par)
Price-r$100 a share. No un¬
derwriting. For expansion purposes.
f
Wilson
Slick
I
$700,00615-year! convertibie debentures and
225,000 shares ($1 par) common.
The statement also
105,000 shares of common reserved for conversion
qf the; debentures.; Underwriter—Carver 85 Co.^ Inc.
Boston.
Price—By amendment.- Proceeds—For plant
construction, purchase of; equipment and .fortwqrking;
capital.
'
! •"
"
! " 1
5 % cumulative preferred.
Santa
•
-
Dec; 20 filed
Aug. 28 filed
Jan. 16 filed
J'l~
1
covers
(letter of notification) 2,750 shares ($100 par)
Price—$100 a share.. No underwriting.
For purchase of machinery and
equipment and other
items.
Y
*
Utah! Chemical & Carbon Co., Salt Lake City!
common.
ficly at $1 Of share, 16,000 shares will bebe offered pubommon. a the total 31,000 shares will transferred to
e«
,'
22
Swern &
Mo.
V--:
■
•
-,A'i•y.i);' >A.;
V-■;V-.y '.•."'.W-iStillwell Corp., New Orleans, La.^
par)
(no
to be offered to stockholders at $5 a share in the
one share for each three shares held.
Under¬
writer—Federal Underwriters, Inc., Dallas; and Trinity
Bond Investment Corp., Fort Worth.
For additional
Telephone Corp., and to reimburse company's treasury.
($1 par)
Alex.
(letter of notification) 30,000 shares
of
ratio
York./Price^by>mendment.;;Procee^
j&y$1,56,9,^050 demand note held by Southwestern^
parent,: General
Jan.
*
OSiftW
6
3
common
Acquiring and developing mining properties.
filed
30,000 shares ($25 par) common stock.
Underwriters^—To be determined by competitive bidding.
Probable underwriters: Kuhn, Loeb & Co., and
•\
Dec.
(no par) $2.20 cumul. preferred.
Webber, Jackson & Curtis, New
.
.
San Jose
Jan.
v
Corp., Norfolk, Va.
20) (letter of notification)
y common stock "B."
y
Jan. 13, 32,000 shares
Class A
t
Universal Corp., Dallas, Texas
D.; C<
^.V
share of. new; common
for each share owned and 1% shares of new
preferred
a.
*
:of;bu5i»essr^;;:;:'^'h*':^
;
^ Southwestern Associated Telephone Co.,:
Dallas, Tex. (2/3-4)
-amendment.
,
reserved for the converison of the preferred. Under¬
writers—Names by amendment. Price $5 per share for
preferred. Proceeds—For working capital and expansion
(letter of notification) 1,000 shares ($100 par)
5% cumulative preferred.: Price—$100 a share.
No
underwriting. To acquire hew business location.'
; -
'
for each share of common held.
Unsubscribed shares
will be offered by the
company to the public.
Price—
$30 a common share and $10 a preferred share.. Proceeds
;
Jan. 21
shares ($2 par) 50e cumulative preferred.
Underwriter-^-/
If company finds it necessary to enter an
underwriting
O agreement, the name of the underwriter will be filed by
10, 1947, in the ratio of %. of
.;•.•' •;>
Southern Hotel Supply Co., Washingtoii,
...
Dec. 12 filed 20,000 shares
($10 par) common and 50,000
«;
Public offering price of unsubscribed
>—■
shares by amendment. Proceeds-r-For expansion of
plant
facilities, and for additional working capital. Offering
Republic Indemnity Co. of America, Tucson,
Ariz.
vertible
holders for subscription at $25-a share in the ratio of
"one preferred «harer fdr each five shares of common heldi
unsubscribed shares will be sold to underwriters at saipe ;
••*
*
y.%
>J'
200,000 shares (par $1) 25c cumulative con¬
preferred and 230,000 shares of common (par
50c). Price of preferred $5 per share. Of the common
30,000 shares are reserved for the exercise of warrants
up to Jan. 15, 1950 at $3.50 per share and 200,000 are
Nov * filed
.
preferred. Underwriter—Ames, Emerich & Chrr,
InCij Chicago. Offering—To be offered to-©omtttdn stock¬
price. Price
Ul 8. Television M»nwfa«^ing *Corp., • New York
r:
con-
r
capital;
.V*1 W*--V, •
'
Manufacturlng Co., Detroit, Mich.
vertible
~
;
t
Jan. 8 (letter of notification)
105,800 shares (50c par)
common.
Price—85 cents a share.
Underwriter—The
Federal. Corp., New Yorkr Forworking
»
Soss
r
Sept 3 filed 40,000 shares ($25 par) 5% cumulative
-
y.,
United Air
Jan.
20 filed
ferred.
Lines, Inc., Chicago
Offering—For
holders in the ratio of
common
held.
Ripley
&
Co.,
!
New
one
.
.
:
to them
•
the
upon
Co;
v:
Nov. 12 filed 5,000 shares (par $100) preferred stock.
Underwriter—Rauscher, Pierce & Co. Proceeds—Will be
used in part to equip three new cafeterias, to remodel its
.
shares will be purchased
by underwriters/ Price by amendment.
Proceeds—For
general corporate purposes. The company plans to spend
about $70,000,000 for new flight equipment, new ground
facilities and communications equipment.
will "be distributed
North West Utilities
Wyatt Fruit Stores, Dallas, Texas
to common stock¬
share for each 19.5 shares of
subscription
Unsubscribed
which
dissolution of
94,773 shares ($100 par) cumulative pre¬
Underwriting—Harriman
York.
common
;
super
markets and to increase working capital.
;;
(Continued on na£e.:642)
;
*
;
0
THE COMMERCIAL &
642
Offerint
ospective Security
f
' "
.
V
}■
'•
'/,/
.
K
?-i
.
J./t/
-
1
*
Commonwealth of
expected aft offering in February in the Amer¬
market of $45,000,000 bonds to refund the 4V2s of
Jan, 28
ican
1956, with Morgafi Stanley & CO. This will
issue in this market by the Commonwealth
be the third
since Labor
Day,
•
representatives of the Chicago Transit ' Board
"will confer with Harris, Hall & Co. (Inc.), the First
Boston Corp., and Blyth &. Co., inc., Feb, 4, in New
York, on a plan for the" bankets arid assoei&teS to pur¬
chase new securities in connection with the purchase
Of the Chicago Surfriee LifieS. A total 6f about $90,000,000 iri neW securities is iriydlved.
A syndicate^ Of 140
fifrii£ has beefi formed by* the bankers, it is said.
Jan. .28,
Erie RR.
Cleveland
(Ohio)
will
•
'
'
(1/30)
Electric Illuminating Co.
be received lUritil
to
V
able
r
ririLADELFHiii
r
■
.irV';
■
nil
•
..
.
ST.
■
,'nm
'
'
Co.
(Inc.)
and
Mid¬
M
•
....
„
...
•
of about $77,000,000 bonds to retire
capital through
offering of rights to stockholders to
Wheeling & Lake Erie Ny.
The company
Probable bidder^ if -bonds
are
Inc., and Dominion
sidered
Feb.
tificates/
sold in: United. States include Hartfman Ripley &
Co.
IMi,1
.n
„
Southwestern Public Service Co.
Jan. 28 company is expected to raise new
National Lock Co.
reported city is exploring the advisability of early
outstanding higher cost debt.
•
8AN FRANCISCO
*
,
Harris Hall &
stock.
-
subscribe'to
~
-
'
a
(City of)
sale in this country
LOtfiS
n.il ■li
& Hutzler;
Hutzler.
the
Montreal
Jan. 28
PITTSBURGH
♦
'
tenders
$1,800,000 first mortgage bonds, series B, dated March 1,
1947, arid maturing March 1, 1967. fhg interest rate Will
be that named by the successful bidder. Probable bid¬
ders include Halsey, Stuart & Co. Inc.; Salomon Bros^ &
Keystone.
•
NEW YORK;
Iiimnin'r
Sealed
bidders include,.Halsey, Stuart & Co. Inc.; Salomon
additional preferred and common
CLEVELAND
.
contracted to purchase, subject
000 of short-term debenture notes and
*
•
stock.
western bahks and trust companies.
supplement cash on hand the Keystone will issue $2,500,- <
/^bIMTr 6- C o,
CHICAGO
RR.
.
On a basis of $40 a share, $7,356,080 is to
paid.
Of the total number of shares to be Sold, z
137,102 eornprise the entire holdings of the Foundation ^
rind 46,800 are for the Spriimer family account.
Key¬
stone will acquire 142,632 shares for retirement and
National Lock CO. will buy the remaining 41,270. To
t; •/•"> i)*
•
Central
Bowman* President of C&O,
at Room 745 Chrysler Bldg., New York, ori or before
noon (EST) Feb. 11.
,
.
$1,500,000.
BUFFALO
York
to be submitted to R. J.
Thcf compariy, a leased liriO tiriit in tho NeW York, NOw
approval by stockholders at a special meeting on
Feb. 21, 183,902 shares of Keystone stock from the Forest ■<* Haveri & HartfOrd RR.' System, Will TiectefvWbldS
noon
(EST) Feb. 5 at its Boston office for the sale of
Park Home Foundation and W. R. Somrtier, President
Corporate Securities
•.
(2/11)
to
State, MxJniCipM. and
BOSTON
RR.
27, keystone Steel & Wire Co. and its subsidiary,
Jan.
UitifeD StATeS GOVERNMEiit1,
5-'-.Q",rr
Central
York
of New
it
are
be
; *" *
/ •'y-tZKu*-
.
rioon
Keystone Steel & Wire Co.
National Lock Co., have
of
''V>
New
Bros.
Registration of 1,714,525 -common shares expected about
North American Co. for offering to latter
Stockholders at $15-per share Oft basis of brie share of
Cleveland for each five shares of North American.
'
«;
Chesapeake; & Ohio Ry. is inviting tenders for the sale
conditional sale agreements.
under
Feb. 17 by the
•
.
New York Chicago & St. Louis RR. (2/4)
(EST) Jan.- 30 by
Company haS issued irivitatioris for bidS id bd CPrisidefed
company in Cleveland for lowest interest at Which bid- ~
Feb. 4;fpr $1,000,000 of equipment trust certificates. The
.ders Will provide not t<y exc&ed $696,000 to firiarice:
certificates Will be dated Feb. 15, 1947, and will mature
about 80% of cost of 200 70-ton gondola cars to be built
by Bethlehem Steel Co.
The equipment is to be issued i lit 3$ ^qxial/fiftriual instalments Feb/ 19, 1948-97. Prob¬
Bids
•
•
•
Corp.; Smith, Barney & Co.; Grlore, Forgan
Co.; Halsey, Stuart & Co. Inez; Blyth & Co., Inc., and
Shields & Co. (jointly). , ' , >
■
Board
Chicago Transit
•
,
&
directors1 announced that they, are studying a
program for additional financing which will be required
to take care of. Company's construction! budget iri nCxtr
few* years. Exact form bf financing noW yet detefriiiried,but it is reported company may sell $20,000,000 riewj
bonds this year.
Probable bidders for new securities: v;
The First Boston Corp.; Halsey, Stuart & Co. Inc.; Cof¬
fin & Burr; Spencer Trask & Co.; Dillon, Read & Co. Inc.
Jari, 22
Australia,
•
First Boston
Detroit Edison Co.
•
(Continued from page 641)
•
p//-'''"r.V4.
ft
given herewith. Itenis
;
.
v.
(Only ^proopectiv€i6,r reported during the past week are
previously noted are not repeated)
'
'
s...L
'■*v
r'
^'1' '^OrV'/' '''
;vV"'
V*
■
•';
(not yet in registration);
indicate9 additions since previous issue
•
•'
Thursday, January 30, 1947
FINANCIAL CHRONICLE
Securities Corp. (jointly); The
(2/13)
has issued invitations for bids to be
13
The
for $1,680,000 in
con-*
equipment trust sCr-
certificates will mature serially-/from
"
:
w/./'c C
Sept. 1, 1947 to March 1, 1957.
;
Another Big One Ahead
Corp's 150,000 shares of $100 par
cumulative preferred stock will be
Week unless there is a last minute
common
Demand is still per¬
term rates materialize, it
is not
expected that the cost of irioriey
for intermediate and long-term
would be affected.
The
long-term market natu¬
rally takes its cue from Treas¬
ury policy and
there" have beeri
repeated assurances from gov*
ernment circles, including that
in the President's
sage,
ties
budget ines-*
that the Federal authori¬
remain committed to an
easy money
basis.
high-grade
sufficient' to sus¬
demand
While
issues has been
tain the market,
vestors
for
institutional in-*
such
There
is
no
disposition
on
their part to follow prices up.
Rather the tendency is to pull
•'••• out of the market when the tide
:
gets too strong and to sit back
and wait for prices
to slip off.
companies In particu¬
lar, have been holding to a care¬
fully prepared schedule and While
their incoming funds present a
problem,
from
an
investment
standpoint,
they
refrain
from
walking in and bidding the mar¬
ket up in order to put such funds
/ Insurance
to work.
,
/'N. Y. State Electric
r
&
r
Gas
New York State Electric & Gas
Act
to obtain funds for
construction by -the issuing
; TWO large syndicates are ex¬
pected to be in the running for
this stock which is one Of fflhtty
such similar undertakings that ap¬
receptive mood.
pear to
by a substantial
sinking fund which would re¬
tire the entire issue by matu¬
debentures
with
so
becoirie
In the past he
*
:i"1
in
as^ed.
i.
'
-
,
'
•/•
■/•
&C&PP,;'49
*
a
zt/
'
V:
$10.95 a
to reoffer the
Inc., 75 Pearl Street.
publicly
at
$12
a
share.
inquiry// according to
dealers, indicated a quiek closing
of subscription books.f
^
.
(Special to
The Financial chronicle)
CHICAGO, ILL.—Robert J.
*
Ta-
affe has become associated with*
Whii^-PHillibs Coiripariy; Inc.^38
South Dearborn Street.
With R*/H^ Johiison&Co.
Ricketsdn
try").
of
2. Assure maintenance
■
an
ade-
quate network of war-huilt
'pofts.
'
3. Authorize
land
air-
MASS.—Leonard C
has been added to the
staff of R.
H. Johnson & Co.,>3(1
State-Street,
'
z;i -;■ m
//.\ '.::::/
condemn
Government
WAA
where
to
the
With
Slaytoh ih St. Lotiis j
(Special
to :The Financial
Chronicle)
plants during war
'"'ST. LOUIS, MO.—Oscar L. Beal
on property it did not own.
hdS joined the staff of Slayton 8^
Maintain in stand-by condition
Company, Inc., 408 Olive Street.
plants vital for national securliiifi in i
:—
—, I
ity.
constructed
4.
*
(Special to" THk FiNANiftAi' CttRONiCLi)
BOSTON,
—
/; With W. H. Heagerty
,,/' (Special to The Financial
Pfe/sale
Co., Inc., 135 South La Salle
Joins White Phillip* Staff
legislation to maintain a "min¬
imum synthetic rubber indus¬
(Special to The Financial Chronicle)
share with the successful syridi^
shares
G,
Street,
present.
recommend
would
Truman
;
HARTFORD, CONN, — RheaClare B. Simpson has been added
to the staff of Kennedy-Peterson,
which sought the stock.
cate making ready
>
Harry
announced
With Kennedy Peterson
syndicates
ton &
Littlejohn
assistant to the President,
Saturday that Mr.
man,
(8peclRl tor Tfi« Fina^oiab ChUonicle) ; ■ ■
BOSTON, MASS.—Augustine A.
Mandino has become affiliated
coni-
ori Monday
with a difference of only about
six cents separating the bids of
The winriirig bid was
•/^ •• ^^
industry J'in the interest of na¬
(John R. Steel-
'
bidding
banking
■«.-^
—^
Harry A. Zweig
have become affilated with Slay-
predecessor was Lieut. Gen.
Gregofy.
/ '
Q'Mahoney's report recom¬
mends legislation to:
■
•
1. Protect' the synthetic rubber
""M;
Federal Street.
two
-v■
ILL.,
and
Norstrom
tional defense,
expected to reach market with Cannell," French
betitive
personnel, who, in
instances, have served under
His
French & Copp
today.
sold iri
With
'Special to Th* Financial CbronicIe)
CHICAGO,
Edmund B,
With Cannell,
South West Utilities Co. common
the
has
with H. L. Rupperf & Co.
was
Central S. W. Utilities
was
provisions of the
act/' WAA and congressional
committees "have placed a high
return to the (Government, ahead
of antiriionopoly considerations/*
criticism of the
is WAA administrator at
MO. —William
LOUIS,
418 Locust StreCtV
Quick sale was forecast for the
1,342,102
shares of Central &
This issud
too,
says,
that "contrary to
job at hand," O'Mahoney added:
"This is not said in any spirit of
,Maj. Geri. Robert M.
S.
associated
Herrick, Waddell &. Co., .Inc.,
ST.
persistent that before the closing
of business for the day the quota¬
tion iri' "when^ilsued" dealings
stock
Lotiis
(Special to The Financiai. Chronicle)
Madden
100% bid—101
concentra¬
.subcommittee
"
brisk demand when offered at
was
toward
experienced during the war.
.The
meeting the requirements of the
orders "
attracted
The call for the issue
tion"
in
difficulties
j-" great
trend
erated
Saying that these men have "en¬
countered
most
Witfa Herricfe in
t»ur oh Tuesday,
was?
be making up for the Cur¬
rent year.
Featured
overhauling
an
disposal program to military men
who have been in charge, t
/
offering of Firestone Tire &
Rubber Co.'s $25,000,000 of 2%%
debentures found the market in a
buying have
cautious
Company
urging
policy and top management,
O'Mahoney attributed a
"major share" of responsibility
"for the near breakdown" of the
utility.
who are the chief source
held to a
policy, with yields still
the key to their operations.
of
Holding
the
In
the
objectives / of
(SufpluS property) uct which were
of supposed/ to reverse ■ the accel¬
Senator
of
Bankers who handled the pub¬
antimonopoly
about
WAA
and partly
gradually cleaning up.
lic
the
.
one-third completed." ~
partly to conform to provisions
Firestones at Premium
rity
only
job is
"the
disposal
itself, the latter ac¬
counting for 140,000 shares of
the total, is being undertaken
company
new
the much
in short-
tbef
Electric Cd., and the issuing
&
$13,000,000 of
recently as a
part of the same operation.
Of¬
I Gilt-edge investments have not
fered on a 2.61% yield basis, this
been visibly disturbed by the cur¬
issue at last reports was about
rent renewal of talk involving
75% distributed with the balance
possible firming of short-term in¬
"flexibility"
Co.
ing marketed by Standard Gas
The company sold
sistent and even should
"a
perhaps next week.
This imge block of stock,
first mortgage bonds
terest rates.
Electric
mittee
stock Which Will be of¬
fered soon,
ing certain of its obligations.
as
&:
Gas
Oklahoma
At least three banking groups
expected to seek this issue
which will provide the company
with funds needed for' refinance
are
reported
surplus property subcommittee of the Military Affairs ComV
of the Seventy-Ninth Congress on Jan. 12 recommended;
Complete overhauling" of the War Assets • Adriiiriistration "with
respect to top personnel, internal organization and policies," accord-^
ihg to Washington Associated Press advices an Jan. 12, which added:
The report of the subcommittee, headed by Senator Joseph iC.
O'Mahdney" (D-Wyo.)
declared^
"has paid lip service orily to the
that after three years of surplus
A
tion for the forthcoming competitive biding for 890,000 shares of
charige in plans.
discussed
Overhauling of WAA Urged by Seriate Group
Banking groups are putting the
for competitive bidding next finishing touches to their calcula¬
up
:
ST.
PETERSBURG,
Chronicle)'
FLA.
'The
report also
consideration
WAA's
latest
by
urges
prompt
of
Congress
survey
on
disposal
With Stranahan, Harris
:'/'f (Special to The Financial Chronicle),
/
?TOLEDO, OHIO—Ross Harris
has beeri added to the staff o
Inch war¬
Strariahan, Harris'J &
*
^
nected with W. H. Heagerty & CO., time pipelines.
Ohio Building.
f
The report contends that WAA
Florida Theatre Building.
James' R. McConriell is liow con¬
of the
Big arid Little
.
Co., /Trie.
,
.
,
z
,
Volume
Number 4564
165
THE COMMERCIAL & FINANCIAL CHRONICLE
outlined
by A. ; Edward Scherr;
Chairman of the Investment Com¬
Established i New Record in 1946
i
Investment commitments for" residential construction reached ah
the Rocky Mountains during
1946, it was reported bis Jan. 13,;by JT. W. Dodge ^Corporation, it tact-
all-time high in the 37 states east of
finding* organization for the construction.industry, |t
gj.
~
:
The total valuation of contracts awarded for r6sidehtial cohstruction last Thar in the 37 states was
$3,142,102,000 whichlcorhpares with
IV;,!..ft:;',!,!!
$2,?88;3t8;Q00:"ffi:ift^
previous record-breaking
year.
Support of AIITear
residential building called for in
Sat. Closing Advocated
'contracts awarded, however, 1946
fourth, higher residential
being shown for- m Y. Sav. Banks
On -the
basis
of
floor
area
of
totals
area
1928 with
568.382,000 square feet,
with
559,499,000, and 1926
1925
wijlh 521,062,000. -The total floor
called for in last year's resi¬
dential contracts was 516,256 000,
area
thijis
reflecting
-
current
building costs, the Dodge
higher
corpora¬
&ast year's residential contracts
called for the construction of 446,625 dwelling units distributed as
follows: in * apartment
76,372; \in one-family
buildings,
dwellings
built for. owners' occupancy, 50,459; in onerfamily dwellings built
for-sale or rent, 294,491; in twofamily dwellings, 21,794, and in
combination
projects,
such
as
stores and apartments, 3,509.
On
basis
the
of
oflawards, 5% of last year's resi¬
dential contracts were for projects
the
New
York
f6r all-classifications of-construc¬
tion/''- " ' '*
'
communities
closing a part of
other day during the .week,
some
Corporate Fiduciaries
says
fThe Corporate- Fiduciaries As¬
sociation of New York City on
tftat .this practice .has, be^f follpjwecl "in some' areas during' lthe
,
28
-
reelected-
all-
the Association, which states
in recent
months
summer
officers.
years.
James M.
Trenary, yice-President I A uniform effective date for
antd Secretary of United States closing, particularly for banks in
Company of New York, is
President; William A. Eldridge,
by John O. Dornbusch, Chairman
Vice-President of Central Han¬ of the Association's Committee.on
Service
over'Bank & Trust Co.r is Vicer.
Development.
"If all
President, and Erwin A. Berry^ banks that are going to close on
Trust
Officer of Manufacturers Saturdays would start to do so on
the pame date, it would tend to
eliminate confusion in the public
Trust Co., is Secretary-Treasurer;
A.
Nye Van Vleck,; Vice-Presi¬
dent oL the» Guaranty-Trust. Com¬
pany "of New York, Stewart L.
DeVausney; Vice-President of the
Bank of New York, and Clement
M. ,Cooder, Trust Officer of the
mind," he said. At the same time
hfe urged that each bank review
its banking hours to determine
whether those presently in force
New York
(Special
The
Financial
Chairman
E,
the
of
re¬
B.
Sav-
the
original enabling act was passed
in 1938 the purchasing power of
the dollar has dropped by at least
40%; Thus,, the $3,000 limitation
imposed ht that time amounts, in
effect, to a limitation today of
$1,800 ; and that, an increase to
$5,000 at the present time would
only be equivalent,' in* terms of
positors in the respective
purchasing
the $3,000
ago.
Further¬
to
power,
limitation 9 years
there have been
more,.
some
sub¬
stantial increases in wages for all
groups so that there are hundreds
of
thousands
who
well
can
workers
of
SITUATIONS
sive
wishes
services
and
member
Thorough
areas.
with
to
markets.
through
special
i
I
120
57.
^
-Y*» '
"!;";.
'
-
r>
•
Commercial
to
National
be
1947 Red
/// 25 Park Place, New York 8, N. Y.
Twenty-two
years with mu¬
nicipal and investment serv¬
ice departments of large fi¬
(Special .to
Box
G
The Financial
Chronicle)
i ; WORCESTER, : MASS.—Henry
Freeman has become
associated
with
&
Bonney
Main Street.
390
Inc.,
Moor,
/
;
-
>
With Merrill Lynch Firm
(Special to The Financtal Chronicle)
LOS
ANGELES, /CALIF.
M
David B. T. Myrick has joined the
Meirill
of
Lypch,
Pierce,
-
West Sixth
With Geo. K. Baum Co.
(Speqial- to" The Financml Chronicle)
KANSAS
CITY; MO.—Russell
Smith has. joined
E.
the staff of
George K. Baum & Co., Inc., 1016
Baltinjore Avenue.
have
to
Mr.
excellent
Gibson's
In
Goulet & Stein Members of
NY Security Dealers
The firm of Goulet &
been admitted to membership
has
in the New York
"Times" said;
Ass'n
Stein, 27
Street, New York City,
William
accepting the chairmanship,
Security Dealers
delighted to be able to Association;
serve again and I am convinced
/Americans every Where will be
DIVIDEND NOTICES
glad to help in this great cause.
The most important American Red
EATON MANUFACTURING COMPANY
Cross task iii the coming year is
continuing its services to the
..v/'V
* Cleveland, Ohia
armed forces and to veterans and
"I
am
[^51")
their families.
war's
has
DIVIDEND NO. 88
been
The Board of Directors
for the Red Cross to in¬
vastly its activities in vet¬
Manufacturing
a dividend of
Seventy-nve Cents (75c) per share on
the outstanding common stock of the
Company, payable February 25,1947,
"Since
end it
necessary
crease
erans'
hospitals. The number of
hospitalized veterans
now
ap¬
proximates 112,000 and the peak
fg still ahead' %
*We all i vdshi .td liiHiB/ w *e-
of Eaton
Company has declared
to shareholders of' record at the Close;.
,of business February 5,^1947;
1
H. C. STUESSY
DIVIDEND
NOTICES
January 24,
1947
iftCOftflOAATCO
Secretary & Treasurer
^
NewYork3,N.Y.
Fifth Avenue
111
WOODALL
INDUSTRIES, INC.
Common Dividend and
166th
■A regular quarterly
Extra Dividend
regular dividend of Seventy-five Cents
A
share and an extra dividend of
Fifty Cents (500) per share have been
(75(0
per
•per ? sharel
on ■
Preferred
Stock
has
dividend of 3il4o
5% ; Cjinvertible
($25.00
par
payable
stockholders
to
ruary
the
declared
been
194T
of
value)
March
record
1,
Feb¬
1947.
15,
'
Stock and Com-,
E.
M.
Stock B of The American Tobacco
GRIFFIN,
Secretary'Treasurer.
in
1947, to stockholders of record at the close
(offbusiness February 10, 1947. Checks wjll
jie mailed^-
']'
•
,
Edmund A. Harvey, Treasurer
s
January 28, 1947..,.
and
Wall
field.
Salary secondary. Box
W 619 Commercial & Finan¬
cial Chronicle, 25 Park PL,
New York 8.
-
Southern
••
Railway
THE BUCKEYE PIPE LINE
COMPANY
30 Broad -Street
:
// /
/
:
The Board
this
of
Company
.
per
this CJompany has
dividend of Twenty (20)
the outstanding capital
a
on
stock, payable March 15, 1947 to shareholders
of
record at
the close of
business February
18, 1947.
in
DIVIDEND NOTICE
Directors of
declared
share
day
Cents
•
Nevr York, n; t„ January'29/ 1947.
,C. O. BELL, Secretary.
'
>
/fv-
New Yorir, Januaiy 23;1947;
aggregating $3,75 per share on the
Preferred Stock of Southern Railway Company
have today been declared, payable as followss
Dividends
/' ,f;~
j
Date of
AVAILABLE
-W" 'w
r
J
' V,''
' '
^
■1.25
i:
DonUrii
J*-'?'
and specialist. in
securities
many years.
for
i5ox M130,
Commercial & Financial
124,
The
Chronicle,
Place, New York-8, <i N...,Yy-
Chronicle, 25 Park PI.,
iBonlmS
DIVIDEND No.
CO
,
.
-
,
.
w,
Feb.
15,
16, ,1947
May
>5,
1947
Septi
15, J947
Aug. 15,
1947
regular quarterly dividend of 75fJ per
on 1,298,200 shares of Common Stock
value of Southern Railway Com¬
pany has today been declared, out of the
surplus of net profits of the Company for the
fiscal year ended December 31, 1946, pay¬
able on March 15, 1947, to stockholders of
record at the close of business on February
15, 1947.
A
close
/'y,,
Checks in payment
•"/
of these dividends
on
the
Preferred and Common Stocks will be mailed
to alt stockholders of record at their addresses
as
they
appear on
the books of the Company
unless otherwise instructed in writing.
'
.
.
January 28,1947
1947
<S. 1947
June
share
148
:of business .February J, 1, 1947,
"
E. L. NOETZEL
-
without par
An interim dividend of sixty cento
(600) per share has been declared
on the
capital stock of The Borden
Company, payable March 1, 1947,
to stockholders of record at the
of Business on:
;
<
Mar.
$1.25
1.25
To Stockholders of
Record at the Close
Payment
Amount
Vi"!»*
Financial
*———
Bonney & Moor Adds
; ;
fourteen
district
years
with
municipal de¬
partment of financial publi¬
cation. Now retired, but de¬
sire to continue in municipal
firm.
Experienced in Real Estate wanted by
established house specializing in this
25,. Park
—w m
CompanYj jpayablo ^in 'cas^ ohx Marchr: 1,
situa¬
TRADER
and
the
of
O'Connor, Chairman of the
Red Cross, according to a dispatch
from Washington to the New York
"Times", "is extremely fortunate
mon
Municipal Man
trader
securities.
521./t//;:-
'
Basil
declared upon the Common
Available
unlisted
of
Chairman
Cross Fund, for which
the campaign goal is $60,000,000.
"The American Red Cross," said
Financial Chronicle
&
%
HELP WANTED
class
issue of Jan. 23, page
Street.
Harvey D. Gibson, President of
the Manufacturers Trust Company
of Ne\v^ Yprk, who served in the
same capacity during last year's
drive, was appointed on Jan. 18
Well known experienced
Commercial
prompt
/!'/!-/!•'■: /:••!./
Cross
Fenner & Beane, 523
£ ■'
-"-"vy"'
and
generous
;
an
;
•'*
a
previous item on the Red
campaign appeared in our
A
if
staff
Gibson Heads 1947
Red Cross Drive
Box G 129.
Advertising Agents
Broadway; New York 5,JN, Y.
'
cooperative
& COMPANY
DOREMUS
serves
response."/:/
Direct inquiries
■
-
needs
the
to
pact that it has upon the 14 mil¬
lion people of New York State.
,
| Box
disasters
when
arise. These
among the many reasons why
the
1947 Red Cross
appeal de¬
advertising campaign and the im¬
capital.
Primarily interested in
Recaps., Reorgs., Liquidations, rights and
other interesting situations.
Past record
highly successful.
Write, in confidence,
invest
Replies "held
strictest confidence.
to
their
States
emergency,
stantial
tions, arbitrage and maintenance of
primary
banks
available
United
or
are
WANTED
Desires connection with firm having sub¬
progres-,
non-member
or
knowledge
material
.
SITUATION
capital
tional
the
Arbitrage & Trading Specialist
!SPECIAL
trader
wide variety and
advertising and promo¬
volume of
sponsibility to these men as well
to each community throughout
as
today
Street
Well known
the
lustrated
afford to purchase
nancial. institution
>
W. Sparks, Chairman of the Com¬
mittee on Public Information, il¬
•
Schrauf is rjow with Heath & Co.,
In
approved.
mittee pointed out that since
Chronicle),
*u
appropriate
uig^'Bank!^^ Life Ihsurahce Com¬
Gharies Jt.
To^wer,Building!" "
and
this .subject;
on
Schwulst,
-
to
also
was
porting
A bill to permit investment by
Executive "Committee for a
thtee-yearierm* y >
— - th^^avihgs^bmjks in bonds .of fho
Canadian Government; its prov¬
inces and, With certain restrict,
With Heath & Co.
tions as to debt limit, its cities, was
■
State
best meet the convenience of de¬
Fulton Trust Co., were elected to
the
unanimously voted by the Con¬
ference. It was pointed out* that sistently /opposed V any / extension
of such insurance in this and other
new, if ever/ mortgagees were in
a! position to make payment on states." ;
■...;/.;;/-:/| ■
account of principal on their debts
/In a visual presentation, Robert
the Metropolitan area, was urged
Trust
expected from
Mr. Gibson it is1 learned from the
dp Saturdays at the present time,
*
measure was
both the life insurance companies
and their agents who have con¬
life
there is nothing in the regulations
*
to this
opposition
leadership again in 1947."
j^a^would preventbahk^ in those
Jap.
Ooiitihuation ; of
the: / Mortgage
Moratorium beyond July, 1947 was
cated that considerable
Savings Bank Life Insurance from
$3,000 to $5,000. on an individual
bring the year's value of all sulted as to its terms. The bill, if
buRding and construction con¬ passed iiv -its present >form,. be¬
tracts to $7,489,722,000, the second comes effective upon signature by
highest total on record. Construc¬ the Governor!
tion'^contracts totaled $8,255,061,IWhUe it-was pointed out that
600 in^ they 37-easteni JJtates-jn^
34soines upst^te^reommtmiUes it
1942,, setting an all-time > record might not be practical tp close
Re-Elect. Officers of >:
the
they
He indi¬
so.
was sponsor¬
Bankers Association
in
fcpy'.V.fZ
of
if
coverage
"A bill to increase the limit of
000 to
'"V.
["Strenuous opposition
insurance
permitted to do
State
ing a bill already introduced by
holding the total vol¬ Assemblyman D. Mallory Stevens
ume of this classification ofproj*: and
that officials of the Savings
ecfs to a valuation of $4,347,620,- Banks Association had been con¬
mental
life
are
,
that
out'
on non-
residehtial construction and heavy
engineering, works were instru¬
very
ciation advices also .state; |
legislation is enacted. legislation permitting the savings
Myron S. Short, Chairman of the b^nks to invest in mortgages oh
Committee oh Legislation, pointed prefabricated houses.
assuming
classified as'publicly owned.
Government restrictions
of the State,
area
a
like to
purchase additional savings bank
.
fective in each
savings-bank
^Surveys of present
$f!87 billion to the list
of legal investments. The Asso¬
.
dollar volume
life insurance.
would add
protection, in nearly every in¬
outright termination of the mort¬
stance; could now make arrange¬
gage moratorium are major points
ments to pay off their mortgage
ih; the program .of > the savings
indebtedness on a reasonable basis.
hanks of New York State for 1947
'"Other subjects pertaining to
as
a
result of action taken on
Jan. 14 at the State Association's mortgages discussed by Fred C.
annual all-day mid-winter con¬ Lemmerman,
Chairman
of
the
ference in New York City at the Mortgage and Real Estate Com¬
Hotel Biltmore.
The conference mittee, were the amendment to
voted to support ' legislation' fof the law permitting a broadening
permissive year-round Saturday of the regulations for lending un¬
closing and also to bring about, der the GI Bill of Rights, exten¬
through group action, a uniform sion of the savings banks mortdate on which to make them ef¬ gag€^ lending to areas (outside of
tion reported.'
.
policy holders indicate
high percentage would
These securities, all pay¬
able in U. Sv dollars, if fipproved,
and, also, that according to a sur¬
vey
made
in the Metropolitan
.
area
among the
savings banks/
over
70% of the mortgages had
I Full support of all-year Satur¬
already been taken /out through
day .closing, ! the -Tight to - invest
voluntary /agreement
between
in Canadian bonds, an increase in
mortgagor and mortgages; The
the savings bank life insurance
minority who continue to seek its
limit from $3,000. to $5,000 and
stood
floor
$5,000 of ^low-CQgt
mittee.
Contracts lor Residential Construction
Treasurer
J. J. MAHER, Secretary.
\
THE COMMERCIAL'
& FINANCIAL* CHRONICLE
Thursday, January 30, 1947!
INDEX
For detailed index, of
'*"
contents
Old
see
"'"if \y'Kx
>*«?,• Vv--Iry
.f
*;•
•
•
page
•
'
;\
591
1
Reorganization
RaHs
•
i''«''•
r;.1'%,;X'
Domestic &
'
-
Foreign
Securities
,
,'*•!,,1'sA'-*, 'y Sr"'-
''
I 'v'>, I- >!>,'>
New Issues
ESTABLISHED 1919
41
Members
40
N.
7.
Security Dealers Attn
Exchange PL, N. Y. 5
HA. 2-8780
'
|| Teletype N. T. 1-13071
148 State Si, Boston 9, Mass,
Teletype
Tot CAP. *«*■'■t
BS WO
JC. Y. Telephone HAnover 2-7914
Sheraton Controlled
Thompson's Spa.
$6 Cum. $100 Par
Dividend Arrears $83 Sh.
Price Around
$35
Common Around 2%
Teletype—NY 1-971
HAnover 2-0050
Abitibi Power & Paper
Ralph F. Carr & Co., Inc.
Co.
!\31 MUkStreet,Bo8ton9,Mass.^
Brown Co.
■
.
-
„
■
,
'■
>
V.':
.
.
t
,
f
Minnesota & Ontario
*
'
«.-r
)
.
I'l<Be«leBl.*>iII NewYork
-
Hubbard 6442
Paper Co.
Teletype 4
Hanem 2-7913
IS 328
,
Bonds and Shares
<'"-uk-'l,~"l Li'&";)•
-r
k-f '"'x V'i^^^j
_
?•''
-•
-
~
t,"
..
•'
,
We Specialise
HAUL MABKS & f?0. Inc.
-
;
mmmmmmemsemJm
Industrial Issues
FOREIGN SECDBINES
sPEauuOTS•4*sSI^Si#S:X^,^./;':
SO Broad Slrwi
To
^Directors
Gustave Kobbe II
tHe
announce
™
New York 4. N. Y.
AFFILIATE: CARL MARKS & CO. Inc.
|onnation of
ptp;fnyestment Trust Issues §J
Public Utility
CHICAGO
Stocks and Bonds'
^TEXTILE SECURITIES | V
Securities with
the investment securities firm of
a
New Eng. Market
Frederick C. Adams & Ce.
Kobbe &
I
<
"
Douclas C; Alexander
Company
lacoriwated
,
i".
\
*'
'
55
I
\
'
'•••••'
Liberty Street
eciafixing in Zlnlisted
•
.
Charles F. Rudloff
•:
*^"^5:
-iV"*-It wJtV5*.
Telephone BArclay 7-2663
-
,
Puklic
>
indicates
U. S. Radiator Pfd.
Sunshine Consolidated
business for
(freight
',
car
' Teletype BS 23
Seaboard Fruit Co.. Inc.
Utility,^Industrial*--'Real Estate
"General Products
BonJsy Preferred and Common Stocks
■'
RALSTON STEEL CAR CO
•
:I
Corp,
"Susquehanna Mills
long-term large volume of
| -1
;
Established in 11922
Bank—Insurance
Lumker & Timker
Delhi Oil
-
■,
11 30 FEDERAL STREET; BOSTON 10
Securities
Shortage of Freight Cars
Gerotor-May
Specialists in
■ ,«
England Unlisted Securities
Tel. HANcock 8715
•
■
"
New
New York 5, N. Y.
:
in ail
InmranceandBankStockf
JLwsetmmsmemseemmmesssemmm^^t^mmemeemeeemeemmm^
Empire Steel Coip.
BOUGHT—SOLD — QUOTED
manufacturers)
•
*Ptospectus on Request
\
Market about 9
'
i
1946
high
Circular
about
12
REMERo MITCHELL & REITZEL,
CHICAGO 4 • PHONE RANDOLPH 3736
.
I.;.r.'I/'/,1
V-. :i
TELEPRINTER "WUX" • BELL SYSTEM TELETYPE CG-989
208
LERNER & CO.
120 Broadway, New York 5
Inactive
INC.
Available
SOUTH LA SALLE ST.,
:.>,Vr
*•-,
WESTERN UNION
Hill, Thompson & Co., inc.
Markets and Situations for Dealers
Securities
-
Telephone COrtlandt 7-0744
<
v
Bell
Teletype NY 1-886
10 Post Office
Square, Boston 9, Mass.
Telephone Hubbard 1990.
' H.w Teletype Be 69.
120
Broadway, New York 5
Tel. REctor 2-2020
Tele. NY 1-2660
@FedFRASER